235 Vaughn Tan – What population wheat, the world’s best restaurants and low intervention wine should teach us about investing in regeneration and uncertainity
Jul 18, 2023
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Vaughn Tan, author of the Uncertainty Mindset, discusses uncertainty, low-intervention wine, and population wheat. We learn from the best restaurants and their dealing with uncertainty. Investing in regenerative agriculture and food requires getting comfortable with not knowing.
Adapting to non-risk not knowing is crucial in agriculture and requires being comfortable with uncertainties and making reasonable decisions without full knowledge of all variables.
Long-term thinking and a broader perspective on value creation are necessary for sustainable investments in regenerative agriculture and food systems.
The use of population wheat as a metaphor highlights the importance of a portfolio approach and adaptability in decision-making, emphasizing the need for diversification and innovation in farming practices.
Deep dives
Understanding the Difference Between Risk and Non-Risk Not Knowing
The main takeaway from this podcast episode is the importance of recognizing the difference between risk and non-risk not knowing. In truly risky situations, we have knowledge of all the possible outcomes, actions, and their probabilities. However, many of the problems in agriculture and the world at large fall into the category of non-risk not knowing, where we don't have comprehensive knowledge of the outcomes, actions, and probabilities. Understanding this distinction is crucial because traditional risk-based decision-making approaches are not suitable for non-risk situations. Adapting to non-risk not knowing requires being comfortable with uncertainties and having the capacity to make reasonable and sensible decisions without precise knowledge of all the variables.
Shifting Towards Long-Term and Multi-Dimensional Investment
The podcast emphasizes the need for long-term thinking when it comes to investing in regenerative agriculture and food systems. Long-term investments, spanning more than 20 years, are necessary to address the pressing issues and uncertainties faced by agriculture and the environment. Furthermore, the podcast suggests that a narrow focus on maximizing financial returns is not sufficient for sustainable and impactful investments. Investors should consider multi-dimensional outcomes beyond financial gains, such as the long-term viability of agriculture, the quality of food produced, and the impact on the environment. Shifting towards a broader perspective on value creation can drive investments that align with regenerative principles.
Applying Population Weed Concepts to Decision-Making and Adaptability
The use of population weed as a metaphor provides insights into decision-making and adaptability in uncertain environments. Harvesting and processing population weed involves looking at the whole field as a portfolio of diverse wheat varieties. This approach requires farmers, millers, and bakers to adapt their practices based on the performance of the crop each year. Farmers select the successful wheat varieties from the previous year's population, enriching the blend for the next planting. This concept of a portfolio approach and adaptability can be applied beyond agriculture to decision-making adaptability in general. It highlights the importance of being able to react to uncertainties, adjusting strategies and actions based on constantly evolving information.
Investing in a Portfolio Approach
It is important for investors to adopt a portfolio approach and diversify their investments, rather than relying on a single solution. This approach allows for a range of different farming methods, such as biochar, regenerative agriculture, and AI, to be explored and tested. By taking small-scale experiments and diversifying their portfolio, investors can mitigate risk and discover innovative and sustainable farming practices.
Understanding Capital Sources and Trade-Offs
Investors should understand the goals and trade-offs of their capital sources. Some investors, like family offices, prioritize long-term pro-social and environmental benefits over financial returns. By aligning investment strategies with the goals and values of the capital sources, investors can reduce paralysis and make informed decisions. Additionally, considering how returns are measured and being open to exploring different models can lead to new investment opportunities and more resilient agriculture.
A fascinating and wide ranging conversation with Vaughn Tan, author of the Uncertainty Mindset, a fascinating newsletter about not knowing. Vaughn was in the army, worked at Google, studied at some of the world's best restaurants. We talked about uncertainty vs risk, low-intervention wine, population wheat and so much more.
Investors and everyone in the regenerative ag and food space can and should learn a lot from getting comfortable with not knowing. What can we learn from how the best restaurants in the world deal with uncertainty or not knowing. And why are low intervention wine and population wheat important?
The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
