Attrition and Cheerleading

This article has been on the front page of Hacker News for the past couple of days.  It is short and content light, you can read the whole thing in about ten seconds, and to excerpt it is to reproduce it.  Basically, it says that this guy’s brother wasn’t worried about the 90% attrition rate in special forces training because attrition is a group statistic and he’s an individual, and thus you shouldn’t worry about the failure rate of start-ups because you’re a gosh-darned individual.

Now, first:  The worst part of the HN community is this cult of the founder and posting these kind of inane little content-free links.  I don’t begrudge the author writing short, kind of stupid articles — sometimes sitting down to write a 2,000 word think piece just isn’t in your schedule that day — but aggregator sites are supposed to filter out that kind of chaff, not promote it.

Second:  well, fine, let’s talk statistics and attrition.

Knowing an attrition rate is important, even for you, yes, the individual.  If we assume that attrition is purely merit-based, then even though the average attrition doesn’t speak to your merit as an individual, it does tell you how much merit you need.  If the attrition rate is 25%, and it’s merit-based, then you just need to be in the top 75% by merit.  If it’s 90%, you need to be in the top 10% by merit.  And if you are capable of a bit of clear-eyed introspection, you might be able to say, “I’m sure I’m in the top 25%, but I’m not sure that I’m in the top 10%.”  Or whatever.

But more importantly than that: the “attrition rate” of the lottery is 99.999999%.  And if you think that because you’re an individual, that doesn’t apply to you, well, then, you’re probably the kind of person who spends a lot of money on lotteries.  It sounds dumb to call it the “attrition rate” when it’s a purely luck-based system like a lottery, but the more luck is involved in any given sorting between success and failure, the more you should pay a LOT of attention to the attrition rate.

Startup success isn’t purely luck-based like the lottery, but — I say this not knowing a lot about special forces training — I don’t think it’s as merit-based as special forces training.  If you’re going to found a company, or join an early-stage start-up, you have to be clear-eyed about the fact that with all the merit in the world, you may still fail.  In fact, you are likely to still fail.  You may swing the odds much higher than they are for “everyone else” via your merit, but there’s a long way to go before you reach even-steven.

I work for an early-stage start-up.  My last job was for an early-stage start-up (that failed).  I suspect my next job will be for an early-stage start-up.  I certainly at least contemplate being a founder at some point.  The trick of having a good experience with early-stage start-ups is not to deny the reality that most of them fail, not to stick your fingers in your ears and insist that of course it can’t happen to you.  It’s to find ways to make the experience a success for you (along any number of axes) even if the company as a whole does not become the next big thing.

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