Interesting stats on tech startups – only 16% fail?

robbieallen.com

13 points·bouncingsoul··5 comments

Data is clear, individuals don't succeed. The larger the founding team, the higher the chance of success - Solo entrepreneurs seldom succeed, 2 are more likely to succeed, 3 are even more likely, 4 are even more likely, and 5 are even more likely (don't have enough data after 5)

I think the main factor behind this is not work division, but social stimulation. Just being around other people is stimulating. Plus, we are wired to assign importance to what other people are doing; if nobody else is doing it, it doesn't seem important. By contrast, look how hard two friends will compete to outdo each other in meaningless contests of trivia, gross-outs, and even hazardous stunts.

... of the 769 companies in his study.

That 90% failure percentage is still true. You just have to not die for a grand total of 18 months, and the odds go from 85% to much less.

The author of the linked article talks about the 90% failure stat in a blog post (http://robbieallen.com/2007/05/against-the-wrong-odds/):

> An often cited statistic (presumably from the Small Business Administration) is that 90% of businesses fail within the first 12-18 months. ... Fortunately, the stat is a load of crap.

He talks about how the average outcome of widely differing situations isn't useful. The average entrepreneur has less than a high school diploma. If you've graduated highschool than the 90% failure rate already doesn't apply to you.

That's a bit like George Burns's famous saying, "If you live to the age of a hundred you have made it because very few people die past the age of a hundred."

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Interesting stats on tech startups &ndash; only 16% fail?

Interesting stats on tech startups – only 16% fail?