If I recall correctly, one of the Compass VC analyses covered serial entrepreneurs and found that there was no increase in success rates and each attempt looked independent. There's just that much randomness in it, and I suppose the various selection effects cancel out.
I've been seriously, actively interested in building a tech biz or startup since 2003.
In 2003, I started selling chat bots on the Internet.
In 2005, I cofounded an affiliate marketing website that cracked the Alexa top 10k
In 2007, I built an app that scaled to 100k MAUs and was acquired for $20K
In 2009, I started a SaaS but couldn't break $~600/month in revenue.
In 2010, I built a business that ran for over 5 years and supported me entirely for two of them, but probably grossed less than $100K total revenue. But it couldn't grow, as I struggled to find a repeatable and predictable customer acquisition channel.
In 2013, I got involved in Bitcoin. Finally one home run after a portfolio of mediocrity. [I am choosing to omit various projects from this list, but between 2003-present, there have been a lot.]
In 2013, I also started doing stock market research with ruby. In 2015, my work had attracted enough momentum to bring on an outside angel investor and even piloted the strategy in the markets with $1.5MM. Didn't perform that well; investors withdrew their capital.
In 2017, I started a SaaS that is currently doing ~$2800/month in revenue. I also did consulting. I grossed about $190K this year from my business efforts - note, that's nearly 10 times faster (in terms of growing revenue) than I was 7 years ago. I also fixed a major hole in my previous business skillset, i.e., predictably acquiring customers - something I could never do for the biz in 2010. Furthermore, I have a lot more emotional maturity than I did 7 years ago - though Sam Altman was precociously mature, with the "emotional maturity of a 40 year old" (Paul Graham, on meeting Stanford undergraduate Sam Altman).
So I can tell you definitively, that:
- My skills are expanding due to systematically resolving the deficiencies in previous attempts.
- These improvements are a result of deliberate practice.
- Some people may have the ancillary skills, resources or characteristics that position them to perform better from early on - YC seems to be adept at identifying these people, but also credit them for making 1,500+ bets.
- My best success to-date has been as a result of luck.
For me it was learning all about sales. I actually got a job selling industrial equipment specifically for this purpose. I learned that a good sales person is an agent who advances the best interests of the buyer as well as the seller. I also had the epiphany that my ads and website are - essentially - salespeople, selling to exactly one visitor at a time. So if I can't sell without the website, I can't sell with the website. But once I can sell, and then once my website can sell in my stead, it's about getting the website in front of as many people as possible - just like a productive sales rep will make many phone calls per day. Just as a salesperson will tailor her approach based on the market or personality of the buyer, a good website should do so as well. Therefore, I have segmented mailing lists, different landing pages for different buyer types, and so forth.
Dunno, depends on the kinds of startups you're trying to create. For example, I don't think you're "bad at startups" just because you create more ambitious ones with a higher chance of failure. Some people are at a place where they can take more risks, it doesn't make them an abject failure.
If you had the social and monetary capital to attempt 10 startups and fail, one wonders if that money and effort would not have been better invested elsewhere (if we assume that the goal of the startup is to achieve a successful exit), perhaps in easier forms to generate passive income or what have you.
Or you might think you’ve learned tons but you’ve actually learned all the wrong lessons and are spiraling hopelessly confident in the wrong direction. Failure doesn’t owe you anything.
What I recall of chances of success, earlier failures do not correlate with success - either way. So basically one is throwing fair dice every time. I might be recall wrong...
I think your parent is saying that when you actually measure whether your claim is true, it isn't actually correlated in the failure case.
I remember reading something that corroborated this [1]. That source claimed that previous founders of successful companies had a much greater chance at additional success, but previous failures didn't increase your chances (ie. you don't, in fact, learn more from failure than success -- at least when it comes to founding failed startups).
Ycombinator has made a lot of money based on the idea that some people are better at creating start ups than others. They don't just bet on ideas they also bet on people.
On the flipside, it could be that Y Combinator has made a lot of money by creating an environment that helps startups succeed. Apart from money, they provide founders advice, structure and a set of motivated peers. More cynically, they also provide prestige, validation and connections.
I have no doubt Y Combinator would still be successful even if their selection method was not very good. (I tend to think about top universities the same way—the quality of Harvard's admissions process is not the core reason they graduate so many successful students.)
Personally, I feel like the success of Harvard students is mostly selection bias with respect to their admissions department - i.e., everyone who gets into Harvard would be successful anywhere else.
But then again, I was just rejected from Harvard, so you might want to take my opinion with a grain of salt.
I also thought that, but I couldn’t find any references to any of those studies when I was writing my comment. Do you happen to know where I could find them?
Right. And that source isn't claiming that people are all equally good at founding startups. Rather, it's claiming that previous failures don't substantially make a person better at founding successful companies. (They do find a very small 2% effect, but that may be statistical noise).
Two caveats: 1. That study only applies to venture-funded startups, so startups funded by other sources are not included. 2. There is a small difference between success rates of 1st time entrepreneurs (18%) compared with entrepreneurs who previously failed (20%), so previous failures may give a small boost in future success rates.
Luck plays a big role, but there are also other important dynamics.
Domain expertise, creativity, intelligence, education, insights from other fields, financial resources, connections to other impactful individuals, personality, etc. Such things significantly affect how events unfold.
