[HN Gopher] Forced Entrepreneurs
___________________________________________________________________
Forced Entrepreneurs
Author : yarapavan
Score : 116 points
Date : 2021-05-18 14:15 UTC (8 hours ago)
(HTM) web link (papers.ssrn.com)
(TXT) w3m dump (papers.ssrn.com)
| starkd wrote:
| Maybe forced entrepreneurs are also more eager to accept venture
| capitol or buyout offers earlier than voluntary entrepreneurs.
| thiago_fm wrote:
| That's why FED should stop the money printing press and let the
| chips fall where they may.
|
| I've been for a long time waiting for that crisis to pop up and I
| go back to my community to try something new, not as an employee
| but as an employer.
|
| Many other software devs shared common concerns with me, like
| that it isn't worth to drop the ball now that salaries are sky
| high.
|
| I think a recession would definitely annoy people, but like when
| it rains, it would clean up a lot of things. Too many zombie
| companies going on, big tech getting so much money as it seems
| the only thing that will stick around post-crisis.
|
| We need to shed the tears before there is progress. Can't keep
| holding this thing on forever.
| Taylor_OD wrote:
| > I think a recession would definitely annoy people, but like
| when it rains, it would clean up a lot of things. Too many
| zombie companies going on, big tech getting so much money as it
| seems the only thing that will stick around post-crisis.
|
| Annoy people is a funny way to describe poverty.
| marcosdumay wrote:
| You are assuming that printed money benefit the poor.
|
| This is possible in theory, but it does really look like it's
| not happening on the US.
| thiago_fm wrote:
| Poverty can only be really fixed by tackling poverty. In a
| country where discussing universal healthcare and basic needs
| coverage is a considered extreme leftist ideas. I am not
| impressed that people are worried about recession and the
| life of the poor.
|
| Sure, in a recession, Elon Musk might get poorer, but it
| isn't the same kind of poverty that affects the poor.
|
| If US wants to tackle it properly, first solve the initial
| issues. It is possible to have a recession where poor people
| aren't the ones most affected, it's all a matter of approving
| policies, laws and really looking after the poor.
|
| A recession where some rich people that took more risk than
| they should and get punished isn't bad. What is bad is
| workers depending so much on their employers to survive.
| Well, in the US that would get tagged as communism.
|
| Best regards from Germany.
| burlesona wrote:
| This is a poor characterization of the issues in the US.
|
| (a) We have universal healthcare for those without income:
| Medicaid.
|
| (b) We have universal healthcare for those over 65:
| Medicare.
|
| (c) _Discussing_ healthcare reform is not considered "far
| left," there is significant debate about how to do this and
| how to pay for it across the spectrum. So far relatively
| left politicians have gotten the most airtime about this,
| but it is discussed broadly.
|
| Your note reads as snarky and condescending, and then you
| signed it "Best regards from Germany," which just confirms
| this is a drive-by European comment.
|
| When it comes to countries that aren't your own, my
| recommendation would be to ask questions and seek to
| understand rather than to casually cast judgment.
|
| As a final note, please consider that the US is not
| analogous to Germany. California is analogous to Germany.
| The US is analogous to the EU. From my reading of
| international news, it appears that it's more difficult to
| work out things at the EU-level than it is at the level of
| an individual nation. That's useful to keep in mind when
| attempting to make comparisons between the two regions.
| VonGallifrey wrote:
| > please consider that the US is not analogous to
| Germany. California is analogous to Germany.
|
| That statement is not true at all.
|
| I give you that California has about half of Germanys
| population, but it is not a country. California is a
| State. Germany is a country and the membership in a
| political union like the EU does not make it a state.
| burlesona wrote:
| The population is not a match, but States in the US are
| by design far more autonomous than "provinces" in other
| countries. When the original 13 states formed the US they
| thought of it much in the same terms that member states
| of the EU think of themselves today - not an identical
| arrangement, but very similar in spirit.
|
| California (and the other US States) have their own labor
| laws, their own environmental standards, their own
| transportation and energy departments, their own distinct
| safety net programs, even their own militaries! (aka the
| "national" guard)!
|
| Further, the Federal Government is specifically limited
| via the 10th Amendment to _only those powers which are
| enumerated to it._ By default, legal power is held by the
| _states,_ not the federal government. This is very
| unusual.
|
| Every "country" has a different mix of systems and
| different degrees of local autonomy, but US States are at
| the very high end of local authority while the federal
| government is at the low end. Thus, comparing some
| European nation to the US Federal Government is often
| misleading as it implies that the US federal government
| even has the power to do things that a European nation
| can do, which is frequently not the case, or else is
| greatly complicated by needing state participation and
| approval.
| VonGallifrey wrote:
| Germany is a Federal Republic and so is the USA. Germany
| has states as well.
|
| I grant you that they are different forms of federal
| republic, but the point that California is not a country
| stays the same.
|
| I don't care what kind of power the federal government of
| the United States has or doesn't have. That is a problem
| for the US to figure out for themselves.
|
| I don't think that when people compare European nations
| to the US that they are speaking about the US federal
| government specifically or imply anything about the power
| of the US federal government. What is more likely is that
| they are asking why the people of the USA have not
| archived what people of other countries take for granted.
| The fact that this would have to be archived via state or
| federal government is a detail at best.
| burlesona wrote:
| If you want to enact political change then the legal
| structure of the government is most definitely not a
| "detail at best." Consider gun rights, for example. Due
| to the Second Amendment, every level of the US government
| is greatly limited in its ability to enact gun control.
| To change this requires not a mere majority vote in
| congress, nor even a supermajority in the senate, but a
| constitutional amendment which much clear both houses of
| congress AND be ratified by 3/4 of the states!
|
| These details matter, and they are important specifically
| when talking about public policy matters and trying to
| advocate for change.
|
| Back to my original point, there is nothing stopping any
| US state from adopting universal healthcare, but it's not
| clear if the federal government even could if it wanted
| to (see Medicare expansion and how many states have
| chosen not to opt in!). Thus if you want to make
| comparisons to the "things that Europeans take for
| granted," it is often more productive to look at what
| individual US states do and can do, rather than obsess
| over the federal government. Trivializing that is just a
| road to getting _nothing_ done.
| heavyset_go wrote:
| > _(a) We have universal healthcare for those without
| income: Medicaid._
|
| There are tens of millions of people who are eligible for
| Medicaid under the ACA, but they live in states that
| never expanded Medicaid under the ACA so they can't sign
| up for it.
|
| Also, if someone makes more than $12k to $17k a year as
| an individual in a state that expanded Medicaid, they're
| no longer eligible for Medicaid.
| burlesona wrote:
| Yes, which is why I only claimed that we do have care for
| people _without income._ re: states not opting in, I
| couldn't agree more, hence my emphasis on State-level
| action being more important than federal when discussing
| US domestic policies.
| andrewjl wrote:
| > (a) We have universal healthcare for those without
| income: Medicaid.
|
| > (b) We have universal healthcare for those over 65:
| Medicare.
|
| In varying ways, both of these programs have large gaps
| and do not achieve "universal" coverage for the groups
| they claim to be for.
|
| For instance, when it comes to Medicaid, there is a lack
| of actual, physical access to care facilities for those
| without transportation options or a lack of ability to
| take sick time at work. Many rural areas have severe
| doctor shortages. There are many others.
|
| > (c) Discussing healthcare reform is not considered "far
| left," there is significant debate about how to do this
| and how to pay for it across the spectrum. So far
| relatively left politicians have gotten the most airtime
| about this, but it is discussed broadly.
|
| US pays more than most European countries do for
| healthcare on almost any comparable measure, per-capita,
| adjusted for life expectancy / outcomes, and many others.
| Switching to a multi-payer system with basically a
| variant of a public option, ironically similar to what
| Germany and a few other European countries have, seems
| like a pragmatic short-term choice. Unfortunately this
| isn't a popular solution on either side of the aisle.
| hogFeast wrote:
| Germany...a country with one of the highest levels of
| wealth inequality in the world (roughly equal to the US).
| With median net household wealth below Greece, and one of
| the highest proportion of billionaires in the world.
| Endemic corporate corruption, low competition, non-existent
| regulation, weak unions...people in glass houses.
|
| Also, the US has one of the largest public healthcare
| systems in the world. Comparisons are slightly complicated
| but, as a % of GDP, it is roughly the same size as Germany
| (on a tax base a fraction of the size). The only nation in
| Europe that actually has a larger public health sector than
| the US is Sweden.
|
| Work is the only way to lift people out of poverty. Germany
| is a self-evident example of this: the economy revolves
| around large corporations who are heavily protected by
| competition from govt. I would bet on the competitive
| American model that can renew itself every time over the
| corporatist model that protects wealthy industrialists in
| exchange for meagre handouts to the poors. The US tax
| system is a great example of the potential of
| redistribution (particularly, property taxes...an area of
| notable weakness in Germany).
| selfhoster11 wrote:
| I wish you didn't get voted down so much. From a
| Eurocentric perspective, your words make perfect sense.
| PragmaticPulp wrote:
| > I've been for a long time waiting for that crisis to pop up
| and I go back to my community to try something new, not as an
| employee but as an employer.
|
| If anything, the current environment makes it more attractive
| to start a company, not less. Investment money is cheap and
| plentiful. Businesses and customers have plenty of money to
| spend on your products. Risk tolerance is high, so customers
| are less afraid to take a chance on your unproven business.
|
| And if all else fails, you can walk right back into a hot job
| market and pick up where you left off.
|
| All of those traits are reversed in an economic crisis. The
| idea that a crisis spurs people to take entrepreneurial risk or
| fosters entrepreneurial success is backwards. Now is just about
| the optimal time to start a software business, if there ever
| was one.
| [deleted]
| adabyron wrote:
| Unless you work for a great company as a software engineer, you
| can make/keep significantly more money as your own company.
|
| The past few years have punished W-2 wages even more when
| compared to non-W-2 earners or people who partial incomes from
| W-2.
|
| PPP Loans, SEP-IRAs, QBI deduction, plus plenty of other random
| deductions as well that are no where near the sketchy deductions
| that certain people take such as hair/makeup.
|
| Like many things, this doesn't apply only to software engineers
| but any job that you can easily contract out or do plenty of
| remote work.
|
| The current US tax structure encourages entrepreneurship. At the
| same time it seems to make it slightly scary/challenging with
| tons of ridiculous paper work, especially if you move across
| state lines. Oh & paying taxes is a pain. If someone wanted a
| huge unicorn type business idea, making it super easy to handle
| all this garbage would be nice. Most places are either to
| expensive for a single or tiny business, or don't offer enough
| help. Huge opportunity with an expanding niche & no one is doing
| it really well.
| mdorazio wrote:
| Be careful with this advice since it does not apply generally
| or all the time for most people. Being self-employed _can_ have
| a significant financial upside, but it also has significant
| costs and risks. I switched to 1099 work several years ago and
| in comparison to what I could be bringing home in _total_
| compensation with a big tech company, I make anywhere from 0.75
| to 1.5 times as much. The situation is similar for friends who
| made the same switch - some years it 's substantially better,
| some years it's worse, on average you trade different kinds of
| stress for a little bit more money.
|
| It's important to keep in mind that running a business, even
| one where you're the only employee, is a pain in the ass in
| America (and especially in California). In addition to all the
| compensation things you _don 't_ get through an employer
| (health insurance, 401k matching, subsidized meals, paid
| vacation days, etc.) you also have added overhead in self
| employment tax, professional insurance, compliance/service
| fees, etc. And then you have the added headache of a small
| mountain of paperwork, both to get started and at tax time
| every year, in addition to having to keep your accounting
| straight and sometimes having to chase down payments. Also keep
| in mind that the line items you listed have caveats. QBI phases
| out at certain income levels and for certain professions (I get
| $0 from it), PPP is a one-time deal, IRAs are not equivalent to
| getting free matching money from an employer 401k, etc.
|
| As others in here have mentioned, you also have to maintain
| your client pipeline and even then there's no guarantee things
| will work out. For example, last year when the pandemic started
| my primary client paid the early termination fee, cut my
| contract 4 months short, and left me to twiddle my thumbs while
| my W2 friends happily plugged away at their normal jobs with no
| income interruption. That's the kind of risk you take and over
| time it absolutely will impact your total earnings. In general,
| self-employment is most definitely not for everyone - I usually
| only recommend it for a limited subset of people.
| burlesona wrote:
| Having now started / run 3 different small businesses in the US
| in 3 different states, I would say the paperwork and tax
| compliance is the second biggest headache of doing business
| here. Sales tax is especially annoying. But the #1 biggest
| headache is providing healthcare (not mandatory for small
| businesses, but you need it if you want to be able to hire
| anyone).
|
| I would love to see significant reform to simplify taxation for
| small businesses, but more than that I would love for the US to
| have a simple, high quality universal healthcare program so
| that I didn't need to worry about healthcare provision as part
| of my company.
| xwdv wrote:
| > Unless you work for a great company as a software engineer,
| you can make/keep significantly more money as your own company.
|
| This comes at the expense of time and energy. Running a
| "company" will involve a lot of other things beyond software
| engineering. Like stocks, there's also no guarantee you will
| beat the market (the market being the best salary you can get).
|
| The most time and energy efficient way to make money with
| little risk is still to take a standard software engineering
| job, don't take on unnecessary responsibilities, and just work
| remote to eliminate commute (you don't get paid for commute
| time but because you still have to do it you have to account
| for it as part of your work hours, which can vastly reduce your
| true hourly rate).
| adabyron wrote:
| If you have one or two solid long term clients, the running a
| company is minimal once you're setup. You pay yourself a
| salary, do a few quarterly state tax items & a monthly
| payment to the IRS.
|
| It's usually the initial setup that is the biggest pain & if
| you ever make any changes like wanting to move states or
| addresses. This is where I think a service would be really
| beneficial. At the same time, the amount of time/revenue lost
| to this is less than the amount gained by tax benefits. I
| mean every company made 5 months of salary plus benefits per
| employee from the PPP loan over the past 2 years. That alone
| was huge.
|
| From personal experience, it sounds like "the best salary you
| can get" requires hunting for decent opportunities, studying
| for tons of ridiculous interview questions, networking with
| employees at the company to get a leg up & of course taking a
| ton of interviews. Plenty of time/energy goes into that as
| well. Of course you can counter argue that getting clients
| takes plenty of time energy. So it maybe comes down to each
| person's own unique situation and which opportunity is best
| for them. I've found that doing great work, gets your name
| out there & marketing is not required. Learning to say "no"
| to jobs tends to be required more than marketing.
| varispeed wrote:
| > If you have one or two solid long term clients, the
| running a company is minimal once you're setup.
|
| In many countries, big consultancies lobby governments to
| treat such business as disguised employment. Here in the UK
| from this year, you may likely be caught by these new rules
| and have to pay employer and employee tax on the entire
| revenue - which essentially means you pay more tax than an
| employee, you don't have any employment rights and you
| still have business running costs that you cannot claim any
| tax relief from.
| xwdv wrote:
| Don't forget health insurance and errors & omissions
| insurance.
|
| Finding clients takes about the same effort as preparing
| for job interviews except you have to constantly be looking
| for clients.
|
| It's not easy finding and managing multiple long term
| clients, and even then you need about 3 or 4 to ensure one
| doesn't hold too much leverage over you.
|
| In the end, it's a wash, if starting a company was two or
| three times better than a salaried job it might be worth
| it, but as it stands it's barely 1.2x better than a
| salaried job.
|
| If you want more money it's best to just do a salaried full
| time job and then do some work occasionally on the side or
| develop other passive income streams.
| hokumguru wrote:
| Sure but, anecdotally, the only people I know who have "beat
| the market" are either healthcare professionals or small
| business owners. The successful entrepreneur has a much, much
| higher ceiling than almost every other occupation. Sure, a
| cushy software job will be reliable and probably be very
| lucrative but those do have an eventual cap that doesn't
| exist when self-employed.
| vmception wrote:
| > firms founded by forced entrepreneurs are more likely to
| survive, innovate, and receive venture-backing
|
| Actually this result surprises me.
|
| The survivorship bias I was expecting was that upper middle class
| and upper class people got opportunities to try ideas over and
| over again because their funding never ran dry. And therefore we
| get to hear misleading stories about entrepreneurs starting from
| their garage, but turns out the garage was at a home in Atherton,
| the most expensive zip code deep in Silicon Valley.
| michaelt wrote:
| _> Posted: 29 Jun 2016 Last revised: 11 May 2021_
|
| It's a few years since I've been in academia, but is it normal
| these days for papers to receive five years of updates? Or to be
| five years old and still "forthcoming"?
| zhdc1 wrote:
| I don't know what happened in this particular case, but it's
| fairly common for articles in higher ranked business journals
| to spend several years in the working draft -> revision ->
| acceptance pipeline.
| Cyril_HN wrote:
| Why do business journals work that way?
| varispeed wrote:
| These days you are unable to climb the class ladder as an
| employee. Any income that you could have saved is being eaten by
| progressive tax (that is being used to subsidise low wages among
| other things - big corporations avoid paying tax and pay low
| wages that other workers have to bump out of their pay). Only way
| to escape working class and poverty is starting a business. This
| also is becoming more difficult as big corporation lobby for more
| regulation and for increase of barriers to entry for new players.
| Big corporations need smart people as wage slaves, not as
| competitors. This is something that is not being looked enough
| into, mainly because politicians have no incentive to do it. It
| is easier for them to accept donations from rich friends and
| source votes by promising more social programs and more subsidies
| for target voter salaries.
| dumbfoundded wrote:
| A big factor in entrepreneurship that is undervalued is
| desperation. When you have a cushy tech job to fall back on, you
| simply won't try as hard as when you have no safety net. Right
| now it feels like it's okay to fail and you're only really
| risking the opportunity cost of a higher salary. "Forced
| entrepreneurs" risk great personal consequences because they have
| no other options. I'm not sure if this is a good or bad thing for
| society.
| cpp_frog wrote:
| In Spanish there is a saying that goes: A hungry man thinks
| more a hundred intellectuals.
| mettamage wrote:
| It can lead to chronic stress. Chronic stress can kill in the
| worst case. I think Elon Musk is a good public example of what
| (chronic) stress can do despite being financially successful.
| DelightOne wrote:
| Sure it's stress, but it also gives you control, gives you
| the tools and people you need to deal with it. In a job you
| don't necessarily have those.
| dumbfoundded wrote:
| It's definitely way more stressful but it's a balance. I
| think having too little stress can be just as unhealthy as
| too much stress. Some amount of stress is necessary to feel
| engaged and important in the activities you work on. You can
| work at a big company and feel completely unnecessary to the
| world. As a founder, finding the balance is extremely
| difficult but a very rewarding journey if you can sustain it.
| There's a certain zen about finding peace and focus in a
| chaotic situation.
| bigbillheck wrote:
| Musk might have a lot of chronic, but it's not stress.
| [deleted]
| crooked-v wrote:
| > When you have a cushy tech job to fall back on, you simply
| won't try as hard as when you have no safety net.
|
| Or you don't try entrepreneurship _at all_ , because if you
| fail you don't have anything to fall back on.
| Taylor_OD wrote:
| A lot lot lot of start up founders have some type of exit (life
| changing but not retiring type money) then go work as an
| engineer at FANG+. It's always interesting talking to them
| because most of the time they thought about leaving during
| their time running the start up but stuck around for one reason
| or another. Sometimes because they didnt have time to interview
| elsewhere.
| dumbfoundded wrote:
| As a bootstrapped founder who went through such an exit, but
| not planning on going back to a big tech company, I had
| temptations of going back for at least a couple years. My
| primary motivation was the fear of suffering personal
| consequences for completely running of our money. Now that
| I've exited and have plenty of time to start the next thing,
| I can't ever see myself going back to a big company. There's
| something addicting about entrepreneurship.
|
| To me, it just feels so much more real than working at a big
| company. At a big company, I felt like I just tried to make
| my boss happy and I had a very limited toolset to do such. As
| an entrepreneur, it's very connected to delivering value to
| other people who won't give you the time of day if you don't.
| It's difficult to explain but it feels way more real than a
| job.
| granshaw wrote:
| Amen. Plus the high of getting a new sale or getting good
| direct feedback from your customers
|
| Also love how customers don't give a ** about who you are,
| just how good your product is. Very different from typical
| employment where there's a constant undercurrent of
| posturing and your person/personality is always front and
| center to your performance, as much as people don't wanna
| admit it
| PragmaticPulp wrote:
| > "Forced entrepreneurs" risk great personal consequences
| because they have no other options.
|
| Anyone capable of starting a tech company has the skills and
| motivation required to get a reasonably well paying tech job.
|
| And that's more or less what most of them do when their
| startups fail. I see a lot of resumes from people listing
| themselves as CEO or CTO of a tech startup that barely
| registers in a Google search.
|
| I know at least one recruiter who makes a habit of calling up
| people at Crunchbase companies with <10 employees and letting
| them know to reach out if they're ever thinking about going
| back to the job market. Turns out, a lot of them are ready to
| go back to regular jobs after realizing that startup life isn't
| as glamorous as it sounds.
| icedchai wrote:
| They may have the skills, but not the attitude. I've met
| several entrepreneurs who simply can't work for someone else
| due to their own personality traits.
| PragmaticPulp wrote:
| In practice it's rare that someone simultaneously can't
| work for someone else yet can work for some combination of
| customers, investors, and employees. Running a business is
| rarely about working in isolation, taking orders from no
| one, and letting the money roll in.
| granshaw wrote:
| Very true. I dunno what OP is on about saying they're
| interchangeable.
|
| In a similar boat now after having had a taste of
| entrepreneurship but running out of runway. I used to be a
| model tech worker but now being back at a regular job just
| seems so... pointless, even though it pays well
|
| Strategizing and executing at the business level is so much
| more fun than back and forth discussion about how to best
| fit something into a large existing codebase and making
| sure your PRs are small enough... but it's hard to get
| employment doing that kind of work with a SW engineer's
| resume
| jbay808 wrote:
| That might be less true outside of the US.
| sdevonoes wrote:
| Not everyone works in tech. I know some "forced
| entrepreneurs" that failed big. They were "forced" in the
| sense that the country in which they were living was just not
| able to provide them a decent job.
| krono wrote:
| Back then when, lacking formal education in this field, I was
| unable to get anything better than unpaid traineeships. Since
| I needed income those were no viable option, plus I was
| demonstratively far beyond that skill level and felt I was
| being taken advantage of to an unfair degree.
|
| If I wanted to stay in this field, my only option was to
| start my own business which I ended up doing. Things worked
| out quite well.
|
| > Anyone capable of starting a tech company has the skills
| and motivation required to get a reasonably well paying tech
| job.
|
| I find that way too simplistic and too blankety even for a
| blanket statement.
| sokoloff wrote:
| > Anyone capable of starting a tech company has the skills
| and motivation required to get a reasonably well paying tech
| job.
|
| I say that's mostly true, provided they're authorized to work
| in the US and move there.
| sombremesa wrote:
| I'd expect that the people the article talks about did have
| other options since they were "high earners".
|
| > we confirm labor shocks disproportionately impact high-
| earners and these same workers start more successful firms
| dumbfoundded wrote:
| I think the term "forced" implies to me that the other
| options were worse at least. High earners can become low
| earners very quickly like real estate agents in 2008. These
| people have a larger bank roll and wider network then
| suddenly find themselves without a way to sustain their
| existing lifestyle. Similarly, the dot com bust gave many
| previously high paid programmers a lot of free time and few
| options to maintain their income.
| awb wrote:
| I was a reasonably paid developer / manager in 2008 and
| couldn't find a job as hiring was frozen. Unemployment wasn't
| going to cover the mortgage so I was in a sense forced into
| entrepreneurship despite being a previously attractive hire
| for multiple companies.
|
| I had to work 2x as hard to make the same salary on my own
| the first year, but after that the rewards became easier as
| the company grew.
|
| I doubt I would have had the courage or interest in leaving a
| comfortable salaried position for entrepreneurship if I
| wasn't forced into it. Turned out to be a life changing lay
| off for me though in a good way.
| sombremesa wrote:
| The issue is that GP points to this as a significant
| factor:
|
| > "Forced entrepreneurs" risk great personal consequences
| because they have no other options.
|
| This is just ground reality for many entrepreneurs
| (immigrant families opening new restaurants, for example)
| and does not serve as much of a differentiating factor.
| Based on the study in the OP, the differentiating factor is
| more likely to be some difference in risk tolerance by way
| of savings (since these were high earners after all), some
| difference in skill (since these were high earners after
| all), or some difference in opinion of self (since these
| were high earners after all) which kept them from giving up
| and just taking a minimum wage unskilled labor gig
| somewhere.
|
| It's not interesting that people turned to entrepreneurship
| after being laid off. It's interesting that people who were
| laid off from cushier jobs were able to start businesses
| more successfully.
| rapind wrote:
| If you're a _desperate_ entrepreneur in B2B, just a heads up
| that there are a lot of predators out there trying to cheat you
| into cheap /free work. It's like a special kind of land shark
| that can smell your desperation.
|
| The willingness to walk away is a game changer in sales (and
| other things in life).
| shoto_io wrote:
| Absolutely. I was a well paid manager in a travel company. Then
| Covid hit... In hindsight I am glad I got the chance to become
| an entrepreneur. I am not sure if I would have had the guts to
| make the jump without the f:ing pandemic.
| jressey wrote:
| When Covid hit, I quit my cushy job to create a video game. It
| was awesome, and given the time and resources I am confident it
| would have sold a few thousand copies.
|
| But c'mon, I quit my job to get away from working for a living
| for a year. I put in 4-6 hours a day in earnest, but it was
| pretty obvious from the beginning that I wasn't gonna finish
| and coding the game was just an opportunity to be more creative
| than I am as a manager.
|
| No way would I have ever entertained this idea without knowing
| I could walk back in to a high-paid job a month after starting
| to look, which I did.
| afarrell wrote:
| > they have no other options
|
| This isn't really true and should not motivate us to value
| desperation. Survivorship bias prevents us from hearing the
| voices of those who chose the final solution to desperation.
| awb wrote:
| If you're taking about suicide, we do have statistics to tell
| part of that story.
| TrinaryWorksToo wrote:
| And it's way too high. Perhaps we shouldn't innovate at all
| costs. Perhaps it's okay to slow innovation if more people
| live.
| cle wrote:
| Or perhaps the person "burning the midnight oil" will
| come up with an innovation that will save even more
| lives, and which is only possible by a single person
| putting in the mental effort.
|
| I don't have a strong opinion on this issue, IMO it's too
| complicated and subjective to feel confident in any
| particular stance. There's no question in my mind that
| entrepreneurs taking larger personal risks are more
| motivated to make things work, but whether that
| translates to a net positive or not? Who knows?
| afarrell wrote:
| People also stay up late to see the stars.
|
| Where we see desperation in a company history, we should
| look again to check if it is actually relentlessly
| resourceful curiosity.
| cle wrote:
| You are presenting a false dichotomy, it can and often is
| degrees of both.
| xphos wrote:
| I think the OP is just making an observation not a value
| statement consider his last bit is he doesn't know whether or
| not its a good thing. I also think this kinda doesn't follow
| because during down turns higher ups also commit suicide at
| much higher rates because they are likely to fall from much
| higher up. If you are already poor continuing to be poor
| while terrible isn't really a change in your perceived state
| dumbfoundded wrote:
| Yeah, I was trying to make more of an observation as
| opposed to a value judgement. I do think it's important to
| recognize the role of desperation because it's a powerful
| but negative motivator. It's really a mixed bag. Kind of
| like how are biggest scientific achievements have all been
| funded by the military in an attempt to more efficiently
| kill each other. I'm not sure what the balance should be.
| afarrell wrote:
| I think we should ask which particular humans are
| desperate and which are curious.
|
| Thousands of scientists and engineers would not have been
| motivated to work on ballistic rocketry and guidance
| systems if they had not been curious to learn about the
| moon and outer space.
|
| Congress would never have spent 4% of the 1966 US federal
| budget on the Apollo program[1] if it had not been
| desperate to tell allies and enemies about our ability to
| land a payload in Leningrad.
|
| https://en.m.wikipedia.org/wiki/Apollo_program#
| dumbfoundded wrote:
| It seems like the desperation is the more powerful
| motivator but carries significant side effects. I wonder
| if it's possible to motivate people in meaningful ways
| with only carrot and no stick.
|
| NASA inspired millions of children in the 60s and 70s to
| go into science yet real progress in space technology
| seems to have only picked up recently. Similarly with
| nuclear technology, it took 12 years to get from nukes
| could exist to 15KT yields to 50MT yields but we still
| don't have fusion and fission reactor designs haven't
| changed that much in decades despite significant
| problems.
|
| Sometimes I feel like people are change adverse and won't
| just change things to improve them. People only really
| change things when there's a significant threat of them
| getting worse. Reality is surely more complicated and
| nuanced but I think it will mark a significant change in
| our evolution when we improve things because we know they
| can be better instead of racing to avoid a disaster.
| afarrell wrote:
| > when we improve things because we know they can be
| better instead of racing to avoid a disaster.
|
| I'd encourage you to read the Wikipedia article on
| Taylorism and then to read The Toyota Way and/or
| Leadership is Language.
| afarrell wrote:
| Ah, I may have misinterpreted the word "undervalued" as a
| value statement.
| dumbfoundded wrote:
| Fair enough. Maybe I should've used "underestimated".
| whall6 wrote:
| They've burnt their ships so to speak
| Stevvo wrote:
| As somewhat of a forced entrepreneur myself, I disagree. Didn't
| finish high-school and have never held down a job for more than
| a few months, but don't feel at risk of 'great personal
| consequences'. If the market changes and my current ventures go
| to shit, I will just develop a new product much like an
| employed person would find a new job.
| dumbfoundded wrote:
| I think the difference is the paper focuses on previously
| high income earners. When people earn a high income, they
| tend to get mortgages, dependencies, and expensive habits.
| When you have all of that, it's tough to take it away without
| it feeling like a great loss.
| MattGaiser wrote:
| Anecdotally, what happened to the entrepreneurs in your networks
| when this thing hit? In my network, most of them seem to have
| used the skilled remote work boom to get regular jobs until this
| has all passed.
| varispeed wrote:
| It's interesting that "venture backing" is considered as
| something normal, a success even. Being approved by your rich
| overlords. Workers have to pay huge tax, whereas corporations
| don't. So workers are less able to amass capital and because of
| that they are forced to share their business with VC. If you were
| a rich VC owner, surely you would lobby politicians to ensure
| entrepreneurs are dependent on you. I think this is sickening.
| Corporate feudalism?
| rmac wrote:
| vc's job: find and invest in companies that will make large
| amounts of money. if they are good at their jobs, these
| companies will make them large amounts of money and in so doing
| employ a large pool of workers.
|
| if what I just wrote is true, then I can see how others might
| use vc-backed companies as a proxy for broad economic gains
| hogFeast wrote:
| Some people view any trade where the other side wins to any
| degree as exploitative. Regardless of whether they gain
| themselves. It is an interesting thought pattern.
| cratermoon wrote:
| > and in so doing employ a large pool of workers.
|
| Uber and DoorDash have entered the chat...
| bsedlm wrote:
| yes but the "lord" is a publically traded corporation.
| solumos wrote:
| This is a pretty zero-sum way to look at
| VC/investment/startups. In reality, GPs have to hustle to get
| LPs to invest in their fund. Then, they're able to take that
| money and create a portfolio out of it by investing in big
| opportunities. They really only want to invest in businesses
| that can exceed a $1B valuation (sometimes $10B these days).
| The very best VCs have a track record of identifying $1B+
| opportunities and helping those companies get there.
|
| As a founder, if your business doesn't fit that mold you
| probably shouldn't raise from VCs. There are angels out there
| with a higher risk tolerance who write fewer checks and are
| more interested in contributing directly to a company's success
| outside of capital.
|
| The idea that workers are diluted by the VCs is usually bogus.
| In an upside scenario, everyone wins. In a neutral exit
| scenario, the employees get to keep their wages, the investors
| get their money paid out first (if there's any left) and the
| founders/employees get hosed. In a downside scenario, everyone
| loses, except employees still get to keep their wages earned.
|
| It seems like you're conflating wage workers vs VC vs founder.
| Each of these roles has a wildly different risk profile when it
| comes to a startup.
| doggodaddo78 wrote:
| Yuuup. Nothing like being homeless, hungry, and broke to focus
| the mind into "hunger," unlike Ivy Leaguers' dabbling into
| staplers as a service or Juicero.
| jtdev wrote:
| This report seems to reinforce a notion that I've had for quite
| some time: The latest tech entrepreneur hype cycle is churning
| out very enthusiastic, hopeful/jr. entrepreneurs who have nearly
| nothing to offer in terms of vision, product, service, technical
| ability, etc.
|
| Being an "entrepreneur" is a means to and end, not and end in and
| of itself.
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