The 9 traits Sam Altman looks for to identify founders who can build a $10 billion company

It is difficult to hear an idea at the very early stage and say, yeah, this idea has what it takes to be a $10 billion company. However, I think you can, with practice, identify founders. And I'm going to talk about how that have a chance at creating one of these companies. Paul Buche, one of our partners, made a list of the four traits that he thought founders that go on to create giant companies have. And they are obsession focused, frugality and love. He said this sort of in passing in a meeting like two or three years ago. I've thought about it a lot since there's other obvious things that everyone screens for, but pay attention to these. Speaking of the obvious things that everyone screens for, intelligence is really important. You can give a founder an idea. The problem is they need to come up with new ideas for a company, basically like every week you have to come up with crazy new ideas. Big changes all the time. We tried an experiment once at YC. We funded 20 teams of strong founders that didn't have ideas but were otherwise really good. They all failed. And what we learned is that the good founders are the people that have ideas all the time. So there's an intelligence component to this, there's a creativity component to this, there is an ability to think independent thoughts component to this. But whatever you want to call this, this idea of this particular kind of intelligence that leads to seeing problems in different ways and thinking of ideas that don't yet exist but should, you gotta have that in a founder. Communication skills, I think, are one of the most important founder qualifications that people don't think about enough. So much of your job as a founder is about communication. Every time you hire someone, every time you go raise money, every time you try to sell the product, every time you try and set a direction for the company. A huge amount of a founder's job is being an evangelist for the company. If you don't have really strong communication skills or if you don't develop them quickly, you're at a big disadvantage. There are obviously famous exceptions to this, but if you think about it on the whole, the founders of the really super successful companies tend to be great communicators. Execution speed, there's a lot of ways to measure this and we talk about this a lot, the need to sort of relentlessly execute as a founder, this is incredibly correlated with success. So one way we test this during YC is between office hours, which we have every week or 10 days, how much progress do the founders make? How quickly do they take a new idea and try it and say, hey, I came back and I tried that. This didn't work, but this other thing did. In the process, I had these three new ideas. I tried those. Just this relentless cadence of execution is incredibly predictive of success. We had a joke once where there were all these founders who are incredible on paper. They never execute quickly, they always have great reasons for why they didn't, but they still never go on to be successful. And then there are these people who just like get an amazing amount of stuff done. The speed with which they can generate a hypothesis, test it and implement it is unbelievable. That's really correlated with huge success. The rate of improvement of the founder. If you look at a founder who comes to meet you for a seed round and compare that founder to Brian Chesky, you'll be disappointed 100% of the time. That is the wrong comparison. You will never write a check. However, just like startups, you look at the growth rate, you should look at the growth rate of the founder as well. One thing that we can often tell over the 10 weeks of YC is how fast a founder is improving. It's different than how fast the business is improving. Humans always underestimate exponential growth. We're not well evolved for that. And so if you notice a founder who is improving incredibly quickly over the couple of months, you get to know that founder pay a lot of attention. You won't get Brian Chesky in a first meeting, but you can find people who are on a trajectory to develop into a Brian Chesky and that is super valuable. This is one of those things where I have seen it maybe like 10 times in my career so far, where I just knew that this founder was going to develop into an incredible leader. And it's basically been every time I felt it, it's been right. I really do trust this rate of improvement metric. I think one thing you have to be increasingly aware of are the wrong motivations. Starting a startup is a very long term commitment. If it's going to work, it takes more than a decade. It's really hard. There are a lot of days where you just want to give up. And there are a lot of people now who start a startup because they think it is a way to get rich quickly. And unfortunately it's just not. So as start startups have become the new default career trajectory for ambitious people. There are a lot of people who are doing a startup as a resume item or as a way to get rich quickly. This does not work. The amount of pain that you have to suffer for a startup, you realize at some point, you know what, I can do pretty well in any series of other jobs with much less risk and much less negative effect on my life. You really do want to stay focused on the mission driven founders again. If we look at our own success and failures and our portfolio of yc, every time we thought a company was going to go really well and didn't the company, the founder did not have this deep sense of mission. So it's something we really look for as a primary motivation. And then another way I used to get tricked a lot is there were founders that I didn't think were that good, but they had stumbled on a nice business. You know, they had this metric that was growing pretty well or all of my other investor friends were investing. And so I got scared and did it anyway. But I think this focus on truly exceptional founders, like people that I'm like, wow, I want to go work for him or her is really important. I have never once made a lot of money backing a founder that I thought was only okay, but a business that was otherwise good.