I avoided commenting on this article, because I didn't think I'd be able to respond appropriately, given the state of mind it put me in. Seeing where that's gone, I've decided to try anyway.
The quickest version is that you underestimate the likelyhood of failure at several of your points:
Failure to understand customers.
I'm not sure the typical LWer who makes it through the sequences is necessarily good at this. We've had discussions on social skills and empathy and the trouble with inferential gaps. The population (rationalist | understands potential customers) appears to be worryingly small.
if you don't have the skills, then get them.
This is probably easier for the typical LWer, since autodidacts appear to be a non-negligible population around here, but again, much more easily said than done.
if you don't have willpower, it'll be pretty tough to succeed.
We talk about willpower a lot. I think it's safe to say it's an issue among self-styled rationalists.
Finding a cofounder shouldn't be too difficult though.
Could've fooled me.
Still though, I think not being able to find an investor is a legitimate risk.
Yes. Crowdfunding sites could help with this (unless you're in the subset of people who can't use them / your idea does not meet the requirements of any of the crowdfunding sites that get sufficient traffic).
I've never hired anyone before,
Well, in that case -
but it doesn't seem that hard.
... This is when, the first time reading it, I decided I shouldn't reply. At this point, the words "Naive, wide-eyed idealism" kept looping in my head until I went to do something else. Granted, if you get your starting capital, hiring shouldn't be that hard, since you have something to pay people (including a potential HR person who might be better at managing applicants/hirees, or maybe a legal expert if you fail a comprehension roll with the laws and regulations and paperwork and such.). But by now, we have compounded multiple "I haven't done this, but it doesn't seem that hard"s.
Given all of this, I think that if you're smart and hard working, you should have at least an 80-90% chance at succeeding at a startup.
Just focusing on a few issues, it seems incredibly optimistic to estimate a probability of 80-90% chance of success (where success is measured in millions of dollars). The probability of each must be above 96%:
If you can, after doing lots of examination and updating, give each of those a probability above 96%, then of course you should start a startup. But it's usually safe to say that we're more likely to trip over more than one of those on the way to failure.
Having said all that, this article does serve a useful purpose of laying out the paths to success and failure with startups, and is a realistic exercise in Bayesian updating, so I'm kinda bothered by how its karma was at -9 before I started writing this response.
I'm not sure the typical LWer who makes it through the sequences is necessarily good at this. We've had discussions on social skills and empathy and the trouble with inferential gaps. The population (rationalist | understands potential customers) appears to be worryingly small.
I'm struggling to communicate this (let alone argue it), but I think the main problem is the inability to think specifically, not the inability to understand what it is people want. Ask yourself: once you break a demand down far enough into its components, is it still hard to say ...
My motivation behind this post stems from Aumann's agreement theorem. It seems that my opinions on startups differ from most of the rationality community, so I want to share my thoughts, and hear your thoughts, so we could reach a better conclusion.
I think that if you're smart and hard working, there's a pretty good chance that you achieve financial independence within a decade of the beginning of your journey to start a startup. And that's my conservative estimate.
"Achieve financial independence" only scratches the surface of the benefits of succeeding with a startup. If you're an altruist, you'll get to help a lot of other people too. And making millions of dollars will also allow you the leverage you need to make riskier investments with much higher expected values, allowing you to grow your money quickly so you could do more good.
A lot of this is predicated on my belief that you have a good chance at succeeding if you're smart and hardworking, so let me explain why I think this.
Along the lines of reductionism, "success with a startup" is an outcome (I guess we could define success as a $5-10M exit in under 10 years). And outcomes consist of their components. My argument consists of breaking the main outcome into it's components, and then arguing that the components are all likely enough for the main outcome to be likely.
I think that the 4 components are:
The Idea
Your idea has to be for a product or service (I'll just say product to keep things simple) that creates demand, and can be met profitably. In other words, make something people want (this article spells it out pretty well).
What could go wrong?