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dclayh comments on Incremental Progress and the Valley - Less Wrong
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It's important to realize that this is another myth perpetuated by the media and our ignorance of the statistics. Most startups fail; I think the statistics are that 80% die in the first 5 years. But the ones that get written up in glowing articles are the ones that succeeded. Of course all those founders who struck it rich believed strongly in their ideas, but so did many of those that failed. That irrational belief may be a crucial ingredient for success, but it doesn't supply a guarantee. Most of the people who held that irrational belief worked for businesses that failed--but they didn't get their name in the paper, so they're relatively invisible.
But is it also true that 80% of entrepreneurs fail? I was under the impression that yes, 80% of startup companies fail, but the average entrepreneur might start five or more companies over his career, so that average success rate per person is much higher than 20%.
Interesting question. It would be useful to know what the real statistics are. We certainly know that some successful entrepreneurs start up several companies, and that some of them have multiple successes. But it's harder to find reports about serial failures. I think I've read that (successful) VCs don't count prior failures against CEOs they're considering funding, and sometimes the people they place in funded companies are experienced with start-ups, but haven't had any big hits yet.
But for most people, I think the real question is what type of start-up to join, not whether to start one of your own. The vast majority of people at every successful company weren't founders, and weren't even early joiners. I think for relatively young workers, joining a succession of promising start-ups may be the right way to spread your chips around. Stay for 3-5 years (and work at it with all your heart and mind) and after that much time, if it doesn't look like blistering success is just around the corner, move on to another opportunity. As you get older (and don't have a big win under your belt) it probably makes more sense to take a lower chance on the big win in order to get more current income.