Dear Young VC: Your next big win is in the unproven

Over the past decade as an early-stage investor, one of the most critical lessons I've learned is that a successful VC's foundation goes beyond analysis and hustle — it’s built on the courage to trust intuition.

The courage to see beyond the status quo, to stand firm alone when surrounded by skepticism, and to accept uncertainty as an essential companion to value creation. This boldness is essential to discovering the next generational ideas in places where few dare to look.

In your early days, you focus on recognizing patterns, observing seasoned investors, and trying to grasp what makes a great deal. You study your firm’s past wins, missteps, and market trends to carve out your own niche—be it SaaS, fintech, AI, or consumer brands. You quickly learn what to avoid: hardware, one-time transactions, niche markets.

But despite all the analysis and best intentions, something still feels off. The SaaS company you're eyeing is lost in a sea of competitors, the consumer brand lacks differentiation, and the B2B startup struggles with cash flow. The hottest sectors? They're already priced out of reach.

So, what now? Does the future look bright, or were the best deals made before you even got your start?

This is perhaps the perfect time to embrace that the real opportunity lies in what hasn’t been discovered yet. So, if you are chasing the next Swiggy in food delivery, Freshworks in SaaS, or Mamaearth in consumer brands, that’s a race you perhaps shouldn’t be running.

In fact, I firmly believe the best deals are still to come—and you may be in a better position than more experienced peers to find and win them.

Venture capital moves in cycles of "explore" and "exploit." You entered the industry during an "exploit" cycle, where established archetypes dominate. The goal was to identify the next Swiggy-like on-demand platform or Freshworks-like SaaS startup. But maybe that formula has run its course. Maybe the world doesn’t need another SaaS app, brokerage platform, or beauty brand. In an "explore" cycle, like the one we're in now, the task is to discover the next wave of winning archetypes. While it may seem daunting, this is where the opportunity lies.

Here’s a simple framework to guide your thinking:

In an "explore" cycle, unproven, high-impact ideas deserve your attention. They may be riskier, but the potential rewards far outweigh sticking to outdated formulas.

But here’s the kicker: these new archetypes will look weird and unappealing to your senior colleagues. They might be capital-intensive, have long gestation periods, operate offline, or target markets like Bharat or underserved segments they aren’t familiar with. They will most definitely not have a successful predecessor.

This is where you have the edge. You’re more open-minded, you have the time to go deep on unproven ideas, and you’re likely more in touch with the emerging zeitgeist.

Think about some of the biggest successes of our time: SpaceX, Airbnb, or even Uber. All of these started out as “weird” ideas that didn’t fit into traditional archetypes. They weren’t following the formulas that had worked in the past. But they’ve gone on to redefine industries, and investors who backed them in the early days are now reaping the rewards.

This is why you must lean into the weird, the unproven, and the misunderstood. This is your time to take the bold bets that will define the next era of venture capital.

The future is yours to shape.