As early-stage investors, while we often talk about companies, we really invest in people, specifically those who are rewriting the narratives of how we live, work, and play. In these visionaries, we seek out analytical acumen, engineering aptitude, earned insight, grit, and that indescribable ability to sell a dream that does not quite yet exist to investors, employees, and consumers alike.
To put it lightly, we expect a lot of the entrepreneurs we invest in at the earliest stages of the journey. Yet while generation-defining founders are a rare breed, we as an industry constantly try to bucket them for easier screening and sorting. Ask your average investor at Blue Bottle (or Felix Roasting Co. for you New Yorkers…) and they’ll tell you the best founders are “Stanford CS grads,” “former Google PMs” — and the list goes on. But do average answers generally yield exceptional outcomes? Do these archetypal consumer founders actually hold the keys to outsized success? Skeptical to rely on heuristics ourselves, we decided to let the data tell the inside story.
Unveiling the Unicorn Makers: A Data-Driven Exploration
VCs have (rightfully) been reported to be “often wrong, never in doubt.” So, in hopes of better grounding our beliefs in reality we turned to data to gain a more nuanced understanding of what makes for a successful consumer founder. By analyzing the characteristics and backgrounds of founders at the helm of consumer unicorns, we aimed to uncover patterns that might challenge the conventional wisdom. To do this, we screened for US headquartered unicorns according to Pitchbook at the time of their last disclosed valuation. Believing that consumer company DNA is generally quite different from their B2B counterparts, we began our analysis by restricting our dataset to consumer applications, marketplaces, and prosumer platforms. Though far from comprehensive when it comes to the wacky, wonderful, and incredibly diverse spectrum of consumer companies, we felt like this list of 100+ startups was at least an acceptable starting point. While past performance is no crystal ball, the findings were illuminating, challenging long-held beliefs and rewriting the founding fables we've grown accustomed to.
The Dynamic Duo (or Trio): Cofounding Catalysts
While magazine covers often feature the visionary solo founder, our data revealed that most successful startups are a collaborative effort built by an average of 2.2 cofounders. Interestingly, our research revealed that not all cofounding tales began at the first chapter – quite a few of the cofounders in our analysis joined a year or more into the founding journey.
So, should you be considering a revision to your script? Not necessarily. While the majority of companies in our analysis indeed had 2 or more cofounders, we found the distribution to be notably skewed across consumer categories. Roughly 1 in 3 successful Marketplaces had a solo founder at the helm (think Larry Liu at Weee! and Aaron Easterly at Rover), while less than 1 in 5 Consumer Apps followed suit (shoutout to Whitney Wolfe Heard at Bumble as a great case study here). For us, this relative dispersion was one of many signals that a company’s profile can deeply influence the type of founders best positioned to seize the opportunity.
The Goldilocks Years: Experience That's "Just Right"
Are fresh-faced founders or seasoned veterans more likely to blaze new trails? Our findings suggest the sweet spot lies somewhere in between. These leaders know what greatness looks like because they’ve seen it before. They aren’t bright-eyed college dropouts but somewhat seasoned professionals instead with a few jobs under their belt. Our analysis revealed that the average successful consumer founder had 7-9 years of experience, with Prosumer founders skewing slightly younger and Consumer App founders leaning a tad more experienced (Marketplace founders were squarely in the middle of this range).
These late twenties and early thirties founders were hungry and had something to prove, both financially and with respect to their impact on the world at large. Their professional networks and experience also afforded them recruiting leverage – a valuable advantage, particularly in the early days. While we did see outliers like Evan Spiegel at Snap and Ilan Twig at Navan (fka TripActions) finding success at the opposite ends of the experience spectrum, the Goldilocks zone seemed "just right" for most consumer founders setting out to build a category-defining platform.
Location, Location, Location – But Where?
In the era of remote work and digital nomads, one might expect founders to be untethered from geographical constraints. However, our data (and arguably, reality) paints a different picture. With consumer companies leaning so heavily into cultural shifts, we found that the majority of successful consumer company HQs remained rooted in the nation’s cultural hubs with California (54%) and New York (14%) emerging as the primary orbits of excellence.
A surprising up-and-comer? Austin, which commanded 6% market share and far outpaced the once hyped Miami, which accounted for a meager 1% of the companies we analyzed (it is worth noting that we did not look at crypto for the purposes of this exercise). While we remain open-minded in our search for greatness wherever it exists, this metropolitan concentration highlights the continuing importance of early insight into cultural shifts and access to top talent.
The Stanford Stereotype: Fact or Fiction?
As much as we love debunking stereotypes, some do hold water. Stanford emerged as the most represented school among consumer unicorn founders, particularly in the world of Consumer Apps, where roughly 1 in 3 companies had a cofounder from The Farm.
Beyond Stanford, the Ivy League maintained a strong presence, with 47% of companies boasting a cofounder from either Stanford or one of the Ivies, where Harvard showed the greatest representation among the remaining pack. Founders from these institutions also tended to skew younger than the broader group, likely benefiting from the high caliber talent in their backyards. While the sustainability of these trends remains uncertain amidst today’s rapidly evolving (cough, cough … tumultuous) academic landscape, the historical signal from our data was hard to ignore.
Big Tech Breeding Grounds or False Idols?
We often laud the Big Tech training programs as fertile breeding grounds for greatness. However, contrary to popular belief, prior Big Tech employment was not the strongest predictor of success for many consumer categories. While 4 in 10 Consumer Apps did have cofounders with Big Tech experience, fewer than 1 in 5 Prosumer or Marketplace platforms could claim the same. Of note, Google did stand out as an exception, boasting an outsized presence among consumer unicorns relative to its tech titan peers.
While the AI talent coming out of these hubs has the potential to meaningfully reorient this founder composition, these historical findings do serve as a valuable reminder that many of these fancy logos have historically offered as much noise as actual signal.
Act 2: Been There; Founded That
Beyond years of experience and exposure to greatness, we found that many successful endeavors came as an Act 2 (or even 3, 4, or 5) for their founders. Over half of the companies we analyzed had at least one former founder on the cofounding team, with the trend being most prevalent among the operationally complex Marketplace businesses, where close to 6 in 10 had repeat founders.
While these prior ventures may not have been labeled as “successful” by traditional standards, they offered invaluable insights that seemed to accelerate the trajectory of the founders’ subsequent journeys. Furthermore, their willingness to embark on the arduous 0 to 1 journey once again served as a powerful testament to their grit – one of the traits we here at Redpoint value the most.
Engineering Expertise: A Nice-to-Have, Not a Need-to-Have
Early-stage investors across sectors often harbor a strong bias towards “brilliant technologists,” generally defined by their engineering expertise. However, the consumer success stories of the past decade present quite a few exceptions to this “rule.” Surprisingly, less than 40% of the founding teams in our study had technical cofounders, with the proportion being notably lower for Marketplaces and Prosumer platforms than for Consumer Apps. While successful consumer companies were able to hire for these technical skills as they grew, engineering prowess was far from their Day 1 differentiator.
Looking ahead, as AI continues to expand and enhance the technical skill sets of builders worldwide, will we see an even greater rotation away from engineering-led organizations? Or will the pace of technical innovation cause the pendulum to swing back in the opposite direction? Only time will tell.
Relationship Risks and Rewards
Ask almost any seasoned investor and they’ll confess to a deep-seated fear of investing in husband-and-wife teams. I mean, when you envision the specter of a divorce potentially sinking an otherwise viable business, can you really blame them?
That said, our data uncovered counter-examples that pour water on this oft-cited incendiary argument – Eventbrite, Houzz, and Canva, to name a few. Close to 4% of the success stories in our study had “related” cofounders, defined as couples, siblings, and parent-child teams. While many wise investors will tell you that life is too short to back teams you don’t want to spend the next decade in the trenches with, our findings do illuminate the upside potential of these more complicated relationship dynamics.
While we’ve only scratched the surface in identifying the traits that define successful consumer founders (trust me, if I had their Enneagrams, you would be the first to know!), our findings indeed challenge the industry's narrow view of what professional potential looks like. It is our hope that by broadening the lens and looking beyond traditional markers of success, we can foster a more accurate understanding of where the next generation of category-defining consumer founders will emerge from and what their founding teams might look like.
If you’re as intrigued by the traits that will define the future consumer unicorns as we are, we’d love to hear from you. Find us on Twitter (@itsmeeraclark), TikTok (@redpoint), or subscribe to this Substack for more.
