I think the subtle answer is it depends on the goals of your investment. A B team with an A idea isn’t interesting. But a B team with an A product that already has product-market fit and customers in an important market in transition may be.
In the end, big market transitions + leading vendor trumps all.
Sometimes, an A team really is what matters. I mean, Slack started off in 2009 as Tiny Speck, a gaming company!
And when we look at the great unicorns, the CEOs are always amazing. The Travis Kalanicks, Elon Musks, Marc Benioffs, etc. are all A+++.
An incredibly tenacious, but merely “Very Good” team, that never ever quits, in a big emerging market can also do well. They do all the time. All of us who have been around for a while, know of founders who were Good But Not Amazing, But Tenacious. They hung around forever, in a strong market, never great, and kept iterating. And make it took 10 years. But down the road, they have a solid exit.
Maybe not like $60b+ Uber well. But a good exit.
A $50m, $100m exit if they are winner, up to a point, in an important space they hit with the right product-market fit.
And as a VC, these smaller exits dosn’t “move” the needle usually, unless it’s a small fund and you invest very early, at very low valuations. In which case actually, it can. This is one reason many VCs outside of the Bay Area are so rigid on valuations. They believe the average exit will be $50m. So to make 10x on that investment, they have to be very rigid on valuation structures.
So I think the answer is a B idea is OK, but really it often needs to be like a B+ or it’s a bridge too far. At least close enough that a tilt, a shift upmarket, a rapid evolution of the product, is enough.
Most of us just can’t turn a failed gaming company into Slack.