When entrepreneurs come to me, I always point out the following:
1) The chances of a venture-backed startup being a hit and returning meaningful wealth are about 1 in 10.
2) You're likely to have about 20-25 years in your career where you can found a company.
3) Each time you found a company, you're going to end up spending 4-5 years of your life on it.
4) Therefore, the equation for entrepreneurial wealth is the following: You have a 10% chance of success per startup, and you get 5 swings to hit it out of the park.
5) 0.9 x 0.9 x 0.9 x0.9 x0.9 = 0.59. In other words, even after 5 startups, your chances of a major success are just 41%. If you become a startup founder, the most likely outcome is that you never get rich, and that if money is your goal, you should go into a different line of work.
Let me reiterate--you have a less than 50/50 chance of founding a successful startup, even if you manage to raise VC every time (which is not a forgone conclusion) and even if you devote essentially your entire professional life to it.
And yet, that's the choice I made. I decided that I was willing to live with the odds being stacked against "success" because entrepreneurship and the startup life makes me happy--a lot happier than when I was a consultant, or when I was a corporate employee.
7 years ago, I told a good friend, "I have everything that money can't buy." That truth was brought home to me in a particularly poignant fashion when my friend, an ambitious and incredibly successful entrepreneur and corporate executive, died of a heart attack last year at 41.
Live your life and be happy, because some outcomes are out of your control.
Inspired by this excellent post from Mark Suster.
Tuesday, July 20, 2010
Sunday, July 18, 2010
Just for kicks, I thought I'd look at the question of whom should be favored in the NBA Finals, the L.A. Lakers or the Miami Heat.
What I'll do is take the current rosters of the two teams and match them up to see who has the advantage.
My big insight is this: Everyone is enamored of the Heat's three stars, Wade, LeBron, and Bosh. But the Lakers have two major stars, Kobe and Gasol. so the question is, does the rest of the Lakers talent outweight the Heat's additional star?
Step 1: Kobe + Gasol = Wade + Bosh
And I think I'm being generous to the Heat. Gasol is clearly better than Bosh. Wade is not clearly better than Kobe or vice versa.
Step 2: Compare the remainder of the rosters
- Mike Miller
- Udonis Haslem
- Zydrunas Ilgauskas
- Mario Chalmers
- Juwan Howard
- Joel Anthony
- Andrew Bynum
- Lamar Odom
- Ron Artest
- Derek Fisher
- Steve Blake
- Luke Walton
- Sasha Vujacic
While LeBron is more talented than Bynum, does that outweigh the massive talent advantages that the Lakers have with Odom over Miller or Artest over Haslem? How about Fisher over Ilgauskas and Blake over Chalmers?
This NBA season will be a true test of whether superstars or depth produce championships.