Again, the upside is significantly higher if you start a company (financial independence is just one piece). It can be risky (see OP), but it's pretty rational to be a founder, especially if you can weather the adversity. I'm not even sure how my claims are controversial (especially here on HN, of all places).
Looking at upsides on their own is meaningless. The mega millions jackpot is currently at $550 Million dollars in cash. That doesn’t mean it’s a good idea to spend 2$ on a ticket.
So sure, it’s possible to become a billionaire by writing books just look at J.K. Rawling. Hell someone got 10,000 bitcoins for the price of 2 pizza, which in theory are worth 366,790,000$ today. In the end the upside of being the founder isn’t worth much on day one. It might be worth something down the line, but it’s critical to have a fallback option.
Which is why I've been mentioning "risks" in just about every post I've made. Which is why a big part of OP is how taxing and difficult it's been. Why is why we keep talking about how 9/10 businesses fail. There's no free lunch.
But my original point was that we already know this. So it's not particularly insightful to point it out on a forum almost exclusively dedicated to people working on startups.
I think the problem is you called it a "reliable" route to financial independence, when the variance is actually pretty high. Anyone who can get a job at a large tech company in SF/Seattle/NY has a much more reliable route to financial independence.
> I think the problem is you called it a "reliable" route to financial independence, when the variance is actually pretty high. Anyone who can get a job at a large tech company in SF/Seattle/NY has a much more reliable route to financial independence.
I feel like I argue this ad nauseum here on HN. No, being engineer #3489 won't ever make you financially "independent" (and by that, I mean having FU money). Financial comfort is something else entirely. Making 100-200k (even including stock bonuses) somewhere like SF/NY where rent for a 1 bed 1 bath is like 3k (and houses/condos start at $1 million) will never have the same upside as starting your own company. Let's ignore for now the very real chance of getting laid off, or otherwise fired in favor of a younger engineer that gets paid less than you do (when you hit your 40s).
But again, financial independence is just one aspect of "winning" at a startup. Everyone conveniently ignores doing your own thing, freedom, self-reliance, self-determination, etc. -- these are non-existent at BigCorp (where you're treated, at best, like a cog). I personally value freedom much more than I do money -- which is why I accept the risks of every few years throwing my hat in the ring and seeing what comes of idea X or Y.
Plenty of engineers working at FAANG and investing in index funds have enough money to retire comfortably in their 30s. That’s what the GP means by financial independence, I believe.
Also “senior” engineers (>5 years of experience) at these companies make a lot more than 200k a year.
> “can be risky (see OP)” is vastly downplaying 1 in 10 odds of nominal success. Simply not failing doesn’t mean the bet paid off.
We know this, yadda yadda "survivorship bias." It's just boring to have the same people making the same points about every startup that made it. It's like the old "correlation does not equal causation" trope you see repeated over and over again when someone links any dataset. We get it.
Again, my point is that this is not insightful -- and you've yet to demonstrate otherwise.
I am not suggesting it’s insightful, just the counter argument you’re posts are largely ignoring. If your looking for everyone that made more than 10+ million in the last 40 being a founder isn’t a great route. Even if your benchmark is 100 million it’s not good overall odds.
It’s only when your benchmark is becoming a billionaire that it starts to look like the best option.
If you live in a state where you can play jackpot only, which is 2 picks for $3 and no eligibility for partial matches, there's a positive EV anytime the cash payout is more than $453,863,025.00
Accounting for taxes ruins it a bit, but once the jackpot gets high enough it's dumb not to buy a ticket.
That also assumes single winners, more interestingly it ignores the diminishing marginal utility of money.
Consider your personal utility function, at 70 what odds would you need to play double or nothing with your entire life’s savings. If it takes more than 50.1:49.9 odds then you like most people don’t have a linear view of money.
The expected utility of buying that ticket is quite poor though which is the thing that really matters for most people. You get a sense of this when you consider that the vast majority of the time you lose your initial investment. If you have any other options to get returns on your money you are going to have the opportunity cost of that to deal with too and that's what makes the lottery ticket unappealing from a utility point of view.
Oh sure the upside is higher because you might start the next Uber or Facebook or Dropbox. However the utility of money diminishes IMO for most people past the point you no longer need to work. It depends on what you goals are and the probability distribution you are after. Also many founders end up burned and in poor physical health so there is that risk too.
The only problem with that is that I think a lot of people are okay with any really good upside above XXX dollars (i.e. comfortable financial independence). Given this, even though the potential dollar amount of the upside is much larger, the odds of an "acceptable" upside are significantly lower, and as a result it is a bad choice for people who aren't extremely ambitious.