{"id":383,"date":"2011-07-29T08:41:17","date_gmt":"2011-07-29T12:41:17","guid":{"rendered":"http:\/\/blog.payne.org\/?p=383"},"modified":"2011-07-29T08:41:17","modified_gmt":"2011-07-29T12:41:17","slug":"the-entrepreneurial-lottery","status":"publish","type":"post","link":"https:\/\/payne.org\/blog\/the-entrepreneurial-lottery\/","title":{"rendered":"The Entrepreneurial Lottery"},"content":{"rendered":"

A recent Financial Times article<\/a> about Facebook’s stunning growth struck a chord with me:<\/p>\n

… I am concerned that he [Zuckerberg] sets an example of meteoric success that virtually no one else will ever be able to repeat. But wannabes are trying to copy him, and consequently squandering their careers on false hopes.<\/p><\/blockquote>\n

For pure-software\/Internet\/mobile ideas, the low barriers to entry have created a very crowded, “weedy” ecosystem. \u00a0 It’s a great<\/strong> time to be a consumer (e.g. look at the number of mobile apps and free Web sites), but a very tough time for entrepreneurs in these segments. \u00a0More and more projects look like lottery tickets: \u00a0 long odds, with a slim chance of payoff.<\/p>\n

Why do entrepreneurs do it? \u00a0It’s partially the psychology of poverty<\/a>, where entrepreneurs hungry for success (financial or otherwise) make irrational decisions. Worse, a startup career commitment, unlike a lottery ticket, has an especially high opportunity cost. \u00a0 The other element is a belief that skill can influence the outcome. \u00a0This is generally true, but is much less so in these segments: \u00a0competition is fierce, copying is rampant, and success often comes from quirky combinations of factors that are difficult to plan.<\/p>\n

We will have more big Facebook-scale lottery outcomes, and that will spurn more entrepreneurial career bets. \u00a0But I think the smartest entrepreneurs will avoid the lottery.<\/p>\n","protected":false},"excerpt":{"rendered":"

A recent Financial Times article about Facebook’s stunning growth struck a chord with me: … I am concerned that he [Zuckerberg] sets an example of meteoric success that virtually no one else will ever be able to repeat. But wannabes … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,7],"tags":[],"class_list":["post-383","post","type-post","status-publish","format-standard","hentry","category-entrepreneurship","category-ramblings"],"_links":{"self":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts\/383","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/comments?post=383"}],"version-history":[{"count":0,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts\/383\/revisions"}],"wp:attachment":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/media?parent=383"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/categories?post=383"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/tags?post=383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}