Most products can be built with mediocre talent. But no one actively goes after mediocre talent. And yes, startups are more sensitive to this, I really had to let go mediocre people because it affects everything. Throwing meat at the problem for long enough time really screws up the product. Even at a very large company that I worked for, innovation ground to halt after a decade of this thinking, because systems that started simple enough, got complex over time in part because of market and primarily because of mediocrity. Adding things became a nightmare, because we threw meat at problems for a long time.
Maybe what you say has worked for your situations, but it really never worked for me over my experience, and it just was a downward spiral over time every single time.
If workers are mediocre, management needs to be top notch to deliver great products.
If management is mediocre, workers need to be top notch to deliver great products.
The odds you'll land at a place that have both are vanishingly low. It also takes a lot of work, money and interest to turn a big ball of mud around and no one gets a prize for that, people get a prize for churning out features and bugfixes, so this is what you get, specially because most large scale rewrite projects are utter and complete failures.
Each can compensate for the other only to an extent. We don't need top notch, we need good. Most large scale projects may fail, but we ended up assembling good people for all the rewrites. Five of the six projects were successful (in production with objectively better metrics). One failed due to underestimating the operational complexity of a piece of technology.
Maybe what you say has worked for your situations, but it really never worked for me over my experience, and it just was a downward spiral over time every single time.