

Thomas Friedman: Start-Ups, Not Bailouts - gabrielroth
http://www.nytimes.com/2010/04/04/opinion/04friedman.html?hp

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msg
High-IQ risk taking does not just come from the school system or immigration.
It also comes from the freedom to fail. Increasing the safety net and taking
the edge off failure will help people step out on the tightrope.

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kurtosis
I've heard this said many times - that in the U.S. there is less of a "stigma"
against founding a company that happens to not work out (for any number of
reasons). Can anyone here give examples of how this stigma is more severe in
non-U.S. countries? Is it that no investor will ever give money to anyone who
has so much as touched an unsuccessful business? Or are there more subtle
social factors at work? (i.e. people stop being your friend if your business
doesn't work out) I'd really like to hear some stories about how failure was
more severely stigmatized that in the U.S. especially in countries that have
much stronger "safety nets" than the USA

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binarray2000
From what the German business press has reported and my personal contacts with
many entrepreneurs have confirmed, in Germany (which still has a strong
"safety-net") you'll be stigmatized.

On the level of your personal contacts, when you start up, you'll mostly not
be (morally for example) supported in your intent by your family, friends,
peers. Most Germans want a secure job, working hours from nine-to-five, their
(circa) 30 (working) days vacations etc. And will most likely aim for that (or
eventually fall into the safety-net of the social state) than risk starting
their own business.

Second problem is your future: If you start a company and it fails many doors
will be (in many cases firmly) closed afterwards making it harder and harder
with every failure for you to start again.

I'd say that a safety-net everywhere (!) isn't good. Because, when you put
safety-net everywhere, everything becomes overregulated. Favorite joke in
Germany is that, because most garages don’t have windows and laws forbid
working environments without windows, Apple, Hewlett-Packard and many other
garage start-ups wouldn't be possible.

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fbailey
I actually had this debate once when I was a member of my local town council
(in germany. A small business started by a woman in her garage had to shut
down and I cited HP and other famous "garage" companies and asked if we would
have shut down their business. The answer I got was "Yes of course" the vote
afterwards was 12-1 for shutting it down.

On the other hand there is a lively startup scene and especially the online
business is quite forgiving so it's not the same everywhere in germany.

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josephd
What Friedman should be asking is as technology commoditizes, what other high-
growth areas can the US be competitive in?Apart from some narrow niche (OS and
productivity software, chip design), it seems the US is content with shifting
certain types of hardware design and fabrication to foreign nations, while
enjoying the role of brand marketing. Cost is usually cited as reasons. I
think the question should be: what other growth areas remain and how can they
be exploited by these risk-takers?

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necrecious
I liked the idea that if an immigrant create a company that gainfully employes
5-10 people, they get a green card.

That would get more entrepreneurial immigrants come and stay in the US.

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prototype56
What would be his legal status while he is doing that ? Or does he have to
create his company in his home country and move it to US to get a green card.

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necrecious
It can be anything from H1B to illegal immigrant. As long as he is here and is
putting into the system more than he is taking out then why care about how he
got here?

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prototype56
H1B's and illegal immigrants cannot start companies . Let alone a successful
company .

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nnutter
He's not the first to make this claim and I question whether it is so clear
cut. For instance, it seems very likely that some of those 40 million jobs
created by start-ups had an effect on established business. Either through
competition for growth or even competition for existing market space.

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thwarted
Obviously the people who work in those jobs need to come from somewhere. Are
you implying that competition isn't a desirable outcome?

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queensnake
Slack and inefficiency keeps people employed and spreads the wealth. Until
we've got Utopian redistribution, every technical improvement puts someone out
of work. Like, say, travel agents. What do people like that do now?

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rictic
That's silly, zero sum thinking. Unless the market for a good is saturated
(everyone who would buy it will), making the production process more efficient
creates both wealth and (often) new jobs as the producing company can now
grow.

As an example, imagine someone develops a bit of tech that improves software
development by 100%. Would a dev shop with this tech fire half their
programmers, or would they expand their speed and scope and grow faster as a
result?

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pontifier
Immigration and education? It could be years before those things have an
effect on the job market.

Why not ask people who want to start startups, or are currently starting them
what would make it easier to get going quickly?

Personally, I would start hiring tomorrow if it wouldn't cost me any money or
part of my business. Perhaps a program that helps startups by paying the wages
for the first 3 or so employees for up to a year? That would certainly kick
start my business, probably many, many, others.

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pontifier
I thought a bit about this, and a loan system like federal student loans but
that can only be used to pay employee wages would help me.

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queensnake
Isn't that a bank, small business loan? You go make your case to a loan
officer, you get it or not on the merits.

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brc
I'm going to controversial and ask : if successful entrepreneurs are
relentleslly resourceful, shouldn't they be able to find a way around the
immigration laws? Everyone I ever met who wanted to live in a country found a
way to make it happen.

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GFischer
Selection bias? I might not be the best example, but I haven't emigrated yet
(to Canada, Australia, the US or the UK) because I am looking to work within
the existing inmigration laws (and I'm not motivated - or resourceful, proving
the point - enough I guess, but I'm definitely not moving illegally anywhere).
For me, they're a powerful deterrent.

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brc
That's a fair point - selection bias. I thought about that later after I wrote
it. I was thinking about people I knew who wanted to move to a country and was
successful in doing so, through visa applications, finding jobs with
sponsorship or whatever. I realise it's not easy, just trying to play a little
devils advocate.

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PG-13
There was a painfully high occurrence of "high-I.Q. risk-takers" in this
article.

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eplanit
Mr. Friedman adds to his lengthy list of stories in which he lobbies (it has
gotten to be numbingly repetitive, Tom) for increased immigration from India
and China.

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gruseom
Why do you single out India and China? This article cites Brin (Russian) and
Khosla (Indian); it nowhere mentions China. The immigrants the author plainly
argues for are high-aspiring educated risk takers, regardless of where they
come from.

