ChrisE - 10:49 pm on Nov 17, 2009 (gmt 0)

The easy answer is "selection bias".

It is easy to see the "offline" failures and successes. A restaurant opens, and a few months later, it is vacant. So it is easy to get a good feel for what the population is of entrepreneurs and the size of the groups that fail and succeed.

Online, it is very difficult to see the failures. It costs very little to put up a website, and that site could be there for years, generating no money, but costing 5 or 10 dollars every month for hosting. Is it a success because it is up or a failure because there is no profit? It is hard to determine.

I bet the failure rates are very different, with online having a HIGHER failure rate. Lots of people want to start an online business. There is tons of buzz on the TV about working from home by running your own business online!