6 ms·
"If we spend a second thinking about this, if 9 out of 10 startups fail, then we only need to roll the dice 10 times and the last startup will (by statistics) a
by evmar 9y ago
"If we spend a second thinking about this, if 9 out of 10 startups fail, then we only need to roll the dice 10 times and the last startup will (by statistics) achieve success."
That is not how statistics works. :<
With a 90% failure rate, your chance of failing 10 times in a row is (9/10)^10 ~= 35%.
- justinpombrio 9y agoThey're also not independent trials. If you just failed 9 times in a row, you're probably not the best at startups.
- GuiA 9y agoOr maybe you learned tons and it makes your 10th attempt more likely to succeed? Ultimately these ponderations are kind of meaningless in the absence of great data to frame them with.
- jabgrabdthrow 9y agoAt which number would you no longer make the point you just made? 100 failed startups? 50,000? You’ve got a lot of faith in people. My number is maybe 5.
- always_good 9y agoDunno, depends on the kinds of startups you're trying to create. For example, I don't think you're "bad at startups" just because you create more ambitious ones with a higher chance of failure. Some people are at a place where they can take more risks, it doesn't make them an abject failure.
- gargarplex 9y agoI've been seriously, actively interested in building a tech biz or startup since 2003. In 2003, I started selling chat bots on the Internet. In 2005, I cofounded an affiliate marketing website that cracked the Alexa top 10k In 2007, I built an app that scaled to 100k MAUs and was acquired for $20K In 2009, I started a SaaS but couldn't break $~600/month in revenue. In 2010, I built a business that ran for over 5 years and supported me entirely for two of them, but probably grossed less than $100K total revenue. But it couldn't grow, as I struggled to find a repeatable and predictable customer acquisition channel. In 2013, I got involved in Bitcoin. Finally one home run after a portfolio of mediocrity. [I am choosing to omit various projects from this list, but between 2003-present, there have been a lot.] In 2013, I also started doing stock market research with ruby. In 2015, my work had attracted enough momentum to bring on an outside angel investor and even piloted the strategy in the markets with $1.5MM. Didn't perform that well; investors withdrew their capital. In 2017, I started a SaaS that is currently doing ~$2800/month in revenue. I also did consulting. I grossed about $190K this year from my business efforts - note, that's nearly 10 times faster (in terms of growing revenue) than I was 7 years ago. I also fixed a major hole in my previous business skillset, i.e., predictably acquiring customers - something I could never do for the biz in 2010. Furthermore, I have a lot more emotional maturity than I did 7 years ago - though Sam Altman was precociously mature, with the "emotional maturity of a 40 year old" (Paul Graham, on meeting Stanford undergraduate Sam Altman). So I can tell you definitively, that: - My skills are expanding due to systematically resolving the deficiencies in previous attempts. - These improvements are a result of deliberate practice. - Some people may have the ancillary skills, resources or characteristics that position them to perform better from early on - YC seems to be adept at identifying these people, but also credit them for making 1,500+ bets. - My best success to-date has been as a result of luck. I'm 30 years old now.
- JamesBarney 9y agoWould you mind going into a little more detail about the hole that you plugged and how you plugged it?
- gargarplex 9y agoFor me it was learning all about sales. I actually got a job selling industrial equipment specifically for this purpose. I learned that a good sales person is an agent who advances the best interests of the buyer as well as the seller. I also had the epiphany that my ads and website are - essentially - salespeople, selling to exactly one visitor at a time. So if I can't sell without the website, I can't sell with the website. But once I can sell, and then once my website can sell in my stead, it's about getting the website in front of as many people as possible - just like a productive sales rep will make many phone calls per day. Just as a salesperson will tailor her approach based on the market or personality of the buyer, a good website should do so as well. Therefore, I have segmented mailing lists, different landing pages for different buyer types, and so forth. You may also find this comment I wrote about a year ago useful as well, https://news.ycombinator.com/item?id=13283234 https://news.ycombinator.com/item?id=13283234
- user5994461 9y ago+1 Sales and marketing is as important as the software. They can't exist without each other.
- ChristianGeek 9y agoBitcoin is not a win until you sell it at a profit (which you may have done...I’m just saying.)
- sihui_io 9y agoThanks a lot for sharing. I'm impressed by your perseverance and so glad to see things have been working out for you lately. Best of Luck!
- gwern 9y agoIf I recall correctly, one of the Compass VC analyses covered serial entrepreneurs and found that there was no increase in success rates and each attempt looked independent. There's just that much randomness in it, and I suppose the various selection effects cancel out.
- raoulj 9y agoI googled around for this document to no success. Do anyone have a link to this?
- gwern 9y agoLooking for it, I think I am remembering either http://10years.firstround.com/ http://10years.firstround.com/ (which says, specifically, that experienced founder returns aren't better because their increased success rate is already priced in, which is not quite what I claimed) or https://www.econstor.eu/bitstream/10419/90815/1/777058081.pdf https://www.econstor.eu/bitstream/10419/90815/1/777058081.pd...
- antisthenes 9y agoIf you had the social and monetary capital to attempt 10 startups and fail, one wonders if that money and effort would not have been better invested elsewhere (if we assume that the goal of the startup is to achieve a successful exit), perhaps in easier forms to generate passive income or what have you.
- matte_black 9y agoOr you might think you’ve learned tons but you’ve actually learned all the wrong lessons and are spiraling hopelessly confident in the wrong direction. Failure doesn’t owe you anything.
- sarreph 9y agoMy thoughts exactly — thanks for writing this. Helps to explain how there are so many 'anomalous' serial-entrepreneurs :)
- fsloth 9y agoWhat I recall of chances of success, earlier failures do not correlate with success - either way. So basically one is throwing fair dice every time. I might be recall wrong...
- TheCoelacanth 9y agoThat is with dice. Startups are not independent random events because some people are better at making startups than other people are.
- computerphage 9y agoI think your parent is saying that when you actually measure whether your claim is true, it isn't actually correlated in the failure case. I remember reading something that corroborated this [1]. That source claimed that previous founders of successful companies had a much greater chance at additional success, but previous failures didn't increase your chances (ie. you don't, in fact, learn more from failure than success -- at least when it comes to founding failed startups). Edit adding source: [1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=933932 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=933932
- JamesBarney 9y agoYcombinator has made a lot of money based on the idea that some people are better at creating start ups than others. They don't just bet on ideas they also bet on people.
- tikhonj 9y agoOn the flipside, it could be that Y Combinator has made a lot of money by creating an environment that helps startups succeed. Apart from money, they provide founders advice, structure and a set of motivated peers. More cynically, they also provide prestige, validation and connections. I have no doubt Y Combinator would still be successful even if their selection method was not very good. (I tend to think about top universities the same way—the quality of Harvard's admissions process is not the core reason they graduate so many successful students.)
- alexashka 9y agoThe intuition behind it still stands - if you're going to not fail 65% of the time when you try 10 times, that's pretty decent.
- mkagenius 9y agoThen according to stats it would take infinite attempts to succeed. That's not how life works ;) edit: a clarification, that's not how a single human's life works. It will work if you take all humans together into account. If you apply that logic to individuals individually then nobody succeeds ever. edit2: a single human life individually doesn't get enough attempts to be statistically significant enough.
- hateduser2 9y agoThe other side says that there’s a 75% chance of not failing ten times in a row. What this says is that it probably doesn’t just happen when it’s a sure thing.
- hartator 9y ago65%
- jdblair 9y agoActually, this is how life works: some people never succeed at what they try to do. It does take an infinite number of attempts to assure 100% success. Relevant in the NYT: https://www.nytimes.com/2017/12/24/opinion/2017-wrong-numbers.html?_r=0 https://www.nytimes.com/2017/12/24/opinion/2017-wrong-number...
- deleted 9y ago[deleted]
- GuiA 9y agoAs you imply, you don’t get infinite attempts because you’ll die at some point. Some people never succeed despite their best efforts, effectively taking them infinite attempts to succeed.
- deleted 9y ago[deleted]
- Noos 9y agoI can't understand why that is even in the parent article. Amir is incredibly open about how much what he did was down to luck, and how much he sacrificed just to roll the dice once. He lists all the things he did that gave him a shot, like living on 1/2 to 1/4 of his income for years, not having kids, being lucky that he never got sick since he didn't have insurance as he did his venture, and more. That quote above is an odd postscript to an article very open about how much it really is luck.
- swalsh 9y agoHere's what I've learned when I quit and tried to start my own thing. A regular paycheck is "nice", it's a safety blanket. But it also keeps you down. You can live nicely on a regular paycheck, but if you want "something more", whether that "more" is money, or "meaning", you have to give it up and go into the real world. You have to take a risk. I didn't really Succeed, but I gained new experience, a bunch of contacts, and learned what I needed. The next time I do it, I'm going to have a better chance of succeeding in it, i'm certain of it. A business model is more than a product, and a way to charge for it. It's having partners, channels, product, and yes some resources. If you're a dev who's planning on quitting, and then spending 18 hours a day coding, you're probably going to fail. If you quit and spend 100% of your time networking, you're going to fail. But if you have a plan for how to get the product built, how to market it, and you have a quantifiable reason to believe people want it. You might just make it. I think it takes a few failures to get there.
- diogofranco 9y agoMore importantly, after 9 failures the last startup has only a 10% chance of success, by statistics.
- hyperpallium 9y agoBut if you try 21.8543 times, the odds invert, to 90% success! Also, you'll probably learn something from all those trials, improving the odds. But a bigger problem is measuring "failure"... how long and hard must you work before calling it quits, for it to count as a trial? Throwing up one "MVP" website a day for 22 days probably shouldn't count... Perhaps, 3 months full-time (about the runway YCers get)? And, 3 months off to recover. So, 11 years, for a 90% shot... assuming you're already imdependemtly wealthy. Like those robbers planning to get money out of bank in the form of a wage for working there, there's probably an easier way.