20 Oct 2021

Doom & Boom: The Power of Practical Optimism

By Paul Miller

The most challenging psychological aspect of impact investing is being positive about something negative. As tech for good investors we now find ourselves in a boom – interest in impact-driven tech companies has never been higher and the amount of capital allocated to tech for good ventures is growing every month.

But that’s all against a backdrop of increasingly terrible news about the planet and social cohesion. In the run-up to COP26 we’ll hear much more about how bad climate change could be and as government funded covid support schemes come to an end, social inequality becomes more and more obvious.

F. Scott Fitzgerald wrote: “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless yet be determined to make them otherwise.”

I wouldn’t claim a first-rate intellect but I’ve learned that doom can be just as paralysing as denial. Practical optimism isn’t about denying that there are serious problems in the world, but neither does it allow those problems to become overbearing. As my colleague Dama puts it more succinctly: “Let’s face it — the world is f***ed… That’s why we need to be more conscious about the investments we make.”

As many people predict an impending crash in the public markets, I can’t help thinking that tech for good and impact investing will gain even more ground.

Economically, Milton Friedman is often portrayed as the opposite of an impact investor but he was also a student of change: “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

We’ve spent nearly ten years developing tech for good investing as a useful tool. We’ve tried never to be overwhelmed by doom or boom but instead to keep a sense of practical optimism about the future. When we started people often said they thought what we were doing was impossible – but now it feels more inevitable.

 

This piece was first published in the October issue of our monthly investor newsletter – ‘The Practical Optimist.’ Sign-up here to receive the latest thinking, resources and events for investors in tech for good and impact, straight to your inbox.