Facebook, Oyo, Greyorange, Apple, & Google. What do they have in common? They were all started by students. Success as a student founder is commonly attributed as an aberration. We think there's a pattern in this aberration. And we agree, 1 in 1000 students may find a successful entrepreneurial path, and hence it’s out of rationality to take that path. However, the representation of student teams in radical outcomes is also absurd. ~30% of the value created by Indian unicorns is driven by students. 3 out of 6 top tech companies by market were student companies. This is not an aberration. This is far more structural and historical.
Here’s how we reconcile this data. The probability of a student having the courage to do something different is low, maybe 5 in 1000. But when they get on that path of being different and building a company, their probability of success is much higher. The hall of fame is undeniable evidence for that.
Here’s our explanation of the data. Students have:
1. Unreal optimism to build a company that others call irrational. Pixxel is building satellites. Zepto challenged incumbents in grocery. Irrational optimism is the moat.
2. Ability to easily team up with friends from campus. Almost all student companies were built by a group of friends. Friends who were vulnerable, honest, accountable & equitable to each other. This reduced founder conflicts, search cost for the founding team, and increased cohesion. An experienced founder may spend months before deciding who to work with.
3. Move mountains with a small amount of money. That’s obvious, but really powerful. The risk-reward ratio is a contextual analysis and it is in the favour of students. The upside is great, and the downside is not that bad.
gC is essentially investing in these conditions. These conditions produce 100x change in human lives. And it has happened across history & geography.
VCs are financially designed to fund projects that can change the course of a large community dramatically. We need to return our money to LPs within 8-10 years. And because there’s inherent risk in all early companies, 10% returns is not enough. We need to fund companies that are radical enough to give 100x returns. We are looking for the next internet, the next social platform, or an all electric future.