That founder naïveté, however, is also what often leads to founders winning. Building Stripe really seems like a schlep if you’ve built a payments company before - so much so that you might not want to do it. It’s hard, and annoying, and has all sorts of regulatory hurdles.
But if you don’t know any of that, you build it anyway, because schleps are really just long collections of much smaller problems, and naive founders can solve much smaller problems at a rapid succession, whereas “conservative industry experts” simply wouldn’t even start because it’s too hard.
It's true, but we shouldn't forget survivor bias here. We tend to focus on the stories of successful founders. To some extent, those are even the only ones we hear about.
Because of that phenomenon, there is absolutely no incompatibility between the existence of disruptive startups, and the opinions of more conservative voices. Similar to how there's no incompatibility between the existence of people who win the lottery, and the opinions of people who don't play the lottery.
This is a good point, but I'd argue survivor bias doesn't really apply here - successful startups often have naive founders because they are otherwise considered 'too hard' by most people to start. It is simply hard to take down a massive incumbent, for example, so most people don't try.
Lots of startups fail, and a few succeed. I find it an interesting leading indicator that most startups who succeed have founders that are naive in some way.
Doesn't mean you can't win and not be naive, and obviously correlation doesn't imply causation, but the phenomenon is frequent enough that I don't think it's entirely baseless either.
Hi HN, entrepreneurial scientist here. You have just given me an idea. Maybe I shouldn't be posting this buried in the comments but can always be reposted elsewhere.
"survivor bias"
This is a constant talking point in HN. It allows anyone to plausibly dismiss absolutely any advice from a successful entrepreneur (no offence to the poster here intended, they may be right - it's just that it can be used anywhere).
It's so powerful, in fact, that the only plausible retort is to look to serial successful entrepreneurs - Jobs, Musk etc. - as evidence that it's at least not entirely luck that leads to success. And even that counterargument is on shaky ground.
So what we need to do is to get more scientific. We need to know how many other startups were formed in that area, or with that idea, or just in general. I think this is totally doable. What we need is a bad ass business scientist in some university to take on this challenge. Actually, hell - this is a startup idea in itself. So it probably exists somewhere.
I would begin by monitoring all new company registrations in my home country (UK) and keeping a look out for tech startups. You can check their websites at regular intervals, look at Companies House metadata, and scrape news to classify them correctly. Monitor accounts returns to see when/if they trade, and fold. Although it'd take time to build the database, after a year I think you'd already have interesting observations.
You could also do phone interviews with (a sample of?) founders. The goal would be to get them to almost "register" themselves in the same way as a medical trial might be registered. You'll definitely have a problem with confidentiality, so you may need to delay the release of data by 10 years, or to release only aggregate data, or else to rely only on aggregating public domain information to infer activity and talk in general terms to founders.
Other sources of data: incubator batches, demo days, product hunt, advertisements placed by the startups, job adverts. I'd also do "exit interviews" with founders that are no longer registered as directors at Companies House, or when their companies cease trading.
If we can do this, we can start to get absolutely solid numbers on whether survivor bias is really a thing. Like, are their explanatory factors as to why Company A did well and not B, or was it just A was lucky? Because if B won because they took VC or because they launched earlier or whatever it is, then we can start to say - survivor bias isn't really a thing, because the best funded or quickest company wins. And here's the best strategy.
This data would seem so valuable to VCs and founders that you'd think you could make money from it.
And then we could put an end to "survivor bias" as an argument - which presumably would be the outcome (ah confirmation bias! i can't be that scientist) because otherwise it's disproportionately luck and we can all go home now.
Ah, there was some guy on a podcast, I think Sam Harris or Tim Ferriss, that was writing a book and / or publishing on exactly this type of research. They reviewed like 500 some startups and how they failed (or succeeded) it was one of the first scientific based studies like that... would love if someone browsing could comment the name if this rings a bell, I'd have to hunt it down...
There is a difference between thinking something is a bad idea because it's hard and thinking something is a bad idea because it's dangerous. Your Stripe example is an example of something that was hard. Mighty is an example of something that is may not actually be hard but is most likely dangerous.
The problem is that early on dangerous and hard are sometimes synonymous; people argued Uber was dangerous, and in some cases, it was - relatively unvetted drivers driving people around the city without a taxi license. But now it's changed how we move about the world.
It's hard to predict how the end of a startup will look from the beginning, but ambitious ideas often look dangerous, scary, hard, or impossible at the beginning.
This reminds me of people who have children very young and by the time they realize in their late 30s how crazy the idea of a 21 year old being the sole example of how a human should behave, the children are now adults. Some things best done with youthful ignorance I suppose.
This. I started my company in my early 20s and had no clue how much work it would be due to my own naïveté. Indeed, we broke the problems down and worked through them one-by-one until we had a functioning business model. On the one hand, it would be a lot harder to start over knowing what I know now about how much work it takes. On the other, it would be a lot easier because I got a lot better at problem solving and decision making.
Yeah, I have absolutely less than zero interest in starting my last company again. That was hard, and I had no idea all of the problems I was going to run into.
I'm super excited to start my next thing, though, which is surely going to be way easier! ;)
>> That founder naïveté, however, is also what often leads to founders winning
I think you overstate your case with the word "often". It is far more often that what they're building never amounts to anything. Even the most successful founders typically bat less than 500
You're right, but misread what I meant (and/or I was unclear!). I meant that when founders win it is often, at least partially, because they were naive when they started.
I did not mean to imply all naive founders win; that would be absurd. :)
But if you don’t know any of that, you build it anyway, because schleps are really just long collections of much smaller problems, and naive founders can solve much smaller problems at a rapid succession, whereas “conservative industry experts” simply wouldn’t even start because it’s too hard.