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Instead of a rubric of attributes like tenacity or intelligence, the focus is on identifying a founder's single, extreme strength that can be leveraged to win. This approach values outlier talent over a well-rounded but less exceptional report card.
Most founders hire senior talent by looking for a lack of weakness. A better approach is to first define the single most critical superpower the role requires. Then, search for a candidate who is a superstar at that one thing, even if they have deficiencies elsewhere.
Over-diligencing for well-rounded perfection is a mistake. The best companies rarely excel in every area initially. Instead, investors should identify the one "spike"—the single dimension where the company is 5-10x better than anyone else—as this is the true indicator of outlier potential, rather than looking for a company that is A+ across the board.
Like a gamer allocating "skill points," Brian Singerman focuses exclusively on his core strength—evaluating founders—while completely ignoring his weaknesses, like reading financials. This strategy of hyper-specialization, rather than aiming for well-roundedness, is how top performers create an insurmountable competitive edge.
a16z's investment philosophy is to assess founders on how world-class they are at their core strengths. Horowitz warns it's a mistake to pass on a uniquely talented founder due to fixable weaknesses (e.g., no go-to-market plan) and an equal mistake to back a less talented founder just because they lack obvious flaws.
To effectively spot founders with an extreme, outlier strength, an investor needs to have a similar "spiky" profile. The ability to recognize genuine, world-class expertise comes from having achieved it yourself in a domain—a "game recognizes game" phenomenon.
Brian Singerman's venture strategy was almost entirely focused on founder assessment, making up over 98% of his decision. He famously doesn't read financial reports or use spreadsheets, instead concentrating all his effort on one question: is this founder the best in the world at something novel?
Ben Horowitz states a common VC mistake is over-indexing on a startup's weaknesses. The better investment is a team that is unequivocally the best at a single, critical thing. Being "pretty good" at everything is a red flag, as greatness in one area is what drives extraordinary outcomes.
Rabois's investment formula requires a founder to be the absolute best he's ever met in at least one specific dimension—be it intelligence, tenacity, or strategy. He avoids investing in founders who are merely B+ across the board, betting instead on extreme, world-class exceptionalism.
Successful founders identify their single greatest strength and then strategically maneuver their company and market to make that strength the deciding factor for success. This requires radical self-honesty about their own weaknesses.
Horowitz instructs his team to focus on how exceptionally good a founder is at their core competency. He warns against two common errors: passing on a world-class individual due to fixable weaknesses, and investing in a founder with no glaring flaws but no world-class strengths.