The power law of venture capital dictates that only a small percentage, 2.5% of all venture-backed startups, will turn into unicorns: companies that redefine innovation and yield thousand-fold returns. Identifying what startups could turn into these elusive outliers is both the challenge and the privilege of being in venture capital.
Several years ago, I discovered a book that forced me into deep self reflection on my life’s journey and offered me a new framework for identifying a class of founders I believe are most likely to achieve the coveted 2.5% stratum: second mountain founders.
In his book "The Second Mountain," author David Brooks draws the analogy of life as a climbing a mountain. During our lifetime, most of us start and finish having only climbed one mountain. Reaching the ‘summit’ of this mountain involves the pursuit of success as defined by societal norms. It’s a version of success characterized by imitation and conformity. We seek achievement and status based on attending specific schools, achieving levels of financial prosperity, and other societal markers. Brooks calls this initial climb, the first mountain. And many of us reach the summit, only to discover it’s in fact, a false peak. Rather than self-actualization, we’re instead left experiencing profound disappointment.
Even among those who quickly summit a first mountain, or initially feel ‘success’ beyond their wildest dreams, the sense of fulfillment is fleeting. In his book, Brooks calls this the “arrival fallacy”. I have seen many previously successful founders struggle with success as they wrestle with ‘what’s next’ and the goldilocks paradox.
The Second Mountain
However, as we climb that first mountain, sometimes we catch a glimpse of a new peak on the horizon. We feel drawn to this new peak by a deep sense of purpose and meaning. Pursuit of this second mountain is a journey to serve something greater than oneself. It can take time to discover and embark on a next climb: sometimes we must really squint, change orientation, or proceed on faith hoping the peak that calls us is not a mirage. The most challenging mountains are not conquered by following well-trodden paths and following-suit, those on a second mountain climb are ready to face trials and tribulations. These founders are driven by causes and problems deeply personal, the pursuit of which they recognize as their life’s work. These founders are in touch with what Boyd Varty dubs “the wild self”. Second mountain founders are not defined by age, or previous accomplishments.
So what makes for a second mountain founder?
There are several patterns and traits I look for:
- Personal Journey → Purpose. Second mountain founders embark on a personal journey driven by a strong sense of purpose leading to a clear ‘why now?’. An internal compass and deep understanding of the problem orient and motivate them to act. They seek truth, not external validation.
- Perseverance → Growth Mindset. These founders embrace a growth mindset, viewing their entrepreneurial journey as a marathon, not a sprint. They are prepared to endure challenges and setbacks, finding meaning in the face of adversity. They have a history of resiliency leading to personal growth, unique insight and ambition. The founders are best defined by lines, not dots.
- Quiet Confidence & Inevitability. Being comfortable with obstacles and uncertainty, second mountain founders tend to have a quiet confidence. They will solve their problem with or without any one investor’s help. Many of the best founders I have backed projected a sense of inevitability in their quest from our first meeting.
- Earned Secrets: Second mountain founders are deeply immersed in the realm of their ideaspace. Through relentless dedication, often in the trenches, they have accumulated earned secrets—unique perspectives and insights that guide their problem-solving and help them recognize non-obvious market opportunities.
- Catalytic Influence & Gravitational Force: Second mountain founders have a natural ability to spark and lead movements. They operate with a communal mindset, prioritizing collective success over individual achievement. By fostering a sense of unity and purpose, they attract talented individuals and opportunities into their orbit, creating a gravitational force that propels their initiatives forward.
- Ikigai: Second mountain founders operate with Ikigai, a Japanese concept that encompasses what they love, what they are skilled at, what the world needs, and what they can be rewarded for. They align their entrepreneurial pursuits with quests they are uniquely capable of impacting.
While rare to find, the venture community would be well served in striving to identify, nurture, and invest in second mountain founders. These individuals are more than just mission-driven: they have a deep sense of obligation and see their entrepreneurial journey as a conduit for meaningful change.
If you find yourself resonating with the concepts above and feel driven by a deeper sense of purpose, you may be on the path of a second mountain founder. If so, please don’t hesitate to reach out.