If failure is an 80% + option, is entrepreneurialism in the genes?

Just into the Broadstuff RSS hopper is HipMojo's note that most Web 2.0 Ad based companies will fail, since - to quote:

...over time I became - via this blog - someone that others turn to to get a sense of where the ad market is headed.

In this capacity, I’ve also become an adviser to many startups, and occasionally, an investor that wants to test a hypothesis or conduct due diligence on a company they are vetting.

I must say: I am baffled with how much many VCs are neither realistic nor knowledgeable with the bulk of their advertising assumptions. Not only are the assumptions off, but they seem to fail to realize the psychology and dynamics that go into play with how ad sales work. The competitive nature and subjective method to the madness is generally unaccounted for. Or, alternatively, the challenges and complexities of building sales streams are wildly underestimated.

Just to add to this tail of woe, I'd add two more reductions in probability of success:

(i) There just is not enough Ad money to fund em all anyway. The Ad business is about $0.5 trillion globally, about 1% - $5bn - will go online globally per annum each year in the next few years (averaging out most forecasts). Most of that - c 90%+ - will go to the Big Boys in the game already, leaving about $500m tops for everyone with those $100m bizplans (and one with a $15b plan.....)

(ii) In any case, statistically at least 50% fail in 3 years, (up to about 2/3 of startups depending on who you believe).

It just gets better and better

Then of course there is the Founders Discount even if you do succeed......

And they say many people start their own companies because they can't stand the corporate grind - this tells you something about how dire corporates must be - but somehow I don't buy that they are that bad.

An interesting bit of research I've just been reading implies that optimism and risk taking may in fact be genetic - its possibly down to the D4-7 Allele:

There is now growing evidence that the behavioral traits which predispose some of us to risky and novelty-seeking behavior have a genetic basis. A recent book, American Mania, by a colleague, Peter Whybrow, director of UCLA’s Neuropsychiatric Institute, summarizes this evidence. He begins by noting that human migration is one major form of risky and novelty-seeking behavior. Only a few of our species left their ancestral home in the African savannahs and began that long walk to the ends of the earth which allowed homo sapiens to colonize the world. Who were these earliest migrants? It turns out they had a particular genetic profile. They had a higher percentage of an exploratory and novelty-seeking gene than those remaining behind. As novelty seeking and risk taking “are . . . behaviors essential to exploration and migration. . . this should be reflected in a distribution pattern of the relevant allele [the D4-7 allele gene] that is similar to the ancient migratory paths of our species.” How do we know this? The geneticist Luigi Luca Cavali-Sforza of Stanford University and his colleagues have provided a genetic mapping of the geographical dispersal of homo sapiens from their original home in Africa. Subsequently, Dr. Chauseng Chen of the University of California, Irvine, found that a coherent pattern emerges from this mapping “where those who stayed close to their original homeland have a higher percentage of the common D4-4 allele in the population and a lower prevalence of the exploratory and novelty-seeking D4-7 allele.”....

....This “migration” gene, as we may call it, is also found in those who evince the most extreme form of risk-taking and novelty-seeking behavior to which the gene predisposes its bearers: addictive behavior which often descends into manic depression (bipolarity).7 Risk taking and novelty seeking are of course also the hallmarks of the merchant and the entrepreneur. For both migrants and entrepreneurs are “mavericks. . . who run at the edge of the human herd. Migrants are a self-selected band of seekers—those of adventurous and curious mind—who in their restless approach to life lie at the extreme of the bell-shaped curve of behavioral distribution.”

So there you are....... now, if this is correct, then one way to foster entrepreneurial hubs is to set up conditions that attract D4-7 Allele holders.