Comparing those numbers to the 5 and 10 year survival rate of more typical small businesses (50% and 33% respectively[1]) puts this into perspective.
This suggests that creating a business with the intent of not exiting, but retaining and growing it gives better odds. While a more typical small business has its own stressors and certainly can have long hours, in my experience the level of intensity is much more sustainable.
The down side - you're much less likely to walk away with large sums of money. On the up side, you're much more likely to create a sustainable venture that has a lot more success paths than the binary 'get acquired or go public' routes available to vc-funded startups.
Many of those small businesses that survive are simply the founder buying themself a job of some sort.
It's no surprise that someone who starts a landscaping or property management company, where the prime thing being sold is hours of labor, would have a higher 5/10 year survival rate than a company selling bits, ads, or other types of digital engagement.
Small businesses are defined as 1-500 employees - I suspect that includes a fair range of company types. Lumping them together as a single thing strikes me as a bit disingenuous.
This shows all business types following roughly the same trend. 'services' [which would include software and property management] have the lowest 5 yr survival rate at 36% and mining the highest at > 50%.
This is data is from the 2010 census, examining businesses started in 2005 - likely a different methodology than the SBA used. This which probably accounts for the discrepancy from my SBA stats in the original post.
It's also arguable that Internet businesses tend toward a few winners take-all scenario and that drastically increases the tech start-up failure rate. Whereas there are 150,000 convenience stores and 72,000 pizza restaurants in the US.
The number of businesses that can be supported in the physical world is dramatically higher than for Internet services. Why? Geographic restriction and franchising.
There are going to be two dozen major cloud hosting companies, and maybe 50-100 smaller players. There are 7,000 frozen yogurt shops.
>you're much less likely to walk away with large sums of money
It would be great to have data on this. How many SMB owners make a few hundreds $K a year, for many years, ending up making a lot more than a very successful/lucky early employee making a couple of $M in one shot after many years. Especially in the software field.
This suggests that creating a business with the intent of not exiting, but retaining and growing it gives better odds. While a more typical small business has its own stressors and certainly can have long hours, in my experience the level of intensity is much more sustainable.
The down side - you're much less likely to walk away with large sums of money. On the up side, you're much more likely to create a sustainable venture that has a lot more success paths than the binary 'get acquired or go public' routes available to vc-funded startups.
[1] pdf - https://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf