Quote:
Originally Posted by Baltar  It's kind of funny to see so many people warning of how difficult it is to start a business and that the failure rate is high. Of course it's hard, otherwise everyone would be doing it. Getting a job is something that anyone can do, which is why most people have a job.
As far as the failure rate goes, I think what many people don't realize is that your chances of success go up after each failure. ...
There's nothing magical about it. Business skills can be learned like any other skill -- by doing, failing, and learning from the failures. ... |
Entrepreneurships statistics have always interested me.
I read two books recently:
1- Illusions of Entrepreneurship
2- The Black Swan (highly, highly recommended btw)
The Black Swan talks a lot about survival bias in business and in life. It's the top 1%-10% that really get any attention, while the graveyeard of failures pass through the cracks of history like they never existed. It's heartbreaking to read of, say, Mathematical geniuses who devoted their entire (entire!) lives to solving one huge problem and had nothing to show for it. Whether we like it or not, luck does play some role - you can't deny 'the right place at the right time' effect.
The Illusions book gave statistical data on every aspect of entrepreneurship you can measure. As I read that book, I really got the impression that a lot of entrepreneurs really are hard working, motivated people with the right ideas but fell to the long tail of failures anyway. There's a blog of a failed software company startup here:
Diary of a Failed Startup -- it's quite interesting, and you realize that these guys were dedicated (and smart) as hell, yet still failed. Sure they did a lot of things wrong, but even successful startups do some things right and some wrong (I imagine it's hard to find which factors are forgiving and which are unforgiving in business). Nevertheless, you'll never hear of these guys (well, you did actually thanks to their blog) but you will continue to hear of all the Facebooks and Microsofts due to survival bias.
This is the statistical problem with 90% of self-help books on success (particularly financial success) -- these books interview successful people and draw the post-hoc conclusion that
all people with such-and-such qualities become successful -- which is wrong, because they really found that
all successful people have such-and-such qualities. Napolean Hill comes to mind...
Then, of course, there's the flipside. A statistic I would truly be interested in is finding out how many 100%
persevering entrepreneurs still end up in the long tail of failure. That is, if you take an entrepreneur who will continue to (1) try harder and (2) learn from mistakes after each failure, what is his chance of success? I still don't think it's 100% in every field, maybe some like IM, but not every field. (e.g. read
What Are the Odds of Becoming a Black Belt?)
I'm certainly not anti-entrepreneurship (or anti-job, or anti-anything). But I do think it's smart to look before you leap. Even if looking is scary as hell, at least look. I'm all for
Ready Fire Aim but don't forget that
Ready is still an important part of that process.
And P.S. I'm not trying to be a
Crab pulling people back down into the barrel, I just think this is an interesting topic worthy of being analyzed through more than one perspective
