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> [...] doing your own startup is one of the few relatively low risk gambles one can take. I was under the impression that around 90% of startups failed. Was

by Merad 4y ago

> [...] doing your own startup is one of the few relatively low risk gambles one can take. I was under the impression that around 90% of startups failed. Was I mistaken, have the numbers changed, or do we just have very different thresholds for "low risk"?

dvt 4y ago
High failure rate ≠ high risk. Everything with a high upside will have a high failure rate, but working 10 hours on your own startup a week is definitely lower risk than gambling with options (which is what /r/wallstreetbets is doing) or gambling with crypto (even higher risk). I know people that made low 7 figures last year flipping NFTs, but the risk profile (to me, at least) was untenable. At least in Vegas you get free drinks.
- saagarjha 4y ago
  Ok, but the comparison was to a 9-to-5 job, not gambling.
  - dvt 4y ago
    That's even more of a no-brainer, as an average 9-5 has practically zero upside, so your net worth is likely to stay flat (if not even go down). We like to pretend that the /r/wallstreetbets or crypto people are crazy, but most are median earners that feel that there's no way to break out without gambling. When we look at the housing situation, most are sadly right. What do people want? To marry a cute girl, buy a house, have a few kids, retire, go fishing; if they get that big promotion maybe even buy a boat. But this life is simply not attainable today.
    - saagarjha 4y ago
      I mean, you already probably know this, but the risk profile of a startup that fails is not that you keep your money constant. It’s that you’ve been spending it all on rent and utilities for the last 7 years and have nothing to show for it. You’re still gambling away your savings, at a much slower and controlled rate, and the house at least doesn’t have the advantage over you, but it’s still incomparable to the risk profile of a 9-to-5.
      - dvt 4y ago
        Yep, a 9-5 has no risk, but no upside. In my humble opinion, a startup provides the best "balance" between risk and upside for those of us that come from lower or lower-middle class. I think your 7-year example is a bit contrived, since (barring exceptions like biotech, space, etc.) if you're working on a project for more than 6 months without product-market fit and/or growth, you're doing something wrong.
        madengr 4y ago
        citizenpaul 4y ago
        I think think that is borderline dangerous advice. Most people don't have the mindset or proper understanding of the startup world. On avg if you enter the startup space you are going to get chewed up and spit out and find yourself looking in the mirror at a middle age face with nothing to show for a lifetime of work.
    - esoterica 4y ago
      > That's even more of a no-brainer, as an average 9-5 has practically zero upside, so your net worth is likely to stay flat (if not even go down). The average millionaire is just a schmuck with a high paying 9-5 job. Doctors, lawyers, engineers, generic corporate drones etc. I don't know where you got the idea that it's impossible to make more than a subsistence wage with a W2 job but you are wrong.
- yieldcrv 4y ago
  I personally find trading crypto to be lower risk than options trading. They have options-like returns, but without the theta decay - you have a longer time period to be on the correct side of the market.
CamperBob2 4y ago
The cool part is, you get to try again.
jliptzin 4y ago
I have started a number of businesses, even what I considered the unsuccessful ones still made me more money than I would have made at any 9-5 I could have had at the time. You just have to be willing to do something boring and compete against businesses that aren’t currently being run well. Starting the 7,000th craft beer company is gonna be really hard but (for example) being the #1 powerwashing company in your town is boring but way more lucrative
- scarface74 4y ago
  The average enterprise dev in any major city in the US can make twice the median household income with 3-5 years experience.
  - jliptzin 4y ago
    That’s still not that much
    - scarface74 4y ago
      It’s not that much yet people making the median household income are not living on the street going hungry.
      - aetherane 4y ago
        That's a pretty low bar, though. There are many different levels of struggling but I don't think it is productive to deny challenges of someone just because they are better off than some others.
        scarface74 4y ago
        Do you mean “struggling” as in “I can’t provide myself with food and shelter” or do you mean “I can’t put little Johny in private school and buy the 3500 square foot house in the burbs and go on nice vacations twice a year”?
- 4y ago
sandworm101 4y ago
If done right, such a failure only impacts the investors, and anyone who took stock instead of a proper wage. The savvy founder pays themselves a salary high enough that they are totally in the black long before the bank arrives to repo the furniture.

by Merad 4y ago

dvt 4y ago

High failure rate ≠ high risk. Everything with a high upside will have a high failure rate, but working 10 hours on your own startup a week is definitely lower risk than gambling with options (which is what /r/wallstreetbets is doing) or gambling with crypto (even higher risk). I know people that made low 7 figures last year flipping NFTs, but the risk profile (to me, at least) was untenable. At least in Vegas you get free drinks.

saagarjha 4y ago
Ok, but the comparison was to a 9-to-5 job, not gambling.
- dvt 4y ago
  That's even more of a no-brainer, as an average 9-5 has practically zero upside, so your net worth is likely to stay flat (if not even go down). We like to pretend that the /r/wallstreetbets or crypto people are crazy, but most are median earners that feel that there's no way to break out without gambling. When we look at the housing situation, most are sadly right. What do people want? To marry a cute girl, buy a house, have a few kids, retire, go fishing; if they get that big promotion maybe even buy a boat. But this life is simply not attainable today.
  - saagarjha 4y ago
    I mean, you already probably know this, but the risk profile of a startup that fails is not that you keep your money constant. It’s that you’ve been spending it all on rent and utilities for the last 7 years and have nothing to show for it. You’re still gambling away your savings, at a much slower and controlled rate, and the house at least doesn’t have the advantage over you, but it’s still incomparable to the risk profile of a 9-to-5.
    - dvt 4y ago
      Yep, a 9-5 has no risk, but no upside. In my humble opinion, a startup provides the best "balance" between risk and upside for those of us that come from lower or lower-middle class. I think your 7-year example is a bit contrived, since (barring exceptions like biotech, space, etc.) if you're working on a project for more than 6 months without product-market fit and/or growth, you're doing something wrong.
      - madengr 4y ago
      - citizenpaul 4y ago
        I think think that is borderline dangerous advice. Most people don't have the mindset or proper understanding of the startup world. On avg if you enter the startup space you are going to get chewed up and spit out and find yourself looking in the mirror at a middle age face with nothing to show for a lifetime of work.
  - esoterica 4y ago
    > That's even more of a no-brainer, as an average 9-5 has practically zero upside, so your net worth is likely to stay flat (if not even go down). The average millionaire is just a schmuck with a high paying 9-5 job. Doctors, lawyers, engineers, generic corporate drones etc. I don't know where you got the idea that it's impossible to make more than a subsistence wage with a W2 job but you are wrong.
yieldcrv 4y ago
I personally find trading crypto to be lower risk than options trading. They have options-like returns, but without the theta decay - you have a longer time period to be on the correct side of the market.

CamperBob2 4y ago

The cool part is, you get to try again.

jliptzin 4y ago

I have started a number of businesses, even what I considered the unsuccessful ones still made me more money than I would have made at any 9-5 I could have had at the time. You just have to be willing to do something boring and compete against businesses that aren’t currently being run well. Starting the 7,000th craft beer company is gonna be really hard but (for example) being the #1 powerwashing company in your town is boring but way more lucrative

scarface74 4y ago
The average enterprise dev in any major city in the US can make twice the median household income with 3-5 years experience.
- jliptzin 4y ago
  That’s still not that much
  - scarface74 4y ago
    It’s not that much yet people making the median household income are not living on the street going hungry.
    - aetherane 4y ago
      That's a pretty low bar, though. There are many different levels of struggling but I don't think it is productive to deny challenges of someone just because they are better off than some others.
      - scarface74 4y ago
        Do you mean “struggling” as in “I can’t provide myself with food and shelter” or do you mean “I can’t put little Johny in private school and buy the 3500 square foot house in the burbs and go on nice vacations twice a year”?
4y ago

sandworm101 4y ago

If done right, such a failure only impacts the investors, and anyone who took stock instead of a proper wage. The savvy founder pays themselves a salary high enough that they are totally in the black long before the bank arrives to repo the furniture.