
New Research on Startup Growth - thehoff
http://fivethirtyeight.com/features/the-next-amazon-or-apple-or-ge-is-probably-failing-right-now/
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dragonwriter
So the research seems to have identified:

(1) A set of behaviors which companies seeking high growth engage in, and
which high growth tends not to occur without,

(2) The fact that even with fewer _total_ startups, more startups are engaging
in these practices,

(3) The fact that startups that engage in these practices are growing less
likely to actually achieve high growth.

(Given the actual behaviors identified, it seems to be the kind of thing that
experienced and institutional investors will demand before investing, and its
quite likely that what they've identified is that knowledge of these demands
is better distributed and more businesses are engaging in them and seeking --
and receiving -- institutional investment, but that those behaviors, while
they are still key filters/demands used by institutional investors, are --
perhaps because _everyone_ knows them now -- no longer particularly effective
filters, they may still be useful and necessary, and there absence may still
indicate failure, but their presence is getting weaker as a signal of
potential success. Which isn't surprising, they are easy enough to do once you
identify that people are looking at them as signals, so they are no longer
indicators of particular sophistication on the part of founders.)

~~~
bencasselman
(I'm the author of the linked article.) At the margin, it's plausible that the
effect you're describing is having an impact. But the real distinction the
researchers are making is between companies that are looking to expand and
those that were always intended to be small businesses. They intentionally
avoided an overdetermined model ("Companies that rhyme with 'Gamma-zon' always
grow huge!") and chose attributes that more generally signal the intention to
grow.

~~~
hackuser
Thanks for joining us. What reception has the research cited received among
economists? Not being one myself, I'm not sure if I'm reading something widely
accepted, an innovative new idea, something untested or even fringe. I lack
the ability to distinguish between those things myself.

(Also, are you an economist? FiveThirtyEight's bio of you is pretty sparse.)

It's great to find some sophisticated analysis and content on the web, rather
than more talking heads. Thanks for writing the article!

~~~
bencasselman
I'm a journalist, not an economist, although these days my role is probably a
bit in between the two. (I have the luxury of digging a lot deeper than your
typical online journalist.)

This research is still new, so there's no clear consensus yet. But so far the
reception has been positive. The paper tries to get at a core question that's
bedeviled economics recently: How is it possible that startups could be
declining, given everything happening in SV? This is probably the most
sophisticated answer so far. But it doesn't mean it's 100% correct.

------
dang
We changed the linkbait title to something anodyne, but if anyone can suggests
a more accurate and neutral title, we'd appreciate it.

~~~
lkrubner
Can you describe what the current policy on titles is? Are you pro-anodyne?

~~~
dang
I meant "anodyne" not as a good thing but as "the best we can come up with for
now", i.e. at least it wouldn't provoke a big argument about linkbait. That's
why I asked readers to suggest something better. Nobody did, so maybe it was
just hard.

What the HN guidelines say about titles has been the same for years:

    
    
      Please use the original title unless it is misleading or linkbait.
    

We deliberately avoid having detailed policies, but in this case we can derive
a few corollaries. What we want is the opposite of what we don't want:

    
    
      1a. A good title is accurate and netural.
    

The reason for preferring the original title is to let the text speak for
itself, so:

    
    
      1b. When changing a title, try to find representative language 
          from the article, rather than making something up.
    

And since one big reason for the guideline is to minimize bikeshed-style
complaining about titles:

    
    
      1c. The best way to comment that a title is bad is to suggest a better one.

------
hackuser
There's a narrative about new businesses and startups that politicians and
pundits in the U.S. like to tell.

It's a magic wand that creates jobs and economic activity without any public
policy or investment - it solves problems without any effort on anyone's part
- heck, you don't even need to go to college, they'll tell you, so we can cut
education funding too.

It's also appeals to the idea of rugged individualism.

Unfortunately, the world doesn't work that way. I'm willing to bet that the
next big Silicon Valley success won't be founded by a minority person who grew
up in poverty, but by a white male, probably college educated, from a middle-
class or wealthier background. Most other people don't have access to these
opportunities.

Also, the idea promotes the 'gig economy', an unstable, poor-paying
alternative to real employment.

