
Entrepreneurs Aren’t a Special Breed – They’re Mostly Rich Kids - monsieurpng
https://www.asia.finance/entrepreneur/entrepreneurs-not-special-breed/
======
Fricken
Those fucken rich kids. Immigrants too, who conventionally start out at the
other end of the class spectrum: they are 13% of the population, yet start a
quarter of all new businesses. Of course, they come from places where
subsisting on the proverbial ramen isn't a temporary insult, but a way of
life.

[https://www.inc.com/magazine/201502/adam-bluestein/the-
most-...](https://www.inc.com/magazine/201502/adam-bluestein/the-most-
entrepreneurial-group-in-america-wasnt-born-in-america.html)

I'm in Canada, and a friend and I walked into once of these sketchy looking
African Immigrant bars for a beer. We sat down, we didn't get to pay for our
beer, someone bought them for us.

We invite the guy to sit down with us and he talks (in broken English) about
how he came to Canada 5 years ago as a refugee from Somalia, started working
in a tire shop, learned a bit about cars, then started buying junkers on
Kijiji, fixing them up and reselling them at a profit, and how he's looking
for a place to open up his own shop.

He had nothing but good things to say about Canada and the opportunities it's
given him and kept thanking us.

It's like no, don't thank us, we're just a couple of spoiled white whiny
millenials. This country was built by people like you (And my great
grandparents, who also came here and made something out of nothing a long time
ago).

~~~
cJ0th
> Those fucken rich kids. Immigrants too, who conventionally start out at the
> other end of the class spectrum

Yeah, the more general pattern seems to be that you're more likely to start a
business if you're at the fringe of society one way or another. That is, you
don't really fit in with the common culture.

~~~
kamaal
People who have already have a lot generally worry about preserving what they
have, than making say 10% more.

Also if you have luxury for a while, you can get used to it. Some one coming
from worse off conditions is likely to work harder.

------
peterburkimsher
Mark Zuckerberg made this point in his Harvard Commencement speech earlier
this year, and he associated that "cushion" with an endorsement for Basic
Income.

[https://www.voicetube.com/videos/52098](https://www.voicetube.com/videos/52098)

I have several reasons for not starting a company. I need a work visa, and
that means I need a job. I also need to collect years of work experience in
order to be eligible for Permanent Residency in future.

On the other hand, my job doesn't keep me busy. I have a lot of time when I
must sit in the office, but actually have no useful projects to do for the
company. So I work on my own personal projects (and I have many ideas).

The problem with personal projects is that my visa won't allow me to have a
second source of income, so everything must be free. That's fine, I like open
source.

The budget for these personal projects is zero, though, and that means I can't
do marketing. I struggle to get even a little bit of feedback, and I have a
tendency to move on to other new ideas when I realise that nobody cares.

Although providing the finance for me to pursue my dream would be great, I
don't think it's enough. It takes a community where it's easy to share project
ideas and get useful feedback.

Example project in question: a Chinese-to-Pinyin word by word translator.

[https://pingtype.github.io](https://pingtype.github.io)

~~~
genbit
I had work visa and had similar thoughts and was deferring starting a business
until green card. I was wrong. Building business takes time, and there are a
lot of tasks that could've done on work visa, even without idea: \- networking
(future customers, employees, investors) \- market analysis \- marketing
(content marketing through blog, twitter)

One way to find feedback without investing into coding - talking to potential
customers or people inside targeted market. This I wish I done while I where
on work visa :)

~~~
peterburkimsher
I enjoy coding, and that's the part I want to pursue. I have no idea about
marketing.

What is networking? I know how to make friends through communities (e.g. the
CouchSurfing meetup, church, volunteer groups), and I've have 3900 Facebook
friends who I met face to face. But they don't have money, either as customers
or investors. They're just friends.

What is market analysis? Do you mean looking at the Facebook Likes of my
friends, and trying to build something that they will enjoy? I already have my
ideas, but I don't think anybody is interested in them. (education tools, some
deep learning research, calendar/map data management system).

Where should I post a blog? I wrote some blogs for Pingtype, but they didn't
attract any traffic. What should I use? Wordpress.com? Medium?

[https://pingtype.github.io/docs/blog.html](https://pingtype.github.io/docs/blog.html)

~~~
genbit
I just wanted to make a point, that a work visa by itself is not a real
blocker, more of a mental one. At least it was for me :) Networking for me is
about building credibility around myself in the area I will need for a
business, online or offline. For education projects, it can be going to
education-related meetups or talking to teachers in real life or online.

Market Analysis - there are many books on entrepreneurship (for example -
[https://goo.gl/tyJSu1](https://goo.gl/tyJSu1)) for education tools you can
talk to people who will use them - teachers or students, and try to estimate
how many of them, and how much they are willing to pay, or if you can make
money off ads.

for your example project, you send a to teachers at local community colleges
and try to get their feedback and maybe they will recommend it to schools.
Also, you can post the link to your project at language learning online forums
or meetup groups.

I mean, not every side project will be big business or even business at all,
but I think about it as a good practice if you really think about entrepreneur
path.

I myself went back to coding for now, I enjoy it too :)

~~~
peterburkimsher
Thank you for explaining; I think we both agree that the code is the easy
part.

I guess I did Market Analysis, although I didn't know that's what it's called.
I made a list of all the universities in Taiwan, and then found all the ones
with language centres. Then I went to each of those websites, found the
contact email address for the language centre (or in some cases, individual
teachers). I emailed them from my personal GMail.

I sent 102 of those emails. Only one replied, telling me that I can post it on
their Facebook.

I tried contacting some famous polyglots to just give me feedback. One of them
was actually rude in his reply, told me to post on the forum, and then banned
me (links are banned, but I wrote to tell people to search for it). The others
didn't reply.

It's been almost total discouragement by everybody except my Chinese tutor,
who I pay so I can study with her once a week. I actually have to pay people
just to talk to me. This is why I get discouraged and give up on other
projects, because I really need a community to discuss these ideas.

I imagine some kind of group where 12 people can share their resources
(providing basic income within the group), and have each person give a
presentation once every 3 months.

~~~
genbit
Nice! what you describe is basically a standard sales process. You will very
often be ignored, and people will not reply to you - don't get it personal.
Read more about cold emailing and sales. It's a complex process, but essential
for bootstrapping entrepreneurship.

> I really need a community to discuss these ideas.

there are local pitch events (at least in the silicon valley) where you can
practice or sites like HN.

~~~
genbit
Although at this stage it's less about sales and more about understanding your
potential customers and what problem do they have. That's why I would
recommend starting side business project by talking to customers first,
understand what problem they have - what jobs they need to be done, and then
actually coding

~~~
peterburkimsher
I don't live in Silicon Valley, and I don't think are pitch-events in Taiwan.
Certainly not where I could give a presentation for free, I'd probably have to
pay to join.

Customer-driven innovation means I have to find people who will give me money
first, and then make a product to sell so I can take their money.

The problem is that I don't know anybody who will give money to me for any
reason, even though I have plenty of friends. We're all too busy just trying
to pay for food and shelter. I think that rich people can easily start
companies because they have rich friends who will pay them. So the only
products that get made are things that benefit rich people, not poor people.

~~~
genbit
By customer-driven, I mean the first talk to customers, then code. Understand
what kind of job your customers are doing (don't talk about a product, just
try to understand your customers), for example, people who study Chinese what
kind of day to day tasks/job/activities they do related to learning Chinese?
What gives them the most pain/problems? Is there anything that you can do
about it?

Before trying to sell, try to understand your customers. If you really solve
an important problem for them - people will pay.

I don't agree with "rich people statement". I started my first web-consulting
company by self-learning how to code websites and then lived in a shitty room
in Russia with my girlfriend, barely making money for a rent and food. I found
first customers by browsing and phone-calling through local classifieds.

------
notacoward
Entrepreneurship is like one of those carnival games where you throw darts or
something.

Middle class kids can afford one throw. Most miss. A few hit the target and
get a small prize. A very few hit the center bullseye and get a bigger prize.
Rags to riches! The American Dream lives on.

Rich kids can afford many throws. If they want to, they can try over and over
and over again until they hit something and feel good about themselves. Some
keep going until they hit the center bullseye, then they give speeches or
write blog posts about "meritocracy" and the salutary effects of hard work.

Poor kids aren't visiting the carnival. They're the ones working it.

~~~
Houshalter
Then why are such a high percentage of entrepreneurs immigrants from poor
countries? Sure the rich kids have it easier. But it's not _that_ difficult to
live cheaply for awhile to pursue a business if you are motivated.

It might just be cultural. Rich successful people encourage their children to
be successful like they were. It could be genetic. Those immigrants I
mentioned go through a fairly difficult and selective process to get into the
country. They have higher IQs and conscientiousness than average. Factors
which are both fairly heritable, and correlate very well with success in life.
Meritocracy rewards the most able and driven. But no one said ability and
motivation were distributed fairly.

~~~
llukas
Maybe this comic would help you understand if it is _that_ difficult:
[http://thewireless.co.nz/articles/the-pencilsword-on-a-
plate](http://thewireless.co.nz/articles/the-pencilsword-on-a-plate)

~~~
Houshalter
I don't deny that wealth gives you advantages. But I think the comic
exaggerates it. If you live in a first world country you already are rich by
world and historical standards. A minimum wage job will earn you multiple
times the income of a person in a poor country. A century ago food used to
make up something like 50% of people's income and now even the poorest are
fat. There are a nontrivial amount of NEETs that get by doing no work at all.

The comic makes a big deal about education. Yet there's a number of studies
that show there is basically zero effect of education and education spending.
In a single chart see this:
[https://www.cato.org/images/testimony/coulson-2-9-11-3.jpg](https://www.cato.org/images/testimony/coulson-2-9-11-3.jpg)
and a nice in depth essay here [http://slatestarcodex.com/2016/05/19/teachers-
much-more-than...](http://slatestarcodex.com/2016/05/19/teachers-much-more-
than-you-wanted-to-know/)

~~~
pacala
It's not what you know, it's who you know. No matter how much money are spend
on the median education, spending [much] more relative to the median buys the
right pedigree and the right circle of friends.

------
jorblumesea
I worked for a startup for 2 years. The CTO was one of the nicest, realest
people I've met. Very down to earth. But I just knew part of the reason he
could stick his neck out far was because of his family. Even if the startup
exploded and crashed (it's not doing great last I checked) he would be fine as
he was part inheritor of a $300 mil fortune. For many of the employees they
had invested years of their lives, many hours away from their family and more
importantly, a possible later retirement due to lower income and lack of
matching retirement. We also lost many quality candidates due to this fact.

I often felt like I was just part of some rich person's game, where win or
lose the stakes were so much higher for myself than for anyone who stood to
make the real money if we ever went public. If we went bust I stood to lose
big, while the people who ran the company would go off and do something else.

~~~
chii
This is why early employees take more risk then the founders, and i would like
to see this acknowledged with more compensation commensurate with the extra
risk.

~~~
manigandham
How does that story support your comment at all? Early employees are still
employees and get paid for their time, they are nowhere near the risk level of
the founders.

~~~
sidlls
People like to pretend the strictly finance industry definition of "risk" is
what this discussion is about, but it's rarely that simple.

~~~
manigandham
In that case it's completely subjective and up to the individual to make the
call, although founders still have to shoulder more "risk" to create the
opportunity for an early employee to even consider as a choice.

~~~
chii
If the founders were such as well off already, then then taking risk in the
same quantity of time and/or money isn't the same as the employee trekking the
same amount of time/money. The founders that are well off can easily move on
after failure, but the employee have lost out (it's not very useful to list a
failed company in your resume).

~~~
manigandham
If they are well off already then they, _as individuals_ , are well off which
has nothing to do with whether they are founders or not. Rich people have more
options than poor people.

There are rich people who work at companies too who won't be bothered by
failure while the founder who came from nothing will be hurt.

------
cabaalis
Having started now a couple of businesses, one of which is doing well, I can
say:

There is a ridiculously high bar to vault in order to break through to a self-
sustaining income valuable enough to employ multiple people. This is why
vcs/investors hold so much power in the equation, and maybe why the studies
are skewed wealthy.

Trying to do this is indeed a risk, as it is not only a lot of work but it
could very easily change you and your personality. It could put your personal
dollar reserves in jeopardy. In my case, it cost me a wife. I don't blame the
work for that, I recognize that I am a very different man than I was before I
took the leap.

I do think it is unfair though to say that only the wealthy are entrepreneurs,
because that wealth came at some point through someone themselves making the
jump. At the same time, I also think the barrier to entry needs to be looked
at somehow.

~~~
cheez
Would you share what you would do differently or the cause of the loss of your
wife?

~~~
cabaalis
I spent many evening hours working, and did not foster the relationship. I
stayed up late at night, she was going to bed alone. Even good relationships
need constant work.

Secondly, I think working for myself somewhat transitioned me from "boy to
man" so to speak, not in a good way. I became less inherently trusting of
other people, and sometimes the stress wore on me and I became distant.

~~~
nbanks
It's probably quite common. This is the part of Elon Musk's story which people
rarely mention. Divorce is a high cost for any business, and I'm sorry you
went through it.

I've read it takes a couple hours a day to maintain the feeling of romantic
love in a relationship (according to Willard F. Harley). If you're in love
this is pleasurable time spent rather than constant work, but it's really easy
to let other stuff get in the way.

------
staunch
It's shocking how class-based Silicon Valley is. You would assume investors
look for innovative ideas and capable people to execute on them, but nope.
Ideas don't matter and it turns out when investors say "team" they mean "what
club memberships does your team have?"

Silicon Valley investors basically just invest randomly in people based on
their membership in a club. It's only because a small percentage of them turn
out not to be complete idiots that it works at all. The smartest of the 99%
receive no funding, while the entirety of the 1% wealthiest do.

It's an insider's club built around the "top schools" (as they call
themselves). You're either in the club or you're an outsider, and only a
handful of token outsiders are needed for display purposes.

If you want help in Silicon Valley, you must have either: 1) a rapidly growing
business (traction) 2) been accepted into a "top school" (pedigree)

It's not a conspiracy per se, it's just a result of rampant cronyism and
nepotism. How do you think investors get their jobs after all...

Some notable examples of non-rich founders, that the rest of us can hope to
emulate: Steve Jobs, John Carmack, Palmer Luckey, Linus Torvalds, Larry
Ellison.

~~~
crush-n-spread
OK so your post boils down to "VCs want to see growth or prestige". It's
actually that they want to see customers and revenue, not necessarily growth.
And so the sentence "VCs want to see revenue and customers or prestige" is
completely reasonable.

Look, if you're a VC who goes to those "clubs", and you trust the people there
and are comfortable giving them your money, _great_. Why should they be
handing it out to you, with your no-revenue company and no prior associations?

~~~
shykes
> _[...] the sentence "VCs want to see revenue and customers or prestige" is
> completely reasonable._

It's reasonable when prestige is earned through individual achievements. But
most of the time it's earned through affiliation. Complete outsiders can
succeed, certainly - but the bar is much higher for them.

~~~
crush-n-spread
What's your point? Others can raise money more easily than you can, due to
some ambiguous idea that investors prefer these other people from Stanford? No
one that is going to build a successful company should care about that.
Because you're 10x better than the competition. The lack of an inherited
advantage isn't going to make the difference between success and failure for
you.

~~~
shykes
> _What 's your point?_

In Silicon Valley, affiliation to established institutions - schools,
conglomerates, social circles - correlates with access to early-stage capital
much more strongly than it correlates with actual performance as an
entrepreneur.

This is bad for two reasons:

1) Silicon Valley investors, as a group, are wasting capital by investing too
much in low-performing insiders, and not enough in high-performing outsiders.

2) Silicon Valley entrepreneurship amplifies social inequalities instead of
reducing them, because a disproportionate share of entrepreneurial
opportunities are reserved for insiders.

------
cbhl
I recall that Kik co-founder Ted Livingston tried to take a step toward
changing this. He said he never would have been able to start his company
without CAD$25,000 from his grandfather, so he donated CAD$1M to a local
university, so they could give out CAD$25,000 to a student team every term
(so, three times a year).

~~~
Cyph0n
Good on him for recognizing his grandfather's contribution and giving back to
his community. It's easy to lose sight of where you began once you become
successful.

I hope his grandfather also got a nice ROI :P

------
abhinai
This answer will get me negative points but I must speak my mind. (1) Yes,
coming from a rich family helps. A lot. You get the cushion and above all you
get the right life advice. Your probability of success increases. (2) Yes,
coming from a poor family hurts. You get neither the cushion nor the advice.
But that's it. These factors simply impact the probabilities for success. They
do not eliminate your chance or hope for success. Agreed that if you come from
a middle-class or poor family you have to work harder and sacrifice more when
compared to rich kids. And I know life is not fair. But guys, for god's sake,
do not think for a second that you can't do it. There are enough examples of
middle-class kids doing amazingly well. Think about AirBnb founders.

Please do not quit trying just because rich kids have a better chance than
you!

~~~
anotheryou
It still can lift the bar out of reach of what is worth risking. Someone not
rich could try to bootstrap something and work more than 40h/week etc., but at
a much higher cost in quality of life on top of the lower probability of
success.

------
astura
There's an old saying "you gotta have money to make money." It's absolutely
true. As I get older the more money I have the easier it is to make more. It
actually feels like the game is rigged.

That being said, just having money doesn't guarantee you'll make money, of
course. It takes skill, knowledge, ambition, and luck.

Wasn't it Mitt Romney that said something like "anyone can start a business,
just borrow $20,000 from your family?"

~~~
quickthrower2
In Australia you can get that $20k by working minimum wage for a year. You
just need some family to provide food and shelter for that year, which might
be less of an ask. Ramen & a tent would do the trick.

~~~
Gatsky
And there is decent free healthcare.

But nobody really starts companies here....

~~~
quickthrower2
?? Of course people start comapnies. Of course property investment is super
popular.

~~~
Gatsky
I mean startups. The ecosystem is poor. The Atlassian guys said they would
never have started in Australia given a second chance. I have also been told
that Australian venture capitalists are utterly hopeless.

------
grandalf
While the headline is true, I think the important factors to consider are:

\- Doing something that has a high probability of failure is also likely
something that is highly leveraged, meaning that if it does not fail the
person doing it is much better off than if he/she had chosen a less risky
alternative.

\- Sadly, VC selection processes (including YC) are heavily biased toward
wealth signals such as ivy league enrollment. Attendance at the ivies is
strongly dominated by one factor alone, which is the wealth of one's parents.

\- The reason YC and others bias toward ivies and wealthy parents is not
because it doesn't work. Raising an angel round and being able to truly give a
startup 100% of one's life energy is something that is much easier when you
have parents willing to support it financially and possibly via networking
connections with other wealthy family members.

\- The interesting statistic would be this: Of all the rounds YC has
participated in, how many have been participated in by relatives of the
founder. My guess is that this number is over 80%.

\- But on the other hand, being rich increases the chances that a kid will
have received a top quality education and will be prepared to face the many
challenges and blows to the ego that doing a startup can entail, and will be
friends with others who can become key hires because they too had a top
quality education.

\- Ironically, dropping out of college makes even more sense when your K-12
education was so good that you realize that you already have the tools needed
to pursue higher goals.

\- The punchline is that in an ideal world we'd all be rich and have the good
education, supportive family, and ability to take risks that rich kids do. So
the descriptive fact that many entrepreneurs happen to be rich is along the
same lines as the descriptive fact that many well-educated people happen to
have had well-off upbringings.

Why bother achieving wealth if it can't buy these kinds of very obvious and
very useful luxuries?

------
WalterBright
It also stands to reason that the children of wealthy parents are also taught
how to handle money, etc. See the book "Rich Dad Poor Dad" by Kiyosaki. It's
really too bad that public schools teach nothing about accounting, finance,
the time value of money, the basics of how business operates, stock market
fundamentals, taxes, etc. They graduate kids who are wholly unequipped to
function in a free market economy.

~~~
candiodari
You can read in this very thread how people react to that. This wouldn't work.
Parents would revolt if you taught kids that.

Above all, people deal very poorly with confronting their own failings.
Getting their kid to criticize their financial and economic decisions (which
is what this will do) ... that's going to go down VERY badly.

------
stretchwithme
Our public schools are designed to make people work jobs, not take risks.

And who's going to these schools? The rich?

If you look at who's an entrepreneur where there is no public education, you
will see plenty of poor people. They haven't been trained to sit, obey and
avoid risk.

I think the entrepreneur is the natural state of man. What is hunting and
gathering if not a hustle?

For that matter, what is every wild animal doing? Exploiting every opportunity
that comes along or waiting for some to tell them what to do?

~~~
stretchwithme
Robert Kiyosaki covered this topic pretty thoroughly in Rich Dad, Poor Dad.

------
Animats
A key point is that it often takes inherited wealth to start a company early
in life. In earlier eras, people tended to start up companies much later.
After they'd had a career with a big company, they'd go off on their own.

Silicon Valley started that way. Look up the history of Fairchild
Semiconductor and its successors. That's because they were doing something
really hard technically, and they needed senior technical people to make it
go.

------
emsal
It's interesting that the speculation (the hope?) that the internet could
allow entrepreneurs to create businesses that don't rely on these connections,
that could sustain themselves just by reaching out to enough consumers
directly, seems to have been wrong.

It seems that the well-connected and savvy old guard has proven better at
reaching ordinary people than an unconnected newcomer entrepreneur can, no
matter how good the product may be.

~~~
pwaai
The other conclusion is that running a business is _fucking_ hard for most
people and that these businesses are started by do gooders, opportunists but
ultimately playing the lottery.

It explains why those with access to capital or people with capital are more
likely to succeed as a result of being able to play the lottery over and over.

Google & Facebook founders did not come from a struggling American family
(Sergei or Larry's family comes from the Soviet elite) and none of the "ivy
league dropouts" had any pressure (twitch.tv justin's comment how he was
unmotivated throughout uni) to be something their socioeconomic class
determined for them.

Finally, Theranos is a clear illustration of economic lineage taking place--
having a rich powerful daddy with other daddies tends to produce consistent
wins, often through sheer will and structural reinforcements that inevitably
sets conditions for even the most incompetent children of the elite to
succeed.

It's starting to feel like, a lot of us are getting into the startup game and
realizing it's just another vehicle of transferring wealth generated with your
life so they can buy a horse ranch or private plane.

~~~
myth_drannon
Sergei's parents were Soviet Jews, that's on the opposite spectrum from Soviet
elites. Well educated - yes, but not elites.

~~~
sattoshi
Jews disproportionatily comprised the upper echelons of soviet politics, what
do you mean?

~~~
stoic
[https://en.wikipedia.org/wiki/Anti-
Jewish_pogroms_in_the_Rus...](https://en.wikipedia.org/wiki/Anti-
Jewish_pogroms_in_the_Russian_Empire)

~~~
umanwizard
This article is about events that took place before the Soviet Union was
established.

------
balls187
This is an opinion article. No sources made for the claims in the article
what-so-ever.

I was in Techstars. There were some founders who came from prominent families,
but there were others from the working class.

~~~
teekno
> "This is an opinion article"

> provides anecdote as counterevidence

~~~
darawk
Anecdotes are a perfectly valid counter-argument to anecdotes. They're both
meaningless.

~~~
moseandre
Evidence accumulates, it does not spring into existence.

------
contingencies
First of all I don't think most entrepreneurs that pass the 2 year mark on a
business are kids, they are probably middle aged.

Second while access to capital is clearly a requirement for many business
types, it is not for others. If you don't have money to start something, use
charm, motivation and time, and maybe take early investment at worse terms. In
short, hustle. You can always start another business under better capital
availability conditions later. Branson is a great example of a hustler.

Personally I worked instead of going to university then started my first
business with $30k and lots of time (years) living in a (very) cheap place. A
few ventures later, I am self funded and probably spend half of that a month.
While this is still paltry versus what many SV startups spend, it's a lot more
than most people can afford, and I am both personally aware and deeply
thankful for the opportunity to develop ideas and lead a team.

My gut feeling is that people who feel everyone starting a business is an
entitled prick haven't met many entrepreneurs.

------
WheelsAtLarge
It's a psychological bar that's easier for people with money to cross. If you
always feel like you're lacking then it's hard to make the jump towards
entrepreneurship. You don't necessarily need to be a rich kid but you have to
have the confidence that ultimately you won't end up homeless and penniless.

If you were raised in an affluent/economically protected home it so much
easier to start a business - even if you don't have the contacts.

~~~
_jal
It isn't just psychological. There is very real risk involved.

An awful lot of entrepreneurs don't succeed the first time, but eventually
figure it out.

Now imagine you're married to someone who just folded a company that ate two
years of their life and most of their savings. How enthusiastic are you for
the next run? I don't call that a psychological effect. The partner is right -
there is a very real risk of failing again, with worse outcomes. If, however,
you have enough zeros in the bank (or an account at the Bank of Mom&Dad), eh,
it is "just" a failure.

That isn't my story, but somewhat close. Started a company, we never quite
"hit", but we hit profitability, were growing organically at a healthy clip
and never had to take money. Made a mistake around the end of year three that
killed us in year five. And that's how I spent 15 years of savings. I've come
close to trying again, but I'm now at an age where that's increasingly stupid
without a substantial cushion in the bank, unless you happen to like the taste
of cat food.

~~~
milofeynman
Health insurance too. Unless you end up married with a SO who has health
insurance and enough to support you it's risky in the US with our healthcare
system.

~~~
sjg007
It's far far less risky with the ACA now since that is based on income and you
can qualify for subsidies. Also straight out of college is less risk too if
you can be on your parents insurance until age 26.

------
throw2016
Capitalism requires the illusion of social mobility and equality but it is
inherently wealth favoring, hence the name, a perfect system for the feudals
to advocate as it maintained their power and influence via accumulated wealth.

The modus operandi is to highlight a few successes to create an illusion while
millions fail or fall by the wayside. Those who succeed are too invested in
the system and celebrating themselves and become perfect advertisements for
the illusion. Immigrants who are desperate with nothing to lose and a few who
grow essentially via a long struggle and trade are old favorites.

But let's look at software. The average company could take a minimum of 2-5
years, just building the product or service could take a year or more at the
minimum. Outreach, marketing and trying to build a user base and customers is
going to take significantly longer. And you need some luck. Thinking of
revenue is premature. Either you need ample savings to sustain for this kind
of period without any certain outcomes or a secure family background.

The stress without a secure family background is going to be overwhelming, you
need to be fit and healthy to put in long hours without interruption for
sustained periods without any family or health issues. Any single incident
here can completely derail you. Your life is going to be at a complete
standstill while you make this attempt.

Your immediate family and relationships are going to take a huge toll as you
struggle single mindedly to build something from scratch, relationships are
going to be under intense strain. If you have kids you should ask yourself
whether you can even afford to take this kind of risk and devote years to
something with completely uncertain outcomes. If you don't you certainly can't
afford them now or the next 5 years. A significant chunk of your life is at
stake.

That's why the only realistic way is to have a rich background or have a VC.
And you need a pretty decent education, experience and profile to begin with
ie some level of privilege to interest a VC. So mobility and entrepreneurship
is not as clear cut as it looks.

------
paul7986
What are some Silly Valley entrepreneurs who hit the big time and came from
complete and utter poverty?

Also your rich parent social networks (other rich people) are going to fund
your startup. A personal example my uncle through marriage... his brother was
a CEO of a huge well known company and he had TONS of money but would never
give me the time of day...my startup was even pursued by Google for potential
buy out. Yet his friends invested in Elizabeth Holmes/Theranos and so did
he(lol).

~~~
shortnamed
Jan Koum of WhatsApp. He brought Soviet-issued notebooks to the US cause the
family was too poor to buy US ones.

------
EGreg
I have a different perspective on entrepreneurship, having done full time
work, consulting, and ran a small business employing others.

When you are an employee, you sell your time for money.

When you are a contractor, you take more risk but you have more freedom. You
can charge based on how much value you provide, by virtue of the fact that you
can name different prices for new clients.

When you run your own shop, you can productize you services reap the benefits
of re-using everything. Not only that, but you provide employment others, who
do the actual work.

But all these are not the best way to accumulate a lot of wealth. Instead, if
you can partner with some capital, some expertise, and in general launch a
rocketship, do it. Start a startup and give away enough equity to make sure it
succeeds. Make sure to only do it if the startup a decent salary from the
beginning. Keep doing this until you hit a big exit. Then you have it set.

You can keep doing this without being rich. What you need is to have access to
capital. Preferably capital that's looking to fund ideas.

There is more and more of that capital every day. Such as crowdfunding. You
lose very little to make a camapaign or an ICO.

------
citizenpaul
Yep. Deep down everyone knows this but wants to hold onto the delusion that
their "unique" skills and ideas are what made/will make them rich.

------
danschumann
I think wealthy parents will teach their children to be wealthy. Perhaps its
easier to have a giant safety net when starting a big company.. but I wouldn't
listen to this article unless the writer is himself a successful entrepreneur.
It's probably better to case-study people who were broke when they started.
Who cares about statistics.. if it's possible, just harder, for you to be a
wealthy entrepreneur, still you should do it!

~~~
pas
It's easy to learn to "manage money" (or be successful), when you get a lot of
money, and you can try again, and again, and again.

------
roman_savchuk
It also has a lot to do with "being born into context" [0] of money. I can
imagine kids observing good skills (like money management or business
communication) of their parents will develop these skills for themselves
rather easily.

[0] Quote from Alan Kay's talk for YC
[https://youtu.be/1e8VZlPBx_0](https://youtu.be/1e8VZlPBx_0)

------
angryasian
I don't think anyone really mentioned how important that safety net is to when
it comes to high risks ventures and failure

------
aussieguy1234
Bill Gates had to pay rent hire employees and pay for expensive computer
equipment. Not to mention servers for the old website. Facebook would have had
similar challenges in the beginning.

Nowdays, I could serve one million requests for a functional product over AWS
lambda for around $5-$10.

------
Aron
Entrepreneurs are good so I guess we need more rich kids. I'll assume that was
the conclusion.

~~~
the_cat_kittles
not sure if you are having a laugh, but it made me think of something: i dont
understand the thinking that says "entrepreneurs are good" prima facie. it
matters what kind of businesses they start. its so weird how we ignore this.
if most entrepreneurs start predatory payday loan companies, we wouldn't want
that. i guess this is obvious, but sometimes i wonder about the balance of
"entrepreneurs". i guess this similar to a critique i have with how people use
money as the sole metric of success. its the same thing! it matters _what_ you
did! in both cases, i think the mistake is using a more general measure in
place of more specific ones. specific should always dominate general.

~~~
Aron
People generally don't give money away for nothing, and spend it carefully, so
when someone figures out how to get a lot of people to pay them for something,
I figure that's pretty high evidence they've done something helpful. Certainly
exceptions exist.

------
PakG1
So I see a lot of comments here about how it's probably mostly middle class
and rich kids together. I find it curious that nobody is mentioning the lesser
well off. Is the rags to riches dream a fairy tale now?

~~~
mac01021
Well, there's Jack Ma. But he's a rarity.

~~~
PakG1
I think that's a funny example because he's on record saying that if you're
not rich, it's your own fault. Which is of course absurd, just thought it was
a funny coincidence given my question and your reply.
[https://news.ycombinator.com/item?id=8377924](https://news.ycombinator.com/item?id=8377924)

edit: Apparently, Alibaba put out a statement saying that this oped with the
tone-deaf statement was not written by Jack Ma.
[https://news.ycombinator.com/item?id=8378020](https://news.ycombinator.com/item?id=8378020)

------
kgilpin
It’s easier to swing from one vine to the next vine, than to one 5 vines in
front of you.

------
m3kw9
Rich kids with some brain and brawns. I just want to be fair with the rich
kids

------
musgrove
I would say strictly speaking from the title, that would make them exactly a
special breed. There aren't many of them.

------
hoodoof
Well it depends if you are saying "all western people are rich".

------
erik_landerholm
Fine, but some of us aren’t so...what?

------
averagewall
Does it matter who entrepreneurs are? They exist to serve society by providing
new products and services that didn't exist before. We pay the winners well to
motivate them to do that. It's not charity for their own good so it doesn't
matter if there's bias in choosing them or some classes of people are
excluded. It's not for them.

~~~
plandis
You also need to consider the opportunity cost. If more people were willing to
take the risk of starting a business perhaps that would lead to a more
prosperous society.

------
ringaroundthetx
There are 13,000,000 millionaires in the world.

They have children. A representative distribution of them create more wealth
with the resources they already have which can have a disproportionate impact
than the same distribution of attempted wealth creators that start off with
less.

Did that really need to be spelled out?

~~~
Y7ZCQtNo39
CNBC [1] says there are 10.8 millionaires in the U.S. alone. 13 seems a little
low for the total worldwide count.

[1]: [https://www.cnbc.com/2017/03/24/a-record-number-of-
americans...](https://www.cnbc.com/2017/03/24/a-record-number-of-americans-
are-now-millionaires-new-study-shows.html)

~~~
ringaroundthetx
also not the point, this is about a representative sample of the population
having the same entrepreneurial tendencies as any other segment of the
population and having disproportionate impact from starting off with more, or
having so many chances to fail with little consequence. The survivorship bias
will lean towards those that can survive financially longer without taking
decades of their life to recoup losses and stability.

~~~
Y7ZCQtNo39
I think getting the facts right is important. If the number of millionaires is
"not the point", why even include the figure in a comment in the first place?

~~~
ringaroundthetx
because I could have put a tilde, or the source I used, and its not important
when we hit these ranges of number relative to the population. The message is
more important.

The figure is for perspective.

Your _problem_ only revealed that the number was too low, which only
strengthens the actual message. Thats very unproductive and not healthy.

------
starchild_3001
What if having born to rich parents is correlated with genetic disposition to
higher intelligence and risk taking? Evolution endows offspring of successful
parents with successful traits. From an evolutionary perspective, the findings
are totally expected.

~~~
ntsplnkv2
The article is arguing that it is the access to capital that makes
entrepreneurs more likely to be successful, not genetics.

------
BadassFractal
Seems like selection bias. Anecdata, but most entrepreneurs I've ever met were
regular middle class joes with the drive to do the journey. Even most YC
founders, as far as I can tell, are not exactly Winklevosses, they're just
regular people who are in a privileged position to be able to take a couple of
years off and live on savings or very meager early stage funding to test if
their business model will work.

~~~
smogcutter
The regular middle class joes you know who took "A couple years off to live on
savings" are not, in fact, middle class joes.

~~~
0xcde4c3db
Put another way, the definitions of _middle-class_ that encompass such people
are ones that separate them from the _regular joe_ , limiting the "middle"
class to the top 30% or so of the income distribution rather than placing them
at the median.

~~~
BadassFractal
That's fair. If we want to say that the top 30% are all "rich kids" as per the
title of the article, then so be it.

------
cocktailpeanuts
Let's say this is 99% true--that 99% of the successful entrepreneurs are rich
kids and 1% are self-made.

If you look at this stat and decide not to start a business, that's fine,
because that's what most people do.

But those who don't care about this stat--maybe because they care so much
about what they're trying to build, or maybe because they're irrationally
confident that they can succeed--I think it's fair to say they are a special
breed. Special isn't always great, but all great things are special.

~~~
avs733
It's not about the stat dictating behavior its about the structures and
systems that cause people to by necessity internalize that mental model of
risk.

They aren't making the decision because of the stat, the stat is simply
reporting behavior that already exists.

Stop reifying entrepreneurial success in this 'passionate' way because it
misattributes reality. That type of self-reinforcing narrative allows this
stat to continue to be a thing, and keeps outlier cases outlier cases rather
than doing anything to change the underlying variables that make it a reality.

~~~
cocktailpeanuts
I'm just stating my own experience. Take it or leave it. Don't play victim
man.

~~~
avs733
I'm not playing the victim. To be transparent I grew up in the class of
children who are empowered and have the fiscal/social stability and network to
participate in entrepreneurship...which I did. I went to a fancy ass private
high school with one of the reddit cofounders, a school that (by nature
largely of the socioeconomic status of the students' parents) has produced a
number of other founders as well. I've founded/co-founded multiple startups
and the most notable quantity of my entrepreneurial friends is that they have
a fall back option (not plan...option). That freedom has heavily influenced
how I make choices throughout my career in ways that leveraged a safety net
that I had and others didn't.

Again, I'm not the victim here I'm the victor...but that doesn't preclude me
from calling a bad argument a bad argument. There is actual research on this.
Expert entrepreneurs evaluate risk based on what would happen in the worst
case scenario (the downside risk) as opposed to the potential profit. You
flipped the interpretation of the evidence on its head and tried to make poor
people feel stupid.

~~~
cocktailpeanuts
You see, this is the problem. You haven't been in the shoes of the people you
think you're advocating for, and I get the good intention, but unless you
really have been in that position, you really don't understand their lives.

I and many other entrepreneurs I know did not grow up with as blessed
situation as you have, and yet I think it's fine. Sure it would have been
better if the situation was better, but in the end we all did fine because we
tried hard despite the fact. When I see people with victim mindset who just
keep saying "Entrepreneurship is only for rich people and that's why I don't
do it, the world is not fair", in my eyes they are just losers, because I know
from my own experience and countless others that that's not true.

To recap, I know of many people from bad situations succeeding despite their
bad background just because they worked their asses off, both personally and
historically.

And you are saying people like us should just give up and live a loser's life
thinking it's only rich people who get richer?

