Steve Jobs presents an uncomfortable problem for today’s entrepreneurship ecosystem. And a landmark 2026 NBER/Stanford study makes that problem newly relevant.

Some of Silicon Valley’s leading venture capitalists passed on him. Later, the company he co-founded pushed him out. Jobs then built Pixar and NeXT.

He then returned to Apple to lead one of history’s greatest turnarounds – and become one of the greatest entrepreneurs of the last 100 years.

The lesson is not that VCs are bad at their jobs. They face an unavoidable problem: they must select a small number of ventures under extraordinary uncertainty.

But should entrepreneurship ecosystems be built around the same problem ? Selection is the investor’s job. But development should be the ecosystem’s job. Someone may ask: Isn’t that the incubator’s job – to select and train? That still starts with selection. If incubators select a small number of entrepreneurs based on ideas, pitches, pedigree or predicted potential, they may simply move the VC selection problem one step earlier – when uncertainty is even higher.

The alternative is fundamentally different: develop Founder-CEO capability broadly . Give many entrepreneurs – everyone who wants to do so – the opportunity to learn, test, generate evidence and demonstrate performance.

Then let performance reveal potential rather than asking experts to predict it.

Here’s why: VCs must select under uncertainty because they cannot finance everyone. But even successful VCs can be wrong on most of their investments and still earn extraordinary returns if they capture one of the rare home runs – about 15 annually, according to top VC Marc Andreessen . That may be a rational investment model.

Why should it be the model for developing entrepreneurs? Entrepreneurial potential cannot be reliably predicted from appearances, behavior, pitches, pedigree, or pitch decks.

Steve Jobs may be the best example of the danger of predicting entrepreneurial potential before entrepreneurs have had the opportunity to prove what they can become.

Before Jobs became one of the greatest entrepreneurs of the last 100 years, some of the world’s most sophisticated venture capitalists did not recognize his potential.

Tom Perkins, co-founder of Kleiner Perkins and one of Silicon Valley’s legendary venture capitalists, later acknowledged that he “ very foolishly didn’t even look at Steve and [Steve] Wozniak .” His fuller recollection was even more revealing: “We turned down Apple Computer. We didn’t – we didn’t even turn it down. We didn’t agree to meet with Jobs and Wozniak .”

Jobs was fortunate. He grew up in what became Silicon Valley. As a teenager, he contacted Hewlett-Packard co-founder Bill Hewlett, who gave him electronic parts and offered him a summer job. Jobs met Steve Wozniak, worked at Atari, and became immersed in an extraordinary emerging-technology ecosystem.

Even with those advantages, sophisticated investors did not recognize what Jobs could become, which is why he was rejected, relegated to a subordinate role at Apple, and eventually pushed out. By proving his capabilities, which was not evident from superficial criteria, he came back to Apple and made history.

If entrepreneurial potential were obvious, Steve Jobs would have been obvious.

The Hidden Cost of Trying to Pick Winners

Investors have to select. They cannot finance everyone. Some will be better at selection than others. They will have varied options, and even the best will make mistakes.

Jobs illustrates the false-negative problem: someone judges an entrepreneur’s potential using superficialities and gets it wrong. We know about Jobs because he survived those judgments and found additional opportunities to prove himself.

The cost for global ecosystems: What about the potential Steve Jobs growing up in Minneapolis, Miami, Mumbai, Lagos, Warsaw, or Buenos Aires without access to Hewlett, Wozniak, Silicon Valley networks and repeated opportunities? If ecosystems screen entrepreneurs out before they have developed and demonstrated their capabilities, we may never know what was lost.

Failed investments eventually appear in the statistics. Great companies that were never built do not.

How Good Are Professional Investors At Selecting?

A landmark 2026 NBER study by Blake Jackson and Stanford’s Ilya Strebulaev examined more than 100,000 professionals affiliated with U.S. venture capital firms. Among VCs with investments, fewer than 40% were ever credited with a successful investment. Just 5% generated 90% of investment profits. The researchers also found persistent differences in investor skill .

The implication is not that selection is impossible. Some VCs clearly appear to be much better at it than others. Or they may have better ventures to select from.

The more important question for entrepreneurship ecosystems is different: If successful selection is highly concentrated even among professionals whose business is selecting ventures, why should universities, incubators and economic-development organizations make superficial selection the foundation of entrepreneurial education and development ?

Evidence From Billion-Dollar Entrepreneurs

My research on billion-dollar Founder-CEOs points toward another model. Just 6% used early VC. Another 18% delayed VC until after taking off. The remaining 76% avoided VC. In other words, 94% did not depend on early VC selection to launch their growth . They did not let the top-down VC selection process keep them down.

Lesson: Reverse the Sequence

The lesson is not to avoid VC but develop Founder-CEO capability first so entrepreneurs can choose whether, when, how and from whom to obtain the resources their ventures need.

That reverses the conventional sequence.

Instead of selecting presumed winners, financing them and hoping they develop the necessary capabilities or replacing them, develop entrepreneurial capability broadly. Let entrepreneurs test, generate evidence and demonstrate performance. Then let the entrepreneur select the right resources.

Some may need VC. Some may benefit from angels, strategic partners, banks, development financing or other sources. Some may generate enough cash flow to need little outside financing at all – check out Michael Dell, Jon Oringer, and Gaston Taratuta.

That last outcome may not be ideal for a VC seeking investments. But it can be an excellent outcome for the entrepreneur – and for the university, community and economic ecosystem that benefits from successful companies, jobs, economic activity, banking relationships, future investments and, potentially, philanthropy.

The objective of an entrepreneurship ecosystem should not be to maximize the amount of VC raised. It should be to maximize the number and quality of successful entrepreneurs and growth ventures created.

The Billion-Dollar Question: If 94% of billion-dollar Founder-CEOs took off without depending on early VC, could VC ecosystems improve their results by developing Founder-CEO capability before capital?

Why Did Entrepreneurship Ecosystems Adopt The Investor’s Problem?

The mystery is not why VCs select. They have to. Their job is to invest scarce capital and earn returns.

The mystery is why business schools, incubators and economic-development organizations copied them.

Investors need a system for selecting a few potential winners. Entrepreneurial ecosystems need a system for developing many entrepreneurs and giving them the opportunity to prove what they can become.

Yet much of entrepreneurship development has adopted the visible machinery of the VC ecosystem: pitch competitions, Shark Tanks, angel capital and VC.

Business schools borrowed a model designed to select entrepreneurs when they needed a model designed to develop them.

And economic-development organizations around the world have often tried to replicate the visible capital infrastructure of Silicon Valley without first asking what developed the entrepreneurs who made that capital productive.

This suggests a different way to improve the VC ecosystem: put Founder-CEO capability before capital and let capital follow evidence.

A capability-based ecosystem does not need professors, economic developers, incubators, pitch judges or investors to predict the next Steve Jobs. Develop broadly. Let entrepreneurs prove themselves.

Let them learn to identify emerging trends, find strategic fit, sell without capital or credibility, bootstrap strategically, finance intelligently, takeoff with limited resources, build competitive advantage and lead through growth. There is an important difference.

The ecosystem does not select the entrepreneur’s ultimate financing path. The entrepreneur does. Financing serves the venture’s strategy instead of becoming the strategy. As entrepreneurs demonstrate performance, additional resources can flow toward those generating the strongest evidence. Those resources do not have to come from the organization that developed them. They do not even have to be VC:

  • For VCs, that can mean a stronger pipeline of proven entrepreneurs and ventures.
  • For banks and other financiers, it can mean more and stronger customers.
  • For economic developers, it can mean more growth companies and jobs.
  • For universities, it can mean successful alumni and future supporters.

The entire ecosystem can benefit even when the VC does not get the deal.

MY TAKE: Steve Jobs gave entrepreneurship ecosystems a valuable lesson: don’t try to predict what entrepreneurs can become. Give them the capability and opportunity to prove it.

The NBER/Stanford study makes that lesson even more relevant today.

Jobs was rejected by sophisticated investors and later pushed out of the company he co-founded. Fortunately, he had the talent and opportunities to keep proving himself.

How many potential Steve Jobs never get that chance?

The problem with VC ecosystems is not venture capital. It is the sequence.

Development should come before selection. Develop Founder-CEO capability broadly. Let entrepreneurs prove what they can become. Then let evidence and performance reveal where resources should flow – and let entrepreneurs choose the resources that fit their ventures and their goals.

Don’t predict entrepreneurial potential. Develop it and let performance reveal it.