Hacker News Reader

Comment by jwoah12 | Hacker News Reader

Just taking out Dropbox and Airbnb, the average for the rest already drops quite a bit. With Dropbox at more than $4bil [1] and Airbnb at $2.5bil [2], that leaves the remaining 283 at about $5bil total, or $17.6mil each. Taking out others like Weebly would drop it further.

[1] - http://www.forbes.com/sites/quora/2013/02/07/why-is-dropbox-...

[2] - http://www.bloomberg.com/news/2012-10-19/airbnb-said-to-be-r...

View on HN

So what you're saying is that if you take all of the successful companies out of an investor's portfolio, that portfolio will have a lower value.

Well I think more precisely, he's implying if you take out the few heavy hitters, then the value drops precipitously.

Or stated even more precisely, the mean and median are very different :)

No, he/she is saying that "average" is a poor metric to represent the totality of the samples. This is particularly true when you have such a high standard deviation.

By eliminating some of the biggest outliers, you're reducing the standard deviation, thus making the average metric more representative.

You'd also have to disregard the companies with very low or no value, but it seems this was already done in PG's original statement: "Of the 285 _that have_ valuations..."

Measuring the "average" in any power-law distribution is mostly meaningless.

Wasn't reddit sold quite cheaply, and not part of this list?

Yes, my mistake. Edited.

Reply on news.ycombinator.com