Picking winners: people vs market

Update: Marc Andreessen comes to the same conclusion based on his personal expeience with 30-40 startups.

Picking winners in the venture business is always difficult. There is much debate as to whether one should bet on the people or the market. Prof Steve Kaplan of the University of Chicago, in his study titled “Back the Horse or the Jockey”, clearly comes down on the Horse side . His findings can be summarized as:

  • A bad management team does not necessarily kill a good idea, but a bad idea is rarely overcome by a good management team.
  • You can change teams much easier than you can change businesses and still win.

I am sure that a lot of people will disagree with him. In the end, you need both the right market and the right people to win. You can find his report here.

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