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I have a problem with the analogy “lottery ticket”. I think analogies are helpful as long as we are talking perhaps a singe order of magnitude difference betwee
by raspasov 1y ago
I have a problem with the analogy “lottery ticket”. I think analogies are helpful as long as we are talking perhaps a singe order of magnitude difference between the two things.
The chance of winning most popular US lotteries is approximately 1 in 300,000,000. In comparison, the chance of IPO-ing a YC company is approximately 1 in 300. You can count how many orders of magnitude of difference that is.
- toomuchtodo 1y agoI buy a lottery ticket for $1, in a moment, with no further effort. A YC startup founder grinds for years, if not a decade, to reach IPO with unknown opportunity costs. They are not the same. How many lottery tickets over how many lottery draws to equalize the odds is a fun thought experiment to quantify a dollar value for the option premium. 17 YC IPOs over how many total YC founder years (Lifetime YC companies * # of founders * years YC company active, roughly)? (I’ve put a lot of thought into being a founder, from an aggressively data driven perspective about how to spend time, which is non renewable)
- raspasov 1y agoIt's all about the opportunity cost. There are always assumptions that need to be made, but it will be hard to argue that lottery tickets are better than startups. I don't think they are. A more useful comparison would be a serious statistical analysis between startups and other occupations.
- raw_anon_1111 1y agoI am not spending years of my life trading money for lottery tickets, startups are worse than lottery tickets
- raspasov 1y agoI said "serious".
- raw_anon_1111 1y agoThought experiment: who do you think would be better off as a group? 10 college grads working at any of the FAANG+ companies or the same 10 being YC founders?