Comment by antasvara

Comment by antasvara 4 days ago

2 replies

There are hundreds of thousands of restaurants across the US, ranging in size from a food truck to McDonald's.

You can have a big idea that makes no money (like Quibi, a streaming service that raised 1.75 billion and shut down after 6 months). You can also start as a door to door salesman selling baking powder and accidentally create Wrigley's gum. You can also assemble custom computers as a side hustle and then scale the business to become Dell.

You have no clue what's going to become a big business. You have no clue what idea will require a lot of work, and what idea will just go viral. Candy Crush makes more money than No Man's Sky.

The thought that you can predict what idea will make it big is laughable. VC's invest in hundreds of companies because while they're pretty good at picking companies, they know it's largely a crapshoot.

amukbils 4 days ago

I think this is mistaken, there are ideas that obviously have the potential to be big .. and ones that have hidden potential to be big. Some people's entire jobs is to find a track them (whole VC industry). But yea, it's not easy.. it's tricky.

  • antasvara 4 days ago

    I mean, yes. The total addressable market for some ideas is larger than others. But realistically, you have no clue what percentage of that market you'll be able to capture. You can guess, but that guess has a lot of uncertainty.

    >Some people's entire jobs is to find a track them (whole VC industry)

    I mentioned this. What percentage of companies that a VC invests in actually go big?

    I'm not denying that VC's are great at their jobs. But I'm pointing out that the best of the best at this have ~5% of the companies make more than a 3x return. 50% lose money.