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Sounds like there is a lot of survivorship bias to me. "We were profitable because we did it right, and we don't understand why one would decide not to be profi
by palata 1y ago
Sounds like there is a lot of survivorship bias to me. "We were profitable because we did it right, and we don't understand why one would decide not to be profitable".
I think it's important to note that if you're building your business and you are profitable, then you're lucky: you're doing something that you find cool, and it's bringing money.
> What holds you back is rarely team size – it's the clarity of your focus, skill and ability to execute.
This, to me, confirms what I said: nowhere they mention anything like "luck". "Being in the right place at the right time", etc.
The reason startups grow without being profitable is because they "fake it until they make it". They pretend that it's all normal and it will work in order to convince VCs who have no way to know if it's true or not, and don't care (it's just another bet).
Of course a founder won't say "we're not profitable because our company is failing". They will truly believe that they're not profitable because they are on the way to get profitable, through growth. But the numbers are here: most startups fail.
It's always tempting to believe that you succeeded because you are strictly better than the others. And that's the whole point of founding a startup: if it succeeds, the founders want to be rich. The first employees will be "compensated" for their lower salary and extra hours, they won't get rich. The founders have to believe that it's all their doing and that they deserve to get rich and not the other employees, that's an obvious cognitive bias. Otherwise how would they feel about themselves? I don't think it could work.
- brazukadev 1y agoIf all comes to luck, we can safely remove it from the equation when talking about success.
- palata 1y agoThat's complete nonsense. Do you safely remove luck from the equation when talking about the lottery?
- brazukadev 1y agoOf course. There are many ways to increase the odds to win the lottery, bets, games. You can't discuss luck but you can discuss everything else, like frequency. More attempts, more opportunities to get lucky. This is kinda obvious, no?
- palata 1y agoSure, you can discuss everything you want. Magic incantations and religion, too.
- jonah 1y agoSure, the chance of winning scales linearly with how often you play.
- teiferer 1y ago> The first employees will be "compensated" for their lower salary and extra hours, they won't get rich. Um..? Not sure what your definition of "rich" is. My neighbor joined a U.S. tech company as employee 1000-ish when that company was at a few hundred $100M revenue, 8 years later they are at a few $1B revenue and his comp has brought him into 8-figures (USD). If he wanted to then he'd never again need to work in his life. I call that "rich".
- palata 1y agoWhich percentage of all the people who worked in startups got rich? If your neighbour got into 8-figures, it means that it's one of the very big tech companies, and the founders are super, super rich. But that's a very, very small minority of the cases. The lotery makes a few people rich, but I don't think it would be fair to say that "the lotery makes people rich" in general. In general, the lotery makes people a little poorer.