The Book of Graham

Post by rdl » Wed, Feb 12, 2014, 2:51 PM UTC

toomuchtodo wrote: post #66

rdl wrote: post #60

Earlier quoted context omitted.

It's really hard to generalize. I think "person who is a top 10% but not top 5 Stanford undergrad CS senior" who then goes to found a YC-backed startup which ultimately fails after 2y is ultimately better off than the person who takes the "good dev job" at Google or Facebook. When the founder is looking for a job 2 years later, if it's via acquihire, it is probably a wash on cash (due to taxes...potentially quite ahe…

> Probably the best bet is to somehow get into a top startup in a role where performance isn't so critical to the ultimate success of the company, usually after Series B, or at a big company. Or just buy a lottery ticket. I'd argue the odds are much similar, with much less effort. > (If I had more of an aero/engineering background, I'd probably prioritize space, and try to work for SpaceX; as it is, the only things I…

Post by CapitalistCartr » Wed, Feb 12, 2014, 3:28 PM UTC

crntaylor wrote: post #77

nl wrote: post #65

Earlier quoted context omitted.

It's easy to pull a quote like that and make it sound like a moral failing. If you read the comment it's quite smart observation: 1% odds in an even game suck; 1% odds where you're given your wager by someone else and you get to keep 50% of the upside and the upside is potentially 10000:1 is pretty awesome. The fact is is someone else's money directly modifies the costs to you, and therefore changes the risk/reward c…

You might not work any less hard, but you'll certainly take more risks if you don't experience the downside. Answer quickly - how much of your net worth would you risk on a bet with 1% chance of a 1000X payout? Now how much would you risk if you can hand off 90% of any loss you take to someone else? The difference is what we call moral hazard: http://en.wikipedia.org/wiki/Moral_hazard

Post by rdl » Wed, Feb 12, 2014, 3:52 PM UTC

jheriko wrote: post #94

rdl wrote: post #36

This was surprisingly entertaining. There's some truth to it, but it essentially misses three things: 1) The intangible benefits of being at a startup (as a founder or early employee) -- working on interesting problems, with smart people, in a well funded environment. You learn things, meet people, get to use amazing tools. (Startups definitely aren't the only way to do this -- academia or, for engineering, some part…

> The downside to failure is exceptionally low. It's all other people's money (at least in Silicon Valley) i always feel disgusted by this sort of attitude. sure it mitigates risk, but as secular and reasoned as i like to think i am its just morally reprehensible as an attitude to take... i treat other people's money with /more/ respect than my own. maybe thats just me being backwards. always taken the attitude that…

Post by arbuge » Wed, Feb 12, 2014, 5:02 PM UTC

ballard wrote: post #40

arbuge wrote: post #2

My 2 cents: He is correct that YCombinator is running little risk doing what it does at this point. That seems pretty obvious now - though it was not when they started. Accelerators were a novelty back then, and YC could have fallen flat on its face. YCombinator is a pretty low risk deal for entrepreneurs too, come to think of it. Perhaps the author misses this point. If your startup does fail and/or you get tired of…

Now there's some guy in every coffee shop claiming to have an accelerator without any idea how to succeed (specialize/differentiate). They're 95% wooly propositions with the occasional one that can sell nontrivial epsilon of value. My favorite so far is this guy that hangs out at a cafe near Stanford that has alienated everyone in his potential "deal-flow" by anger outbursts on conference calls and generally acting l…

Post by rdl » Wed, Feb 12, 2014, 5:56 PM UTC

toomuchtodo wrote: post #98

rdl wrote: post #91

Earlier quoted context omitted.

> Or just buy a lottery ticket. I'd argue the odds are much similar, with much less effort. No one pays you a salary to buy lottery tickets. Wage income or RSUs from Google, Apple, etc. are pretty low risk. Wage income and options from a post-B successful company are pretty low risk, too (e.g. if you're an IT guy at Dropbox, you probably make $80-120k in salary, and the bar to be hired as an internal IT support perso…

"...a startling 93% of the companies that get accepted by Y Combinator eventually fail.": http://www.businessinsider.com/startup-odds-of-success-2013-... Good luck picking that 7% that won't, AND that's only Y Combinator startups. Lottery tickets it is.