Intuition vs Process

In the investing world, there's a tension between intuition and process. 

Some of the "greats" that I've met seem to eschew frameworks or process. The thinking goes: process makes your lazy -- you think better if you start from "first principles" every time. On the face of it, it feels like it should be correct; great investors are great because they've had to teach it to themselves from the ground up. What makes an investor great is their ability to think and diligence. 

It feels like some investment firms (especially smaller ones) are designed with the solo investor in mind. There is no firm standardized process, no standardized sourcing pipeline, no general training. To do so would constrain the investor, who needs to use their gut to make their decisions (so the thinking goes). A framework would stand in the way of intuition.

However ... when you assess funds as an LP, a lot of focus is on process: can we trust this manager to produce alpha, and do they have a replicable process? To assess this at larger investment consultants is the other end of the extreme. The investment framework is truly a process, a 200-plus-line Excel spreadsheet of investment criteria which is then synthesized into a memo. The intuition purists would say: yes, you've checked every box, but you've missed some je ne sais quoi about the investment, something not in your checklist that makes it stand out (or makes it fall apart). There are parallels to Atul Gawande's The Checklist Manifesto, where checklists improve surgery (and air flight safety) despite being initially despised by surgeons (and pilots, etc.)

All this to say: the investment firms that will be most successful with AI will be those that translate process into software-codified systems -- i.e. investment in AI will be all about process. One example: right now, as a firm, sourcing at some places feels spontaneous -- every investor has their own set of connections, resources, rules, etc. Some of this could/should be codified in agentic workflows; I've started to collect a list of "high quality" sources (e.g. a16z speedrun, etc.). Another example: we have a light investment memo template, but many questions are asked beyond what the template contains. These questions should ultimately be subsections of the template, which can then a yardstick by which to measure investment diligence. This means updating a core investment framework template, to ensure that that questions is answered every time. 

On one hand, I hate it -- filling out a 200-question survey (and adding questions to it) seems to take the joy out of reading, learning, and investing. On the other hand, it's a bit embarrassing to miss certain pieces of diligence over and over again. And as a newer investor, it's a bit bewildering to be given tens of documents to read, without a rough mental framework in mind. 

Ultimately, I'm coming to believe that "investment experience" might just mean "I've built a really solid investment framework in my head." It means you know where to look first when doing diligence, or what the top questions are to ask -- those sections of the framework are raising red flags. So why not hand out this framework to earlier-career investors? I think it's ultimately what we'll be training investment LLMs on, a long-time reckoning that investment process is essential.