What if successful startups are just lucky?

Oh yes, that might be even more important. See the Superinvestors of America: http://www.tilsonfunds.com/superinvestors.html

If successful startups are just lucky, I have some questions:

- What's the expected monetary return for someone wishing to enter the startup game? In particular, is it positive or negative? For example, the usual platitude "you miss 100% of the shots you don't take" also applies to the lottery, where the expected return is negative. Could it be the case that rational people just shouldn't do startups?

- What's the expected return after adjusting for diminishing marginal utility of money? For example, a person with 2 million dollars is not 2x happier than a person with 1 million. This increases the impact of the previous point: even if the decision to a startup gives you positive expected money, it could still lead to negative expected change in happiness. Most of the monetary wins go to a lucky few, which doesn't raise their happiness enough to compensate for the unhappiness of the unlucky many.

- What's the expected return if you take the previous two points into account, and also compare against the next best thing you could've done instead of a startup? For example, is there anyone on Earth who's deciding whether to do a startup and who wouldn't get higher expected money, happiness... everything, just by getting hired at Google?

- Given the above points, is it ever morally okay to advise someone to do a startup? What advice would you give people if you were truly, honestly immune to survivorship bias?

I don't think "and of course, I also have to pay the bills" is an instructive part of anyone's life mantra. "The bills" are whatever you decide they're going to be - there's a very low fixed cost to staying alive, what you decide you need beyond that is up to you.

I have no trouble paying the bills now, but I've gone through times working on a startup where I lived on less than $4 a day, for example, without any regrets. That's not my life now, but the point is my life's goal isn't to maintain the high standard of living I enjoy now, it's to build things, try to change the world, and be happy. Having a decent amount of money does help the third thing in that list, but not without the other two.

Thank you for posting a link to that story. It reminds me a bit of Boethius:

"It's my belief that history is a wheel. 'Inconstancy is my very essence,' says the wheel. Rise up on my spokes if you like but don't complain when you're cast back down into the depths. Good time pass away, but then so do the bad. Mutability is our tragedy, but it's also our hope. The worst of time, like the best, are always passing away."

It's not random in the sense that "anybody who tries has an equal chance at success." The prior you're missing is a person's ability, current mind, and biological mental capacity. Some people are just waaaaaaaaay smarter than other people. "All people are created equal" is a fantasy when you reach extremes (sport abilities, mental abilities, creative abilities).

Now, once you have a baseline genius startup mind, no success is guaranteed anyway. Twitter would be nothing without an Internet-famous founder and techcrunch hyping it up constantly its first few years of existence.

That's not saying you can't be rich. Anybody can always get dumb success (especially these days) with things like advertising or affiliates or ebooks.

The money doesn't enable your happiness — the freedom money provides enables your happiness. You can substitute being rich with having a job/life you don't hate plus a good salary.