On: The Real Rates of Business Survival

[CiPHPerCoder]

The argument sounds like it's based on a geometric expansion of 80% failure rate for each year.

    (1.0 - 0.8)^5 = (0.2)^5 = 0.00032

That would mean that in 5 years, 99.968% of business would fail.

Clearly that's a fallacy; an 80% failure rate in the first year does not imply an 80% failure rate in subsequent years.