[gdonelli]

According to the author: - 18% success rate for time founders - 20% success rate after that

Implying previous experience almost doesn't matter that much... so just trying 5 times should assure 1 success.

In that view, starting your company as soon as you can would still be the best way to get to your first success faster.

[Afforess]

>So trying 5 times should assure 1 success

That's NOT how probability works. Just because you have a 50-50 chance of flipping heads does not mean it only takes two try's to get heads. On AVERAGE it does.

[jere]

Yea, I think even if people know this they don't intuitively grasp how far off they are. Five tries at 20% success rate is only 67% overall. That's about the same odds you have to win two rounds of russian roulette.

To have an overall 99% chance (what we might conversationally say is a guarantee), it'd take 21 tries.

[lutusp]

> According to the author: - 18% success rate for time founders - 20% success rate after that ... so just trying 5 times should assure 1 success.

Not according to the Binomial theorem. For a success probability of .2 per independent trial and a binary outcome (i.e. success or failure, no intermediate states):

     Trials  Probability of >= 1 successes
     -------------------------------------
       1      .20
       2      .36
       3      .38
       4      .48
       5      .67
      10      .89
     100      .99

But the probability of success never equals 1.

Source: http://arachnoid.com/binomial_probability

[gfodor]

These aren't independent events. The OP may be right, but for the wrong reasons.

[lutusp]

> These aren't independent events.

I agree. There are a number of ways this could be true -- a person has more experience, is more likely to succeed in later tries because of being seasoned -- or might even be so discouraged by a first failure that he is then programmed to fail. But to a first approximation, the tries are independent. It only shows the limited applicability of theoretical analyses to real-world events.

[bjelkeman-again]

Interesting. I am on my sixth startup. The first one, in Los Angeles, shut down, but the product was sold to another company and became the core product in the next company over 10 years, and that company eventually sold for hundreds of millions in cash. (Nothing for me.) I learnt a lot of painful but good lessons.

The second company was a consulting company, in London UK, with some friends. We did well, but it was so boring eventually that I closed it. Learnt a lot though.

The third one was a software reseller, in London UK, which worked quite well for a number of years. Top worldwide reseller for several products. But the companies we resold for were so keen to cash out that they stabbed the resellers in the back to improve the numbers right before the sale. Handed over my part of the company to my colleagues and moved on.

Fourth company was another consulting company with some friends (Stockholm, Sweden). But quickly found out we were not lined up on goals and methods, so exited that. (Most of them joined me in the next startup, so it was ok.)

Fifth company was a software product startup in San Francisco. Made several mistakes on sales, marketing and people and ran out of money in the dot com bust, and a VC investment, where we had a term sheet, evaporated.

Went back to the third company for a while to help them restructure and pick up new products then moved on.

Sixth organisation started seven years ago and we now have 60 people and have stared expanding rapidly worldwide in a market which is very different and very rewarding. I am finally able to use everything I learned in the previous five attempts and really use that knowledge. People from three of the previous startups are also in this one.

[andyidsinga]

Totally agree about the learning in consulting - you're always working on your customers _actual_ need ...even if that need ends up not being viable or meaningful in the larger market

[Xodarap]

I think this is in interesting point (modulo the remark made elsewhere about "assuring" success), but I don't have the evidence to know how it should affect your decisions.

The research I cited found that first time and failed entrepreneurs have a 20% chance of success, whereas "skilled" entrepreneurs have a 30% chance of success. So if you can become "skilled" in one stint of employment, then you would expect to succeed sooner by being employed first than if you were doing startups that whole time.

But it's entirely possible that it takes multiple stints of direct employment to obtain whatever knowledge makes you skilled, in which case your argument is valid. I just don't know of any evidence about this though.

[tomasien]

Yep - if you spend 8 years working for someone else, that's 2-4 chances at a startup you've lost.