I mean, N=3, but I've made decent money on smaller exits.
The relevant metric is not exit price, it's ratio of exit price to pref stack; i.e. raise $40M and sell for $50M, founder is worse than if they raised $2M and sold for $10M.
Economic returns of VC-backed companies follow a power law distribution. This means that the vast majority of the returns for the VC are at the "fat head" of the distribution. The "long tail" does not impact returns, for the VC.
However, for the founder, those returns in the tail can be life-changing. It takes a $5B exit for YC to care. But a $5M exit can be real money for the founder.
So the correct math, from the perspective of the founder, is not "what % are unicorns" but rather "what % sell for more than capital invested" and that number is likely to be closer to 50% than 1%.
I had not realized that PG and his family moved to England.
I also recently moved from California to England, so would be fascinated to learn more about the genesis of PG's move. (As an aside: I sometimes hear my kids late at night trying to convince their friends back in California to ask their parents to move here. Anecdotally it does feel like many families are considering it. Of course I have an availability bias here.)
Does anyone know of any essays or interviews where PG discusses his decision to emigrate?
Amazing timing - I returned my first ever item to Trader Joe's today, and the experience was memorable.
My wife bought blackberries this morning. Tonight, after dinner, we realized they were moldy. I went to exchange them at about 8:30 pm, just before closing. The store was out of blackberries, though. I called home to ask if there was anything else I should get.
"Olive oil" was the answer. So I walk up to the counter, ready to do an exchange, and the cashier looked at the $8 bottle of Olive Oil, the $3 carton of moldy blackberries, and said:
"Yeah those are about even. Have a good night." He then shooed me out the door without even ringing anything up on the computer.
That kind of autonomy is not what you expect from ANY retail establishment, let alone a grocery store.
Use of a device at home does not automatically beget use of that device at the office.
For example, over 50 million Nintendo Wiis are installed in homes around the world, but nobody is clamoring for "Wiimote" apps at work.
The iPad surely has the potential to change the way casual home users interact with their computers... but I believe pg's comparison to microcomputers in the enterprise is a misplaced analogy.
Paul, if you're reading this, I urge you to spend a few days observing the 'knowledge workers' at a bank, claims processor, hospital, or real estate developer. Watch how they have memorized all the shortcuts and quirks of their custom line-of-business apps. You'll discover a class of users who want power and control, not simplicity and ease-of-use.
I actually think that lately (viz., reactions to the "Facebook Login" incident) most tech people are forgetting that the vast majority of computer users are not dummies, but intelligent, educated professionals who use a computer as a tool to complete their job.
For example: how many people use Microsoft Excel at least once a week? 100 million people? 250 million? It's certainly a large chunk of the computing public. These are sophisticated users of desktop software, and I can't imagine they'll be putting down their Windows PCs in favor of iPads.
Lately, HN-types have been suggesting that there are two classes of users: the sophisticated software engineer, and the unsophisticated masses. This is both insulting and wrong.
The relevant metric is not exit price, it's ratio of exit price to pref stack; i.e. raise $40M and sell for $50M, founder is worse than if they raised $2M and sold for $10M.