
What the literature says about the earnings of entrepreneurs - BenjaminTodd
http://80000hours.org/2016/02/what-the-literature-says-about-the-earnings-of-entrepreneurs/
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gizi
> many founders of high-technology startups believe they stand a much greater
> chance of becoming wealthy by launching a startup than by ordinary
> employment. If many founders really do believe this, it appears they are
> largely wrong.

Not true. There is no massive upside to being an employee. There is one to
launching a startup.

> All told, entrepreneurs earned 35% less over a 10-year period than they
> could have in a “paid job”.

Not true. An enterpreneur could just sell hours as a consultant to a client.
In all practical terms, it would be the same as selling hours to an employer.
The consultant pretty much always makes more money than the employee.

> And of course, founding a company is far more risky than earning a salary.
> This suggests that entrepreneurs are in most cases giving up security and
> making no extra money in return.

Not true. It is not more risky, if you are just selling hours, for example. It
is often exactly the same as being an employee, with the difference that you
send out an invoice instead of getting a paycheck.

> In contrast, the average unincorporated self-employed person earns 16.5%
> less than their salaried counterparts.

What it really means, is: the average unincorporated self-employed person
declares 16.5% less as personal income than their salaried counterparts. It
does not mean anything beyond that.

> Will you earn more if you become an entrepreneur?

An employer is just a middleman between you and the real customers. If you
cannot sell to the real customers directly, that means that you will also have
trouble selling to employers.

If you are actually able to sell to real customers directly, you will have a
much better negotiation position when dealing with middlemen. Therefore, you
will automatically make more, regardless of whether you do that as an employee
or a self-employed person.

