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Data Sheet—Tuesday, June 27, 2017

When entering an unfamiliar society, it is wise to learn the local customs, the unspoken rules, and the names of its heroes, villains, and gods.

The same rule applies to Startup Land. To an outsider, the world of venture-backed startups might feel impenetrable. But don’t despair: The Internet is littered with free guides to The Startup Way. Look first to the luminaries known by their acronyms: PG, TK, @AVC, a16z. (That would be Y Combinator founder Paul Graham, Uber CEO Travis Kalanick, Union Square Ventures partner Fred Wilson, and venture capital firm Andreessen Horowitz.) Follow their blogs, listen to their podcasts, repeat their catchphrases, learn the Acronymed Ones’ acronyms. (FNAC stands for “feature, not a company.” HENRY means “high earner, not rich yet.”) You can even consume precious nuggets of startup wisdom through mobile push notifications thanks to products like Startup Funding Bot, Startup Patterns, Startup Quotes, and the website Great Fucking Startup Advice. (Sample counsel: “Don’t ask for permission, ask for fucking forgiveness.”)

Startup Land’s collective knowledge is one part mythology, one part advice, one part inspiration, and zero parts business school-sanctioned case study. (As universities add courses on entrepreneurship, Peter Thiel pays students to drop out.) Its catchphrases have been repeated so much that they are now cliched punch lines, oversimplified to the point of meaninglessness.

But that doesn’t mean they’re not true. So what happens when a piece of startup gospel is flat-out wrong?

I recently found myself carelessly repeating a statistic that I’d heard dozens of times in private conversations and on public stages: “Nine out of 10 startups fail.” The problem? It’s not true. Cambridge Associates, a global investment firm based in Boston, tracked the performance of venture investments in 27,259 startups between 1990 and 2010. Its research reveals that the real percentage of venture-backed startups that fail—as defined by companies that provide a 1X return or less to investors—has not risen above 60% since 2001. Even amid the dotcom bust of 2000, the failure rate topped out at 79%.

Yet the denizens of Startup Land continue to cite the 90% figure because it serves a purpose. It comforts failed startup founders who burned through their investors’ money, laid off staff, and shut down their companies. It supports the startup world’s celebration of failure. “Sure, you failed, but that’s the norm,” the thinking goes. “The odds were against you.”

But startup failure isn’t a natural law like gravity. It’s not a given. Normalizing the failure narrative only conceals the truth, misleads founders, and in certain cases, explains away bad behavior.

So here’s some wisdom of my own: Take a skeptical view of the widely accepted knowledge in Startup Land. It’s especially necessary in an environment where entrepreneurship is fetishized on television shows like Shark Tank, old-economy corporations are desperately trying to imitate their disrupters, and Fortune 500 execs are jumping ship to “unicorn” startups.

Soak up the mantras inside the Silicon Valley bubble. But do so with a grain of salt.

(Adam Lashinsky is on vacation this week. Today’s essay is by Erin Griffith)


Fortune is beginning to work on its third annual Change the World list, which highlights companies that have made measurable progress addressing global social problems as part of their core business strategy. If you’d like to nominate a company for the list, please email Fortune senior writer Erika Fry ( with a brief description of why it should be considered. You can also submit nominations (and learn more about Fortune‘s criteria) through the application portal at this link.

Erin Griffith


Who owns the future? Rental car companies Hertz and Avis haven’t had an easy go over the past decade, but the future looks a little brighter after both announced small, if significant, deals to get in on the self-driving car market. Google’s Waymo said it would use Avis to manage its fleet in Phoenix, while Bloomberg uncovered filings showing Apple leasing some SUVs from Hertz’s Donlen fleet rental unit.

You know what’s cool? The European Union blew past predictions it would fine Google $1 billion over antitrust violations. Instead, regulators said the Alphabet unit must pay a record 2.42 billion euros, or $2.7 billion, for favoring its own shopping service. Google said it “respectfully disagrees” and may appeal.

The partner of my partner. Since the day Donald Trump won the presidential election, Sprint’s shares have jumped 30% on the belief that the new administration would allow the carrier to merge with rival T-Mobile. But on Tuesday, the Wall Street Journal reported Sprint has paused talks with T-Mobile for “exclusive” discussions with cable giants Comcast and Charter Communications, which are just getting into wireless. The end result may not be a merger but investments to bolster Sprint’s network.

Not dead yet. The creator of the digital currency Ethereum, Vitalik Buterin, died in a car crash and insiders are selling like crazy—or so said the headline. It soon became clear the news, posted to notorious troll site 4Chan, was fake, but it still gave the price of the currency quite a jolt.


Speaking of digital currencies, Brian Patrick Eha has the story for Fortune of the early bitcoin investor Charlie Shrem, who was was featured in the documentary The Rise and Rise of Bitcoin. Shrem also cofounded the Bitcoin Foundation, the first nonprofit advocacy group for digital currency. But in March 2015, he went to federal prison. Now Shrem is back:

A lot of people say that I took the first shot for Bitcoin. The first person to walk through the door always gets shot, and then everyone else can come through.


New $100 Million Fund Backs Cloudflare-Related Startups by Barb Darrow

Nokia Smartphone Brands Returning to the U.S. by Aaron Pressman

Four Tech Giants Team Up to Fight Terrorism by Tom Huddleston, Jr.

Google Earth Heads to the Classroom With National Geographic and PBS by Jonathan Vanian

Indian Tech Workers Are Increasingly Facing Layoffs and Demotions by Barb Darrow

Congressional Black Caucus Urges Uber to Diversify Leadership by Polina Marinova

BEFORE YOU GO is a witty blog about suburban architecture, no easy feat. But it’s offline, at least temporarily. Author Kate Wagner, a 23-year-old Johns Hopkins graduate student, tells The Verge that real estate listing site Zillow sent her a “cease and desist” letter for reposting photos from its site. Wagner thinks she is abiding by fair use because her blog is a parody with criticism of the photos:

This blog is my entire livelihood and I am at risk of losing everything.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.