Growing black swans
Paul Graham from the startup incubator Y Combinator published a small essay “Growing Black Swans” , in which he shared his observations on venture financing of Internet companies. For many years of work, he made two main conclusions:
1. Almost all profits came from several “big winners . ”
2. The best ideas at first look like bad (because those ideas that look good were probably already implemented by someone). Because of this, it is even harder to predict "big winners." For example, a website for students where they can kill time is an example of a “perfect” bad idea (Facebook). This is a site for a niche market, where there is no money, for a useless pastime. The same was with Google - a new search engine on the market, which is full of search engines.
Indeed, it is very strange when the chances of success are practically irrelevant, if it is not a “big success”. So a team of smart 19-year-olds who don't know what to do is not much less likely to become billionaires than a startup with a clear business model and experienced managers.
After Y Combinator financed several hundred startups with a total value of $ 10 billion, it turned out that 75% of capitalization accounted for only two startups: Dropbox and Airbnb. At the same time, the profitability of the “big winners” is 1000 times greater than expectations and 10,000 times greater than the profits of other successful startups, which turns venture financing into a very strange occupation.
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Paul Graham says that you need to develop a special ability to “not pay attention to the elephant”, that is, not to take into account the obvious commercial prospects of a startup, and instead think about the likelihood of a big breakthrough, that things are practically unrelated. From this it follows that when growing a startup, one should ignore the opinion of investors, says Paul Graham. It was with such a thought that “We do not care what investors think”, they gave money several times for the development of the strange Airbnb website.
Paul Graham specifically explains that making a profit is not the only goal of Y Combinator, so that in any case, they welcome those hundreds of startups that do not generate billions, but only pay back costs. For example, Reddit does not make a profit, but Paul Graham met many interesting people through Reddit.
On this topic:
Fifteen "excuses" do not create a startup from Paul Graham
1. Almost all profits came from several “big winners . ”
2. The best ideas at first look like bad (because those ideas that look good were probably already implemented by someone). Because of this, it is even harder to predict "big winners." For example, a website for students where they can kill time is an example of a “perfect” bad idea (Facebook). This is a site for a niche market, where there is no money, for a useless pastime. The same was with Google - a new search engine on the market, which is full of search engines.
Indeed, it is very strange when the chances of success are practically irrelevant, if it is not a “big success”. So a team of smart 19-year-olds who don't know what to do is not much less likely to become billionaires than a startup with a clear business model and experienced managers.
After Y Combinator financed several hundred startups with a total value of $ 10 billion, it turned out that 75% of capitalization accounted for only two startups: Dropbox and Airbnb. At the same time, the profitability of the “big winners” is 1000 times greater than expectations and 10,000 times greater than the profits of other successful startups, which turns venture financing into a very strange occupation.
')
Paul Graham says that you need to develop a special ability to “not pay attention to the elephant”, that is, not to take into account the obvious commercial prospects of a startup, and instead think about the likelihood of a big breakthrough, that things are practically unrelated. From this it follows that when growing a startup, one should ignore the opinion of investors, says Paul Graham. It was with such a thought that “We do not care what investors think”, they gave money several times for the development of the strange Airbnb website.
Paul Graham specifically explains that making a profit is not the only goal of Y Combinator, so that in any case, they welcome those hundreds of startups that do not generate billions, but only pay back costs. For example, Reddit does not make a profit, but Paul Graham met many interesting people through Reddit.
On this topic:
Fifteen "excuses" do not create a startup from Paul Graham
Source: https://habr.com/ru/post/151165/
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