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A comment on Startup company failure rates are grossly misleading.

Re:Startup company failure rates are grossly misleading by webwright on Monday May 24, 2010 @12:05PM (#1374934)
I read the other day (HBR?) that 85% of venture-backed startups are dead within 3 years. Say what you will about VC firms, but the companies they fund tend to be a notch above the mean. And they are certainly the types who get (and maybe even ask for) advice. Creating a business (the kind that supports 2+ founders) is HARD.

Thinking your chances are better because you're (by your OWN assessment) smarter, more open to advice, and more hard working than the mean is a dangerous attitude. If you walk into a room and say, "raise your hand if you think you're an above-average driver", pretty much every hand goes up. 50% of them are wrong.

Normally I love Gabriel's posts, but I think this one smacks of Mr. Rogers ("you're special because of who you are").

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Re:Startup company failure rates are grossly misleading by algorias on Monday May 24, 2010 @12:30PM (#1374995)
50% would be wrong if you said above-median driver.
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Re:Startup company failure rates are grossly misleading by amalcon on Monday May 24, 2010 @03:43PM (#1375501)
Median is better than mean as a metric for "average goodness of driver". To take a median, you only need a strict ordering; to take a mean, you need to quantify. Any reasonable method of quantifying how good a driver someone is will be heavily influenced by environmental factors. The worst driver on an infinite, featureless plane would be involved in fewer accidents than the best driver in, say, New York.
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Re:Startup company failure rates are grossly misleading by jcl on Monday May 24, 2010 @02:37PM (#1375351)
Still, it could be even higher than 50% wrong, since sometimes the most capable people underrate their ability: http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
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Re:Startup company failure rates are grossly misleading by nostrademons on Monday May 24, 2010 @02:20PM (#1375309)
Yeah, if you take average=mean, then well over 50% of drivers are above average.
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Re:Startup company failure rates are grossly misleading by epi0Bauqu on Monday May 24, 2010 @12:08PM (#1374942)
So you think someone entering a startup blind (no advice, no methodology on customer development/hiring/etc.) has an equal failure rate to someone who's spent years taking in good advice?

The other subgroups were capital intensive vs not and low marginal cost vs high. I think all three would decrease your chances of failure.

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Re:Startup company failure rates are grossly misleading by nostrademons on Monday May 24, 2010 @02:23PM (#1375318)
What counts as good advice? I would imagine that bloggers on the Internet (even if they've sold companies successfully before, and even though they're better than the information vacuum before the Internet) don't really compare to having face-to-face investments from a network of angels who've done this before.
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Re:Startup company failure rates are grossly misleading by dkuchar on Monday May 24, 2010 @12:52PM (#1375055)
and if you're VC funded your model is capital intensive, otherwise what's the point.
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Re:Startup company failure rates are grossly misleading by dkuchar on Monday May 24, 2010 @12:42PM (#1375031)
VCs expect a 10x return and put an incredible amount of pressure on a startup. getting VC money is not the right path for every startup in every market, which is why the numbers are so dire.
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