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Comment by ampdepolymerase | Hacker News Reader

And luck too can be bought. With enough capital you can afford to play the game again and again.

This is why startups are a game for rich kids. If you know you can’t really lose, then you can just try again and again until you hit the three cherries.

I think rich kids will often lack the inner motivation and discipline to see a startup through. That's the flip side of knowing you can fail and it won't impact your life negatively. Startups are really hard, if you don't have that burning desire and fear of failure driving you forward, I don't think too much of your chances.

Anyone rich, or not can try again and again, it will just be harder for people who also need to figure out how to pay the bills.

Agree. And richkid can only found X startups in their lifetime.

If they play the VC game, returns are still extremely variable.

If they play a bigger game, then they start to be playing the same game as other players that the public can invest in (directly or indirectly) i.e. no advantage.

if you look at many startups that had successful outcomes, you'll generally find people who, if not rich, at least come from affluence. Affluence affords them the ability to take on more risk than say someone from a modest background, saddled with student loan debt. Generally, just because someone comes from wealth, it doesn't mean they won't work hard. I believe your comment is targeted more towards the trust-fund babies, who go through life having mommy and daddy pay for everything. Why work, when it'll all come to you?

This is something that bugs me about companies like Google just acquiring companies one after another. It's bound to work because it's a sheer number game. One that few can afford to play, one that practically can't be lost and one that will continually snuff out the chances for others to grow to that point and turn into serious competition.

But for any reasonable investment, you can’t know your odds are above 1 (or well above one for long term investments).

We see smart investors fail all the time (VC returns are highly variable, even though each VC is diversifying their risk across many investments).

All VCs together as a segment do not make enough return.

And the OP is wrong because you can only make a limited number of investments - because each takes time and most have a minimum stake. E.g. Buffett has so much capital to manage that he doesn’t invest in small businesses even if they might give 1000% return. And it disregards the problem that investors often concentrate their investment e.g. real estate mogul making a billion dollar bet with everything they own, or e.g. mom and pop putting retirement fund into one stock.

Exactly. It’s a about a capacity for risk. Rich kids have plenty of capacity since they’re essentially backstopped. A poor kid has one shot, and if it doesn’t start paying out quick, that kid starves.

Not necessarily.

If you fail, just get a job, save up more money, then try again.

The more you fail, the more you learn, the greater the likelihood of success the next time around.

> And luck too can be bought. With enough capital you can afford to play the game again and again.

If luck regresses to the mean both within and between startups, then it stands to reason that the value of more iterations is limited. I think it's probably more valuable just to be able to recognize which direction you're likely to regress toward.

Not really, because the returns and losses are asymmetric. If you lose, you lose maybe a million bucks of your own money, probably less. But if you win, you could be a billionaire.

This means that people with rich families and rich connections can afford to play the game as much as they have a taste for.

Sure, but it seems to me that most can afford roughly one iteration at most. I would argue that being able to roll fair dice multiple times is still better than having weighted dice that you only get to roll once.

I'm not sure what you mean?

If winning means getting 3 heads in a row by flipping 3 coins, and you have 3 coins to flip and someone else has 1,000 coins to flip, the second person is much more likely to win.

Tell that to firms like Softbank. They have enough money to play the game as long as they want. Even massive loses don't make them blink until WeWork happened.

That's largely irrelevant. The question is what is the optimal strategy for each player given the assets that they have. No one would deny that some people are starting off with vastly more assets than others.

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