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The Fast Company Executive Board is a private, fee-based network of influential leaders, experts, executives, and entrepreneurs who share their insights with our audience.

How to lean into challenges and capitalize on volatility

Most companies have had to navigate economic downturns, but the most successful ones turn market fears and panic into positive change.

How to lean into challenges and capitalize on volatility
[oneinchpunch/Adobe Stock]

We live in a world of tremendous volatility: financial, political, and cultural. Everywhere we turn, there seems to be major conflicts between polarities—security and freedom, optimism and pessimism, love and hate. As the founder of multiple companies and the general partner of a venture capital firm, this is one of the most common problems I address with founders and CEOs. How can we thrive amid this volatility between such extremes and what do we need to do as long-term-oriented investors and company founders to capitalize on the opportunity this presents?

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It boils down to one key decision each of us is making every moment: the choice between fear and faith (and by faith, I mean favoring certainty over doubt). Do we live in an irrational, miserable universe in which another threat waiting to derail us lurks around every corner? Or is something that looks like a challenge really an opportunity to become more and give more? Every founder, manager, and employee gets to choose a response to every new swing in the markets, every snag in the product development process, or any other outside stimulus. We can give in to the fear that we all naturally experience, or we can take the energy of that fear and consciously opt to build something and contribute to society.

In today’s world, especially in business, faith is often seen as a dirty word, seemingly opposed to science and reason. But in fact, you can think of faith as an underpinning of our scientific worldview. We have faith that the sun will rise tomorrow, that we will keep on breathing, that our heart will keep beating—and while each of these are explained by science, science doesn’t explain the fundamental premise that we live in a universe governed by scientific laws. That is an input to our scientific reasoning, not an output. And we couldn’t live without faith in that. We all use that faith on a daily basis to drive our cars with nothing but a small yellow line separating us from oncoming traffic, and to make a million other small decisions that have become automatic for us in our daily routines.

How does this tie back to long-term investing? In every long-term investment, there will be ups and downs in the markets that test whether we still believe in the fundamentals of the company. When everyone else is running in fear and momentum is driving down prices, we can either flee or we can hold onto our faith (i.e., certainty) in the company based on the fundamentals of the new technology and new opportunities it brings to the market. All of the greatest fortunes that have been made rapidly have been made in times of great fear, when markets crashed and the bold and courageous acted contrarian in the face of their own fears.

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Most companies have had to navigate economic downturns, but the most successful ones turn market fears and panic into positive change. Think of Apple in the early 2000s. When many tech companies were being swallowed up by the dotcom bubble, Steve Jobs completely transformed Apple and launched category-defining products like the iPod. Many executives would have looked for the quickest exit or a life raft. Instead, Jobs was able to turn fear into something positive and use that emotion to chart a new path forward for his company and employees.

What can we learn from that? Take a big deep breath, take a sip of water, re-center, and check in with yourself: Are you getting caught up in groupthink and fear, or are you choosing the state of faith (absolute certainty) that enables you to take action that others do not to better guide your company? This is, of course, not only key to leading a company or investing its profits, but important for all of the decisions we make across our day-to-day lives. For example, in March 2020 at the beginning of lockdowns, many of our portfolio CEOs were understandably anxious. We spent two weeks helping each of them see that while there was a terrible tragedy occurring, there was simultaneously an opportunity for them to be bold and lean into the situation. Similarly, since we have had half a dozen companies going public this year, we have run into challenges with market swings, regulatory issues, and much more. At each of these surprises, of course, fear sets in for our team, but then we decide to turn that fear into faith and figure out how to use the challenge to keep moving toward our outcome.

This year, give yourself the gift of turning fear into faith and deciding for yourself to trust in the better future that is coming for all of us.

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Dakin Sloss is the Founder and General Partner of Prime Movers Lab, the world’s leading partner of breakthrough scientific startups.  

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