A data-driven investigation into “Super Founders”

Things that matter

• HISTORY OF BUILDING -- Founders who have a history of building (tinkering on projects, side hustles, previous companies) have a much higher chance of creating a $B company
• Specifically, 60% of $B founders had previous experience as startup founders. The best preparation to start a $B company is to have started something in the past (e.g. Facebook, Stripe, Flatiron Health, Uber, Box, Instacart, AirBnB)
• Takeaway: look for people who have an itch to create. A bug for building is more important than a shiny resume
• INDUSTRY EXPERTISE -- Many $B founders lacked direct work experience in the industry they ended up disrupting (e.g. Tony Xu @ Doordash, founders @ Flatiron Health, founders @ Stripe). What's more relevant than the technicalities of a specific industry sector is thinking about problems in the right way, having a passion for solving problems, and a willingness to think deeply about the problem
• WORK EXPERIENCE -- Founders of $B companies were more likely to have either just worked for themselves (30%) or had worked at a tier-one company (e.g. Google/Microsoft/McKinsey/Goldman)
• IDEA DEVELOPMENT -- most top founders go through a rigorous ideation process. Some ideas were eureka moments, but many others came out of deliberate ideation. Some were even a result of deliberately searching for a problem
• COMPETITION -- over 50% of $B companies faced multiple large incumbents at the time they were founded (e.g. Warby Parker)
• MARKET TIMING -- not essential to be first-to-market
• DIFFERENTIATED PRODUCT -- important to build highly differentiated products
• NETWORK EFFECTS -- about 30% of the $B startups had network effects

Things that are less relevant

• Age - no appreciable advantage to being young or old
• Founding CEOs can have a business or technical background (but the second-ranking person should be technical)
• University's ranking - less important that its culture and location

Thoughts from top VCs

• Keith Rabois
• I'm looking for someone who can walk you through the path from where you are to success in a way that takes into account all the artificial distractions, the trapdoors, the things that other people have failed with
• When they see a wall, a really good entrepreneur will figure out how to go under it, through it, go around it, make friends with it in a way that nobody else has figured out how to do. They just don't stop. There are no excuses
• Alfred Lin
• We want to see if you have just scratched the surface or drilled down to the second or third layer. For example, on the market, you'll need to show why you are going to be able to win this industry. There's an industry structure already in place. Which part are you attacking? So many founders come across as if they are going to attack everything, but successful founders are laser focused on a small number of important initiatives. Your product or service can't win a large market without a specific way to go to market. Understand the wedge you need to use to get into the market.
• Most successful founders were challenging only one or two major assumptions in their industry. They're creating a solution because they think there are one or two assumptions that just make no sense. They've asked Why, Why, Why and gotten no good answer. They've gone super deep into the industry and why their solution is going to succeed
• One thing about storytelling is it shows clarity of thought. If you're not clear and the pitch is confusing, we wonder whether you are a clear thinker. A lot of business success is about having clear ideas and clear thoughts and clear strategy, and then executing the heck out of that clarity