VC funds see a power law distribution of returns (including YC). This is unusually lopsided, and suggests several possible explanations. For example:
- All these startups compete in winner-take-all markets, where the luck factor would amplify enormously. This may be true for consumer web startups where people vote with their fingers, but it's hard to imagine how it would be true for all startups in every industry VCs invest.
- All VCs are really bad at identifying people who are really good. This is very doubtful, especially for YC. YC seems to be better than most at identifying very competent people.
- Luck is really a huge factor. So far, all the evidence I've seen suggests this is the more plausible explanation.
If you define 'being really good at what you do' as being driven like mad, never giving up, having a massive tolerance for pain and uncertainty and a gift for recruiting others to join you for lots more pain and uncertainty - then I agree.
Comments
Startup = 10% being really good at what you do, 90% luck.
How do you know it's not the other way around?
VC funds see a power law distribution of returns (including YC). This is unusually lopsided, and suggests several possible explanations. For example:
- All these startups compete in winner-take-all markets, where the luck factor would amplify enormously. This may be true for consumer web startups where people vote with their fingers, but it's hard to imagine how it would be true for all startups in every industry VCs invest.
- All VCs are really bad at identifying people who are really good. This is very doubtful, especially for YC. YC seems to be better than most at identifying very competent people.
- Luck is really a huge factor. So far, all the evidence I've seen suggests this is the more plausible explanation.
Sturgeon's Law ;)
If you define 'being really good at what you do' as being driven like mad, never giving up, having a massive tolerance for pain and uncertainty and a gift for recruiting others to join you for lots more pain and uncertainty - then I agree.