[cmahler7]

How is a business anything like the lottery? Thousands of decisions over years vs 1 random event.

Domain knowledge obviously plays a role as well, if you can't code you're going to have a hard time making software. There's a lot of money to be made in AI right, the timing is good but it doesn't matter if you don't know anything about it.

By your logic some random guy off the street would have the same chances of building a successful business as Steve Jobs or Bill Gates.

[open_bear]

Survivorship bias: because for every Steve Jobs and Bill Gates there are millions of folks, whose business ended without any success (something like 80% of businesses close during the first year).

[cmahler7]

That's my point, 80% of entrepreneurs can't make it one year, so what are the odds of Steve Jobs starting multiple multi-billion dollar companies over multiple decades, with tens of thousands of decisions, through pure luck?

You're saying that skill and knowledge play no part in success. A mentally handicapped person would have as good a chance at success as Steve Jobs by your logic, because it's all luck.

[Sir_Cmpwn]

>what are the odds of Steve Jobs starting multiple multi-billion dollar companies over multiple decades

High. The first success is luck and the rest are a consequence of this initial lucky break (namely via generous access to capital).

[komali2]

>generous access to capital

Increases total number of opportunity chances.

I don't like the lottery metaphor, because the math doesn't work out (you can't buy out the total # of lottery numbers to guarantee a win and still profit), but basically, the more money you got, the more tickets you can buy, the higher your chance of winning.

Mark Cuban said something along the lines of "You only have to be right once." Get your first couple million, and from there on it's just intelligent investing, which you can literally pay an intelligent investor to do for you.

[ThomPete]

I wasn't making a lottery metaphor. I was making a if you start a company you have better chances than playing the lottery but you are still playing that game.

There are literally thousands of talented people executing like there is no tomorrow and failing.

Access to capital, access to distribution, luck, timing. Thats what you primarily have the other factors are less relevant because most people playing the entrepreneur game have those.

[ThomPete]

You are missing the point and having a wrong understanding of what talent means.

There are many extremely talented people doing exactly the same not succeeding. You have the same in everything from music to movies and art.

The primary defining factor are things which has nothing to do with the talent but with timing and luck. So the primary insight is to play the game to have a chance to win.

[valuearb]

Yea, you don't understand what talent is in this context, and that it's not equally distributed.

There are hundreds of thousands of people who have gotten the same training on valuing companies as Warren Buffett has. But no one comes close to his long term results because the talent of doing an accurate valuation is not as important as the psychological abilities needed to make smart investment decisions, as well as the ability to determine enduring competitive advantages. So few of these talented people actually have remotely the talents of Warren Buffett.

For entrepreneurs just a few of those key talents include recognizing opportunities, the balls to actually quit a job to pursue opportunities, and an innate ability to understand how to find or build significant competitive advantages.

People with those skills won't succeed 100% of the time, but they succeed far more than people who only have one or two of them.

[ThomPete]

Oh I understand what talent is. What you don't seem to understand is that Buffet isn't the rule but the exception. His wealth wasn't something he foresaw but something that happened over a long time. His insight is primarily to invest in the US market overall and everyone who did that have done well for themselves. That could might as well been wrong no one had any idea.

You can read as many books and follow his strategies as much as you want you will never be him and it's not because you can't be as talented as him and that was the point my comment. You can't read your way to success.

[valuearb]

He couldn't have foreseen his wealth? He was predicting it since he was a teenager.

Buffett would have beat any market, any where any time. That's what you don't understand. He didn't succeed because he invested in the US, he did better because he invested in the US. He averaged 40% returns his first 12 years as a professional investor, quadrupling market returns. He's only had a couple down years in over 50 years of investing. How is that luck? His diverse set of skills is the reason.

Again his set of skills is similar to a successful entrepreneurs skills. The average entrepreneur may only succeed 20% of the time, but a skilled entrepreneur clearly succeeds at a far higher rate.

Do you really think that someone ignorant of competitive advantages, budgeting, market research, leadership skills, etc, etc, has the same chances of succeeding as an entrepreneur as someone who is very skilled at all of them?

[jermaustin1]

Steve Jobs only started Apple and NeXT. Pixar was already a division of Lucas Films and had leadership prior to Jobs that aided in it's success post Lucas Films.

That said, of the 2 companies he explicitly founded and ran, only Apple was successful. NeXT was a spectacular failure.

[valuearb]

NeXt made money for its iriginal investors and provided the OS for every iPhone and iPad ever made.

Hardly a failure, let alone a spectacular one.

Pixar was a tiny struggling business spun out of Lucasfilm and sold to Jobs any employees.

[ThomPete]

And because Jobs had the right connections he could help Pixar. Next wouldn't have made it on it's own.

[valuearb]

NeXt had gotten out of hardware to massively cut it's costs (and resized it's workforce). It had a good customer base for it's software. It likely would have continued on for a long while. I believe they would have repriced WebObjects and continued to enhance it and NextOS and grow their customer base.

Pixar was a software company when he purchased control. What turned them around was their switch to making feature films. I'm pretty sure that they would have gotten distribution from anyone once Toy Story was far enough along, the question is whether they could have financed the effort. Having Steve Jobs helped a lot because he believed in them and people would return his calls.

Let me put it another way. There is a whole army of successful technology CEOs who could have run NeXt or Pixar into the ground. The fact that both became huge successes wasn't just luck, Steve Jobs played a huge role in both.

Apple was going to switch to Windows NT or buy BeOS before Jobs convinced them that NextStep was the better option. He connived Disney to partner with Pixar. Could Steve Ballmer have done that?

[hackbinary]

Was it? Apple bought NeXT for their OS which eventually became OS X. Copeland was a dismal failure, and that is why Apple bought NeXT. Jobs' became the interim CEO, did the initial iMac, and iPod and the rest is history.

[ThomPete]

Built on apples sucess not next.

[_jal]

Other folks have pointed out that NeXT had a successful exit and the software lives on, to which I'd add a nice continuing career path for many of its employees (with Apple).

Can I ask what metrics you're judging by?

[ThomPete]

Those folks are missing the point. Next was bought and brought into apples ecosystem thats were the found sucess none of that was part of any plan. Again luck and timing, ifJjobs hadnt been introduced the chances of Next being incorporated into Apple would be much less likely.

[_jal]

That seems like a high bar for 'success' that I'm not sure many share. Lots of startups people deem successful had exits that weren't originally part of the plan. Luck and timing are huge parts of 'success'.

[ThomPete]

Ever heard of the Paypal mafia? Litterally any largely sucessful company has one. Their access to the ecosystem gives them better chances than most.

[valuearb]

That 80% isn't a measure of failure. Many times a failed startup can be bootstraped into a substantially better job.

[a3n]

A new business run by reasonably competent people is like a lottery in the sense that everything takes a certain amount of luck. Stated another way, there are sometimes obstacles that you can't see, directly, and so you don't know why you're failing. "Bad luck."

If you're really lucky, then luck doesn't affect your business.