Hypothetical Number Inflation
Those aren’t the numbers you’re looking for.
I read a lot of Hacker News and it always strikes how big the numbers are in other people’s blog posts. When people write about a big exit on HN, they talk about $100M not $500,000.
When I was in college, and especially when I was running my first startup, reading those articles made me feel like a failure. From what I could tell, the world was populated exclusively by companies “struggling” to break $10M in yearly sales, and founders learning how to manage similarly “modest” liquidity events.
Now that I’ve been blogging for a few years, I can say from experience that most of those numbers are bogus. Survivorship bias aside, bloggers suffer from what I like to call Hypothetical Number Inflation.
When I write about a topic, I want to make a point, and the point is very rarely to be realistic about ordinary business metrics. I might want to prove that the relationship between effort and reward is correlative not causative, or that bootstrapping your first business makes sense. These are opinions that I’ve thought through and believe, but it helps to rally some ballpark numbers to make the case.
And therein lies the problem: in the course of arguing a point, it behooves me as a writer to push my numbers to the logical extreme to avoid losing my readers to unrelated quantitative niggling.
If I want to provide an example of a successful business in a blog post, I want the example to be unequivocal. If I choose a number that’s too low, the effect is like Dr. Evil asking for 1 MILLION dollars, readers stop and think “wait a minute, $1,000,000 isn’t successful to me.” When that happens, I lose that reader before they hear the entirety of my argument. This is especially necessary when making a complex or contentious point.
Since the HN crowd is so affluent (or at least says that it’s affluent), writers that want to be taken seriously need to choose hypothetical numbers that boggle the mind and leave no doubt as to as to the writer’s intent.
So, if you get frustrated when you read authors talking about “small” exits in the mid-8 figures or “low” executive compensation in the high 7 figures, remember that these numbers don’t represent the median, but the extreme. Better yet, decide for yourself how many zeros constitute success or failure and ignore bloggers.
