The Unicorn's DNA: 3 Patterns I Look for in Every Seed Investment
After years of working with startups and founders, I can tell you that the mythology of the industry—the gut-driven bets and prophetic genius—is just that: mythology. Successful seed investing isn't about predicting the future. It's about recognizing enduring patterns in the present.
When I evaluate a seed-stage startup, I’m not just looking at a pitch deck or a TAM slide. I’m looking for the DNA of an outlier. Through analyzing companies that grew from a simple idea into generational businesses, I’ve found that the most successful ones share a common genetic code. Here are the three core patterns I look for.
1. The Founder Archetype: An Unreasonable Obsession
At the seed stage, the investment is in the people. The product will change, but a world-class team can navigate any storm.
The Inevitable Founder: The most powerful founder-market fit comes from founders solving a problem they have personally experienced in an excruciating way. They arent just conducting market research; they are building a solution for themselves. This provides an unfair advantage in product intuition and resilience.
Stripe was born because the Collison brothers, both developers, were frustrated by how difficult it was to accept online payments.
Dropbox was conceived when Drew Houston forgot his USB drive on a bus trip.
Gusto was created by founders who had personally dealt with the nightmare of small business payroll.
The Alchemists Team: A solo founder is a risk. A team of strangers is a liability. The ideal is a team with a history of collaboration and a complementary blend of skills. Pre-existing trust is an incredible accelerant.
Airbnb fused world-class design from RISD classmates Brian Chesky and Joe Gebbia with the elite engineering of their former roommate, Nathan Blecharczyk.
Ginkgo Bioworks was formed by four MIT PhDs and their former professor, creating an unprecedented concentration of domain expertise.
Unreasonable Grit: Skill is table stakes. Outlier founders display a level of persistence that borders on irrational. They are relentlessly resourceful.
The Airbnb founders famously sold politically themed cereal boxes (Obama Os and Capn McCains) to raise a crucial $30,000 when investors rejected them.
The DoorDash team made deliveries themselves, learning every facet of their three-sided marketplace from the ground up.
2. The Idea Maze: A Contrarian Insight, Perfectly Timed
A great idea is nothing without the right timing and a unique insight. The biggest successes often look non-obvious or even niche at their inception.
Selling Shovels in a Gold Rush: Some of the most durable companies dont mine for gold; they sell the picks and shovels. In tech, this means building the fundamental infrastructure that powers new economies. These API-first platforms build powerful moats.
Stripe built the developer-friendly payment rails for the internet economy.
Plaid created the API layer connecting bank accounts to the entire fintech ecosystem.
Twilio turned complex telecommunications into a simple API for developers.
The Genius Pivot: Many iconic companies didnt start with their billion-dollar idea. They discovered it. This demonstrates a teams ability to learn and their intellectual honesty.
Slack famously emerged from the ashes of a failed video game. The internal chat tool they built to collaborate was the real prize.
Plaid initially tried to build consumer finance apps before realizing the core problem—and bigger opportunity—was the bank-linking infrastructure itself.
The Contrarian Bet: The largest returns come from non-consensus ideas that turn out to be right. This requires a unique belief about a technological or cultural shift that others dont see.
Airbnb launched into the 2008 financial crisis. The contrarian insight was that the recession created the very conditions they needed: hosts who needed cash and travelers who needed cheaper options.
Coinbase was founded when Bitcoin was an obscure, sub-$15 asset. The bet was that crypto was a real asset class, and they built the compliant on-ramp just before the world started looking for one.
3. Traction That Matters: Proof of Love
Early traction isn't about big numbers; it's about the quality of that traction. I look for irrefutable proof of user love.
Do Things That Dont Scale: The best companies often manufacture their initial momentum through intense, manual effort. This creates an unparalleled user experience and a core group of evangelists.
The Airbnb founders flew to New York to personally take professional photos of their hosts apartments, which immediately doubled bookings. This is the essence of creating 100 lovers before you seek 1,000 likes.
DoorDash started with a simple webpage of PDF menus and a Google Voice number. The founders made the first deliveries themselves.
Signal vs. Noise: Vanity metrics like total sign-ups are noise. The signal is in engagement, retention, and organic growth.
DoorDash's early pitch deck showed a 31% week-over-week growth rate. The absolute numbers were small, but the trajectory was a rocket ship.
Slack grew to over 500,000 daily active users in its first year, but the key was that the average user was active for over two hours a day—it was becoming indispensable.
The Viral Engine: The most sustainable growth is built into the product itself.
Dropboxs double-sided referral program—offering free storage to both the referrer and the new user—is the canonical example. It was perfectly aligned with the products value and created a self-perpetuating growth machine.
The next unicorn won't look exactly like the last one, but its DNA will be composed of these elements: an obsessed founder, a non-obvious idea whose time has come, and early proof of intense user love. For founders and investors alike, the job is not to be a fortune-teller, but a master of pattern recognition.