171–180 of 183 posts
This has been on my mind lately as well, for some reason. That, and the point of this story http://sivers.org/horses which is basically that even after the fact, it's really hard to know anything[1]. I don't know if it's just from growing older but I feel a lot more humble when looking at peoples ideas and actions than earlier. I literally feel that I have no clue whether they will succeed or not whereas I used to qu…
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I'm the author. Thanks for the comment. I agree with you, I don't know the Saleforce history but I'm quite sure that at the beginning of the company, they had lot of luck. I'm sure at least 10 other companies tried to address the same problem on the same market and failed. Execution is mandatory but lot of the execution is also based on lot of uncontrollable parameters, hire the right guy at the right time. Look at E…
Have you heard of the concept of increasing your luck surface area? If my memory serves me correctly is that all of the work, networking, etc. you do the more opportunities you have to get lucky. You can't have chance encounters in your basement. You can't stumble onto investors for a product that doesn't exist. I think it goes along the lines of the quote from The entertainment industry that every overnight success…
Well, according to statistics (see Kahneman) CEO 'performance' has very low correlation with perceived CEO performance. Also, past success has low correlation with future success. In other words, there isn't really a 'CEO skill', or a 'successful manager' skill. In other words, company success is not repeatable given the same set of people. In other words, yes, luck is extremely important. There is no moral of the st…
Care to provide pointers on the correlations (research paper, whatever)?
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Sorry, not an expert and I have never been an entrepreneur so forgive me if I am misunderstanding, but doesn't YC give them money? In order for this statement to be true either (1) having startup seed money has no bearing on success or (2) YC gives the same money to people it rejects as to people it accepts.
The amount of capital provided by YC is trivial...a rounding error relative to the value of a successful company. But more relevant is that YC almost certainly has some meaningful data on the companies it rejects. So PG's claim could very well be supported by proprietary information.
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So pg's years of experience getting better than random results is irrelevant and you'll only believe him if he does a long experiment (that would cost him lots of money if it's not just luck) to prove something he already believes?
Generally, and especially with science, the way things work is that you prove something before believing it.
The key is to perform proper Bayesian updates in the face of evidence in either direction; if you do, as long as your prior wasn't totally insane it doesn't really matter where you started.
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So pg's years of experience getting better than random results is irrelevant and you'll only believe him if he does a long experiment (that would cost him lots of money if it's not just luck) to prove something he already believes?
Generally, and especially with science, the way things work is that you prove something before believing it.
All successful startups are lucky, but they're never just lucky. If they were, we could save ourselves a lot of work reading applications and doing interviews. We could just pick randomly instead. If we did that for one batch, you'd really be able to tell the difference, believe me.
For a DropBox-like product, feeling safe you won't lose your files is the baseline. If you cannot reliably ensure the files won't get randomly deleted, you don't have a product. Once you have a product, the value you add gets increasingly more subtle - better metadata capture, nicer ways to organize your files, an outstanding slideshow or music app - and what determines your ultimate success may feel completely random and totally unrelated to the original way you defined your product.
It would be interesting if we could measure luck based on previous YC batches.
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In order for us to "believe you", you would need to test your hypothesis at least once - for example, by selecting a small number the startups you invest in at random and see how they fare compared to the other startups. Keep in mind that most stock pickers would respond exactly like you even though their choices are rarely (if ever) better than chance.
If I was to walk for the first time into your kitchen and tell you that your hotplate was turned on, would you not believe me until I'd also experienced your hotplate turned off? You would discount my previous experiences with hotplates, because maybe, just maybe, your hotplate is hot enough to boil water when it's unpowered? The idea that the null hypothesis is the only source of information needs to die.
Figuring out what makes people successful at starting companies is extremely complex. And without objective evidence, no level of expertise, be it PG or other VCs, will convince me to take someone's word for it.
"I am a great believer in luck, and I find the harder I work, the more I have of it." -- Thomas Jefferson (apocryphal; see [0]) [0]: http://www.monticello.org/site/research-and-collections/i-am...
THIS IS precisely why its not random!!!