A mathematical analysis of entrepreneurship: a new venture

Source: Internet
Author: User

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Entrepreneur success is a small probability event, want to make a lot of money is difficult, and for VCs and the media, success is a big probability event, just do not know what happened, so the position is not the same. Many situations are chaotic and unpredictable.  Why do you want to start a business? How to turn a small probability event into a big probability event? This is the answer that every entrepreneur has to look for. Three poisons in life

Editor's note: The author's life three drugs for the well-known web site and web game company founder, previously for it-type media senior editor, witnessed the early development of China's Internet.

The lottery is a tax on people who don't know math. This is a British mathematician's conclusion about the lottery.

Lottery tickets to the individual buyers, which the odds of a big jackpot will not happen, but for the whole group to buy lottery tickets, it is inevitable that the legend of a rich night.

This is the conflict between mathematics and human intuition. Countless people with a few dollars to achieve a hope that could not be achieved, each time the collapse of the cause of the failure of their own bad luck, and into the next hope, but in strict mathematical calculations, these failures are already doomed. This is the true portrayal of most entrepreneurial outcomes I have seen in the past 10 years.

Return to the topic of entrepreneurship, if the reader read my previous several articles, there will be such an illusion, that is, entrepreneurship can easily let people become millionaires. In fact, only successful people can be reported by the media, and losers will rarely appear, this is the so-called Matthew Effect, the full range of mass media intrusion, will let everyone have the illusion that entrepreneurship is the most fashionable and most successful things.

So let's get math to restore the most fashionable thing:

Chaos theory

Most of the human community behavior, such as the stock market, the foreign exchange market, the fashion of a quarter of clothing, a large area such as "the embarrassment" of the sudden eruption, are attributed to the modern science of a discipline called Chaos (Chaos), and the subject of the most famous allusion is the butterfly effect. And entrepreneurship is definitely a part of the chaos system, so we don't have to look at Barron's forecast of good stock every year, and we don't have to listen to the future predictions of the teacher's career, because basically these predictions have been rigorously proven ineffective and inaccurate in chaotic systems.

Probability theory

1. Small probability event equals impossible event;

2, the big probability event equals the inevitable occurrence event.

In the game industry I am engaged in a city, I have seen a statistical registration of the game development team is about 150, assuming that there are 10 cities all over China, each game development team will release 1 products, then each year there are 1500 game products are born.

But according to the 2012 Iresearch Research Institute sampling analysis, there will be 15 games to become their approved samples, so we use this standard as the standard of entrepreneurial success, then the probability of success is about 1%. The probability of buying a lottery ticket is about 6.71% (an interested friend can deduce it), in other words, with this simplest model, regardless of the team's ability and other performance, in a year of independence, you develop the game, the probability of eventual success is about you casually buy a welfare lottery winning 1/6. And this completely satisfies the small probability event equals the impossible event.

But according to the game life cycle, then every year will appear in a profit far beyond the input of the work, we are familiar with the "disdain Three Kingdoms" "Proud Sword" "Immortal Road" "Pinball Hall" and so on are such works. The beauty of entrepreneurship is that, when you succeed, you can say a lot of causal reasons to prove the inevitability of success, and the greatness of a person such as the teacher, cannot predict the next success there. This is also true of the work of "Ted". This has long been mathematically proven in chaotic systems, so in essence, the mathematical model of entrepreneurship and lottery is basically the same, but the media, VCs and the opposite of the founders, they know that entrepreneurship will be successful, but do not know who is now, so for them, the approximate rate of events equals inevitable events, They will certainly preach entrepreneurship! So they can get more profits or more reporting opportunities.

So if we assume that the results of a startup are chaotic and unpredictable, the probability of success is that a small probability event cannot occur, and our so-called advantages actually do not have the absolute advantage of obeying the normal distribution. Why do you want to start a business? How to turn a small probability event into a big probability event? This is the answer that every entrepreneur has to look for.

The author concludes:

This group of articles is the result of betting with a friend at a dinner to leave the media for so many years. In the 2012, with the mobile boom, compared to my younger colleagues and friends in the same year as our internet boom to join in, I seem to see those years, we seek the youth together. So when writing this group of articles, recall a lot, every youth should have a lot of adventures and mistakes. So I just want to show the success of those who think and confused, so that everyone in the careless success, can embark on a higher level.

The last article is probably my own sentiment, when I am rational to fully use mathematics to deduce entrepreneurship, entrepreneurial difficulty reduced a lot, but also lost a lot of fun, and then this is the actual operation of the law of society. When we use ideals, enthusiasm and diligence to engage in entrepreneurship, we expect a warm and high return. The world, however, runs in mathematical and physical rules, so he ignores the romance and ideals, but chooses those who meet the rules. The world's entrepreneurs are willing to succeed!

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