Very nice analysis. One potential confounder could be the unusually strong performance of startups and tech stocks since 2014 due to expansionary monetary policy. I’d be curious to see these numbers broken down by different timeframes: say, the performance of startups founded in 1995-2001, 2001-2008, 2008-2014, and 2014-2022. Perhaps success over the last decade depends strongly on the macro environment — or, maybe building a startup takes long enough that you can outlast any particular business cycle and achieve stable returns.
Although potentially the value of having an additional person wanting to do direct work could also vary based on the similar economic factors. To take a trivial example, that value is basically zero if there is no funding. And if funding is a significant constraint, the worker who the hypothetical worker pushes out by choosing to do direct work was probably pretty effective themselves.
So we should be careful not to adjust the effectiveness of GTE strategies downward based on economic trends without considering whether to adjust the projected benefit of a decision to pursue a direct-work career path for similar factors.
Yeah, this is one of the things I’d like to see, although you could take Ryan’s analysis (which focused on 2005-2009) as partially doing what you want.
It’s interesting to note that Airbnb was founded in 2008 and Stripe in 2009; these are currently the two most valuable YCombinator companies, which seems like some evidence that you can outlast business cycles (or maybe even that it’s good to start in a recession).
Very nice analysis. One potential confounder could be the unusually strong performance of startups and tech stocks since 2014 due to expansionary monetary policy. I’d be curious to see these numbers broken down by different timeframes: say, the performance of startups founded in 1995-2001, 2001-2008, 2008-2014, and 2014-2022. Perhaps success over the last decade depends strongly on the macro environment — or, maybe building a startup takes long enough that you can outlast any particular business cycle and achieve stable returns.
Although potentially the value of having an additional person wanting to do direct work could also vary based on the similar economic factors. To take a trivial example, that value is basically zero if there is no funding. And if funding is a significant constraint, the worker who the hypothetical worker pushes out by choosing to do direct work was probably pretty effective themselves.
So we should be careful not to adjust the effectiveness of GTE strategies downward based on economic trends without considering whether to adjust the projected benefit of a decision to pursue a direct-work career path for similar factors.
Yeah, this is one of the things I’d like to see, although you could take Ryan’s analysis (which focused on 2005-2009) as partially doing what you want.
It’s interesting to note that Airbnb was founded in 2008 and Stripe in 2009; these are currently the two most valuable YCombinator companies, which seems like some evidence that you can outlast business cycles (or maybe even that it’s good to start in a recession).