There are competing theories on what makes great founders, including: technical ability, vision, charisma, grit, and industry experience. Different venture capital funds have different priorities; some back strong founding team, others seek product differentiation; and others still evaluate the market size and opportunity.
To better understand successful founders, Chang Xu (Kauffman Fellow Class 23) and her team at Basis Set Ventures (BSV) commissioned a survey (which you can find here) that asked venture capitalists to evaluate their founders through 28 behavioral questions. The VCs were able to able 0 (strongly disagree) to 6 (strongly agree). In total, 60 founders were evaluated from their active investment portfolios.
Let’s evaluate the findings on what makes a successful founder. And why funding Stanford PhDs or college dropouts to find the next Google, Facebook, or Box is not the best strategy.
Being technical is overrated. However, having a complimentary team is key
The BSV dataset shows that being technical does not matter – 53% of technical founders are doing well, compared to 56% for non-technical founders).
That said, having a complementary cofounder is highly correlated with success. 68% of cofounders with complementary skills are doing well, compared to 38% of cofounders without complementary skills.
Moreover, we find that age does not matter. 50-60% of founders surveyed across the ages of 25 to 40+ were doing well. So we can get rid of technical skills and age as factors. Now let’s dig into more about what truly matters.
Tension, stubbornness, and humility make great founders
The data shows that being an effective operator day-to-day is highly correlated with success; 91% of founders that were rated for being great day-to-day had companies that are doing well.
The same is true for founders that quickly learn (97% doing well) and those that are results-driven (90% doing well). All things equal, you would prefer to back a founder who is great at managing the daily work and is able to learn and adapt quickly.
More interestingly, though, the data uncovers that the best founders are always being pulled in different directions. They are in tension. They are a great storyteller that is also scrappy. They have a high degree of confidence, but also listen diligently to customer feedback. They are stubborn on the long-term vision and flexible on the steps to get there.
Truth be told, these findings uncover that the best founders are self-aware and self-critical. A young technical founder can be successful, when they recruit a diverse team around them in terms of age, background, and skillset.
A seasoned industry expert can be successful, again, when paired with people who are willing to question assumptions, push the boundaries, and build innovative products.
The best founders, we find, are those who are smart and interested in surrounding themselves with people who will challenge their most fundamental assumptions.
There is no single universal founder archetype that works. And that’s a good thing. The world needs more founders who are self-aware and able to attract complementary talent.