YouRise: Five Tips on Emotional Intelligence for Investing & Startup Success (Jeremy & Arjun)


1. Emotional Intelligence 2.0 – ‘It’s a great one…..just a very practical way to understand EQ…

2. The Hard Thing About Hard Things – ‘I think that book is incredible, it’s by Ben Horowitz…about the reality of what it takes to build a massive business.’

3. Zero to One by Peter Thiel


Jeremy: In today’s episode we discuss how emotional intelligence plays an essential component in investing, closing deals and even building teams. We talked with someone named Arjun. Arjun you say? Yes, the name Arjun was originally given to a legendary hero who is a master in archery. The origin we speak with today is a successful venture investor and entrepreneur who shares lessons from his hard-fought battles. Arjun has been a partner at 500 Startups previously. He was a successful founder and CEO. He earned a degree in Electrical Engineering and Computer Science from UC Berkeley. Arjun, I met you 10 years ago and was always struck by your willingness to get to the people around you. Today I want to start by giving our listeners an initial negative wisdom so let’s jump right in. I’m going to cut directly to the chase. What is one skill that will make the biggest difference for people so that they may develop emotional intelligence?

Arjun: Yeah, I think around you know emotional intelligence in particular, I think a lot of what I learned was just the art of listening. I think one of the most important things is the ability to really sit and be present with someone and listen thoughtfully. And that art I think is critical to being able to build meaningful relationships in business or in life. And I think that one of those skills or that skill in particular has been one of the things that I really look back fondly.

Jeremy: This is so true Arjun. Listening can happen on multiple dimensions that include other people, the environment and even yourself. And I found that to improve one’s listening ability with others, it really helps to be fully in the moment.

Arjun: Absolutely.

Jeremy: To picture what’s being said, and finally to practice active listening as if you were going to be quizzed on what you understood. And then at the advanced level there is even 360 degree listening where the magic happens because you’re not just listening to what the other person is saying but also how they’re saying it.

Arjun: Well I think one of the things that we often hear a lot about at least a Silicon Valley Press or the founder entrepreneur focused press is all about product market fit, strategy, fundraising. There’s all of these very technical things that a founder needs to know in order to build a successful company. But one of the things that often gets missed is the ability to work well with oneself and with other people and that really is the essence of emotional intelligence. So, the best founders that I know, know themselves really well and have an incredible ability to understand other people and what matters to them. And that really is the heart of emotional intelligence is being aware of other people and the data, the signal that they give off through their emotions through the things that they share. And if you do that well, not only can you build a great company but you can do it in a way in which people grow and learn from that experience and everyone benefits not just financially, not just from a career perspective but also personally and I think that’s really important. If you can do all of that as a founder it is incredibly impactful you attract great talent and you build great businesses. So, I think for all the reasons both business related and otherwise it’s really important to be thoughtful about emotional intelligence.

Jeremy: Arjun, you’ve built an impressive career starting as an engineer at Berkeley and then finally successful company and then becoming a venture investor. What was a challenging time or failure in your career and was it in any way related to emotional intelligence?

Arjun: Sure. I think with regards to emotional intelligence, I wouldn’t necessarily call the failure but I would say a big learning was just hiring folks that weren’t the right fit for the organization or not letting folks go soon enough when we should have. Because the timing wasn’t right or the culture fit wasn’t there and those lessons were really tough lessons. Because they have such an impact on the team, the organization that growth trajectory when you don’t have the right people in the right seats on the bus. And so, I think those are very much kind of EQ related decisions or conversations and they’re either fear based or I don’t want to let this person go because they drive a ton of revenue for the business or disturbance might that cause the rest of the organization. There’s certain things that are more internal dialogues and internal tracks that hinder a founder or in this case myself for making kind of the right decision to let someone go and move on at the right time. And then other kind of challenges often that, or failures that are around emotional intelligence are often not winning deals. So, when selling to customers being able to really understand what, where they’re coming from and what’s important to them. Even though it may not be the kind of obvious thing right oftentimes like oh you know it’s a customer, they want to either save money or make money or make their life easier in this one way that’s very business oriented. But if you actually spend the time to listen and pay attention you may realize that, wait it’s actually something completely different. And those failures of deals, deals lost or customers not retained or things like that are often coming from some of those challenges if not truly understanding what matters to a client or a customer.

Jeremy: Absolutely. And I think that probably drives back to what you were saying about listening and a lot of times we see founders and investors that ultimately are not digging deeply enough and really understanding. Like you just said what the real problem is that the customer or the entrepreneur has and so that’s interesting. What you mentioned around not being able to let people go, that’s something that I’ve seen has been really tough for many of the entrepreneurs that I’ve worked with and it’s interesting because I almost think that it has. There’s a component there where it’s almost being able to in a sense control or regulate your emotions in really difficult circumstances like that.

Arjun: Right.

Jeremy: In a lot of ways I’ve seen EQ being played out in its most visible form at the most difficult or trying times for investors and for entrepreneurs.

Arjun: Yes.

Jeremy: And that ultimately becomes the test or the measure are those trying times.

Arjun: Yeah and just to kind of add on that I think that’s the trend. The opportunity to really get to test your strengths and the practice that you’ve done in developing that presence and that emotional intelligence are in those kinds of difficult times. And just to share a quick recent story as I got an email, I was trying to help out a founder send an email to somebody and I’ve got a really weird kind of almost inappropriate offensive response that seem pretty off, off the cuff. And I got that my response and my initial reaction was wow I’m just trying to be helpful to a founder that I’m working with and I ended up getting a pretty negative response. And I think in that moment it was easy to kind of fly off the handle and respond in a way that would be negative. But actually, taking the moment to breathe, walk away, recognize that that person may be in a difficult situation or whatever it is and actually just try and respond by getting to the root of the matter. And I think those sorts of extremes are where you really get to understand how much progress you’ve made as an individual in developing really strong emotional intelligence and so in some ways those opportunities are welcome as a weather balloon or as a canary in the coal mine to help understand. You know, well, where am I? How do I fit? How am I doing in practice? Back in school you’ve got tests you’ve got exams but as you think about personal growth and emotional intelligence these are the opportunities that allow you to test and understand kind of where you sit in terms of developing that skill set.

Jeremy: Yeah that example that you just mentioned really resonates, that makes a lot of sense. That brings us to the topic of investing and you in your transition from entrepreneur to an investor you’ve been able to see both sides of the equation. And I’m curious what you’ve learned about investing that you think is relevant to investors regardless of what they invest in. And then also what’s relevant for specifically investors that are on through the angel side investing in early stage companies. And again, part of that maybe related to our discussion around emotional intelligence as well so.

Arjun: Yeah. And to kind of answer the first question around meta learnings from just investing in general I think it’s an ability to be very clean about what the truth of the situation is. So, what I mean by that is have a very firm grasp on reality and that grasp on reality actually to your point comes from having a really strong emotional intelligence because emotions do play such a strong role in us kind of avoiding reality or looking the other way. So, if you’re really happy and excited and juiced about a particular deal and greed starts to come in then that starts to crowd your judgment around what might be really happening or the inverse happens often where folks are cynical and maybe just very negative on something and they’re driven by fear. This fear of not working out but they miss the opportunity that’s in front of them. So that clarity and that centeredness, that gravitas and a firm grasp on reality I think is critical for any investor regardless of whether it’s public markets investing or railroads investing or early stage tech startup investing. I think it’s the same principle of a firm grasp on reality is critical and then it’s a decision of how much risk you want to take. So, I see that this is a great opportunity and but it clearly has X Y and Z that could go wrong or are likely to go wrong. But I am still willing to invest because I’m comfortable with this risk tolerance and that’s really important. So that way you’re making a decision based on facts and you’re based on clarity of mind versus kind of an emotionally driven decision. So that kind of the answer your first question around I think what’s important regardless of stage sector or size of check you’re writing I think holds true. And then I think the other piece there is just people so how do you really get to know people, what matters to them, why they’re driven why they’re doing this.

Jeremy: People on angel investing side some for private market investors that are investing in startups.

Arjun: Yes. Yeah exactly. I think that you know the people’s side is kind of the most important thing on the early stage particularly at the angel side of things. I mean they’re really usually isn’t much more than a deck and maybe a little bit of an MVP but 9 times out of 10 that product is going to pivot, things are going to move in a different direction. So, it’s just important to know that you do have a faith in those individuals that are running that business and their ability to adapt to the market as they learn new information.

Jeremy: When it comes to people what is the sort of DNA or the core elements that you look for as an investor?

Arjun: Yeah, I think it’s first and foremost, it’s great. I think particularly the early stage it is so difficult to get a business up and off the ground and get things moving and get that flywheel spinning. So, you need someone who has an incredible kind of clarity of purpose and work ethic and ability to kind of deal with any sort of challenge that might come their way. So that I think is kind of step number one. I think the other thing is someone who is intelligent not just in the kind of other great engineer or their great kind of book smart but someone who gets and grasps intelligence and all of its facets. Whether it be emotional in nature or kind of product market intelligence or market intelligence or just an ability to really be thoughtful about everything that they do. And so that is kind of more of what I consider to be intelligence especially these days you know the ability to look things up very quickly and knowing where to look is more important than knowing the information itself. So, I think the skill sets around intelligence are changing as well. And then I think it’s a clarity of vision or clarity of the market that they’re going after. So, we want to serve x y z set of people and know the old adage is “If you want to be a billionaire, solve a problem for a billion people”, I think holds a lot of truth. And it’s just the point around that is not around being a billionaire or the number of people but more around is there a service orientation towards solving a problem for a particular group of folks. And if that orientation around solving a problem for people is genuine and there’s deep desire to do that then things generally turn out well.

Jeremy: That’s interesting Arjun. I see a lot of entrepreneurs one of this case people that could become entrepreneurs, people that have ideas. Everyone’s got ideas right and very few people turn them into reality or in any way grow what they’re thinking about. And it seems like the areas that you just mentioned that include grit and that included adaptability and a clarity of sort of market in visionary in terms of what they’re doing. Those elements are essential to actually allowing someone to move forward. Does that sound right to you?

Arjun: Yeah absolutely and I think that adaptability piece is just so critical, the customer orientation, the ability to kind of quickly grasp ideas and that’s what maybe I call intelligence. And then grit, the ability to just keep powering through when you know you’re headed in the right direction, when you know things are going in the right way. And things maybe don’t turn out the way you want them to. But the ability to just continue to push forward is important.

Jeremy: Yeah. It’s interesting. When you sort of made the transition from entrepreneurship to investing and you saw sort of both sides of the equation, it sounds like you were able to apply some of what you learned as an entrepreneur to your role as an investor and vice versa. How did you see that play out?

Arjun: Yeah, I think it’s interesting. I think out the gate it’s kind of being an entrepreneur there’s an inclination to want to kind of fix things or be solution oriented or you know oh I can jump in and kind of help the entrepreneur do X Y and Z. But the reality of the situation is you really have to let the entrepreneur run their own business as much as you want to be helpful or think that your involvement can have an impact, you’re just not in it 70 to 90 hours a week. So, you’re not the one who’s actually going to make those changes so I think the lesson from that early is look for founders who are coachable who can take a lot of different data points and understand them. And then make their own decisions but ultimately who are thoughtful and adaptable in doing so. So, I think for me that was a big part of the transition was kind of taking off my entrepreneur hat off being solutions oriented, fixing problems, jumping in, digging in to do that sort of things. And switching more towards actually being thoughtful about can this founder and team and product be a part of a great story and build something massive. And how I might be able to be helpful when asked or in ways in which I’m not necessarily getting in the founder’s way but supporting them and truly supporting them. So, it’s on those margins where I think the transition from entrepreneur to founder, sorry to investor is critical.

Jeremy: That makes sense. Arjun I’m curious what is the one book in the last few years that you would definitely read a second time.

Arjun: Yes, that’s great question. I think Emotional Intelligence 2.0 is a great one. Just a very practical way to understand EQ and many things that matter. The other one I would definitely say is the The Hard Thing About Hard Things, I think that book is incredible from Ben Horowitz around just the reality of what it takes to build a massive business. And I think that if anyone wants to really understand what it takes to build a software business that scales and the challenges that both the technical and product challenges but also the very human challenges of building a scaling a business, that’s a phenomenal book. And Zero to One which is by Peter Thiel has some of those similar insights but is a bit less story driven and a bit more kind of I guess practical for lack of a better term.

Jeremy: Arjun, it’s clear that you continue to educate yourself and learn as evidenced by the number of books that you were able to shrewd with software.

Arjun: I think it’s so important so I think reading is absolutely critical.

Jeremy: Yes.

Arjun: For so many reasons.

Jeremy: Yeah absolutely. What is the one thing that you would want to be known for when you were looking back on your life?

Arjun: Yeah, I think for me it’s mostly about just being of service and being of service to others and I think that’s what ultimately drives me and I think what I want to be known for service to family community. This kind of Silicon Valley entrepreneurial ecosystem and the capital markets and folks are looking to deploy capital into meaningful projects that have a positive impact. I think those are the things that really drive me at the end of the day and that’s what I would hope to be remembered for.

Jeremy: Excellent Arjun. It was great connecting with you today. Thanks so much again for making it on the show and we’re looking forward to your next adventures. And in the show notes if listeners want to connect with you or your ventures that at some point in the future will make sure to include that and thanks again for everything.

Arjun: Yeah. Thanks so much really enjoyed the conversation.

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