The unbearable probability of succeeding

Posted: March 2, 2010 in Misc
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One of my strong beliefs is that, when it comes to building a company, the probability of succeeding is a constant.

With the help of top mathematicians, I’ve formalized this theorem:

P(success) = C

(Stephen Hawking remarked that each equation in a book halves its sales, so I guess the title just halved the audience of this post to three people. That is, however, the price one has to pay for scientific rigorousness, and I have no alternative than to live with it.)

What does the theorem mean in practice? Basically, I claim that the probability of succeeding is independent of the aggressiveness of your goals; a startup trying to change the World is as likely to succeed as another one going for a smaller, “more realistic” goal. The most significant implication of this is that you should always think big and aim as high as possible.

In case you find the idea profoundly stupid, here is the reasoning behind it:

  • It is much easier to attract top talent if you have a larger-than-life mission. This applies to co-founders, employees, advisers, partners, investors – you name it. It is true that if your goal seems almost impossible to reach and/or you are short on street credibility, most of the people just ignore you or think you’re nuts. However, today the World is both small and flat, and you’re likely to find enough superstars who share your passion. And when you have a kick-ass team, the impossible goal starts to look… less impossible.
  • If you aim very high, even a partial success could be a life-changing event for you. Despite of the common belief, the startup game is not based on the winner-takes-all rule – it’s more about winner-takes-a-lot. If you tried to create a billion dollar market cap company, but ended up exiting, let’s say, with only 1% of this valuation, it’s still $10m, i.e. a lot of cash. (By the way, I don’t think it is in general a good idea to think about the exit when founding a company, but more about this in one of the later posts.)

So, are you aiming high-enough? Am I? I think we better leave this topic.

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Comments
  1. Thanks Petteri for this strong post. I must admit the two points you have here are exactly what I’m doing in my own life, although I haven’t found this simple words to describe it.

    I set my goal to making a million in 139 days. Some people think this is ridiculous and that it can’t be done but there has been a great deal of those who consider this goal to be way too modest.

    The higher the goal the less of a difference there is in the actual figures. And if you aim high, there is always the chance that you fall down from there too. Just think of the massive learning experience in failing a multi-million goal instead of a small business.

  2. hkokko says:

    Agree. With mild goals you will attract medium talent or maybe even risk averse people. With big enough goals you are likely to get higher caliber people -> better chance of success and partial success with high enough goals can already be rewarding.

    You also learn a lot if you have lots of top class people working with you.

  3. Petteri, good luck! It is good that you didn’t play it safe by allowing yourself ample time such as e.g. 150 days 🙂

    Hannu, you’re absolutely correct: learning from others is one of the key reasons for going at a big challenge.

    BTW, I should have added to my post that being analytical and brutally honest to yourself is a must if you aim for the sky: everyone will eventually run out of good cards and then it’s time to collect the chips and head home.

  4. […] is interesting about Petteri’s blog is that already his second entry addresses the very essence of my project. He places his words rather ambitiously: … a startup […]

  5. toivo says:

    Hmm, well written post & very inspiring conclusion. Thanks.

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