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by nerdsniper 32 days ago
Due to the power law distribution of startup outcomes, the "expected value" of the "average" (mean) startup is infinity (assuming there are infinite startups). This means YC's model to invest a modest amount in as many startups as possible is the rational strategy. Even the tiniest percentage of equity in infinite companies yields infinite returns.

This seems as counter-intuitive as saying "superconductors have zero resistance". It makes people think you meant to say "nearly zero resistance" or "approaches zero resistance".

But both cases are true - the power law distribution really does tell us that the expected return is actually infinite and superconductors really do have zero resistance (up to the critical current limit).