If you're an entrepreneur, this is indeed the way you want to be thinking. But these are investors discussing outcomes for different startup creation vehicles. If you're an investor, you need to focus on the skinny tail of the outcome distribution, if only because it's where the liquidity is.

While I applaud his motivation, what he's suggesting is an intrinsically unsound way to go about it. A startup = a chemical reaction with extremely high activation energy. In such circumstances, the best thing you can do is get one or more catalysts. YC or any other VC/incubator is just a catalyst to lower your activation energy & let the chemical reaction happen sooner/faster. Without the catalyst, the reaction will most likely not happen, period. Whether you get a catalyst or not, you most definitely don't want inhibitors in your reaction. "Holed up in Philly for $650 a month working 14-hours a day" - that's a bigtime inhibitor right there. Why not spend $6500 in sv and work 8 hours a day - its a lot more sustainable, that $6500 comes out of some vc's pocket in exchange for equity, nobody's burnt out and everybody's happy. Let the capital markets work in your favor. Don't handicap yourself.

Median is arbitrary. Why not 90th percentiles? Profit pays the bills.

The whole point is that a very great fund will still have 60%+ with valuation of 0, and that's completely ok.