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My econ prof always said that moderate success is the worst outcome for entrepreneurs - failure means you can do something else and learn, and massive success m
by mindvirus 6y ago
My econ prof always said that moderate success is the worst outcome for entrepreneurs - failure means you can do something else and learn, and massive success means you are rich, but moderate success can trap you for years.
- jlbnjmn 6y agoI think the same applies to careers, at least for me. The worst outcome is a moderately good job. A bad job you can quit, a great job you can retire from, but a moderately good job is slow speed entropy with a gradually narrowing window of opportunity.
- robocat 6y agoI view many multi-million dollar businesses as economic failures, because too often: (a) owners ignore their opportunity costs (especially prevalent for software engineers that can get a huge salary in a safe job) (b) owners ignore that they need to get extreme returns to cover the large risks that they take of business failure. The standard pass-mark is a 30-times return after 10 years. If one “invests” $y00_000 savings, and one forgoes $x00_000/yr salary by quitting work, one needs to get back say a minimum of ten million. (10_000_000 divided by 30 is $330k, which is a surprisingly easy amount to have “spent”, especially due to what one could earn in a boring 9-5 job). Edit: I am ignoring other personal benefits or costs, and only considering a startup from a purely economic POV.
- ykevinator 6y agoI think there is a bit of a free pass in this thinking. A company that makes $100 a year makes more money than peleton, slack, palantir, dropbox (is drop box making money yet? Not sure about this one) etc. I think vc produces a lot of high user unprofitable businesses that are worse than a moderate success.