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I just tried to look at the tweet to see where this data's coming from, but "[...] quoth the server: '404'". But really, forty percent!? For a statistical stud

I just tried to look at the tweet to see where this data's coming from, but "[...] quoth the server: '404'". But really, forty percent!? For a statistical study that's an unusually convenient/round number, and for a state with the population of California, the chances of that statistic being accurate for any measurement methodology are astronomically small. Sure the dude could've been rounding it, which is totally fine of course, but I also question the validity of that statement because that's nearly half the entire small business segment for the most populous state in the nation! And that just doesn't sound right, fundamentally. It's possible, sure, but c'mon, really? Near half?! I don't buy it, not without data from well-respected sources to back it up. So I go to click the link, only to find it no longer exists. Which further casts doubt on this statement. (18 hours after tweet linked on HN is when I checked Twitter; or in my world, "just now".)

mpalczewski 5y ago
One can't even judge if 40% is unusual. Most businesses fail. It could a healthy sign that a bunch of businesses were started. It could be a normal amount, or it could be really terrible. Without more context, it isn't really informative.
cyanydeez 5y ago
Probably more a sad state of professional contractoritis as small business
Terretta 5y ago
40% in 2 years is 20% a year. Considering the definition of small businesses, that’s relatively unsurprising. You’d actually imagine more than 1 in 5 giving up in a year. In any case, 20% a year for first two years, compare SBA data from 2018: > “According to the Small Business Administration (SBA) Office of Advocacy’s 2018 Frequently Asked Questions, roughly 80% of small businesses survive the first year.“ So, right on track?
- dragonwriter 5y ago
  > 40% in 2 years is 20% a year. 40% failing over 2 years is 22-23% failing per year—√(0.6) = 0.7745966...—but close enough.
- istinetz 5y ago
  This feels very wrong. ~40% of new small businesses will fail in 2 years. If 40% of all small businesses fail, that's completely different. If I model a small business surviving for 15 years on average, conditional on surviving the bumpy start, that would imply the equilibrium is - small businesses started each year ~10% of all small businesses - ~40% of those fail within the first two years; that's ~4% of the total - looking at the more mature/stable small businesses, ~12% will churn over that same period - total expected: 16% of all small businesses failing over a two year period - therefore the pandemic represents a 250% jump If you model a startup living for 10 years on average, conditional on surviving the first two years, the pandemic would cause a ~200% jump. If you model a startup living for 25 years on average, conditional on surviving the first two years, the pandemic would cause a ~500% jump.
larrydag 5y ago
I saw that yesterday and it said the data was produced by Womply. I can't find the source though. BUMP: could this be it? https://tracktherecovery.org/ https://tracktherecovery.org/
clint 5y ago
Marc Andreessen spouting off at the mouth about things he doesn't understand?? I can't believe it! /sarcasm
- CryptoPunk 5y ago
  Andreessen has never been associated with "spouting off at the mouth about things he doesn't understand". What exactly does he not understand, that his betters do?
  - jjeaff 5y ago
    That 40% of California businesses failing is right on track with the normal failure rate of businesses pre-pandemic.
Fezzik 5y ago
This is older news, but it notes that the permanent “closure rate” in California was 9.3/1,000 businesses. I’m guessing that’s a monthly rate but it’s not entirely clear to me. It also notes that LA had seen 15,000 businesses closing with half of those being permanent. https://www.cnbc.com/2020/09/16/yelp-data-shows-60percent-of-business-closures-due-to-the-coronavirus-pandemic-are-now-permanent.html https://www.cnbc.com/2020/09/16/yelp-data-shows-60percent-of...
EUFintecheer 5y ago
- amf12 5y ago
  Sorry, but why was that a type of "asshole comment"? I don't get it. The poster has valid concerns with the data and the validity of the tweet (as do I). The tweet also seems to be deleted.

mpalczewski 5y ago

One can't even judge if 40% is unusual. Most businesses fail. It could a healthy sign that a bunch of businesses were started. It could be a normal amount, or it could be really terrible. Without more context, it isn't really informative.

cyanydeez 5y ago

Probably more a sad state of professional contractoritis as small business

Terretta 5y ago

40% in 2 years is 20% a year. Considering the definition of small businesses, that’s relatively unsurprising. You’d actually imagine more than 1 in 5 giving up in a year. In any case, 20% a year for first two years, compare SBA data from 2018: > “According to the Small Business Administration (SBA) Office of Advocacy’s 2018 Frequently Asked Questions, roughly 80% of small businesses survive the first year.“ So, right on track?

dragonwriter 5y ago
> 40% in 2 years is 20% a year. 40% failing over 2 years is 22-23% failing per year—√(0.6) = 0.7745966...—but close enough.
istinetz 5y ago
This feels very wrong. ~40% of new small businesses will fail in 2 years. If 40% of all small businesses fail, that's completely different. If I model a small business surviving for 15 years on average, conditional on surviving the bumpy start, that would imply the equilibrium is - small businesses started each year ~10% of all small businesses - ~40% of those fail within the first two years; that's ~4% of the total - looking at the more mature/stable small businesses, ~12% will churn over that same period - total expected: 16% of all small businesses failing over a two year period - therefore the pandemic represents a 250% jump If you model a startup living for 10 years on average, conditional on surviving the first two years, the pandemic would cause a ~200% jump. If you model a startup living for 25 years on average, conditional on surviving the first two years, the pandemic would cause a ~500% jump.

larrydag 5y ago

I saw that yesterday and it said the data was produced by Womply. I can't find the source though. BUMP: could this be it? https://tracktherecovery.org/ https://tracktherecovery.org/

clint 5y ago

Marc Andreessen spouting off at the mouth about things he doesn't understand?? I can't believe it! /sarcasm

CryptoPunk 5y ago
Andreessen has never been associated with "spouting off at the mouth about things he doesn't understand". What exactly does he not understand, that his betters do?
- jjeaff 5y ago
  That 40% of California businesses failing is right on track with the normal failure rate of businesses pre-pandemic.

Fezzik 5y ago

This is older news, but it notes that the permanent “closure rate” in California was 9.3/1,000 businesses. I’m guessing that’s a monthly rate but it’s not entirely clear to me. It also notes that LA had seen 15,000 businesses closing with half of those being permanent. https://www.cnbc.com/2020/09/16/yelp-data-shows-60percent-of-business-closures-due-to-the-coronavirus-pandemic-are-now-permanent.html https://www.cnbc.com/2020/09/16/yelp-data-shows-60percent-of...

EUFintecheer 5y ago

amf12 5y ago
Sorry, but why was that a type of "asshole comment"? I don't get it. The poster has valid concerns with the data and the validity of the tweet (as do I). The tweet also seems to be deleted.