Comment by enaaem
Comment by enaaem 4 days ago
There is also survivor bias at play here.
Succeeding without safety net is hard -> only the best can do it -> the best entrepreneurs you know did not had a safety net
Comment by enaaem 4 days ago
There is also survivor bias at play here.
Succeeding without safety net is hard -> only the best can do it -> the best entrepreneurs you know did not had a safety net
I mean Gates, Musk, Bezos, etc all had a safety net.
Also need to define what successful means because a lot of trades people are successful solo-prenuers but don't make more than say a doctor.
In a thread about survivor bias, and you fall for the same trap. How many people coming from wealthy background end up failing?
Take Bill Gates, his father cofounded a law firm, and his mother was a board members of several firms. That is a very wealthy background, but not outrageously so. How many people of the same level of wealth became successful businesspeople? It's said that his mom being on the same board as IBM's CEO at the time was a more instrumental factor to his eventual success than his family's wealth, and his own effort of course.
> It's said that his mom being on the same board as IBM's CEO at the time was a more instrumental factor to his eventual success than his family's wealth, and his own effort of course.
This sounds a lot like "his family's wealth was a more instrumental factor than his family's wealth" since "being on a board" is pretty rarified air. It's not Gates-himself-level wealthy, but what percentile is that? 90th? 95th? 99th?
> his mom being on the same board as IBM's CEO
When IBM came knocking, Bill Gates referred them to Gary Kildall. Kildall (for whatever reason) muffed the deal, and Gates didn't pass on that opportunity again. Gary had the opportunity, and came from a middle class company. He invested in his company with his own resources.
Gates received $5000 from his family for his business.
I've read accounts of Microsoft's early days. It was self-sustaining very quickly.
I also know something about compilers and interpreters. BASIC of that era was simply not difficult to create. Yes, Gates & Allen had access to a PDP-10 at Harvard which helped. But it was not required, as Woz proved by writing Apple BASIC in a notebook and hand assembled it.
I also know that Hal Finney wrote a BASIC in 1978 or so that fit in a 2K EPROM (for Intellivision). As I recall, it didn't take him very long.
So no, Microsoft is simply not a result of massive infusions of money. An awful lot of people had the ability to create Microsoft, what they lacked was vision, drive, and willingness to risk.
And no, Gates and Allen were not going to starve if they failed, even without their parents' money.
Okay can you name one successful modern day tech company whose founders didn’t come from money?
People, it wasn’t just a safety net.
Bezos’s mom was his first investor, giving him $300K.
Then he also had connections to millionaires through his family
Bill Gates’ mother, Mary Gates, was instrumental in securing Microsoft's first major deal with IBM through her connections. His family was wealthy and provided connections and support
What about Replit? Two guys in a coffee shop in Jordan, you cannot be much further from Silicon Valley. They got turned down four times from YC and decided never to try again. But pg fell in love with the startup and urged him to try again. Then during the interview one of them got into a heated argument with Michael Siebel and thought for sure he had failed.
Yet he got in without a wealthy family and an American Ivy League degree. There are lots of other examples, I can even think of a one in Michigan.
And how many of the thousands of YC companies have disappeared in to obscurity?
How many of these do you think will see a successful exit?
https://docs.google.com/spreadsheets/d/1Uy2aWoeRZopMIaXXxY2E...
And “raising funding” is not a successful business. Having an exit where you as the founder makes an outsized return is.
Another definition is being profitable. Any idiot can sell dollars for $0.95 backed by VC’s hoping to find the “greater fool”
Sure, but if Bill Gates was a drug addict with no software, there would have been no deal and he certainly wouldn't have been successful.
Whenever I see the topic of success, people LOVE to talk about 'survivorship bias' as a way to somehow discredit the person that is successful and also give an excuse as to why they might not be successful.
It's pretty destructive in a community that's supposed to be about startups and building businesses. This is why I originally came here years ago, but it seems like the mindset has shifted to anti-capitalist group think.
> giving him $300K
Yes, and cities are filled with $300K and up houses. The idea that Bezos started Amazon with unusual vast wealth is wrong.
I wouldn't assume size of success is correlated with "having success or not." It's notoriously hard to predict what business ideas will succeed at all, let alone be mega-billion-success-stories. Many things could've gone differently leading to Bezos being a ten- or hundred-millionaire vs a multi-billionaire even in worlds where Amazon was successful. AWS, for instance, was not in the original plan.
I think the strongest correlations would be between:
"has safety net" and "has success" - one major factor here is not having a poverty mentality that would lead to panicking and quitting early
as well as between "has safety net" and "takes multiple swings if no initial success", for the direct reason of "can afford to do so."
Citation needed that panicking and quitting early is a "poverty mentality".
Then let’s control for that. Among people with a decent safety net, can we correlate eventual success with number of tries?
The answer seems self evident, but idk for sure, and I would like to know the Gini coefficient of successes vs failures among safety netters be that of non-safety netters. Wouldn’t we expect the successes within the safety net to be massively larger on average than those of the non-safety netters, given that a safety net affords you so many more swings to take? Your comment suggests that this is not the case, driven by the selection/survivor effect within non-safety net