Why Trust is Your Best Growth & Venture Capital Strategy
A few weeks ago, I was involved in a conversation about the difference between Growth and Venture Mindsets and how each influences innovation outcomes quite differently. It was great to be part of this debate. Much was shared.
One of the great comments was this, “... the biggest problem with AI: humans.” And that is so true. You invest in the technology and its embedding into an organisation, whether corporate or government, but forget the end user and the need for a support framework to unlock how AI can support humans and increase productivity, because humans can resist anything that looks like a threat.
All this got me thinking about how these two philosophies, Growth and Venture, dominate a lot of the outcomes that shape innovation and the world we live in.
So, what are Growth and Venture Mindsets, and how are they different? To summarise, the former is obsessed with scaling metrics, including user acquisition, revenue curves, and market penetration, while the latter is fixated on strategic positioning, exit multiples, and portfolio returns. For years, these have been viewed as parallel tracks, sometimes even at odds with each other.
But what if the most significant multiplier for both isn't the technology or innovation, but rather perception and/or trust —the human element and the perception, as well as the appetite to risk that we have or don’t have?
Trust and perception play a critical role in innovation, yet it is often left to a tactical stage of delivery. Leveraging this requires expertise and a deep understanding of emotions and human decision-making. Trust isn't a soft skill, but a hard currency that directly accelerates growth and secures venture-scale outcomes.
The Growth Mindset: The Engine of Scale
Popularised by Stanford psychologist Carol Dweck, the term ‘growth mindset’ has been adopted by the business world to describe a relentless focus on scaling a company. It’s a culture of experimentation, data-driven iteration, and a ‘get-big-fast’ mentality.
What the growth mindset requires is also the right culture and the right understanding of risk-taking and the returns that risk-taking can deliver, all aligned over a specific period of time. This is equally what different countries have, a different appetite to risk based on culture and how decision makers perceive the associated risks to innovation and the associated costs, as an example, short term investment vs. short term or long term returns.
Growth Mindset can be defined as:
Core Focus: User acquisition, market share, revenue growth, and operational scaling.
Key Metrics: Month-over-Month (MoM) growth rates, Customer Acquisition Cost (CAC), and Lifetime Value (LTV).
This mindset is powerful and pushes teams to move quickly, break things, and prioritise speed above all else. However, the risk is that when pursued in isolation, this mindset ‘can’ harbour a fatal flaw: it often sacrifices long-term stability for short-term gains. Think of it, as ‘build and flip.’
The ‘move fast and break things’ mantra, which was once the rallying cry of Silicon Valley, over time has revealed its limitations.
Mark Zuckerberg later reflected that the focus needed to evolve. "We used to have this famous mantra... and what we realised is that it wasn't helping us to build the best services for people because building a service that is meaningful for people and that helps people connect... it needs to be reliable," he stated in an interview with TechCrunch. Make of Zuckerberg’s comments what you will, and think of how Meta is now perceived and if it is, now, an innovative company or if it just leverages it’s capital to buy up innovators?
The breaking point for many companies today trust. A data scandal, a product failure that harms users, or a toxic culture exposed to the public can halt growth overnight. Leaders in these companies often call in reputation advisers (lawyers, more often than not) when the damage is done, and often because they have not factored in perception, reputation and trust during the building, delivery and growth stages. Why? Because perception, trust and reputation are seeing as tactical and not strategic assets that are part of the brand.
Trust is what investors need to equally consider when they are supporting founders and innovators. Growth and disruption with no care or investment in building trust and reputation increases risk for investors, and that is not what investors want.
The Venture Mindset: The Architecture of Value
The venture mindset, meanwhile, is typically associated with investors and founders planning for an exit, takes a longer, more strategic, and pragmatic view. It’s about building a valuable, defensible asset that focuses on the quality of growth, not just its quantity.
Venture mindset can itself be defined and measured as follows:
Core Focus: Business model durability, competitive moats, intellectual property, strategic partnerships, and ultimately, a successful exit (IPO or acquisition) at a high valuation multiple.
Key Metrics: Valuation, EBITDA multiples, market capitalisation, and internal rate of return (IRR).
The venture mindset asks, "Is this growth sustainable and valuable to a future acquirer or the public markets?" This mindset is inherently risk-aware, constantly evaluating how external factors, from regulatory changes to market sentiment (perception!), could impact the company's ultimate worth.
The renowned investor Ben Horowitz of Andreessen Horowitz wrote that the fundamental challenge in building a company is communications. Horowitz said, “As a company grows, communication becomes its biggest challenge. If the employees fundamentally trust the CEO, then communication will be vastly more efficient than if they don’t. Telling things as they are is a critical part of building this trust. A CEO’s ability to build this trust over time is often the difference between companies that execute well and companies that are chaotic.”
This confirming that it’s people who regulate the speed of innovation and growth, and not technology, which is iteration at greater speed that people shifting their perception of risks of innovation.
The Trust Bridge: Where Growth and Venture Converge
Effective communication and the building of trust is critical to ensure how innovators can bridge the growth and venture mindsets. Trust is not an intangible abstract concept or asset; it is a very tangible and fluid asset that when managed correctly can help deliver sustainable growth while unlocking the realisation of venture-scale value.
Research by PwC found that organisations with high levels of trust significantly outperform their peers. They are more innovative, have stronger customer loyalty, financially perform better and are better at managing crises.
1. Trust as a Growth Accelerant
From a growth perspective, trust is the ultimate growth hacker. It reduces friction at many parts of the growth journey. Perception in and of your business influences the trust and confidence that you, your brand and your proposition have, which influences how you sell or secure investment.
Trust helps with:
Lower Customer Acquisition Cost (CAC): Customers who trust you are more likely to try your product, refer others, and forgive occasional missteps. Word-of-mouth, the cheapest and most effective marketing channel, is powered entirely by trust. A Nielsen study found that 83% of consumers trust recommendations from people they know.
Higher Lifetime Value (LTV): Trust drives retention. When customers believe you have their best interests at heart, they tend to stay longer and make more purchases. For example, after a significant data breach, a company can expect not only an immediate drop in users but also a long-term increase in churn, which can be devastating to LTV.
2. Trust as a Venture Multiplier
From a venture perspective, trust is directly quantifiable in a company's valuation. It is the ‘reputation premium’ that acquirers and public markets are willing to pay for.
Trust influences:
Higher Valuation Multiples: A company with a strong reputation for ethical conduct, data security, and customer care is a less risky investment. It is insulated from reputation-based crises that can wipe out billions of dollars in market capitalisation overnight. As Warren Buffett famously stated, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."
M&A Attractiveness: A strong brand built on trust is a powerful competitive moat. It makes a company a more attractive target for acquisition. Large corporations, especially those in regulated industries such as finance or healthcare, will pay a significant ‘reputational’ premium for a trusted brand that aligns with their own risk and compliance standards.
The Foundational Pillars of Trust Capital
Building this ‘trust capital’ in your venture, enterprise company, or start-up requires effort from both leaders, founders and investors, and, in my experience, rests on three pillars, each demanding specific qualifications.
Pillar 1: Radical Transparency
This goes beyond marketing and tactical communications. It means being open about product limitations, transparent about data usage policies, and proactive in communicating mistakes. The qualification for founders and leaders is integrity and courage, the willingness to be vulnerable for the long-term health of the brand, as well as transparency and empathy in your tone of voice and how you communicate.. For investors, it means championing transparency even when the news is bad, understanding that covering up problems only further damages the trust and reputation further.
Pillar 2: Consistent Reliability
Trust is built in increments through consistent delivery on promises. Does the product work as advertised? Is customer support responsive? Are payroll and vendor payments made on a timely basis? The qualification here is operational excellence. Founders must build systems that ensure reliability, while investors must value and measure these operational metrics as diligently as they measure growth. An increase is positive perception and trust can equally be a signal of future improved earnings.
Pillar 3: Genuine Empathy
Trust is a human emotion. Companies that demonstrate genuine care for their customers, employees, and community build deeper, more resilient bonds. The qualification is emotional intelligence. Founders must foster a culture of respect from teh start, and investors must evaluate culture and employee satisfaction as key indicators of long-term viability of what they have or are considering investing in. If founders and leaders have a strategic understanding of the importance of trust then there is an increased chance that investments carry less risk.
The New Qualification Set for Founders and Investors
The fact is that traditional playbooks, even from the last 10/15 years, are no longer enough. The qualifications for what is needed to secure success is evolving.
For Founders:
The modern founder must be more than a visionary operator. They must also be Chief Trust Officer and have as part of their team leaders and advisers that understand:
Proactive Communication Skills: The ability to articulate vision, own failures, and engage with stakeholders authentically.
Ethical Data Stewardship: A deep understanding of and commitment to data privacy and security, viewing customer data as a responsibility, not just an asset.
Crisis Management Preparedness: Having a plan for when things go wrong, focused on preserving trust above protecting ego.
For Investors:
The modern investor’s role is expanding from capital provider to trust and reputation partner. Their qualifications must include:
Due Diligence on Culture: Actively investigating company culture, leadership integrity, and customer satisfaction during the investment process.
Long-term Value Mentality: Prioritising sustainable growth strategies over short-term ‘pump and dump’ schemes that can damage a portfolio company's reputation.
Governance Guidance: Using board seats to advocate for strong ethical frameworks, diverse leadership, and transparent reporting.
Fusing Mindsets for Unbreakable Growth
The difference between a growth mindset and a venture mindset is a false one. The most formidable companies of the future will not choose one over the other; instead, they will choose both. They will fuse them, using and investing in the building of trust as the catalyst and to secure growth.
Growth achieved without a foundation of trust is britille. Venture-scale value built without reputation is an illusion, a high valuation waiting for a reality check, which is why American business media outlets always focus on a loss in market capitalisation when an issue or crises happens.
The ultimate competitive advantage lies in building a company where the growth engine is powered by customer and stakeholder trust and the venture-scale outcome is secured by the integrity of the brand. Yes, it’s a more challenging path, requiring greater discipline and a broader set of qualifications from both leaders and investors. But as data and many example show, it is the only path to creating something that is not just big, but innovates and is allowed to disrupt.
