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This whole “what matters is the founder” idea really discourages me. It’s such a VC perspective. The VC has a flock of people they pick from to invest in and if your traits doesn’t fit the necessary requirements you shouldn’t start a startup. And I’m sure it’s true too. It’s just that it feels like if you don’t have the grit etc necessary you’re just out of luck and out of this club and it’s not really something you can work on. (After all if it was something you could improve then it could be taught but PG et al seems to think - and I think they’re right - that it’s an innate thing.)

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This is probably my biggest topic of contemplation and experimentation.

The startup I co-founded was funded by YC the month after this essay was published. It was the same batch as Airbnb. We didn't tick the VC boxes. PG commented later that we were "so nervous" in the interview; he had no idea how much.

It was said that all the startups in our batch were chosen because we seemed particularly resilient. It's amazing how being told that by someone like PG will make it come true.

Our startup didn't make it as a "home run" success, and we found it hard to raise VC funding, partly, I think due to not ticking VC boxes. But the company still exists in a different form. It employs over 10 people and is doing really important work to help airlines recover from the effects of the pandemic. It could yet be a huge success, thanks to the resilience and determination of the people still there (I left about 7 years ago).

Thanks in large part to the YC experience and vote of confidence, I've been undertaking a very profound journey of self-discovery and growth, and have worked on several important and successful projects. I'm now exploring multiple opportunities to start or join new startups, some related to the work we were doing in our YC-funded startup, and others completely different.

I think the last few years has been a tough time to be the kind of founder who doesn't tick VC boxes; the whole startup world has been dominated by glitz and hype.

It feels like that's changed in the past week. It seems the latest hype era is over, and we're re-entering a period where resilience, resourcefulness and determination will be in strong demand.

Please don't be discouraged. If you really want to build something important and valuable, you'll find a way to do it, and you'll get the support and funding you need when you're ready. It may take a long time, but important work always takes a long time.

I hope you find the purpose and motivation you need to have a go. It really can be the most amazing, life-changing experience. Feel free to contact me (email in bio) if you want to ask or discuss anything.

Best wishes.

I'm a little skeptical of the thesis because the company you're referring to survived by becoming increasingly VC friendly. It got leadership with connections to investors and pivoted to VC-legible products. There's only one person still there from the beginning, who is, admittedly, resilient and determined, but would also tick the VC boxes because he's just generally a stud

This is mostly false, except perhaps for the suggestion of my co-founder being a stud.

The company survived by becoming commercially focused and profitable, which happened after we recruited a leader with experience/connections in the airline industry, not to investors. The products the company pivoted to were not more "VC-legible" than what we started out doing; they were just products that could generate enough short-term revenue to enable survival. The company hasn't raised funds from VCs; its funding has been from angels, airline/travel tech companies and family offices.

It has unquestionably taken a ton of resilience to get the company to where it was before the pandemic, then to survive the pandemic, and to find a way to thrive on the other side of it.

Looks like the site is Adioso, but I don't see a link to it on the Internet. A reddit post which you replied to says you shut it down for now [0], is there a link I can visit? Or are you talking about another startup that employs 10 people?

[0] https://old.reddit.com/r/travel/comments/owdpnj/it_seems_adi...

The original company rebranded when it pivoted to enterprise. I traded the Adioso brand/IP for my equity when I left, but have been working on other things, particularly since the pandemic arrived. A bit of LinkedIn sleuthing will lead you to the rebranded/active company, or you can email me if you want to know more.

Startups are a game of kings, courts and conquerers. Everything written by a player is propaganda, it was written with intention to further an interest. No one gives a fuck if a peasant can become Alexander the Great but they very much benefit from getting you to dream that you can, and your compliance.

I don't see how a VC benefits, they'd be throwing their own money at a peasant who might not be successful.

Most VC’s don’t fund peasants. Founders tend to be the children of lesser nobles, with a few social climbers thrown in to add spice.

Yes, hence why I was confused at the parent's line:

> but they very much benefit from getting you to dream that you can, and your compliance

I can't see how VCs benefit from selling a dream to peasants.

The employees need to come from somewhere, and selling the dream helps with that. It’s also good investor storytime for the LPs, and great PR for prospective customers.

Not to mention it boosts applications from the unconnected, from which you can find the most appealing diamonds in the rough - or, if you’re more underhanded, you can just pass their ideas on to someone in your network.

This is the model Ivy League schools have practiced for decades; most applicants who get marketing materials from Harvard have no chance of getting admitted, and Harvard knows this.

I grew up working class and found that VCs were more accessible than, in my experience, any other upper class institution I have seen.

When I was younger I had an easier time getting meetings with partners at decent VC funds (including YC) than interviews with Google, for example. And accordingly an easier time getting seed funding than a prestigious internship.

VCs would generally look at prototypes and listen to the story, if you made the initial case concisely and it made sense, whereas other institutions would just throw my resume away with no calls because it didn't match whatever filters. I just wouldn't even get to talk to hiring managers at decent companies.

I didn't raise a really meaningful amount of money, but it seems implausible that VCs/angel investors who were willing to give me five-six figures for pre-seed wouldn't have given me six-seven in the next round if traction was there.

They said they would, and if they wouldn't, they knew the company had a runway such that it would need to raise again, so giving me anything would have been irrational. If I was going to be discriminated against for being from a working class background/not going to a good enough school/being a technical cofounder who didn't study CS, it would probably be at the very beginning.

Willing to believe that this used to be the case, especially when YC was less famous and G was wildly elitist in its hiring practices (less so now). But I’ve seen very few venture funded startup founders, then or now, who lack either family wealth or an elite education.

In fact I’d say the diversity of founders seems worse than it was five years ago, back then it seemed like founders from underrepresented groups were becoming more common.

VCs do not market to peasants. When a VC emphasizes "team" - that is a specific euphemism for "not peasant". But if they said that outright they would be cancelled.

That's a pretty accurate way of putting it.

> This whole “what matters is the founder” idea really discourages me.

Yep that is one of those pesky traits...not getting discouraged from rejection.

I think everyone should at the least start their own business, even if just to become a better employee in the future through their failure and gaining perspective of how difficult starting and running one successfully is.

Before this turns into a rant about how soft the world has become and I share my unacceptable opinions, I will just say that if you allow fear of failure to keep you from making the attempt you fail by default.

> It’s such a VC perspective

Ideas don't execute themselves. Problems are everywhere and ideas are a dime a dozen. Reddit is full of armchair generals. Companies are ultimately run by people. They live and die by whether the people running the company can build a solution, sell a solution, recruit people to expand the solution, and keep the people they have come to depend upon. Everything else - even money - is secondary.

> Reddit is full of armchair generals

So is the local pub. Sometimes what they say is based on some inside information, a unique perspective, or otherwise makes a lot of sense. There can be actual value in those comments, even if the commenter themself doesn't recognise this or simply isn't in a favourable position to exploit it. Dismissing all that's said off-hand is rather wasteful :)

> This whole “what matters is the founder” idea really discourages me. It’s such a VC perspective. The VC has a flock of people they pick from to invest in and if your traits doesn’t fit the necessary requirements you shouldn’t start a startup.

In an uncharitable interpretation, this is tech/VC returning to the mean -- this is the "good ol' boys club" (the sex of the person in particular is not important) that generally people talk about, and it's how society works most of the time. VC is not charity, they are incentivized to filter, and they do. That does not necessarily mean it's the same discriminatory environment but that depends on the person doing the searching and their ethics/principles/choices.

That said, YC is just about the antithesis of the aforementioned phenomenon -- they were one of if not the first to significantly drop the barriers to accessing VC. They took their program abroad and lowered barriers to entry for smaller international economies abroad. They've upped the amount given to founders and are running hot trying to accommodate huge incoming batches. They make founder school and other resources available absolutely free. YC's made it a breeze to work at any of their companies and get on the hundreds/thousands of rocketships they launch every year, VISA difficulties aside (there was also some mention of them working on a VISA "fast track"-ish path or something).

> It’s just that it feels like if you don’t have the grit etc necessary you’re just out of luck and out of this club and it’s not really something you can work on. (After all if it was something you could improve then it could be taught but PG et al seems to think - and I think they’re right - that it’s an innate thing.)

This is an extremely reasonable thing to filter for -- judging startup ideas is hard/impossible, and with lots of reflection it seems that grit is one of the things that sets founders apart (clearly ideas don't, execution usually will but maybe sometimes doesn't, etc). It makes sense for all VCs to filter for these qualities.

Now where I do agree is that people who can game the system -- but maybe grit is hard to fake. At some point you end up just... acquiring grit, because the situation is hard.

Grit and perseverance can definitely be learned. What it takes to embed it in yourself and motivations may vary from person to person, but it can definitely be acquired most of the time, I think.

[EDIT] - forgot about free founder school and stuff on YT

I agree 100%,

I donate every year to charitable causes but VC is not charity.

This thread reminds me of my softer youthful years, I can still feel the despair while standing with my back against the wall at the school dance, wondering why and noting how unfair it was that I wasn't dancing with anyone...

Great points here especially about YC, and but I want to highlight one that you missed which I think is most impactful, which is the innovation of a SAFE.

Early stage fundraising before SAFEs became a norm sucked. You had to deal with awful convertible note terms if you wanted a note, or deal with highly dilutive priced rounds; either way, there was so much friction on both sides. With the SAFE, you had a highly standardized instrument that both parties understood and which was very founder friendly. If investors wanted special things beyond that, they need to specifically carve it out into a side letter which spells out the special things they want. Just a different conversation.

Beyond that, it's not just that the SAFE as an instrument revolutionized early stage funding, it's that YC made it the de facto norm. This, more than anything else YC has done IMO, has permanently changed the landscape for early stage founders. I'll always be thankful to YC for that.

Ahhh yes, you're totally right -- the invention and forcing forward simplification/normalization of the process of raising money and running a startup is huge.

Having grit is probably the single most important trait of a founder, and one of the few which could reasonably argued to be innate. Just about everything else is learned, often by doing, which is why you need grit -- the learning curve is long and steep. Grit is how you bootstrap your way to being good at the other parts of building a startup.

I think grit is obtained through adversity.

Hard times create strong people, Strong people create good times, Good times create weak people, Weak people create hard times.

What time is it?

It’s „weak people“?

Hard times create weak people. People aren't iron that gets tougher when forged in fire. People are bags of meat. People accumulate damage and damage creates scars. Scars are only "tough" in the sense that they are less easily damaged than the virgin tissue before. Otherwise, the function of the tissue is degraded in every other property.

Stress causes health issues. Particularly traumatic stress causes (wait for it) Post-Traumatic Stress Disorder. All else being equal, a person with ulcers and anxiety disorders and depression and PTSD is a less capable person than one without.

The body’s response to exercise argues the opposite of your first paragraph.

Sitting on your butt and punching keys at a startup for 60hrs a week is not anything like exercise.

Not everyone can start a successful business. When you start you have your idea and yourself, and as the saying goes ideas are cheap.

So I think that the founder is key, indeed, and whether VCs are involved is not relevant. But of course this means that VCs will judge the founder, not just the business plan.

I would only consider the lack of grit unfair if you have passion for achieving a specific goal and you cannot achieve it due to the lack of grit. Is that possible? If you deeply want to achieve something, don't you automatically have the grit to achieve it?

Lack of grit should be more a problem for people who see startups as a job where they are team-leads and they need some level of perseverance to overcome obstacles.

Still, why shouldn't grit be trainable? It's just that VC make money by selecting founders with grit. In a sense, they corner the market by investing into the best. Why should they destroy their moat by flooding the market with viable founders?

> why shouldn't grit be trainable?

Grit is not trainable in the sense that one can add it to a grade school curriculum and reliably graduate people with grit. Fundamentally, grit is formed by coming up against obstacles, failing, and getting back up again and perservering. No curriculum on the planet can standardize the experience of failure - even the Kobayashi Maru was beat by Kirk.

Kirk didn't beat the Kobayashi Maru.

"Cheating is fine because I'm the main character and I'll get away with it" is not a bad summation of "hustle culture", though.

Depends on your perspective.

If you think Kobayashi Maru is about measuring your ability to function under pressure, loss, and failure, then you're correct. Kirk's unwillingness to face failure made him fail.

If you think Kobayashi Maru is about how the captain is supposed to react in an unwinnable scenario, then you're wrong, and you're not just wrong, Kirk is the poster-boy for exactly the correct approach. Ultimately, there are no real rules in war - only who survives. Business is different, but not that different. The annals of history are awash with the red ink of failed companies who insisted on letting the perfect be the enemy of the good.

He kind of did beat it by sacrificing himself at the end of Star Trek vii.

You don't need a guarantee of failure. Let the students do several challenges at their skill level and they are bound to fail at some. That's where they can learn.

> Let the students do several challenges at their skill level

Define "their skill level". Particularly in large classrooms with mixed skill levels.

Coming up with such challenges is more difficult than it would seem.

Nah I think it is absolutely not innate. There are so many other factors at play into the success or failure of a founder beyond their innate characteristics.

"Grit" is another word for the ability to distinguish between surmountable and insurmountable obstacles. Otherwise we would have to believe that insurmountable obstacles don't exist. If you believe an obstacle is insurmountable, it is rational to give up.

Therefore, grit can only be identified (or distinguished from irrational belief) in retrospect.

Let’s be more blunt, VCs pattern match. If you don’t look like Zuckerberg, you’re much less likely to get funding.

https://www.holloway.com/g/venture-capital/sections/pattern-...

When they say "founder", they are talking about building BILLION+ dollar companies. They are talking about someone who is going to give up everything else in life if necessary to win at building a billion dollar company.

They are not talking about someone who is going to build a company with 5M in profit a year and live a balanced life. Almost by definition they are talking about an insane person.

Personally, I don't think it is a insult for someone to look at me and say. "That guy seems like he spends a lot of time with his family and traveling and staying healthy, he isn't good founder material since he is so busy with those other things"

> When they say "founder", they are talking about building BILLION+ dollar companies

Last time I checked the most successful companies in American corporate history are:

1) Standard Oil

2) IBM

3) Microsoft

All 3 of them managed outcompete any other company in their field and were only stopped by the U.S. Federal Government

None of them ever needed VC capital. VCs are like sirens, they are bankers in disguise.

Given all that you might as well do like the 3 aforementioned GOATs and just go to a banker if you need money.

There is nothing wrong with debt. When you have to add a liability to the balance sheet you might as well add a liability that looks and feels like a liability instead of falling for the sirens who promise to make that liability into an asset. It ain't.

Umm... that's because "VC" as an asset class has only existed for a few decades, and didn't come out of the fringes until around the dot-com bubble. So pointing at companies started decades earlier with massive first mover advantages as a call against VC is a bit silly.

Perhaps instead talk about the % of VC funded decacorns over the last 10-15 years?

> Umm... that's because "VC" as an asset class has only existed for a few decades, and didn't come out of the fringes until around the dot-com bubble

Rockefeller and Gates wouldn't have wanted VCs on the cap table anyways, even if they were around back then.

That's because they knew they had the means to repay the 27%something interest rate loan that a newborn Standard Oil or Microsoft commanded.

People resort to VCs because they don't have the entrepreneurial arrogance to believe that the thing that they'll build is gonna be a hit.

Actually given that any movement is a bottom-up movement...VCs exists solely because entrepreneurs have lost their entrepreneurial arrogance.

Oh come on, you don't know what Rockefeller or Gates would have done if VCs were in vogue at the time of founding their companies. It's entirely possible they would have taken VC money. The advantage of getting a huge boon of cash to grow the company may have seemed worth it for the reduction in risk.

Times have changed from when Rockefeller or Gates founded their companies. It's far riskier and harder today to build successful companies. Competition is fierce due to globalization. Increased standards means a longer road before people will pay you. The population has the same distribution of "entrepreneurial arrogance" by nature, but there's less viable options to exercise it.

Instead, people turn to VCs for a multitude of practical reasons:

  - Capital to get the idea off the ground
  - Networking
  - Guidance of experienced people

Someone who is absolutely sure their jump to conclusions mat company is going to be a hit isn't arrogant, they're just stupid. On the other hand, an arrogant but smart person with an idea on how to design a better wind turbine recognizes the practical problems that building wind turbines is expensive.

Interesting argument, just a minor comment/question here...are you aware of the history of the Silicon Valley come and modern VC? Would you say that your argument already accounts for that history?

Silicon Valley is the last 10ft effort at the end of a 5000 years long race made possible thanks to debt.

I also don't buy the hype of Silicon Valley , from a social standpoint it seems a place full of arseholes. Zeros and ones in the bank account, however many won't compensate having to live in such environemnt

Being one of the many "millionaires next door", that is what the American dream has always been about.

Gates chose to put a VC (Technology Venture Investors) on the cap table even when flush with cash.

He picked him, like he picked Ballmer. Not because of the cash but because he wanted that particular person on board and they were particularly adamant about joining in that particular fashion.

How are those the most successful companies in corporate history? By what metric? Apple took dilutive investment, as did Amazon, as did Google and famously Intel did also. Even the formation of general electric involved financing from jp morgan, who financed a lot of the early giants.

Apple is the most successful company in American, and well, human history

> After all if it was something you could improve then it could be taught but PG et al seems to think - and I think they’re right - that it’s an innate thing.

But who will do the teaching and how can anyone figure out who it can be taught to?

Allowing the innate trait to emerge naturally avoids needing to solve these difficult problems.

Don't let it discourage you, because it's motivation to discover what they're trying to key in on. For us and our investors it was whether we'd mortgage our houses (hypothetically) to keep the business afloat and see the vision through.

As it turned out, we started in Feb of 2020, with much of our sales pipeline (over 2mil) disappearing in a day and a half when things shut down. So we didn't mortgage our houses but we buckled in, reduced expenses, found alternative revenue streams and survived.

We are here today and executing on our original vision after going through all that. I did end up selling my house to fund my family while we navigated everything, and it was not easy.

Now our investors treat us well because we did that. If you asked me ahead of time if we had the grit to do that I would think almost certainly no. When you're in the thick of it (And especially if you PG'd something), it changes perspective.

For me, it was really a life lesson of don't raise money or take a chance unless you really believe in it and there's a fuzzy path to victory. Sales fixes everything, even if you have to temporarily pivot.

You have it in you, I promise.

What an awful criteria. Your investors aren’t mortgaging or selling their houses. They’re just giving you other people’s money. Unfortunately, in a bad economy investors will hold all the cards and will be able to pressure founders into questionable life decisions.

If you had a choice to invest in founders who had such clarity, commitment, and grit that “they’d mortgage their house” vs a choice to invest in founders who were “in it as long as things keep going well”, which would you pick?

Do they face the same constraints with their LPs?

Does CALPERS or the Texas Teachers Pension Fund require an Austin based VCs to mortgage their house?

Hardly.

Founders who have been around a long time know the game. Founders are disposable soldiers , VCs are Lieutenants and GPs/Asset Owners are Generals.

It's that simple. And it's okay. The BS part is when Lieutenants feel the need to conceal the truth or make motivational posts such as the OP .

The absolute worst is when a soldier manages to be decorated in battle...all the Lieutenants become absolute fangirls and ask him for autographs and pictures whereas they treat other soldiers like crap. Of course such behavior is in the hope to impress the Generals.

One that had a savvy to stay focused on the bottom line and the gut to say no to investors making vastly asymmetrical demands of risk, reward and personal security.

I do however wish the GP all the luck in the world.

The latter, because the former clearly doesn’t understand the game.

No, they gave us their own money as angel investors.

The criteria isn't awful if you rationalize what the goal is: don't lose the money without a good fight in a good strategy.

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