Comment by ramanujan | Hacker News Reader

Comment by ramanujan | Hacker News Reader

Unfortunately, Vivek Wadhwa is being highly misleading here. He publishes a variant of this same article over and over and over again in every forum available to him (see his old TechCrunch posts, for example).

The key is really the misleading definitions at the beginning. He includes what we'd call lifestyle businesses as startups. Is a new carpet cleaner a startup?

Publish the raw data, Vivek, with the actual names of the businesses, their founders, their market caps, their sectors, and their revenue growths in a single publicly accessible, read-only Google Spreadsheet.

Because my feeling is that the actual businesses selected will differ strongly from the kinds of operations peoe on Hacker News are concerned with: Google, Facebook, Adobe, LinkedIn, Apple, Twitter etcetera, and the kinds of companies they acquire.

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Edit: here's the original study

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1431263

Note that this is a survey of 549 respondents across twelve industries. First, that is a relatively small sample to slice and dice on multiple axes simultaneously, though you can compare each attribute to the population at large.

More importantly though it is not a rank ordered survey within those industries. For example, identify the top N most profitable companies started in the last T years in the hardware sector, for different values of N and T. Who are their founders? What are their characteristics? They are going to look more like Jen Hsung Huang of Nvidia, another Stanford grad school product, than the demographic profile Wadhwa presents.

The big clue is how few of the companies in his survey have ever had venture capital -- which he cites as "myth-busting" about startups, but really just revealingly myth-busts his sample set.

I could go next month and start an innovative book shop with a wine bar instead of just coffee drinks, but that's why we have the distinct term "startup" to mean a new business likely capable of exponential scaling once it proves product-market fit, the only kind VCs want to plug into, and not just a new small business that is likely always going to stay small or at best grow slowly, that will be fun and might pay the bills but would never be worth outside equity investment.

Wadhwa gives no indication that I could tell that he's made any attempt at that distinction, except in the negative with the very low VC rate of his sample group, and with the claim that they are in twelve "high growth" industries. Twelve entire industries is a pretty broad segment of the entire economy, and doesn't approach the defining distinction of startups.

EDIT TO ADD: his selection criteria were just involvement in any of fifteen (17 except two are listed twice) industries indicated as high-growth, and which include for example "engineering consultants", "health care facilities", and "audio and video equipment" though a little later it says some of the respondents were also from "other (non-technology)", so it's pretty non-selective. He also defined a "founder" as "an early employee, who typically joined the company in its first year..." so his definition of "founder" is also pretty loosey-goosey. Good thing he cleared up myths about startup founders.

I want to agree with you because I find Vivek's writings repetitive, highly subjective, and often misleading. But to be fair, without seeing the study I can't be sure whether he's talking about startups or entrepreneurs in general. The title of the article is Five myths about entrepreneurs, but the content seems geared toward the tech sector. Unfortunately, the excerpt doesn't say which 12 "high-growth" sectors the study focused on.

> 4. Women can’t cut it in the tech world.

Vivek throws out this straw man (straw woman?), but other than a rare sexist I don't hear anyone saying that. There may be observations that the number of women in tech is low - and a lot of speculation as to why - but no one's saying women can't cut it.

> but other than a rare sexist I don't hear anyone saying that.

The thing about rare sexists is that they are not all that rare.

     Is a new carpet cleaner a startup?

Yes.

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