How To Think Like a VC Part IV: Stories From the Entrepreneurship Trenches

How to Think Like a VC · IV · Stories from the Trenches

Photo by Muhammad Raufan Yusup on Unsplash

The fourth part of our nine-part journey into the Silicon Valley VC mindset.

The vast majority of startup founders don’t get written about. Multi-billion dollar outcomes are the exception, not the rule. Pattern-matching just on the successful cases risks creating survivorship bias in your mental model of what a good entrepreneur looks like.

Further, many founders only achieve outlier success after middling outcomes or even failures: Sam Altman and Travis Kalanick are both examples of this. So how do you identify a diamond in the rough? How do you learn the traits of what makes an outstanding entrepreneur — one who, though they may not have been successful yet, nonetheless has the right stuff?

In this week’s chapter we pull back the curtain on the entrepreneurial journey and all of its character-building warts, dividing it into five parts:

The Creative Act. A deep dive into the process of birthing new products and the obsession, determination, and relentlessness it takes to will something into existence.
Seizing Opportunities. The startup journey is seldom linear and opportunities aren’t always obvious. These are stories of entrepreneurs who capitalized on unexpected openings.
Failure. A strong track record is no guarantee of success. Even with experienced leadership, an exceptional team, and millions of dollars of funding, sometimes things just don’t go your way.
Getting Back in the Ring. Is it failure, or just a setback? Stories of resilience and persistence in the face of adversity.
Entrepreneurship Outside Tech. While tech takes outsized mindshare, there are incredible, motivating, inspiring, and cautionary tales across industries — and decades.

It takes creativity, perseverance, resilience, mental agility, moxie, and good fortune to build a successful company. This chapter sheds light on all those elements so you can better recognize them in yourself and others.

The Creative Act

“If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea.”
— Antoine de Saint-Exupéry

You can’t think intelligently about entrepreneurs until you understand what creation actually feels like. The birth of a company is not a PowerPoint and a pitch deck. It is a period of radical uncertainty: no social proof, no external validation, no “market pull,” nothing but an idea and a human being unwilling to let go of it. This is the phase most outside observers never see, and it is precisely the phase that determines everything downstream.

If you want to develop founder judgment — the ability to identify exceptional entrepreneurs before the outcome exists — you must internalize what the Creative Act looks and feels like from the inside. These stories are not about polished CEOs presenting neat narratives; they are about the raw, obsessive act of dragging something into existence when it does not yet make rational sense to pursue it.

And this is exactly why VCs who only study billion-dollar post-hoc narratives get blindsided: by the time something is legible, the act that mattered is already over. The Creative Act is where the signal lives: the first-principles thinking, the ungovernable internal drive, the willingness to stare down risk and ambiguity without blinking.

Below are works that let you inhabit that state of mind directly — not by summarizing it, but by immersing you in it.

The Soul of a New Machine (Tracy Kidder, 1981) — A team of engineers kills itself building a computer most of the world will never notice — not because it made sense, but because they needed to see if they could do it. The book shows the cultural ingredients of early-stage creation: pride in craft, willingness to suffer for the build, and the belief that shipping matters even when the market hasn’t proved it yet.
Return to the Little Kingdom (Michael Moritz, 2009) — Early Apple before Apple was Apple — not the myth, the mess. You can watch Jobs and Wozniak’s creative compulsion collide with constraints, boredom, skepticism, and internal politics. The lesson: greatness doesn’t look inevitable at inception; it looks insubordinate, unreasonable, and emotionally over-weighted relative to “common sense.”
Indie Game: The Movie (2012) — This film shows you exactly what it is like to live inside an unfinished thing that might never work — and yet to continue anyway. IT captures the claustrophobic psychological cost of creation: isolation, identity-fusion with the product, and the inability to stop even when stopping would be rational. This is founder energy in its purest, least sanitized form.
Masters of Doom (David Kushner, 2003) — Two kids from nowhere, with no credentials and no permission, build software that rewires culture. Not because they “founded a startup,” but because they were already living in the future they wanted to see. This is what non-consensus inevitability feels like in real time: it looks fringe, obsessive, and unserious — right up until it defines the category.

Taken together, these works show that the defining trait of an exceptional founder is not foresight or strategy, but rather an intolerance for the world remaining as it is. Creation is not prediction; it is refusal. Understand that refusal, and your ability to evaluate entrepreneurs changes permanently.

Seizing Opportunities

“No plan of operations extends with any certainty beyond the first encounter with the main enemy forces.”
— Helmuth von Moltke the Elder

“Everybody has a plan until they get punched in the mouth”
— Mike Tyson

If you only study companies that hewed closely to their original course, you will misunderstand how many large outcomes actually take shape. The modal breakthrough is not a straight line from pitch deck to product-market fit: it is the discovery and exploitation of an unexpected opening. Founders rarely know in advance which stroke of the oar will catch the strongest current. What separates the exceptional ones is their alertness to those openings and their willingness to slam the wheel when they appear.

Unplanned success is not luck in the passive sense; it is a function of posture. The founders who capitalize on unexpected opportunity are the ones already in motion, already close to the problem, already immersed in the work. They are biased to act. When chance presents a side door they don’t ask for permission or validation: they walk through it and only later justify why it was obvious.

Most post-hoc narratives retrofit intentionality onto what was originally improvisation. Studying unplanned success is therefore a corrective: it restores the real texture of company-building — opportunistic, nonlinear, and contingent — and trains you to recognize the kind of mind that can metabolize an accident into an empire.

Pulling back the curtain on the unexpected twists and turns that can lead to success. The startup journey is rarely linear. Incredible opportunities are often hard to recognize.

Founders at Work (Jessica Livingstone, 2001) — The most important book in this section because it captures entrepreneurs in the present tense before they know the ending. You get to see how often major companies were the result of pivots, dismissals, rewrites, and opportunistic grabs, not fully-formed grand strategies. The founder psychology is visible in its raw state: scrappy, improvised, and hungry.
The Founders (Jimmy Soni, 2022) — The PayPal story is one of the most concentrated examples of unplanned success leading to unplanned dominance. The initial product concept — sending money between PDAs — was a flop, but it contained the kernel of the massive opportunity the team would seize. Over its rapid rise the company was beset by fraud threats, regulatory friction, a hostile acquisition environment, and internal factionalism. And precisely because of that turbulence, the cohort of founders that emerged from the company — the famous PayPal Mafia — share superior opportunity-recognition sense: LinkedIn, YouTube, SpaceX, Square, Affirm, etc. The lesson isn’t that PayPal won*,* it’s that the people who built it developed a spidey sense keenly attuned to identifying and exploiting emergent opportunities in rapidly changing environments. (If you want a supplement, I highly recommend The PayPal Wars by Eric Jackson.)
Chaos Monkeys (Antonio Garcia Marquez, 2016) — A brash, inside-the-room view of a founder who rides a chaotic sale, internal politics, and shifting agendas into unexpected leverage and relevance. It’s not a morality tale: it’s a realism tale. You see that success is often seized by people who are willing to be fast, aggressive, and unembarrassed in moments of ambiguity.

Studying unplanned success trains you to look for founders who are not merely executing a plan but are capable of re-aiming reality while moving. The biggest outcomes are rarely the ones that follow the original slide deck; they are the ones built by people who treat surprise as a resource rather than a threat.

Failure

Even with elite teams, ample capital, and real technical ambition, most startups die. This isn’t a pessimistic framing: it’s the statistical base rate. If you want to think like a VC, you cannot treat failure as an anomaly; you must treat it as the default state and study it with the same rigor that people usually reserve for success.

Failure is instructive not because it proves that something was impossible, but because it reveals where the boundary conditions really were. In retrospect, dead companies often look “obviously doomed,” but in real time they are frequently indistinguishable from the ones that might have become world-changing. Studying failure in detail teaches humility about prediction and sharpens your ability to detect fragility — structural, cultural, strategic — early.

It also corrects a subtle bias: once someone becomes successful, we tend to backfill competence into their past decisions. Reading primary-source accounts of failures disrupts that illusion. You see smart, respected, heavily funded people make decisions that felt justified in the moment and still lose. That is the reality founders build inside of, and the reality investors must bet against or with.

Startup: A Silicon Valley Adventure (Jerry Kaplan, 1996) — Go Corporation attempted to build the tablet decades before the hardware and market were ready. The book puts you inside the psychology of a serious team with real money and visionary intent and then shows how macro timing, suffocating incumbents, and ecosystem gaps can erase all of that. The key lesson: being early and being wrong are indistinguishable until after the fact.
General Magic: The Movie (2018) — A loaded founding roster (including the father of the iPod, Tony Fadell, two of the members of the original Apple Macintosh team, Andy Hertzfeld and Bill Atkinson), a prescient product vision, massive ambition — and still company death. Watching this collapse in real time is illuminating: market readiness, platform dependency, internal alignment, and external politics can kill even the most generative product cultures. This is not the failure of amateurs; this is what big failure looks like when done by the best talent of their era.

Studying failure builds the only kind of judgment that matters: the ability to separate effort and competence from inevitability. Most doomed companies do not look doomed from the inside. If you train your mind on why excellent teams still lose, you gain a truer map of what risk actually is, not the sanitized kind people describe after they win.

Resilience, Persistence, and Overcoming Adversity

Everyone fails. The differentiator is what happens after. In venture, this matters twice over: first, because most founders will hit a wall long before they hit traction; second, because many of the most successful entrepreneurs reached greatness only on their second or third attempt.

Resilience is not motivational fluff, but an operating advantage. The ability to metabolize setbacks without strategic collapse is often the only thing that keeps a founder alive long enough to catch the lucky break, the market shift, or the unexpected opening. From the outside, resilience is easy to romanticize; from the inside, it is humiliating, exhausting, and psychologically expensive.

What investors must learn is not merely that adversity occurs, but what real resilience looks like in practice instead of the theater of “grit” people perform on stage. The works below reveal the difference: not slogans about endurance but the lived reality of people who kept going when failure was the rational choice.

Steve Jobs and the NeXT Big Thing (Randall Stross, 1993) — This is a portrait of Jobs not as the mythic return hero but as someone living through what, at the time, looked like irrelevance. You watch an icon lose the platform that made him, wander in the wilderness, and still insist on building with conviction while the world stopped caring. It shows resilience before redemption — the part people usually delete from the narrative. Pairs well with Infinite Loop by Michael S Malone: published in 1999, right before the iMac/iPod resurgence, it treats Apple as a failure. A case study in how quickly narratives invert, and how resilience looks like a lost cause right up to the moment it doesn’t.
The Hard Thing About Hard Things (Ben Horowitz, 2014) — This isn’t a theory book: it’s a trench manual. Horowitz articulates the psychological violence of running a company through layoffs, existential threats, investor pressure, and unresolvable tradeoffs — and still getting up the next morning to do it again. It is a study in how leaders behave when there is no appealing option left.
The Messy Middle (Scott Belsky, 2018) — Captures the long, joyless middle years where companies are neither early-stage adrenaline nor late-stage triumph — just grinding, ambiguity, and attrition. Important because this is where many founders break: not at the start, not at the end, but in the extended period of non-obvious progress.
Jeen-yuhz: A Kanye Trilogy (2022) — Whatever you think of Kanye West, the footage is undeniable: he was relentless, unshaken self-belief that he was destined for greatness, even in the face of universal dismissal. The lesson is not about music — it’s about identity-fused conviction. Great founders often sound delusional until they are not. The emotional stance is the same. Hence the well-worn aphorism, “Founders run out of hope before they run out of money.”

Resilience is the hidden denominator of outliers. Most people can persevere when things look promising; only a few can keep going when the evidence says stop. If you want to think like a VC, you must learn to recognize not just competence but staying power — because almost every great company must survive a long stretch where victory is not yet legible.

Great Stories of Entrepreneurship

The value of broad entrepreneurial history is not comfort — it is contrast. When you widen the aperture beyond Silicon Valley, you see that the psychological and structural patterns of company-building recur everywhere: in retail, in food service, in logistics, in entertainment, in manufacturing. Different industries, same underlying species of person.

Reading outside tech also de-programs the mythology that innovation only lives in software or venture-backed contexts. You see founders who operate with no halo, no hype-cycle, no culture of glorification — just desire, ingenuity, endurance, and commercial cunning. That contrast sharpens your mental model of what “founder quality” actually is when you strip away the Valley’s cultural scaffolding.

The following works are not case studies in technology — they are case studies in human appetite applied to commerce. They show the same instincts — compulsion to build, indifference to permission, willingness to shoulder risk — expressed in completely different arenas.

Shoe Dog (Phil Knight, 2016). A memoir of decades of chaos, insolvency, supply dependence, and near-collapse before Nike looked inevitable. The key lesson is temporal: greatness feels fragile for a very long time. Knight shows that legendary outcomes often require tolerating discomfort for longer than outsiders believe is sane. The biggest omissions are the lack of detail into the process and consequences of signing Michael Jordan — the most pivotal moment in the company’s ascendency to the top echelon of consumer brands — and Nike’s decision to offshore its supply chain, both exploring its operational rationale and consequences for the company. It’s a wildly entertaining and inspiring read nonetheless.
Sam Walton: Made in America (Sam Walton, 1992) — Walton is a pattern-breaker hiding in plain sight: relentlessly curious, operationally compulsive, and maniacal about learning from competitors. No Silicon Valley aesthetics, no myth-making, just permanent dissatisfaction with the status quo and a systematic and relentless hunt for advantage. The autobiography provides a window into the work ethic and habits that have always propelled founders to greatness — even back in the analog world of the 1950s and 60s.
The Founder (2016) — A portrait of opportunism weaponized: Kroc is not the inventor, not the technologist, but the scaler. Kroc didn’t found McDonald’s, but he did see its potential and bring the drive and vision that turned it into a household name. The story shows that empire-building is often less about originality than about recognizing structure and pushing it harder than anyone else will. Useful for understanding that many giant outcomes are built on executional aggression, not pristine invention.
The Fish that Ate the Whale (Rich Cohen, 2012) — An extreme case study in entrepreneurial audacity, to say the least. Sam Zemurray, an immigrant banana trader with no pedigree or structural advantage, bent an entire commodity supply chain to his will, ultimately upending the dominant players, shaping US geopolitics, and toppling governments. A reminder, too, of the moral ambivalence that has always haunted the most driven entrepreneurs. What price is too high to pay for a specific vision of one person’s success — whether it’s you paying it, or the world around you?

For a supplement, on an ongoing basis the Founders podcast by David Senra regularly offers high-frequency immersions in entrepreneurial psychology across eras and categories, reinforcing how consistent the founder phenotype is across industries and centuries. And I’d be remiss not to also recommend Ron Chernow’s Titan — but I’ll stop there, as there’s a long list of additional entrepreneur or “great person” biographies that fit here (Caro’s The Power Broker, Nasaw’s Andrew Carnegie, etc.)

Looking beyond tech proves that “founder quality” is not a product of Silicon Valley but a recurrent human phenotype. When you strip away domains and decades, the same traits surface again: impatience with the default, high disagreeableness and tolerance for being misunderstood, and an abnormal willingness to absorb risk in pursuit of leverage.

If there is one through-line across creation, unplanned success, failure, resilience, and non-tech entrepreneurship, it is this: outlier founders are not defined by environment or plan, but by mindset. They move before certainty, persist after setbacks, exploit emergent opportunities, and refuse the role the world assigns them. Everything else — product, funding, timing, narrative — comes later. Entrepreneurship is an attitude and a way of seeing and moving through the world before it is anything else.

For a VC, this reframes the core question. The right question is not “Is this plan good?” or “Is this market large?” Those matter, but they are second-order. The first-order question is: “Is this the kind of person who will still be dangerous to underestimate in five years?” That is the bet you are actually making.

And for a founder, the implication is symmetrical: you are not being evaluated on the elegance of your narrative — you are being evaluated on whether you are the sort of person who turns adversity, randomness, and incomplete information into forward motion, and who seizes on the smallest advantage to create outsized outcomes.

With the texture of real entrepreneurial reality now in view, we can move to the next layer: not what founders are like, but how they operate once in the arena. In the next part, How to Operate, we’ll shift from psychology to execution: the systems, habits, decisions, and operating mechanics that enable a determined founder to build a high-performance company.

Have feedback? Think I’m missing something critical, or have a resource to recommend? Let me know!

Originally published on Medium.