Five Charismatic Nerds

This year, gener8tor will invest up to $100K into each of 25 seed-stage startups through five equity-based accelerators. Our staff of more than 40 will work with 190 more pre-seed startups through our 38 gBETA pre-accelerators. 

A common question we get from entrepreneurs applying for our programs, from investors considering our portfolio, from sponsors supporting our programming and from partners mentoring our companies is: How do we recruit and select the more than 200 startups per year we'll work with from all over North America?

Put simply, the founding teams we choose for each program are the five nerdiest, most charismatic teams we could find.

You might think “nerd” and “charisma” are mutually exclusive terms. When I say “nerd,” I mean an expert who is driven by a highly-refined, natural curiosity.

Nerds are the best.

Less than a week remains before we close applications for our upcoming gener8tor Madison 2020 accelerator. This seems like a good time to describe what drives our selection decisions. 

Like any investor, we look at traditional metrics while vetting applications – traction, backgrounds of founding team, market, history, financials, COGS, CAC, LTV, user reviews, etc. 

But a Venn diagram we're acutely interested in as we evaluate startups reveals where nerd, charisma and founder overlap.

In November 2019, Y-Combinator co-founder Paul Graham published an excellent essay, “The Bus Ticket Theory of Genius.” He describes an often overlooked characteristic of people who go on to do great work: an obsessive interest in a particular topic:

To explain this point I need to burn my reputation with some group of people, and I'm going to choose bus ticket collectors. There are people who collect old bus tickets. Like many collectors, they have an obsessive interest in the minutiae of what they collect. They can keep track of distinctions between different types of bus tickets that would be hard for the rest of us to remember. Because we don't care enough. What's the point of spending so much time thinking about old bus tickets?

Which leads us to the second feature of this kind of obsession: there is no point. A bus ticket collector's love is disinterested. They're not doing it to impress us or to make themselves rich, but for its own sake.

When you look at the lives of people who've done great work, you see a consistent pattern. They often begin with a bus ticket collector's obsessive interest in something that would have seemed pointless to most of their contemporaries.

What’s important about this obsessive interest, Graham writes, is that it drives all kinds of behaviors that are generally positive for a founder to have. Resilience, dedication, unique domain knowledge, focus, attention to detail, the ability to recognize opportunities others can’t. It’s also accompanied by an expansive knowledge that's impossible to fake.

But for their ideas to truly prosper, that obsession needs to be coupled with an uncommon ability to communicate.

Our most successful founders have been very effective at activating networks to help their cause. They can communicate the most complex aspects of their obsessions simply and effectively to people who have little initial understanding. At the same time, they can turn around and debate the most nuanced aspects of what they’re building with experts in the field. 

They can look at themselves and their products critically from multiple perspectives. They are good at finding new ways to describe or shape value. They have a growth mindset and learn hard lessons from their failures rather than being deflated or destroyed by them. They can read a room and improvise because whatever questions they are asked, they have likely already asked them of themselves.

They have a specific type of charisma.

Because they can enthusiastically and clearly communicate to many types of people – not just to industry/technical wonks – they tend to be very good at motivating peers with supplementary skill sets to join their cause and gain access to networks they need to leverage in order reach their goals. 

Their communication skills, uncommon obsession and enthusiasm help them quickly generate more opportunities to succeed than many founders -- because more potential partners can understand what the hell they’re talking about. 

The greater number of opportunities a founder has to reach a new customer, or land a big distribution partnership, the greater their likelihood of success. This is how these founders tend to make their own luck.

Quick thought exercise to further demonstrate this point: 

Disregard industry, technology, customer base, etc. and focus on putting all the active startups in the country into two buckets. Bucket No. 1 = incrementally better than what came before it. Bucket No. 2 = fundamentally different from what came before it.

If you were to scroll through lists of active startups on Google, Crunchbase, Angel List, F6S, TechCrunch, PitchBook, etc. you’d likely find that you tossed significantly more startups into Bucket No. 1 than Bucket No. 2. 

You might also find that if you calculated the average market cap of startups in Bucket No. 2 vs. Bucket No. 1, the startups in Bucket No. 2 would be astoundingly more valuable. 

We really like Bucket 2. 

Most of the time, building something incrementally better is easier and more obvious than conceiving of some fundamentally different way of doing things. Bucket 2 offers the most valuable opportunities because introducing new products and solutions sometimes introduces entirely new markets the founders are then in a position to quickly dominate.

Most people don’t see Bucket 2 opportunities as worth their time because the market isn't intuitively obvious. It’s hard to see the value of a product that, as far as you can see, doesn’t yet have buyers. 

Because of this, a nerd pursuing this type of innovation will face an insurmountable challenge if they do not value and have communication skills -- or if they fail to develop them. To build a market they can sell into, they need to very quickly change a lot of people’s minds about the way they do things. This is challenging.

But the degree of difficulty is a big reason why the reward can be so high. 

So, we search for nerds who either have the charismatic ability to share their vision or have a strong desire to work with us to develop that communication skill. 

We cast a wide net and meet with as many potential founders as we possibly can in the weeks, months and days leading up to our application deadlines. 

Our team spreads out far and wide in search of the nerdiest, most charismatic (or potentially charismatic) founders in North America. We check every resource we can to find startups solving problems in interesting ways, then reach out to them to hop on a phone call or buy them coffee to see if the timing is right for them to apply. 

But as many as we’ll reach out to, there are many more we’d like to meet. 

If you think you’re one of them, I challenge you to shoot me a message ([email protected]), sign up for office hours, or fill out an application.

I love nothing better than to chat with charismatic nerds.