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Comment by Retric | Hacker News Reader

When a million people try X, a few hundred can get really lucky.

Tell a million people to go to take a grand to Vegas and bet their 1,000$ on 7 on a roulette table. Then have them take their winnings and do the same thing until FU money. Some of them would become millionaires, but collectively they would all be worse off. (They started with 1 billion.)

The secret is to look for things where risk > reward. Unfortunately writing generic web apps is probably not it. But, the obvious cost is simply time which people tend to undervalue, so it's not obvious if the game is rigged or not.

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You want a risk greater than the reward? That seems like a losing strategy to me.

What you want is a reward greater than the risk. Of course, everyone wants that. The way to find it is to have some insight into how to make the market more efficient (ex: a new product that solves a pain point), or to find an under-valued asset (ex: a business that is losing money because it is mismanaged).

Of course, municipal bonds also have a reward greater than the risk, but no one gets rich off municipal bonds. So you do want as much risk as you can tolerate, but you want the potential reward to be worth it.

The risk greater than reward scenario is no different than playing the lottery. You may get rich by chance, but on average, you lose.

Yea, I was thinking -> not greater than. see: http://news.ycombinator.com/item?id=1612073

I agree with your observation that not everyone can be amongst the lucky ones in the entrepreneurial lottery.

However, luck always goes in hand with superior skills and correct timing. Warren Buffett provides some great related reading material here: http://en.wikipedia.org/wiki/The_Superinvestors_of_Graham-an...

I'm confused. There are lots of things where risk > reward, and most seem like pretty poor ways to get rich (e.g. jumping off a bridge).

Sorry, that seemed more clear when I wrote it. I meant (risk -> reward) as in your paid for the risk you take.

You want to be the House charging people because you risk something, not the gamblers paying someone to let them make bets. In the startup world that seems to be VC's who charge people money to invest in startups while sharing the startup's upside.

Risk less than Reward seemed like a poor way to express it.

I think you need a comma in there.

FWIW the grandparent is nothing like it was when I wrote this.

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