Second-time founders (“Act II teams”) possess a unique advantage. They can solve the same core problem but with complete clarity from the start, knowing the edge cases and organizational structure required. This allows them to leverage modern technology while avoiding the mistakes of their first venture, as seen with the founders of Workday and Affirm.

Top entrepreneurs don't just build a product; they become historians of their domain. They study predecessors, understand market evolution, and learn from past attempts. This deep historical knowledge, seen in founders of Stripe and Airbnb, is a key differentiator and trait of the very best.

Don't start a company in a space you're indifferent to and ignorant of. Your founding idea must be anchored in either deep domain expertise ("what you know") or a genuine, intense passion for the problem ("what you care about"). Lacking both is playing on "extra hard mode."

A common trait among exceptional founders is a deep, almost academic, understanding of their industry's history. They learn from every past attempt, success, and failure. This historical context allows them to innovate with a unique perspective and avoid the pitfalls that doomed their predecessors, a sign of true commitment and expertise.

Founders who have experienced failure develop healthy skepticism, preventing them from acting on weak signals. They require an overwhelmingly high bar of evidence, like ten consecutive successful demos, before believing they've truly achieved product-market fit and are not deluding themselves.

When evaluating senior candidates, don't view a failed entrepreneurial venture as a negative. It often indicates valuable traits like risk-tolerance, scrappiness, and resilience. These leaders have learned hard lessons on someone else's dime, making them potentially more effective in a new organization.

While technical founders excel at finding an initial AI product wedge, domain-expert founders may be better positioned for long-term success. Their deep industry knowledge provides an intuitive roadmap for the company's "second act": expanding the product, aligning ecosystem incentives, and building defensibility beyond the initial tool.

While assessed during diligence, the true caliber of a founder—their passion, authenticity, and ability to "run through walls"—becomes starkly clear after the deal closes. This distinction is not subtle; the impact of a truly exceptional founder versus an average one is immediately evident in the business's trajectory.

To identify non-consensus ideas, analyze the founder's motivation. A founder with a deep, personal reason for starting their company is more likely on a unique path. Conversely, founders who "whiteboarded" their way to an idea are often chasing mimetic, competitive trends.