The fact that the best ideas seem like bad ideas makes it even harder to recognize the big winners. It means the probability of a startup making it really big is not merely not a constant fraction of the probability that it will succeed, but that the startups with a high probability of the former will seem to have a disproportionately low probability of the latter.
It could be that it's a bit late, and I am tired. But it sounds a bit awkward.
There is a tradeodd between are startups that will succeed, i.e. return their risk-adjusted capital, and those that will make it big - the subset of the prior that are able to scale. One can get return-of-capital startups in niches that cannot scale or attempt to take on Google or Fb with a very low probability of success.
The fact that the best ideas seem like bad ideas makes it even harder to recognize the big winners. It means the probability of a startup making it really big is not merely not a constant fraction of the probability that it will succeed, but that the startups with a high probability of the former will seem to have a disproportionately low probability of the latter.
It could be that it's a bit late, and I am tired. But it sounds a bit awkward.
Anyone care to clear that up for me?
Thanks!