The rate of improvement is often more important than the current absolute ability. If you meet someone three times in three months and notice detectable improvement each time, pay serious attention—particularly with younger founders, who can improve extremely quickly.

On identifying future greatness in founders

The main question Altman asks himself when meeting a founder is whether he'd work for that person. The second is whether he can imagine them taking over their industry.

Founder evaluation heuristics

Limit yourself to opportunities that could be $10 billion companies if they work. The power law is that powerful—the failures don't matter much, the small successes don't matter much, and the giant returns are where everything happens.

On portfolio construction and the power law

Most investors are obsessed with the current size of a market instead of how big it will be in ten years. That asymmetry is an opportunity you can exploit.

On market sizing

Altman has almost never made money investing in founders who don't respond quickly to important emails. People tend to be either slow movers or fast movers, and that seems hard to change.

On the predictive power of speed

The chronic investing mistake hardest to correct: bad founders sometimes have good ideas, and investing in them is a trap. The second biggest chronic mistake is chasing investments primarily because other investors like them.

Altman's own recurring errors

Founders have a sixth sense for who will treat them like a peer versus a boss. If they're good, they know you're failing an intelligence test if you act like their boss.

On winning competitive deals

The most important way to help founders is to get them to be more ambitious. Help them set goals they can just barely hit—momentum is self-reinforcing, and most people set goals just out of reach, which is demotivating.

On adding value post-investment