Questions
The more we know, the harder it is to ask
Happy Thursday, 👋
Can I ask you something?
These five words have the power to command our attention. The words prompt our subconscious to begin an evaluation of the person asking and of the question itself. This instinctive process evolves over time as we become increasingly aware of these judgements and begin assessing our own questions.
In response, our conscious mind develops a defense mechanism. It warns us against asking questions due to the fear of how we might be perceived. Consequently, the questions we dare to ask become those which demonstrate our existing knowledge, rather than questions which could expand our understanding. The irony lies in the fact that the more we know, the harder it becomes to ask the simpler questions.
Fraud Spotting: The Unasked Questions
We have discussed several cases of investor fraud ranging from FTX to smaller firms. Within each we find a common pattern emerges: initial concerns by investors were often not pursued with detailed follow-up questions.
In the case of FTX, initial investors questioned the choice of the company’s audit firm. Yet, none dared to directly ask why a multi-billion-dollar company opted for a little-known firm to lead a large international audit process.
A similar scenario unfolded with HeadSpin. Despite its billion-dollar valuation, no investor raised a hand to suggest a third-party audit. Over $100 million was invested, yet none of the well-known investors questioned the lack of audited financials or the company’s consistent ability to beat every revenue projection.
The Endless "What Abouts"
One of the key strengths of questions lies in their endless nature. There is always another "what about..." probing a different perspective on an idea or company. A well-balanced question set involves a balance between analysis and action while also acknowledging the inherent uncertainties in any project or idea.
Corporate boards often misuse questions as a stalling tactic for new product decisions or strategy shifts. We have seen more than one board member or executive leverage an endless stream of questions to postpone key decisions.
Additional Thoughts
Asking questions can be challenging when we fear judgment based on our queries. Often, it's the simplest questions—those left unasked—that could unveil fraud or investment challenges.
A great scientist once urged us not to dwell on the reasons for our queries, instead encouraged us to just ask the question. Einstein stated “do not stop to think about the reason for what you are doing, about why you are questioning. The important thing is not to stop questioning.”
As leaders, it's crucial to balance understanding with uncertainty, especially when most questions originate out of uncertainty. Be careful about using a list of questions as a delay tactic.
Nobel laureate Isidor Rabi credits his interest in asking questions to his mother. Each day after school she would ask him “did you ask a good question today?” Good questions should be something we strive to ask each day, without fear of judgement, as part of our personal and professional growth.
Wishing everyone a weekend full of great questions,
-The Caymont Ventures Team.