(Foolish) Consistency

“Consistency is the hobgoblin of little minds”

- How most people quote Ralph Waldo Emerson, Self-Reliance

“A foolish consistency is the hobgoblin of little minds”

- Ralph Waldo Emerson, Self-Reliance

Earlier this week, Andreessen Horowitz announced that it had broken one of its long-standing rules for the first time, promoting a staffer, Connie Chan, to General Partner, thereby “violating” the firm’s stated policy to not promote from within, and to only name someone who had previously led a startup company to the position of GP.

Of course, this “violation” was a positive one, greatly celebrated industry-wide, in part because we desperately need more female GPs in the industry (women often make better investors than men BTW — link link etc.). Industry-leading a16z has made an important statement not only by breaking its own rule, but by naming a woman to the position in doing so,

Consistency and discipline are essential in investing. The hallmark of a great investor is his or her methodology — an almost formulaic, unwavering adherence to process that enables the investor to make countless difficult decisions based on imperfect information (cf. Buffett, Munger, Marks, USV’s new thesis each fund, Gurley’s seminal framework for evaluating marketplaces, and on and on). Every investor must have a personal or institutional set of heuristics that guide and dictate their decisions.

Deviating from consistency is not just foolish, it can be deadly; however, a foolish consistency will lead “little minds” to similarly bad outcomes. The key to consistency is being able to occasionally — consistently? — alter the discipline, change the rules going forward, to a new consistency, one that makes more sense given the new givens.

The greatest investors don’t deviate from a consistent discipline — rather, they are consistently willing to alter the discipline itself, to confront new realities.