Food For Founders #55

Takeaways from the Center of Economic Studies on a Team’s Impact on Startup Success

I read this 30-page study and half a dozen pages of graphs to see if an idea is good enough to stand on its own, or is it all in the team who is executing it. 

If you want to read the paper for yourself, here is the link. I normally don’t get to far into these due to longer PDFs being really difficult to read (am I the only one whose eyes start crossing after 20 minutes??).

What really intrigued me about this piece is the fact that they were aiming to prove or disprove something that is core to KnowCap. Whether or not having access to expert operators can materially affect the outcome of a business idea.

Abstract takeaways

In reality, this piece is a study on whether the belief where VCs care more about the team than the actual ideas and product is actually true. Personally, I believe it is. I have seen what has happened when a really amazing team takes an okay idea and turns it into a rocket ship (I’ve also seen the reverse). 

When you are looking at spending a lot of time with a founding team, you have to analyze and weigh their ability (or perceived ability) to build a fairly large company. You have to know they can lead a team of hundreds or thousands, that they can whether regulatory and competitive storms when they inevitably begin blowing in their direction. 

At the end of the day, betting on the jockey and not the horse (as Gary Vaynerchuk would say) is the topic of discussion in this 30-page report. 

Findings

  1. "In this report they are not only including founders, they are including employees that worked within the business during the first year of business.”

This is an interesting take because it deals a little bit with vision-casting and recruiting prowess of the founders to build an amazing early team and not just survive off the talents of the founding/executive team. 

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