Tuesday, April 10, 2012

Odds of Winning a Silicon Valley Jackpot.

The recently announced acquisition of Instagram by Facebook has evoked an article with this title:
Clearly, some form of a product that appeals to the billions of netizens is the prerequisite for such a jackpot.

However, here's a little tongue-in-cheek way of analyzing for the odds.

Now, if you are an engineer with all the right personal ingredients to create a startup, you'd do well to consider the following facts:
  1. The odds of someone's winning MEGA Millions jackpot, which reached recently as high as $640 million, is 1 in 176 million, according to California Lottery web site.
  2. The odds of someone's winning the smaller SuperLotto Plus jackpot is 1 in 41 million, also according to California Lottery web site.
  3. The San Francisco Bay Area, of which Silicon Valley is a part, would rank first [in the United States] with 387,000 high-tech jobs.
Now, what are the odds of an engineer's succeeding in Silicon Valley? Consider this:

If the general odds of meeting another engineer with complementary characteristics is 1 in 10 million1, the availability of a pool of 387,000 of them makes the probability of 1 among those to be your startup partner to be 0.0387, or 1 in 25. If you don't want to admit that all of the Bay Area's 387,000 can be Mark Zuckerbergs2, you can narrow the field to Google alumni, Facebook alumni, etc. to, let us say, 10,000. Finding your entrepreneurial partner from among these 10,000, you get the odds of 1 in 1,000. Further, if you feel that you can only really pick one from a very small pool of an elite 100 in Silicon Valley, then the odds turn into 100/10,000,000, or 1 in 100,000.
While the foregoing is a highly simplified model of how one goes about creating startups, one thing is certainly clear:

As a brilliant engineer, you have very good odds of finding an entrepreneurial partner to succeed in Silicon Valley.

You can substitute your favorite entrepreneur here, e.g., Google CEO Larry Page, Salesforce.com's CEO Marc Benioff, ...

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