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How is that survivorship bias? Bootstrapped, small, one person companies are still startups, where the odds of success are less than 10%, while venture-backed

How is that survivorship bias? Bootstrapped, small, one person companies are still startups, where the odds of success are less than 10%, while venture-backed startups is 20%-30%. [0][1] What non-survivors are excluded from these cohorts? [0] https://www.wsj.com/articles/SB10000872396390443720204578004980476429190 https://www.wsj.com/articles/SB10000872396390443720204578004... [1] https://www.embroker.com/blog/startup-statistics/ https://www.embroker.com/blog/startup-statistics/

lugged 5y ago
You're defining success using a metric one person companies don't use to define success. The only ones that survive to success are "normal startups" which are not actually normal at all for most businesses around the world.
- peterthehacker 5y ago
  That’s not survivorship bias. And the measures of success in the article I cited are universal. The way you’re describing success (not going out of business) is included in those sources.
  - lugged 5y ago
    No they're not. Making a solid living is what's important to these companies. Not finding investment. Exits maybe.
    - peterthehacker 5y ago
      To be clear: staying in business is the universal success metric I mentioned and cited earlier (not funding or exit). Here’s another source citing the same 9/10 failure (10% success) rate for all startups in the U.S. > Many small businesses start up every month but the failure rate is high. As of 2019, startup failure rates are around 90%. 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year. [0] Small bootstrapped companies can still exist and succeed against these odds (several are cited in the article), but to make the claim that these odds don’t apply to bootstrapped startups is foolish wishful thinking. [0] https://www.investopedia.com/articles/personal-finance/040915/how-many-startups-fail-and-why.asp https://www.investopedia.com/articles/personal-finance/04091...

lugged 5y ago

You're defining success using a metric one person companies don't use to define success. The only ones that survive to success are "normal startups" which are not actually normal at all for most businesses around the world.

peterthehacker 5y ago
That’s not survivorship bias. And the measures of success in the article I cited are universal. The way you’re describing success (not going out of business) is included in those sources.
- lugged 5y ago
  No they're not. Making a solid living is what's important to these companies. Not finding investment. Exits maybe.
  - peterthehacker 5y ago
    To be clear: staying in business is the universal success metric I mentioned and cited earlier (not funding or exit). Here’s another source citing the same 9/10 failure (10% success) rate for all startups in the U.S. > Many small businesses start up every month but the failure rate is high. As of 2019, startup failure rates are around 90%. 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year. [0] Small bootstrapped companies can still exist and succeed against these odds (several are cited in the article), but to make the claim that these odds don’t apply to bootstrapped startups is foolish wishful thinking. [0] https://www.investopedia.com/articles/personal-finance/040915/how-many-startups-fail-and-why.asp https://www.investopedia.com/articles/personal-finance/04091...