Entrepreneurs Don't Have an Optimism Bias (opens in new tab)

(blogs.hbr.org)

9 pointssmit12y ago3 comments

3 comments

The high failure rates of startups suggest otherwise.

Not so. The payoff of a successful startup is so high that it's often a good bet even with a high chance of failure.

Expected value only enters the picture if you can play many, many times. It's more realistic to look at the median outcome, yet every entrepreneur is transfixed by the big exits. If that's not optimism I don't know what is.

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3 comments

codex12y ago

The high failure rates of startups suggest otherwise.

cookingrobot12y ago

Not so. The payoff of a successful startup is so high that it's often a good bet even with a high chance of failure.

codex12y ago

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