While this has become a well-known cliché, why it’s true (or if it’s true at all) is rarely given.

The obvious reason is that ideas are simply unreliable. Markets are complex systems, and it is very difficult to predict what would happen in the medium and long term. Additionally, a successful startup not only has to predict the market but also disrupt it in some way, which is very unlikely at first. After all, markets are shaped the way they are by strong environmental and evolutionary forces. So, to disrupt them, you need to be in the right place at the right time.

Because of all of this, it is pride to think that the first version of your idea would influence the world just the way you think it is. When new ideas hit the market, they are subjected to creative destruction, and those that survive usually go through a serious iteration process before turning into self-sustaining and growing businesses.

Getting a startup from idea to exit is a very difficult and usually long process, which means that as a startup investor you don’t need someone to come up with the right idea, you rather, you need someone who can handle this process and reshape their idea as they get feedback from the market.

So put more simply, good investors invest in people rather than in ideas. Smart, knowledgeable, and driven founders are more likely to lead this process right, and flawed founders could easily waste even a good idea.

This notion is reinforced by the stories of legendary founders like Elon Musk and Steve Jobs, who seem to reliably achieve the impossible. The influence of these people in the tech industry has been so strong that many young founders try to emulate the successful ones, and many investors are looking for people who fit the mold of the charismatic and visionary leader.

While that’s not necessarily a bad thing, it can certainly backfire on us, as stories like Elizabeth Holmes or, to some extent, Adam Neumann’s WeWork show.

The truth is, there is no obvious formula for a successful startup founder – there are successful founders of all shapes and sizes. This should be pretty obvious from the two examples we’ve given above – Industry giants Steve Jobs and Elon Musk are brilliant in their own way, and it’s easy to see that both are built quite a bit. different.

This means that investing in people rather than ideas is easier said than done. What really constitutes a good startup founder? You can’t go wrong with vague terms like intelligent, motivated, knowledgeable, but as an investor, you will quickly find that most industry founders fit this description, even the failed ones.

A more cynical person might say that in reality, what investors consider a good startup founder is a startup founder that other investors love. After all, investors are herds, and the fear of missing out (and the desire to protect oneself) is a major driving force in the industry.

However, if you want to make up your own mind about a founder, you will have to rely less on the judgment of others. And after thinking deeply about the subject, you might argue that the requirements for a good startup founder relate more to the circumstances around the founder, rather than the character of the person, which brings us back to the beginning of this argument – after any, one of these important circumstances is a good idea.

In reality, as with all complex questions, there are no simple and easy answers. In complex systems, anything can be a big factor, which means that in order to make a value judgment you have to weigh all the information you have – the character of the founder and the quality of his idea included.

In addition, you have to accept that there is a high probability that you are wrong, which means that the amount (and variety) of the bets you make could be more important than their quality because the quality is so difficult to judge. above a certain basic threshold. .