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We have a silicon valley success story in our family. His parents were telling me how he built everything up out of nothing, clearly unaware of their own contr
by doorstar 6y ago
We have a silicon valley success story in our family. His parents were telling me how he built everything up out of nothing, clearly unaware of their own contribution.
He could pour all his money into his start-up because if he'd lost every dime he could have moved back in with them. He'd have his own bedroom, bathroom, and a fresh-cooked meal every night. He could have stayed with them as long has he wanted. Very few people have that kind of soft-landing.
- pal_9000 6y agoExactly what i wanted to post. Also excludes everyone who is married or has to feed their family.
- Jommi 6y agoI don't know think this is as clear. Can you link me to some researcher where a stronger social net leads to better entrepreneur outcomes? Because looking at country level data, USA, with it's terribly scary and risky path of entrepreneurship completely outperforms welfare state countries like the Nordics. You could say the difference is from capital markets, but still even the difference in startups that are not successes is humongous.
- btilly 6y agoDo you have statistics demonstrating that, per capita, the USA outperforms Nordic countries on entrepreneurship? I don't either way. But I have run across the counterintuitive fact that Nordic countries outperform the USA on how many people per capita are worth at least $30 million. And at least some of them got there through entrepreneurship.
- djhn 6y agoCan't ignore old money. Nordics (most obviously Sweden and Denmark), Baltics (Lithuania) and many CEE countries (Poland) have hundreds of old aristocratic families with family trees two to four times as old as the US.
- marmaduke 6y ago> with it's terribly scary and risky path of entrepreneurship completely outperforms welfare state countries like the Nordics or maybe it's worse than you suggest: taking a risk on a startup is the only opportunity to earn any income, where "welfare state countries" take basic income out of the picture. And, according to which mesurement are these welfare states being outperformed? and is it relevant to the humans involved?
- Nasrudith 6y agoIt isn't the only opportunity in the US at least (Artisinal miners, tree poachers, dump pickers, and street vendors certainly certainly are an example and can be found), but that it tends to pay the most. In addition to some social baggage that the individual may have had. Drop out (small) business owner who has issues with authority other than their own is a niche stereotype. Apparently according to some traveler's accounts Ukraine has a lot of "side hustles" due to lower wages of day jobs and lack of consolidation. I suspect it may be both and a result of culture shaping actions shaping culture. Essentially a more risk adverse culture is more likely to support a strong safety net and a culture with a strong safety net is in itself incentivised to not encourage have people take stupid risks even if the nominal purpose is to allow those risks. (That sort of left hand vs right hand thing crops up every organization large enough with distinct duties.) Then there is the whole Maslow hierarchy of needs aspect where they would ironically need to be better off before considering anything collective. Revolutions have been lead by disgruntled college students far more often than the desperately poor.
- _jal 6y agoI don't know of any research, but personally know people who looked for ways to start their company while hedging various risks[1], couldn't find a way, and never tried. I started a company after the first dot.com bust, because I had almost nothing to lose. But I also had no dependents to hurt. So it can cut both ways, but I don't think many folks take the path I did by choice. [1] One had a spouse with a chronic medical condition, losing insurance was not an option; one had a large student loan debt and didn't want to risk defaulting. I've heard other stories.
- blueagle7 6y agoI don’t think the issue being brought up here is the outcome of the entrepreneur (and their companies) but moreso the Well being of the entrepreneur
- sp332 6y agoThis article is a good summary and links to several studies. https://qz.com/455109/entrepreneurs-dont-have-a-special-gene-for-risk-they-come-from-families-with-money/ https://qz.com/455109/entrepreneurs-dont-have-a-special-gene... Here are a couple of the most relevant: http://www.andrewoswald.com/docs/entrepre.pdf http://www.andrewoswald.com/docs/entrepre.pdf and https://www.nber.org/papers/w19276.pdf https://www.nber.org/papers/w19276.pdf
- pwinnski 6y agoThere are cultural factors as well that make entrepreneurs valued and respected in the USA in ways they aren't in other places, so the right comparison doesn't seem to be across countries (where non-financial cultural factors may overshadow all else) but within a country in which the government-supplied safety net is severely lacking. In the USA, those best-suited to pursue entrepreneurship are those for whom the personal safety net is strong, despite the overall national safety net being weak.
- sir_kin 6y ago> Can you link me to some researcher where a stronger social net leads to better entrepreneur outcomes? is Harvard good enough? https://news.harvard.edu/gazette/story/2016/07/public-programs-are-good-economic-bets/ https://news.harvard.edu/gazette/story/2016/07/public-progra... https://www.nber.org/papers/w18441.pdf https://www.nber.org/papers/w18441.pdf > looking at country level data, USA, with it's terribly scary and risky path of entrepreneurship completely outperforms welfare state countries like the Nordics. False. >> The U.S. likes to think of itself as the world capital of start-ups. But America doesn't lead the world in actually starting new businesses. By various measures, it's behind Canada, Denmark, and Norway. https://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socialism.html https://www.inc.com/magazine/20110201/in-norway-start-ups-sa...
- tick_tock_tick 6y agoThey clearly means successful businesses.
- deleted 6y ago[deleted]
- shard 6y agoIt's easy to find many countries with much worse social nets than the USA, but with worse entrepreneurial outcomes. The social net versus entrepreneurial outcome function might not be a monotonically increasing one.
- Nasrudith 6y agoTechnically that constraint only applies to rational actors. There are plenty of reckless actors who risk it all on a longshot without anything to fall back on and enough survivor bias to make others think it is a good idea in general.
- SamReidHughes 6y agoWhat sort of joke is this? Having parents with an extra bedroom, once used by kids, is perfectly ordinary.
- doorstar 6y ago<shrug> I have a supportive, middle class family and if I went broke I'd be sleeping on an air mattress in front of the TV and trying to figure out how soon I could start contributing to the monthly expenses. It enough to keep me from wanting to take any large risks. I also didn't mention location, but my relative's parents are withing spitting distance of the valley. Someone who has to move from Mountain View to Omaha is going to find it really hard to get back into the thick of things.
- wtvanhest 6y agoThe most underrated type of privilege is location privilege. If you grow up far away from a major city, you have to invest heavily to break-in. One false move and everything you worked to establish gets wiped away. People growing up in Omaha are at a severe disadvantage vs people who grow up in Mountainview.
- dsr_ 6y agoPeople growing up in Alliance, Nebraska, are at a severe disadvantage vs Omaha. Almost everyone in Nebraska lives within 50 miles of Omaha (1.3M of 1.9M people).
- epicureanideal 6y agoRight. And if your parents are in Mountain View or nearby, you can stay with them a few extra years after you get your first job to save money for a downpayment on your own house. A person without that option may spend a decade paying rent and trying desperately to save up enough for a down payment.
- jboy55 6y ago
- chrisco255 6y agoUh, most parents would take their kids back in the event of financial disaster. That's not even rare. Many folks live with their parents until late 20s / early 30s these days.
- haney 6y agoThis does make the assumption that the parents are doing well enough to be able to support their adult children. There are some situations where the parents need the support of adult children, instead of the other way around.
- onetimemanytime 6y agoSleep in the couch or basement, food costs very little. That's still a lot of support, means that no matter what you have a place to stay and regroup. Not all parents can do that but most could
- blub 6y agoThat assumption holds for most of the population in European countries, even the poorest ones. In fact it's common for young people to live with their parents a long time. One has to be either dirt poor or very unlucky not to he able to move back with relatives. This sound like an excuse.
- rrrrrrrrrrrryan 6y agoThe median wealth of African American households in the U.S. is $35k, vs. $150k for white households. Yes - most people might be able to move back in with relatives, but among those people who can't, minorities are almost certainly going to be overrepresented, which was OP's point.
- golemiprague 6y agoWhat it got to do with household income? there are whole countries where the average income is lower than that and people stay with their parents. If you lived with your parents before why wouldn't you be able to live again after some financial disaster? If anything it is the opposite, as an adult you can contribute to the household income. Tired of those black people excuses, the reason they are not represented is not because they can't go back to their parents, it is the same reason they are not also regularly represented in tech companies as employees, because they never bothered to learn anything technical. Unlike slightly less black Indians with lower median household wealth to start with and much less chances to hook with someone in Tinder in the US, which is the real pure racism nobody talks about.
- ballenf 6y agoI think it's perfectly ok that if I save and work that my kids will have a leg up on my peers' kids who don't do the same. Don't we want, as a society, to encourage parents to do these things for their kids? Isn't that a net win for society as a whole? The alternative would require a near 100% estate/death tax, wouldn't it?
- doorstar 6y agoDon't misunderstand me, the parents did nothing wrong. Their problem was their mental model where their child's success was entirely due to their child's talents and drive, and that since they ( the parents ) had not provided any seed money, they had nothing to do with their child's success.
- adnzzzzZ 6y agoIn a way that's true though, because the majority of kids who have that soft-landing available don't go on to achieve any kind of success like that.
- deleted 6y ago[deleted]
- _jahh 6y agothe point is that the vast majority of people able to have that sort of success do have the soft landing and it is that advantage that enables them to create the successes they do.