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.