How do so many talentless people end up getting funded and running startups?
I can't figure out why this happens. Thanks very much for all your responses! I truly appreciate it.
That's why startup founders are usually salesmen. And they might look talentless to you, because you judge them by their tech skill level. But they ARE talented in things like raising money. It's just that you don't value their skill set.
Even if they have good market timing they usually eventually stop listening to anyone competent in the skills the company requires and start jumping techs as quickly as possible to keep their hiring and excuse generating skills as priorities for the CEO.
I started working at a corporate (my first) about a year ago. To my endless un-surprise, the people at the top are entirely people who are good at getting top jobs at large companies. And nothing else. Darwin must chuckle daily.
Darwin only stated that the fittest will survive. He didn't define a fitness function for founders/employees at startups.
You seem to be projecting a fitness function of "what's best for the company to run efficiently" when the fitness function of the employee is something closer to "maintaining employment (somewhere) and/or getting promoted".
My comment was intended to get people to think more broadly about what the components of the fitness function could be.
I was also trying to point out that the fitness function for an employee doesn't exactly match the fitness function for the company. The delta is most likely what the OP was inquiring about.
> tons of dumb herd animals who are heavily rewarded by grass
Or they are evolved to take advantage of the low interest rate environment and VC funding model (lots of money thrown at rapid growth businesses in funding rounds).
Consider that to get hired at a small company, you might be subject to 8+ hours of interviews over multiple days, where you are expected to demonstrate some basic understanding of your craft. Frequently, the interview circuit for a small company will include some time with the CEO or other senior executive.
Contrast this with a VC funding a small company. The VC will likely not spend 8 hours evaluating the company, much less 8 hours talking with the company. If the VC is larger, they will likely not have its senior executives meet anyone from the startup. In all likelihood, a company that receives a few million of funding has only been evaluated for less than half of the time that same company spends evaluating each prospective hire. I would be surprised if it is common for VCs to even run on founders the basic checks companies commonly run on prospective hires (credit checks, drug screens, criminal background, etc.).
Basically, companies scrutinize potential employees more thoroughly than VCs do companies before funding them.
Hence, you're looking for quantity over quality. Ideally, you'd have both, but the talent pool is only so deep.
I was going to disagree with this, but instead I'll combine it with some of the other comments here.
I think you're right that the talent pool that they recognize is only so deep, and as some of the other commenters pointed out, the way talent is recognized is flawed. For example:
> The problem is 'due diligence' on a startup's prospects cannot be reasonably made and so investors end up making gut decisions ...
> ... chose any combination of name recognition, form fitting for preferred narrative of the day, social proof, in-group bias and proximity bias
> Same as lots of incompetent people are in senior positions, it's a complicated social construction, it's not just a skills ranking.
> 1. They're good salesman.
> 2. They convinced people/VCs who are also "talentless".
> It is about who you know, not what you know.
As most of us know, there is a lot of talent out there, but it's not pattern-matching with what the investors are looking for. There are other problems too of course, but that's one of them. Another might be that the talent doesn't have access to sufficient capital or connections to build up a business to the point that it's worthy of investor attention.
Speaking about myself, I still have reasonable confidence I'll end up in a good place, but it seems like it'll be a longer road than I had thought, and involve a path more like bootstrapping for 5-10 years.
Same as lots of incompetent people are in senior positions, it's a complicated social construction, it's not just a skills ranking.
Same to the other 5 or so early commenters who all have some good insights that all sort of align in the same direction, broadly speaking.
Starting a start-up is mostly about taking a leap into unknown and hustling together a team and a funding. Correlated with sales know-how rather than technical know-how. And sometimes, if they are smart enough, they recruit to fill their deficiencies and survive to profitability. Sometimes their ego get the best of them and they cant see past their own lies and crater into ground.
Nevertheless, you have to have ego. Due to supeority-complex or because you actually know what you're doing. Or something in-between.
The problem is 'due diligence' on a startup's prospects cannot be reasonably made and so investors end up making gut decisions, masked by performance rituals of due diligence, the role of which is ultimately to increase the investors confidence in what actually is a simple roll of dice, as well as providing plausible deniability for making this gamblers choice.
As for why the talentless get chosen - chose any combination of name recognition, form fitting for preferred narrative of the day, social proof, in-group bias and proximity bias
As well as height and physical looks
Hustlers get funded regardless of their background.
How?
I worked in a simple startup 6 years ago. They didn't do anything difficult and still got the money.
Experiencing this made me understand that I'm already further down they road and can also get money.
And that's were I am. Searching for money this year and being actually optimistic about it.
Not everyone is willing to be a one-person company in the beginning, risking their own time, money/wealth, effort/attention, opportunity costs, rough living in the early years, bankruptcy, etc for only a risk at funding. The downside risks include lost personal time and lost time with family, mental health costs, stress costs, etc.
I would argue it's less likely that they are "talentless" and more likely they are talented in sales, schmoozing, networking, showing a vision for the market/product. When you consider they also need to have some intersection with tech/business to get VC funding, the intersection of these skills means the pool of candidates is smaller.
1. They're good salesman.
2. They convinced people/VCs who are also "talentless".
Why do so many crypto scams get funded? Why do people buy into scam crypto projects believing that the project will succeed and make them rich?
Is it talentless-ness all the way to the top? ("turtles all the way down")
Maybe so? Talentless founders being funded by talentless investors, who are given money by talentless High Net Worth individuals or funds? I mean, clearly some people did earn their money by hard work and intelligence, so I wonder why their influence isn't felt in the market.
By the way, thanks for your answer.
More talent is certainly better but an ambtious founder who is not nicely familiar with trusting capitalists who are capable and willing to back their type of efforts, will have an extreme disadvantage compared to those who are.
Regardless of talent.
Especially when the ideal talent may be like a black swan anyway, and nobody knows when or if it may come up anytime soon or at all.
In the mean time there is a noticeable trend where the lesser talent prevails exclusively, and eventually that is the only preferred pattern recognized.
Talentlessness would be extreme as well as idealness for both founders and capitalists, but it does look like all have some work to do if they want to effectively leverage more overlooked opportunities.
>Is it talentless-ness all the way to the top?
Always has been in some cases. Now you're talking extreme.
When the funding is strong enough to overcome all obstacles, talent may not tend to be just second-fiddle, it can become expendable.
OTOH when all talent is lost, so many times then only extreme funding will enable continued operation. Also enough to overcome all obstacles, and it can be difficult for talent to return or have a path to leadership then.
A lot of technically smart people over analyze everything and don't take any decisions that are non deterministic.
You can also say many technically smart people are also heavily short sighted and misses the big picture.
That's why you need the Jobs. Steve Wozniak by himself would have not started any kind of company and not remotely a company like Apple.
So the ones who are courageous, takes the risk and have a big picture vision gets the money.
Also the reason why many technically smart people never gets laid.
Tons of technically very smart people are a great example of that. Are they technically smart? Yes. Do they overanalyze the shit out of everything and almost always come up with reasons why it won't work? Yup.
Every smartup CEO I've worked with has been delisionally optimistic and very charismatic. Their main skill is to be a true believer (at least externally) and brainwash everyone around them into their vision (investors and current as well as perspective employees).
It is about who you know, not what you know.
YC used to be a small prestigious clique, today not so much.
And then.. ignore quite a lot of it. That's their modus operandi.
Take Elon Musk for example. He’s not the smartest of individuals but his main skill is convincing people to give him money to fund his vision and then convincing smarter people to work for him to achieve the vision…that’s salesmanship, not intelligence.
Startups are high risk and mostly about selling a vision/delusion than having technical know-how. You might be the most technically skilled person alive, but if you can’t craft a story to sell to VCs, you won’t succeed.
How did Adam Neumann convince Masayoshi Son to hand him over $10 billion for a co-working space company (and squandered it) when many more interesting startups go unfunded? Charisma and charm…that’s the main skill in startup land, not intelligence and expertise.
After that it's mostly about risk taking, luck, perseverance and temperament.
Worked for a lot of startups, and observed millions of dollars being wasted in completely obvious ways, obvious psychological/character flaws, poor leadership in ways that are called out in standard books that the very same leaders have on their bookshelf but clearly haven't read.