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The 99% (of startups)

justinkan.com

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Re: The 99% (of startups)

#131

Post by jasonkester »

noname123 wrote: post #29

Would love to see a series of good curves: (1) of all startup's started by people who working in the industry, quit FT jobs to do startup or put in serious moonlighting hours in startup; total earnings - opportunity cost, annualized: (total income from startup - opportunity cost of hours worked on startup) / years spent Maybe this data-set should be split further into bins of founders whose last title prior to startu…

You'll want to divide again by hours worked per year, since that's where the true payoff comes from running your own business.

Imagine a SaaS product that brings in just shy of a single Bay Area dev salary. Is that a success for a single founder who has put six years into building it? Of course not, right?

But what if said single founder now needs to put in roughly 100 hours per year to keep that business ticking along and delivering that salary? What if he can spend another 1000 hours per year building the next product, leaving a little over half the year to pursue his dream of competitive kite surfing?

Stick that into your curve, and I bet it'll trend a little more up and to the right.

Re: The 99% (of startups)

#132

Post by davedx »

Estragon wrote: post #127
6stringmerc wrote: post #70

Earlier quoted context omitted.

The way you phrase this reminds me of what I studied happening in the hedge fund world, in that some of the 'top performer' funds only out-performed the market due to insider trading. Galleon (Raj - convicted), SAC (sanctioned), and probably a handful more that got spooked out of the avenue of enrichment. It almost seems - almost - like there may be a similar insular community whereby those who feel like piling in wi…

It's fascinating to me that many startups put their crown jewels on github, a company with an inexplicably high valuation due to investments from some of the most successful VC companies. Don't they worry about exactly the kind of insider trading you're talking about, or worse? Same goes for slack.

"Crown jewels"? You mean a git repo? You know it's a matter of minutes to migrate between git repo hosting, right? :)

Re: The 99% (of startups)

#133

Post by Hengjie »

akg_67 wrote: post #129
zaidf wrote: post #112

Earlier quoted context omitted.

Pretty sure the fb board wouldn't have a problem with Zuck getting any in into one of their top competitors. Zuck bleeds fb and a minority stake worth a fraction of his net worth isn't going to negatively impact his judgement. It's pretty common for companies to get minority stakes in competitors to get an in. Granted that is much more common in the public sector and sometimes sews the seed for a hostile takeover. Th…

> It's pretty common for companies to get minority stakes in competitors to get an in. Do you have an example of this? It will be conflict of interest and may bring anti-trust issues. No competitor will allow access to confidential information and board proceedings to be observed by competitor. I have only seen this happening when two companies settle some legal claims (ex: QTM-Data Domain) or form partnership (not c…

Yes. Porsche made cars but also purchased a stake in Volkswagen. http://priceonomics.com/porsche-the-hedge-fund-that-also-mad...

Re: The 99% (of startups)

#134

Post by akg_67 »

Hengjie wrote: post #133
akg_67 wrote: post #129

Earlier quoted context omitted.

> It's pretty common for companies to get minority stakes in competitors to get an in. Do you have an example of this? It will be conflict of interest and may bring anti-trust issues. No competitor will allow access to confidential information and board proceedings to be observed by competitor. I have only seen this happening when two companies settle some legal claims (ex: QTM-Data Domain) or form partnership (not c…

Yes. Porsche made cars but also purchased a stake in Volkswagen. http://priceonomics.com/porsche-the-hedge-fund-that-also-mad...

Just because Porsche and VW both makes car don't make them competitor. One is a luxury car maker and another is mass car producer. Adjacent market deals are common, direct competition are uncommon.

Re: The 99% (of startups)

#136

Post by lmm »

6stringmerc wrote: post #70
downandout wrote: post #64

This gives an interesting glimpse into the prognostication abilities of supposedly brilliant VC's. It also shows the the near-impossibility of cashing in private company shares, at least through VC's. In addition to this story, the Sony hack revealed that Evan Spiegel of Snapchat wanted to cash in about $40 million worth of shares just after he spurned Facebook's $3 billion offer. He was also roundly rejected. Had so…

The way you phrase this reminds me of what I studied happening in the hedge fund world, in that some of the 'top performer' funds only out-performed the market due to insider trading. Galleon (Raj - convicted), SAC (sanctioned), and probably a handful more that got spooked out of the avenue of enrichment. It almost seems - almost - like there may be a similar insular community whereby those who feel like piling in wi…

There's an old saying that "you can't fool an honest man". Where did all the Albanians who poured their savings into Ponzi schemes think the crazy returns were coming from? Drugs. Where have a 419 scammer's supposed riches come from? Usually embezzled from Nigerian public funds.

Re: The 99% (of startups)

#137

Post by lmm »

Hengjie wrote: post #133
akg_67 wrote: post #129

Earlier quoted context omitted.

> It's pretty common for companies to get minority stakes in competitors to get an in. Do you have an example of this? It will be conflict of interest and may bring anti-trust issues. No competitor will allow access to confidential information and board proceedings to be observed by competitor. I have only seen this happening when two companies settle some legal claims (ex: QTM-Data Domain) or form partnership (not c…

Yes. Porsche made cars but also purchased a stake in Volkswagen. http://priceonomics.com/porsche-the-hedge-fund-that-also-mad...

Volkswagen was their supplier for some components, no? Buying a stake in your supplier/customer is a lot more common and non-antitrusty.

Re: The 99% (of startups)

#138

Post by Joof »

coryl wrote: post #88
Androider wrote: post #80

Earlier quoted context omitted.

Take 1000 people, have each predict a coin flip 10 times. The top 10 players will have predicted way better than random chance would have you believe. Why several of them are even 10 for 10, they must have special prediction powers! ;) Grow the player base, increase the number of predictions, you'll end up with some real super-stars who just go on winning. They'll probably write books and lecture about their techniqu…

Enough time and volume should eventually show whose truly good (statistically).

Flip 1000 pennies and calculate the results enough times and you'll get a gausian curve. Some results will consistantly flip heads the majority of the time.

It's harder to model with VC's because they are measured in rewards that get exponentially better with success (money) and are self-reinforcing (better deals from recognition). My guess is that they figured out how to eliminate the absolutely horrible ones and got lucky enough times to have the best deals come to them.

Re: The 99% (of startups)

#139

Post by zaidf »

akg_67 wrote: post #129
zaidf wrote: post #112

Earlier quoted context omitted.

Pretty sure the fb board wouldn't have a problem with Zuck getting any in into one of their top competitors. Zuck bleeds fb and a minority stake worth a fraction of his net worth isn't going to negatively impact his judgement. It's pretty common for companies to get minority stakes in competitors to get an in. Granted that is much more common in the public sector and sometimes sews the seed for a hostile takeover. Th…

> It's pretty common for companies to get minority stakes in competitors to get an in. Do you have an example of this? It will be conflict of interest and may bring anti-trust issues. No competitor will allow access to confidential information and board proceedings to be observed by competitor. I have only seen this happening when two companies settle some legal claims (ex: QTM-Data Domain) or form partnership (not c…

Dell. Michael Dell owned 15% of the stake. He partnered with a hedge fund to take it private(buy it back from all the many shareholders.)

Also, Jos A Bank's takeover by Men's Warehouse, facilitated by minority owner Eminance Capital.

Re: The 99% (of startups)

#140

Post by huhtenberg »

huhtenberg wrote: post #14
zillionize wrote: post #9

"There is a tremendous amount of excitement about the top 1% of startups, but there are hundreds if not thousands more startups that will make their founders and investors rich." I cannot agree more with Justin and we have had several investment cases like that.

What an odd comment. Reads like a spam for "zillionize".

(Parent has edited the comment now)
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