What if successful startups are just lucky? - <AUTHOR> http://blog.ploki.info/what-if-successful-startups-are-just-lucky/ <comment><USER3> All successful startups are lucky, but they're never _just_ lucky. If they were, we could save ourselves a lot of work reading applications and doing interviews. We could just pick randomly instead. If we did that for one batch, you'd really be able to tell the difference, believe me.

<comment><USER4> I would absolutely love to see a double-blind randomized experiment with controls for YC applications. In one batch, randomly and secretly assign CONTROL or EXPERIMENT to each application (in whatever proportion you are comfortable with). Of the CONTROL batch, do regular reviews. For the EXPERIMENT batch, randomly accept the same percentage of groups as the control. Then have people outside of the reviewers try to label each group correctly at different stages and see how they do. These people could be: YC alums, YC staff not on the interview loop, VCs making investments, outside experienced CEOs, successful startup founders.

For full double-blindness you could even do interviews with the EXPERIMENT group, then use a program to automatically either use the interview result or not. This might be aggravating for reviewers, though, seeing their work wasted by random choices.

<comment><USER5> So pg's years of experience getting better than random results is irrelevant and you'll only believe him if he does a long experiment (that would cost him lots of money if it's not just luck) to prove something he already believes?

<comment><USER6> Generally, and especially with science, the way things work is that you prove something _before_ believing it.

<comment><USER7> This is oversimplified. In many cases, it is the conjunction of a reasonably strong prior belief and the absence of preexisting "proof" that motivates a scientist (or mathematician) to try to prove something in the first place.

The key is to perform proper Bayesian updates in the face of evidence in either direction; if you do, as long as your prior wasn't totally insane it doesn't really matter where you started.

</comment></comment></comment></comment></comment><comment><USER8> This has been on my mind lately as well, for some reason. That, and the point of this story [http://sivers.org/horses](http://sivers.org/horses) which is basically that even after the fact, it's really hard to know anything[1].

I don't know if it's just from growing older but I feel a lot more humble when looking at peoples ideas and actions than earlier. I literally feel that I have no clue whether they will succeed or not whereas I used to quickly get quite strong feelings in one direction or the other. In one way, this feels more mature and zen but at the same time, it annoys me a bit. I feel that conviction is the trait of a leader and something I need to possess if I want to convince anybody to engage in my projects. Maybe I'll just practice faking it and hope they didn't read this comment :-)

Edit: [1] One of my favorite examples of this is in Felix Denis' book How To Get Rich where he describes that the problem with Apple is Steve Jobs. This was written 7 years ago when Apple was struggling and it looked like Steve Jobs was driving it into the ground with his stubbornness. (The book is excellent by the way, in spite of the tacky sounding title)

<comment><USER9> Thank you for posting a link to that story. It reminds me a bit of Boethius:

"It's my belief that history is a wheel. 'Inconstancy is my very essence,' says the wheel. Rise up on my spokes if you like but don't complain when you're cast back down into the depths. Good time pass away, but then so do the bad. Mutability is our tragedy, but it's also our hope. The worst of time, like the best, are always passing away."

<comment><USER10> Otherwise expressed as

       This too shall pass.

</comment></comment></comment><comment><USER11> One important point to realize for the author is that games are not services, they are works of art. As such, you can't say _this is an incredible game_ with the same objectivity as _this is an incredible service_.

Ryzom was a great game, but MMOs are built on one thing: atmosphere. Blizzard made WoW precisely because WarCraft was its longest running and most popular brand to date. Blizzard already had a massive fan base of WC fans ready to play WOW. The lore was considered a masterpiece, which immediately immersed the players in the world before they even played it.

With services, things are much more objective, because we don't care about branding. Using a service like Dropbox is not a deeply emotional experience, but it does work very well. Apple is one of the few companies that can instill emotion into its services and hardware, and that is due to their marketing and design philosophies, which are considered the best in the world. However, this is nowhere near the level of emotion that art invokes.

As such, I would advise the author to carefully distinguish between art and service. When making art, you should never make it with the expectation that others will like it. You should make it such that it satisfies your own tastes. If others like it, you know that your taste is shared. If not, your tastes are unique. It's a win win.

Don't regret making works of art. It is all that succeeds us when we leave this realm.

<comment><USER12> _Don 't regret making works of art. It is all that succeeds us when we leave this realm._

Until someone turns off the hosting servers.

<comment><USER13> Why would anyone do that unless they _were_ dead? :-)

</comment></comment></comment><comment><USER14> "I am a great believer in luck, and I find the harder I work, the more I have of it."

\-- Thomas Jefferson (apocryphal; see [0])

[0]: [http://www.monticello.org/site/research-and- collections/i-am...](http://www.monticello.org/site/research-and- collections/i-am-great-believer-luckquotation)

<comment><USER15> Bizarre - the last link I was on was a random ESPN quiz with UVa star Joe Harris in which that quote was one of the questions. (I realize this is a pretty meaningless and useless comment, but seeing this quote 2 times in less than 10 seconds was too much not to mention).

<comment><USER16> I'm unable to find a definitive reference, but Gary Player (golfing legend) is also attributed with the quote: "The harder I practice, the luckier I get." Perhaps that's why it was on ESPN.

Pretty sure George Simmons has this quote of Player's on one of the chapter pages in his "Precalculus Mathematics in a Nutshell" book.

<comment><USER17> Quote Investigator has tackled this one:

[http://quoteinvestigator.com/2010/07/14/luck/](http://quoteinvestigator.com/2010/07/14/luck/)

The upshot is that its origin is unknown, but goes back at least to a Walter Winchell column from 1949. Gary Player used it and became associated with it. The attribution to Jefferson is nonsense, of course.

<comment><USER15> Jefferson and Einstein, never trust a quote attributed to them!

</comment></comment></comment></comment></comment><comment><USER18> As a former player, and customer service representative of the game, i can say confidently that the reason Ryzom failed had nothing to do with bad luck, and everything with bad decisions and incompetence.

They had no qualms about changing large parts of the game. The prime example being that they changed the experience distribution in the game such that where it was first that any large group of players could play together and cooperate, after beta it was changed such that only squad-sized groups could cooperate and squads being in the same area only meant difficulties, since experience could not be shared anymore.

On the technical side they had a lot of terrible code as a result of much of their 50 man staff being students doing an internship for free there. They also had a very bad attitude towards volunteer support staff, where, for example, an issue on the web site would be reported, the dev in question would say nothing, and when asked five minutes later would say "What problem, i see none?" after obviously having fixed it.

Lastly, they also had a very bad attitude to players. The game had guilds and an ingame browser (kind of hidden, since it was the backend for 90% of the game UI), so some enterprising players had figured out how to use that to provide guild forums. The result being legal threats.

As much as i love the game still to this day, and still hold on fondly to the screenshots and memories i collected in its wonderful world, it wasn't luck that killed it. It was Nevrax' incompetence and shortsightedness.

</comment><comment><USER19> Well, according to statistics (see Kahneman) CEO 'performance' has very low correlation with perceived CEO performance. Also, past success has low correlation with future success. In other words, there isn't really a 'CEO skill', or a 'successful manager' skill. In other words, company success is not repeatable given the same set of people. In other words, yes, luck is extremely important.

There is no moral of the story other than: failure does not mean that you didn't do well.

<comment><USER20> "There is no moral of the story other than: failure does not mean that you didn't do well."

While this lesson is pretty well internalized, I think there's some difficulty with the converse: just because you succeeded, doesn't mean what you were doing was right. Life is contingent.

<comment><USER19> Oh yes, that might be even more important. See the Superinvestors of America: [http://www.tilsonfunds.com/superinvestors.html](http://www.tilsonfunds.com/superinvestors.html)

</comment></comment></comment><comment><USER21> I know it's not the point of the article, specifically, but it's very difficult to draw any startup conclusions based on a game company. Games are notoriously difficult to make into successful products, even more-so than your average startup.

That said, I do think the author has a lot of good points. Surely there is a portion of "randomness"/luck, but there's also a healthy dose of focus & determination that make things work.

To play a bit of devil's advocate, I do feel that in the last few years the idea of "success" has somewhat diverged from what it used to mean. Is Twitter successful? To their founders & early investors, certainly they are. In 5 years, will Twitter still be relevant & a worthwhile investment to their millions of new stockholders?

Was Zynga "successful"? Again: to early investors, they were wildly successful. They were able to dump their shares onto a greater fool.

To me, those are two examples of "lucky" startups. A startup like Salesforce is less "lucky" and more a well-executed product. It's not as sexy as a Facebook/Twitter/Zynga, but it's a solid business addressing a specific need. It isn't reliant on "scale massively and figure out a sustainable business model later", which to me is what the aforementioned companies are.

To paint a picture, some startups have fisherman tactics: throw as wide of a net as possible, catch as many things as possible and some small portion will be valuable. These would be startups to whom luck would seem to play a larger role (in my opinion).

Others are more focused: identify a specific set of targets to go after, and hunt them down. This would be more like Salesforce. To me, these are the startups that don't rely as much on luck.

<comment><USER22> I'm the author. Thanks for the comment.

I agree with you, I don't know the Saleforce history but I'm quite sure that at the beginning of the company, they had lot of luck. I'm sure at least 10 other companies tried to address the same problem on the same market and failed.

Execution is mandatory but lot of the execution is also based on lot of uncontrollable parameters, hire the right guy at the right time.

Look at Evernote for example, they were almost bankrupt even if the execution was good, the market here and so on. It's a pure luck if the are still there and so strong.

<comment><USER23> Have you heard of the concept of increasing your luck surface area? If my memory serves me correctly is that all of the work, networking, etc. you do the more opportunities you have to get lucky. You can't have chance encounters in your basement. You can't stumble onto investors for a product that doesn't exist.

I think it goes along the lines of the quote from The entertainment industry that every overnight success is a result of years of hard work (paying your dues in the form of acting/music lessons, community theater/coffee house performances, tons of auditions).

<comment><USER22> Yes I heard of the concept of increasing your luck surface area and yes it's clearly what everyone should do.

</comment></comment></comment></comment><comment><USER24> I used to think I was really smart and that my intelligence would carry me when I finally set out to start a company.

Wrong, while I still consider myself to be smart, I don't think I'm savvy enough to rely upon good decisions to carry me. There are plenty of people smarter than me that have failed in their ventures. So, I've reverted to a brute force strategy coupled with an unrelenting resolve to see projects to completion.

Just lucky? Not just. When you build your companies with a willingness to change, frequently self re-evaluating, you will amaze yourself with how much you grow as an entrepreneur. It is ridiculous what I know today when compared against my assumptions 2 years ago.

When the author was talking about the failed MMO, I took him at his word when he said his team created an amazing game. So the point of failure is obviously marketing. Who knows what could have been if those game developers had a comparable marketing team in their corner. What if they launched a beta 1 year into development to help develop a core user group as well as aid in gamer feedback which could then be redigested by the marketing team to help them create buzz.

I love this rumored quote assumedly from Jack Dorsey "It only took 10 years for me to become an overnight success." The entrepreneur that doesn't die is hardened and polished in failure over a number of years. When luck finally strikes, he will have the tools, experience, insight, vision to take full advantage.

I'm 2 years into this journey, hopefully I'll find luck in year 3, and hopefully I will have grown enough to take full advantage of it.

<comment><USER25> You missed the point of the article. Ultimately, the universe is unfair. No special insight, ability, breakthrough, or perseverance is sufficient to change that.

<comment><USER24> I didn't say anything about fair. I didn't even say that you don't need luck. I believe you do need luck. But, you can remove a lot of your dependence on luck by getting better at the game over time, as well as by playing a lot. Just ask anyone that plays Texas Hold'em.

Want to score more? Get your number of shots on goal up. Luck is just the positive result of chance being realized. Chance to succeed vs chance to fail. So as long as you don't care about the number of failures you stack up, you just keep rolling the dice until you succeed.

Perseverance is sufficient as long as it is accompanied by adaptability. You simply need the ability to recognize your strengths/weaknesses/personality type and play the game accordingly. Either invest in improving your weaknesses, or spend time networking to find a partner to complement them. Even better, pick an idea where your weaknesses will not be a factor.

What makes startups so hard is all the opportunities to fail that come along as you try and build something new. Every month, or every week, there is a new thing that wants to kill you. Sometimes these things have nothing to with the company. But, there are sooo many ways to mitigate these problems and you learn how to do so better and better the longer you play the game.

If you'd like me to go into some more personal details to show some examples, just let me know.

Edited: minor edits.

</comment></comment></comment><comment><USER26> "Success in [indie] game development is lucky like poker, not lucky like the lottery."

I forget where I read this; it may have been on Twitter, but it could apply to startups and probably many other facets of life.

Edit: Found the source. [https://twitter.com/MattRix/status/401072871323086848](https://twitter.com/MattRix/status/401072871323086848)

</comment><comment><USER27> Of course they are lucky. Luck is not the only thing, you really do need something useful and it has to work so you need to know your audience, but luck is a big part of it.

You have to be in the right place at the right time. That is all luck.

<comment><USER28> _You have to be in the right place at the right time._

You also have to recognize the opportunity and take it. That's what "making your own luck" is all about - exploiting opportunities to their full.

<comment><USER29> This, to me, implies an extraordinary claim of prophetic insight.

The person who "recognizes" the opportunity is still doing a lot of guesswork, and good luck has as much to do with his recognition of the opportunity as it does anything else.

Networking and having a head start are also key factors--show me a successful tech startup and I'd lay better-than-even odds on the founder(s) coming from a life of (relative) privilege (and also being white, if in America). What could be luckier than being born to the "correct" parents?

</comment></comment></comment><comment><USER15> It keeps me up at night that you could work your entire life in startups, do everything right and even work on good ideas, and you could still never really succeed. Then I realize that success (in terms of an exit or something similar) can't be the goal: I work on startups because I like building things (edit: things that have the potential to have a tremendous impact) and I want to change the world.

<comment><USER30> > Then I realize that success (in terms of an exit or something similar) can't > be the goal: I work on startups because I like building things and I want to > change the world.

While the above might be a commendable personal goal, startups are indeed created for their possible exit value. The vision, the tech and the kind of things you end up working on are commanded or at least heavily influenced by these circumstances. In that sense there isn't too much difference from working for an innovative established company (except you don't get a shot at the money pot).

<comment><USER15> The startups I work on have that as a top level goal, absolutely and 100% - <USER2> a person, you have to focus on and reward the process as much as the potential result, or it won't work. Paul Singh is fond of saying "we always celebrate the result, but we need to celebrate the process". Putting more people in the right process will produce more positive results, even if not all those people can achieve the massive results we're learning for.

</comment></comment></comment><comment><USER31> No, not really.

About being too complex to be controlled, yes maybe, but there is very good people controlling complexity.

I know lots of entrepreneurs, as I am one myself.

The best entrepreneurs will learn from other people. Take for example Steve Jobs, he was not born knowing it all, he had f _ck_ ng Robert Noyce as mentor, and all his life was spent learning from the best he could, like Polaroid inventor or Sony founder.(every year he will take 100 people from his company to learn from)

No matter were you are, there is always someone 10 to 20 years over you on a topic, and the best thing you could do is learn from them instead of thinking you are inventing gunpowder(Spanish expression that means you are inventing something revolutionary nobody knows about).

I personally know a man called Warren Buffet. This man, who is super rich old(normal old people believe they know it all) and famous will cold call you if he is interested in something you do for please explain it to him, and then he will start asking you deep questions about your business like crazy and if you ask him, he would do the same for you for anything you ask. This man has amazing amounts of valuable knowledge. In public he could not say what he really things because his word alone is capable of making markets go up or down.

Successful people do something called "masterminding", that is very similar to "pay it forward" in Silicon Valley. They learn form each other what works and what does not. They do it officially or by networking and just talking.

</comment><comment><USER32> For anyone arguing that there is some causation behind a startup's success besides "luck", I challenge you to prove it.

It is not easy to prove causation.

For example, startup says "We did X and this was the direct cause of Y", where X is some random thing, and Y is "success". That is difficult to prove. And startups never say that. They just say "We did X." Maybe they also say they believe this was crucial somehow to their success. But they never try to prove causation.

Of course, no one demands anyone to prove causation when it comes to the actions and the success of any startup. The scientifc method does not apply here. We are happy to listen to someone tell us about what a startup did, about their eventual success and then let our imaginations make the supposed causal connections.

I do not think it's unreasonable to question, as does the OP, whether "luck" is a proper explanation for the success of a startup. If it were, then that leaves startups free to make their own rules instead of believing they must do X in order to produce Y. And I say that is fine. The fact is, doing X might not bring about Y for every startup that does X. Clearly there is more to this than a "formula", whether it is the YC's or someone else's.

</comment><comment><USER33> This meme is particularly viral among game devs. They say "Notch was lucky", but what they really mean is that Minecraft resonated with the market more than they can comprehend. They say "my game failed, and I can't see why, so I must be unlucky", rather than saying "my game failed, because people didn't like it more than the alternatives".

Short of people being forced to purchase it, the only thing that makes a product successful is when people _want_ it. How the product stands on its own merits is dependent on customers knowing about it, and choosing it over the alternatives.

When it comes to games, works in the same genre may not even be competing against each other because of the way gamers buy games. Plenty of gamers will buy Battlefield AND Call of Duty, or will buy Minecraft AND all of its derivative clones. They just won't buy things they don't want.

MMORPGs in the same genre, though, are often competing against each other. People can only play so many MMORPGs because of the time and social aspects.

</comment><comment><USER34> To echo the monkeys writing Shakespeare analogy, if a hundred startups are throwing darts at a dartboard, there's a decent chance that at least one of them will hit the bullseye.

Where network effects are involved, they may not even need to hit the bullseye - just getting closer to the bullseye than anyone else may be enough.

</comment><comment><USER35> IMHO, luck is only a factor in success. Failure is much more frequently pre- determined. For example, a startup with a great idea and a great execution still might fail, while a startup with a terrible idea or poor execution will almost definitely fail. I think of startups as needing to be not good but good enough: if the idea and execution are good enough, other factors start mattering. However, if they are not good enough, then no amount of luck will change that in the long run.

For example, the Color app had all the resources (funding, contacts), but the basic value proposition was just not there. They never had a chance. OTOH, Turntable.fm had a great product, but as luck would have it, they did not make it. Either the timing wasn't right or something else, but despite everything they are having to pivot.

</comment><comment><USER36> It's doing-the-right-things plus luck.

You do need to be good at marketing. You do need to get product-market-fit quickly. You do need to have a good product, and so on.

The better you are at these things, the less luck is required. But you cannot get the amount of luck needed down to zero.

<comment><USER37> Seems like this is kind of a parallel to his "lottery" analogy - doing those things is sort of like buying another ticket. Your chances might be better but it doesn't mean you're going to win.

</comment></comment><comment><USER38> "Think of it like a lottery. In this case the obvious decision is to buy more tickets in order to get more chances to win."

I like what Seth Godin has to say on failing until you succeed:

[http://www.youtube.com/watch?v=fDtkBsWgzWE](http://www.youtube.com/watch?v=fDtkBsWgzWE)

And this article by Scott Adams:

"What's the best way to climb to the top? Be a failure."

[http://online.wsj.com/news/articles/SB1000142405270230462610...](http://online.wsj.com/news/articles/SB10001424052702304626104579121813075903866)

<comment><USER37> I love Seth Godin, he seems to have universally good advice. Sometimes his blog is hard to follow but it's usually a pretty good read.

I love the quote "if I fail more times than you I win."

</comment></comment><comment><USER39> If successful startups are just lucky, I have some questions:

\- What's the expected monetary return for someone wishing to enter the startup game? In particular, is it positive or negative? For example, the usual platitude "you miss 100% of the shots you don't take" also applies to the lottery, where the expected return is negative. Could it be the case that rational people just shouldn't do startups?

\- What's the expected return after adjusting for diminishing marginal utility of money? For example, a person with 2 million dollars is not 2x happier than a person with 1 million. This increases the impact of the previous point: even if the decision to a startup gives you positive expected money, it could still lead to negative expected change in happiness. Most of the monetary wins go to a lucky few, which doesn't raise their happiness enough to compensate for the unhappiness of the unlucky many.

\- What's the expected return if you take the previous two points into account, and also compare against the next best thing you could've done instead of a startup? For example, is there anyone on Earth who's deciding whether to do a startup and who wouldn't get higher expected money, happiness... everything, just by getting hired at Google?

\- Given the above points, is it ever morally okay to advise someone to do a startup? What advice would you give people if you were truly, honestly immune to survivorship bias?

<comment><USER40> It's not random in the sense that "anybody who tries has an equal chance at success." The prior you're missing is a person's ability, current mind, and biological mental capacity. Some people are just _waaaaaaaaay_ smarter than other people. "All people are created equal" is a fantasy when you reach extremes (sport abilities, mental abilities, creative abilities).

Now, once you have a baseline genius startup mind, no success is guaranteed anyway. Twitter would be nothing without an Internet-famous founder and techcrunch hyping it up constantly its first few years of existence.

That's not saying you can't be rich. Anybody can always get dumb success (especially these days) with things like advertising or affiliates or ebooks.

The money doesn't enable your happiness — the freedom money provides enables your happiness. You can substitute being rich with having a job/life you don't hate plus a good salary.

<comment><USER41> "That's not saying you can't be rich. Anybody can always get dumb success (especially these days) with things like advertising or affiliates or ebooks."

People that are doing this should speakup but I don't believe "anybody" can do the above. Your statement is general to a certain extent and could apply to many areas but I don't think successful people in these areas are any less smart, hardworking, determined than startup founders.

<comment><USER40> I know people who write really low quality populist fiction on the Amazon Kindle store and bring in over $3k/month. Over time, the old books still sell, so you have recurring revenue that gets compounded as time goes on.

There are other examples, but that's the easiest to understand.

</comment></comment></comment></comment><comment><USER42> Luck and skill tend to have the same distributions (generally a normal curve). As an outsider looking in, it is difficult to tell the difference. In fact, it can be difficult as an insider as well. We may have a plan, and attribute our success, or failure, to the plan rather than to luck. Or something could look like luck to an outsider because they don't understand all of the intricacies that go into making a system work.

</comment><comment><USER43> Great blog Vianney. I just attended a conference last week full of silicon valley's best and brightest ([http://warmgun.com/](http://warmgun.com/)). I don't think that things are totally random, but I was struck by the million different ways to success (and failure). Chance definitely has a lot to do with it. It allows the really hard work to pay off.

</comment><comment><USER44> Luck by definition is based on chance, something one cannot fully control. A startup of course involves luck, simplify because no company can control all the factors involved in becoming a success. So yes, I completely agree that successful startups are lucky. However, it's not "just" lucky as your title suggests. Just like playing lottery or gambling, there are ways you can maximize your chances of winning. Buy more lottery tickets as your blog post says, is one way to maximize the chance. In the startup world, obtaining the right skills, choosing the right features to implement, making the right connections and a million and one others are all the things you can do to maximize your chances of building a successful startup. I think your post illustrates the right idea that there is luck and chance involved at building a successful startup. But isn't that the case for everything in life? In the end, the rule of thumb is, "do whatever you can, and the rest is luck".

</comment><comment><USER45> To put a little finer point on it, what if successful startups have enough randomly-uncontrolled and untracked things happen to them to make them successful as to be not reproducible?

So you do all the right things, and you still only have a 1-in-20 chance. Or the other guy does all the wrong things, and he sells out in two years for 20 Million. A third guy does some good things and some really bad things, still manages to grow and flip, then he writes a book on "How to have a successful startup" that claims to know the answers.

As far as I can tell, this is pretty close to the state of things, and that's okay. It just means 1) you can't give up, and 2) you need to choose your strategy based on this state of affairs.

What you _don 't_ want to do is to acknowledge there is randomness, then throw in the towel. Or to go on some jag where you hero worship Zuckerberg or some other rich schmuck simply because the startup lottery hit for them. The truth is much more complicated -- and involves a lot of hard work.

</comment><comment><USER46> Obviously successful startups are lucky. I think the idea of releasing quickly/efficiently is to test the market to see if a larger, more complex product is desired (IOW can you get lucky?). In the example provided, a beta release of one level of Ryzom could have saved years of dev time if it was not well received.

<comment><USER18> They did a beta release. People loved it. Then they did a massive change to XP distribution shortly before release that forced people to run in single squads, because experience couldn't be shared among multiple squads cooperating anymore. People hated it. Nevrax didn't give a fuck and released anyhow.

</comment></comment><comment><USER47> If successful startups are just lucky then you should have as many startups as you can to get more chance at winning. That could mean focusing on quantity instead quality. Also that can be the reason behind MVPs: do something minimal that works then move onto the next project.

</comment><comment><USER48> High growth start-ups are nothing but luck. How does a company built in a garage with practically no marketing budget get such high growth numbers in the initial stages (facebook, twitter, snapchat, instagram,etc)? They manage to go viral. Pure herd mentality.

</comment><comment><USER49> "Even if it's not random, it's too complex to be controlled." \- OP.

I think it's this realization that gives rise to quotes like, "Talent hits a target no one else can hit; Genius hits a target no one else can see." by Arthur Schopenhauer.

</comment><comment><USER50> A start founders charisma points must be very high. You have to get others(co- founders, future employees, investors, ealry customers) to believe in your vision. And I'm not sure that's teachable. But, there are many ways to pull it off.

</comment><comment><USER51> What if successful startup founders have high IQs? Or particular personalities making them persevere? It's entirely possible that all those methods and practices count for nothing or are completely eclipsed by IQs, luck, networks...

This argument is being made against education. How much education really matters and how much outcomes are just a matter of raw cognitive ability of students and (self-)selection?

Truth is that we don't know. So most people choose to follow in the footsteps of those who have demonstrable achievements and hope for the best.

BTW This might be the first time I'm seeing a ghost blog in the wild. Just browsing the Internet, not looking at ghost blogs specifically.

<comment><USER22> As you said, we don't know.

I moved to ghost 2 days ago and for the moment, it works quite nicely!

</comment></comment><comment><USER52> I think that it is some misunderstanding between be successful and have money. Money is the consequence, but the objective of a business should be create real value. In this sense, if you have only a few customers but you are delivering real value, you are successful. Take youtube, for example. They were a very successful company in the beginning, delivering a delightful experience. Now, if you consider money as objective, they are still successful, but they are not. They now deliver a awful experience, with Ads in the beginning, middle and the end of each video. For me, no matter how much money they are making, they just not successful anymore.

</comment><comment><USER53> The problem is that it is hard to give each project any real chance of success without spending your full effort on seeing it through. A strategy like this will make you abandon your good projects at the first resemblance of a road block.

</comment><comment><USER54> Honestly, this is poorly written. The author ends up giving advice even though he starts out claiming that is a problematic thing to do. His advice is not so different from common startup knowledge-- success is proportional to the number of swings of the bat. That I think any founder can take to the bank. It is true regardless of what your personal situation is. Obeying a simulated annealing algorithm rapidly through life keeps you from looking too far ahead and from getting stuck in ruts. There are many other generalizations largely independent of your personal story that are very helpful.

</comment><comment><USER55> Just because OPs game floundered does not mean that startups must be lucky to succeed.

OP was quite proud of his game, is confident is was great because there were 15 talented people working on it... but ultimately the idea didn't resonate with the public in the way they implemented it.

Notch on the other hand resonated with the public incredibly well. By giving away completely free versions and listening to, even literally interacting with game players: He now heads a very successful software company where most of the original code was written by one man.

I don't think a successful company necessarily involves luck at all.

</comment><comment><USER56> If you define luck as the happening of an event that the probability of not happening is greater than the probability of happening. Then all depends on how well you can calculate your probabilities of success and how much risk you want to take.

Of course you can't be 100% sure that you are going to be successful. But you must try to increase your probabilities as much as you can, trying to predict your probabilities as accurate as you can.

As Laplace said: "Life's most important questions are, for the most part, nothing but probability problems".

</comment><comment><USER57> I think luck is a trivial factor in a startups success if you're smart. If you think about success more reductively, and ask yourself "what has to happen for me to succeed?" and "can I accomplish those things?", you'll see that luck isn't too big a factor. I wrote an article that talks about this: [https://medium.com/i-m-h-o/cd29597704f9](https://medium.com/i-m- h-o/cd29597704f9).

</comment><comment><USER58> This argument compares apples to oranges. Your game was not the same as World of Warcraft. It had completely different graphics, different marketing, distribution, gameplay, etc. Facebook is not Google+. Windows is not OS X.

Lottery tickets are apples to apples. Yes, the problem domains for these start-ups may overlap, but these are not apples to apples. Your MMO was not the same as WoW.

The differentiating factor between your MMO and WoW was not _just_ luck. They're different games.

</comment><comment><USER59> It seems weird to be shocked that success in a startup depends on luck. Of course it does; we already know that from seeing how widely the returns fluctuate. But that doesn't mean successful startup founders aren't smart. A good way to put it would be that, while your chances of success are random, if you're smart and determined your chances are higher. If you aren't smart or determined, you don't qualify for the lottery at all.

</comment><comment><USER60> "I am a great believer in luck, and I find the harder I work, the more I have of it." — Thomas Jefferson

"The harder I work, the luckier I get." — Samuel Goldwyn

<comment><USER6> The more lottery tickets you buy, the higher chance you have to win the lottery.

</comment></comment><comment><USER61> Chance favors the prepared mind.

</comment><comment><USER62> Great post and I'm totally agree. Once I got a idea, i do it quick and release it earlier, that's cool than just talking. but i usually lost after I release my first version of my project. I don't know how to promote my product, how to raise traffic and how to let people know my product, that makes me really confuse. I think marketing knowledge is also very important for engineer

</comment><comment><USER63> The only startups that are "lucky" are those that never validate before development and still find traction.

I define validating as getting 3 paying customers before building a viable app.

You could have built an abridged or simpler version of your game and asked people to pay you to play it. If that posed problems, you could have pivoted to a different premise for the game.

</comment><comment><USER64> Are famous artists such as musicians and actors just lucky or do they actually need the talent as well?

You can have all the talent in the world but not lucky to be in the right place at the right time. However, when you are at the right place at the right time you better make sure you bring the talent.

One doesn't exclude the other, you need both: talent + luck = success

</comment><comment><USER65> 1/3 Talent, 1/3 Effort, 1/3 Luck

</comment><comment><USER66> My essay on the subject, cast in terms of climbing a fitness landscape and getting stuck in local optima: [https://plus.google.com/u/1/+RayCromwell/posts/5bhdU8hF68t](https://plus.google.com/u/1/+RayCromwell/posts/5bhdU8hF68t)

</comment><comment><USER67> I've noticed that people who win the lottery are the ones who bought tickets. Also the ones that win usually play every week, increasing their chances.

So at this point how are you defining lucky? They might be lucky but then they also worked harder and longer (i.e. bought more tickets)

<comment><USER68> The lottery analogy made me think of this: Even if most startups fail, is the expected value nonetheless positive?

</comment></comment><comment><USER69> Guy releases a unfun game with less then half the budget of his competitors and no name recognition along with poor marketing. Also program was technically ambitious. Then claims its random chance.

THIS IS precisely why its not random!!!

</comment><comment><USER70> Among the best, luck is more important for winning than between best and mediocre (where skill is more important). I thought this was common knowledge after being described in so many pop.sci. books like black swan,etc.

</comment><comment><USER71> It's similar to a video going viral. Luck is always a factor, but you need less of it as the quality of your video increases.

</comment><comment><USER72> "I'd rather be lucky than good - but nothing beats lucky and good."

</comment><comment><USER73> Obviously it can't be about luck, because that would deflate a lot of egos.

</comment><comment><USER74> It all depends on what -- exactly -- you define as "luck."

</comment><comment><USER75> If startups are luck, you should found as many as possible.

<comment><USER76> Exactly, that is why "most" of founders failed multiple times before they become successful.

</comment></comment><comment><USER77> of course they are. But you have to have been working hard all those months/years, so you can capitalise on the luck when it comes.

</comment><comment><USER78> First you are lucky, then you have a network.

</comment><comment><USER79> There is no lucky

[http://en.wikipedia.org/wiki/Outliers_(book)](http://en.wikipedia.org/wiki/Outliers_\(book\))

</comment><comment><USER80> This is what I always thought.

</comment><comment><USER81> Interesting topic, but the blogpost lacks data.

</comment><comment><USER82> Michael Jordan and Lebron James definitely get lucky... But I'd bet on them hitting that lucky shot more than 99% of other basketball players because they just know how to execute. One of my friends was a top 10 high frequency equity futures (snp minis) trader in the u.s. i used to think damn he gets lucky all the fking time. i mean at best it's like 70/30 ratio. just pure luck. how does he just call the tops and bottom and never read a sec filing or financials of a company?! nope he is really that good at execution, and that's why he's only right 70% of the time whereas others are just coin flipping.

a lot of times. timing is luck. but a lot of people get lucky on timing... it's like if the bubble bursted next year then people would have said there was never an easier market to raise money / take risks / make quick money in mobile,social, etc. but i'm pretty sure there's a ton of smart people with luck on their side that's trying to do that right now; and 100 other variables besides luck will make majority of businesses fail.

how do you define luck? break down the components of luck.

</comment><comment><USER83> there is definitely an element of "luck" (timing, what other actors in the relevant space are doing, etc.)

but the way you hedge against that is by exposing yourself to lots of things with a potential net upside. both in parallel and serially. you might have bad luck with one thing, then good luck with another thing. just like the reasoning behind YC-style investment bets, it only takes one of your little bets to pay off huge in order to more than make up for all the other little failures. which leads to the other complimentary tactic: minimize your spend (money,time,energy) you're willing to risk on any given thing before you see an ROI from it. Also, you never have to completely give up on a thing --- in the software/digital world especially you don't have to destroy/delete/throwaway things, you simply passivate them (put on the backburner), press Pause, etc.

</comment><comment><USER84> LOL... sorry to laugh, but casual perception should tell you that if you have a startup and your first product's release is a PC game with a date that is four years out (Four YEARS?) - You are going to need more than just luck to be successful.

</comment><comment><USER85> If successful startups are just lucky, then getting an A on your project/exams in school was all luck. Can someone show us someone making money with shitty products today? Yeah, it's possible to get popular with an incomplete buggy product, but if it's filling a need, it's better than nothing. You will still have to work hard and improve to maintain your position.

Say what you might about how facebooks earlier/current code was/is horrible and in PHP, Facebook has done amazing things to be able to handle a billion users every second/every day. Say what you might about how simple instagram or snapshot is, they filled a need and grew. Their products doesn't "suck", sure they might be valued ridiculously by some groups of investors, but don't discount their work.

Successful startups are not JUST lucky. There is always an element of lucky, but there is also the hardwork. One mistake a lot of "failed" startups make is thinking and believing that they failed. If your goal is to create an application that solves a certain problem and you do so. You have succeeded. A lot of startups have this goal, they don't really have a goal of making money. After they achieve a goal of building their app, then they want to make money and when they fail on that end, they consider everything a failure. The truth is that making money is not just about your apps or how smart you are or hard you worked to designed.

It takes a very different set of skills to market, hustle, and sell. A lot of programmers don't have those business skills, and they whine and cry when the world don't rush to their door for the better mouse trap. Don't cry, the world didn't know because you failed to market or they have heavily vested in another one because you started late.

If you want to really realize that startups are not just lucky, find the other group we don't talk about on HN that make money off the internet. The hustlers, these are guys with little to zero tech knowledge. They do whatever they can, outsource via internet, basic wordpress sites, they sell actually products, their business is rarely based on ads, their business is physical products, software as a service or ebooks etc. Technology is usually a small part of their game, maybe 10%, the other 90% is pure sweat and hustling. We don't hear for them, but there are many of them out there, making very good money.

Successful starts are not lucky, they out hustled the rest and that's just what it is. So if you wish to make money, don't just stay a hacker, become a hacker and a hustler.</comment>


Color Bash Prompts - <AUTHOR> https://wiki.archlinux.org/index.php/Color_Bash_Prompt <comment><USER2> ArchLinux wiki became, along with gentoo's handbook, one of the few places to get good information about many recurring questions about gnu/linux configuration.

<comment><USER3> Yes. I used to use the Gentoo wiki...these days, it seems like all the action is on the Arch wiki.

Arch is a great distro!

</comment></comment><comment><USER4> This could be the first time I've approved of style="text-decoration: blink;" being used.

<comment><USER5> Indeed. But after reading your comment i had to open Firefox to see that, it doesn't blink in Chrome. It seems that "The 'blink' value is not supported in IE, Chrome, or Safari." according to w3schools.

</comment></comment><comment><USER6> I have a question that suits the context.

How can I get syntax highlighting on Bash while in interactive mode of interpreted languages like Python. Also applies to Standard-ML prompt.

<comment><USER7> Bash doesn't actually handle the syntax highlighting in those cases, it's all done by the interpreter itself. You'll need to either modify your interpreter through a plugin or replace it. For Python, check out bpython [1]. If you don't mind using a graphical program for your interactive REPL, check out DreamPie [2] or the newish GUI version of ipython [3], which is a bit of a bear to install, unfortunately. I don't think the command-line version of ipython supports syntax highlighting, but I'd love to be wrong about that. I'm not really qualified to talk about Standard ML as my experience with it have been primarily in Emacs rather than the REPL.

[1] <http://bpython-interpreter.org/>

[2] <http://dreampie.sourceforge.net/>

[3] <http://ipython.org/>

<comment><USER6> Thank You.</comment></comment></comment>


Ask HN: How many H1B holders here taking the H4 "punishment"? - <AUTHOR>

If you are a married H1B holder you know what I am talking about. H4 (H1B dependent) holders are not allowed to work. Period. It does not even matter if it is remote work to home country.
To me this is one of the biggest problems of being a H1B holder in this country.
If you and your spouse are on this situation, can you please share your story? How do you handle the situation? <comment><USER2> In my case, I had my wife enroll in a graduate program rather than wasting 6 precious years of her life. Promptly, I had her switch from H4 to F1. So effectively, I've just kicked the can down the road. It remains to be seen what will happen once she graduates and the OPT runs out.

The US govt and Congress are apathetic in resolving this issue. On a more hopeful note, recently, there has been some noise about allowing H4 visa holders to work after the H1-B holder has completed 6 years[1]. The commenting period closed recently. It remains to be seen how, if and when, USCIS will implement this rule.

[1] [http://www.reginfo.gov/public/do/eAgendaViewRule?pubId=20121...](http://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201210&RIN=1615-AB92)

</comment><comment><USER3> It's not just the H1B visa, F1 students have the same problem.

</comment><comment><USER4> On H4 you can still run a business, but you cannot be your business employee.

You can also get another immigration status (such as H1B or F1), though it can be hard.

IANAL</comment>


Honda's New Tactic for Attracting First-Time Car Buyers: Esports - <AUTHOR> https://www.bloomberg.com/news/articles/2019-08-08/honda-s-new-tactic-for-attracting-first-time-car-buyers-esports <comment><USER2> People think that Google is smart. However, they don't need to be as smart as other programmers or people who think about string theory or... All they have to do is be smarter than the people who buy ads and they get rich!</comment>


Show HN: Limus – Transform image to be more professional - <AUTHOR> https://limus.netlify.app/ <comment><USER2> Droped my screenshot, nothing happens...

<comment><AUTHOR> Ah, that's definitely a bug. I'll fix this soon. Thanks for reporting. For now, please use the browse file button instead.</comment></comment>


Rome enlists American falcons to hunt starlings - <AUTHOR> http://www.theguardian.com/world/2015/nov/22/rome-enlists-american-falcons-to-hunt-starlings-befouling-eternal-city?CMP=twt_gu <comment><USER2> Interesting. How are starlings viewed in Europe? As far as I know they're not well-regarded in North America; they're only here because, and I am not joking, the American Acclimatization Society wanted to have all birds mentioned in Shakespeare to be present in North America. ([https://en.wikipedia.org/wiki/Common_starling#North_America](https://en.wikipedia.org/wiki/Common_starling#North_America))

Just wondering if this is a new problem, some kind of ecosystem imbalance, or something else?

<comment><USER3> ... and 50 years from now, they will have some new initiative to deal with the issue of a large falcon population in Europe.

I am actually OK with this, but wish we would be less afraid of doing similar things with other environmental issues like global warming... At scale, things like white roofs and ocean cloud misting, etc. would have provably positive effects.

We're way, way, way past not screwing with the environment.

</comment></comment><comment><USER4> It's only a matter of time before Italian Falcons unionize and start complaining about American Falcons coming in here and taking all their jobs...

<comment><USER5> That's fine, they'll just upgrade to using Bald Eagles for extra freedom

</comment></comment><comment><USER6> Chicago started using Peregrine Falcons to combat pigeons quite a while back. The falcons are federally protected and apparently, the effort was successful.

[https://www.fieldmuseum.org/science/special- projects/illinoi...](https://www.fieldmuseum.org/science/special- projects/illinois-peregrines/peregrine-frequently-asked-questions)

</comment><comment><USER7> A hotel in Cannes has been using falcons to scare off pigeons and gulls during the annual film festival there.

[http://www.rivieratimes.com/index.php/provence-cote-dazur- ar...](http://www.rivieratimes.com/index.php/provence-cote-dazur- article/items/hotel-martinez-uses-hawks-to-scare-away-pigeons.html)

</comment><comment><USER8> Just came back from a month in Rome. On the Tiber walkway there a bunch of art installations, bars and restaurants I ate at, never noticed the Starling "problem". To be honest the whole Tiber outside of the immediate walkway is pretty overrun by weeds and plants. Loads of places for them to nest. I would say start there.

</comment><comment><USER9> Italy, we owed you a debt for all the delicious foods your emigrants brought to America with them.

We're... we're good now, right? All squared up?</comment>


Webkit - Introducing SquirrelFish Extreme - <AUTHOR> http://webkit.org/blog/214/introducing-squirrelfish-extreme/ <comment><USER2> Um wow, it is freaking fast. I have never seen Reader, Digg or Gmail load that quickly. Perhaps I can wait for Chrome on the Mac. Someone should benchmark this against V8.

<comment><USER3> [http://summerofjsc.blogspot.com/2008/09/squirrelfish- extreme...](http://summerofjsc.blogspot.com/2008/09/squirrelfish-extreme-has- landed.html)

Already done. ;)

<comment><USER4> Anyone here know much about the SunSpider benchmark? It's used in this article.

It's a WebKit benchmark, so if they are using that to drive their performance tuning then this might lead to a bias (if you use a benchmark as your milestones you're going to get good at that benchmark, even a complex one).

Not saying they have, just curious.

<comment><USER5> SunSpider is used pretty widely; it claims to be a balanced benchmark, but where the balance point between different language features lies will depend quite a lot on what kind of application one happens to be writing, so it's more an art than a science.

<http://www2.webkit.org/perf/sunspider-0.9/sunspider.html>

</comment></comment></comment></comment><comment><USER6> The JavaScript engine performance improvements we've seen over the last few months has been awesome. The competition clearly benefits everyone.

Obviously it varies between apps, but it wouldn't surprise me if the major bottlenecks in many applications are in the DOM access rather than JavaScript engine. It would be great if we saw similar competition on DOM performance.

<comment><USER7> _it wouldn't surprise me if the major bottlenecks in many applications are in the DOM access_

No question about it. I'm wondering why we're not seeing much work being done in this area. Perhaps it's because the problems are messier and not as well defined (let alone as well researched) as things like method dispatch?

<comment><USER8> Well if you put any stock in microbenchmarks, try this DOM in your favorite browsers: [http://www.hixie.ch/tests/adhoc/perf/dom/artificial/core/001...](http://www.hixie.ch/tests/adhoc/perf/dom/artificial/core/001.html)

Safari + ToT WebKit is way faster than the others.

<comment><USER9> Macbook OS X 10.5.4 results

FireFox 3.0 Total elapsed time: 1399ms Breakdown (fraction shows time relative to append time): Append: 1.00; 301ms Prepend: 1.49; 447ms Index: 0.32; 97ms Insert: 1.36; 410ms Remove: 0.48; 144ms

Crossover Chromium Total elapsed time: 412ms Breakdown (fraction shows time relative to append time): Append: 1.00; 128ms Prepend: 0.90; 115ms Index: 0.28; 36ms Insert: 0.90; 115ms Remove: 0.14; 18ms

Webkit Nightly Total elapsed time: 116ms Breakdown (fraction shows time relative to append time): Append: 1.00; 56ms Prepend: 0.29; 16ms Index: 0.36; 20ms Insert: 0.32; 18ms Remove: 0.11; 6ms

</comment></comment></comment></comment><comment><USER10> "SquirrelFish Extreme" sounds like the kind of software product name that The Onion would come up with.

err, yeah, faster JavaScript is good. Hope that Microsoft finally wake up and do something about theirs.

<comment><USER11> Heh, I bet MS is gonna call theirs something with "Silver" in it, and market it like its from a product suite.

<comment><USER10> This is not as outlandish as it sounds; the easiest way for MS to get high- performance JavaScript would be to jit it onto the existing Silverlight in- browser VM, and use that VM's existing optimisation tricks.</comment></comment></comment>


What's The Greatest Software Ever Written? - <AUTHOR> http://www.informationweek.com/shared/printableArticle.jhtml?articleID=191901844

<comment><USER2> Summary: Unix (and especially BSD 4.3)

I hate articles which ask a question in the headline and then answer it only in the last few paragraphs.

<comment><USER3> Duh! I wouldn't be reading my Lions book if it weren't.

</comment></comment><comment><USER4> "Hello World!"

</comment><comment><USER5> The first compiler. Thank God for that thing. If it hadn't existed...

<comment><USER6> ... it would have eventually.

<comment><USER5> And then that would have been the first compiler. Thank God it existed.

</comment></comment></comment><comment><USER7> Emacs, because it's still around after 27 years and in everyday use.

Edit: had the number of years wrong, was originally based on the original emacs and not GNU emacs.

</comment><comment><USER8> Didn't even have to read the article to guess that the answer is Unix</comment>


Introducing WeSeeYou – Democratizing De-Anonymization - <AUTHOR> https://robertheaton.com/2017/10/17/we-see-you-democratizing-de-anonymization <comment><USER2> One (small) caveat is this doesn't work with people just copy and pasting links others have shared before. I'd be interesting in knowing the proportion of users who copy paste urls from their location bar?</comment>


How We Moved Our Data Center 25 Miles Without Downtime (2012) - <AUTHOR> https://www.braintreepayments.com/braintrust/switching-datacenters

<comment><AUTHOR> nearly 2 years old, when it was posted on HN it didn't get many votes and got 0 comments. I guess it never made it to the front page but I find it impressing, inspiring and very relevant 2 years later.</comment>


Show HN: Learn Actionable Growth Hacking Techniques - <AUTHOR> http://www.turbogrowthhacking.com/?utm_source=Hacker%20News&utm_medium=Hacker%20News&utm_campaign=Hacker%20News&utm_content=Hacker%20News.%20Show%20HN%3A%20Practical%20...

<comment><USER2> the fuck is a growth hacker?</comment>


Bitfinex never 'repaid' their tokens, they started a ponzi scheme - <AUTHOR> https://medium.com/@bitfinexed/bitfinex-never-repaid-their-tokens-bitfinex-started-a-ponzi-scheme-86a9291add29 <comment><USER2> Reading this article made me wonder - how much of the bitcoin rally is due to counterparty risks?

If I remember correctly the last ramp up happened during Mt. Gox era. They were having USD withdrawal issues which resulted in BTC prices being very high on the exchange. But it din't deter them from publishing prices and making markets.

Now is the case of Bitfinex suffered from a hack like Mt. Gox and are trying to stay afloat. As per coinmarketcap, has nearly 15% of bitcoin volume which is pretty high to ensure market follows in-step to their market making. A quick search on Google turns up pages of people asking about Bitfinex withdrawals.

For people who are curious about this, there was an article yesterday about Zimbabwean Bitcoin soaring to 12k USD, which obviously hinges a lot on counterparty risks and resulting low liquidity: [https://news.ycombinator.com/item?id=15627608](https://news.ycombinator.com/item?id=15627608)

<comment><USER3> I am not sure I follow. Counterparty risk should push the price down, not up. This thing is not worth as much because there is a significant risk your investment may go away because of a bug or a mistake.

<comment><USER4> > Counterparty risk should push the price down, not up.

Not if the counterparty risk causes you to be unable to withdraw national currency, thus forcing you to buy bitcoins for national currency and then withdraw the bitcoins.

The only way for the price to go down, in a scenario like this, is if it's possible to sell bitcoins on the exchange (thus pushing down the price) and withdraw the proceeds.

In a BTCUSD market, if you are unable to withdraw BTC you will sell BTC for USD and withdraw USD, thus pushing down the price. And if you're unable to withdraw USD you will buy BTC for USD and withdraw BTC, thus pushing up the price.

<comment><USER5> It would only push the price up on the untrustworthy exchanges, and it would lower the price everywhere else because it indicates the asset is not useful, it could be stolen & dumped on the market, it discourages anyone from getting in, it forces them to use alternative usually less convenient exchanges, etc. And even the counterparty risk doesn't produce that much increase: right up to the end when it was too late, the Mtgox premium was only like 10%. Such a mechanism can't possibly explain all or even a little bit of a runup from $2k to $7k (not to mention, the market cap being an order of magnitude or two higher).

<comment><USER2> That is assuming bitcoin and other cryptocurrency markets are mature and perfect. They are not.

<comment><USER5> Well then, why do you think they're mature and perfect enough to worry about counterparty risk? What's sauce for the goose is sauce for the gander.

<comment><USER2> Um? Let me use an example to explain what is happening here:

Me - Cryptocurrency markets are not mature that is why we have lot of arbitrage opportunity between exchanges.

You - Why do you think they're mature and perfect enough to worry about _arbitrage opportunities_?

So, let me repeat again - It is exactly because they are not mature there are issues. If they are mature, there is nothing to worry. And that is the _sauce_ you are looking for.

<comment><USER5> You're claiming they are efficiently pricing in a particular risk, pushing up prices to reflect the counterparty risk, but then denying they are efficient enough to price in the other consequences they should be. This is not consistent or at least is very stretched.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER6> While I'd enjoy a good detective journalism, this article is just making claims out of thin air. And here is one:

> However, this doesn't stop Bitfinex from tripping over their shoelaces to > immediately list a fork which doesn't exist, in order to make money off of > suckers.

That is not correct. Bitfinex didn't list Bitcoin Gold. They listed a future contract of Bitcoin Gold (though the naming "token" is a bit confusing). You can create a future contract about anything, like the weather or soccer.

> Prior to publishing this post I was informed that Tethers are on the rise. > Today, at the time of this post there has been another 25,000,000 USDT > printed.

First, a new creation of Tether doesn't result in a pump. That would be too obvious for traders to arb the effect.

Second, Tether is not used by Bitfinex heavily. Tether biggest clients are Polonix and Bittrex. And there is _blockchain_ proof for that: [https://wallet.tether.to/richlist](https://wallet.tether.to/richlist)

<comment><USER7> >First, a new creation of Tether doesn't result in a pump. That would be too obvious for traders to arb the effect.

Orly? -> [https://www.dropbox.com/sh/lylx2da2vobps8h/AAAN0q62s1X_Wl0H-...](https://www.dropbox.com/sh/lylx2da2vobps8h/AAAN0q62s1X_Wl0H-j3W7KGDa?dl=0)

<comment><AUTHOR> There is interesting linear regression analysis in the folder above, between issuance of Tethers and the price of Bitcoin.

</comment></comment></comment><comment><USER8> This guy has been trying to spread doubt about bitfinex for a long time, but never has much to back it up. A few months ago he went on a big campaign against Tether (tokens associated with Bitfinex), claiming they were created out of thin air. Tether then completed and released an audit by a professional, accredited team of their bank balances (1). I don't personally use Bitfinex, and it's possible some of these accusations are at least partially true, but there's really no evidence to confirm that. Don't buy into this type of FUD without doing your own research.

Some of the claims he makes are disingenuous. Bitcoin Gold has nothing to do with Bitfinex, and is listed on a number of exchanges. It's definitely a pretty sketchy project, but it was a BTC fork and users tend to dislike when their exchange keeps forked tokens to themselves. EOS/IOTA are big projects with large market caps and real teams. Did some weird accounting happen after the Bitfinex hack? Maybe. Did most of the people end up getting their money back? Yes. Does it matter now? Not really. This is the largest BTC exchange (by volume) in the world. They generate tens of millions of revenue from exchange fees every month. There's no clear reason for them to engage in any weird, illegal money schemes at this point, they already have a money printing factory.

[https://tether.to/wp-content/uploads/2017/09/Final-Tether- Co...](https://tether.to/wp-content/uploads/2017/09/Final-Tether-Consulting- Report-9-15-17_Redacted.pdf)

<comment><USER9> There are two key quotes that you need to pay attention to in that document:

 _This engagement does not contemplate tests of accounting records or the performance of other procedures performed in an audit or attest engagement._

 _In addition, our services do not include a determination of compliance with laws and regulations in any jurisdiction. All inquiries made throughout the consulting process have been directed toward, and the data obtained from, the Client and personnel responsible for maintaining such information._

In other words, that document is not an audit. Just like previous "audits" published by Bitfinex connected companies, it's an internal management report created for the management by an accounting firm. Such reports assume that everything they're told by management is true: why would management lie to themselves? What would be the point?

If you're an external entity on the other hand, eg a shareholder in the company say who wants an external third party to validate claims made by management, then you will only rely on a real audit made by a company that sends staff to check on those claims personally. This document is not such an audit & it's authors are at pains to point that out.

Edit: The auditors did confirm bank balances with the holding banks, but did not perform an audit that would find any corresponding liabilities, nor that the claimed Trustee relationship between the company and the individual named on the account had any legal force. What this document shows is that people connected with the company had accounts with the claimed $Xmillion in them in total on the day in question & this was confirmed by the accountants. That's it - it's still not an audit.

<comment><USER8> > Such reports assume that everything they're told by management is true

No, they checked the balances with the banks. They verified the amount as stated was held by the bank at the time. You can see that in the section that begins "FLLP confirmed each bank account directly with the respective bank"

<comment><USER9> Apologies: I had missed that line. Edited appropriately.

</comment></comment></comment></comment><comment><USER10> Maybe I misunderstood this, but basically you got 1 bfx token for each dollar that was stolen due to the hack. As people sold bfx tokens at lower prices than $1, (in part, because the us announced this was not ok, in part due to varying confidence in bfx ability to repay,) bitfinex could rebuy some of those tokens at a discount, and clear them to itself at a fraction of the cost

There were also occasionally rolling rebuys of bfx tokens at the face value of $1.

</comment><comment><USER2> > As Bitfinex has become more and more desperate, they have listed more and > more crypto-currencies of questionable value, such as EOS/IOTA/ETP and so > on.

As per coinmarketcap.com:

EOS is ranked 19, 442 million in marketcap

IOTA is ranked 11, 950 million in marketcap

ETP is ranked 70, 73 million in marketcap

Anyone can throw some light on what these coins really are?

Additionally, BTC markets:

[https://coinmarketcap.com/currencies/bitcoin/#markets](https://coinmarketcap.com/currencies/bitcoin/#markets)

shows Bitfinex raking in over 15% of the current market volume. I wonder what will happen to the price if they go under.

While I agree to most of the article, specially the Tethers part, Debt to Equity swap is a real thing and not a Ponzi scheme:

[http://www.investopedia.com/terms/d/debtequityswap.asp](http://www.investopedia.com/terms/d/debtequityswap.asp)

Though whether the equity shares are worth as much as Bitfinex is claiming them to be is an another question.

<comment><USER11> IOTA actually seems pretty revolutionary. I don't think it's a finished product yet but if you want some info then it's a DAG ("tangle")[1] instead of a blockchain and offers 0 fees and possibly huge scalability. There are some products already using it: RuuviTag[2], Bosh XDK Iot[3], PoC ElaadNL charging station[4], Modum[5]. Once they prove they can go without the "Coordinator"[6] I'm going to be completely sold on the project.

[1] [https://iota.org/IOTA_Whitepaper.pdf](https://iota.org/IOTA_Whitepaper.pdf)

[2] [https://lab.ruuvi.com/iota/](https://lab.ruuvi.com/iota/)

[3] [https://xdk.bosch-connectivity.com/](https://xdk.bosch-connectivity.com/)

[4] [https://medium.com/@harmvandenbrink/how-elaadnl-built-a- poc-...](https://medium.com/@harmvandenbrink/how-elaadnl-built-a-poc-charge- station-running-fully-on-iota-and-iota-only-e16ed4c4d4d5)

[5] [https://www.reddit.com/r/Iota/comments/6vl57m/iota_modum_ask...](https://www.reddit.com/r/Iota/comments/6vl57m/iota_modum_ask_us_anything/dm14etf/)

[6] [https://domschiener.gitbooks.io/iota- guide/content/chapter1/...](https://domschiener.gitbooks.io/iota- guide/content/chapter1/current-role-of-the-coordinator.html)

<comment><USER12> The principles could be relevant (although I haven't verified (or read an independent review of) the proofs).

However, at least the execution is dubious: not only was a major cryptographic vulnerability found a few months ago[0], it highlighted that

1\. they made their own unproven crypto hash, which is a red flag, (in production, you should always prefer crypto that has survived many years of cryptanalysis) and

2\. they were really not up-to-date on cryptanalysis techniques, as being vulnerable to differential cryptanalysis is, as Bruce Schneier puts it, "a rookie mistake".

Worse than that, they seem to rely on security through obscurity, purposefully making it hard to analyse their systems by making it base 3 (instead of the obvious base 2 that all of practical computer science relies on).

Finally, their justification for the coordinator is also a red flag[1].

[0] [https://medium.com/@neha/cryptographic-vulnerabilities-in- io...](https://medium.com/@neha/cryptographic-vulnerabilities-in- iota-9a6a9ddc4367)

[1] [https://medium.com/@ercwl/iota-is- centralized-6289246e7b4d](https://medium.com/@ercwl/iota-is- centralized-6289246e7b4d)

<comment><USER13> The coordinator will be open-sourced and in all seriousness, even bitcoin had a sort of coordinator in the beginning, people aren't even forced to use it/can bypass it, but it's recommended to use it for now. So your statement isn't 100% valid.

Regarding crypto, you can read their response & reasoning here: [https://blog.iota.org/curl-disclosure-beyond-the- headline-18...](https://blog.iota.org/curl-disclosure-beyond-the- headline-1814048d08ef)

"The replacement Kerl hash function is unmodified KECCAK-384 that only converts its input and output from/to 243 trits to 48 bytes using basic two's complement. KECCAK-384 is well vetted and researched."

<comment><USER14> Just to clarify, since I misread your quote and think others might as well:

> "The replacement Kerl hash function is unmodified KECCAK-384 that only > converts its input and output from/to 243 trits to 48 bytes using basic > two's complement. KECCAK-384 is well vetted and researched."

"Replacement" really does mean replacement, i.e. what they substituted in after the researchers successfully attacked their original hash function. (The new one is called "Kerl" and the old one is called "Curl", which seems confusing.)

I'm not sure how asserting that the _replacement_ is well-researched addresses the OP's point that their history of (a) rolling their own hash function, and (b) not adequately considering differential cryptanalysis, is a red flag. True, that specific vulnerability can now be considered fixed, which might not be clear from the OP's post - but it's still evidence of incompetence, which doesn't bode well for the quality of the rest of their design.

<comment><USER15> This is a common misunderstanding. IOTA never deployed a vulnerable hashfunction. They had precautionary measures in place and thus had Curl there to test it out, which worked out brilliantly. Keep in mind that IOTA asked the team to attack Curl, not the other way around. This was planned.

Curl is meant to be a lightweight crypto for IOT, a field of very active research. None of this is controversial to anyone that isn't looking for things to latch negativity onto.

<comment><USER16> > Keep in mind that IOTA asked the team to attack Curl, not the other way > around. This was planned.

This seems to contradict the researcher's own post [1]:

> We discovered a vulnerability in IOTA after reviewing their code on GitHub > in July. We disclosed what we found to the IOTA team on July 14th, and have > been in contact with them since then as we discovered new issues and > exploits.

Finally, even if Curl is meant as a new, lightweight hash function, it was broken by _differential cryptanalysis_ , not some novel, exotic attack vector. Sounds like it needs a lot of work before it's fit for purpose.

[1] [https://medium.com/@neha/cryptographic-vulnerabilities-in- io...](https://medium.com/@neha/cryptographic-vulnerabilities-in- iota-9a6a9ddc4367)

<comment><USER15> Yes, Ethan was then forced to admit that the IOTA team actually approached him in May.

<comment><USER16> Can you provide a link please? All I see in the comments to the researcher's piece is an IOTA advisor threatening a libel suit - a really good sign that they "really care" about their technical issues.

<comment><USER15> I highly suggest you read

[https://blog.iota.org/curl-disclosure-beyond-the- headline-18...](https://blog.iota.org/curl-disclosure-beyond-the- headline-1814048d08ef)

<comment><USER16> Ok. I've read it. Nowhere does it mention IOTA contacting the researchers in question in May.

This article also answers the wrong question. If the crytocurrency is not cryptographically secure all that stands between an attacker and a victim is a piece of malware or social engineering. The fact that the researchers didn't go all the way and document a specific attack that could be performed tomorrow does not mean that Curl was secure in practice.

Finally this continues to fail to address many salient points. Like why use trits? Why wasn't kekkac used from day one?

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER17> Bitfinex didn't force anyone to convert to equity. I was a bitfinex customer. I lost money in the hack. They certainly paid me back. These silly criticisms of them need to stop. They did the best they could with a bad situation. I wouldn't have wanted them to do anything differently than exactly what they did.

They allowed people to convert to equity as an _option_. A _choice_. They paid back everyone who didn't _choose_ to do that, in full, and quite quickly. Bitfinex's response to that hack should be considered a model for any future company in that situation. Hopefully such a thing won't happen, but if it does, there's no better way to respond than _exactly_ how Bitfinex did.

<comment><USER18> All scams start with a "choice". That is not relevant, and the author is right to educate "choosers" by demonstrating the information asymmetry that leads to them going broke by choosing incorrectly.

It's great for you that you were able to be repaid at the cost of other victims who were robbed and swindled, but that isn't a responsible way to handle these things, and is most definitely not a model for handling losses. It's illegal for a reason.

<comment><USER17> What information asymmetry? They didn't lie about anything. They offered people a choice between repayment and equity. Some people chose equity, and to be quite honest, I wish I had too. It seems like they're doing very well.

</comment></comment></comment><comment><USER19> The 112k bitcoins stolen were worth $72 million at the time, they are now worth $856 million (!). The loss they caused their customers is only getting worse and worse.

</comment><comment><USER20> Bitfinex has a big pie chunk of bitcoin trading volume [https://www.coingecko.com/en/coins/bitcoin/trading_exchanges](https://www.coingecko.com/en/coins/bitcoin/trading_exchanges)

Not going to afford another mtgox are we?

</comment><comment><USER21> Every exchange has their own "virtual dollars", i.e. the user deposits. How do you know they are real? Tether is just a way to securely transfer user deposits between exchanges, and it's not more or less trustworthy.

<comment><USER22> If the alligation is true that the supply of Tethers is created from nothing, they would have the ability to trade their millions of "dollars" for other cryptocurrencies, taking control of the supply of other blockchains.

<comment><USER21> Every exchange can fake their user deposits in the same way. Tether doesn't change that. We have to trust their audits.

</comment></comment></comment><comment><USER23> Cache: [https://webcache.googleusercontent.com/search?q=cache:Hpndb2...](https://webcache.googleusercontent.com/search?q=cache:Hpndb2l0FX8J:https://medium.com/%40bitfinexed/bitfinex- never-repaid-their-tokens-bitfinex-started-a-ponzi- scheme-86a9291add29+&cd=1&hl=en&ct=clnk&gl=us)

</comment><comment><USER24> LOL

Even better than a Ponzi Scheme, let's just sell "shares" of this "company" (which by the way has a paper value of a very round and big ZERO) for cash

Toilet paper provides better value

Oh wait, he "buys low and sells high", that explains it.

<comment><USER8> Bitfinex is the largest BTC exchange in the world, over $500 million per day in volume today. Big days are multi-billion dollar volume. Like most exchanges, they take a percentage cut of every transaction. This is not a company with zero value. The "buy low sell high" arbitrage thing is from a previous, unrelated business idea posted 5 years ago to a btc forum by the founder of bitfinex. As far as I know, it never went anywhere.

</comment></comment><comment><USER25> > As Bitfinex has become more and more desperate, they have listed more and > more crypto-currencies of questionable value, such as EOS/IOTA/ETP and so > on.

EOS and IOTA are legit!

</comment><comment><USER26> my mtgox-spidey sense is a tinglin

</comment><comment><USER27> I really wish that HN had a rule where it would be mandatory for commenters to disclose their holdings in any cryptocurrency threads. This would make it easier to flag comments that look like they're just pumping a coin to improve its search engine status.

If you're praising Bitcoin, EOS, IOTA or whatever FooBarToken, please add a short note at the end to explain what you stand to gain. Either: "I'm long IOTA", or "I don't own IOTA and have no plans to initiate a position on the short term".

Similar rules apply at forums where penny stocks and other volatile traditional securities are discussed, so it's absolutely not an unreasonable thing to ask.

<comment><USER28> It's not unreasonable to ask but it's completely unreasonable to expect that anyone pumping a coin on HN would have even the slightest inclination to be truthful about their position.

<comment><USER27> The disclaimer (truthful or not) serves two purposes:

1) For the pumper poster, it makes them more conscious of the lie. Promoting a coin and forgetting to mention your holdings feels like a little white lie of omission. Actively lying about your holdings feels like deceit.

2) For the reader, it's an important reminder that a seemingly objective technical-looking comment can be motivated by greed.

</comment></comment></comment><comment><USER29> Lots of bullshit.

Just a few points:

A) Iota is a legit currency trying to do something new in the crypto space.

B) The listing Bitcoin gold did not 'create' 2 bn usd - if you tried to liquidate even a fraction of that, you would drive the price to 0. There was significant demand from trader and speculators for its listing (not that I agree with it, but anyway).

C) Saying that a company that generates 30 mil. usd in revenues each month is worthless is really laughable.

D) This author has had a bone to pick with bitfinex for a long time. I consider him a shill with an agenda, and it is surprising that he is given so much space (even on HN) to spew his BS.

edit: formatting

<comment><USER30> IOTA made their own crypto, then when got called on it they denied it mattered at first. Then they backed down and said it was intentional! So that they could destroy anyone else using their open source code. When pressed to promise that they had not left more backdoors in, they refused. Of course they had to refuse, these were accidental bugs rolling their own stuff.

That looks totally incompetent to me. Then mention centralized coordinator and they throw fits. Refuse to discuss it because it is only temporary.

But judge for yourselves. Look at this nice comment by Vitalik Buterin (Ethereum) and the childish retorts from the IOTA people: [https://www.reddit.com/r/CryptoCurrency/comments/72l7kp/why_...](https://www.reddit.com/r/CryptoCurrency/comments/72l7kp/why_i_find_iota_deeply_alarming_eth_core_dev/dnk2zdy/)

<comment><USER29> Fair enough, the currency has questionable potential. However, the article seems to imply that bfx lists some questionable currencies, and I feel that that characterization is misleading.</comment></comment></comment>