[HN Gopher] Parents' income, not smarts, key to entrepreneurship
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Parents' income, not smarts, key to entrepreneurship
Author : markyc
Score : 381 points
Date : 2021-01-28 15:10 UTC (7 hours ago)
(HTM) web link (www.jpost.com)
(TXT) w3m dump (www.jpost.com)
| theinverseidea wrote:
| You ever try making an assessment like this in regular
| conversation?
| LatteLazy wrote:
| I've been self employed on an off for the last 4.5 years. I spend
| 4 years working a job I hated (plus all the time building up to
| that job) to save the money to take a year off and do my own
| thing.
|
| The first 2 years went amazingly well, I was very lucky. The last
| 2 have been pretty rough. A combination of government crackdowns
| (I'm a brit) on self employed people, brexit and now covid has
| pretty much done for me. I have enough cash for 3 more months.
|
| I wish I could have started 2+ years earlier with a loan from mum
| or dad. I wish I could continue now with the same. But they're
| poor. I suspect I will be too if I don't get a job or a major
| sale soon.
| exabrial wrote:
| Correlation, not Causation
|
| The actual cause is more than likely: parents who have high
| income set a precedent for self-employment.
| jeffreyrogers wrote:
| Doesn't fit in with what I've seen personally. Most of the
| people I know who've started companies have parents in high-
| paying jobs where they work for someone else, e.g. finance,
| medicine.
|
| Edit: I'm also not saying you need to have family help to be a
| successful entrepreneur. Maybe the most successful person I
| know personally did it on his own, but he is unusual.
| p2501 wrote:
| From my anecdotical experience: more children from well off
| families are optimistic and have more tolerance to economic
| risks. It's not that they need the family's money to start a
| venture, but that they know they can fall back on it, if it
| doesn't go well
| AlchemistCamp wrote:
| Fields like finance and medicine require both a good amount
| of intelligence and an exceptional work ethic.
|
| Perhaps if the source of the parents' money were lottery
| winnings, the correlation with entrepreneurial success would
| vanish.
| jeffreyrogers wrote:
| Yes, except I'm mostly talking about Harvard grads, so
| everyone is smart with a good work ethic.
| akhilcacharya wrote:
| "Everyone"? Isn't that the community college that Jared
| Kushner went to?
| anonuser123456 wrote:
| Risk tolerance and deferred gratification are heritable
| traits.
| rchaud wrote:
| I've heard a great deal about Bill Gates in my lifetime, but it
| wasn't until I read Paul Allen's 2011 autobiography that I
| learned that Bill's mother (a director at a bank) introduced him
| to IBM chairman John Opel in 1980. They both sat on the board for
| United Way[0].
|
| It really struck me how these kinds of connections are less of a
| twist of fate, and more about environment and proximity. Even now
| it feels remarkable that someone with Gates' intellect and access
| to rich district school computers (in the '70s) benefited so
| massively from being born into a connected family.
|
| [0] https://www.cnbc.com/2020/08/05/how-bill-gates-mother-
| influe...
| sramam wrote:
| > Even now it feels remarkable that someone with Gates'
| intellect and access to rich district school computers (in the
| '70s) benefited so massively from being born into a connected
| family.
|
| While this seems to be the accepted correlation, by all
| accounts Bill Gates also brought an extraordinary curiosity and
| drive to the party.
|
| From what I gather, (adjusted for age) he works just as hard
| today. Listening to him speak on a topic of current interest to
| him, gives me a IQ bump (self-perceived and short-lived
| unfortunately, but that's on me)
|
| I'm no statistician, but I'd be willing wager that the two
| ratios are about the same:
|
| 1. kids with privilege in the 70's: Bill Gates
|
| 2. people with the ability to spend billions to further a
| cause: Bill Gates
|
| Edit: formatting
| vulcan01 wrote:
| > rich district school computers (in the '70s)
|
| Gates went to Lakeside, often considered the top _private_
| school in Washington state.
| osullivj wrote:
| Not surprising to a British reader. Sutton Trust research [1]
| finds that positions of influence in the UK, and the
| professions generally, are dominated by the 7% who were
| privately educated. Conclusion: networks and connections are
| everything.
|
| [1] https://www.suttontrust.com/our-research/elitist-
| britain-201...
| JKCalhoun wrote:
| I'm not so sure.
|
| I think to put a finer point on it, if you grow up in an
| environment where your family expects you to succeed and be
| wealthy, where your peers are expected to also succeed and be
| wealthy it gives you both the training, the knowledge, and
| drive to succeed. Never mind the means (dosh) to higher
| education.
|
| In the U.S. my parent's were working class, broken home.
| Neither parents had ever invested, knew anything about 401Ks,
| Roth IRAs, neither owned their own home, knew about
| mortgages....
|
| So I was beginning at square one and had to teach myself all
| these things, pay for my own college, etc.
|
| Unless "networks and connections" allow you access to the
| Next Level (and I have observed this may in fact be true,
| allowing some to "fail upward") I think the bigger hurdle is
| not having the environment that gives you an investing and
| monetary success mindset.
|
| I have taught my children as best I can. We'll see how this
| experiment plays out with the next generation....
| monadic3 wrote:
| > I think to put a finer point on it, if you grow up in an
| environment where your family expects you to succeed and be
| wealthy, where your peers are expected to also succeed and
| be wealthy it gives you both the training, the knowledge,
| and drive to succeed.
|
| Yea, but more importantly it also gives you easy access to
| capital.
| sjg007 wrote:
| This is exactly why, in the US, the Ivy league has its
| status. Yes you learn the same stuff but it's the network
| effects.
| xapata wrote:
| The UK is probably worse off for having such an obvious clue
| that someone is high class. Accents are harder to switch than
| clothes and a haircut.
| JKCalhoun wrote:
| Maybe. Growing up in the U.S., my obvious lack of straight
| teeth (single mother could not afford braces for my sister
| or me) gave away my pedigree.
| ska wrote:
| I suspect the main difference between the US and UK this
| way is the honesty of the process. In the US a ton of
| money an energy is spent on social signalling and class
| definition, but also on maintaining a fiction that
| "class" isn't really a thing.
|
| I do think the US class system is easier to fake, as it
| relies a bit more on superficial signifiers than
| institutions and history than the UK. The myth of the
| "self made man" is also held dear, so you can do ok if
| you play to that story; you'll still may never really
| belong but your kids probably will.
| sjg007 wrote:
| Class in the US is a function of Zipcode.
| ska wrote:
| That's one factor. And for the most part, accessible
| "merely" with money which is one of the things that make
| it more superficial.
| throwaway2037 wrote:
| Second login with my throwaway account today! Apologies
| in advance: This stuff is much too personal to post under
| my real identity.
|
| Exactly this, in my experience. I am from a upper-middle-
| class family. I live in East Asia now, and wealthy by
| local standards. Whenever I travel to developing
| countries in Asia, I am regularly reminded of my upper-
| middle-class-plus-plus status by the straightness and
| whiteness of my teeth! Yes, literally, I can count on
| many, many hands how many times random strangers approach
| me on the street/bus/train/hotel/airport in developing
| countries with comments about my straight and/or white
| teeth. (Please: Do not read humble-brag into that.)
|
| Could we, perhaps, say that accent is a big social divide
| in UK, whereas teeth are a big social divide in US? I
| would love to hear from Canadians, Kiwis, Aussies,
| Saffers, etc...(anyone!) about experiences in their home
| culture.
| encoderer wrote:
| For many years I worked for Zillow -- a great company.
|
| Their co-founder was telling a story of how he got into tech
| and it went something like... my mom made friends at work with
| another woman with a son about my age and they set up a play
| date and that's when I met Bill Gates. Co-founder is a great
| and talented dude but mom's the real MVP there.
| everdrive wrote:
| I'm not sure how you hope to avoid this problem. People with more
| resources can accomplish more. This is true even in a strict
| meritocracy. All that's modified in a meritocracy is who the top
| performers are. It doesn't level out the playing field for
| everyone.
| jcadam wrote:
| All my attempts at entrepreneurship have been via moonlighting,
| and have failed. There just aren't enough hours in the day. But I
| can't just quit my day job and take my income down to $0 to
| pursue a startup.
| wegs wrote:
| My experience as well, until the first time I got funded.
|
| After a success under your belt, it's easy to keep going and
| get more funding. There's no shortage of capital looking for
| people to fund right now (it goes through spells).
|
| The first time I got funded, it was through a rich elite
| idiot's social connections (CEO). CEO was a sleazeball, and got
| all the financial and most of the branding benefit of the
| venture, despite doing no work. I launched a successful
| business with CEO as the figurehead, and in the process, I got:
|
| 1) Connections and network
|
| 2) Visibility and branding
|
| 3) Stepping through the process once. Moonlighting can be
| enough time if you're efficient (which you can't be if you're
| muddling through figuring stuff out)
|
| It was a stepping stone towards financial stability, and I'm
| much closer. Socioeconomic mobility is a process. Some people
| get lucky, of course, but for the most part, there's a pathway
| from:
|
| 1) Unskilled labor; to
|
| 2) Professional labor loaded with student loan/mortgage debt;
| to
|
| 3) Financial stability; to
|
| 4) Being able to launch high-risk high-reward ventures
|
| That's possible, but it generally takes a few generations:
|
| * It's possible for someone without an education to send kids
| off to college through public schools, but they'll have a hard
| time competing with kids who were exposed to advanced tutoring,
| math, STEM, makerspaces, etc. from an early age (children of
| professionals)
|
| * It's possible for first-generation professionals to network
| into power networks and achieve financial stability, but they
| won't be in a place to quit a job and launch a new venture.
|
| * And it's possible for children of professionals to then
| (finally) engage in a few high-risk high-reward projects until
| one pays off....
| jcadam wrote:
| Yea, I'm doing well enough in my career to have some
| disposable income now, and was thinking maybe I should
| outsource to some freelancers next time I get a new software
| idea, and just play project manager / salesman.
|
| However, the engineer in me would hate to not be building the
| thing myself.
| dopeboy wrote:
| From one engineer to another who recently internalized this
| lesson: you're getting in the way of yourself. If you have
| the resources, use them so that you can move fast.
| jimbokun wrote:
| "1) Unskilled labor; to
|
| 2) Professional labor loaded with student loan/mortgage debt;
| to
|
| 3) Financial stability; to
|
| 4) Being able to launch high-risk high-reward ventures
|
| That's possible, but it generally takes a few generations"
|
| That sequence is coming up a lot lately in discussions of
| African Americans low wealth accumulation across generations,
| relative to whites.
|
| In the sense that, first through slavery, then through Jim
| Crow, then through red-lining, and other forms of egregious
| discrimination, that multi-generational sequence of wealth
| accumulation has been artificially interrupted.
|
| It's not clear what should be done to rectify that imbalance.
| (Reparations? Or is it enough to allow this sequence to play
| out unobstructed starting with current generation of African
| Americans, similarly to if they were a new immigrant family.)
| germinalphrase wrote:
| How are defining 'financial stability' here?
| chaganated wrote:
| There was a guy who owned a recording studio. His observation
| was that artists who had menial jobs eventually made it. The
| ones with professional jobs all struck out. Brain energies may
| be in shorter supply than hours.
| Sevii wrote:
| I definitely have more energy for personal projects when I'm
| not coding at work all day.
| JKCalhoun wrote:
| I find your comment amusing because, of course you can. And
| famously, the people that made it big did just that.
|
| But I get it, I'm like you. Also had a college loan to pay off,
| later kids.... So I stuck to the day-job, read about the high-
| flyers and work instead on trying to get-rich-slowly.
| cloverich wrote:
| On a similar note, I've noticed that some of the successful
| entrepreneur's I know took success in one area and applied it
| to another, often in the form of re-investing their savings.
| Watching someone go from salaried to having a million in
| savings, and then investing _all_ of it into a new business
| that's not guaranteed to succeed... I question whether I
| could do that. A million dollars is enough to retire ahead of
| schedule, would I be willing to risk it all and go back to a
| salaried employee with no savings? Yet I've noticed many
| successful people do this, often repeatedly.
| deeeeplearning wrote:
| > And famously, the people that made it big did just that.
|
| And not so famously the 90%+ of entrepeneurs who failed and
| lost everything.
|
| Survivorship Bias is sooo rampant in SV.
| snicker7 wrote:
| The clear solution is to make Jeff Bezos everyone's dad.
| cblconfederate wrote:
| Those kids just made the smart choice of parents
| dennis_jeeves wrote:
| Couldn't upvote you more that once :)
|
| Moral - choose your parent carefully, or if you miss that boat
| marry rich.
| ramoz wrote:
| 'Why haven't you sold a startup by now? ... go do your own
| thing...'
|
| Because, Since I was young, I've been hammering a cinderblock
| away that can grow 3 new heads at random intervals
| wing-_-nuts wrote:
| >Because, Since I was young, I've been hammering a cinderblock
| away that can grow 3 new heads at random intervals
|
| English _is_ my first language and I still have no idea what
| this means?
| anonuser123456 wrote:
| Income is also correlated with deferred gratification and risk
| appetite.
|
| Did these studies normalize for those confounding variables,
| because both are heritable.
| fwip wrote:
| Ironically, the type of studies you're citing make the same
| mistake in not controlling for the effects of income.
|
| One reason that poor children are likely to "fail" the
| marshmallow test is because growing up in poverty means that
| promises made to you are less likely to work out - so, having
| learned from experience, they make the rational choice.
|
| https://bigthink.com/mind-brain/new-marshmallow-experiment
| PaulHoule wrote:
| My father-in-law got together with his brother to buy a bulldozer
| and ran a business putting in curbs and sidewalks.
|
| Today my wife teaches people to ride horses.
|
| Thus she had a precedent in her family of someone who succeeded
| at self-employment and she wound up doing something similar in
| work.
|
| John Kenneth Galbraith would say that that sort of self-employed
| person is highly exploited, etc., that it isn't a realistic
| vision for many people to get ahead. But I know many people
| who've succeeded that way. I've known a number of successful
| academics (like Galbraith), but I met them in grad school or
| after they were successful.
|
| 2000+ years before Marx the greeks talked about "class" as being
| networks of families that gravitate to towards certain family
| wells and that is alive and well today.
| blackcats wrote:
| You need money to make money. No surprise here.
| Abishek_Muthian wrote:
| 'If You're So Smart, Why Aren't You Rich?'
|
| Every now and then an article about research on that topic pops
| up which attributes success from 'Chance'[1] to 'Personality'[2]
| and everything in between[3].
|
| [1]https://www.technologyreview.com/2018/03/01/144958/if-
| youre-...
|
| [2]https://www.bloomberg.com/opinion/articles/2016-12-22/if-
| you...
|
| [3]https://www.forbes.com/sites/rogerkay/2015/02/02/if-youre-
| so...
| orange_tee wrote:
| I think this falls more in the category of "being rich is
| actually better than being poor", of which there are an equal
| number of articles that routinely pop on the frontpage.
| czbond wrote:
| ha ha ha ha ha. Ok. As a grizzled founder, who is becoming numb
| to the entitlement that is easy startups, easy funding, easy
| results.
|
| I know many founders - and they were broke, broke, broke (and
| went broke to bootstrap). This 'finding about your parents' can
| make those straight out of college who don't stick with it feel
| better.
|
| Reality is... entrepreneurship is an incredibly hard game that
| takes years of grinding away after hours, or eating away at your
| own savings and your free time.
|
| Founders I know (including myself): - One worked years on the
| side to grow it enough just to get seed. With newborn kids, then
| quit his CompSci job to live off his teachers wife salary for
| years. - One was on foodstamps for 6 years, and kids on medicaid
| to pull his shop through - One saved for years, and spent most of
| his money to get through the rough spots and is coming out the
| other side just now. - One failed 4 times - each attempt taking a
| few years, entered bankruptcy to try on a 5th attempt. - One
| lived at poverty means for years with a family while
| bootstrapping.
|
| So.... lets stop the entrepreneurship is easy pr0n. It sucks so
| hard you'll hate your life. If blowing all your time and money
| getting there isn't worth the suffering you'll feel - don't try.
| mmmBacon wrote:
| I'm sure if you came about entrepreneurship at the highest
| difficulty setting, it's hard to shake your own perspective. As
| a person who has tried twice and failed both times, I totally
| agree there is no easy path. There are however, _lower
| difficulty_ paths and those paths lead to better outcomes for
| entrepreneurs.
|
| If you keep at it, are smart, have good ideas and execute, I
| think you can probably build an equivalent network over time
| that leads to success. I always like to think that investors
| fund people more than ideas.
| czbond wrote:
| Totally agree with your perspective. I'm now on a lower
| difficulty - but still rewarding path - that can still scale
| over time.
| jdoliner wrote:
| Paul Graham wrote about what YC looks for in startup founders in
| 2010 [0]. The first thing he notes is that intelligence wasn't
| anywhere near as important as they expected it would be. And I
| think pg had a much better definition of intelligence than
| "academic achievements and standardized test scores." So I don't
| think this paper is really making a strong-man case for parent's
| income being the most important factor in entrepreneurship,
| they've ignored all 5 aspects that experts like pg think are the
| actual most important factors and focused on one that he thinks
| isn't as important as people think it is.
|
| [0] http://paulgraham.com/founders.html
| ed25519FUUU wrote:
| The causation v correlation here just raises more questions,
| wouldn't "smart" people inclined towards entrepreneurship
| _become_ smart parent and reinforce the tradition?
| raizinho wrote:
| It's even hinted at in the article: "A significant connection
| between the parents' level of education and entrepreneurship
| was also noted." The clickbait title confirming people's priors
| isn't surprising though.
|
| If I had to guess at the causal graph it would something like:
|
| smart -> income smart -> entrepreneurship entrepreneurship ->
| income income -> entrepreneurship
|
| And even without the last two connections the smart confounding
| variable would induce a relationship between income and
| entrepreneurship.
| m463 wrote:
| makes sense.
|
| If you're concerned about paying for living expenses, you will
| find it an uphill climb to risk entrepreneurial things.
|
| If your living expenses are taken care of, you can think more
| strategically, look to higher goals, and look for meaning in
| them.
|
| I can definitely say my life changed the first time I got ahead
| of my bills instead of reacting to them. I would imagine a
| similar sort of change with a sense of set for life (although it
| could also work against you)
| steveBK123 wrote:
| UBI takes care of the financial risk component, less so the
| parental knowledge of the rules of the game, connections or free
| capital to invest.
|
| I think this is all obvious if you dig just below the surface of
| most ultra successful people in NY/CA Finance & Tech space. These
| people are largely smart, well educated, but also raised in a
| particular way with connections that you only have from being in
| the top 5% at birth. There is the financial backing that allows
| these people to take large risks because they aren't worried
| about a paycheck, the capital to invest in their ventures, and
| the connections to clients/partners/other investors.
|
| The founder of the last firm I worked told a story about his
| father giving him the option of a big party when he came of age
| in middle school or to have the cash value of the party to
| invest. He chose to invest, and that is how he launched his
| investment career, he told us proudly.
|
| Cool story, until you inflation adjust the dollar figure was
| something like $100k at the age of 14. So he started his young
| adult life +$100K whereas my wife&I started our adult lives (post
| college) -$100K in debt.
|
| Another place I worked the founder started in his 20s with $1M
| equivalent in capital... etc etc
| steveBK123 wrote:
| I would add that simply having been raised rich doesn't
| guarantee any sort of success, it just makes it easier if the
| aptitude is there.. which is why so many of the ultra ultra
| rich come from ultra rich families who came from rich families
| who... Capital accumulates over time as long as the inheritor
| has some aptitude.
|
| I live in a condo in NYC that is owned almost equally by three
| groups - investors, trust funders, rich worker bees.
|
| The trust funders are an interesting lot to observe. We have
| the child of a minor politician in an oil rich countries in one
| of our most expensive units. My neighbor has never to my
| knowledge had any sort of a job in his life, but owned 4
| apartments before age 30, before selling all of them at a loss
| in the last year. We have people in their 20s with job titles
| like "makeup artist", "political organizer/activist", "personal
| assistant", "journalist", etc living in paid-off $1M
| apartments.
|
| Even the "investor" units are interesting as more than half of
| them are owned by some combination of the developer, the
| developers children, the developers silent partner, the
| developers lawyer, etc..
| jl2718 wrote:
| > income of someone's parents is the factor that correlates most
| to entrepreneurship, with higher wealth connected to a greater
| likelihood of being a start-up founder
|
| So which is it: income, or wealth?
| dawsmik wrote:
| Middle class in the US goes up to about $120k. I dont know any
| licensed tradespeople that work for themselves that make less
| than this.
| iso1631 wrote:
| Electricians $50-60k:
| https://www.indeed.com/career/electrician/salaries
| https://www.salary.com/research/salary/alternate/electrician...
|
| Plumbers: $60k
| https://www.salaryexpert.com/salary/job/plumber/united-state...
| https://www.salary.com/research/salary/alternate/licensed-pl...
|
| Now those aren't self employed, but
|
| "What Kind of Money Can a Self-Employed Master Plumber Make
| Annually?"
|
| Suggest maybe 20% more for self employed
|
| https://bizfluent.com/info-12088771-kind-money-can-selfemplo...
|
| "The salary for a master plumber with more than 20 years of
| experience ranges from $43,790 to $74,700 a year"
|
| Do you have any data rather than your self-selecting annecdote?
| ska wrote:
| > Now those aren't self employed, but
|
| This is probably key. If GP's comment is accurate, I suspect
| it has more to do with "small business owner" than
| "tradesman". Of course they may just have a inaccurate view
| of real net, also. I know a few guys who would brag about "I
| made X last year" as a self-employed sub, but on a little
| interrogation it became clear they were very handwavy between
| company gross revenue and "I made".
| JKCalhoun wrote:
| Maybe you hit upon it: "work for themselves".
|
| For every painter that owns his own company, a dozen guys are
| climbing ladders and slinging paint buckets for him.
| orange_tee wrote:
| So everything is at it should be. People who cannot afford to
| risk big, should not risk big. It is a simple fact that being
| wealthy allows one to risk more, financially. Even if you gave
| poor promising candidates free money with no strings attached,
| they would still be better of going into a stable career path
| with stable growth, rather than try to start a startup because of
| the opportunity costs.
|
| And, why should smarts and entrepreneurship be correlated,
| anyway?
| AnIdiotOnTheNet wrote:
| It's because we like to believe we live in a meritocratic
| society, where the people who have wealth have earned and
| deserved it.
|
| There is a strong incentive for the successful to ignore all
| the many advantages they had in getting where they are in order
| to believe they 'pulled themselves up by their bootstraps' and
| that anyone as hard working or intelligent as they are could do
| the same. By convincing themselves of this, they are able to
| believe that they deserve everything they have and poor people
| deserve to be poor, and, being inherently superior, it is
| therefore ok to exploit their lessers.
|
| This thinking is a hallmark of prejudice. White supremist have
| long held that black people and other races are genetically
| inferior, less intelligent, lazier, more prone to violence or
| criminality, etc. to justify their position. I have less
| experience with it, but it seems the same sort of
| rationalization is at work with the Indian caste nonsense too.
|
| P.S. While your question seems to be meant in the objective
| sense of "why would one expect that intelligence and
| entrepreneurship are correlated?", it is apparently being
| interpreted as "why should society function such that
| entrepreneurship is a path available to anyone with enough
| intelligence?".
| SMAAART wrote:
| I find the discussion here more interesting than the article.
|
| I'd like to see the same study conducted in the US and -
| separately - in Europe as well.
| tolbish wrote:
| Wired covered the "myth of meritocracy" as it pertains to
| entrepreneurship and Silicon Valley 8 years ago:
|
| https://www.wired.com/2013/11/silicon-valley-isnt-a-meritocr...
| yunesj wrote:
| > But if the tech scene is really a meritocracy, why are so
| many of its key players, from Mark Zuckerberg to Steve Jobs,
| white men?
|
| I disagree with the author that Jobs and Zuckerberg are
| evidence that meritocracy is a myth. According to Wiki:
|
| > ... Zuckerberg excelled in classes. After two years, he
| transferred to the private school Phillips Exeter Academy,
| where he won prizes in mathematics, astronomy, physics, and
| classical studies.
|
| > By the time he was ten, Jobs was deeply involved in
| electronics and befriended many of the engineers who lived in
| the neighborhood. He had difficulty making friends with
| children his own age, however...
|
| Later in life, they had great ideas, took huge risks (both
| dropping out of school), and worked hard.
| ampdepolymerase wrote:
| Are you aware of how much Phillip Exeter costs?
| yunesj wrote:
| That's not really relevant. Zuckerberg didn't outperform
| his peers at an expensive high school because he was white.
|
| But, "for families with incomes under $75,000, Exeter is
| free. We pick up the cost of tuition, books and academic
| supplies, and we provide a stipend ... We meet 100 percent
| of our admitted students' demonstrated financial need. [1]"
|
| Sadly, the idea that we live in a meritocracy is so
| politically incorrect that GSIs (TAs at Berkeley) are
| taught to interrupt a conversation where they hear a
| student saying "America is the land of opportunity" or "I
| believe the most qualified person should get the job. [2]"
|
| [1] https://www.exeter.edu/admissions-and-financial-
| aid/tuition-...
|
| [2] http://gsi.berkeley.edu/media/tool-recognizing-
| microaggressi...
| JKCalhoun wrote:
| It is a meritocracy, but some get to start at a chute, and
| some start at a ladder.
| mywittyname wrote:
| Also, Steve Jobs is biologically half-Arab. Making him kind
| of a weird pick for such a claim.
| k__ wrote:
| All entrepreneurial people in my age (35), that I know, have (at
| least) better off parents.
|
| Most of their success stems from the fact that they could live
| with their parents for an extended amount of time and found&crash
| a bunch of companies before they were 25.
|
| Even the most average person knows how to run a company after
| they tried and failed often enough.
|
| People joke around how Trump got "a small loan of one million
| dollars" from his dad.
|
| But it doesn't even have to be that much money, just enough so
| you don't have to work for 2-3 years.
| PragmaticPulp wrote:
| I've worked with a few university programs that help some
| students sidestep these issues by wrapping entrepreneurship
| opportunities inside of their course load. Students use much of
| their junior and senior year time working on business plans,
| pitching investors, and trying to get their businesses started.
| It's a great model for leveling the playing field.
|
| Anecdotally, local entrepreneurship circles are absolutely full
| of young people from wealthy backgrounds who think they're going
| to leverage their parents' connections and capital into personal
| riches.
|
| They almost all fail the same way: They focus too much on quick-
| flip opportunities and the get-rich-quick schemes. They view
| entrepreneurship as collecting capital from investors and giving
| it to contractors to produce a business for them. They don't
| actually want to grind out years of work to get a business off
| the ground. They burn out after a year or two.
| Taylor_OD wrote:
| Sure. Even more so a safety net allows for entrepreneurship. My
| parents are not wealthy but they have always had a large enough
| home and enough extra income that I knew if I needed to move home
| and live when them I could comfortability for 3 months or more.
|
| I'm not much of an entrepreneur risk taker anymore but every time
| I've had to make a difficult risk decision in the past I knew the
| absolute worst case scenario was that I would end up broke living
| in my parents basement. It's carpeted so it never seemed that
| bad.
| jrexilius wrote:
| People are extrapolating way too much from a study in Israel
| about their market, culture, and system. While it is a truism
| that starting a company is easier with money than without, that
| doesn't explain the abundance of poor immigrants (here in the US)
| who build businesses. Nor is any of it a clear indicator that
| shifting policy towards blanket money hand-outs would be an
| efficient means of increasing entrepreneurship. The left-tech's
| attachment to universal hand-outs looks much more like a guilt-
| salve than reasoned, efficient policy.
| ksec wrote:
| I still remember the tweet [1] PG strongly disagree with that and
| arguing with Matthew Prince.
|
| [1] https://twitter.com/paulg/status/1129897694984646657?s=20
| dawsmik wrote:
| You could still agree with everything in the article and tweet
| this tweet. The article states the strongest predictor of
| entrepreneurship is parent's wealth. There are many other
| predictors.
| staunch wrote:
| > _The next time someone claims that starting startups is for
| rich kids, remind them that Airbnb happened because its
| founders literally could not pay their rent._
|
| Starting startups is not _just_ for rich kids. But it is
| dominated by rich kids to an extreme that Paul Graham is
| completely blind to, living in the bubble he has his whole
| life.
|
| Depending on your definition of rich, of course. Most of the
| benefit is being in the upper class, that's what "rich" means
| to people living in the lower classes. To upper class people,
| being "rich" means having a private jet.
|
| Almost every major tech founder fits the profile of having had
| the benefit of SAT prep and tutors to game entry into an
| "elite" school and parents able to provide free
| food/shelter/funding. Many parents have connections to draw
| upon.
|
| Steve Jobs is one of the very few exceptions. And, to my mind,
| it's not a surprise that he's the best tech founder that ever
| will be.
|
| Airbnb founder Nathan Blecharczyk was definitely a rich kid.
|
| "He grew up in an upper-middle-class family in Boston,
| Massachusetts. He attended Boston Latin Academy."
|
| "He was also on the business staff of The Harvard Crimson
| during his time at Harvard."
|
| https://en.wikipedia.org/wiki/Nathan_Blecharczyk
|
| The others maybe not. It's hard to know how much money a family
| has. But they moved to SF and rented an expensive apartment
| with no jobs. This isn't something most poor kids do. Who co-
| signed their lease, given that they had no income? Likely it
| was a parent ready to bail them out if they ran out of credit
| cards.
| the-smug-one wrote:
| PG should remind himself that statistical outliers exist.
|
| A short quip on Twitter does not mean anything when you have
| quantitative data against you.
| polote wrote:
| People should be reminded that PG is a VC investor and so he
| wants the most people as possible to create companies
| CalRobert wrote:
| One thing that confuses me, though - if having a strong safety
| net to fall back on is important to enable entrepreneurship, why
| does it seem like Europe is so bad at it?
| nemo136 wrote:
| We have a lot of small start-ups, the successful ones go to the
| US to get more financing and less taxes.
| iso1631 wrote:
| Europeans may be more risk averse too -- perhaps more YOLOs in
| America because there's nothing to lose, where as in Europe you
| can still have a normalish life, but it's not just a strong
| safety net either though -- many unicorn concepts were done in
| Europe, but they didn't become big globally.
|
| Maybe the lack of VC to scale - a lot of money sloshing around
| in SF. Maybe there's less of an culture of thinking "my way is
| the best" that Americans have more than others[0], maybe the
| smaller cultural market (there are 350 million Americans, only
| 30 million Spaniards). Maybe could be Americans are more into
| Consumer Ethnocentrism and less likely to buy into foreign
| things than Europeans too (the number of American flags waving
| around in the states is shocking). I wouldn't expect to see
| "Designed in Finland" if I bought a nokia phone. The US market
| has always been far harder for europeans - even Brits - to
| crack than the other way round.
|
| [0] https://infographic.tv/wp-content/uploads/2019/06/Map-Who-
| th...
| CM30 wrote:
| I think the VC one is the main factor here, as is how risk
| adverse many investors seem to be in Europe. Put simply, the
| majority of them don't like investing in B2C companies, they
| don't like investing much money in general (by US standards)
| and they certainly don't like investing in businesses where
| it'll take years for it to pay off if they're lucky.
|
| This means that if you ask for investment in something like
| Facebook/Twitter/Instagram/YouTube/Reddit/whatever you're
| almost certain to be turned down by European investors,
| because they're seen as too risky compared to say, a shop
| saying office software to ad agencies. But these high risk
| businesses are also ones with a high pay off if they do well.
|
| There's also the fact European investors seem to have a
| relatively 'stingy' standard when it comes to how much money
| is worth investing in a startup. While over there in the US
| it seems like unproven companies are getting tens of millions
| of dollars on a whim, over here it seems like PS50-100K is
| seen as a 'reasonable' investment amount, with some offering
| even less than that.
|
| That money is not gonna be enough to hire Google level
| software engineers, have all the fancy buildings and
| facilities that many young folks expect, pay for high end
| hosting platforms, pay for a massive marketing/ad campaign,
| etc.
|
| So even if you did get funding, you'd likely be outcompeted
| by US based companies flush with cash and resources that have
| years of runway compared to your 6 months or so worth.
| CalRobert wrote:
| It's interesting, when I look at EU supports for
| entrepreneurship or vc amounts it's largely a question of
| whether an investment of 6 months' salary is enough to quit
| my job. The scale is pathetic by comparison to the US.
|
| Although, I'm hoping to bootstrap something here in Europe
| for my next gig. Public healthcare, insanely cheap houses
| (compared to California) and cheaper devs should help with
| runways.
| JKCalhoun wrote:
| Your first point is interesting to me. I have a friend that
| made a crazy call on some stock options that seemed to me
| like 10 to 1 odds. When I asked him why he said essentially,
| it's the only way I'll ever have a chance to get rich.
|
| I think a lot of Americans may be driven to entrepreneurship
| because, short of the lottery, it may seem to them the only
| way to climb the ladder.
|
| Countries where life is a little more ... comfortable? ...
| may have fewer people willing to roll the dice (so to speak).
| JoeAltmaier wrote:
| I've known this for decades. When Bill Gates started publishing
| Smart Basic (or whatever) in magazines, I got a copy and saw what
| crap it was. I could do better.
|
| Why didn't I? That was my very first thought. The reason was, I
| had to work halftime to pay tuition and buy food. I was mired in
| working to live. Ol Bill had a family to support him as he bought
| resources (ads in magazines etc), recruited staff, took meetings
| etc. Always a hot meal on the table when he got home from a big
| day.
|
| One result of a Basic Income: more folks can be entrepreneurs, if
| they're willing to live off that few dollars a month. It could
| make all the difference.
| Vaslo wrote:
| While there will be a few folks that will prosper from basic
| income, I can't say I'm interested in paying people to pursue
| things that are more like hobbies. For every entrepreneur or
| community volunteer that makes a difference, I fear 9 others
| will set their sights on being gaming streamers or will just
| sit around writing blogposts. If you aren't adding value
| somewhere and are able minded and able bodied, I don't want to
| invest my money in you.
| bumby wrote:
| I really appreciate Jack Goldstone's perspective on this.
|
| Instead of perpetual UBI, he's in favor of a larger single
| lump sum paid out after a period of time post-civil service.
| The idea being instead of the slow morphine drip of $1k a
| month for life, you can get, say, $25k-$50k in a lump sum
| after serving a year or two in the Peace Corps, AmeriCorps
| etc.
|
| The advantage being service builds a stronger sense of
| community and gives you more skin in the game. Additionally,
| a larger single lump sum is more conducive to helping start a
| business as well as being cheaper long term. It parallels the
| GI Bill in a lot of aspects.
| aksss wrote:
| I'm not sure that's a good plan with such a huge dependency
| on financial wisdom. Look at Alaska - they have the PFD
| every year (well, mostly) and people just use it to buy
| TV's, quads, and all the rest. You could say it frees up
| other income to pay bills, but I think generally people
| indulge themselves with lump sums of cash unless they are
| really struggling _and_ have some good sense. In Alaska
| there are people who would favor switching the PFD to a
| monthly stipend rather than a lump sum to discourage this
| behavior.
| bumby wrote:
| I think the rationale is that between UBI and his plan,
| his has more upside. I don't think AK is a good analogy
| because, as you state, it's a nearly annual re-supply of
| cash
|
| 1) not everybody will use it because they won't want to
| do the civil service part
|
| 2) those who do won't have perpetual payments. Once you
| use it (unlike Alaska) it's gone. If you squander it, at
| least there is an upper limit to your benefit as opposed
| to a plan that acts as an open-ended annuity. I actually
| think this may help foster better decisions because for
| many, this is their one chance at such a windfall. Of
| course there will be some who squander it regardless
|
| 3) As opposed to UBI, the rest of society will get some
| benefit in the form of service.
|
| To elaborate on the financial wisdom aspect, he advocated
| for putting the money in a trust fund payable at around
| 25 years old. Similar to the GI Bill, you could also have
| strings attached as to what it could be used for (the GI
| Bill, for example, can be used to open a business, go to
| university, go to a vocational school, but not just a
| check for "free" money)
| AnIdiotOnTheNet wrote:
| > For every entrepreneur or community volunteer that makes a
| difference, I fear 9 others will set their sights on being
| gaming streamers or will just sit around writing blogposts.
|
| Providing entertainment and insight has no value to society?
| caskstrength wrote:
| People who provide good entertainment and valuable insight
| already collect money through subscriptions.
| Aunche wrote:
| In that case, you would except a lot more entrepreneurs from
| Saudi Arabia. Instead, you have a bunch of freeloaders who
| outsource their work to foreigners. They started a UBI program
| a few years ago. Before that, they had a jobs program that
| essentially functioned as UBI, since it was nearly impossible
| to fire a Saudi citizen.
| AZRS wrote:
| Not really, it can be multi factor, with a set of minimum
| values in several metrics being required before parental
| wealth becomes the dominant factor.
|
| To be glib, some people leave millions to their cats but I
| don't see any entrepreneur kittens.....
|
| That is, the baseline genetic, cultural, and environmental
| potential for entrepreneurship probably needs to be in place
| before familial wealth becomes so important.
|
| Given that Saudi Arabia has entirely different ethnic groups,
| with an extremely different culture, and a very different
| climate and business environment, I am not surprised at all
| that the principle factor in north American derived
| populations entrepreneurship isn't that in the Saudi Arabian
| population.
| theinverseidea wrote:
| I cant wait for basic income, because I cant wait to quit my
| job and focus on my ideas.
| koverda wrote:
| If you can't wait, start focusing on your ideas now. Chip
| away, one hour a day, every day.
| theinverseidea wrote:
| Of course, I'm not complaining.
|
| Just stating plainly I welcome the opportunity to do it
| full-time.
| AnIdiotOnTheNet wrote:
| I wouldn't hold my breath if I were you. As much as it is
| discussed and promoted in certain circles, it has basically
| no traction in national politics and its hard to see that it
| ever will since national level politics is currently pre-
| occupied with trying to figure out if crimes are actually
| illegal when their own party does them.
| theinverseidea wrote:
| You can tell from the downvotes that proponents of this
| idea believe people like me do not exist.
|
| We do. I welcome UBI and I will quit my job.
| anovikov wrote:
| Thing is, elites are hereditary. They always will be. If we
| enable entrepreneurship (or education) for that matter for the
| poor, other social mechanisms will appear that will make both
| of these irrelevant so that elites are preserved. Which in
| particular?
|
| I'd rather not find it out.
| birdsbirdsbirds wrote:
| As a programmer, it's possible to do the same, just one decade
| later. Jack Ma argues in some talk that people should gain
| experience before starting a company. This mirrors the numbers
| that show that older founders have a much higher success rate.
| After having worked for a decade, there can be enough money to
| handle some years without income.
|
| Bill Gates was not successful because he started young, but
| because his mother had the connections to IBM (see some other
| comment). That cannot be replicated with basic income.
| Bakary wrote:
| No aspect of a massively successful person's path can be
| meaningfully analyzed and replicated other than in general
| principles that are already obvious (be ambitious, proactive,
| etc.)
| Abishek_Muthian wrote:
| I knew Bill Gates's family was well to do when he started with
| his endeavors, but I recently came to know Bill Gates Sr. was a
| prominent personality from Howard Schultz's account of him.
|
| The story goes like this -
|
| When Howard was offered Starbucks for US$3.8 million by
| original founders, he was working to raise funds for that and
| his current investors went over his back to buy Starbucks.
| Howard was introduced to Bill Gates Sr.(Lawyer) by a friend,
| who took Howard to the building where those investors were
| straight away and threatened them out of it immediately.
| hogFeast wrote:
| Gates was also introduced to Warren Buffett through his dad.
| aksss wrote:
| Isn't this a really bad comparison though? Most
| entrepreneurs own small (I mean small) businesses providing
| services and employment to a mostly local area. Bill Gates
| and his dad are not representative of most small business
| owners, and seem rather immaterial to a conversation about
| entrepreneur success.
| Geminidog wrote:
| I mean who didn't know this? It's quite obvious that if you're
| in debt or are poor you're not in a position to start a
| startup. Meanwhile if mommy and daddy are billionaires you can
| start up a business and fail with no worries.
|
| Look at the extremes and the outcomes of the extremes. If the
| outcomes are opposite then it's quite likely that a gradient
| exists in between.
| fred_is_fred wrote:
| Bill's high school also had a PDP terminal connected to UW.
| Basically no other high school had that - which gave him an
| early head start.
| throwaway2037 wrote:
| I logged in with a throw-away account just to refute the down
| vote. However, it already looks "neutralised" after my login.
| Assuming it is true, why would anyone done vote this comment?
| Makes no sense lah.
|
| Less controversial: High level, this comment seems
| believable. It seems reasonable and possible. Has this be
| written about? If yes, please kindly provide some links. I
| would like to read more about it. This high school was really
| something special!
| souprock wrote:
| His high school was out of the norm, but certainly not the
| best. At that time, a school in LA had an IBM 360
| mainframe. Having an oil rig on school property sure helps.
| fred_is_fred wrote:
| It was discussed in the book Outliers. Here's another link
| I found discussing it.
|
| https://www.gatesnotes.com/About-Bill-Gates/Early-Days-
| as-a-...
| elliekelly wrote:
| This was mentioned in _Outliers_ , I think. I wonder what the
| equivalent one-in-a-billion "head start" technology is for
| kids today.
| reidjs wrote:
| My prediction is it will be students receiving education i
| with little to no technology. The paradox being modern
| technology is so streamlined UX wise you don't inherently
| learn anything about modern tech by using them.
| adenozine wrote:
| Call me crazy, but I think if there's any HS classes or
| earlier, teaching algorithmic thinking, those kids are have
| a crazy head start if they choose CS.
|
| I don't mean these classes where they get out and write
| class Dog(Animal): def bark(self):
| print("a Dog is barking!")
|
| but if there's young people being taught the difference
| between quadratic/exponential/polynomial algorithms, that's
| going to stew in their brains and ferment into gray matter
| that will ACTUALLY make them better programmers.
|
| I'm not an educator, nor am I educated ABOUT education, but
| it's just my hunch. I've seen many a young buck come around
| with a fancy degree or whatever, and not be able to see a
| skip-list shaped hole for his skip-list shaped peg. That's
| hard to deal with at a meta scale. I can't develop a way to
| quickly train people OTJ how to think algorithmically. They
| either learned to think about the problems that way, or
| they learned to rely on some stupid
| Haskell/Python/Elixir/Kotlin/Blub thing, and can't get any
| meaningful work done quickly.
| 908B64B197 wrote:
| > teaching algorithmic thinking
|
| Even outside of CS this will give them a huge head start.
|
| Functional decomposition is one of the most valuable
| skill one can have. Knowing what an interface is and
| being able to see a system as a series of layers of
| abstraction is too.
| DC1350 wrote:
| There's already a trend in certain high schools where
| kids start doing competitive programming, hackathons,
| blog writing, etc. way before university starts. By the
| time they're college freshmen they're ahead of the
| average new grad already when it comes to interview
| skills. These kids end up interning for FAANG or unicorns
| in freshman or sophomore year. There's thousands of them.
| dualthro wrote:
| I would guess if your parents have a VR headset, a 3D
| printer, and some sort of home lab that you can tinker
| around with. And of course, as the OP indicates, without
| worrying about earning an income.
|
| edit: and probably also superfast internet, and a machine
| with a GPU, and maybe even some way of setting up a server
| cluster
| sjg007 wrote:
| Most kids still don't have reliable internet access and
| computers at home. So I would say that is still the biggest
| tech head start.
| cgh wrote:
| Not exactly a technology, but parents who are
| mathematicians would be my guess. Developing a reasonably
| deep and intuitive understanding of statistics, probability
| and linear algebra at a young age would be a huge
| advantage, especially when coupled with eg R or Python.
| diogenescynic wrote:
| And Bill's mom provided the connection to IBM. That's a huge
| advantage.
| nec4b wrote:
| For one Bill Gates there are probably a million of other
| successful entrepreneurs who likely started poorer than you.
| Axsuul wrote:
| Why are we using Bill Gates as an example here? He is an
| extreme outlier that is far beyond the goal post of what most
| entrepreneurs would see success as. It doesn't require the
| seminal upbringing and kismet growth environment of Bill Gates
| just to get into entrepreneurship.
| Arainach wrote:
| ....but it helps a huge amount. That's the point of this
| article.
|
| It's much easier to risk doing a startup when you know that
| no matter what, you won't have to go hungry or homeless
| because there's family who will help you. You're a lot less
| worried about pouring dollars into your 401k at age 22 if you
| know that you stand to eventually inherit a few million from
| your parents, so whatever.
| Axsuul wrote:
| I'm not denying it helps and isn't significant. But why do
| you need to inherit a few million just to feel secure
| enough to pursue entrepreneurship? Being an entrepreneur
| doesn't mean you have to go big or go home. There is just
| as much entrepreneurship with immigrants as there is with
| the US-born, with the former less likely to have a
| comfortable safety net.
| Arainach wrote:
| Opportunity cost and time value of money. In general, if
| person A puts $5K a year into a 401k between ages 25-35
| and then stops, while person B puts in $5K a year between
| ages 35-65, at age 65 person A will have a larger
| retirement balance despite having put in only 1/3 as much
| principal. This generalizes to the rest of your net worth
| (salary+stock) as well.
|
| If you win the lottery and manage to have significant
| equity in a startup worth millions, congratulations. If
| not, you're faced with the prospect of being older and
| having minimal (or at least far fewer) assets. This is a
| big problem if you want to raise a family or even if you
| want to advance your status in life.
|
| The economics of software are simply different. Someone
| good enough to start a business that brings in $10-20K
| MRR and barely survive is almost certainly good enough to
| get hired and paid $200K+ by any number of companies. If
| you're not going big or going home, it doesn't make sense
| to do a software startup these days.
|
| Even in other industries, starting and running your own
| business is a LOT of work. If your goal isn't to (try to)
| get rich, you can almost always make more money climbing
| some corporate ladder for a lot fewer hours.
| mixmastamyk wrote:
| The focus here is on the hustling Bill of the 80s, not
| billionaire Bill of the 90s.
| ozim wrote:
| Don't forget that this guy full name is: William Henry
| Gates III.
|
| He is not your friend Bill from across the street that most
| of people could compare with.
| mixmastamyk wrote:
| Next you'll be telling me ascots aren't standard morning
| wear. (One of my favorite cartoon alter egos as a child
| was Henry Cabot Henhouse, III.)
|
| Still this is the whole point of the article, he makes a
| reasonable example.
| mhh__ wrote:
| On top of the basic income idea I also would be perfectly happy
| to have the government fund little businesses in a similar
| manner - not a corporate basic income, but the next great
| business might be in the head of someone working for minimum
| wage in shop. Give them a few quid, keep an eye on them, see
| where it goes.
| methyl wrote:
| > pay tuition
|
| Going to college is not required to become a successful
| entrepreneur.
| danilocesar wrote:
| While you have a few examples of drop outs (Zuck, gates, etc)
| the vast majority of those famous entrepreneur went to
| college.
|
| Not a requirement, but increases your chances a lot.
| aksss wrote:
| Why are we only talking about the small percentage of
| entrepreneurs that become famous? Most are not and never
| will be, nor is that a requirement for entrepreneur
| success. That bar is entirely irrelevant to any
| conversation about how to encourage entrepreneurship.
| JKCalhoun wrote:
| Never mind the 99% (a guess here) of successful people that
| are not "entrepreneurs" but wealthy, successful.
|
| Unless we are only talking about Bill Gates.
| SilasX wrote:
| Or all the UBI money would pump up rents to the point that
| living costs make it infeasible again.
| scotty79 wrote:
| Then you can tax landlords an funnel money back into UBI
| epistasis wrote:
| Rents only get pumped up if we don't have enough housing to
| go around... in which case regular incomes do the same thing.
| iguy wrote:
| But we do have lots of housing, it's just located in places
| people don't want to live. Rents are high in places they
| _do_ want to be, and that 's partly a positional thing --
| if you want to live where the top-10% of earners live, you
| need to bid against them for housing.
| triceratops wrote:
| > it's just located in places people don't want to live
|
| Often because there aren't any good jobs there. With UBI
| entrepreneurs can self-select and live in places with low
| rent and weak job markets.
| PeterisP wrote:
| Thing is, requirement for on-site employment _requires_
| you to live where lots of people live; only the very
| wealthy can afford to live in places without jobs nearby
| - as UBI decouples income from where you live, then it
| would be a pressure to equalize rents, as underemployed
| people - the demand for whose labor is decreasing and
| will decrease further - can afford live in the many
| places which are currently shedding population because of
| lack of jobs despite being actually very nice to live in.
| iguy wrote:
| Maybe. But the counter is that entrepreneurship has
| strong network effects, it _really_ pays to be around
| other talented people and hear about the future they 're
| busy inventing. Maybe we'd see the opposite, people
| leaving a stable job which ties them to some unexciting
| place, to try to make it in NYC.
| tsimionescu wrote:
| > But the counter is that entrepreneurship has strong
| network effects, it really pays to be around other
| talented people and hear about the future they're busy
| inventing.
|
| The actual powerful network effects are essentially a
| somewhat benign form of cronyism, not mere inspiration
| from other entrepreneurs. People do more business with
| less haggling with friends than with strangers.
| nlitened wrote:
| > People do more business with less haggling with friends
| than with strangers.
|
| This is how humans work. This cannot change with UBI.
| tsimionescu wrote:
| Agreed, wasn't trying to claim that it would, just
| pointing out that network effects are not about
| inspiration, mainly.
| iguy wrote:
| I think you're talking about networking for money, and
| that's a thing.
|
| But there _are_ also ideas. Even in fields where there 's
| basically no money, half the world's innovation happening
| within a circle of a few miles is routine. For instance
| this happens in music, repeatedly.
| epistasis wrote:
| From this angle, a UBI is even more powerful, in that it
| will go a lot further in areas that are less economically
| productive, and let us use "surplus" housing there.
|
| Ideally we'd just let more people live closer together
| like they want to, but the elites won't let more people
| get close to them.
| Lammy wrote:
| The supply of housing in the places people do want to
| live is artificially constrained, intentionally driving
| up prices to achieve the New Segregation.
| rubicon33 wrote:
| Exactly. The high costing of housing really has more to
| do with the type of person you've living around/near,
| than the house.
| SilasX wrote:
| Meaning that, unless you fix housing, UBI doesn't make a
| difference.
| epistasis wrote:
| I would think almost the opposite. The prices are high
| where there are high incomes--California, NY, Boston,
| Washington...
|
| If you don't need to chase a high income, you can move
| where there's cheaper rent and try to innovate there.
| Assuming that you don't need any of the spatial resources
| of the expensive areas. (A _big_ if... but perhaps you
| can grow your idea then move to the areas with lots of
| capital.)
| JKCalhoun wrote:
| I imagine UBI would be good for landlords.
| SilasX wrote:
| Henry George held that belief on steroids and thought that,
| unless you taxed away the site value of land, then almost
| all of the benefits of any good policy or improved economic
| activity would accrue to landowners.
| JKCalhoun wrote:
| And never mind that Big Money is following the business
| plan that the future of America is all of us are renters.
|
| Well, you know, everyone but the uber-wealthy.
| tenebrisalietum wrote:
| UBI needs to be paired with restricting rent increases or
| eliminating zoning restrictions that limit housing supply
| then.
| xapata wrote:
| > restricting rent increases
|
| No, that'll just create a lottery system and unemployment
| or lower wages, because people won't be able to move to the
| jobs.
|
| > eliminating zoning restrictions that limit housing
|
| Yes, this would be great.
| thisisnico wrote:
| As a landlord, and landlording in an area with restricted
| rent, it makes zero difference. It's only good if you stay
| where you rent, but if you move, it's market rent. You
| can't adequately control market rent because there are so
| so many variable on what market rent is for every
| individual unit, location, type, etc. I'm all for the
| eliminating zoning restrictions though.
| nostrademons wrote:
| That's the case for rent restrictions. It's actually
| worse - rent control decreases housing mobility (nobody
| wants to give up a rent-controlled apartment, even if it
| no longer meets their needs) and disincentivizes
| development, so the prevailing market rate for _non_
| -rent-controlled apartments goes up.
|
| But eliminating zoning restrictions and building more
| housing actually does work. Then when you move, you have
| your pick of many apartments to choose from, and nobody
| has pricing power to charge more.
| sudosysgen wrote:
| I live in a rent-restricted area. There is quite a bit of
| construction, and the average person moves almost once
| every two years.
|
| The effects of rent-restriction you quote are theoretical
| effects. In the real world, it does work, as long as the
| rent-restrictions are well-thought-out.
| xapata wrote:
| My interpretation of the evidence leads to the opposite
| conclusion. Here's a good summary:
|
| https://www.slowboring.com/p/induced-demand
| sudosysgen wrote:
| This article is completely orthogonal. Yes, building more
| pushes price down. Eventually though, you stop being able
| to increase density economically, and at that point the
| only way to prevent housing prices from increasing is
| rent restrictions.
|
| It's important to note that even according to your
| article, you need to drastically increase supply even for
| a modest decrease in rent.
|
| No one here is against increasing density. It is however
| insane to believe that increasing density is enough to
| fix the problem. Cities at the edge of density still have
| affordability issues, whereas much less dense cities with
| appropriate rent restrictions don't.
|
| There is not a single reference to induced demand here.
| As long as housing stays a profitable investment, and as
| long as density cannot be increased infinitely without
| increasing marginal costs, then rent will rise.
|
| The only long term solution is to reduce the
| profitability of speculation on land prices, so that only
| productive activities, such as building, are profitable.
| Rent restrictions are part of this, as rent is a large
| part of the profitability of land.
|
| And rent restrictions can work. There are many cases
| where they have been implemented without a significantly
| negative impact to mobility. So why oppose them?
| xapata wrote:
| Not completely orthogonal. Perhaps they should be, but
| the intersection of the two sets (advocates for rent
| restrictions and advocates of zoning restrictions)
| appears to be a large portion of the total, as far as I
| can tell.
|
| > enough to fix the problem
|
| I think we need to define the problem before we start
| arguing solutions. In my view "can't afford the rent" is
| a poverty problem, not a rent prices problem. So, I want
| anti-poverty solutions, not rent price adjustment
| solutions. I view "the rent is too high" as a distinct
| problem from "can't afford the rent." So in my mind, rent
| price adjustments via price regulation are inappropriate
| for both problems.
|
| > so that only productive activities ... are profitable
|
| I understand taxing negative externalities, but this
| sounds anti-democratic. Who decides what's productive?
| Let's put an appropriate tax on pollution (broadly
| defined) and let the market figure out what's most
| productive. That's what it's good at.
|
| > why oppose them?
|
| I don't know of any instances where rent control didn't
| affect mobility. Are you considering the effect on
| immigration and wages in other cities? If they didn't
| affect mobility, then almost by definition they had no
| effect whatsoever. They'd have to be covering such a tiny
| portion of the market that they can essentially be
| ignored, both cost and benefit. Which makes them a waste
| of bureaucracy.
| sudosysgen wrote:
| There is a very simple definition for things that
| absolutely aren't productive. Things that produce nothing
| are not productive. Owning land is not productive, and
| should not be profitable at all. It is settled economics
| that the profitability of non-productive actions (often
| called _rent_ -seeking) is bad.
|
| It doesn't matter what your threshold for affordability
| is. Rent is increasing faster than economic growth, on
| average. It will continue increasing at this rate until a
| large part of the population literally cannot afford
| housing. You're never going to be able to solve the issue
| of people not being able to afford rent once it stops
| being economical to increase density, because there will
| be no incentive for landlords not to push up rent until
| people can't afford it anymore and start to move out
| (which is what we don't want to happen).
|
| There are no cases where rent control literally did not
| affect mobility. There are many cases where there _is_
| rent control, _and_ high mobility. The city in which I
| live has around 40% of renters move each year, which is
| more than enough mobility, and rent control. You do this
| by using the additional regulatory framework to make it
| easier for people to move.
|
| Your first paragraph is literally meaningless. No one
| here said anything about zoning except you. If you want
| argue against someone else, then argue against someone
| else. The arguments I put forth and your response were
| completely orthogonal.
|
| The rest is simply pure ideology. If you want to convince
| people or build a coalition with people that disagree
| with you, put your free-market absolutism aside and focus
| on solutions and problems.
| ch4s3 wrote:
| > and the average person moves almost once every two
| years
|
| Are you sure? There's lot of research n rent control and
| it basically all highlights decreased housing mobility,
| event he pro rent control authors mention it asa
| downside.
| sudosysgen wrote:
| In my province, the rent office arranges for two measures
| to counterbalance and increase mobility. Firstly, most
| rental agreements are made to end on July 1st - legally
| up to 1974 but now mostly out of tradition. This allows
| for much less friction, as everyone can change housing
| without any downtime with access to the full market.
|
| Secondly, landlords are allowed to evict if they do
| sufficient improvements to the property, which allows a
| safety valve.
|
| There are so many people that move in the month of July,
| that over 7% of the entire population - including people
| who don't rent - moves out on that day. It's pretty much
| impossible to get a rental truck to move for the entire
| month of July.
|
| The statistics are that, around July 1st alone, 250 000
| out of 900 000 people move. Add in people that don't move
| in this period, and you get almost half of renters in the
| entire city moving, despite strict rent control.
|
| You just need to do your rent control carefully. There
| will be some reduction in mobility, but if you
| counterbalance them, you can have minimal impacts in
| mobility and large impact in affordability.
| ch4s3 wrote:
| Ahh, are you in Quebec?
|
| > landlords are allowed to evict if they do sufficient
| improvements to the property
|
| This is a REALLY unusual provision in rent stabilization
| laws in the US and as far as I know the EU which normally
| don't allow evictions like this and severely cap rent
| increases for improvements.
|
| If you are in Quebec, the RDL is really unique as a form
| of rent control in that it doesn't set prices or cap
| increases but rather acts as an arbiter for rent increase
| disputes. I understand that there are some local
| criticisms of the system, but I'm not very well versed on
| the subject.
|
| I think most HN comments about rent control are referring
| the type that exists in SF where prices are more or less
| locked in place or otherwise set by the government.
| sudosysgen wrote:
| The Regie des logements in Quebec absolutely does cap
| price increases, or even forbid them outright some years.
|
| It also does extra controls that many countries don't do,
| such as capping price increases even if the tenant change
| (the tenant needs to request the former rent, though).
|
| Allowing rent increases in the case of renovations is
| unusual, but not that rare either. That said, it's
| absolutely not "just a dispute resolution board". It 100%
| is traditional rent control with capped price increases,
| on top of the rest.
| ch4s3 wrote:
| I looked to me like they don't set hard caps based on
| their explanation here[1], but again I'm not overly
| familiar with the RDL. Can you point me to a better
| explanation of how it works? I'm quite interested. French
| language sites are fine.
|
| [1]https://www.tal.gouv.qc.ca/en/news/calculation-of-
| the-2020-r...
| sudosysgen wrote:
| There are indeed no hard caps. There is a formula that is
| used that takes into account various costs, such as
| heating and electricity as well as improvements made to
| the property, and using that formula along with the
| included utilities, a maximum percentage of price
| increase is calculated.
|
| It's generally under inflation. A typical price increase
| cap might be 1.8%.
|
| For cases where the landlord actually asks for a hearing,
| the average is of around 2.9%.
|
| If no major repairs were necessary, you'll see around 1%
| or increase, maybe a bit more.
| tenebrisalietum wrote:
| I was thinking of something like a cap on rent increase
| (e.g. max 10% rent increase or something like that), not
| banning rent increase entirely, if it matters. Maybe with
| exceptions if the landlord improves (not just maintains)
| the property.
| mc32 wrote:
| Soviet style housing is an answer and also not an answer.
|
| It would provide housing for people on UBI, but because it's
| operating on a thin budget, over time it becomes less
| desirable.
|
| Now, it's not always the case _if_ you can get the tenants to
| cooperate and pitch in on basic maintenance and keep anti
| social behavior at bay ala Singapore, but my feeling is we're
| not of the same mindset as Singaporeans.
| eeZah7Ux wrote:
| Any creation of affordable housing contributes to slowing
| down increasing prices.
|
| Many countries do this by putting legal limits against
| gentrification.
| willcipriano wrote:
| > Any creation of affordable housing contributes to
| slowing down increasing prices.
|
| As does creation of market rate housing[0], even in the
| short term.
|
| [0]https://research.upjohn.org/up_policybriefs/13/
| ch4s3 wrote:
| > Many countries do this by putting legal limits against
| gentrification.
|
| What does that even mean? I'm not aware of any country
| that restricts the change in the income mix of housing,
| or the renovation of dilapidated housing by new
| residents.
| eeZah7Ux wrote:
| There are thousands of building regulations.
|
| Here are few examples among some EU countries: setting a
| minimum density and number of floors in urban areas to
| prevent "mcmansions".
|
| Mandated commercial areas (aka shops) on the ground floor
| on new buildings.
|
| Requirements on walkability applied to new road design to
| prevent sprawls e.g. limit cul-de-sacs.
|
| Minimum and maximum percentage of buildings for
| industrial / office / shop / domestic use.
|
| Minimum and maximum apartment size.
|
| Tons of limitations on renovation of historical
| buildings.
|
| A lot of this stuff makes it very difficult to quickly
| transform an already urbanized area into a bunch of
| super-luxury villas or similar.
| burntoutfire wrote:
| > Now, it's not always the case _if_ you can get the
| tenants to cooperate and pitch in on basic maintenance and
| keep anti social behavior at bay ala Singapore, but my
| feeling is we're not of the same mindset as Singaporeans.
|
| I live in Soviet-style housing in Poland. The antisocial
| behavior of some tenants (it seems that there's always at
| least one) is something you learn to live with. Over the
| years, you start ignoring the occasional puke in the
| hallway or automatically put on headphones when someone
| next to you starts blaring loud music again. All in all,
| given how much people pay for such flats in Poland, my
| guess is that it would be totally acceptable for most
| people to deal with the inconveniences, if the flat was
| free as a part of the UBI.
| abhiyerra wrote:
| Healthcare and Basic Income would do a lot to encourage
| entrepreneurship. I had to also wait till I paid off my student
| loans. There are a whole lot of shackles if you come from a
| humble background to starting a company full time.
|
| On the other hand it has never been cheaper to start a side
| hustle.
| BluePen8 wrote:
| With the caveat that as long as it doesn't require physical
| space.
|
| With the cost of space in any major city, anything that
| requires a workshop, working space, or significant storage
| space is out of the window nowadays for anyone in a major
| city.
|
| When I was a teenager my side hustle was buying, fixing, and
| selling used cars. My dad's was the same with small fishing
| boats.
|
| The story of these billion dollar companies being started in
| their parent's garage sounds inspirational and all, but I'd
| imagine less so for the kids whose parents can't afford home
| with a garage.
| Valgrim wrote:
| Exactly, starting out in a garage sounds like starting out
| from nothing, but in reality it means that your parents
| have a house with a garage that they lend out to you for
| free, where you can do whatever you want (so forget condos
| undergound garages), and that house is probably not very
| far from a large city so you have access to clients,
| employees and resources.
|
| You don't need your parents to be millionaires to get that,
| but in today's terms this is definitely upper middle class.
| mixmastamyk wrote:
| Yes, many of the success stories of the 90s started out
| like you mentioned, the second paragraph was often, "then
| I borrowed 20k from Uncle Bob to buy a used Sparc
| station.."
| umvi wrote:
| > Healthcare and Basic Income would do a lot to encourage
| entrepreneurship
|
| Would it though? From what I understand EU has way better
| social safety nets, yet much smaller entrepreneurship rates
| compared to USA.
|
| Counter-intuitively, limitations drive innovations. When your
| resources are limited, you are forced to innovate. When you
| have infinite resources, you tend to waste it. Ever notice
| that when you have infinite time, you waste it doing nothing,
| but when your time is extremely constrained, you tend to use
| it much more effectively? Same thing happens with companies
| and money. Read: NASA, Texas Instruments developing laser
| guided bombs, etc.
|
| For example, _because_ TI had such a limited budget for
| developing laser guided bombs, they couldn 't afford a wind
| tunnel like their defense-contractor competition. So they
| dropped scale models of bombs into swimming pools and
| performed mathematical transformations on the measurements.
| TI's design ended up being far more innovative and
| outperformed their money-flush competitors[0]
|
| All that said, I think there is some truth to what you say.
| If healthcare were decoupled from employers, I would be much
| more likely to leave my current company and start my own
| since that is one thing holding me back.
|
| [0] https://en.wikipedia.org/wiki/Paveway
| kenjackson wrote:
| There are cultural differences in the EU and the US. I
| don't think you can control for social safety nets, but not
| the rest of culture. That said, the existence of social
| safety nets could well be related to the other differences
| in culture.
| adsche wrote:
| Regarding the entrepreneurship rates, are gig economy
| workers considered entrepreneurs?
|
| Also, where did you find these numbers indicating such a
| big difference?
| walshemj wrote:
| Exploited working class people who have no other choices
| I think you mean
| mrcartmenez wrote:
| Sweden, for example, has much better safety nets and better
| income equality than the US, and is rated as being much
| easier than the US to start a business.
|
| Essentially, Swedes have far greater economic freedom due
| to greater economic equality. Despite not having UBI.
| spamizbad wrote:
| > Would it though? From what I understand EU has way better
| social safety nets, yet much smaller entrepreneurship rates
| compared to USA.
|
| Germany is pretty close to the United States, despite the
| United States being a wealthier nation by comparison.
| mixmastamyk wrote:
| Basic income in my understanding is far from "infinite
| resources," and a lot closer to ensuring folks have at
| least McDonalds levels of nutrition available.
| zests wrote:
| I'd guess that basic income would encourage
| entrepreneurship in individuals with a high degree of self-
| actualization but not individuals with a low degree of
| self-actualization.
|
| Whether or not basic income itself would increase the
| degree of self-actualization people have is not an easy
| question. It is in fact a complicated question deeply
| integrated with culture. I'd guess peoples opinion on this
| question mostly reflects their political ideology and/or
| support for basic income.
| medium_burrito wrote:
| China Lake's development of the Sidewinder missile is a
| similar story - minimal resources, compared to the vast
| amounts wasted on radar guided missiles that more or less
| didn't work until much later.
|
| However, I think it's orthogonal. Limitations are good, but
| having a basic fallback is also good.
| cgh wrote:
| But the study says exactly the opposite, that ample
| resources are key to innovation. Basic income would replace
| parental income as a backstop.
| ska wrote:
| > Would it though? From what I understand EU has way better
| social safety nets, yet much smaller entrepreneurship rates
| compared to USA.
|
| This is definitely a multiple factor problem, and health
| care is just one of them. A couple obvious ones - social
| acceptance/rejection of this as a path, and
| government/financial friction. If you have only been
| exposed to the US, it's pretty shocking how hard it is to
| get a company up and running in many countries. One of the
| biggies is fairly direct access to capital with the right
| risk appetite, which itself is complex.
| tormeh wrote:
| This. Not sure about the US, but starting a company seems
| pretty damn daunting from where I'm standing
| ska wrote:
| This is all jurisdictional of course, but in parts of
| North America (I'm including Canadian provinces as well
| as US states) you can incorporate in less than 30 min
| online for a few hundred dollars. There are a few other
| details you'll have to sort out before your first tax
| filing, but that's about it.
| dbingham wrote:
| 1. Europe has healthcare but not basic income.
|
| 2. Innovation and entrepreneurship are not the same thing.
| Innovation is coming up with something new,
| entrepreneurship is starting a new business to make money.
| The former does not always lead to the latter, and the
| latter does not always require the former (in fact, it
| rarely does).
|
| 3. What the research in this study shows is that
| limitations of the financial and survival sort do _not_
| drive entrepreneurship.
| heavyset_go wrote:
| Rates of entrepreneurship are higher in Scandinavian
| countries than they are in the US.
| Gibbon1 wrote:
| I've heard that as well. A reminder that most
| entrepreneurs aren't founding web tech companies.
| 908B64B197 wrote:
| > Would it though? From what I understand EU has way better
| social safety nets, yet much smaller entrepreneurship rates
| compared to USA.
|
| Try firing an employee in France. It's a two year process
| minimum and in the end a judge might rule you can't do it.
|
| Also the regulatory landscape in the EU imposes such a high
| burden on entrepreneurs. Coupled with investors being way
| more conservatives.
| La1n wrote:
| >Counter-intuitively, limitations drive innovations. When
| your resources are limited, you are forced to innovate.
|
| If this was true you'd see people from poor families being
| more entrepreneurial than those from rich.
| umvi wrote:
| Well, as another commented pointed out, there is a
| difference between innovating and starting companies. So
| I would argue that you _do_ see more innovation from poor
| families than rich families. After all, rich families
| have no need to innovate, they just throw money at
| problems until they go away. Poor people are financially
| constrained and have to think outside the box to solve
| their problems. But you also see more companies started
| by rich people. Not necessarily _innovative_ companies,
| mind you, just companies.
| tsimionescu wrote:
| > So I would argue that you do see more innovation from
| poor families than rich families. After all, rich
| families have no need to innovate, they just throw money
| at problems until they go away.
|
| This is not something to argue about, this is something
| that that we should measure.
| umvi wrote:
| And how do you measure innovation in poor families? Does
| jerry-rigging your car to work using duct tape and
| aluminum cans count?
| tsimionescu wrote:
| In the discussion here, I am assuming innovation refers
| specifically to innovative products and business ideas,
| not stuff that remains confined to your close family.
| umvi wrote:
| Well yeah, you probably aren't going to get a lot of
| _business innovation_ from the poor, but because they are
| resource constrained, you 'll see innovation in other
| forms - such as how they adapt to broken cars,
| appliances, shortage of food, clothing, etc.
| mixmastamyk wrote:
| In my travels in Brazil I saw some incredible hustling
| going on in poor areas.
| Mediterraneo10 wrote:
| Healthcare is decoupled from employment in a number of
| countries, but barriers to entrepreneurship remain high,
| sometimes even higher than in the United States.
| war1025 wrote:
| > Healthcare and Basic Income would do a lot to encourage
| entrepreneurship.
|
| I have a dream that Healthcare will someday be decoupled from
| employment. So much waste is tolerated simply due to the fact
| that the majority of the expense is borne by your employer
| before the number they put on your paycheck.
|
| I can live on a part time salary without issue, but health
| insurance, which is already $200/wk for my family with my
| employer chipping in, would jump to more like $600/wk, which
| is just completely untenable. There is no sane reason why
| health insurance should be my single largest expense each
| month.
| Someone1234 wrote:
| They could even do this without too many major changes.
| Just three in fact:
|
| - Increase HSA Contribution Limit
|
| - Allow both Traditional & High Deductible insurance
| premiums to be paid with the HSA
|
| - Ban employers from directly providing/choosing insurance
| (ex. US Military)
|
| Essentially everyone goes out onto the open market and buys
| their insurance using pre-tax HSA contributions (similar to
| tax benefits to employers now). Employers can continue to
| "help" be providing dollars to HSA/HSA match, rather than
| picking your insurance for you.
|
| There are more radical and arguably better solutions, but
| if you want to see a large improvement with minimal
| changes/the least controversy this is it. Most insurance
| companies could likely just convert existing employer
| provided policies into employee direct ones paid via HSA.
| snakeboy wrote:
| Is there any momentum behind these ideas? I don't have
| any idea what the state of US healthcare reform is.
| aksss wrote:
| Yes, at least two big changes were attempted in last
| administration with 50% success rate. First, loosening
| restrictions on association health plans which would have
| allowed diverse groups of small businesses in an area to
| band together to negotiate lower rates as if a larger
| organization. This was struck down by the federal court.
|
| The second, and successful, move was to allow health
| reimbursement accounts (HRA) to pay for insurance
| premiums on the individual market. These plans, an ICHRA,
| would allow a small business to essentially give pre-tax
| dollars to the employee for buying health insurance as
| long as the reimbursements were applied consistently
| across the employee base.
|
| The second was great, but the first would have been even
| better since it would have lowered group rates.
| Individual insurance premiums and deductibles (when not
| subsidized by gov) are often so expensive they are hard
| to justify. Still ICHRA's are at least another tool for
| employers and employees to share the burden.
| Someone1234 wrote:
| Nope.
|
| The current "war" is between complete re-invention and
| essentially the status quo. This is neither of those,
| therefore it upsets both sides, and gets squished by
| "perfect is the enemy of good."
| luigibosco wrote:
| You're assuming people have the money to contribute to an
| HSA and an employer when many do not.
| Someone1234 wrote:
| I am talking about a solution to separating employers
| from your choice of insurance policy, you're talking
| about an entirely different issue.
|
| I said there are other, arguably better, solutions (e.g.
| universal coverage) whereas this is an attempt to solve a
| near-term issue of employer provided health insurance.
|
| If you can get the political support to pass universal
| reform to health coverage in the US, then absolutely do
| _that_ instead. In the current political climate this
| compromise is still a vast improvement.
| aksss wrote:
| In 2019 the Trump administration made a change allowing
| HRA plans to pay for insurance premiums. That went into
| effect on Jan 2020. That effectively allows a small
| business to take part/most/all of the employee's
| insurance burden from the individual market
| (healthcare.gov) onto their expense sheet rather than the
| employee paying for it with post-tax dollars. The problem
| of course is that in a number of states the individual
| market plans are still pegged to the price of unobtanium,
| but it's a good step forward. The particular vehicle is
| called an ICHRA.
| danilocesar wrote:
| You know that your dream is actually the standard in every
| developed nation except the US right?
| war1025 wrote:
| That's what makes it seem achievable.
| nemo136 wrote:
| That is more or less what we have in France, it comes with
| other issues... like really high taxes.
|
| But we have many start-ups, which usually migrate to the US
| as soon as they grow big.
| omgwtfbyobbq wrote:
| This, times a large number.
|
| It doesn't have to primarily be UBI either. Given where we are
| technologically, it could be PV/wind/demand
| management/batteries on every roof, a semi-automated garden in
| every yard, etc... With a little bit of UBI for whatever people
| aren't able to do at home (eg TP).
| danenania wrote:
| It definitely makes a huge difference to have savings if you
| want to be an entrepreneur. But these days, a decent programmer
| can save up a year or more of runway _and_ build industry
| connections just by working for a few years and not spending
| outlandishly. If the startup doesn 't work out, a new cushy job
| is waiting for you.
|
| So yeah, startups are risky and favor the wealthy, but let's
| not overstate the case. I'm in favor of basic income and I
| agree it would be a boon to entrepreneurship, but people with
| the skills to build a tech startup have already won the
| lottery. We're not the ones in need.
| mhh__ wrote:
| Whereabouts? I guess this might be true in the valley but in
| the UK for example I'd imagine you'd have to live off nowt
| for years to be able to do that - i.e. salaries are pretty
| horrific in some industries.
| pastage wrote:
| That means some extra years/decades off from your career, to
| get to the same level of security. So this is not overstating
| it, it just basically says if there is capital available
| ambitious ventures will succed at a more frequent rate.
| advisedwang wrote:
| Realistically a startup needs more than a year or two of
| runway for one person. It requires several years of runway
| for several people, plus paying for infrastructure, legal
| work, marketing etc.
| [deleted]
| snarf21 wrote:
| This is all very true but UBI isn't the solution.
|
| The middle class can win this game with a perspective change.
| Instead of saddling their kids with school loans and pressuring
| them to "get a job" right out of school, they should give them
| 5 years where they "angel" them in their own houses for a stake
| in the company. Get four young sharp kids a couple of years
| with no bills to pay and I bet they could create something
| viable.
|
| This is the difference. Entrepreneurs need funding and
| encouragement. Parents could play this role instead of VCs and
| they could bank big when funding comes. You don't need $MM to
| fund a start-up if you approach it will bootstrap principles.
| remirk wrote:
| This works with the assumption that parents have enough
| disposible income to fully maintain their children well into
| their 20's. Which isn't always the case.
| terryf wrote:
| I am a son of a single mother, who was a teacher at the time.
| In a country that was just recently liberated from the soviet
| union. Trust me, I was _not_ rich.
|
| Started my first company at 20, after dropping out from
| university. (mom wasn't exactly happy)
|
| Sorry, your excuse doesn't apply.
|
| Unless you want to claim that going to a state-funded
| university is a privilege, in which case I guess everyone in
| all the countries where universities are free are privileged?!?
| mgkimsal wrote:
| The term 'privileged' almost becomes meaningless when
| comparing between different countries/cultures. Yes, compared
| to many in the US, you were 'privileged' with respect to
| education, because you had free university-level education
| provided. This is something that is outside the reach of many
| who want it here, and for some who get it, they get it with
| burdensome financial strings attached. So..., in that
| respect, you were privileged. People in the US are
| 'privileged' in other respects compared to your
| circumstances. But using the word 'privileged' as some sort
| of singular distinctive quality doesn't make much sense.
| narrator wrote:
| The problem with most welfare schemes is they have big welfare
| cliffs. You make one dollar more than a certain amount and you
| lose thousands in benefits. It's the virtual equivalent of a
| greater than 100% marginal income tax.
|
| Also, countries with greater welfare programs don't have
| greater entrepreneurship. The opposite is somewhat true.
| Probably due to higher taxes and it's very hard to go out of
| business once you're in business and to fire employees in other
| countries.
| Knufferlbert wrote:
| I don't think those reasons are true for the "lack of
| entrepreneurship". I'd love to know some numbers actually, I
| know EU doesn't have as many unicorns like Uber, Google,
| Amazon, etc. But that is a tiny amount of people who started
| those (and now employ a staggering number of people).
|
| I think there are two reasons why that may be: - Generally
| larger regulatory barriers. GDPR is an obvious recent one,
| but also market complexity with EU countries regulations/laws
| differing more than US states. I think (without knowing).
| That coupled with "first to market" advantage of US
| companies. - Money isn't as big as a driver for Europeans.
| "Rags to riches" is a pretty American thing. "Get educated
| and live well" is closer to our lookout I think.
| yardie wrote:
| I know that France is the butt of many jokes about work, "no
| French word for entrepreneurship," but in my experience
| almost every business I interacted with around socialist
| Paris was a small, independent business. This was the
| unintentional consequence of labor laws. <50 employees fall
| under one set of labor laws, >50 employees you're in a tight
| spot until you're >1000 employees. Then the additional
| overhead of benefits for those employees is subsidized by
| economies of scale.
| sjg007 wrote:
| Having UBI could loosen job protection rules and labor laws
| too.
| yardie wrote:
| UBI and single-payer HC may be fastest way to unlocking
| capital to the lower and middle class. I know far too
| many smart people who stick with a job they hate simply
| because the group healthcare is the only thing keeping
| the individual or family from bankruptcy.
| chaganated wrote:
| Correlates? Sure. Causes? I strongly doubt it. Drop a million
| bucks on Joe Blow and see how things turn out.
|
| I see the milieu of having semi-affluent parents--being steeped
| in the ins-and-outs of business, law, assets, broader social
| ties, and higher social standing--as a far more powerful edge
| than a wad of cash.
| fwip wrote:
| Drop a small loan of a million dollars on an idiot, and he ends
| up being President for 4 years.
| chaganated wrote:
| 1) This is ideological bullshit rather than a good faith
| argument. 2) Adjusted for inflation, I'm sure this
| description fits more than one president, so you'll need to
| be more specific. 3) Whichever example it may be, I'm sure
| that president also had a wealth of credentials, connections,
| shibboleths, etc. of greater value than a mere one-million
| fiats.
| zests wrote:
| Intelligence is overrated. It's one piece of the puzzle. If we
| look for "one factor" that's responsible for success we are going
| to be searching for a long time.
|
| Income is a more robust metric because it is a somewhat natural
| combination of many personal characteristics.
| caturopath wrote:
| This seems to be interpreted as a meritocracy vs. oligarchy sort
| of thing. I agree with the basic takeaways there (about
| opportunity, resources, discrimination, network effects, etc.),
| but even if we had a meritocracy, I'm not sure this would be an
| unexpected outcome.
|
| Since when did anyone think the smartest people, those with the
| best booklearnin learning acquisition, would be the best
| entrepreneurs? I don't know that the biggest Ayn Rand cultist
| would have that expectation. It's equally plausible that the
| traits that lead to entrepreneurship are heritable but not
| learning-related.
| Scoundreller wrote:
| Reminds me of a newspaper writeup on a recentlyish murdered
| billionaire where the murderer is still on the loose, and one of
| the sons had a writeup about his alibis. One proof of his
| whereabouts was an iPhone picture of his crypto seed he took
| while in another country. Bad opsec, ugh.
|
| The child was running a nothing special b&m chain business, but
| they had a "loan" from the billionaire to acquire and expand the
| business.
|
| I'm like, okay, at least a loan has to be paid back.
|
| Then half-way through the article, there's a shareholder
| agreement involved and I'm like, _it doesn't even need to be paid
| back!!!!_ , ugh.
|
| How is Joe Schmoe supposed to compete in a sector where the
| competition has that kind of financing?
| maskys wrote:
| In other news, the sun rises in the east and sets in the west.
| m-i-l wrote:
| Certainly within London, you'll have a hard time finding a
| startup founder who doesn't have a privately-educated upper-
| middle class accent, i.e. who doesn't have wealthy parents. And
| while there are startup accelerators focusing on helping groups
| like female entrepreneurs and black entrepreneurs (which is great
| don't get me wrong), there aren't any that focus on helping lower
| or lower-middle class entrepreneurs, i.e. those who don't have
| wealthy parents.
| elliebike wrote:
| I suspect a large part of this is due to the fact that those with
| wealthy parents are more likely to have a) family money to fall
| back on if things go wrong and b) family investment in the early
| days
|
| Everyone else has to seriously consider the (high) risks of their
| startup failing and not being able to afford rent, or whether
| their idea is worth burning their life savings.
| brundolf wrote:
| Your parents don't even have to be wealthy. Just having parents
| who are financially stable, own their house, could literally
| keep you off the streets and give you food if you fell on truly
| hard times, makes an _enormous_ difference compared to not
| having that.
| polote wrote:
| If you had read the article, you would have seen that it's
| exactly what they say : "A strong economic base may benefit
| those interested in setting up a start-up, providing an
| economic safety net in the event of failure,"
| cmrdporcupine wrote:
| It's also highly cultural; if the people around you that you
| see as role models are serious about business, connections,
| management, etc. that's what you pursue. And higher management
| comes more naturally to people who have spent their childhood
| in an ethical framework that divides people into manageable
| units, too.
|
| My working class / middle class parents just didn't have room
| in their worldview for having employees, nor would they feel
| comfortable delegating their household aspects to maids and the
| like. When we had kids my wife and I couldn't imagine having a
| nanny (despite being able to afford it) while many of those
| around us didn't blink at it.
|
| I remember working at a startup in the 00s and having to peel
| out of the office every day at 5:30 to get my daughter from
| daycare and my (silver spoon raised) boss saying something like
| "we need to pitch into get you a nanny" and it struck me then
| how that kind of thing was really tied to "entrepreneurship." I
| didn't _want_ a nanny, I liked my daughter's daycare, and I
| very much enjoyed picking her up and getting my hug at the end
| of her day of play and learning with a group of kids.
|
| Connections, money, yes, but also a managerial/directive ethic,
| no qualms about telling other people what to do and paying as
| little as possible for it.
| JKCalhoun wrote:
| Wow, I just made this exact same point. You and I must have
| similar experiences.
| mamon wrote:
| And c) They are more likely to be entrepreneurs themselves, so
| they have some experience to share.
| BluePen8 wrote:
| And support for when it doesn't go to plan. An entrepreneur
| parent will empathize, as odds are they've experienced
| setbacks themselves.
|
| Most ideas and first attempts fail, I'd imagine people are
| more likely to try again if they're not catching flak from
| their parents that they didn't get it right the first time.
| HarryHirsch wrote:
| You forgot the family network. Zuckerberg _pere_ is a prominent
| Westchester dentist. Easier to find decent lawyers and
| accountants when you grow up in that sort of environment.
| Apparently, Zuckerberg met Sandberg at a party, hosted by a
| mutual friend.
| michaelbrave wrote:
| I would also bet family connections and introductions.
| OneGuy123 wrote:
| Or they have it completely upside-down:
|
| Those parents who adopt a more enterprenurial mindset are able to
| make more money.
|
| Thus they pass on this enterprenurial mindset on their children.
|
| Children of middle class workers are indoctrinated into a 8 hour
| job.
|
| In the same way one can think that children of enterprenurs are
| indoctrinated into entreprenurship.
|
| Obviously being a company owner will net you much more money than
| being a worker.
|
| Most middle class people are feeling guilty just for asking for a
| raise.
|
| Children of enterpreneurs think completely differently.
| dudul wrote:
| Not all middle class workers are salaried. My
| electrician/plumber/etc own their businesses but they're closer
| to the middle class than the 1%. And while I have a salaried
| job I probably make twice their salary.
|
| "Owning a company" is much broader than the SV startup scene.
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