This essay glosses over the fact that most startups die a horrible death and earn little to no money for the founders.
Somewhere in this essay it needs to say “99% of you who try this will fail”.
Somewhere in this essay it needs to say “99% of you who try this will fail”.
take the shot, but have a back-up plan, basically.
And, in the unfortunately common case, recognize when you cannot take any bets and instead focus on getting yourself to a place where you can, rather than betting everything and losing everything.
A 15-year-old hearing this talk from Graham as-is might take from it, "wow, if I learn programming, work on things that interest me, do well in school, and go to a good university, I'm guaranteed to build a Google-scale successful startup!"
Telling that kid that there's also a component of luck involved, and that the vast majority of startups fail, would temper that enthusiasm in a much more honest way. If that means fewer kids decide to start companies, that's obviously a negative in Graham's book, but may not be a negative for those kids themselves.
If the kid is motivated from this essay to learn programming, work on things that interest them, do well in school, and go to a good university -- I think they're well setup for success in their life.
- discount the useless advice you get from people who got lucky and are unaware of this fact
- target trying to be in the right place at the right time and have a plan B if you don't get lucky, rather than waking up at 0400 every day to eat raw eggs or whatever
- respect yourself and your employees more
- be more generous with what luck brings you
etc etc etc
a much better question is why do YC and co not talk about luck and connections more? why do they pretend it's all some imaginary meritocracy rather than hugely dependent on going to the right school / being born into the right social class, and then hugely advantaged by having YC's name recognition and tame lendors attached?
I think it’s reasonable to inspire more than hedge. They’ll presumably already hear lots about what the least risky things to do are from many, many sources — that’s the default.
The luck is seen in the short term fluctuations but over the long run when executing your strategy there is no luck.
This requires proper bankroll management among other things.
Also starting a business is easier than poker, poker is zero sum (more often negative sum due to rake).
Business is positive sum. What this means is people will gladly hand you money if your product generates more value for them than holding that money does. In poker, every single hand is like a fist fight because there is always a loser in every hand.
Yes you can win if you are a VC. Less clear what to do if you’re just a card.
The insight here is to only play in games that you have the advantage (or are at least evenly matched) and be very, very careful not to put yourself in a position to go bust on any one hand.
Also, people don’t realize that startups aren’t one single event. There’s a million events and each one has its own luck. For example, you make a piece of content marketing there’s luck in whether it performs well, but that luck can be managed and the risk spread across many events by doing lots of small pieces of content marketing.
I also wrote a blog post about how a popular psychology book oriented towards poker pros (The Mental Game of Poker) can be easily reframed for entrepreneurs:
https://writing.billprin.com/p/the-mental-game-of-entreprene...
With all that said, it’s highly ironic you picked Moneymaker as your example poker pro, since he’s famous in the poker world for being a very bad amateur player who got extremely lucky at the perfect time . It’s a bit like talking about the importance of hard work and deep technology skills for founders, and using Adam Neumann and WeWork as your example of that.
You may be overly generous in your estimation of MY poker skills! However bad Chris is, I am sure I am not anywhere close.
That's a prism it's really worth applying to all advice given by VCs: What's the outcome for me if I fail vs what's the outcome for them if I fail?
There is an opportunity cost to starting your own company, but it's not some kind of horrible experience that will drive you to bankruptcy unless you're part of the 1% who manages a spectacular exit.
Maybe start an actual, scaleable business that makes money. It's not sexy, but it's within the realm of possibility to get it off the ground yourself; and usually those within the gilded class are not interested in such things.
If you're a regular schmuck, maybe take a page from the countless immigrants in the U.S. that start various businesses (trade, real estate, etc.) that make them enough money to allow them to live like kings back in their home countries.
There's something to be said about the severe glaucoma of understanding class in the U.S. Very few (notably the middle class) are willing to internalize they're serfs, whose current comfort is more a product of luck than anything more. It's a precarious situation, and any notions of aspiring to "life satisfaction" or other leisure-class values is just foolish, in my opinion.
If you had a 1 in a million chance of winning something and you tried a million times, the chance of winning once is about 63.2%, not much different from when n=100.
So yeah, give someone 500 years, hopefully they keep going at it and the odds play out...but in the lets call it 50 productive years I feel I probably have been given, plus a few distractions along the way, there are maybe 5-10 serious bets one can place? Feels like that needs to be considered in conjunction with the mathematical probability "just keep trying" misleads us to believe.
10 coin flips can happen in less time than it took to type this reply. Those odds are a little more predictable because of the time span involved.
Also, I'm just more interested in family and enjoying the mobility of the youth I have left, much more than chasing down unlimited resources.
Each time, you learn and get better, your odds go up. Now the real question is whether your odds are going from 1:1000 to 1:100 or from 1:100 to 10:100?
Given it's a repeated game, and you gain knowledge at each round, I'd say the odds are probably pretty good that the highly dynamic / fast learning environment of early companies yields returns over a lifetime.
Google: 180,000 employees. Let's say including ex-employees 250,000
These started 1,200 companies, according to the only source I could find. These collectively apparently made their founders ~20 billion. Let's say (heh) that it's a power law, let's say the top 10 got 1 billion each.
So we're talking the odds for an "average" software engineer to get to 1 billion is about 0.1% * 10/180000 = 0.000005556%, or about 1 in 18 million.
Odds for a current or ex-Google engineer: 1 in 18,000.