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Technology companies follow an extreme power law curve. Of all tech companies started in the US in any one year, around 15 ever generate $100M in annual revenu
by joshmlewis 14y ago
Technology companies follow an extreme power law curve.
Of all tech companies started in the US in any one year, around 15 ever generate $100M in annual revenue.
Those 15 companies are ultimately be responsible for 97% of the market cap for all companies started that year.
15 companies! That’s way harder than making the NBA in any given year – most of you would never attempt such a difficult thing. And yet here you are.
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Wow.
Edit: I mean you hear a lot about it's near impossible to have a super profitable startup and that most fail, but when you say 15 only ever generate 100mm in revenue, that puts a new perspective on it. For me anyway.
- harlanlewis 14y ago100mm annual. 100mm lifetime is still one hell of an achievement, but I'd imagine significantly more reach it than 3%. Lots of B2B companies survive for a few years with 8 figure annual rev.
- mkramlich 14y agoThe counter-complimenting (but not contradictory) point is that it's also true that you could create a business, especially a purely software-based business in terms of how it scales, and it could hit only say $1M or even $200k in revenue or profit each year, and that would be a huge success -- as long as you kept the team small, the ownership in your hands, etc., ideally as close to 1-2 people as possible even. Getting say $200k/year of mostly passive income would be a huge life-changing state of affairs. We don't all need to become GitHub or Pinterest or Facebook, etc. In business, a homerun is relative. FU money for a single founder with 100% ownership is pretty small in the grand scheme of things.