I hear this almost as much as the "90% of startups fail" piece of wisdom, and I was a little surprised to see it in a PG essay. I'm not saying it's necessarily wrong, just that I don't totally understand it.
Risk is "the possibility of suffering harm or loss; danger." So what's risky about a startup? If you are paying for it yourself, maxing out credit cards, etc, then the startup is indeed likely to be harmful to you.
But, if you get YC funding, and are the under 30 crowd that PG refers to with low living expenses, then it's pretty unlikely that you're taking that approach. Instead, you're simply not saving any money for awhile. So there is opportunity cost lost, since surely most of the YC founders could make a nice chunk of change working for the man. But is this really the harm that's implied by the reference to risk? Especially when you factor in the experience you gain from a failed startup, it seems pretty questionable to say that serious harm will likely befall you. It's more like, less savings and a great experience will likely befall you.
So I wonder if the sentiment is just referring to the harm that may happen to the startup itself. As in, it's quite likely -- 90% likely! ;) -- that the startup you create will die. But isn't that kind of like saying it's risky to scratch off a lotto ticket that someone gives you? It's "risky" for the lotto ticket I suppose, but not really for you.
I'll try to answer my own question. I think it's about riskiness from the point of view of investors. The thing is, I think the wisdom is oft repeated as risky for the founders (though perhaps not in this essay), which is what I'm objecting to.
It's risky in the sense that you might fail, and not get paid (enough) for your efforts. I calculated my last startup to have paid me about $3/hour (not discounting the time factor) after all was said and done.
It depends whether you're counting law school, business school, medical school, pharmacy school, nursing school, etc. as grad school. Among Hackers grad school is far more likely to be of the type "studying fractal patterns in African architecture while teaching two sections of introductory socio-cultural anthropology" Generally you pay through the nose for the first kind and they pay you (a little) to do the second kind.
It's amazing how few people know that if your PhD doesn't cost -$12,000 a year or less you really are not doing something right.
I'm not sure how many hackers could physically work in [law|business|medical|pharmacy|nursing].
My point was that because school systems are hackable, sometimes hackers will have hacked the signs of the costs involved. For example, my graduate school costs less than -$12,000 a year, but some peoples' schools may cost more than $12,000 a year (so they're not "doing something right?"). Big deal. In the long run, education wins financially and in terms of helping people accomplish their goals.
One can easily make the argument that startups are education, but obviously this consists of more than "Web 2.0" and a few other buzzwords thrown together at random. (I'm not criticizing Paul here, but I am criticizing the lunatic fringe that seems to grow around Paul.)
The risk is that if your startup fails, you've traded what probably would have been a great salary at a larger company, so essentially you gave up that guaranteed income for the more risky startup.
I hear this almost as much as the "90% of startups fail" piece of wisdom, and I was a little surprised to see it in a PG essay. I'm not saying it's necessarily wrong, just that I don't totally understand it.
Risk is "the possibility of suffering harm or loss; danger." So what's risky about a startup? If you are paying for it yourself, maxing out credit cards, etc, then the startup is indeed likely to be harmful to you.
But, if you get YC funding, and are the under 30 crowd that PG refers to with low living expenses, then it's pretty unlikely that you're taking that approach. Instead, you're simply not saving any money for awhile. So there is opportunity cost lost, since surely most of the YC founders could make a nice chunk of change working for the man. But is this really the harm that's implied by the reference to risk? Especially when you factor in the experience you gain from a failed startup, it seems pretty questionable to say that serious harm will likely befall you. It's more like, less savings and a great experience will likely befall you.
So I wonder if the sentiment is just referring to the harm that may happen to the startup itself. As in, it's quite likely -- 90% likely! ;) -- that the startup you create will die. But isn't that kind of like saying it's risky to scratch off a lotto ticket that someone gives you? It's "risky" for the lotto ticket I suppose, but not really for you.
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