Black Swan Farming
The total value of the companies we've funded is around 10 billion, give or take a few. But just two companies, Dropbox and Airbnb, account for about three quarters of it.In startups, the big winners are big to a degree that violates our expectations about variation. I don't know whether these expectations are innate or learned, but whatever the cause, we are just not prepared for the 1000x variation in outcomes that one finds in startup investing.That yields all sorts of strange consequences.
- ▪The total value of the companies we've funded is around 10 billion, give or take a few.
- ▪But just two companies, Dropbox and Airbnb, account for about three quarters of it.In startups, the big winners are big to a degree that violates our expectations about variation.
- ▪I don't know whether these expectations are innate or learned, but whatever the cause, we are just not prepared for the 1000x variation in outcomes that one finds in startup investing.That yields all sorts of strange consequences.
Paul Graham — Essays files mainly under blogs. We currently carry 219 of its stories.
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| Original publisher | Paul Graham — Essays |
| Canonical URL | http://www.paulgraham.com/swan.html |
| Publication time | Not provided by source |
| Retrieval time | 2026-07-26T08:49:07.854Z |
| Last seen | 2026-07-26T08:49:31.730Z |
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| Cluster | 37Nt1aVuXJCF |
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Basis: Derived from the published RSS/Atom feed. Contact: [email protected]. Reviewed: 2026-07-24.
Opening excerpt (first ~120 words) tap to expand
Want to start a startup? Get funded by Y Combinator. September 2012I've done several types of work over the years but I don't know another as counterintuitive as startup investing.The two most important things to understand about startup investing, as a business, are (1) that effectively all the returns are concentrated in a few big winners, and (2) that the best ideas look initially like bad ideas.The first rule I knew intellectually, but didn't really grasp till it happened to us. The total value of the companies we've funded is around 10 billion, give or take a few. But just two companies, Dropbox and Airbnb, account for about three quarters of it.In startups, the big winners are big to a degree that violates our expectations about variation.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at Paul Graham — Essays.