3 ms·
Well, of course, the richest people will all come from the high-risk high-reward pool. But the expected value of doing a startup could easily be lower than work
by ced 16y ago
Well, of course, the richest people will all come from the high-risk high-reward pool. But the expected value of doing a startup could easily be lower than working in an investment bank.
If one startup in five "succeeds" and the average return is 5M after 5 years of work, then the expected annual "salary" is 200K. Not a completely unreasonable figure for investment banking (I have no clue what the real numbers are. Plus, not everyone can work in wall street or do a startup)
If that's the case, then a startup would be similar to a lottery ticket. Do it for the thrill, do it for the experience, but don't do it for the money.
- pg 16y agoSure, the average expected value of starting a startup could be lower. Or it could be higher. But I feel pretty sure in a startup you have more control over the outcome. You don't have to pay any dues or work your way up any ladder. So if the average expected value of starting a startup was equal to that of going to Wall St, but you were convinced you were a superstar, you'd be better off starting a startup, because there is less force pushing you toward the mean.
- swernli 16y agoThat makes sense, but misses one important point: most people who are convinced they are superstars are wrong.