Hacker News Reader

Comment by shereadsthenews | Hacker News Reader

Congratulations you have just committed the elementary Chinese Soda fallacy.

While I knew what you were implying, I wanted to see if this was actually a common term. It isn't but it did lead me to another HN comment [1] and this Fast Company article referring to is as "Chinese Math" [2]. Just an FYI for anyone else because this sort of "1% of x market" thing comes a lot and a term is helpful to speed up the convos.

[1] https://news.ycombinator.com/item?id=10735610

[2] https://www.fastcompany.com/1710460/chinese-math-or-1-mistak...

I consulted for someone once to do some market sizing among other things. They were determined to make a case around winning 10% or whatever for the worldwide market for X.

I didn't know the term for it [1], but yes, I had long since started checking out whenever someone starts to appeal to "if we can just get n% of <huge market>".

[1] Even "Chinese Soda" has not entered common usage enough to justify calling it "the" or "a standard" term for it.

The "Chinese math" fallacy is only fallacious when it hides how difficult it is to steal a small percentage of a giant established market.

How exactly does the "fallacy" apply to Uber, a company that thoroughly understands how difficult it is to carve a big chunk out of entrenched competitors?

Since they've already demonstrated the ability to steal a sizable percentage of the taxi and car rental markets, it's good for Uber that they didn't listen to all the smart guys on HN.

>The "Chinese math" fallacy is only fallacious when it hides how difficult it is to steal a small percentage of a giant established market.

Which is what I was using it for.

>How exactly does the "fallacy" apply to Uber, a company that thoroughly understands how difficult it is to carve a big chunk out of entrenched competitors?

To clarify, that part is not the problem with the comment. That is a legit argument for why Uber can justify its valuation.

The problem is trying to amplify the persuasiveness of the argument by appealing to "small percent of huge = big". That deceptively makes the argument more appealing than it deserves to be, and is a lazy form of justifying a valuation. It plays tricks with human intuition on big numbers to (as you note) underplay the difficulty of getting a small number.

Hence why it's a "reach for my revolver" type situation.

Be careful not to equate "they have, independently of this argument, a good case here" with "therefore it's not the Chinese Soda fallacy to mention the percentages."

It would be helpful to others if you explained what exactly your purported fallacy entails.

I can find only one other reference to it and it's on HN.

It’s not that uncommon. I’ve certainly heard of it. But basically winning 1% of sizable markets is neither easy or cheap in most cases.

The way it was taught to me, decades ago because I’m old and people used to say “Chinaman” out loud, was the fallacious line of thinking begins “if I can just sell every Chinaman one Coke...”. The Fast Company article is right on.

Thank you, I appreciate the added historical context. Will give the Fast Company article linked above a read.

So the 1% fallacy - i.e. "if we could just get 1% of this huge market we will be billionaires!" (ignoring the costs involved).

Basically every other episode of Shark Tank.

Reply on news.ycombinator.com