Startup success is mostly random. I'm reminded of a quote from SMBC [1] that I've always liked:
"Doubt kills more dreams than failure...but Random Chance is like, Grim Reaper for dreams."
Success in startups (and life in general) is not the linear function that most of us want it to be. It isn't related in direct proportion to the amount of effort, intelligence, work, time, love, energy, etc that's invested. It's more of a logarithmic function. There is a minimum amount of effort and those other things that must be put in to have any chance of success. But after that the returns diminish rapidly. It's comforting to think that if we just try harder or smarter we can triumph in the end. But the fickle winds of fate have the ultimate say, and any sense of control is probably an illusion.
Saying that a company failed due to lack of product-market fit is like saying that a sports team lost due to not scoring enough points. It's always a true statement, but it doesn't illuminate the cause of the failure in a way that would be instructive to others. Most startups that were successful enough to be included on this list probably did 80% of things "right". Some times "it just didn't work out" is all that you'll be able to say.
Despite all that, I think there is a lot of value in these autopsies. Being able to learn something, anything, from the experience of others is very valuable. Knowing more about what causes failure won't guarantee success, but it sure as hell beats knowing nothing.
It may be true that "startup" success is mostly random in the YC/modern Valley-VC culture of throwing a fistful of darts at the board and hoping that at least a few stick.
If startup success is mostly random then how can someone like Elon Musk create startup-after-startup shooting for a goal against-all-odds, but always come out on top?
For consumer, yes luck is important, for enterprise not as much. Generally in enterprise if you work hard, are deeply talented, and know your particular vertical / market really well you'll at the very least get an acquisition / acquihire.
The human angle behind these stories transcends way beyond the business one.
Its uncanny how these two founders articulated about the pain in almost the same way as each other:
99Dresses - Nikki Durkin:
Many startup folk say that failure should be celebrated. “Fail fast, fail early, fail often!” they all chant, trying to put a positive spin on the most excruciating pain any founder could experience..Let me tell you — failure fucking sucks..I travelled to my parent’s place in the countryside of Australia, locked myself away in my room and cried for what seemed like an entire week.
Critica - Jason Huertas:
You’ll hear the phrase “Fail fast” or “It’s good to fail”. Which is true. You can’t learn without failing. But what they don’t tell you is just how utterly devastating failure actually is for an entrepreneur. To sacrifice your personal relationships, finances, and health to the dream, and to still come up short. How could this happen to me? It was a very frustrating and dark place to be in.
The case of 99Dresses was an eye opener. I would beg to differ with the general sentiment in the comment section here about how co-founders lacked sense of product market fit etc.
Nikki Durkin had oodles of determination, immense grit, was a YCombinator alumni, had great product-market fit, managed decent seed funding, had good traction which many startup can only aspire to in the initial days, a team who were behind her most of the time, still..
All things being equal (actually the case showed even if they are not) fate, right-time-right-place is a factor which nobody can control, and which has decisive play in the scheme of things.
I can only wish good luck to Nikki Durkin, and I’m 100% sure that she would come out with something amazing in future.
1) Learn to live with failure. Most of these folks sound pretty privileged, as if they never got smacked in the face with reality or had to deal with failure. Sometimes that's what happens when one is a young superstar, the odds were in their favor until it wasn't. The rest of us just learned to deal with disappointment and overcoming.
2) The real secret about success is that it's random. It's not even about luck or hard work, success is simply random. Luck is just a lottery scratcher and hard work lets you get more tickets to scratch but hard work, product fit, traction blah blah don't guarantee success. Because again, success is random. Thinking otherwise will drive you crazy trying to analyze why bad things happen to good people and good things happens to bad people. Determination is the only trait that finds success, because you just keep trying until you die. Which then calls back to my first point: learn to live with failure. It's good for you. Each subsequent time you need to cry less.
I reason that the hard part was failing in spite of all those great things that she had managed to accomplish. That is super tough. She overcame many obstacles that, in her understanding, would bring her closer to the goal. In the end, the core of the business was not sound. Is it her fault? I don't think so. Its nobody's fault. A business is more of an experiment than anything. She may have felt that way because it was a very public failure and she was the face of the business. Which is a mistake in my opinion. Don't become the face of your business. Let the product take center stage. You should be the person behind the curtains making things happen, but never in the spotlight. If the product fails, all you have to do is find another product. No shame to deal with.
I learned this from my first business failure. I was being the center of attention and loving it. But when it failed, I was crushed. Took me a while to understand that a business is merely a system that works around selling a product. Its not me. This has allowed me to build and sell products that fail without feeling shame or pain. Its just a product. It failed. Let's move on to the next.
Looking through the list, it seems to me like a good 90% of these (if not more) can be summarised as "lack of product-market fit", meaning that they blew their money on building something that nobody wants.
I've been working on my own version of this, "a business guy's take on 100 startup postmortems". The results (thus far) fall in line with what you're picking up. As I told a programmer friend recently, you don't see too many failed startups saying they just couldn't get the code right so they had to shut down. More often than not it's about product/market fit, growth/traction, and sales. (Another reason why aggressively code-focused startups typically irk me...while also presenting a great opportunity for guys like to me to make some money.)
I'm a bit tired of seeing "product-market fit" over simplified in posts such as yours. In reality, product market fit isn't black and white. Even when you build something that people want, you might not have product market fit. Even when you've built something that nobody wants right now, you may have still product market fit. And then there are a billion shades in between.
We should talk about nuances of why startups failed. Otherwise, "lack of product market fit" is just jargon for "we failed." Of course, we already know they failed. And since they are startups, they probably didn't fail with millions in revenue.
Had the iPhone failed it would have fit perfectly in that category. In an alternate universe nobody wanted a huge display with no physical keyboard.
When you introduce new products or services the market may or may not buy them, it's very difficult to predict beforehand. If your product is disruptive enough the market won't even exist, so you'll have to create it. If you fail it will be easy to blame it on "lack of product-market fit" but that will just be obvious. What else did fail? Why weren't these products able to create market demand?
the term "product-market (mis)fit" means that the product failed to find its market, not that the product has no market. The term for that is "shitty product".
It's interesting that so many startups listed lack of product-market fit as the reason for failure, even though another startup with an adjacent idea has been able to get traction.
For example, the first was a "same day ingredient delivery service" that "simply didn't have legs", but both Blue Apron and Instacart could be considered same-day ingredient delivery and both are growing fast.
I wonder if we can "unpack" product-market fit into a checklist of smaller goals?
"Fit" is a checklist of subtle details and features that together make up the product. I like to think of it as "When the sum total of nice touches and problems solved that make you love the product is greater than the sum total of annoyances, missing features, and usability snafus that make you fear and loathe the product." Most of these are invisible to someone reading a 1-sentence summary, but you very much notice them as a user.
That's why MP3 players and smart phones failed to get widespread consumer adoption before Apple, why Instagram succeeded where Picwing failed, why Facebook has taken over the world while Xanga is relegated to the dustbin of history, and why Google makes billions while Lycos, Infoseek, Altavista, etc. failed. Same product category, but the product itself was much better.
Product-market fit has more nuance than the words suggest. Maybe the product wasn't right for the market they tried (Caviar for rural Kentucky I'd imagine), or the market as a whole never wanted the product (drive thru dog grooming), and then there's the matter of timing, maybe it was right, just not at that moment. It would be interesting to explore those deeper assessments of lack of product-market fit (as assessed by the founders and outsiders) and see which one is most common. I'm sure we'd find some fun surprises.
Two days ago I've met this friend of mine, who's been working on a project for the last 1.5 years.
He's been living off savings and he's got a couple of months of money left. The project is not ready yet and even if it were there's the huge question of how it can ever make money, being open source and all.
He's been working day and night and he's so obsessed with it and the myriad of complicated technical issues that plague the project. He will not take a weekend off. He doesn't want to rest because he has a lot of work to do.
From the looks of it, he'll not make it, but how can I possibly tell him that ?
How can I possibly take his dreams and hopes and break them into pieces and hope to still be a friend after that.
Sometimes failure is unavoidable, no matter how much people will warn you about it.
Failure is something so personal and private that the only way to understand it is to live through it.
I have a friend like that too. I'm really happy I stfu when I was tempted to point this out to him because he actually did make it - against all odds - and is a fairly wealthy fellow nowadays. Good for him, and a good lesson for me. In the past I've seen a couple of those 'impossible' stories take off despite my misgivings and I've learned to temper my impulse to tell others what they can't do. Just like I really don't like it when people tell me what I can or can not do.
Here's another angle: try to help your friend succeed.
Your friend knew that failure was likely when he started on his project, and he went ahead anyway. So it isn't helpful to remind him that the odds are stacked against him, or to tell him "I told you so" after.
Many people don't have the heart to even really try. Many people don't have the heart to keep going for years when at times it looks hopeless. Your friend does, and that's admirable. If he's a good programmer he's not going to put his future in jeopardy. There's no need for well-intentioned -- but ultimately patronizing -- concern here.
So don't volunteer your opinion. If he's a friend, just be there for him (emotionally).
Perhaps making money out of it may not be the goal.
However working in isolation for such a long period can result in disconnect. How about asking him to do a limited alpha among a small tech group and getting their feedback?
> From the looks of it, he'll not make it, but how can I possibly tell him that?
You just should tell him that - "I think this is going nowhere and you will likely burn out and have a crisis." And then when in few weeks/months he will start having doubts, he will have a reference and hopefully it will help him to bury the project faster and move on to other things. At the very least he'll have an option of coming back to you and asking why did you say what you said and you two can go on from there.
Thanks for doing this!! (I'm one of the folks mentioned).
Something I've noticed when discussing failure is there's a class of people who are real assholes about other people's failures (focusing on blame, using very negative phrases, trying to second guess founders for who knows what reason, etc). I notice some comments in this thread are along those lines.
I'd love it if you kept that in mind as you build this, esp since some of the comments/suggestions in this thread are quite, em, unpleasant.
There is a somewhat dated but still useful book by Stephen Flowers called "Software Failure: Management Failure" that does a nice job of post-mortems for failed large-scale development projects you might find interesting.
There is no business idea I cannot kill using a sufficiently cold and objective evaluation. I can show the demand is not there, that it doesn't solve a customer pain-point, that the price is too high, that the model won't work in this market, that the technology won't scale...
At the end of WWII Vannevar Bush, the head of the American military rocketry program, said that human beings would never go to the Moon because you'd have to take a rocket the size of a battleship, stand it up on end, and launch it into space, and this was obviously impossible.
Prediction is hard, especially about the future. Entreprenuership is fundamentally about courage, because you've got to jump off that ledge knowing the odds are you'll fail. If you dig too deeply or look too closely at the problem you may never start, because the risk is always going to be unacceptably high to any sane person.
So it's important for entrepreneurs to balance their optimism against reality, rather than just giving in to realism and sticking with the day job.
Vannevar Bush foresaw many things correctly. But the rocket thing... It was only a few years later that we were lobbing those vertical battleships into space.
It might be valuable to add the ability to have discussions for each of the entries on autopsy.io, allowing people to analyze it further and include the founders in the discussion. From this it might be possible to combine the analysis of a couple of the autopsies and launch a new idea.
Betting so much of one's soul into a consumer play is a risky decision. The pay-outs are huge, but the odds are enormous, as bad as a lottery. Consumers decide to use a product based on intangibles; brand recognition, emotions, entertainment. These are fleeting, like fashion, and for an entrepreneur, hard to pin down what works and doesn't. There is no repeatable model for us to experiment and learn from.
Businesses on the other hand are considerably more rational. B2B decisions are made based on value. Even when a deal doesn't go through, you get tangible data to see why. But make yet another photo-sharing app and no one uses it? That's a lot more harder.
yes some more data based analytics on metrics you could calibrate on such as months alive, rounds of funding, profit margins, basically any type of portfolio you would present to an investor for value assessment.
It may be interesting and important to note that some of the "failures" on this list may have simply been before their time. I see a few going back to ~2006 that might actually have a decent chance today if given another go.
Sometimes the fine line between failure:success hinges on nothing more than timing itself. The optimal time to enter a market is a variable that should be weighted almost as heavily as cash to burn.
There's selection bias at play here, but anyone else notice that 99% of these are consumer plays? There's mostly photos/food/social/video/community/jobs ideas. In consumer plays, there's a lot of luck involved, since the company is essentially guessing whether the problem itself is significant, let alone their particular solution.
There's a lot of luck in everything. I've been involved in startups in remote sensing, computer-assisted surgery, medical imaging, and other areas, and while there were various reasons for the failures luck loomed large in all of them.
The medical imaging play got scooped by a patent issued to another research team a month before our patent application was ready to go (this was before applications were published.) That was pure bad luck. We were a small team who weren't publishing our work while it was in development, they were a small team who weren't publishing their work while it was in development. They started a few months before us, or long after us but had more resources, or long before us but worked more slowly, or didn't go down the same blind alley we did part way through. I defy anyone using the information available at the time to pick out a better set of choices than we made without flipping a coin.
The key to understanding the role of luck is to realize how scarce information is when you are building something new. You don't know how big the market is. You don't know what customers are willing to pay. You don't know what the "killer application" will be. One company I worked with thought they were aiming for selling a service to the bottled water sector. They ended up selling it to the sewage treatment sector.
I also know people who were one decision away from success: if they had taken deal X or added feature Y they almost certainly (in hindsight) gotten rich. Given the information at the time, they made the best choice they could. That it happened to be the wrong choice was luck, and nothing else. These are people who had built successful companies during the dot-com era, mostly. If they had exited at the right time they'd be hailed as geniuses today.
Most of these "startups" are boring; they are not STARTUPS, they are small businesses doing what others are doing (or have done).
They seem to lack the OMG spark of insight into how technology can be used to do something exciting. IMHO, a web site or an App (is there really much difference) is not a STARTUP--but it can be a business that generates income.
This is a really great effort. It feels like a nice addendum to Sam Altman's class (http://startupclass.samaltman.com/) - take that knowledge and use it to come up with what would you have done differently.
[+] [-] karmacondon|10 years ago|reply
"Doubt kills more dreams than failure...but Random Chance is like, Grim Reaper for dreams."
Success in startups (and life in general) is not the linear function that most of us want it to be. It isn't related in direct proportion to the amount of effort, intelligence, work, time, love, energy, etc that's invested. It's more of a logarithmic function. There is a minimum amount of effort and those other things that must be put in to have any chance of success. But after that the returns diminish rapidly. It's comforting to think that if we just try harder or smarter we can triumph in the end. But the fickle winds of fate have the ultimate say, and any sense of control is probably an illusion.
Saying that a company failed due to lack of product-market fit is like saying that a sports team lost due to not scoring enough points. It's always a true statement, but it doesn't illuminate the cause of the failure in a way that would be instructive to others. Most startups that were successful enough to be included on this list probably did 80% of things "right". Some times "it just didn't work out" is all that you'll be able to say.
Despite all that, I think there is a lot of value in these autopsies. Being able to learn something, anything, from the experience of others is very valuable. Knowing more about what causes failure won't guarantee success, but it sure as hell beats knowing nothing.
[1] http://www.smbc-comics.com/?id=3506
[+] [-] teacup50|10 years ago|reply
Business success, however, is not mostly random.
[+] [-] jv22222|10 years ago|reply
If startup success is mostly random then how can someone like Elon Musk create startup-after-startup shooting for a goal against-all-odds, but always come out on top?
Does he define the "mostly" in the argument?
[+] [-] justonepost|10 years ago|reply
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] auganov|10 years ago|reply
[+] [-] achow|10 years ago|reply
99Dresses - Nikki Durkin:
Many startup folk say that failure should be celebrated. “Fail fast, fail early, fail often!” they all chant, trying to put a positive spin on the most excruciating pain any founder could experience..Let me tell you — failure fucking sucks..I travelled to my parent’s place in the countryside of Australia, locked myself away in my room and cried for what seemed like an entire week.
Critica - Jason Huertas:
You’ll hear the phrase “Fail fast” or “It’s good to fail”. Which is true. You can’t learn without failing. But what they don’t tell you is just how utterly devastating failure actually is for an entrepreneur. To sacrifice your personal relationships, finances, and health to the dream, and to still come up short. How could this happen to me? It was a very frustrating and dark place to be in.
The case of 99Dresses was an eye opener. I would beg to differ with the general sentiment in the comment section here about how co-founders lacked sense of product market fit etc.
Nikki Durkin had oodles of determination, immense grit, was a YCombinator alumni, had great product-market fit, managed decent seed funding, had good traction which many startup can only aspire to in the initial days, a team who were behind her most of the time, still..
All things being equal (actually the case showed even if they are not) fate, right-time-right-place is a factor which nobody can control, and which has decisive play in the scheme of things.
I can only wish good luck to Nikki Durkin, and I’m 100% sure that she would come out with something amazing in future.
[+] [-] alaskamiller|10 years ago|reply
1) Learn to live with failure. Most of these folks sound pretty privileged, as if they never got smacked in the face with reality or had to deal with failure. Sometimes that's what happens when one is a young superstar, the odds were in their favor until it wasn't. The rest of us just learned to deal with disappointment and overcoming.
2) The real secret about success is that it's random. It's not even about luck or hard work, success is simply random. Luck is just a lottery scratcher and hard work lets you get more tickets to scratch but hard work, product fit, traction blah blah don't guarantee success. Because again, success is random. Thinking otherwise will drive you crazy trying to analyze why bad things happen to good people and good things happens to bad people. Determination is the only trait that finds success, because you just keep trying until you die. Which then calls back to my first point: learn to live with failure. It's good for you. Each subsequent time you need to cry less.
[+] [-] bliti|10 years ago|reply
I learned this from my first business failure. I was being the center of attention and loving it. But when it failed, I was crushed. Took me a while to understand that a business is merely a system that works around selling a product. Its not me. This has allowed me to build and sell products that fail without feeling shame or pain. Its just a product. It failed. Let's move on to the next.
[+] [-] justonepost|10 years ago|reply
[+] [-] feedjoelpie|10 years ago|reply
[+] [-] jdimov9|10 years ago|reply
Anyone notice anything else standing out?
[+] [-] Disruptive_Dave|10 years ago|reply
[+] [-] badclient|10 years ago|reply
We should talk about nuances of why startups failed. Otherwise, "lack of product market fit" is just jargon for "we failed." Of course, we already know they failed. And since they are startups, they probably didn't fail with millions in revenue.
[+] [-] josu|10 years ago|reply
When you introduce new products or services the market may or may not buy them, it's very difficult to predict beforehand. If your product is disruptive enough the market won't even exist, so you'll have to create it. If you fail it will be easy to blame it on "lack of product-market fit" but that will just be obvious. What else did fail? Why weren't these products able to create market demand?
[+] [-] hharnisch|10 years ago|reply
Not so much on this list, but one I've heard repeatedly for Bay Area startups.
[+] [-] imaginenore|10 years ago|reply
You can hate lemonade, but can still make money selling it.
[+] [-] infinitone|10 years ago|reply
[+] [-] misterbee|10 years ago|reply
[+] [-] blazespin|10 years ago|reply
[+] [-] brandonb|10 years ago|reply
For example, the first was a "same day ingredient delivery service" that "simply didn't have legs", but both Blue Apron and Instacart could be considered same-day ingredient delivery and both are growing fast.
I wonder if we can "unpack" product-market fit into a checklist of smaller goals?
[+] [-] nostrademons|10 years ago|reply
That's why MP3 players and smart phones failed to get widespread consumer adoption before Apple, why Instagram succeeded where Picwing failed, why Facebook has taken over the world while Xanga is relegated to the dustbin of history, and why Google makes billions while Lycos, Infoseek, Altavista, etc. failed. Same product category, but the product itself was much better.
[+] [-] roneesh|10 years ago|reply
Product-market fit has more nuance than the words suggest. Maybe the product wasn't right for the market they tried (Caviar for rural Kentucky I'd imagine), or the market as a whole never wanted the product (drive thru dog grooming), and then there's the matter of timing, maybe it was right, just not at that moment. It would be interesting to explore those deeper assessments of lack of product-market fit (as assessed by the founders and outsiders) and see which one is most common. I'm sure we'd find some fun surprises.
[+] [-] codeshaman|10 years ago|reply
From the looks of it, he'll not make it, but how can I possibly tell him that ? How can I possibly take his dreams and hopes and break them into pieces and hope to still be a friend after that.
Sometimes failure is unavoidable, no matter how much people will warn you about it. Failure is something so personal and private that the only way to understand it is to live through it.
[+] [-] jacquesm|10 years ago|reply
Here's another angle: try to help your friend succeed.
[+] [-] akbar501|10 years ago|reply
Don't tell him. Ask questions that get him to think.
[+] [-] gizmo|10 years ago|reply
Many people don't have the heart to even really try. Many people don't have the heart to keep going for years when at times it looks hopeless. Your friend does, and that's admirable. If he's a good programmer he's not going to put his future in jeopardy. There's no need for well-intentioned -- but ultimately patronizing -- concern here.
So don't volunteer your opinion. If he's a friend, just be there for him (emotionally).
[+] [-] myth_buster|10 years ago|reply
However working in isolation for such a long period can result in disconnect. How about asking him to do a limited alpha among a small tech group and getting their feedback?
[+] [-] huhtenberg|10 years ago|reply
You just should tell him that - "I think this is going nowhere and you will likely burn out and have a crisis." And then when in few weeks/months he will start having doubts, he will have a reference and hopefully it will help him to bury the project faster and move on to other things. At the very least he'll have an option of coming back to you and asking why did you say what you said and you two can go on from there.
[+] [-] njp89|10 years ago|reply
@NiralSJP here—one half of the team that put this together.
Glad you're finding it useful and we appreciate the comments and suggestions
[+] [-] pbiggar|10 years ago|reply
Something I've noticed when discussing failure is there's a class of people who are real assholes about other people's failures (focusing on blame, using very negative phrases, trying to second guess founders for who knows what reason, etc). I notice some comments in this thread are along those lines.
I'd love it if you kept that in mind as you build this, esp since some of the comments/suggestions in this thread are quite, em, unpleasant.
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] ValG|10 years ago|reply
[+] [-] mellavora|10 years ago|reply
Reminds me of one of the best books I ever read on SCUBA theory: a case by case description of some 30 odd fatal incidents.
Knowing what goes wrong is helpful
[+] [-] tjradcliffe|10 years ago|reply
[+] [-] vincele|10 years ago|reply
[+] [-] pdevr|10 years ago|reply
It is fascinating to read it now and see how much of it they got right (and see how much was wrong, with the benefit of hindsight).
[1] Why E-commerce Didn’t Die With the Fall of Webvan http://hbswk.hbs.edu/item/2496.html
[2] What Webvan Could Have Learned from Tesco http://knowledge.wharton.upenn.edu/article/what-webvan-could...
[+] [-] AndrewKemendo|10 years ago|reply
[+] [-] tjradcliffe|10 years ago|reply
But...
There is no business idea I cannot kill using a sufficiently cold and objective evaluation. I can show the demand is not there, that it doesn't solve a customer pain-point, that the price is too high, that the model won't work in this market, that the technology won't scale...
At the end of WWII Vannevar Bush, the head of the American military rocketry program, said that human beings would never go to the Moon because you'd have to take a rocket the size of a battleship, stand it up on end, and launch it into space, and this was obviously impossible.
Prediction is hard, especially about the future. Entreprenuership is fundamentally about courage, because you've got to jump off that ledge knowing the odds are you'll fail. If you dig too deeply or look too closely at the problem you may never start, because the risk is always going to be unacceptably high to any sane person.
So it's important for entrepreneurs to balance their optimism against reality, rather than just giving in to realism and sticking with the day job.
[+] [-] intrasight|10 years ago|reply
[+] [-] praveenster|10 years ago|reply
[+] [-] jasim|10 years ago|reply
Businesses on the other hand are considerably more rational. B2B decisions are made based on value. Even when a deal doesn't go through, you get tangible data to see why. But make yet another photo-sharing app and no one uses it? That's a lot more harder.
[+] [-] c17r|10 years ago|reply
It'd be great if the table had start/close dates, or "months alive", or something.
[+] [-] usmeteora|10 years ago|reply
[+] [-] sxates|10 years ago|reply
[+] [-] shawnee_|10 years ago|reply
Sometimes the fine line between failure:success hinges on nothing more than timing itself. The optimal time to enter a market is a variable that should be weighted almost as heavily as cash to burn.
[+] [-] kzhahou|10 years ago|reply
[+] [-] tjradcliffe|10 years ago|reply
The medical imaging play got scooped by a patent issued to another research team a month before our patent application was ready to go (this was before applications were published.) That was pure bad luck. We were a small team who weren't publishing our work while it was in development, they were a small team who weren't publishing their work while it was in development. They started a few months before us, or long after us but had more resources, or long before us but worked more slowly, or didn't go down the same blind alley we did part way through. I defy anyone using the information available at the time to pick out a better set of choices than we made without flipping a coin.
The key to understanding the role of luck is to realize how scarce information is when you are building something new. You don't know how big the market is. You don't know what customers are willing to pay. You don't know what the "killer application" will be. One company I worked with thought they were aiming for selling a service to the bottled water sector. They ended up selling it to the sewage treatment sector.
I also know people who were one decision away from success: if they had taken deal X or added feature Y they almost certainly (in hindsight) gotten rich. Given the information at the time, they made the best choice they could. That it happened to be the wrong choice was luck, and nothing else. These are people who had built successful companies during the dot-com era, mostly. If they had exited at the right time they'd be hailed as geniuses today.
[+] [-] drallison|10 years ago|reply
They seem to lack the OMG spark of insight into how technology can be used to do something exciting. IMHO, a web site or an App (is there really much difference) is not a STARTUP--but it can be a business that generates income.
[+] [-] tathagatadg|10 years ago|reply