6 ms·

The 80/20 Rule of Technical Founders

44 points by scotch_drinker 16y ago

markszcz 16y ago
I'm printing this out and putting it up on my wall. "Our best estimates put the number of developers in the world at around 5 million." It would be nice to see how they got that estimate but for arguments sake, I still like where the breakdown is going.
edw519 16y ago
Hmmm, I smell a general case... Our best estimates put the number of x in the world at around y. Applying the 80/20 rule you can estimate: Of those, 20% (y(.2)) want to z Of those, 20% (y(.2)(.2)) have enough motivation to start educating themselves about the process Of those, 20% (y(.2)(.2)(.2)) will actually start building something Of those, 20% (y(.2)(.2)(.2)(.2)) will actually finish building something Of those, 20% (y(.2)(.2)(.2)(.2)(.2)) have prepared themselves enough to achieve some measure of success
- pingu 16y ago
  >20% (y(.2)(.2)(.2)(.2)(.2)) have prepared themselves enough to achieve some measure of success What does this prep entail? What more needs to be done apart from having the motivation,starting and finishing building the damn thing?
  - Benjo 16y ago
    Yeah, the last factor I didn't quite follow. Seems like the original author felt like 8000 was too large, so he needed a bullshit excuse to scale it down one more time.
  - tastybites 16y ago
    I believe what he meant was the stuff in between 'starting' and 'finishing', i.e. doing the work. Lots of people start and do some of the work and never finish. Many also start, do a huge amount of work, but also never finish. It's 3 distinct phases, each of which represents a progressively smaller proportion of people.
- adamtj 16y ago
  General, yes, but useful? You can easily get wildly different numbers by arbitrarily adding and removing steps. "Of those, 20% don't get too discouraged after educating themselves about the process" Now there are 320. Or combine start and finish building into simply "20% actually build something". Now it's 8000. It was clearly meant to be motivational, not something you should bet your house on.
jrussbowman 16y ago
well, i've made it to the 40,000 group
jayro 16y ago
It would be great if some enterprising designer created a poster out of this concept with some cool graphic depicting a sequence of sieves. Going further I think that you could create an entire collection of Hacker News posters that would find a ready audience.
jswinghammer 16y ago
I wonder if the category you are really looking for is building something that people want and like. Seems like if you have something that people really like that making money from it will come with time.
atldev 16y ago
Don't worry if you get 'filtered' out at any step along the way. You'll learn something new that will prepare you for your next attempt. Learning is progress and you'll probably be able to push through to the next barrier. Just keep going and push a little further each time. When I look back, I see a very clear pattern of working my way through this funnel. A decade ago, I dropped an idea in an early stage because the consulting $ was too good. Five years ago I built a product, but was nervous to release it because it wasn't "perfect". Last week I launched a product at Startup Riot and had a blast. It was an awesome experience. Remember Edison. With each attempt, you get closer to success.
delano 16y ago
Of those, 20% (8,000) will actually finish building something Hey now, we can't all be Edsger Dijkstra.
Jabbles 16y ago
I'm very skeptical. I see no reason why all these factors should be the same, nor a good method of measuring any of the variables mentioned. I doubt there's any evidence to suggest that such a ratio exists, or that its effects are visible against the small minority of entrepreneurs who succeed because they are "lucky".
horseass 16y ago
In other words, the current economic system is a brutal primitive jungle where only a tiny minority like Tom Cruise and Dana White get an insanely unequal share. The only start up potential left is the biological equivalent of parasitism and the illegal like streaming movies without permission, using shady yard sign advertising, tricking people with viral advertising schemes and such. What am I supposed to do, take an existing product and put a clock in it? The market is saturated and the existing players compete for the shelf space while trying to buy laws that make reselling their stuff illegal. Any software I could make is already available free and open source. The masses get to work at the mini dictatorships of McDonald's and Walmart.
jwb119 16y ago
1,600 is way low
pedalpete 16y ago
I think there are some major flaws in the inputs. For instance, '20% have enough motivation to start educating themselves' reduces the number of successes significantly, but who's to say that is a valid input to overall success? I can come up with many random variables, and feed these numbers through it to come up with the last 1. of those, 20% have enough free-time to commit to the needs of their startup? of those, 20% have the sales skill to get other people involved. Of those, ... I suspect there are far more than 1600 who have and will achieve 'some measure of success'.
RiderOfGiraffes 16y ago
I remember seeing almost exactly the same analysis by a well-known author concerning people who claim they want to write a book. I'll see if I can dig it out - it's in one of my "Analog" magazines as an editorial. ADDED IN EDIT: I think it was Heinlein .. stand by ... Yup, here it is: http://technologydesignconsultants.com/InterestingDocuments/RobertHeinleinSpeechAtAnnapolis.pdf http://technologydesignconsultants.com/InterestingDocuments/... I won't submit that link as a separate HN item because I don't want scribd to get it. He starts with an estimate of 100 million for the literate adult population, and says that half claim they want to write. * 90% never write, then * 90% never finish, then * 90% re-write endlessly, then * 90% never put it on the market, then * 90% don't keep it on the market. That leaves 500. He then quotes that in a survey by the Authors' League of America, 400 stated that they supported themselves and their families through writing.
- coffeedrinker 16y ago
  Writing (and finishing) a book is a lot of work. I always admired people who did it (regardless of the final quality) because I thought I could never do one myself. Now I've written several. And now back to my software projects.
travisp 16y ago
Is this really the 80-20 rule? As I understood it, the 80-20 rule is that 80% of the effects come from 20% of the causes. E.g. 80% of profits come from 20% of your clients. Here he's saying that 20% of developers want to launch a startup, and that you can further subdivide each group into another group that is 20% of the size of the previous group. That doesn't make sense to me as an application of the 80-20 rule other than that there's a 20% in there. Edit: here's an explanation. http://en.wikipedia.org/wiki/Pareto_principle http://en.wikipedia.org/wiki/Pareto_principle
- endtime 16y ago
  I believe you're right, though the 80-20 law is just a very rough layman's approximation of a Zipf distribution.
PaulHoule 16y ago
"Finish" is a funny thing. Interactive community web sites, like say, Facebook or Deviant Art aren't ever 'finished'.
swombat 16y ago
90% of tech blog authors want some cool statistics to quote 90% of those will be willing to make them up to get there 90% of those will add as many steps as it takes to make the point they were trying to make, probably one about difficulty of getting from one step to the next 90% of those will be willing to publish those made up statistics 100% of those will lose a chunk of credibility by doing so.
- damoncali 16y ago
  I get your point, but I think you missed his.
  - mwsfc 16y ago
    Agreed....and I generally enjoy the article listings on Swombat too. Nothing wrong with the application of the 80/20 "rule" here. No way to determine the actual numbers but as a thought provoker 80/20 is just fine.... and an identifiable concept many are already familiar with.
    - swombat 16y ago
      It's a very poor way to make a point. It's like if I used the fact that the earth is flat to illustrate an otherwise good point. The point may be valid, but using such a bad illustration is better than not making the point at all.
  - stanleydrew 16y ago
    His point isn't anything more than "Only a small proportion of people will be successful startup founders." We know this from experience and intuitively, because it's hard to start a startup and succeed. The problem with his "argument" is that it's completely arbitrary. And I don't mean the 80/20 part, although that is too. He applies the 80/20 rule an arbitrary number of times. Why not one fewer? Why not four more times, which would get the number of startup founders down to 2.5? I can easily make up four more statements justifying the application of the rule.
stdbrouw 16y ago
Look, at first this kind of thing was all fun and inspirational, but Seth Godin-style aphorisms have been demoded for about three to four years now. Content with substance, please.
jorkos 16y ago
This makes no sense, arbitrarily applying the 80/20 rule to any and all circumstances holds no grounds - really. The 80/20 fallacy is one of the most overused and misunderstood concepts in stats...."applying the 80/20 we won't worry about this aspect of our customer base....or this aspect of our business...". It's pernicious, it really is.

I'm printing this out and putting it up on my wall. "Our best estimates put the number of developers in the world at around 5 million." It would be nice to see how they got that estimate but for arguments sake, I still like where the breakdown is going.

edw519 16y ago

Hmmm, I smell a general case... Our best estimates put the number of x in the world at around y. Applying the 80/20 rule you can estimate: Of those, 20% (y(.2)) want to z Of those, 20% (y(.2)(.2)) have enough motivation to start educating themselves about the process Of those, 20% (y(.2)(.2)(.2)) will actually start building something Of those, 20% (y(.2)(.2)(.2)(.2)) will actually finish building something Of those, 20% (y(.2)(.2)(.2)(.2)(.2)) have prepared themselves enough to achieve some measure of success

pingu 16y ago
>20% (y(.2)(.2)(.2)(.2)(.2)) have prepared themselves enough to achieve some measure of success What does this prep entail? What more needs to be done apart from having the motivation,starting and finishing building the damn thing?
- Benjo 16y ago
  Yeah, the last factor I didn't quite follow. Seems like the original author felt like 8000 was too large, so he needed a bullshit excuse to scale it down one more time.
- tastybites 16y ago
  I believe what he meant was the stuff in between 'starting' and 'finishing', i.e. doing the work. Lots of people start and do some of the work and never finish. Many also start, do a huge amount of work, but also never finish. It's 3 distinct phases, each of which represents a progressively smaller proportion of people.
adamtj 16y ago
General, yes, but useful? You can easily get wildly different numbers by arbitrarily adding and removing steps. "Of those, 20% don't get too discouraged after educating themselves about the process" Now there are 320. Or combine start and finish building into simply "20% actually build something". Now it's 8000. It was clearly meant to be motivational, not something you should bet your house on.

jrussbowman 16y ago

well, i've made it to the 40,000 group

jayro 16y ago

It would be great if some enterprising designer created a poster out of this concept with some cool graphic depicting a sequence of sieves. Going further I think that you could create an entire collection of Hacker News posters that would find a ready audience.

jswinghammer 16y ago

I wonder if the category you are really looking for is building something that people want and like. Seems like if you have something that people really like that making money from it will come with time.

atldev 16y ago

Don't worry if you get 'filtered' out at any step along the way. You'll learn something new that will prepare you for your next attempt. Learning is progress and you'll probably be able to push through to the next barrier. Just keep going and push a little further each time. When I look back, I see a very clear pattern of working my way through this funnel. A decade ago, I dropped an idea in an early stage because the consulting $ was too good. Five years ago I built a product, but was nervous to release it because it wasn't "perfect". Last week I launched a product at Startup Riot and had a blast. It was an awesome experience. Remember Edison. With each attempt, you get closer to success.

delano 16y ago

Of those, 20% (8,000) will actually finish building something Hey now, we can't all be Edsger Dijkstra.

Jabbles 16y ago

I'm very skeptical. I see no reason why all these factors should be the same, nor a good method of measuring any of the variables mentioned. I doubt there's any evidence to suggest that such a ratio exists, or that its effects are visible against the small minority of entrepreneurs who succeed because they are "lucky".

horseass 16y ago

In other words, the current economic system is a brutal primitive jungle where only a tiny minority like Tom Cruise and Dana White get an insanely unequal share. The only start up potential left is the biological equivalent of parasitism and the illegal like streaming movies without permission, using shady yard sign advertising, tricking people with viral advertising schemes and such. What am I supposed to do, take an existing product and put a clock in it? The market is saturated and the existing players compete for the shelf space while trying to buy laws that make reselling their stuff illegal. Any software I could make is already available free and open source. The masses get to work at the mini dictatorships of McDonald's and Walmart.

jwb119 16y ago

1,600 is way low

pedalpete 16y ago

I think there are some major flaws in the inputs. For instance, '20% have enough motivation to start educating themselves' reduces the number of successes significantly, but who's to say that is a valid input to overall success? I can come up with many random variables, and feed these numbers through it to come up with the last 1. of those, 20% have enough free-time to commit to the needs of their startup? of those, 20% have the sales skill to get other people involved. Of those, ... I suspect there are far more than 1600 who have and will achieve 'some measure of success'.

RiderOfGiraffes 16y ago

I remember seeing almost exactly the same analysis by a well-known author concerning people who claim they want to write a book. I'll see if I can dig it out - it's in one of my "Analog" magazines as an editorial. ADDED IN EDIT: I think it was Heinlein .. stand by ... Yup, here it is: http://technologydesignconsultants.com/InterestingDocuments/RobertHeinleinSpeechAtAnnapolis.pdf http://technologydesignconsultants.com/InterestingDocuments/... I won't submit that link as a separate HN item because I don't want scribd to get it. He starts with an estimate of 100 million for the literate adult population, and says that half claim they want to write. * 90% never write, then * 90% never finish, then * 90% re-write endlessly, then * 90% never put it on the market, then * 90% don't keep it on the market. That leaves 500. He then quotes that in a survey by the Authors' League of America, 400 stated that they supported themselves and their families through writing.

coffeedrinker 16y ago
Writing (and finishing) a book is a lot of work. I always admired people who did it (regardless of the final quality) because I thought I could never do one myself. Now I've written several. And now back to my software projects.

travisp 16y ago

Is this really the 80-20 rule? As I understood it, the 80-20 rule is that 80% of the effects come from 20% of the causes. E.g. 80% of profits come from 20% of your clients. Here he's saying that 20% of developers want to launch a startup, and that you can further subdivide each group into another group that is 20% of the size of the previous group. That doesn't make sense to me as an application of the 80-20 rule other than that there's a 20% in there. Edit: here's an explanation. http://en.wikipedia.org/wiki/Pareto_principle http://en.wikipedia.org/wiki/Pareto_principle

endtime 16y ago
I believe you're right, though the 80-20 law is just a very rough layman's approximation of a Zipf distribution.

PaulHoule 16y ago

"Finish" is a funny thing. Interactive community web sites, like say, Facebook or Deviant Art aren't ever 'finished'.

swombat 16y ago

90% of tech blog authors want some cool statistics to quote 90% of those will be willing to make them up to get there 90% of those will add as many steps as it takes to make the point they were trying to make, probably one about difficulty of getting from one step to the next 90% of those will be willing to publish those made up statistics 100% of those will lose a chunk of credibility by doing so.

damoncali 16y ago
I get your point, but I think you missed his.
- mwsfc 16y ago
  Agreed....and I generally enjoy the article listings on Swombat too. Nothing wrong with the application of the 80/20 "rule" here. No way to determine the actual numbers but as a thought provoker 80/20 is just fine.... and an identifiable concept many are already familiar with.
  - swombat 16y ago
    It's a very poor way to make a point. It's like if I used the fact that the earth is flat to illustrate an otherwise good point. The point may be valid, but using such a bad illustration is better than not making the point at all.
- stanleydrew 16y ago
  His point isn't anything more than "Only a small proportion of people will be successful startup founders." We know this from experience and intuitively, because it's hard to start a startup and succeed. The problem with his "argument" is that it's completely arbitrary. And I don't mean the 80/20 part, although that is too. He applies the 80/20 rule an arbitrary number of times. Why not one fewer? Why not four more times, which would get the number of startup founders down to 2.5? I can easily make up four more statements justifying the application of the rule.

stdbrouw 16y ago

Look, at first this kind of thing was all fun and inspirational, but Seth Godin-style aphorisms have been demoded for about three to four years now. Content with substance, please.

jorkos 16y ago

This makes no sense, arbitrarily applying the 80/20 rule to any and all circumstances holds no grounds - really. The 80/20 fallacy is one of the most overused and misunderstood concepts in stats...."applying the 80/20 we won't worry about this aspect of our customer base....or this aspect of our business...". It's pernicious, it really is.