Paul Graham knows a few things about startups and founders. In 2005, the venture capitalist founded Y Combinator, a startup accelerator that helped Airbnb, Stripesand other tech companies to quit.
On Saturday, Graham wondered why some entrepreneurs succeed and others don’t.
“Someone asked me what is the most dependent on luck thing in startups. I answered: if you deserve it. Only a small fraction of people,” he Tweet.
When asked to describe in one word the key characteristic, he answered, “determined,” as it is “very common” for a person suitable for launching startups to “succeed only on the third or fourth attempt. ”
But, he added, it is not clear who has this quality. “If it was,” he said, “YC would have a much higher success rate.”
In a Twitter user asked, “Are you saying this is something you can’t change? Something you can’t do better?”
Graham ANSWERED, “If you’re good at it, you’ll be better at it. But you can’t get much better at fitting it. “
In the case of Airbnb, the determination of its founders impressed Graham more than their business idea. Brian Chesky, Joe Gebbia, and Nathan Blecharczyk launched the company in 2008 but were rejected by venture capitalists. Graham, too, is skeptical of the idea that people would invite strangers to stay in their home.
But then Graham saw the determination of the builders. Facing rejection from potential backers, now-CEO Chesky and his partners instead raised funds from their own customers. by selling them $40 cereal boxes. The team custom-designed and hand-glued the boxes to feature former presidential candidates Barack Obama and John McCain, offering them as a breakfast option to Airbnb customers, some of its first people who attended the Democratic and Republican national conventions. The boxes proved popular and sold unexpectedly well.
Like Chesky recalls at a recent Stanford Graduate School of Business event, Graham asked the founders about the boxes at the end of their interview, which turned out to be awkward. They replied, “This is how we financed the company because no other investors gave us money.”
Graham was suddenly impressed. “Well if you figure out how to get people to pay $40 for a $4 box of cereal, maybe, just maybe, you can convince strangers to live with each other,” he told them.
Y Combinator then invested in Airbnb, which now has a market cap of nearly $70 billion.