Any of us who have had at least two “successful” businesses will tell you that this quote is ridiculous.
What’s your ideal of being successful? If it’s exiting at a billion, then sorry. But you can use a lot of this entrepreneur advice to find some level of success.
The problem is that non-entrepreneur or first timers always try to skip the small stuff.
1. have a good team and hire right. you need just three roles: sales, operation and product.
2. TAM is real and will determine the size you can grow your business.
3. focus on sales first literally. as a founder you should do your own selling. take care of your customers!!!
4. don’t be a crook
5. manage your money right; be cheap.
6. grow where you’re planted. dig deep in areas you know or that your personal networks know.
7. be lucky - this is about timing and also putting yourself in a place to have information first or at least know the value of certain information first.
8. know you’re going to get it wrong sometime and fail; when that happens take a small break and then spin up another
I’ve bootstrapped two companies to success in my eyes which has changed me and my families life.
The first was in the 2000s out of college (~$500k annual) it eventually petered out then in the 2010s (~$5m annual). Now I’m going to do another and I hope to create a $5-10m company all off the advice of other entrepreneurs.
I’ve also failed miserably and had 5-7 business go under or never even really get off the ground.
Honestly it just looks to me like the lottery you won is not "having a successful business", but "having the luxury and connections to try and fail 5-7 times with one success"
Most people cannot afford to recover from failing once.
Yeah, this is one of the things that drives me nuts about these "inspirational" stories where some millionaire/billionaire talks proudly about how their first business failed, their car was repo'd, bank foreclosed on them, etc... but I've never heard one talk about what they did between that and the successful business. Where did they sleep? How did they afford food?
There is a parable I can't remember. The gist is as follows.
A man/woman has a nice life, a cheap apartment in an okay neighbourhood. Their 9-5 job isn't particularly exciting or well-paid; however, at the weekend, it allows them to enjoy sports, video games and other frivolous activities, such as dating and hanging out with their partner or children.
A stranger approaches them and says they make a much better life for themselves. He tells them they just need to get a cheap apartment in a sketchy neighbourhood, work all waking hours of the day, and give up any fun until they make it. They may fail five times until they succeed and may be declared bankrupt.
After listening, they ask what their life looks like after they make it. He answers it allows them to have an okay apartment in a more expensive neighbourhood, and they can enjoy sports, video games and other frivolous activities, such as dating and hanging out with their partner or children.
They smile at the stranger, and say "But I already have most of this right now". The stranger walks off wearily.
Indeed. I’m not an entrepreneur or anything but liken it a bit to having a good initial poker hand - you can win with one good card but it is helpful and gives one more options to have two good cards.
So in the context of bootstrapping a company it’s helpful to have a legit fallback (way to suck it up and find an OK job) when things don’t pan out.
Edit: maybe this is obvious for CS/software folks but the extracurricular work I’m involved with is not exactly tech related, though my day job is coding
I'm never sure what to do with this class of comment - it reminds me of guys who say they can't get a girlfriend because they're 5'8".
(Also, you forgot people whose parents are able-but-unwilling. This also sometimes makes some things harder than they would be, compared to, say, being given fistfulls of cash each weekend by your rich parents who have a sofa AND a bed.)
> Having a strong support group in your life is probably one of the most important things to success.
This. “It's not what you know its who you know.” Though often the people who give that advice privately are the most invested in maintaining the illusion of meritocracy publicly.
This works a lot better if you have parents that live in Palo Alto or SF compared to Tulsa, OK.
To the original post, I generally agree. There are some fundamental lessons about business you can learn, and if you follow them, have a better chance of success. But the magnitude of that success largely comes down to luck. There's plenty of thought leaders out there that just happened to join the right company at the right time. Much of their success is "beta" rather than "alpha", but they are treated like they have unique insight to drive amazing outcomes.
right, also we don't like hearing stories about all the entrepreneurs who failed to find success, and slipped into impoverished obscurity. How many kids are sitting in the back seat of the car, lamenting "I could have been a contender" you know? You don't hang out with the ones who failed to keep their heads above water, because you're afraid they're going to drown you too.
Elon Musk cleaned out manure tanks for a while in Canada if I'm not mistaking. There are some interviews where he talks about this (and showering at the gym across the street and sleeping under a desk and having no money) in quite some detail.
"But still you'll never get it right/'Cause when you're laying in bed at night/Watching roaches climb the wall/If you called your dad he could stop it all."
This was basically Memnoch The Devil's [0] argument against the legitimacy of Jesus Christ's sacrifice - it didn't count, because he did it with full knowledge of his own immortality. Through crucifixion he suffered and died, but he never faced the existential dread that plagues humankind, and therefore giving up his own life was an inauthentic act.
It's more that he came from such wealth that his family could acquire a nontrivial share in an emerald mine on what amounted to a whim.
> Standing with the cash in his hand, Errol was made another offer he couldn't refuse: Would he like to buy half an emerald mine for half of his new riches?
> "I said, 'Oh, all right'. So I became a half owner of the mine, and we got emeralds for the next six years."
If Wikipedia or Snopes are to be believed on the matter (and I really don’t know anymore), this is way overblown. Mines (emerald, not diamond btw) are cheaper than you think. If my dad buys half of a tiny mine in his retirement I’ll start walking around claiming I’m from a mine owning family!
The story of how he even got to own the mine sounds pretty wild:
“According to the story, in the mid-1980s, Errol and a copilot landed their plane near Lake Tanganyika in Zambia, where "a group of Italians" offered them 80,000 pounds in British currency in order to buy the plane.
Standing with the cash in his hand, Errol was made another offer he couldn't refuse: Would he like to buy half an emerald mine for half of his new riches?
"I said, 'Oh, all right'. So I became a half owner of the mine, and we got emeralds for the next six years."”
It proceeds to say he made about $400000 from the mine in total - hardly a billionaire villain level money.
> It proceeds to say he made about $400000 from the mine in total - hardly a billionaire villain level money.
Just to clarify for anyone else wondering, that’s 400,000USD inflation adjusted for 2021. Converted to South African rand, it’s about 7.2 million.
To put that in context, the average home price in South Africa is about a million rand. So at most they would have been able to buy 7 properties. If they bought in an expensive area, they likely would have only been able to afford 4 or 5.
There are lots of people from wealthy backgrounds who'll slum it for a while. There's not usually a reason to doubt that. The thing to keep in mind is that voluntary/temporary poverty is very different from poverty you can't get out of with an embarrassing phone call.
I lived in relative poverty for a while when doing my first business, and while my parents were not particularly wealthy, knowing they provided an escape hatch took a lot of pressure off (living somewhere with a highly functional welfare system provided additional comfort). Things could have crashed and burned at any time, and I'd likely have been better off financially.
>Most people cannot afford to recover from failing once.
That’s not true in my experience. I’m a similar case, have started 8 businesses in 30 years. Most have had some level of success: enough pay my employees and provide good healthcare while also making a (often small) profit. I’ve also had 2 exits, one of which generatied a life-changing amount of money for my co-founder and myself. Of the 6 business that did not exit, 2 failed to start, 2 achieved multi-million dollar revenue levels then failed, 2 somewhere in the middle.
In between startups I worked for other companies. I tried to optimize $/hr while I did, rebuilding my reserves and even my credit (lost everything once)
Working for others after a failed startup has many benefits. You look at company leadership differently. You observe. You learn. You make more connections. You see more market opportunities. You get inspired. You try again.
Probably key in being able to do this cycle well is to not let the businesses get over leveraged. I’ve had both funded and non-funded businesses. I’ve gone nearly broke a couple of times but a big part of learning to be an entrepreneur is learning to manage money.
I'd assume "most people" refers to the average (assuming American) person that likely has tens of thousands of dollars of debt and works a job (or three) that can sustain them only by not fully servicing that debt. Putting time and money into a business venture means putting all they have on the line; failure means "skin of the teeth" living for some decades, if they can survive some winters outside.
Just a comment on this. Congratulations on exiting with "life-changing money". But I think germane to this comment would be the order in which these companies were tried and succeeded or failed would be relevant.
I assume your first venture was not the "life-changing money" venture, and the impact of when that did happen certainly can change the narrative of the rest of the businesses in regards to risk taking, particularly if it was not the last venture that was greatly successful.
Not if you have the connections and funding to start on third base where you can afford not to work and start your business on the side and hire enough people where you don’t have to work hard.
I worked for a startup before my current job where the founders - two brothers - had connections with the governor of a state in the Midwest to get a grant to start a small health care company. Neither of them were technical. They hired a few people in the state as basically QA and then hired a full stack consulting company that did the design, the project management and the development by hiring cheaper labor from India.
Then when they started getting enough revenue, they started bringing the technical skills in house including hiring a very good CTO.
The CTO then hired me as his third technical hire to oversee the “cloud application modernization” initiatives because they wanted to sell access to their micro services to large health care providers.
They sold the company three years after I was hired for 10x revenue. It was only $30 million. But the founders and the CTO I assumed made out well.
I think the people who had been there the longest made in the low six figures. I left ten months earlier and didn’t exercise my options. I might have left about $60K on the table.
Please play the worlds smallest fiddle for me. My next job after leaving the 60 person company was a remote job working at $BigTech in the cloud consulting department where my two year prorated signing bonus was $nice.
And that’s the entire purpose of the article. “I pulled myself by own bootstraps by calling my parents and asking them to write me a very large check and to put me in contact with someone who could give me a path in”
Sure, yeah a lot of them are oblivious because of the conscious effort they still had to make. I don't think people need to make disclaimers about all the privilege they recognize they had, that's pretty performative.
I think it is up to everyone else to recognize the barriers to entry. In feudal society everyone knew that.
How much money are people sinking into micro-SaaS in 2023?
If you live in a cheap place, get a decent job, then you can save money which you can use to start a business.
It costs literally $50 to get a LLC from your local Secretary of State or equivalent. You can do it yourself…like tomorrow.
Your chances of making it to Elon Musk status are slim, but there’s literally no excuse in America to not spin up an LLC by tomorrow, get a free EIN, open a bank account for FREE, throw up a landing page and start interacting with potential customers…
If I follow the "scratch your own itch" advice I ultimately fail because nobody wants to pay for e.g. a better register allocation algorithm for 6502 C compilers.
If I follow the "put yourself in the future and build that" advice I fail because nobody wants to pay for e.g. a library capable of guaranteed constant-time computation.
If I follow the "build products for your niche hobby community" advice I fail because nobody wants to pay for e.g. a better than state-of-the-art comb filter designed for NTSC laserdiscs.
If I follow the "capitalize on new trends in tech" advice I fail because nobody wants to pay for e.g. an ML model trained to invert audio cassette dub generational fidelity loss.
How do you figure out what people want when you're very, very, very different from most people?
Trying to form an entire business around some small bit of technology is a non-started, imo. Focus on one area (eg the 6052 uc), blog with passion about what you're doing, build a following, and start up a Patreon. The long tail of the Internet enables business models that target tiny niches, so the cassette heads can find each other, and subsidize the creator of an ML model trained to invert audio cassette dub generational fidelity loss.
It's a scary leap to make, but if you can pay some bills following your passion, making things you need to build, then I'd call that a win.
You won the lottery in the sense that you went to college, live in a well-off english speaking country and as such, can burn through 5-7 failures. I'm sure you're smart and hard working, and I don't believe in shaming gringos as if being born rich (e.g. having access to a toilet and clean water) was their own fault. You deserve to be happy with what you have. But will never get to be preachy about it without some one calling you out, unless you surround yourself with people with the same biases.
No they're not. Just the self-admitted fact that they could afford to fail 5-7 times creating a business shows that they had more social and financial safety net than an average American. Most Americans can't just create a business, fail, and repeat it 4-6 more times.
[1] is interesting - suggests that 32% of American adults getting a surprise $400 bill would require them to borrow, sell something, or be unable to pay it.
Which is quite the statistic when you think about it.
> Any of us who have had at least two “successful” businesses will tell you that this quote is ridiculous.
> I’ve also failed miserably and had 5-7 business go under or never even really get off the ground.
This means that you incurred (2+) / ((2+) + (5-7)) chance of creating a successful business. This is in the spirit of the OP. Creating a business may involve some skill, but ultimately it's just a lottery. Sometimes you win only because you're lucky. Or something you lose only because you're unlucky. I apologize but I truly do think giving advise like this can be dangerous. Not everyone is as privileged and maybe a single failure can put them in life-long debt, or financial trouble, or homelessness.
> As a ratio I’ve failed a lot more than I’ve won but it is not a lottery.
It may not be precisely a lottery, but if most of the successful people are “I’ve failed a lot more thab I’ve won”, then, the ability to afford to fail a lot more than you win.
Especially with the narratives where the failures involve periods of homelessness, etc., possibly mitigate by couch-surfing or other network support—having a network that mitigates in that way is fortune. Surviving homelessness without it in a way that lets you to buy another totally-not-a-lottery-ticket at business? Even more a matter of fortune.
That's exactly the lottery. The fact that you can play multiple rounds of "golf" is the privilege that the OP is talking about.
You are lucky enough to be able to afford buying multiple lottery tickets and some hit the jackpot.
Most people will never even have the opportunity to afford one lottery ticket.
The lottery idea works in the sense that I was born in the U.S. rather than a developing country AND my parents, who were far from rich or even stable at times still were able to afford a family computer (thank you Atari 520ST) which was very fortunate since my formal education ended the 3rd time I was expelled from high school.
Yes, from the life perspective, as opposed to a worst-case (even in the U.S) I most certainly am privileged and lucky, and did certainly win a lottery of sorts. You’re absolutely correct.
Having said that, most of us that work in tech have won that same or a similar lottery.
Life, location, family, stability, yes those things are a bit of a lottery.
But not so for startups. Your odds of winning the lottery never increase. Your odds of winning in business do, as long as you learn from your failures.
I agree that measure of success is relative and like the principles you list, but your reply lands reinforcing the point of the tweet.
Does 2 out of 9 successful startups mean your tenets listed here will lead to your level of success 22% of the time? Or do they only lead to success 0.022% of the time and you're the 1 out of 5000? How do you know?
It's not just this topic, it's a problem with general advice humans give to other humans without applying any specific context.
While I don’t agree with the premise of the tweet, having created 2 successful businesses doesn’t necessarily mean that it wasn’t all luck, because you’re missing the fact that the number of entrepreneurs, who would be the equivalent of the lottery contestants, is highly limited.
If you had a daily lottery but only 1000 people were able to enter it, by year 5 nearly everyone would have won the lottery at least twice.
Yeah that is why he said it is a bit of a lottery. 2 of 9 seems like a pretty solid success rate but that means even you (someone who has a knack for it) would need 4 solid efforts to have good odds at getting a winner. 4 failed attempts is going to burn most people out emotionally if not financially.
Was your first successful business one of your first ones? What if it had taken you until your 6th try to get a winner? Would you have stuck it out?
You are precisely demonstrating the original post, no?
You had 2 of 9 businesses succeed. You are demonstrating roughly 1:5 odds of rolling a successful business.
With 1:5 odds if we reroll you doing 10 businesses over and over, 10% of you never succeed. About 1/3 of you win once, 1/3 of you win twice, and 20% of you win 3 times.
The versions of you that won 3 times are not any different than the versions of you who won never. Any advice you give is neither more accurate because a version of you won 3 times nor less accurate because a version of you won never.
If you do everything badly (i.e. come up with bad business ides, cannot implement even those bad ideas, are bad at hiring, managing money, paying taxes etc.) then your success rate will be 0%, not 20%.
The issue here isn't about how hard starting a business is. It's obviously hard enough that many (most?) people who try will fail.
The issue is: can you do things better? Is doing things better lead to higher probability of success?
The "it's all luck" people say that you can't. There is no better or worse way. It's just luck. Therefore any advice is useless.
The opposite point of view is: yes. There are better and worse ways of doing things. And if you know what they are then you can tell other people. And that advice will help them to achieve success. But not guarantee.
"but not guarantee" is almost the entire point of what folks are pointing out and what the OP meant - you could do literally everything perfect and still it's VERY likely you will fail.
I’ve bootstrapped two companies to success in my eyes which has changed me and my families life.
…
I’ve also failed miserably and had 5-7 business go under or never even really get off the ground.
All other things being equal, I’d expect someone who started 8 businesses and had one mild and one moderate success to have more useful insights to offer than someone who started one business and had it become wildly successful. Yet our culture valorizes the latter to extreme extents.
Perhaps that was what “awinkinson” was trying to get at with his pithy comment on that terrible platform.
The tweet is a hyperbole, but it points at the important role of luck and survivorship bias.
It is clear that given the dimensions of skill and luck, the most success will come from having both. If you lack either skill or luck, you will automatically be at a disadvantage compared to those who have both. This implies that the most prominent success stories are the result of luck as much as of anything else. However that isn’t very often mentioned in those stories.
I think it’s probably right that some people are better at running successful startups than others. They might be more willing to try / fail, have better ideas, etc, and it isn’t just stuff like having good connections to funding.
I think it could still be true that the advice isn’t very good but not for the reason the tweet gives (I agree the tweet is stupid). In particular, I think there could be a lot of tacit things that aren’t really expressed in advice, especially the ‘startup influencer’ types who give out advice on twitter. For example, it might be that being really good at hiring and having people work on the right thing is a key skill and a successful founder might think they just walked around the office and asked obvious questions without being able to write down what exactly it was they did to steer the company in the right direction.
Unless your startup was profitable before you sold it, it could just as well be luck and connections and not skill. It takes a lot more skill to run a “profitable” business.
I wander how many of those “successful” startups will be successful when they can’t spend years living off of VC funding?
+1. I have 3 IPOs and numerous acquisitions, across multiple industries. It's still 50/50 but that's way better than the long odds most people face.
Also agree that it depends on your goals! I've done venture capital deals, self funded deals ("lifestyle"), non-profit & political campaigns, etc - and different stages and goals.
Obviously YMMV: I know people who legit get lucky and then their luck runs out, and I know smart guys who do everything right and can't catch a break.
It's also fun to angel invest. Get to see dozens more companies from (a bit) of the inside.
thanks. I was very early, but not a founder of the IPOs. If you have access to dealflow and add value (e.g. as staff, investor or adviser), then it's much easier to "pick winners" and let others take the bigger risks and enjoy the billionaire lifestyle. By valley standards, I'm a small but respected player.
Could you explain this a little more? I've worked in early stage startups for almost eight years and had 1 minor acquisition where I got barely anything. I'd love to look into this 'targeted approach' you mention.
Luck is involved in everything because whatever you have decided, it’s not a sure shot of winning. The decision to make the product a certain way for example, or certain timing, marketing spend etc and all of them matter
The chance of the average CS grad - well at least until this year - of being able to “grind leetcode and working for a FAANG” (c) r/cscareerquestions and ending up with over 1 million dollars of before tax “profits” in four years is much greater than your average “startup founder” that’s not even counting the risk premium.
Yeah, first finding out this is a way to game the software engineer hiring system and having the believe to go “all in” and try if one of the company’s stupid enough to hire mostly based on that fact
All of that seems very "necessary but not sufficient." The fact you had multiple businesses fail seems strongly to argue for that: presumably you didn't violate any of the above points when you failed?
I think they mean it was $5 million. The same sentence seems to be talking about both of them, but would be clearer broken into two before "then".
I'm interpreting it as "The first was in the 2000s out of college (~$500k annual); it eventually petered out. Then [the second was] in the 2010s (~$5m annual)."
Or “the $x market is one quadrillion dollars if we just capture 1% the company will be worth billions” - or the first slide of the pitch deck of every startup seeking venture capital.
That there are successful entrepreneurs, or that some of them may give good advice, doesn't mean that he doesn't have a valid point about entrepreneurial advice as a genre.
I think there are three keys to the problem: 1) readers want feel-good success stories, 2) successful people strongly benefit from positive PR, and 3) people often can't usefully talk about why they succeeded.
The first, I think, is pretty obvious. The Hero's Journey long predates modern capitalism, but it very much gets applied. On top of that, add that readers want to feel positive, powerful, smart, enabled. So you can't just tell them, "Sure, you'd like to be rich like this guy, but take it from me, you're fucked from the get-go." There's a good critique of the corporate bio that relates: https://davidgerard.co.uk/blockchain/2023/02/11/jeff-john-ro...
And the third is something I'm sure many here have experienced. I started coding as a child, the son of a software developer. When people ask me how to get started as a developer, the honest answer is: I have no fucking idea. I have little recollection of how I learned, and I have no idea whether the parts that were easy for me would be easy for anybody else. I'll be positive and encouraging and give vague general advice. But if I talked about what worked for me, it would be very much in the vein of "here's the lottery ticket number I used", because my path was so personal.
The third one resonates. As someone who also started coding at a young age, here’s what worked for me: 1. Have at least 10 free hours each week, 2. Get fanatically addicted to coding, 3. Repeat for 8 years and then do a four year CS degree. Pretty useless advice.
Apropos the article, it’s easy to imagine there’s a similar lottery for most paths in life, including entrepreneurship. “Be born rich enough that you have the innate confidence that the universe will bend to your will” is a lottery I didn’t win.
Surely, a kernel of the current political polarization is the left’s insistence that these lottery tickets matter, and the right’s insistence that the wealth they’re holding is the result of their own hard work. (To be clear, it’s a spectrum — tickets come in different sizes, and hard work plays a role — but such nuance has no place in public discourse)
Pretty clear to me after meeting a number of very successful people in NYC/SF that some people "just have it". Meaning, they can identify opportunities that have a high probability of success and execute on those opportunities. There are absolutely personality types/genetic backgrounds where stumbling into 100M based on thinking of an idea is a real thing.
Also, if someone went to a school like Stanford, its common for them to raise 5M in funding with nothing. From there, they can try for a few years with a decent chance at coming up with something, raising more money, pulling money off the table in round B, and then basically getting rich with no innovation at all. There are all these payoffs that exist from being in a certain class of prestige
Your first sentence is selection bias. Of course, successful people look like they "just have it". Once you have succeeded, convincing investors to fund another opportunity is far easier. The real question is how to succeed in the first place.
Having the right connections helps in getting funding. If you went to Stanford, your network would have many connections that are able to invest 5M. If you are raised in the slums, you are far less likely to have these connections, regardless of your genetic background or personality.
I've bootstrapped successfully three times, and have seen it from the other side.
Some people just don't get it. They have ideas that are so bad someone who "gets it" wouldn't even conceive of it as a possibility - the way that someone with Asperger's does unimaginably dumb things in social situations.
Unlike Asperger's, though, people that think this way aren't a tiny minority with a diagnosed disorder but ~70% of the population.
Yeah, it's really insane the number of bad ideas people try to make work.
All of the successful startups I've seen sounded like they could be successful. And every idea I've heard that sounded like it wouldn't be successful hasn't been.
Having a good business plan is no guarantee of success, but having a bad one will guarantee failure.
Any chance you could go a little more in-depth with what you mean? Why are the ideas so bad and what can someone who gets it recognize in them? Just curious.
Juicero for example. Most bad ideas stopped in the infancy stages, but some manages to find VC's who also don't get it and combined you get Juicero. There isn't something to get, its just really dumb ideas that aren't solving problems.
You need to be clear on outcomes though - as most people are talking about $10m+ exits for the founders. Bootstrapped to $100k ARR is nice but most people would still consider that a failure unless it takes little to no effort.
I started a business and realized very quickly that there are people who are good at sales and business development, and I’m not one of them.
The overall experience was still very worthwhile - what I learned about that side of things made me a better engineer, and I have a newfound respect for people who are good at the business side of things.
It would be easy for me to chalk it up to bad luck or not having the right privilege or whatever, but that just would be sour grapes.
As with everything in life, hard work can make up for lesser talent or bad luck, great talent can make up for a lack of effort, and being lucky is sometimes better than either.
Similar to software engineering its a skill that can be taught and honed. You don't get born as a natural salesman/woman but you learn the fundamentals, you practice and you get better.
Its funny how similar it is from the methodology perspective to programming despite it being about a completely different spectrum of skills.
> Pretty clear to me after meeting a number of very successful people in NYC/SF that some people "just have it". Meaning, they can identify opportunities that have a high probability of success and execute on those opportunities. There are absolutely personality types/genetic backgrounds where stumbling into 100M based on thinking of an idea is a real thing.
Yeah, I very much doubt it and I would bet a whole bunch of $$$ that there is no genetic basis, only a background/privilege correlation with some Gaussian noise. Do you have any papers to back up your claim? Or is this all anecdotes of "meeting people in NYC/SF"? We all meet people in NYC/SF but I see no such trend, I only see already rich people investing in things to get even richer.
Of course it does, the second paragraph in my original response states just that. This doesnt negate the fact that some people are exponentially better at business than others. Its the same in math, chess, basketball, football, writing, and every other human endeavor
> This doesnt negate the fact that some people are exponentially better at business than others. Its the same in math, chess, basketball, football, writing, and every other human endeavor
Citing chess directly contradicts your thesis about "innate talent".
In chess, the Polgar sisters are proof that training is the key and not genetics. The increasing existence of younger and younger chess grandmasters distributed around the world also shows that it's more about training than "innate talent".
Football and basketball do have a "innate talent" component--at the highest levels the competitors are genetic freaks.
However, any human endeavor not relying on pure physicality does not have "innate talent" limitations. "Talent" is almost always correlated to "early training" and "hard work".
I do wonder about the Polgar sisters case. By any measure their parents were also pretty exceptional individuals - just read the Wikipedia page - which is a huge confounding variable. Maybe “being laser focussed about raising a child genius” is a trait that manifests as “being laser focused at getting good at chess” when inherited!
"the Polgar sisters are proof that training is the key and not genetics"
Look, I don't have a dog in this fight but the idea that the Polgars "prove" that training is more important that genetics doesn't make sense. Evidence maybe, "proof" is just a silly assertion.
They were all born at different times and had different experiences and have different genes!
Here on HN folks are always going on about genes with confident assertions but the number of people that understand the difference between "heritability" and "genetics" seems to be very small.
"Football and basketball do have a "innate talent" component--at the highest levels the competitors are genetic freaks."
This is not a thing you have actual evidence for, and there are players at the highest levels of these sports that don't fit the mould of what you would expect it takes to succeed - it is too broad an assertion.
Polgar sisters clearly proves a genetic point if you notice their ancestry?
But I dont want to go individual examples, because individual geniuses possibly exist in every genetic pool. Let’s talk about averages where genetics do matter. On average which groups did/do well in intellectual pursuits. The trend is obvious but unfortunately taboo so we can’t have a reasonable conversation about this, even in this forum at times but if you study I think you’ll find some small sub groups overly represented in intellectual pursuits even when given extremely unfair environmental conditions like abject poverty or literal prosecution and you see this trend happening over and over again that it becomes clear to me that some gene pools are better suited to intellectual pursuits than other gene pools.
I only ever found one foolproof system to win the lottery, and it allowed me to win on every single ticket. I owned a retail store that sold lottery tickets. The retailer gets a small commission on every sale, and one on any ticket cashed in at the store.
This is basically the same as the VC fund model. They get annual carry (ie percentage) on every fund, and then get a percentage of the gains for every exit.
Often this is "two and twenty" (aka 2% annual carry, plus 20% of the gains). Pretty awesome skimming.
A shocking number of VC's still fail to make much money. The amount of effort to source and manage investments eats up a whole lot of those management fees, and the 20% carry is often after preferential returns up to a certain level and a lot of funds never reach that level.
(I worked for a VC until end of last year; still years of waiting to see if the carry I vested will pay out anything at all)
Absolute cope in the twitter comments, and it's weird seeing this on HN, which (at least historically) was a pretty entrepreneur-friendly forum. Yes, we get it, Zuck and Gates and Jobs were "lucky." But that doesn't mean starting a business is like going to the race track, and this extreme oversimplification reminds me of equally-reductive positions (solipsism, nihilism, etc.) where zero knowledge is imparted, and therefore zero knowledge is gained.
>Entrepreneurship is like one of those carnival games where you throw darts or something.
>Middle class kids can afford one throw. Most miss. A few hit the target and get a small prize. A very few hit the center bullseye and get a bigger prize. Rags to riches! The American Dream lives on.
>Rich kids can afford many throws. If they want to, they can try over and over and over again until they hit something and feel good about themselves. Some keep going until they hit the center bullseye, then they give speeches or write blog posts about "meritocracy" and the salutary effects of hard work.
>Poor kids aren't visiting the carnival. They're the ones working it.
Imo, this is completely false in the realm of software where anyone can launch a new app/project basically every other weekend and feel out what sticks & has traction.
Of course, but we're not talking about people in poverty, or that are homeless, etc. You're just bringing up a weird red herring that's orthogonal to my point--namely, that the bar is extremely accessible (esp. compared to ventures prior to the advent of computers).
More people than just those below the poverty line work on weekends. Launching an app over a weekend is easy...if you've got all of the required skills a priori and the leisure time available to do so. Launching an app over the weekend isn't a viable option for people lacking either of those two components no matter their distance from the poverty line.
This does not sound believable. Even assuming a 2 h / day commute each way, this person is working 56 h weeks with 28 h of commute? Introduce me to this poor person doing this (if they're within 50 mi of 94103) and if they have 2800 h of wages to show for last year, I will pay $1k just to talk to them for 2 h in a place of their convenience at a time of their convenience.
I think it's much more likely that people who are too poor to participate cannot participate in gainful labour in a predictable fashion, i.e. their employment is sporadic, or shifts are unpredictable, or they are seasonal labour. i.e. they are not time-constrained, they are employment-constrained.
Not sure what this has to do with anything; my point was just that the bar is much more accessible, generally speaking, than it was prior to software being a thing. It wasn't some grand thesis about the affordability of internet or larger social problems (housing, poverty, etc.).
Plus, the fact that having the winning lottery ticket numbers being your parents' telephone number, means that you can fail quietly until you succeed, then everyone sees the success.
Corollary: Nearly every "overnight success" happens 'overnight', sure. But the 'overnight' period is after decades of slogging it out in the trenches of obscurity. The ability to freely take risks with life with high potential payoffs is partly attitude, and partly being able to get up on the high wire with a net underneath, so you can try again until you succeed. Many end up succeeding without really knowing why, or noticing that they had the net to keep trying until they did.
Agreed. If Jeff Bezos started over in a non-tech industry, with no money or previous connections, is the author arguing that his chances at being successful in say a garden supply or waste management company the same as any other person? That seems absurd.
If entrepreneurs have no useful advice then there's no right or wrong way to structure or run a company, it's all random and any method will do. Just generalizing from other fields of study we know this isn't true anywhere else, so why would it be true for running a business?
If Jeff Bezos started off in a garden supply or waste management company then his chances of being successful would be well above average, but his chances of being successful enough for anyone in HN to care about what he had to say would be the same zero as anyone else looking to operate in those industries. What he had to say about would probably be quite different too...
It really isn’t, but not in the way you think. Starting a business is a _demonstrably_ worse idea than informed gambling.
Winning at horses is much lower variance, is easier to learn, and depends enormously less on accidents of upbringing and social class. VC has historically been a fallback for people who couldn’t hack it in proper finance, and while that’s a little unfair, it’s only a little unfair.
I'm going to disagree; it is like going to the race track (I assume you mean horses).
You might just be lucky, period, and still succeed. (Lightning does strike. ha, great name for a horse.)
But your chances are FAR better if you are well prepared, know the stats, know the jockeys, have inside info on what a horse has been fed, maybe even that morning, and so on. You might be able to rig things in your favor via inside connections.
But even with all your "skills" lined up, you still need luck and lots of it.
I think what I'm taking issue with is your statement that winning at the race track is _mere_ luck. No, like being a successful entrepeneur, it also requires lots of preparation.
Twitter by its nature is reductive. The position of the author here should really be read as: I know the other 5 lotto numbers. (baseline for a chance at success.) Now here is the 6th number, the random and lucky part that I'm taking credit for and that won't be reproducible by you.
"But your chances are FAR better if you are well prepared, know the stats..."
Gambling is zero sum.
Businesses, even failed ones, generally do some positive things along the way.
Learning to do things that are useful and getting paid for them is really different from learning some useless information that happens to help you win at the expense of others.
I generally have to agree with you, except for your denigration of betting. If it sharpens your analytical skills it isn't useless. And besides that, there is entertainment value. The "expense" comes against other willing bettors (addicted ones excepted perhaps -- but then lets also exclude negative value businesses like juicero, or basic supply hoarders during covid). Your characterization seems a bit extreme.
Anyway, to be clear, this isn't the point I was arguing. Whether zero sum vs positive sum, where any benefit might lie (value to society, or to anyone at all) is not my point. It's that skill is clearly involved in both activities, as well as a large luck factor. Not only did I not like the race track analogy, I found the critical reading of the tweet to be too narrow to be useful.
For the record and again, I generally agree with your comment. But as a reply to my own, I think you went off base from my argument.
I'm going to comment in a different direction: As someone who achieved great success at a young age (under 30) it is almost impossible for it not to go your head, mostly because everyone treats you like you are a genius. Unfortunately for me, I lived the adage that "pride goeth before the fall"
I was part of a small startup that was purchased by a big company, making me a worth a couple of million. It became a Tony Hsieh situation for me, with too much money and a large ego that told me I knew better than anyone. It wasn't until I surrendered and started doing what people told me to do to get better that I recovered. I had to be broke before that happened. It was quite a ride. I lived and survived all in one piece so I'm not complaining!
Zappos Founder Tony Hsieh Surrounded by Drugs and Nitrous Oxide Cartridges in Fatal Fire
Edit: I journaled about it recently, which I'll share in case in helps anyone:
I wasn't awake when I was younger. Like in the 80's when I suddenly made a lot of money. I didn't go to the beach and sit on a bench on a pier to think about it. What does this mean? How is this going to change my life? What do I have to do to manage a lot of money? What are my responsibilities to family that are still be struggling? That's what I mean when I say I was asleep. I was asleep in the ignorance of my youth. I did not have situational awareness. My self-awareness was low.
Bottom line: I grew up without much money. Since I was successful I thought I was smart enough to figure out how to handle a lot of money. Turns out, managing money is a skill that I don't have and wasn't going to figure out because it didn't interest me, so you know the saying "A fool and his money are soon parted"
Your reply makes me think of a blog post I read (I believe it was this one: https://collabfund.com/blog/the-art-and-science-of-spending-...) that talked about how there’s a big difference between the mindset needed to make money, and the mindset needed to save money. Many are good at one, but few are good at both.
I knew how to write code, not how to make money. Thanks for sharing that article because it's a good one. I'm in good company. For example, Mark Twain blew most of his money on inventions that were never going to work. Nikola Tesla died penniless. And so on.
I just want to add, when you are born in the upper classes and you strike it rich, people around you will recommend you get a wealth manager and hand you business cards. That doesn't happen when you are working class. Your friends and family are equally clueless.
My general take on successful people giving advice is to ask yourself "how reproducible is this?". When the advice hinges on a unique set of circumstances that you can't reproduce, then they are likely giving you their lottery ticket. Otherwise you might want to listen more closely.
> When the advice hinges on a unique set of circumstances that you can't reproduce, then they are likely giving you their lottery ticket.
People typically don't explain their success with "just after I opened the pickaxe shop, the gold rush started". Even if that is a major factor in their success, they will explain their success coming from other factors, like waking up at 5 am to listed to podcasts while running on the treadmill.
(The advice that you should wake up at 5 am and listen to podcasts on the treadmill is reproducible, but timing the pickaxe shop opening with the gold rush is not reproducible. You hear one as the advice, not the other. This makes it difficult to follow your advice "When the advice hinges on a unique set of circumstances that you can't reproduce, then they are likely giving you their lottery ticket. Otherwise you might want to listen more closely.")
> My general take on successful people giving advice is to ask yourself "how reproducible is this?". When the advice hinges on a unique set of circumstances that you can't reproduce, then they are likely giving you their lottery ticket. Otherwise you might want to listen more closely.
I think this is tricky - advice can be reproducible within a limited environment, but still be fragile. For example, extremely risky real estate investing can work within a market cycle. But if you try to bridge cycles without consolidation, you're going to be in for a bad time.
> ”Here's the number I used to win the lottery“ – Entrepreneurs giving advice
this is a funny quip, and it is completely recognizable as a quip.
Feeling the need to defend entrepreneurs against this quip is a defect in you. Feeling the need to analyze what %age of the time this quip would need to be true in order for it to be acceptable marks you as a complete nerd who misses the forest for the trees. Wanting to burden this quip with extra words so as to make it quantifiably good advice is misunderstanding what makes something funny.
have a laugh, go on about your day, this quip was never meant to be flypaper for humorless gadflies.
There’s definitely some truth to it, and it’s exposing humorless gadflies on both sides - those who feel the need to argue against it to justify their success, and those who can use it to feel better about their lack of success.
Cynical take, but probably popular in today's social media. I don't think it's right to say building a company is only based on random chance. It clearly also involves at least some skill.
Skill, and luck have a geometric relationship. Your ability to "catch" success is the surface area formed by multiplying those together. The more of each you have the more likely you are to succeed.
Skill is reproducible. A successful entrepreneur can tell you what skills they have found useful in their successes. You can look at a bunch of businesses and figure out what skills are necessary. Luck is not reproducible. Far too many entrepreneurs discount their luck or lack the ability to recognize and analyze it.
Yes indeed, there are some more nuanced takes on it in this thread that I thought were good.
I feel in corporate land this translates to the Peter principle in some cases where the manager made a random decision that turned out great.
I'm surprised I don't see a reference yet to Darius Kazemi's iconic 2014[1] talk, which is basically riffing on this joke for 10 minutes: https://www.youtube.com/watch?v=l_F9jxsfGCw
A key takeaway I've kept with me this whole time is the idea of there being two kinds of creative advice: (1) how to buy more lottery tickets, and (2) how to win the lottery. The former is useful, the latter not so much.
My favorite example of this is when there were all these books and articles in the 00s that were like "Google's Business Secrets" and "The Google Way". And then I remember a Google employee being interviewed and saying something along the lines of "To understand 'The Google Secret', pretend you have a giant basement full of money, and then whenever you pull bags of money out of that basement (to hire the best people, afford great perks, spend on the latest hardware, etc.), the basement magically fills up with money again. That's 'the Google Secret', and if your company doesn't have a massive revenue stream like that, a lot of their advice won't work for you"
I think the take home message is that successful entrepreneurs can tell you everything that’s necessary for success and it still may not be sufficient.
I work with some pretty successful people who started their companies.
I can tell you, the sentence is pure BS.
Successful people may not know why exactly they got successful. Or they may not understand how much what they do contributed to the outcome. But they certainly tend to be sharp people putting a lot of hard, HONEST work and doing a lot of things right.
Even if you could say it was luck, think in terms of being the kind of person that creates a lot of chances for luck and prepares so that when they get lucky they do most out of it.
It is a bit like a person who never bought a lottery ticket complaining the other one won. After playing it every day.
Don't be salty. Try to understand what successful people do that makes them successful. Just because they can't explain it well doesn't mean there isn't wisdom to be had.
> Try to understand what successful people do that makes them successful. Just because they can't explain it well doesn't mean there isn't wisdom to be had.
As a successfully exited entrepreneur I can tell you that a lot of stuff I considered important in my success later I started to consider optional. Or more precisely: there are kind of combinations of strategies/behaviors that strengthen each other, and that's why it is 1) too complex to write recipies like i see here at the top, 2) different clientale, context and the industry itself makes different kind of these work more or less.
Basically I think it is a bit arrogant to "know" it, but also it is quite pessimistic not to think and talk about these as successful serial-entrepreneurs have a lot to say that has merit.
Consider that luck starts at birth.
The genes you get, the health, the level of energy, stubbornness, personality, who you meet in life, etc .. these are all dice rolls.
It does take skill to build something, but having the ability to learn that skill is a 'chance', which is in the realm of luck.
Neither being lucky nor skilled is enough for success, it's the combination of both.
And here I leave 'success' as loosely defined.
You can't get lucky at the lottery unless you participate in it.
Skill is due to luck and subsequent luck in some area is due to skill.
I just mentioned above - luck comes first, skill is the ability to get lucky at something.
That was an overly simplistic and silly take. But there is a kernel of truth to it that has always bothered me a little.
I've started four startups with two exists and two failures. In every cases there were deals that, if they had come through, would have have pushed the startups to huge success. There were were also deals that, if they had not happened, would have killed that startup.
If you are skilled, you prepare. You plan contingencies. You are ready to take advantage of any opportunity that comes, but after that, a lot is outside of your control and comes down to luck.
The line between success and failure is often razor thin, but the world does not see it that way.
If you are an inch over the line you are a success; a role model. You are expected to share the secret to your success. If you are an inch behind the line, well maybe you had better go work for someone else and let the successful people talk.
Many successful founders give terrible advice, and many failed founders have fantastic insights.
I don’t actually get why people come to a tech startup forum and post this. Like, I get why this guy posts on Twitter (his audience likes this stuff), but why come to HN and do this?
I get it. /r/workreform, the managers are taking all the money and only make tps reports. But surely not every place needs to be like this.
As most commenters here say, this is a dumb take, all due respect to Andrew.
Entrepreneurship is 80% an emotional journey. Getting advice from other entrepreneurs about the emotions of starting and running a company is incredibly helpful. Nobody else -could- give that advice.
Exactly. Taking the low probability play with a high payoff is, well, unlikely to succeed. But talking to people who had a high payoff will lead you to think that it is guaranteed to succeed. Survivorship bias exists.
It’s not just a random lottery, but this is not totally wrong.
There is no formula, no one way of doing it. If there was there would be no entrepreneurs. Banks and large companies would just do the “thing” that always works and reliably produce successes over and over again.
All the chaos and trial and error of entrepreneurship exists because every market “hole” is a unique bit of problem domain that can only be filled by a unique solution.
When an entrepreneur tells you how they did it, their advice may not be transferable to anything other than their niche. It’d be like a fish giving advice to a mountain goat.
Bad analogy. Founding a startup is not entirely a gamble. There are some things you can do to increase your chances of success.
However, that doesn't mean you should do everything a successful startup founder mentions in their retrospectives. Founding a successful startup does not equate to having a flawless perspective into what caused your success. It's the job of VC firms to study startups and figure out what works and what doesn't, not founders.
Entrepreneurs make tons of decisions and lots of creative work that meaningfully impact their chances of success.
Maybe the chances are still quite low if you do everything really well, and maybe an entrepreneur giving advice is likely to massively overestimate that, driving the sentiment behind this tweet. But they're certainly higher than if you do everything really poorly.
Apart from a few lucky people, it all comes down to generational wealth, basically.
In the UK the leadership pretty much all come from the same stock on both sides of the fence, private schools etc, to be in high business/politics you're pretty much raised for your job.
I think it's somewhat valid argument. Reduced to absurd for sure, but not absurd. It's not only about randomness, but also uniqueness of situation.
You cannot become someone else. You cannot be where someone else was, when someone else was. And even if you can, it may not be the right place and the right time for you, as much as it was for someone else. Success cannot be copied.
I really hate these "12 steps to becoming successful" recipes. It's well know phenomena that people tend to unrealistically attribute success to their personal traits and not luck. Success needs skills and knowledge, but also some luck. I doubt successful people really know why are they specifically are successful unlike hundreds of their competitors.
This does not mean best practices do not exist. They do and they work. Only they work statistically. You may follow all best practices in the world and still fail miserably.
Making a half witted quip like this is far easier than actually trying to build a business. You just convince yourself that success is out of your personal control. Easy…no hit to the ego.
The author of the tweet is also a very successful entrepreneur; he owns 70% of a ~$700M CAD business [0]. Though I do think he is somewhat anti-VC culture.
I only give the context in case people think the author is some bitter, failed startup founder.
If someone say there is no luck involved they are saying they every position they take is 100% winning. 100% success rate in all decisions, sort of like a risk free investment, really no such thing.
The people you hire, there is no sure thing they can build it properly. The marketing effort, no sure shot. Absolutely every decision you make involves some luck
Pretty disappointing to see this on HN. it’s the weekend so quality is generally low but seriously this is what moderation is for. r/latestagecapitalism exists. Maybe take this trash over there.
First order, every number is equally (un)likely and there is no harm in choosing yesterday’s number, because it is nevertheless no more unlikely today than any other.
Second order, you want to avoid split pots, so doing what others are doing reduces EV… your number should be as random as you can make it… and any lottery that actually produced the same numbers twice in a short period of time would be subject to increased scrutiny, which must also be factored in (you might get no prize if it is discovered, even if the conclusion were untrue, that the lottery were rigged) so yesterday’s numbers actually are objectively bad choices.
I don't know why the "you didn't build that, you just got lucky/born wealthy/born in the US/born with good connections" argument has picked up recently. Just a lot of people wanting to justify why they're not also wealthy business owners? Most without ever trying in the first place?
Every idea for a business isn't equal. A good idea, combined with good leadership, and good execution, will 'beat the odds' the majority of the time.
Honestly, that this is all there is to the post, and that it was a tweet, just adds to the rediculous of the statement. Just spewing unfounded opinions with no evidence onto a platform that encourages short easily digestible posts.
Any of us who have had at least two “successful” businesses will tell you that this quote is ridiculous.
What’s your ideal of being successful? If it’s exiting at a billion, then sorry. But you can use a lot of this entrepreneur advice to find some level of success.
The problem is that non-entrepreneur or first timers always try to skip the small stuff.
1. have a good team and hire right. you need just three roles: sales, operation and product.
2. TAM is real and will determine the size you can grow your business.
3. focus on sales first literally. as a founder you should do your own selling. take care of your customers!!!
4. don’t be a crook
5. manage your money right; be cheap.
6. grow where you’re planted. dig deep in areas you know or that your personal networks know.
7. be lucky - this is about timing and also putting yourself in a place to have information first or at least know the value of certain information first.
8. know you’re going to get it wrong sometime and fail; when that happens take a small break and then spin up another
I’ve bootstrapped two companies to success in my eyes which has changed me and my families life.
The first was in the 2000s out of college (~$500k annual) it eventually petered out then in the 2010s (~$5m annual). Now I’m going to do another and I hope to create a $5-10m company all off the advice of other entrepreneurs.
I’ve also failed miserably and had 5-7 business go under or never even really get off the ground.