

Getting Rich By The Numbers, A CrunchBased How-To - zher
http://techcrunch.com/2012/07/21/getting-rich-by-the-numbers-a-crunchbased-how-to/

======
astrofinch
There's obvious sampling bias here. The companies in CrunchBase are not chosen
according to objective criteria. They're chosen because someone visited the
CrunchBase website and added them.

It's not a big surprise that the only semiconductor companies anyone bothers
to add tend to be the successful ones.

And, your company can be a cash cow even if it never gets acquired or has an
IPO. I suspect this applies to a lot of consulting companies, but what would I
know?

------
therealarmen
So, if you want to get covered in Techcrunch, start a consumer internet
company. If you want to get rich, don't start a consumer internet company.

------
Dn_Ab
What I find interesting is that biotech and semiconductor have barriers high
enough that you need to be high quality to even think of attempting. But lower
barrier areas like web and software have a lot more people trying but similar
numbers as biotech getting funded. This to me means that the hard stuff needs
lower barriers because a larger sample size should be correlated with a wider
variety of ideas. More stupid ideas sure, but also more of ideas so stupid
they just might work.

The numbers funded is strange. Take other for example. Are the ideas in Other
really that bad? Why are the numbers funded all within 2 magnitudes of each
other regardless of number of people trying? My guess is that active VCs form
a bottleneck on ideas and the numbers funded is more strongly coupled to the
number of active VCs in the area than the average merit of the ideas. And that
the number of VC per area does not vary too much, with areas like software and
web having the most participants.

~~~
cipherprime
Or could it be that dealing with atoms, vs. bits requires more OpEx and CapEx?

------
jamesmcn
Nassim Taleb makes a good argument in Fooled By Randomness that the best way
to maximize the expected value of your net worth is to go into dentistry. But
this isn't Dentist News...

<http://en.wikipedia.org/wiki/Fooled_by_Randomness>

~~~
nandemo
Hmm, I don't think that's a fair representation of what Taleb wrote. Dentistry
is just a profession he chose to illustrate his point. A stereotype. And the
point is not so much the high expected value of a dentist's income, it's the
very low variance of that income, i.e. a dentist's lifetime earnings are
pretty much predictable within a certain range. He could have said "train
conductor" and it would still be true.

Of course, dentist has the added merit of allowing you to get moderately rich.
But the real distinction is between dentistry vs. fiction writing or
entrepreneurship, fields where the difference between #1 and #10 can be an
order of magnitude.

I suppose Taleb's caveat here would be that while a table of past results can
be very useful for someone working in insurance or logistics, they are not so
useful or are even harmful if we're talking about startups. Until the other
day, the largest exit in the "web startups for sharing pics" category was
(say) $50 million, then the next day we saw a $1 billion acquisition.

------
diego
(+) Past performance is no guarantee of future results.

Edit: to clarify, the intro paragraph is extremely misleading. This analysis
looks back in time several years; he might as well tell you to start a social
network or a search engine. It would be honest to say that it's simply an
analysis of what _has_ done well, but of course it would not be as
sensationalistic.

~~~
pedalpete
to further your point Diego, maybe there hasn't been an IPO or major
acquisition in something like education because few companies are focusing on
that, and therefore it is an opportunity.

------
ixacto
I will love the day that I can start a biotech company with a laptop and an
internet connection.

~~~
technotony
That day is coming: <http://t.co/E1oURlQ9>

------
Havoc
Reads like a TechCrunch advert.

Good thing this isn't Reddit else I'd have phrased that less politely.

------
rabbitonrails
This is terrible, simplistic advice. The supposed "get rich" acquisition
industries both involve so much fundraising that by acquisition time, the
founder is likely to be buried under such a large liquidation preference that
he won't see a cent.

Total funding should never be an indicator "getting rich" -- it either
correlates with failure or a capital intensive project, neither of which have
anything to do with improving the founder's net worth.

------
majormajor
It sounds like there's supposed to be a table at the end, but it's not showing
up for me.

The first question I have, without seeing the numbers, is: do the higher
percentages of IPOs/acquisitions for more capital-intensive fields just mean
that it's harder to start and fund a company in those area without a much more
fleshed out idea?

~~~
palish
Here you go: <http://i.imgur.com/R7cZ5.png>

------
46Bit
"Well, if you want to make TechCrunch, you might want to start one of those
web companies. [...] At the bottom of the list was Biotech, with less than
half a percent of Biotech startups getting any coverage."

------
dinkumthinkum
For all the kind of derision in the article, I don't feel anymore
knowledgeable about startups, other than some vague thing about only
worthwhile business being biotech or semiconductors.

I would say don't let this article be any real part of your decision making
process, unless you're doing biotech, in which case I guess you can let it
boost your confidence. :)

