Land of the “Super Founders“— A Data-Driven Approach to Uncover the Secrets of Billion Dollar Startups

I Spent 300 Hours Gathering Data On Billion-Dollar Startups and Here’s 100 Charts You Shouldn’t Miss

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Here are 50 things I learned:

The “Super Founders” of Yesterday Create the Billion Dollar Companies of Today

1) Two or Three Is The Most Common Number of Co-founders

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2) More than Half of the Founding CEOs Are Over 35 Years Old

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3) Founding CTOs/CSOs Have An Even Wider Age Distribution

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4) SaaS/Enterprise Founders Are Younger, Health/Pharma Founders Are Older, Consumer Founders Are Not Just Millennials

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5) 50% Have Over 10 Years of Work Experience

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6) Directly Relevant Industry Experience Does Not Matter; It Matters Even Less For CxOs

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7) Almost 60% Are Repeat Entrepreneurs

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8) The Repeat Entrepreneurs Founded and Led a Couple of Startups Previously

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9) Almost 70% of Repeat Entrepreneurs Had Previously Founded A Successful Company (Let’s Call Them “Super Founders”)

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10) Some of the Founding CEOs Had More Than One Successful Prior Exit

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11) Bachelors and MBAs Are The Most Common Degrees Among Founding CEOs

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12) Half of CxOs Went To Grad School (Mostly Technical)

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13) As Many Technical CEOs As Non-Technical CEOs

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14) The Founders Had Previously Worked In Tier 1 Companies

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15) Google, Oracle, and IBM Are the Biggest Billion Dollar Founder Producers

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16) Previous Work Experience in Other Startups (Not Founded By Themselves) Does Not Matter

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17) Stanford, Harvard, and MIT, But Also Some Lesser Expected Universities

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18) This Is For Fun. A lot of Johns, Robs, and Daves

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Obviously, these names constitute just 20% of all founders. 80% are other less repeated names.

Industry/Sector

19) Most Common Themes: Cloud, Data, Mobile, Marketplace

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20) Software Is Eating the World, But Not All of It

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21) Social, E-Commerce, Network, Database, Biotech, Automation Are The Largest Sub-Sectors

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22) Biotech Companies Go Public Fast, FinTech and Software Companies Stay Private For Longer

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23) Cancer, Ride-sharing, Lending, and Autonomous Vehicles Were The Buzzwords

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Business

24) 2000 And 2008 Crashes Did Have An Adverse Effect — Also 2017 Was An Exception

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25) Many Companies Did Not Have Much Engineering Complexity, And a Disproportionately High Number Were Deep Tech

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26) Similar Number of B2B and B2C Companies, Very Few Doing Both

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27) If You Can Raise the Money, High CapEx Companies Work Too!

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28) 2008–9 Was Peak of Enterprise, 2011–12 Was Peak Of Consumer

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29) Over 50% Were Competing With Multiple Incumbents At the Time of Founding

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30) Engineering and Network Effects Are The Most Defensible

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31) The Product Matters! Most Startups Had Very High Differentiation in Their Core Product Offering With Competitors

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32) The Market Was Already Large At The Time Of Founding

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33) In Over 65% of Cases, Their Aim Was to Get Market Share From Others, Not To Create A New Market

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34) It’s Hard to Crack The Secret To Timing! You Can Be First, Among the First, Or Last!

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35) You Need to Be A Pain Killer, But Vitamin Pills Work Too!

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36) Save Time, Save Money, Or Make Things Easier

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37) California is By Far Home To the Highest Number, Followed by New York and Massachusetts

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Funding

38) Almost 90% of These Companies Did Not Go Through Any Accelerator Program. Of the Rest, YCombinator Is №1

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39) Over 90% Are VC-Funded

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40) Tech Companies Have Mostly Raised ~$250M, Pharma/Health Companies Have Raised ~$400M

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41) 2009 and 2012 Seed Rounds Produced The Highest Number of Billion Dollar Companies

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42) The Valuations Follow The Power Law. Over 50% Between $1-$2Bn

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43) Tier-1 VCs See The Best Deals, Get The Highest Returns

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44) Ex-founders Make the Best Angel Investors

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45) Early Stage Investing Is Hard

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46) Late Stage Funds Get Into More Billion Dollar Companies

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47) They Raised Money Quickly, and Kept Raising Quickly

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48) They Were Large and Expensive Deals From The Very First Round

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49) Tech Unicorns Became a Unicorn Very Fast, In Some Cases In Just Two Years

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50) The Seed Round Has Grown From <$0.5M Into Multi-Million Dollar Rounds

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Conclusion

1- Yesterday’s “Super Founders” (at least one previous exit over $50M or $10M+ annual revenue) create billion dollar companies of today.

2- For founders, overall work experience matters, directly relevant industry experience matters much less.

3- These startups were disproportionately built in markets that were already huge and the large majority didn’t create a new demand.

4- Competition is good, or at least not an extinction risk; the super-majority of these startups competed with multiple large incumbents at the time of founding.

5- Product differentiation matters a lot; these companies had very high differentiation in their core product/offering versus what was out there.

Founder turned VC — Partner at Data Collective (DCVC)

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