8 ms·

Analysis of unicorn startup founders

62 points by NoSEVDev 2y ago

hmmokidk 2y ago
Immigrant founders piece is interesting.
novagameco 2y ago
I appreciated the simplicity of this page
api 2y ago
Well I got the impostor syndrome thing down 100%. The top university factor is probably bias. I mean those schools are good and lots of good people come from them, but people from those schools are also more likely to get funding and other things like top tier employees and co-founders. That's going to create an outsized effect. Solo founders being older makes a lot of sense because to be successful as a solo founder you need a deeper skill set. You really need to be both technical and business/sales until you can get far enough to hire for the ones you are weaker on.
- zeroCalories 2y ago
  As someone from a mid tier state school, I've definitely found that people from elite schools work harder and produce more consistently good work. I think this is just anti-elitism cope.
  - sakjur 2y ago
    Do they work harder because they attended elite schools or did they attend elite schools because they worked harder? It’s all multipliers: a bias existing doesn’t mean that there isn’t also a factor that relates to the quality of the education. You’re more likely to attend a top university if you have good contacts, good finances, and good test scoring already — those are also probable significant factors to whether you’ll successfully start a company. Location also matters–and at least in Europe–VCs, engineering staff, and top-tier universities are often in the same area. None of that is dismissive of the schools’ qualities, but all those factors contribute to a bias that likely exaggerates the reader’s perception thereof.
    - zeroCalories 2y ago
      I don't disagree. I don't think the quality of education at Harvard is that different from other schools. But the quality of the people that get into these schools is way higher. Yes having a good upbringing makes you more likely to get into a good school, and as a result of your upbringing you're more disciplined, educated, and capable. The good have already been sorted from the bad before they've even been accepted into a a school.
- sakjur 2y ago
  > people from those schools are also more likely to get funding and other things like top tier employees and co-founders You are also likely to come from a family with stable finances, and might be able to afford not working on something tied to a direct income for a while.
  - borski 2y ago
    That may be true for Stanford and Harvard (I don’t know), but a wild majority of MIT students were there on financial aid. There was clearly a spectrum, but overwhelmingly the people at MIT did not seem to be well off.
flownoon2 2y ago
> Unlimited self-belief > History of feeling like an imposter How is this not contradictory?
- keiferski 2y ago
  "I can accomplish anything, but I won't be really worthy until I accomplish that next big thing." Rinse and repeat after every significant accomplishment.
- NayamAmarshe 2y ago
  Not a founder (yet) but I think it's relatable. I believe in myself that I can learn and achieve anything and be really good at it but when I see the seniors and people doing amazing things, I feel like I still have a long way to go and prove myself.
- Kalanos 2y ago
  I know that I can achieve anything I put my mind to. I feel like I can shoot lightning from my hands and I wield 2 lightsabres. However, as a primarily computational and business-oriented founder, I am trying to disrupt an industry that is dominated by scientific PhDs and institute spinouts. So even if my science is really novel, I'm still an outsider. I'd imagine that most founders are, to an extent, outsiders. You kind of have to be in order to develop a radically new thing. You have to be dissimilar to the status quo.
- ertgbnm 2y ago
  I don't see a contradiction. Self belief means you believe that you can accomplish what you set out to so are willing to bet on yourself and take risks. Feeling like an imposter is a motivational drive from the other end of the spectrum pushing you to continuously improve, holding yourself to a progressively higher standards, and never resting on your laurels.
  - borski 2y ago
    > Feeling like an imposter is a motivational drive from the other end of the spectrum pushing you to continuously improve, holding yourself to a progressively higher standards, and never resting on your laurels. And also making you depressed. It’s something real to look out for.
madamelic 2y ago
I would be very curious how this landscape changes when you don't consider VC funding as a necessary part of being a startup. I want to see how demographics change due to funding method. Another interesting point, and this is likely outside the scope you are wanting to do, is to do democraphics -> positive personal financial outcome (ie: people who successfully landed it). The past few years has shown it isn't difficult to start a 'startup' but still difficult to get a positive financial outcome for the people who founded it. I am not saying it will change or one group is better, just curious to see how the demographics hold or if all the "elite school" and "elite employer" ends up washing out where it becomes a coinflip. From my personal experience, people who went to "elite schools" and/or "elite employers" for an extended period aren't as good of a fit as people who are more 'underdog' background (more startup experience, no big school name or maybe even any college, etc). The Harvard / etc junk in my opinion is just Zuckerbergs/Gate overfitting by VCs (some are great, some are awful; essentially the same as any other school).
- keiferski 2y ago
  You'd probably have far more 40-50 somethings with a couple decades of experience in the industry their startup is in, who raise funding from co-workers/customers/family members/former employers and not institutions. At that point, your 20 years of experience in the field will outweigh any Ivy League degrees.
  - p1esk 2y ago
    Got data to support your claim?
    - keiferski 2y ago
      Among the top 0.1% of startups based on growth in their first five years, we find that the founders started their companies, on average, when they were 45 years old. Why might this be? Although there are many other factors that may explain the age advantage in entrepreneurship, we found that work experience plays a critical role. Relative to founders with no relevant experience, those with at least three years of prior work experience in the same narrow industry as their startup were 85% more likely to launch a highly successful startup. https://hbr.org/2018/07/research-the-average-age-of-a-successful-startup-founder-is-45 https://hbr.org/2018/07/research-the-average-age-of-a-succes...
Kalanos 2y ago
LOL "Psychological Factors: No plan B + Unlimited self-belief + History of feeling like an imposter"
- waysa 2y ago
  no sane person would start a company ;)
  - Joker_vD 2y ago
    As a joke goes, an entrepreneur is someone who is willing to work unlimited hours, with no clearly specified days off, for wildly unsure income figures, just so they don't have to work 8 hours 5 days a week with 28 paid vacation days and a stable pay check.
codingwagie 2y ago
1. Went to a top school Prestigious people are essentially handed capital. This drives most of the funding at the very early stage. A random founder with no connections or background needs an MVP product with real traction, and even then may raise on worse terms than a stanford/harvard grad. Raising venture funding can be thought of as a career path. Its not entrepreneurship. VC backed founders are more similar to hedge fund managers, they essentially get paid out a percentage of the capital they manage, assuming they manage it well. Raise 20M, you are bound to build a business with some revenue. The bet is that if they fund 20 Harvard grads, one of them might be like Gates. Even if the rest are duds. The math still kind of works out, they need an outlier.
- Kalanos 2y ago
  In biotech, this is an understatement. PhD's get to develop stuff for years using university funds while on a salary.
  - cqqxo4zV46cp 2y ago
    That feels like a slightly different can of worms, though.
  - BartjeD 2y ago
    And they work slavery hours,6 am to 1am
    - Kalanos 2y ago
      so? most founders are doing that without pay, without a budget, and (most importantly) without the credibility that comes from the org/lab/prof
      - BartjeD 2y ago
        It's apples and oranges. If a founder is successful they stand to earn billions in intellectual property value, not to mention the income from the product itself. PHD's earn practically no money even if they are succesful, apart from earning their degree. (Which has an abstract long-term monetary value) Seems very different to me. Apart from this, PHD's are employees, while founders are... well... bosses ;)
jaysonelliot 2y ago
Would have been interesting to see the following factors considered: • Presence of one or more mentors in their life • Exposure to successful adult role models in childhood • Financial ability to survive for extended period of time without income • Access to talent in their personal network
lettergram 2y ago
> No plan B That really hits home for me. I decided to start my current company (https://ipcopilot.ai https://ipcopilot.ai) when I had already been out of work 3 months, I had 4-6 months runway when I left my prior role. Meaning, I had 1-3 months left before I couldn't pay my mortgage when I incorporated my company. My responsibilities were high: 3 kids, wife due with another baby in 60 days, no source of income, and an estimated 45-60 days of runway. I passed up two mid-six figure jobs to start this business. My wife just said "better make this work", which fair enough haha. I was able to get 3 funding offers in 45 days & signed the paperwork for funding the day my 4th child was delivered (1 hr after). 48 days after my first VC meeting. Barely able to make my mortgage payment (my co-founder offered to lend me money). Obviously, didn't tell the VCs how up against the wall I was, but to say it was stressful is an understatement. That said, everything worked out well and business has been doing great. I had to make it work, there literally wasn't another choice. And if this sounds insane, it kind of was, but I saw the opportunity and took it. I'm also sure I would have figured it out if things didn't work out as well, but inexplicably I knew it would work out. Might also play into the: "Unlimited self-belief"... haha
- Edmond 2y ago
  Intriguing product, definitely something that is a major pain point for inventors. I do wonder however, I see a couple of the profiles listed show 500+ patents. Does this indicate that we are now in an era of full fledged "IP spam" or can you argue that inventors have in fact historically been under-rewarded by the difficulty of filing patents? Otherwise that is a lot of patents for someone who isn't building a spacecraft :)
  - lettergram 2y ago
    Haha to be fair, the team I ran was an applied research group that’d partner with teams within the organization. So every month we’d do designs & bring in ML expertise to a new project. Plus we maintained a ton of tools. This resulted in a lot of patents every month. Particularly, around generative AI, autoML, federated learning, etc years before it was popular. So it was a fairly open space, resulting in a high number of patents
didgetmaster 2y ago
The title definitely needs to say is "What unicorn startup founders have in common". There are plenty of 'successful' startup founders who never become household names and make billions of dollars. Bootstrapping a simple startup that eventually generates enough revenue to sustain the founders and perhaps a small team of ICs, is much more common than unicorn companies (they call them unicorns for a reason). Those companies are successful in my book.
TrackerFF 2y ago
Couldn't find much (didn't look through the source reports) on socioeconomic background - any interesting statistics there? There's a difference in "No plan B" if you have a family or network that you can fall back on, or if it means you'll end up as a homeless person.
system2 2y ago
Forgot to mention "lucky" part.
- Kalanos 2y ago
  Luck is a matter of time and networking. If you do the right stuff, eventually you will get lucky.
  - system2 2y ago
    I know people hustled and tried for decades didn't get lucky. Many rich people mention luck in their source of success as well.
- crackalamoo 2y ago
  In what way is luck important? One part of me says someone that identifies an urgent market need and executes on it doesn't need too much luck. On the other hand, maybe luck is important in terms of your network: meeting the right person at the right time. (This leads to "luck surface area" arguments.)
  - system2 2y ago
    Warren Buffett, Bill Gates, Elon Musk, Jeff Bezos, Charlie Munger, Ray Dalio, Mark Cubam, Ophray, Richard Branson, Steve Jobs, Jack Ma, Howard Schultz, Sheryl Sandberg. And many more mentioned Luck played a big role in their success. Please use google.com search for the name of the person + "interview" + "luck" and you will find the first results to be the relevant ones.
    - crackalamoo 2y ago
      Yes, I have seen many of the interviews from these extreme outliers. But I am curious to hear regular people's experiences with luck, and whether they have succeeded without much of it, even if they didn't become billionaires.

62 points by NoSEVDev 2y ago

hmmokidk 2y ago

Immigrant founders piece is interesting.

novagameco 2y ago

I appreciated the simplicity of this page

api 2y ago

Well I got the impostor syndrome thing down 100%. The top university factor is probably bias. I mean those schools are good and lots of good people come from them, but people from those schools are also more likely to get funding and other things like top tier employees and co-founders. That's going to create an outsized effect. Solo founders being older makes a lot of sense because to be successful as a solo founder you need a deeper skill set. You really need to be both technical and business/sales until you can get far enough to hire for the ones you are weaker on.

zeroCalories 2y ago
As someone from a mid tier state school, I've definitely found that people from elite schools work harder and produce more consistently good work. I think this is just anti-elitism cope.
- sakjur 2y ago
  Do they work harder because they attended elite schools or did they attend elite schools because they worked harder? It’s all multipliers: a bias existing doesn’t mean that there isn’t also a factor that relates to the quality of the education. You’re more likely to attend a top university if you have good contacts, good finances, and good test scoring already — those are also probable significant factors to whether you’ll successfully start a company. Location also matters–and at least in Europe–VCs, engineering staff, and top-tier universities are often in the same area. None of that is dismissive of the schools’ qualities, but all those factors contribute to a bias that likely exaggerates the reader’s perception thereof.
  - zeroCalories 2y ago
    I don't disagree. I don't think the quality of education at Harvard is that different from other schools. But the quality of the people that get into these schools is way higher. Yes having a good upbringing makes you more likely to get into a good school, and as a result of your upbringing you're more disciplined, educated, and capable. The good have already been sorted from the bad before they've even been accepted into a a school.
sakjur 2y ago
> people from those schools are also more likely to get funding and other things like top tier employees and co-founders You are also likely to come from a family with stable finances, and might be able to afford not working on something tied to a direct income for a while.
- borski 2y ago
  That may be true for Stanford and Harvard (I don’t know), but a wild majority of MIT students were there on financial aid. There was clearly a spectrum, but overwhelmingly the people at MIT did not seem to be well off.

flownoon2 2y ago

> Unlimited self-belief > History of feeling like an imposter How is this not contradictory?

keiferski 2y ago
"I can accomplish anything, but I won't be really worthy until I accomplish that next big thing." Rinse and repeat after every significant accomplishment.
NayamAmarshe 2y ago
Not a founder (yet) but I think it's relatable. I believe in myself that I can learn and achieve anything and be really good at it but when I see the seniors and people doing amazing things, I feel like I still have a long way to go and prove myself.
Kalanos 2y ago
I know that I can achieve anything I put my mind to. I feel like I can shoot lightning from my hands and I wield 2 lightsabres. However, as a primarily computational and business-oriented founder, I am trying to disrupt an industry that is dominated by scientific PhDs and institute spinouts. So even if my science is really novel, I'm still an outsider. I'd imagine that most founders are, to an extent, outsiders. You kind of have to be in order to develop a radically new thing. You have to be dissimilar to the status quo.
ertgbnm 2y ago
I don't see a contradiction. Self belief means you believe that you can accomplish what you set out to so are willing to bet on yourself and take risks. Feeling like an imposter is a motivational drive from the other end of the spectrum pushing you to continuously improve, holding yourself to a progressively higher standards, and never resting on your laurels.
- borski 2y ago
  > Feeling like an imposter is a motivational drive from the other end of the spectrum pushing you to continuously improve, holding yourself to a progressively higher standards, and never resting on your laurels. And also making you depressed. It’s something real to look out for.

madamelic 2y ago

I would be very curious how this landscape changes when you don't consider VC funding as a necessary part of being a startup. I want to see how demographics change due to funding method. Another interesting point, and this is likely outside the scope you are wanting to do, is to do democraphics -> positive personal financial outcome (ie: people who successfully landed it). The past few years has shown it isn't difficult to start a 'startup' but still difficult to get a positive financial outcome for the people who founded it. I am not saying it will change or one group is better, just curious to see how the demographics hold or if all the "elite school" and "elite employer" ends up washing out where it becomes a coinflip. From my personal experience, people who went to "elite schools" and/or "elite employers" for an extended period aren't as good of a fit as people who are more 'underdog' background (more startup experience, no big school name or maybe even any college, etc). The Harvard / etc junk in my opinion is just Zuckerbergs/Gate overfitting by VCs (some are great, some are awful; essentially the same as any other school).

keiferski 2y ago
You'd probably have far more 40-50 somethings with a couple decades of experience in the industry their startup is in, who raise funding from co-workers/customers/family members/former employers and not institutions. At that point, your 20 years of experience in the field will outweigh any Ivy League degrees.
- p1esk 2y ago
  Got data to support your claim?
  - keiferski 2y ago
    Among the top 0.1% of startups based on growth in their first five years, we find that the founders started their companies, on average, when they were 45 years old. Why might this be? Although there are many other factors that may explain the age advantage in entrepreneurship, we found that work experience plays a critical role. Relative to founders with no relevant experience, those with at least three years of prior work experience in the same narrow industry as their startup were 85% more likely to launch a highly successful startup. https://hbr.org/2018/07/research-the-average-age-of-a-successful-startup-founder-is-45 https://hbr.org/2018/07/research-the-average-age-of-a-succes...

Kalanos 2y ago

LOL "Psychological Factors: No plan B + Unlimited self-belief + History of feeling like an imposter"

waysa 2y ago
no sane person would start a company ;)
- Joker_vD 2y ago
  As a joke goes, an entrepreneur is someone who is willing to work unlimited hours, with no clearly specified days off, for wildly unsure income figures, just so they don't have to work 8 hours 5 days a week with 28 paid vacation days and a stable pay check.

codingwagie 2y ago

1. Went to a top school Prestigious people are essentially handed capital. This drives most of the funding at the very early stage. A random founder with no connections or background needs an MVP product with real traction, and even then may raise on worse terms than a stanford/harvard grad. Raising venture funding can be thought of as a career path. Its not entrepreneurship. VC backed founders are more similar to hedge fund managers, they essentially get paid out a percentage of the capital they manage, assuming they manage it well. Raise 20M, you are bound to build a business with some revenue. The bet is that if they fund 20 Harvard grads, one of them might be like Gates. Even if the rest are duds. The math still kind of works out, they need an outlier.

Kalanos 2y ago
In biotech, this is an understatement. PhD's get to develop stuff for years using university funds while on a salary.
- cqqxo4zV46cp 2y ago
  That feels like a slightly different can of worms, though.
- BartjeD 2y ago
  And they work slavery hours,6 am to 1am
  - Kalanos 2y ago
    so? most founders are doing that without pay, without a budget, and (most importantly) without the credibility that comes from the org/lab/prof
    - BartjeD 2y ago
      It's apples and oranges. If a founder is successful they stand to earn billions in intellectual property value, not to mention the income from the product itself. PHD's earn practically no money even if they are succesful, apart from earning their degree. (Which has an abstract long-term monetary value) Seems very different to me. Apart from this, PHD's are employees, while founders are... well... bosses ;)

jaysonelliot 2y ago

Would have been interesting to see the following factors considered: • Presence of one or more mentors in their life • Exposure to successful adult role models in childhood • Financial ability to survive for extended period of time without income • Access to talent in their personal network

lettergram 2y ago

> No plan B That really hits home for me. I decided to start my current company (https://ipcopilot.ai https://ipcopilot.ai) when I had already been out of work 3 months, I had 4-6 months runway when I left my prior role. Meaning, I had 1-3 months left before I couldn't pay my mortgage when I incorporated my company. My responsibilities were high: 3 kids, wife due with another baby in 60 days, no source of income, and an estimated 45-60 days of runway. I passed up two mid-six figure jobs to start this business. My wife just said "better make this work", which fair enough haha. I was able to get 3 funding offers in 45 days & signed the paperwork for funding the day my 4th child was delivered (1 hr after). 48 days after my first VC meeting. Barely able to make my mortgage payment (my co-founder offered to lend me money). Obviously, didn't tell the VCs how up against the wall I was, but to say it was stressful is an understatement. That said, everything worked out well and business has been doing great. I had to make it work, there literally wasn't another choice. And if this sounds insane, it kind of was, but I saw the opportunity and took it. I'm also sure I would have figured it out if things didn't work out as well, but inexplicably I knew it would work out. Might also play into the: "Unlimited self-belief"... haha

Edmond 2y ago
Intriguing product, definitely something that is a major pain point for inventors. I do wonder however, I see a couple of the profiles listed show 500+ patents. Does this indicate that we are now in an era of full fledged "IP spam" or can you argue that inventors have in fact historically been under-rewarded by the difficulty of filing patents? Otherwise that is a lot of patents for someone who isn't building a spacecraft :)
- lettergram 2y ago
  Haha to be fair, the team I ran was an applied research group that’d partner with teams within the organization. So every month we’d do designs & bring in ML expertise to a new project. Plus we maintained a ton of tools. This resulted in a lot of patents every month. Particularly, around generative AI, autoML, federated learning, etc years before it was popular. So it was a fairly open space, resulting in a high number of patents

didgetmaster 2y ago

The title definitely needs to say is "What unicorn startup founders have in common". There are plenty of 'successful' startup founders who never become household names and make billions of dollars. Bootstrapping a simple startup that eventually generates enough revenue to sustain the founders and perhaps a small team of ICs, is much more common than unicorn companies (they call them unicorns for a reason). Those companies are successful in my book.

TrackerFF 2y ago

Couldn't find much (didn't look through the source reports) on socioeconomic background - any interesting statistics there? There's a difference in "No plan B" if you have a family or network that you can fall back on, or if it means you'll end up as a homeless person.

system2 2y ago

Forgot to mention "lucky" part.

Kalanos 2y ago
Luck is a matter of time and networking. If you do the right stuff, eventually you will get lucky.
- system2 2y ago
  I know people hustled and tried for decades didn't get lucky. Many rich people mention luck in their source of success as well.
crackalamoo 2y ago
In what way is luck important? One part of me says someone that identifies an urgent market need and executes on it doesn't need too much luck. On the other hand, maybe luck is important in terms of your network: meeting the right person at the right time. (This leads to "luck surface area" arguments.)
- system2 2y ago
  Warren Buffett, Bill Gates, Elon Musk, Jeff Bezos, Charlie Munger, Ray Dalio, Mark Cubam, Ophray, Richard Branson, Steve Jobs, Jack Ma, Howard Schultz, Sheryl Sandberg. And many more mentioned Luck played a big role in their success. Please use google.com search for the name of the person + "interview" + "luck" and you will find the first results to be the relevant ones.
  - crackalamoo 2y ago
    Yes, I have seen many of the interviews from these extreme outliers. But I am curious to hear regular people's experiences with luck, and whether they have succeeded without much of it, even if they didn't become billionaires.