When I was a kid, I got an invitation to a birthday party for one of my classmates. He was a quiet kid that mostly kept to himself (not unlike me), and definitely wasn’t super popular. None of the other kids brought the invitation home, so I ended up being the only one who came to the party.
But it didn’t matter. We played GI Joes all afternoon and his mom made us fresh bread. It was a great time for us both, and it’s a lesson I have carried with me my entire life, and especially into VC.
It’s not about how popular someone is or what school they went to—they can be an amazing friend (or startup founder).
This childhood memory captures something amazing about success in business and life: the people you choose to surround yourself with matter far more than pedigree or popularity. As the famous Jim Rohn quote goes, “You are the average of the five people you spend the most time with.” This wisdom isn’t just philosophical—it’s backed by hard data showing that the human element is often the determining factor between startup success and failure.
The Numbers Don’t Lie: Teams Make or Break Startups
The statistics paint a picture of just how critical people are to business success. Research shows that 90% of startups fail globally, with first-time founders having only an 18% success rate (DemandSage). Even more, 23% of startups fail specifically due to team issues—making it the third leading cause of failure, ahead of running out of cash or lacking product-market fit (Embroker).
Startups with co-founders have higher success rates than those with single founders, demonstrating that surrounding yourself with the right people isn’t just helpful—it’s essential. The data shows that two founders increase the odds of a startup’s success by 30% more investment, three times the customer growth rate, and a higher likelihood that the startup will not scale too fast (Embroker).
But it’s not just about having partners—it’s about having the right partners. Teams that include at least one founder from a “top school” outperformed other teams by approximately 220%, while teams that counted at least one founder with a background at Amazon, Apple, Facebook, Google, Microsoft, or Twitter demonstrated a 160% better performance than their counterparts (Flair.hr). However, this doesn’t mean you need an Ivy League degree to succeed.
Quality Over Credentials
While top universities continue to produce many funded founders—Stanford, Harvard, MIT, and UC Berkeley hanging on to the top four slots in recent rankings (Crunchbase)—the real lesson isn’t about credentials. It’s about the quality of thinking and character that these institutions happen to attract and develop.
Investments in companies featuring at least one female founder yielded a 63% higher return than those with all-male teams (Lendio). This statistic reveals something crucial: diversity of thought and perspective, not just academic pedigree, drives superior outcomes.
The most successful entrepreneurs understand that building the right team means looking beyond surface-level qualifications. Essential soft skills like “entrepreneurial passion” and a “shared strategic vision” are prerequisites for team success in ways that traditional credentials simply cannot capture (Flair.hr).
The Circle Effect in Action
Your success is deeply intertwined with the people in your orbit. This “circle effect” manifests in multiple ways throughout a startup’s journey. Investors who adopt the talent perspective and prioritize the foundation team above the startup’s initial products often recognize that a good team can overcome many challenges in the lead-up to product-market fit (Scientific Reports).
Founders who score high on openness and agreeableness are more likely to raise funding, while emotionally resilient founders fare better across all venture stages (Columbia Business School).
The data consistently shows that the people you choose as co-founders, early employees, advisors, and investors become the foundation upon which everything else is built. They influence your decision-making, your resilience, and your ability to seize opportunities.
Beyond the Stanford Yearbook
So, put down that Stanford yearbook and start looking for amazing people doing interesting things. The quiet kid at the birthday party might just have the vision, determination, and character to build the next big investment opportunity. The friend who shares fresh bread and genuine enthusiasm might be exactly the co-founder you need.
Success in startups—and in life—isn’t about collecting the most impressive names in your network. It’s about surrounding yourself with people who challenge you, support you, and share your commitment to building something meaningful.
The most valuable lesson from that childhood birthday party isn’t about being inclusive for its own sake—it’s about recognizing that extraordinary people often come in unexpected packages. The founder who will change the world might not have the shiniest resume, but they’ll have something far more valuable: the heart, mind, and character to turn vision into reality.
In a world where 90% of startups fail (DemandSage), your choice of people isn’t just important—it’s everything. Choose wisely, because you truly are the average of the five people closest to you.