{"items": [{"author": "Rose", "source_link": "https://plus.google.com/101325682976325937897", "anchor": "gp-1317902863918", "service": "gp", "text": "If you spend your whole life worrying about maximizing earning regardless of all other factors you will be miserable.", "timestamp": 1317902863}, {"author": "Phillip", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221674801227814", "anchor": "fb-221674801227814", "service": "fb", "text": "You definitely want a co-founder. Zero Stage Capital (or one their founders Mr. Roberts) did a study that found success was highly correlated with the number of co-founders. They intuit (given that they have seen a lot of these companies) that this comes from multiple talents being brought to the company (marketing, account, etc. as well as the requisite engineering. I am currently on my sixth start-up, and have had some success. I don't necessarily encourage you to go down this path, and particularly not necessarily now. You and I should have a long talk about this, if you are interested.", "timestamp": "1317904000"}, {"author": "Rick", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221691851226109", "anchor": "fb-221691851226109", "service": "fb", "text": "Hi Jeff. I both agree with Rose and with the idea that it would make sense for you to consider starting a company. I also think it would be a shame if you pulled back from the effort to make a dance accessible from the T happen weekly. I don't at all think they are mutually exclusive. Probably the dance effort would use up a bunch of time while you were still in the early planning and thinking stages about a company, and would like be up and running before you needed to devote a large amount of time to a company. At that point you could pull back from the dance. Like Phillip, I have been involved in starting many companies (at least 4, but really more like 6, if you count some of the things I did in Taunton). I think it's a great idea (althought not necessarily for the same reasons you do). I also think a co-founder is very helpful (e.g. me and Donna vs. Jimmy's solo effort). However, it is crucially important that the co-founder be the right person. I'd love to talk more about it with you.", "timestamp": "1317907403"}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1317907661760", "service": "gp", "text": "@Rose\n I think I could make myself miserable with this, but I don't seem myself going in that direction right now.", "timestamp": 1317907661}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221694437892517", "anchor": "fb-221694437892517", "service": "fb", "text": "@Phillip: to me the question of cofounders is not whether they increase chances of success (they definitely do) but whether they increase chances by at least 2x.", "timestamp": "1317907886"}, {"author": "Sean", "source_link": "https://plus.google.com/107270646379592003271", "anchor": "gp-1317908170845", "service": "gp", "text": "I'd be down. ;-) 'course, you don't really KNOW me, per se, but if you ever want to go sit down and hack on something and/or talk about ideas, just let me know. :-D", "timestamp": 1317908170}, {"author": "Taviy", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221703694558258", "anchor": "fb-221703694558258", "service": "fb", "text": "I think one of the knacks in life is to know how to balance having the capital to do what you really want to do (rather than a single-minded pursuit of one exclusive of the other). But like i've been saying for a while - biweekly! biweekly! I agree with the sentiment there should be more opportunities for dancers (and performers) accessible by public transit - but i think that making BIDA weekly would be too much. It might succeed for a while, but there is such a thing as market saturation for contras. Dancers get burned out on the style if they're doing it too often, and in that regard contra can be like crack. I think it makes more sense to have BIDA on the weekends that JP is not (because perhaps few BIDA regulars dance in JP, but several JP people attend BIDA).", "timestamp": "1317909614"}, {"author": "Phillip", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221733427888618", "anchor": "fb-221733427888618", "service": "fb", "text": "Jeff, If you start a company you can't simply think of it as probability theory. If you don't think you entirely control your own fate (while at the same time expecting the universe to throw you multiple curves), and do everything rational to increase your likelihood of success, then you aren't meant to start a company.", "timestamp": "1317914878"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221734087888552", "anchor": "fb-221734087888552", "service": "fb", "text": "@Phillip: I don't see why it is helpful to ignore arguments from probability theory.", "timestamp": "1317915010"}, {"author": "opted out", "source_link": "#", "anchor": "unknown", "service": "unknown", "text": "this user has requested that their comments not be shown here", "timestamp": "1317916471"}, {"author": "Mac", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221755824553045", "anchor": "fb-221755824553045", "service": "fb", "text": "Jeff,

1) While you have a likely number on the value of a successful start up ($5.7 meg), it is not obvious that you have factored in the probability of your start up being successful. The product of those two probabilities produces a very low dollar value on the career choice of being a founder of an enterprise. It's kinna like having a career in art.

2) I believe this might be what Phil was getting at: You've gotta be nuts to found an enterprise. Really. You have to be passionate and monomaniacal to the point of just having no concept of failure. Without that craziness to carry you through, the gotchas will kill you. It is a LOT like marriage. If you have to think about it, forget it.

3) I have not founded an enterprise (my consulting company doesn't count). But I have worked closely with someone who has. He says you need three ingredients: A) Have an idea that will make a big difference to the user/patient/customer. B) Have a BIG, recurring market. C) Have a lock on the IP. If you have these three things, you have a company.", "timestamp": "1317918781"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221774731217821", "anchor": "fb-221774731217821", "service": "fb", "text": "@Walker:

\"While you have a likely number on the value of a successful start up ($5.7 meg), it is not obvious that you have factored in the probability of your start up being successful.\"

The $5.7M is after taking that into account. The numbers looking only at successful startups are much larger.", "timestamp": "1317921555"}, {"author": "Rachel", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221777251217569", "anchor": "fb-221777251217569", "service": "fb", "text": "oh! i like the idea of having bida the weekends when there isn't a jp dance.", "timestamp": "1317921911"}, {"author": "Mac", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221783911216903", "anchor": "fb-221783911216903", "service": "fb", "text": "Jeff, I have a tough time with \"Start a company, walk away with 5.7 mil.\" My guess is that something is missing, maybe like the $ invested before selling. What is the source for that number? Poll Phil.", "timestamp": "1317922911"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221791577882803", "anchor": "fb-221791577882803", "service": "fb", "text": "@Walker: the number comes from a 2009 economics paper by Hall and Woodward http://www.stanford.edu/~rehall/HallWoodward6.pdf

The most important thing to know about the $5.8M number is that it is an expected value. If you add up the total amounts earned by all vc-backed startup founders and divide by the total number of founders, you get $5.8M. But most people actually earn nothing. This is a chart from the paper:

http://sccs.swarthmore.edu/~cbr/startup_exit_value.png

It plots the exit value the founder sees (in millions) against the fraction of founders in that category. We can see that 74.9% made no money, while 0.18% made more than a billion dollars.

That's the catch, it's a pretty big catch, and I'm ok with it.", "timestamp": "1317923974"}, {"author": "Mac", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=221803777881583", "anchor": "fb-221803777881583", "service": "fb", "text": "OK. Makes sense now. In the second sentence, the paper's abstract mentions that the studied group is a \"...class of entrepreneurs, those backed by venture capital.\" That is a HUGE filter. That means that the enterprise has been evaluated by those (very) \"skilled in the art\" of picking winners. (And even VC's hit rate is WAY below 50%. They make it up in the few winners.) Ask any entrepreneur about her experiences in getting funding from straight-up VC's. Not exactly like winning the lottery, but close. A lot of entrepreneurs start out with \"angel\" money, usually a second mortgage or wealthy relatives and friends. And most of those lose. If you've knocked on a dozen VC doors and still haven't gotten funding, there is a major message there. Another wisdom I learned from a VP of a start up that grew to a billion dollar company: \"Don't invest your own money. The VC's will think it clouds your judgement.\"", "timestamp": "1317925756"}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1317926992440", "service": "gp", "text": "@Colin\n I'm thinking about maybe the summer 2012 cycle of YC", "timestamp": 1317926992}, {"author": "Ben", "source_link": "https://plus.google.com/114916079067259685158", "anchor": "gp-1317930545162", "service": "gp", "text": "To what extent are those two mutually exclusive? If you get a weekly BIDA dance rolling now, could you hand it off when you actually start the startup?\n
\n
\nAlso, someone mentioned that your source only counts VC-funded startups. The odds of a startup getting funded appear to range from 1 in 200 to 1 in 500 (\nhttp://smartstartup.typepad.com/my_weblog/2011/01/startup-capital-what-are-your-odds-of-attracting-angel-investors.html\n), which takes your expected payoff down to about $30,000 tops. While the odds for web startups are probably better, I'd be surprised if it was enough to push you above a market wage, especially considering how long a successful exit can take and how many extra hours you'll be working.", "timestamp": 1317930545}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1317931892090", "service": "gp", "text": "@Ben\n 51 companies out of 20,395 sounds so much lower than I would expect that I don't think it's measuring what we think it is.\n
\n
\nAlso note that if my startup failed to get funded at all, that's a relatively early failure. The sooner the failure, the less opportunity cost.", "timestamp": 1317931892}, {"author": "Ben", "source_link": "https://plus.google.com/114916079067259685158", "anchor": "gp-1317932970842", "service": "gp", "text": "@Jeff Kaufman\n You may be right about that particular article, but still, few companies get funded. This article (\nhttp://www.businessweek.com/smallbiz/content/jul2010/sb2010079_119155.htm\n) gives about 1 in 35, and that's the highest estimate I've seen. That still drops the expected exit to 166,000. It's hard to say without time data, but that seems barely worth it.\n
\n
\nOf course, getting into YC or another incubator raises those odds considerably. I definitely think it's a great idea if you make it into one of those. But since they only have a 2% acceptance rate, and don't start until the summer, I hope that doesn't stop you from getting the BIDA dances rolling now.\n
\n
\nEDIT: I realize that I'm taking mostly the \"oh noes weekly BIDA dances might not happen\" angle. This is not representative of my actual position, which is mostly \"yay for Jeff trying to maximize utility\". I just have more to say in the first vein.", "timestamp": 1317932970}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1317933441283", "service": "gp", "text": "@Ben\n technically I could still apply for winter YC; the deadline is 10/10. But I'm not planning on doing that.\n
\n
\nThe businessweek article is very light on details, but it looks like they're looking at new companies overall. Which is not a good reference class for internet startups.", "timestamp": 1317933441}, {"author": "Jonah", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=271624252899535", "anchor": "fb-271624252899535", "service": "fb", "text": "See also Carl Shulman's recent post to the 80,000 hours blog on the same subject http://80000hours.org/.../12-salary-or-startup-how-do...", "timestamp": "1326246197"}, {"author": "Ruair\u00ed", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272103116184982", "anchor": "fb-272103116184982", "service": "fb", "text": "hey:)!im all for proffesional philanthropy and am seriously considering it myself but i have serious doubts about the possibility of getting venture capital. ive seen that paper too and it looks very appealling but the number of start ups that get VC seems to be super low,", "timestamp": "1326316268"}, {"author": "Ruair\u00ed", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272108332851127", "anchor": "fb-272108332851127", "service": "fb", "text": "some links about the possibilty of getting VC:

this suggests its about 1 in 4000 (but this is for all companies not just tech start ups) http://blog.guykawasaki.com/2008/01/top-ten-myths-o.html...

this suggests about 6 in 1000 and is directly about tech start ups http://www.amazon.com/.../dp/product-description/068487170X

i emailed susan woodward regarding start ups in general (not exclusivelt tech) and she said that;

We don't have any idea, but we can put some bounds on the figure. You can learn from the US Census Business Dynamics that there are about 800,000 new businesses started each year (this from tax return data -- do you think would-be entrepreneurs would deduct their startup expenses? If yes, then they get into this data).
.....
Breakouts by industry (which are very coarse) indicate there are 200,000 new businesses in services (no other sector could include what venture firms try to do, except possibly manufacturing, and these are very few).
......
There are only about 7,500 venture-funded firms, and only about 1,700 new ones each year.

here is another article which suggests its difficult too http://techcrunch.com/.../ditch-the-biz-plan-buy-a.../...

maybe investment banking or something might be a better choice? i thought this seemed like a great idea too until i found out about the numbers that actually get vc, perhaps the people at 80,000hours are suggesting this for people who are already fantastic coders?", "timestamp": "1326316826"}, {"author": "Ruair\u00ed", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272111439517483", "anchor": "fb-272111439517483", "service": "fb", "text": "thanks very much to the people who posted the other excellent links and i hope you end up doing something fantastic!:D! and hopefully that you can keep dancing too! funnily enough i also worry that i wont have time for dancing due to maybe persuing a career where i will have to work very long hours also to become a proffesional philanthropist! haha :) one last thing i thin you might like is felicifia http://felicifia.org/index.php a utilitarian forum, where proffesional philanthropy is often discussed, but i bet you already know about it actually, infact i think i remember your name, but perhaps it will be useful for some other people who have commented here :)", "timestamp": "1326317164"}, {"author": "Ruair\u00ed", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272112802850680", "anchor": "fb-272112802850680", "service": "fb", "text": "*oh sorry as regards that book and the 6 in 1000 figure, i didnt mean its in the book, though i presume it is though i havnt read it (yet), but if you scroll down its in the description :)", "timestamp": "1326317334"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272118812850079", "anchor": "fb-272118812850079", "service": "fb", "text": "@Ruair\u00ed: getting venture capital is difficult, but if you fail to get funding you can move on with whatever you were going to do instead.", "timestamp": "1326317983"}, {"author": "Ruair\u00ed", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272129649515662", "anchor": "fb-272129649515662", "service": "fb", "text": "ok but i think even the salary you wouldnt earn from not working would probably outweigh this? do you disagree? how would you do the calculation?

i suppose it has a lot to do with the situation you're in, i dunno about you but im still in high school so i can go into anything really and i think something like banking maybe much better", "timestamp": "1326319231"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272134126181881", "anchor": "fb-272134126181881", "service": "fb", "text": "@Ruair\u00ed: I think the 6:1000 and other similarly low figures aren't very good because as far as I can tell they include lots of people who didn't try to get venture capital funding. They also include people starting companies in fields that venture capitalists are not much interested in (restaurants), but if you're starting your own company you can choose your field.", "timestamp": "1326319742"}, {"author": "Ruair\u00ed", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272136672848293", "anchor": "fb-272136672848293", "service": "fb", "text": "ok cool do you have any idea what the actual figure might be?", "timestamp": "1326320052"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272141322847828", "anchor": "fb-272141322847828", "service": "fb", "text": "@Ruair\u00ed: I don't. Let's say it's 1:100. Then Carl Schulman's $1.4M/year becomes $14K/year, if it takes you a whole year of full time work before you know whether you get funding. Really the time is much less than that, and you don't have to work on it full time before you know.", "timestamp": "1326320533"}, {"author": "Ryan", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272172382844722", "anchor": "fb-272172382844722", "service": "fb", "text": "Great posts all. I don't really know, but for a high-school leaver, investment banking looks pretty good. I mean, even for a graduate of medical school like myself, the same is true. I think the chance of earning $1.4m/year is larger than 1:100 there.", "timestamp": "1326324466"}, {"author": "Ruair\u00ed", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272465699482057", "anchor": "fb-272465699482057", "service": "fb", "text": "theres probably a much better way to calculate it than this but lets say that you manage over the course of your whole life to start about 100 start ups, living on saved money while doing them, if one gets venture capital you run with it, otherwise you go back to work and try again soon. id imagine you'd get a whole lot better after several attempts so maybe we could/should factor this in. but supposing that from the theoretical situation i propose that you'd end up with one VC backed start up, which were saying means an equivalent of $5.8 million donation for your whole life. the 80,000hours website suggests you could donate more than this in a 30 year banking career, plus as ryan was saying theres a chance you'll get into a ridiculously highly paid job.
maybe there could be an argument for not selling your start up and making money that way?", "timestamp": "1326376146"}, {"author": "Ruair\u00ed", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272467192815241", "anchor": "fb-272467192815241", "service": "fb", "text": "one more thing id be concerned about is that as someone commented \"You've gotta be nuts to found an enterprise. Really. You have to be passionate and monomaniacal to the point of just having no concept of failure\" i dunno about you but i have no idea, im passionate about making happiness, not programming, and so far i have no programming experience, from what i know of it it looks like something i might find o.k...ish...

maybe theres something else about succesfull founders, some kind of intelligence we could quantify that might show which of us this is a more viable career option for?", "timestamp": "1326376358"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/221665077895453?comment_id=272518969476730", "anchor": "fb-272518969476730", "service": "fb", "text": "@Ruair\u00ed: \"lets say that you manage over the course of your whole life to start about 100 start ups\"

I'm not sure that kind of persistence is actually helpful. Failing to get VC funding on several successive attempts is an indicator that you won't be successful on future attempts. Also, the 1:100 number is one I completely made up, so don't trust it too much. My guess is that for a Stanford or MIT grad who is passionate about their idea, moves to the bay area, and spends a lot of their time around tech entrepreneurs, their chances of getting funded are much higher, perhaps 1:4. Again, I'm just making up numbers.

\"im passionate about making happiness, not programming, and so far i have no programming experience\"

The most stereotypical web startup has a tech cofounder and a business cofounder. If programming doesn't appeal to you it's possible you'd do better doing marketing and business development. Learning some programming would still be a good idea, though.

Tech startups may also not be a good fit for you. Different people will be good at different things.", "timestamp": "1326383010"}]}