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>Thus, in rough numbers, the chance that a funded company goes on to become a billion-dollar business is 0.005 percent to 0.016 percent. Rounding to any signifi

• Joeboy 11y ago
  Ok, but what's the probability that a 20 year old who believes they're as good as Mark Zuckerberg is correct?
• outworlder 11y ago
  It's not entirely random, but most of the forces involved are out of your control. So, thinking in terms of chance is helpful. The 20 year old Mark Zuckerberg could likely beat both of us combined in say, business. And would probably be successful no matter what. But would probably not be a billion dollar business, were circumstances even slightly different. Lots of companies and individuals fail all the time, despite their skills. You are unlikely to be a special snowflake. Even in the case that you are, it might be summer.
  • waterlesscloud 11y ago
    No. 20 year old Mark Zuckerberg would keep adjusting until he was whatever a unicorn needs to be in this instant. That's his nature. You would not. That's the difference.
    • Amezarak 11y ago
      So why isn't Zuckerberg continuing to create new billion dollar businesses? Why stop with Facebook?
      • vinceguidry 11y ago
        Maybe he likes Facebook? Not everybody is Larry / Sergei.
        • monksy 11y ago
          > Larry / Sergei What's so special about those people? Their success is probably due to their connections, and mostly luck in timing. I'm sure there are people that are better than Larry or Sergei and are much less successful.
          • MaxScheiber 11y ago
            The point the poster you responded to was making the point that Zuckerberg may be satisfied with just Facebook, whereas Larry and Sergey choose to pursue other ventures in addition to Google. The poster wasn't making a point about talent or luck. Even with that, Zuckerberg isn't 100% focusing on the Facebook core product; look at the Connectivity Lab, for example.
          • seiji 11y ago
            What's so special about those people? It's not all luck, a lot of it is who they are. They are mostly aspie nerds. They all went to private montessori "we just do whatever we want" schools. Those schools teach them they don't have to compromise, they don't have to be average, they don't have to work within the system. They just do whatever they want. If someone tries to stop you, you destroy them for standing in the way of you doing whatever you wanted to do. The same people generally lack overt, crippling hardships in their lives. They get to associate with other successful people from an early age and often have built-in family or community connections. Musk was studying supercapacitors obsessively as a kid, as a teenager, as a 20-something, and now he puts them in his cars. It's not all luck. We're at the first age of humanity where aspie hyper-focused weirdness can be funneled into taking over the world. We're just getting started.
      • a3voices 11y ago
        Most likely it's more effective to acquire smaller companies and grow them.
    • coldtea 11y ago
      That's mystical BS thinking, from too many self-help books. Most succeses had been a combination of being born at the right place and time, to the right parents, going to the right school and meeting the right people. Most of those are heavily determined by the past beyond one's control -- and others are semi-random. Then there's talent for business and determination -- but it's only survivorship bias that doesn't let us see that lots of people who didn't get to have FB also had equal talent for business and determination, or even more than Mark. Even a "perfect" Mark could have been hit by a bus before the success, or had a dehabilitating illness, etc -- and then your "magical unicorn" admiration would go to whoever else got to be succesful at the time, while Mark still be the same person (only unsuccesful).
      • waterlesscloud 11y ago
        I'm sure that line of thought makes you feel better, but it's pretty demonstrably not the case.
        • SpaghettiCat 11y ago
          Care to elaborate on how that is?
        • coldtea 11y ago
          Please, show me the science behind the "unicorn". https://en.wikipedia.org/wiki/Great_Man_theory https://en.wikipedia.org/wiki/Great_Man_theory And since it's all about the determined individual, I also guess women, blacks, latinos, LGBT et al are just lazy or not competent enough as Mark, Gates et co to not have such many billion dollar success stories -- heck even way less million dollar success stories per percentage of the population. Right?
        • seiji 11y ago
          We found the mark zuckerberg account everybody! He was born with his star in ascendence, destined to rule over the unruly private lives of every human alive, destined to surround himself with empty mansions so no others may peek upon his divine unicornhood. He is the first coming of social media ceo-frat-bro-jesus. praise be unto the billionaires, for they know not what they do; they only do what they are destined to accomplish regardless of their parents sending them to $60,000 per year teenage boarding schools. do not believe you can know them, for they are not fellow humans, they are Greater while we shall always remain Lesser to their unicorn brilliance. Bow, and praise be.
    • 001sky 11y ago
      This is delusional survivorship bias. Its like saying Churchill would have gone around starting world wars, to prove he could rise to the occasion. Had hitler not done it for him. etc.
      • deleted 11y ago
        [deleted]
      • waterlesscloud 11y ago
        You do realize, of course, that YC depends on the idea that certain people will adjust as necessary to become unicorns. They're fairly explicit about it. And their track record is pretty positive about the concept.
        • seiji 11y ago
          I'll give you a billion dollars if you stop saying "unicorn" like it actually means something.
          • waterlesscloud 11y ago
            Great. You've decided to focus on terminology. Congratulations. Am I wrong about YC's central operating principle? Are they not explicit about it? Does their track record prove them wrong?
            • 001sky 11y ago
              This has nothing to do with YC. The math just doesnt agree with your argument.
            • pswilson14 11y ago
              95% of YC-backed startups fail. A few go on to have decent success, and maybe 2 or 3 YC ventures actually went on to billion-dollar valuations (Dropbox and Airbnb). And that's considered a really good success rate. Since we're talking here about what you call 'unicorns' (I hate that word), then we're talking about the odds of building a billion-dollar company. YC is made up of hundreds of incredibly talented entrepreneurs, and even then, it's pretty evident that building a billion dollar company is as much about luck and circumstance as it is about talent and determination. EDIT: Correction - I was very wrong about YC stats, as it turns out [1]. My mistake. I stand by the original point, though. 8 billion-dollar companies out of ~940 YC companies demonstrate clearly that building a billion dollar company isn't easy, and takes a whole lot of luck. [1] http://blog.ycombinator.com/yc-stats http://blog.ycombinator.com/yc-stats
  • greghendershott 11y ago
    Yes. I'd say that every success is due to a combination of determination, skill, timing, privilege, and luck. (You could say that most of these are really variations on "luck".) Naturally, people tend to emphasize only some of these factors, depending on their own experiences, current agenda, and what kind of story they need or want to tell at the time. Each of these stories is the truth, but not the whole truth. [Is this fatalistic? I don't think so. Just because most factors aren't under your direct control, doesn't mean you can't be determined and keep trying. Also you could insert here some aphorism like, "it's the journey not the destination". If you're having any fun and even a modest amount of success, you're quite fortunate. You could do worse. Some billions of people probably are doing worse. You may as well be appreciative and thankful, while you keep pushing forward.]
    • jcoby 11y ago
      Your comment reminded me about Timothy Dexter (http://priceonomics.com/the-strange-life-of-lord-timothy-dexter/ http://priceonomics.com/the-strange-life-of-lord-timothy-dex...). This is an uneducated man who could barely write but managed to make a fortune through, luck, tenacity, delusions of grandeur, and a series of truly idiotic or brilliant decisions depending on how you look at it.
  • branchless 11y ago
    This whole thread is interesting. I'm not sure which part to reply to so I"ll just pop this here. I'm calling it. American dream's heart stopped beating. 04/09/2015. Dead.
    • sp332 11y ago
      I don't recall the American Dream involving a billion-dollar company. Affording a nice house and raising kids on a single income though - that's definitely dead.
      • JoeAltmaier 11y ago
        Hm. Maybe if you live in the right place? I have 80 acres in Iowa, a house free and clear, 2 in college and one working in Silicon Valley. All on one income.
        • bennyg 11y ago
          Exactly. Try anywhere not directly in the highest rent-inflated area in the US, or in any moderately rural suburb. Not that difficult to afford a house. Could get a decent 3 bedroom, 2.5 bath starter home where I'm at right now for about $750 a month in mortgage.
        • Retra 11y ago
          *for every American. The "American Dream" isn't that stuff for the ones who already have it. It's that for everybody.
          • refurb 11y ago
            If that's your definition of the "American Dream" it never existed. You think folks back in the 1920s could live in the most expensive cities in the US, own a home, send their kids to college, all on one income. I don't think so.
            • sp332 11y ago
  • dperfect 11y ago
    I like to think of business success in light of one of my favorite quotes: "Luck is what happens when preparation meets opportunity." - Seneca Scott Adams' book "How to Fail at Almost Everything and Still Win Big" also touches on this, suggesting that skill + hard work don't automatically result in success (there certainly are factors beyond our control), but it's a lottery that you can keep playing over and over with no real inherent cost other than time. Especially in software, you can test a lot of ideas with very little financial risk/investment, and persistence often allows preparation and opportunity to meet. There are no guarantees of course, except the guarantee of failure without trying. A lot also comes down to your definition of success. I'd say aim high, but expect very little. Expect the kind of return you'd get from a hypothetical full-spectrum new venture ETF. A handful of unicorn successes averaged with a huge tail of losses = returns that are probably really depressing. Be happy with anything above that.
    • marcoperaza 11y ago
      My favorite version of this aphorism is "fortune favors the bold".
      • machinshin_ 11y ago
        "Fortune favors the bold, the foolish, and ships named Enterprise"
  • taneq 11y ago
    Everyone who ever did anything that truly changed the world did so thinking it was obvious and that anyone in their place would have done the same.
• jaegerpicker 11y ago
  The part I think most people miss is that how "good" Zuckerberg is/was matters less than the resources he had access to. Luck/privilege account for SO much and that's true of all most all the billion $ startups.
  • merpnderp 11y ago
    What resources did he have access to besides being a Harvard student? That's a huge one, but it's not like he had access to (or needed) lots of resources to make The Facebook a success at Harvard. And after that it was all downhill.
    • jaegerpicker 11y ago
      A. being at Harvard, is a huge advantage in of itself. B. having a roommate with enough money to invest in it was a huge advantage. C. Being rich enough to attend a full time and not work a job to support him self. There are a ton more to keep going on.
      • gerpsh 11y ago
        D. He had parents who indulged his interest in programming early on and hired a software engineer to privately tutor him E. Happened to have a group of friends (including Adam D'Angelo, later Facebook employee) at his VERY expensive private high school that were also great programmers by that point, likely helping each other become better. I'm not saying the first versions of Facebook were ingenious feats of engineering, but Mark easily may have never learned to build things. Considering everything else mentioned in this thread, we can reasonably conclude that a lot of went very right for him at many points along the way.
      • deleted 11y ago
        [deleted]
    • mdorazio 11y ago
      He had the resource of being in the right place at the right time (i.e., market opportunity). Facebook did not exist at the time, and the social media market, which a college student could disrupt, wasn't saturated. What would he have started today? We can look at Airbnb or Uber as this decade's runaway success, but neither of those could have been started by a solo college student. Don't underestimate the power of luck in determining startup winners and losers.
• ebbv 11y ago
  > The 20 year-old version of Mark Zuckerberg beats the 20 year-old version of me every time. If that's your attitude, then yes he would. But Facebook being the success it is was not due some genius insight on his part that was destined for greatness, it was mostly luck. If MySpace hadn't driven itself into the ground, Facebook would have never taken off. If Google hadn't been so slow to realize the importance of social media, if Google+ hadn't been so bad, etc. There are any number of factors that are 100% outside of Mark Zuckerberg's ability to influence that could have stymied Facebook. A good idea, hard work, good decision making, etc. all are necessary, but they are not enough. People who are hugely successful, and people who think they will one day be that successful like to believe that it's merit that got them there. But it's not. There's just as many talented people who don't make it. The filter is largely luck.
• frgewut 11y ago
  Sounds like survivor-ship bias. We also have to account for all broke/dead/etc "Marks Zuckerbergs".
  • vinceguidry 11y ago
    Survivorship-bias assumes that the dead stay dead. But the ability to attract more capital is not necessarily affected by failure. Survivorship bias does not apply here. We can account for the broke / dead in the normal way.
    • gnaritas 11y ago
      > Survivorship bias does not apply here. Survivorship bias always applies and it is the normal way.
• coldtea 11y ago
  >The 20 year-old version of Mark Zuckerberg beats the 20 year-old version of me every time. No, he doesn't. FB's success due to 20+ random meetings, connections etc he had. And of course that there wasn't already a capable competitor in that space. And the non-random facts of his rise, you can't control anyway (being born to rich parents, going to an Ivy League school, etc). The idea that we as individuals are somehow "special" and odds don't matter is a fallacy.
  • steveklabnik 11y ago
    https://en.wikipedia.org/wiki/Great_Man_theory https://en.wikipedia.org/wiki/Great_Man_theory > The theory was popularized in the 1840s by Scottish writer Thomas Carlyle. > But in 1860 Herbert Spencer formulated a counter-argument that has remained > influential throughout the 20th century to the present; Spencer said that > such great men are the products of their societies, and that their actions > would be impossible without the social conditions built before their > lifetimes.
    • coldtea 11y ago
      As idlewords said, it will take a special man with courage and determination to finally bring down that fallaceous theory :-)
    • ksk 11y ago
      What is the point of linking to such an article? YOU have to do the work and explain how it applies in this case.
      • steveklabnik 11y ago
        I'm providing support for what coldtea is saying by linking to relevant other work.
      • coldtea 11y ago
        He just left that exercize for the reader. We are all adults here, capable of reading a link and determining if the information in it refutes a prior comment or not. (And if we don't care enough to do the work, then we can always not do it and just skip the comment with the link).
• e40 11y ago
  The 20 year-old version of Mark Zuckerberg beats the 20 year-old version of me every time. That's not the right question. It's whether the 20 yr old Mark Zuckerberg beats himself every time? What are his chances of doing it again. In my life I've met a lot of people that made it, but few that made it multiple times. The ones that made it all had a lot going for them and many were brilliant. A lot of them were in the right place at the right time, and had a lot of luck along the way. Very few of them (1 that I know for sure) was a serially successful. Henry Burkhardt III. Problem is, he was not an ethical person and was sued by the SEC for fraud[1]. Let's also be honest: on the path to being insanely wealthy there are a lot of forks in the road. One fork is treating people "right" (think golden rule here) and the other is being completely selfish and screwing people over. In my career, I've been at that road many times. I always chose the sleep-at-night path. There are some serially successful people that always take the "get mine" path. I've known a few of those people, too. So, luck and the willingness to screw people over. Those are two ingredients for success. [1] https://www.sec.gov/litigation/litreleases/lr14895.txt https://www.sec.gov/litigation/litreleases/lr14895.txt
  • damon_c 11y ago
    >So, luck and the willingness to screw people over. Those are two ingredients for success. The older I get and the more I witness people doing business, the more I have come to the same conclusion. I would possibly broaden "willingness to screw people over" to something like "the capacity to be able to overlook or be oblivious to any negative effects of one's path to success on the other people on the planet."
  • untog 11y ago
    There's also putting radio on the internet. I know it's a little weak to reference a fictional TV show, but the Silicon Valley investor who made it big with radio on the internet then spends the rest of his career flailing around with no idea what he's doing is more real than the mystical Great Man Unicorn.
  • brianwski 11y ago
    > but few that made it multiple times Elon Musk has succeeded at everything he has touched, and some of those things were deemed impossible before he did them. As a society, we should be throwing money and projects at Elon until he fails for the first time in his life. Disclaimer: I work at Backblaze.
• taneq 11y ago
  It's closer to hold'em than it is to a lottery. But like both of those comparators it is certainly a gamble.
• rayiner 11y ago
  I'm not sure Zuckerberg is such a great example to use (as he's admitted himself). Bill Gates, Jobs, Page, Brin, maybe. 25 year old Page beats you because he invents PageRank while studying the graph structure of the web as a PhD student at Stanford. That's a much better example of intellectual horsepower/execution rather than luck playing a pivotal role in making a successful business.
  • deleted 11y ago
    [deleted]
  • cookiecaper 11y ago
    They were all dependent on luck and outside circumstances. Without Bill's mother's connections that got him in the door at IBM, Microsoft may've never been anything more than a blip. Without the gross indifference to search pre-Google (Y! focused on being a "web portal", not search results), Page/Brin may've just been starving grad students that eventually found a semi-OK job in academia. Most blatantly, if Jobs didn't have a passive engineer like Woz to co-opt, he would've been just another self-centered burnout.
• steven2012 11y ago
  You are wrong. It is mostly random. Even pg admits it because the only two metrics he can come up with that are somewhat meaningful signals of success is pedigree of its founders and having co-founders. They even eschewed having a good idea to present, at least a couple of years ago. Even with having the same metrics for the YC entrants, they still get more than a 50% failure rate. It's mostly random.
• bildung 11y ago
  > The 20 year-old version of Mark Zuckerberg beats the 20 year-old version of me every time. Why are you so sure about that? Has anybody ever observed all the Mark Zuckerbergs that didn't make it? This situation is a classic hindsight bias problem.
• oh_sigh 11y ago
  > The 20 year-old version of Mark Zuckerberg beats the 20 year-old version of me every time. What basis do you have for saying this? If Mark missed out on the social media boom, what are the odds that he would find another industry waiting for a multibillion dollar company to come along?
  • xiaoma 11y ago
    I couldn't really code a website when I was 20. He had already built music software that Microsoft offered $1,000,000 for when he was in high school. There were many other social networks starting when fb did. They did not build and iterate at the same speed.