Say you're looking to invest in a particular niche and two entrepreneurs come to you with proposals to start a company in the space. Both appear clever and energetic, and both have well-thought-out plans to conquer the market. How would you decide between them?

This is a highly theoretical question for most of us, but partners at top startup accelerator Y Combinator face it all the time. Thanks to its track record of success, the accelerator is bombarded with promising entrepreneurs and great ideas. Its leadership has had to come up with smart ways to sift through this impressive pile, picking out the would-be founders who are most likely to succeed.

Former partner Harj Taggar recently shared one of the firm's secrets with Business Insider, and it's useful to anyone assessing a potential co-founder, thinking about making an investment, or even wondering about their own capacity to hack it as a startup founder.

What do you do on Saturdays?

Your first guess might be that the Y Combinator team looks for prestigious degrees or experience at top tech companies known to employ only whip-smart people. But actually that doesn't work so well, Taggar revealed to BI.

"Often, we'd fund people that had been promoted and risen up the ranks at really top-quality companies like Google. But they'd work at a startup and they couldn't handle the ambiguity. It wasn't a good fit for them," he said.

Instead, the surest sign of coming success was what a potential founder did in their spare time. People "who had an unusual background, an eclectic mix of things that they'd done, actually turned out to be really great at [entrepreneurship]," he explained.

This observation, said Taggar, led Y Combinator to start asking founders "what projects did they work on, and in particular when did they work on projects out of personal interest, because they thought that they would learn something or they were just curious about something." A question in this spirit now appears on the accelerator's application.

Your free-time self is your real self

Y Combinator's leadership aren't the only ones who have noticed the correlation between free-time passions and entrepreneurial success. Entrepreneur and Andreessen Horowitz investor Chris Dixon has famously insisted that "what the smartest people do on the weekend is what everyone else will do during the week in 10 years."

He observes, "Engineers vote with their time, and are mostly trying to invent interesting new things. Hobbies are what the smartest people spend their time on when they aren't constrained by near-term financial goals." That means how smart people spend their weekends is a great barometer for what tech trends are about to blow up. But it's also a great way to tell what people are really interested in -- what truly drives them.

Startups are so difficult it's close to impossible to succeed if you're not truly driven to pursue a particular business idea. Which is why VC Brad Feld is another famous startup veteran who insists that if you want to know if a founder (or even an employee) will succeed, ask what they do in their free time.

"What do you do on the weekends?" is a great interview question, he believes. "I've used it with founders of companies I'm looking at investing in, Techstars founders, and execs for early-stage companies. Basically, anyone when I'm trying to understand what they are thinking about long term," he says. "The variety of answers is fascinating, often deeply personal, and occasionally very confusing to me. But they are always enlightening."

Another reason hobbies predict success

Apart from the fact that your off-the-clock passions are a good gauge of what really motivates you, there is another reason passionately pursued hobbies are a good sign when it comes to entrepreneurial success. Hobbies, both seasoned founders and science insist, are a great way to let off steam, get some creativity-inducing distance from your day-to-day work, and build resilience.

Whether it's surfing, horseback riding, running, mountain climbing, or sailing, having a passion outside your career is actually one of the most sure-fire ways to increase your odds of success at work. That's apparently true for startup founders (see links above), but it's also true of just about anyone else.

So if you're wondering if someone has what it takes to cut it as an entrepreneur, don't just look at their resume. Ask what they do in their free time. If their eyes light up as they give an in-depth answer about an after-hours project, raise your expectations of their success accordingly.

The Extreme Hobbies of Famous Entrepreneurs
Published on: Oct 12, 2018