George Soros is one of the most famous and divisive leaders of the 21st century. He’s a billionaire hedge fund investor, Holocaust survivor, leading philanthropist, financial speculator, far-right fiend, geopolitical consultant, founder of a world-renowned university — and more.
Inspired by reading the excellent recently published book “George Soros: Living To The Full” (a compilation of essays from Harvard Business Review Press), I wanted to offer five insights from his life with startup leaders (including fintech founders) people) related courses.
1. Find unique opportunities globally.
A defining characteristic of George Soros is his worldview. Sebastian Maraby, one of the financial journalists and contributors, explained Soros’ point as “across borders: he was a global figure long before the word ‘globalization’ entered the lexicon.”
This lens is essential for finding unique opportunities around the world that are often missed by others. His most famous (or notorious) investment was when he “broken” the Bank of England, betting that their peg would not hold. This is of course just one of the countless trading opportunities he has found.
But at the same time, George Soros maintains a perspective rooted in local realities. As Michael Ignatieff, Emeritus Rector of Central European University and contributor to another book, told me, he explained the nature of our interconnected world, but crucially its limitations: “Not What’s global is labor, what’s not global is politics.” Soros has maintained this lens throughout his investments and philanthropy.
For founders, this global perspective is critical. Innovation is a global opportunity – more important today than ever. The best ideas come from anywhere and are everywhere. At the same time, however, many markets are underpenetrated and underfunded. Looking internationally allows us to connect the dots and uncover underappreciated opportunities at home and abroad. Understanding and adapting to local realities allows us to unleash the potential of innovation for meaningful impact.
2. When you have faith and the timing is right, don’t just bet. Take a gamble.
When Soros first started, his investment strategy was to reserve 16 equal spots for different opportunities. As he improves his approach, Soros will move to a more concentrated portfolio, often using leverage to enlarge his positions. For example, instead of adding positions slowly and methodically during the pound trade, he chose to act decisively and quickly to achieve “maximum market exposure.” Its fund size is under $1 billion and its market position exceeds $10 billion. The resulting victories exceeded $1 billion.
Likewise, founders should first take the time to build belief in their ideas. Test the product. Interview clients. Find the right solution. But when they are confident in their ideas, and timing is critical, they should put in the effort.
3. Use feedback loops to your advantage
One of Soros’ most important intellectual contributions has to do with the power of feedback loops. He realized that the market – like most elements in life – does not change linearly. Rather, individual decisions affect others. Bubbles tend to be self-reinforcing on the way up, as well as on the way down. Things can be overcorrected in both directions. He called it reflexivity.
Startups at their best (and worst) face reflexivity. Some startups benefit from the buzz, which helps them get more funding at higher valuations, allowing them to hire faster and spend more on marketing and customer acquisition, driving further growth. Growth and investor appetite. Network effects in a business model can further cement a startup’s edge and drive years of growth.
For founders, a positive feedback loop will accelerate business development. Equally important is finding ways to mitigate negative impacts – building a solid foundation in this area is critical.
4. Learn, inspire and lead from the best
Soros founded several organizations, including his investment firm (and its flagship tool, the Quantum Fund), Central European University and the Open Society Foundation. His thinking is evident in the way he organizes his network and philanthropy. He finds talented people already doing the work and provides them with resources. Soros then checked their progress and decided whether to continue funding them. Over time, some of these contacts were able to share the best practices they developed with others.
On a related note, Soros has not only cultivated excellent contacts across a range of interests, but has also built a network of contacts. He creates opportunities where people can not only interact with him, but connect with others and forge new partnerships in an ever-expanding network.
Founders should listen to their community and put themselves in the company of the best people in the world to accomplish their mission.
5. Balance realism and hope
Michael Ignatif explained Soros’ philosophy to me very forcefully: “Isaiah Berlin once wrote: ‘History has no lyrics’. History is not a song of freedom. For Soros, you can’t be great Killing survivors and telling stories to himself. Soros maintains a cool, sober realism. He believes in open societies, but has no illusions about them.”
Many of the philanthropic ideals for which Soros fought were not realized. Authoritarianism is killing open societies around the world. His beloved Central European University was forced to leave Hungary, but Soros remained committed to the institution’s vision and the reality of moving it to Austria. He continues to support his work to enable his agency to live another day and hopefully one day they will be able to fulfill their mission. Through it all, Soros combines “historical realism with timeless optimism.”
Startups naturally face ups and downs, and sometimes potential end-of-life events. Founders must hold realist competing views and boundless optimism about what is possible.
where are we going from here
It’s easy to feel hopeless and helpless reading headlines these days. Reading this essay on Soros’ life and contributions made me optimistic about the future and the potential for leadership to make a difference.