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Just take a look at the average YC batch. If anyone is set up to succeed, it is those guys with coaching, resources, and connections. Most of them don't become

Just take a look at the average YC batch. If anyone is set up to succeed, it is those guys with coaching, resources, and connections. Most of them don't become wildly successful and are only successful in any sense because of the ability to pivot, learn lessons, etc. (see Schwartz's Infogami -> Reddit transition). Or check out small business failure rates. More anecdotally and less scientifically, watch retail/food locations which have business after business after business open in them. A successful lifestyle business takes a lot of learned knowledge, and by virtue of building a single one you've had more success than most. Just beating the odds on one was your survival, once you did that you had a lot of advantages. Bigger serial entrepreneurs often have similar patterns. One success allow you to make another which allows you to make another, all with varying degrees of success and with failure effectively subsidized. See Mark Cuban, Ev Williams, Pewter Thiel.

thenomad 10y ago
YC companies are, to the best of my knowledge, mostly looking for unicorn-style plays. That's a very different game to a lifestyle business, and one where I would agree 100% that the failure rate is extremely high. Small business failure rates: well, for starters, the usually-quoted numbers have been updated as of late. A quick Google shows that most sources are converging on around a 60% success rate for small businesses at the moment. (I think that's actually unrealistically high - I'd estimate more like 40% and guess they aren't accurately polling online businesses, but hey.) Secondly, there's a significant difference between small business failure rates and small businessperson failure rates. As I mentioned above, most people's first businesses will fail. That will obviously skew the numbers in favour of failure: indeed, given that it's surprising the survival rates are as high as they are. You're correct that it's (sometimes) easier to build a successful business after you've already built one. However, you don't mention the secondary point, which is that it's also much easier to build a successful business after you've already tried really hard and failed at one.
- marcosdumay 10y ago
  > there's a significant difference between small business failure rates and small businessperson failure rates Most people can not afford a failed business. If you are looking at repeated tries, you are taking a huge amount of survivorship bias already.
  - thenomad 10y ago
    Depends on the business. Not everything requires huge or even significant initial outlay. For example, infoproducts (or any kind of digital product) are very cheap to start up. They take time, but not necessarily a lot of money.
    - igk 10y ago
      The thing is, time is money. Leisure time is one privilege of the rich, or lucky, which leads to unfair compounding advantages (like philosophy as well). "Normal" people (as in, if you selected them at random) don't have the time to learn the special skills required and also invest the time to develop the very specific type of product you are talking about. So, in order to start a business, you need to have a break. It can be getting lucky with your job, a windfall, or just gambling some precious savings or time onto your idea. And then, most of the time, it fails, and most people cannot afford to retry. Those that manage anyway are the exception, not the rule

thenomad 10y ago

YC companies are, to the best of my knowledge, mostly looking for unicorn-style plays. That's a very different game to a lifestyle business, and one where I would agree 100% that the failure rate is extremely high. Small business failure rates: well, for starters, the usually-quoted numbers have been updated as of late. A quick Google shows that most sources are converging on around a 60% success rate for small businesses at the moment. (I think that's actually unrealistically high - I'd estimate more like 40% and guess they aren't accurately polling online businesses, but hey.) Secondly, there's a significant difference between small business failure rates and small businessperson failure rates. As I mentioned above, most people's first businesses will fail. That will obviously skew the numbers in favour of failure: indeed, given that it's surprising the survival rates are as high as they are. You're correct that it's (sometimes) easier to build a successful business after you've already built one. However, you don't mention the secondary point, which is that it's also much easier to build a successful business after you've already tried really hard and failed at one.

marcosdumay 10y ago
> there's a significant difference between small business failure rates and small businessperson failure rates Most people can not afford a failed business. If you are looking at repeated tries, you are taking a huge amount of survivorship bias already.
- thenomad 10y ago
  Depends on the business. Not everything requires huge or even significant initial outlay. For example, infoproducts (or any kind of digital product) are very cheap to start up. They take time, but not necessarily a lot of money.
  - igk 10y ago
    The thing is, time is money. Leisure time is one privilege of the rich, or lucky, which leads to unfair compounding advantages (like philosophy as well). "Normal" people (as in, if you selected them at random) don't have the time to learn the special skills required and also invest the time to develop the very specific type of product you are talking about. So, in order to start a business, you need to have a break. It can be getting lucky with your job, a windfall, or just gambling some precious savings or time onto your idea. And then, most of the time, it fails, and most people cannot afford to retry. Those that manage anyway are the exception, not the rule