The Crazy-Tenacity Matrix

One factor I hear investors talk about more than any other is the entrepreneur. Every investor wants to bet on someone they believe has what it takes to change the world. But what exactly is that "it" factor?

Here’s what Steve Jobs had to say:

“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules, and they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world are the ones who do.”

Let me pause here. There are plenty of entrepreneurs and business owners who are "crazy" in the sense that they’ve chosen to leave a comfortable path to start their own ventures. However, most of them are still "sane" enough to stay within society's established norms. They’re betting on hard work, operating in proven markets with established products, and playing a game that’s already been defined—believing they can outperform the competition. And I say all the power to them!

But Steve Jobs is referring to a different kind of crazy. 👇️ 

A smaller percentage of entrepreneurs—call it 1-3%—are what I’ve termed Frontier Founders. These individuals aim to reshape the world in their own vision, and they must gather the resources and talent to bring that vision into objective reality. They need to convince investors they can pull it off, even when the odds of success are slim. These are the “crazy” ones Steve Jobs was referring to, and they’re the ones I personally want to invest in because there is definitely some crazy in me. As an investor in Frontier Founders, I’m not looking to turn $1 into $1.25, but into $100 or even $1,000. Peter Thiel expresses this idea in Zero to One, where he emphasizes that founders shouldn’t be looking to compete—but to invent and dominate.

But "Crazy” isn’t the only factor, and focusing solely on that metric would be a colossal error. There’s another equally important quality that Steve Jobs didn’t explicitly mention, though his actions demonstrated it. It’s called “Tenacity” — a combination of intelligence, ambition, and an unrelenting drive to win. So, what you're really looking for in a Frontier Founder is “healthy” mix of crazy and tenacity.

To help demonstrate this, I created the Crazy-Tenacity Matrix. Yes, the format might be familiar to some of you but this is a relevant (and serious) application to better understand what to look for in a Frontier Founder.

Here’s how it works:

As Steve Jobs mentioned, think of crazy as a form of genius. We all have some level of genius within us, but some people are more open than others in terms of thinking differently, challenging norms, and being willing to take bold, unconventional actions.

Tenacity, as mentioned earlier, is a mix of smarts, ambition, and relentless drive. As an investor, you want to bet on individuals who possess both crazy and tenacity.

First, it’s critical to understand that successful Frontier Founders need both traits to succeed. A crazy person without tenacity, or a tenacious person without crazy, lacks the balance necessary to navigate the Frontier. This is what I refer to as the No Investment Zone. Someone that is all crazy with no ambition to realize it in the marketplace is an academic (no judgment—I’m also a professor). Someone that is all tenacity but no crazy is like a bull in a china shop—they’ll break more than they build and burn people out in the process.

Thus, if you want to take big swings with your capital, you need to find and back founders in the Grit Zone. They have a unique idea, and you can sense their ambition to win in the market. Whether they succeed or not is another story, but over time, you hope they become increasingly tenacious and creative as they gain momentum and reach the Mastery Zone. In the Mastery Zone, founders transition into an elite level of creativity and execution, attracting top talent to their team and securing the resources needed to bring their vision to life. This is where founders drive their startups toward billion-dollar valuations—and where you, as an investor, can reap huge returns.

When a founder moves above the Crazy-Tenacious axis line, they officially enter “bad” crazy territory. Bad crazy occurs when a founder becomes delusional, letting their ego take over. Some signs of this include believing they’re entitled to bend the rules to achieve their vision (e.g., lying or cheating), or seeing themselves as a larger-than-life figure capable of anything. When this happens, they’ve officially entered the Chaos Zone—no longer grounded in reality and often losing their sense of right and wrong.

Most founders start in the Grit Zone and might brilliantly build something early, only to become the catalyst for its inevitable crash after crossing over into the Chaos Zone. Think Theranos, FTX, or WeWork. Ego can be a sneaky and destructive force—most don’t even realize when they’ve crossed into the Chaos Zone until it’s too late. There’s a reason books are written about these founders—they’re called tragedies.

The inverse is also true: a founder could start in the Chaos Zone and move below the Crazy-Tenacious axis line, dialing down the crazy and ramping up the tenacity. This is where Spirit begins to take hold once again, and like Ego, Spirit is also a mystery. But beware: backing founders in the Chaos Zone, hoping they’ll fall back below the Crazy-Tenacity axis line, is playing with fire—you’ll eventually get burned, have your heart broken, or both.

And, finally, there's the Celestial Zone — a rarefied space where an individual pushes both crazy and tenacity to their absolute limits, operating at the edge of genius without tipping into Chaos. This zone represents a delicate balance, where visionaries blend relentless drive and unconventional thinking in a way that fuels groundbreaking innovation while avoiding the collapse into hubris or self-destruction. It’s a space of extreme pressure, where decisions must be made with both high stakes and high uncertainty, often without precedent to guide them.

In my view, Elon Musk is one of the few who successfully operates in the Celestial Zone, constantly challenging conventional wisdom and pushing the boundaries of what’s possible. Yet, unlike many who falter, he has thus far managed to stay just on the right side of Chaos, leveraging his audacity and ambition to bend the world to his liking.

Many young entrepreneurs aspire to imitate Musk’s success, drawn by his boldness and success, but few understand the immense pressure required to maintain this equilibrium (I certainly don’t). It’s not just about thinking big or being willing to take risks—it’s about sustaining the discipline, resilience, and focus to keep those risks from spiraling out of control. In the Celestial Zone, the margin for error is razor-thin, and the consequences of losing balance can be catastrophic.

So, to you young founders out there, first get into the Grit Zone, commit to staying below the Crazy-Tenacity Axis Line, and give me a call 🤣 

Add your thoughts to the comment section and please forward this post to others in your network! Or send a personal note to me at [email protected].

This Week’s Diligence Report

For Premium Community Members, we finally released Fierce Foundry report this week (they’re currently raising on Wefunder) without having a chance to speak with the Founder but we’ll let you know if we do!

Have a great weekend, everyone!

Sincerely, -gerry