Deep fear in Silicon Valley (1)-time screened who

Last year, on demo day, 36 Krypton Silicon Valley station, I was fortunate enough to meet an excellent and young female entrepreneur, Erica. In my opinion, she founded a very great technology company, Tcpengines, whose core product is a novel algorithm that can be used to increase the data throughput of any network (throughput). In the conversation, I can feel her smile of self-confidence and relaxed, but also can feel, her slender shoulders are carrying a suffocating pressure. Entrepreneurship, even for her excellent people, is full of unpredictable unknowns. Although I am subjectively convinced that she can succeed on this path, all of it still takes a long time to test.

It is often said that time is a sieve, but this sieve is not always sand and deposit gold, especially in the High-tech business history of Silicon Valley, there are many have represented a certain period of the most advanced technology, ER failed to survive on the commercial battlefield, it is indeed sad. Of course, now we know the importance of marketing packaging, know the importance of the user experience, know the importance of the ecosystem, but also know the importance of Wall Street backers, but this all in more than 10, more than 20 years ago, not so easy to understand.

However, even if you have a deep understanding of all of the above, and the ability to do so, you are still likely to reap a "failure" in Silicon Valley, because in the Silicon Valley to start their own High-tech enterprises, from the outset, is a very low probability of success of the Lotto game.

Combinator, the most famous incubator in Silicon Valley, has given the fact that, after 5 years, only 37 companies have been identified as "successful" [1], with 511 start-ups graduating from YC. Here, YC's definition of "success" is that it is worth more than 40 million dollars. This is an unwritten standard that is recognised by many American entrepreneurs and investors. 37/511≈7%, that is to say, the other 93% are losers.

YC is the Silicon Valley's top incubator, and its start-ups are sparkling with stars: Omgpop (bought by Zynga for 180 million dollars), Reddit (a news based social BBS, valued at $240 million [2]), Airbnb (online short rent website, Valued at $2.5 billion [3]), Dropbox (cloud storage services, valued over 4 billion US dollars [4]), etc. YC provides two training each year, a total of thousands of start-up team applications, of which only 3%~5% lucky people can weren't, "married" success. Thus, the ratio between 0.21%~0.35% (3%_7%~%5_7%) and the failure rate was more than 99.6% to get the initial success from YC's path.

Of course, this is only from YC data, but there is no reason to believe that the YC-independent start-ups will have a greater probability of success, as no one would think that students from the Hangzhou teachers ' College will be more successful than the students in Peking University:

Even if a start-up succeeds through 5 years of testing, the road behind it is still thorny. If the "30" as the Silicon Valley High-tech enterprises of the "longevity" standard, then a company can start a successful business, and "finish" the probability is even more minimal. The following example tells of a giant company that once had a market capitalisation of more than $200 billion trillion, but eventually fell to the age of 28. Its name is Sun Microsystems.

On one occasion, in 2012, I went to the Facebook headquarters at Menlo Park and inadvertently, at the entrance of Hacker way, I saw the mark left by Sun Microsystems, the owner of the park's generation, that the front of the company's number was Facebook's. Like "logo, but the back of the number is Sun logo. At first, I was surprised: shouldn't Facebook wipe Sun's traces completely clean? Then I had a little bit of a sense of what it was: perhaps it was the best stance to salute the old master's past exploits, and to remind the latter of the past.

Sun Microsystems was founded in 1982, famous in the last century 90, in the computer industry, the hardware and software have a tripod: Java software platform, and SPARC based on high-end server. In 2005, Sun launched the pinnacle of Grid computing (Computing) server, known as the "Huangdaushing array" of sun grid, assembled with 3,000 CPUs, such as the solar system, 3000 bright stars.

However, after the "Huangdaushing", Sun failed to change the world, but was plunged into years of losses, near-bankruptcy, until 2010 was coveted Java and server business for a long time Oracle to buy 7.4 billion U.S. dollars, the price is only the peak of 3%. Sun's two mega-parks, one sold to Facebook and the other to Oracle. Alas, Dan Lou bi ge is current affairs, only Jiangshangu.

Such a strong company as Sun, technology, capital, talent, no lack, unexpectedly or failed. For similar examples, there are many more in Silicon Valley: 3COM, SGI, 3dfx (the pioneer of 3D graphics), etc. (Intel, Microsoft, in the future?).

Well, now back to the title of this section, in the extremely difficult entrepreneurial or business path, the Oracle of time will choose who to succeed? Is it really possible to start a successful business by learning from those MBA textbooks?

I'm a geek and really want to burn out all those MBA textbooks. Let me first talk about "success and failure" with a slightly geek description.

From the point of view of pattern recognition, "success and failure" seems to be a classification problem (classification). If you are familiar with machine learning, you must know some linear algorithms to deal with classification problems, such as SVM (Support vector machine). However, the difficulty of the classification of "success and failure" is that the dimension of its parameters is too high and almost infinite. In other words, you cannot design a classifier with only 100 parameters to solve the classification problem with hundreds of billions of parameters.

Similarly, it is impossible to give a convincing logical answer to Sun's demise. Each company's failure, are involved in countless subjective and objective factors, and even can not describe the "luck" ingredients mixed with it.
If you want to answer this question, I would rather say: no one can laugh to the end, time will make every company to the failure and extinction, like every one of us in sickness and death.

Indeed, this is the time of our "doomed cruelty" screening. When one day, Silicon Valley is full of sand and sunset, do not know whether anyone can recall those lonely and lovely entrepreneurs, and their youth is buried here, dreams are buried here.

(This series begins with a discussion of "Changing the World", "software and Hardware", "algorithms and Ideas", "good People", "money", and so on.) This series will be published at the Bay Area review/www.valleytalk.org and 36 Krypton/www.36kr.com. ）

[1]. http://www.businessinsider.com/startup-odds-of-success-2013-5

[2]. http://news.yahoo.com/depending-ask-reddit-worth-240-million-700-million-155121063.html

[3]. http://online.wsj.com/article/SB10000872396390443684104578066811794775602.html

[4]. http://www.forbes.com/sites/quora/2013/02/07/why-is-dropbox-worth-more-than-4-billion/