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Do personality traits predict success?
Considerable research — across educational psychology, organizational behavior, sociology, even military science — has established correlations between specific personality traits and success.
But unicorns are rarified successes, outliers on the graph, up and to the right. To get there, the blitz-scaling, fundraising, and the speed and breadth of adaption required is unique. The traits for generalized ‘success’ may or may not overlap with this exact type of success, given its extremity.
VCs have spent years trying to perceive and pinpoint these traits using pure intuition, i.e., “guess and check”. Most have only just started to approach this question empirically, using hard data.
Regardless of how scientifically (or not) they source and develop their list of personality traits, it has become increasingly en vogue for VCs to package them as a “founder assessment criteria.” Criteria can be codified in processes and communications. And that feels pretty scientific.
This formalization has at least two significant benefits: it attracts/selects for founders fitting that profile, and it broadcasts to LPs that the fund has an established methodology for founder assessment. Methodologies are good: they make a process repeatable, scalable, and create an impression of accountability.
The criteria itself, serving as both a screener and a differentiator, insinuates itself into the most valuable elements of a VC’s thesis.
The trouble is, most criteria are still just souped-up intuition or only feebly data-directed — pretty flimsy, and not at all accountable (they’re not easy to check or revise, anyway).
Nonetheless, founder personality criteria are definitely en vogue, and they run the gamut:
Ben Horowitz, a16z: “The best founders are ‘some combination’ of super-smart, super-energetic, and super-courageous.”
Sarah Guo, Conviction: “We are looking for authenticity and attributes — passion, focus, vision, urgency — rather than a specific pedigree.”
Outlander: Vision, Intelligence, Character, Execution = 38 point “Founder Framework”
Creandum: it’s a lot.
Fika Ventures:
As AI has further integrated into deal sourcing and screening, VCs have applied these criteria in their prompts to surface and evaluate deals. This way, the VC sees more of what they want to see, filtering out the rest.
But the universe of criteria measures is wider than most VCs think. LPs might as well know what else is out there because when VCs target one thing, it is to the exclusion of others.
The Successful Founder
The traits listed here are a tiny sample of the truly hundreds of (different!) targeted traits funds focalize as part of their processes.
Determination — Y COMBINATOR
Learning — BENCHMARK
Bill Gurley said, “The best entrepreneurs are learning machines.” Creandum suggests they show a constant curiosity in and outside their domain (1 of 6 Creandum investments become unicorns). Likewise, Ben Horowitz emphasizes independent thinking and unique insight, developed over time.
Passion — INDEX VENTURES
Index Ventures puts passion in their Top 3 traits of successful founders: “The early obstacles that a startup faces -- the spark to ignite the startup journey must come from the passion of the founders.” Creandum ranks it above industry knowledge. And many operators-turned-VCs rate this highly as well, having seen it as a motivating force during difficult times.
Humility — GREYLOCK
Reid Hoffman stresses the importance of humility, seen in crucial early stage decisions like hiring, where CEOs must be willing to cede authority and bring in executives better than themselves. Sequoia, too, looks for “intellectual humility”.
Leadership — SV ANGEL
At the top of Ron Conway’s list is leadership. “When you’re talking to me in the first minute [of the first meeting], I’m thinking — is this person a leader?”
Where is the nuance?
It’s great for founders to have each of these qualities, to be sure, but for something so central to the VC’s decisions, it’s surprising how little stress-testing or definition these criteria incorporate.
For instance, isn’t too much curiosity or learning counter-productive, and can’t too strong a determination become refusal to pivot and a forerunner of failure?
Many criteria for success are on a bell curve; how much is too much? Measuring these criteria is essential for their validity; otherwise, we’re back to intuition.
Next time we’ll talk about how VCs deal with traits that require more nuance and how the most sophisticated founder criteria in VC are developed.
See you in two weeks.