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See also "Ecological Fallacy": http://en.wikipedia.org/wiki/Ecological_fallacy

The famous example mentioned is W.S. Robinson's 1950 study of literacy among immigrants[1]. He found that states with higher populations of immigrants had higher literacy rates, but the average literacy rate among individual immigrants tended to be less than the average population. He concluded that immigrants must move to areas where the literacy rate was higher.

It's not too much of a stretch to make a similar argument for Silicon Valley as a whole or refute any individual startup's odd's of success as 1 in 20.

[1] http://ije.oxfordjournals.org/content/38/2/337.full




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