There is a small cadre of people who actually have what it takes to successfully build an NBT, and experienced investors are pretty good at recognizing them.
I really do question this. The "problem of induction"[1] comes into play when you start talking about pattern matching and learning from "experience". That is, there's no guarantee that the future will look like the past.
Before Zuckerberg was Zuckerberg, I wonder how many people would have said "Hey, I recognize in this kid the innate capacity to be an NBT"? Of course they got funded, but I believe most of it was after they already had demonstrable traction.
On that note, one of the things that makes fund-raising such a drag, is that so many angels (at least in this area) want to see "traction" before investing. Even though, typically, you would thing that angels are investing at such an early stage that nobody would really have traction yet. Maybe it's just that the angels here on the East Coast are more risk averse.
And also memory is very tricky. I imagine there are lots of people who met Zuckerberg thought he didn't have it took, but now believe they always thought we was going to succeed. That's why I suggest angel investors write down everything they thought about an encounter with someone immediately after the meeting. Why you think they'd succeed and fail? Then when you follow them in the future you can compare your notes to what happened and learn. Otherwise it's really easy for your brain to put together a completely unrealistic view of what happened in the past based on what's happened since.
I remember an article where someone said they were doing this in the Army, writing / saying "this guy has the potential to be great" or "this guy will wash out quickly", and discovering 20 years later that their predictions had no relationship to reality. (Can't find that article anymore though.)
In Facebook's amazing case, Zuck got $500K from Thiel almost immediately out of the gate, after a little traction and a bunch of backstabbing as to who at Harvard college controlled the company.
I totally agree. In not so many words, the author explained how implicit bias works. It's not so different from the processes that shape the incoming classes of prestigious universities.
Want to know why these people can be recognized by experienced investors? At least part of the reason is that they know who looks like an NBT builder to other experienced investors. I would assert that this makes a massive difference in a founder's ability to close rounds and continue executing.
There's tons of companies like Clinkle, where the founder literally and figuratively looked just like Zuckerberg. Looking the part doesn't guarantee success, but it often does guarantee a few huge rounds of funding, at very impressive valuations.
Clinkle got $25million before they even built a product, from the tsunami of money raining down all over Silicon Valley post-Facebook IPO. Very different from Facebook which actually had traction.
Well Sean Parker and Peter Thiel seem to have picked up on it in the very early days. Not to mention the fact that the two biggest/best VC funds co-investing for the first time, letting them take money off the table.
Every successful company will have a list of early investors. But not only is the list of those successful investors inconsistent (some startups were backed by Founders Fund, some by Sequoia, some by KLCB, some by Benchmark), the list of companies within the portfolio of a single investor (Founders Fund, to pick your example) is far from being 100% homeruns.
I recall seeing a comment by Paul Graham somewhere to the effect that Zuckerberg set off his "founder detector" very strongly. This was after Zuckerberg was successful, admittedly, but it at least gives some suggestion that someone skilled at recognizing founders would have seen his potential.
Unless you saw something else, he was making a joke about having his own biases, not that he could identify Zuckerberg due to keen founder detection instincts:
> And Graham knew that he had his own biases. “I can be tricked by anyone who looks like Mark Zuckerberg. There was a guy once who we funded who was terrible. I said: ‘How could he be bad? He looks like Zuckerberg!’ ”
It wasn't a comment on HN, but during an interview (video) he did with MZ on YC. I don't have a link, but that may help.
Zuckerburg was telling a story of how he built a "social" website to share notes for an art history class, except he didn't have any notes himself but got everyone to share theirs so he could pass his exam. This supposedly was an early experience that started him thinking about social websites and sharing online.
PG then commented how his internal alarm was going off saying "fund him. Fund him", and how even though it was too late he can't shut off his brains instinct to sniff out good founders.
It's a story of how PG loves people who are "naughty" and know how to combine technical chops with an "screw over everyone around me to get ahead" attitude. AirBnB is the quintessential YC story.
I really do question this. The "problem of induction"[1] comes into play when you start talking about pattern matching and learning from "experience". That is, there's no guarantee that the future will look like the past.
Before Zuckerberg was Zuckerberg, I wonder how many people would have said "Hey, I recognize in this kid the innate capacity to be an NBT"? Of course they got funded, but I believe most of it was after they already had demonstrable traction.
On that note, one of the things that makes fund-raising such a drag, is that so many angels (at least in this area) want to see "traction" before investing. Even though, typically, you would thing that angels are investing at such an early stage that nobody would really have traction yet. Maybe it's just that the angels here on the East Coast are more risk averse.
[1]: https://plato.stanford.edu/entries/induction-problem/