Lived Experience - Jason Towns
What is ‘lived experience’? Lived experience is a term used to describe those who have seen things in life that may have altered their perspective. Jason Towns and Ross Baird recognize that, in the entrepreneurial world, lived experience may have a greater significance than degrees or connections, although this is not necessarily what investors will finance. Those entrepreneurs who have lived experience, throughout their life, have seen the need for something that is not out there and have been able to capitalize on the gap in the industry. The sentiment is that since they personally saw the gap in the industry, their entrepreneurial ideas would be able to help more people than ideas from those who do not have the lived experience. Morgan Stanley recently did a study with Venture Capitalists and found that, “an overwhelming majority (88%) of the VCs we surveyed view the lived experiences of underrepresented entrepreneurs as a competitive advantage in identifying problems to be solved and markets to be addressed.”
Towns and Baird wrote about the concept of lived experience. Please find below a short excerpt.
“From the customer’s perspective, a pedigree doesn’t matter, but from an investor’s perspective it often matters far too much. A top investment bank or consulting firm will care where you went to school and what your grades were, and your CV may determine whether a Fortune 500 company will “buy” your expertise. But these things won’t matter to your customers — as long as you are giving them a great product or an outstanding service.
“We have learned the value of empowering entrepreneurs who have lived experience, and the competitive advantage this offers forward-thinking investors. Locating and supporting entrepreneurs with varied life experiences can lead to more successful companies. We believe that it can, in fact, lead to the development of products and services that the majority of people actually need and are asking for, rather than those that a small segment of investors think people want.
“Few of the world’s entrepreneurs have access to the capital they need to test and scale their innovations. This holds especially true for first-time entrepreneurs who cannot self-finance, and they therefore must rely on investor partners to make their vision a reality. However, investors tend to make decisions based on ‘market wisdom’ and ‘pattern recognition,’ and some ideas are just too far outside the mainstream to get a chance. This means that, to secure funding, many entrepreneurs feel they must match their vision to investors’ criteria — which too often falls within funders’ limited realm of acceptable ideas rather than coming from a real understanding of customer needs.
“The venture capital system is biased in many ways, and capitalizing on people’s lived experience is one way to make it more democratic and to get better returns by making products that meet users’ specific needs. Doing this will require a conscious decision by investors, and it will allow venture capital to live up to its potential. We argue that, if entrepreneurship is going to change the world for the better, it will have to give everyone the opportunity to innovate.”
Read more about Lived Experience
Read more about Morgan Stanley’s study
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