“You have to strike the right balance between competency and gumption.” said Charlie Munger. “Too much gumption and not enough competency can get you killed. But the more you know the limits of your competency the more valuable your gumption is.”
Competency – (noun) – the ability to do something successfully or efficiently.
“the players displayed varying degrees of competence”
| synonyms: | capability, ability, competency, proficiency, accomplishment, expertise,adeptness, skill, prowess, mastery, talent |
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Gumption – (noun) – shrewd or spirited initiative and resourcefulness.
| synonyms: | initiative, resourcefulness, enterprise, ingenuity, imagination |
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Little Engine Ventures (LEV) derived it’s name as a result of gumption. “I think I can, I think I can” seemed to capture the enterprising spirit of ingenuity and imagination (how’s that for use of synonyms!) You might also say that the word “Little” is a strong reminder to limit our capability to areas of proficiency and ability. That said, we are moving… growing our skills as we move the cargo forward.
At present, our competency is very, very narrow. We have experience and muscle memory in agtech that is unique in the world. We also know a few things about inbound marketing, software development, consulting and managing high margin, service businesses that have hourly workers. We’ve also worked through real estate and collateralized bank loans, feeling joys and pain there enough to be appropriately respectful of leverage. Probably most valuable of all however is a time and people management system that emphasizes adaptive learning and early, macro trend spotting.
Our gumption? Outside of the above areas of competency we either avoid action, or play it very, very safe with limited capital and lots of time. We hope to expand our competency over time. However, when a deal is inside our circle, we plainly see it and can move boldly and quite creatively… contrasting much popular opinion because we know the situational edge so well.
What are the limits to your competency? What are you doing to expand it? If opportunities are within it, do you have the gumption to act decisively? If you are feeling left out because other’s competency is making them more money are you prone to jump in too? How do you stop yourself?