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Entrepreneurs Aren’t a Special Breed – They’re Mostly Rich Kids (asia.finance)
454 points by monsieurpng on Nov 9, 2017 | hide | past | favorite | 256 comments



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-...

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).


> 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.


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.


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

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


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 :)


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


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) 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 :)


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.


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.


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


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.


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.


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 anyting that you can do about it?

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.


Can't you make an app and say sell it in the app store of your home country? Or run it out of there? Is that a conflict? What about investments?


I don't have a "home" country, but the discussion of that is too long for this comment thread.

I had an developer subscription for one year, 2012-2013. I made YouLing, a mouseover translator for Mac. It got about 557 downloads. It was free. One person donated $25. The developer subscription costs $100. It wasn't profitable, so now I just self-publish on my Github.

http://peterburk.github.io/programs/index.html#youling


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.


Life isn't fair. We're all born into different means and of course more money allows for more optionality. The "poor kids" have to work harder to save up their money to get their chance, but that's completely possible and is the majority of those who start companies.

This article is the typical BS that assumes "entrepreneurs" only do SV startups or want a big exit. The actual reality is that there are millions of small businesses out there, full of hard working entrepreneurs who saved and sacrificed, and are perfectly happy growing modestly and providing for their family. That's the prize that many chase, and many do end up winning.


> Life isn't fair

The whole point of human culture is to transcend the raw reality the universe hands us. Not just by inventing math and microchips, but also by inventing ways to reduce randomness and unfairness, be it the randomness and unfairness of weather, birth, disease, or human nature. Especially human nature. Culture invented morality and laws and notions of justice. The more advanced the culture, the less your birth circumstances matter for political power, social station, or economic opportunity.

But culture can also succumb to that base human nature which it was supposed to help us transcend. When a culture decides that self-interest is the fundamental reality of human nature, that the best thing to do is yield to rather than counter this nature, such a culture becomes a self-fulfilling prophet, and we all end up prisoner's of the dilemma.


> Life isn't fair. We're all born into different means and of course more money allows for more optionality. The "poor kids" have to work harder to save up their money to get their chance, but that's completely possible

That's making the mistake of equating the way things are with the way they should be.

While there's a lot of variations in opportunity from ability that should be respected, I don't think "being born well off" deserves the same kind of respect.


What's the mistake? What's the way things should be exactly?

Nature and humanity will always have inequality. Chaos and entropy are normal and inevitable. Even if you stop the world and reset everyone today to the same exact situation, things will change the moment you let them go. So what is this utopian ideal you think is possible?

I'm also assuming you'll be leaving your children with nothing so that they won't get any unfair advantages right or respect right?


As Biggie Smalls once said, Either you're slingin' crack-rock, or you've got a wicked jump-shot


There's a difference between life, and the economic system of capitalism. More than that, if rich people are only willing to fund the ideas of other rich people, eventually society becomes static as does technological progress.

And the article is focusing on the SV startup scene because that's where most of the new economic growth has been focused. The only other big growth areas have all been in energy.


You create value, you get paid. You don't need any rich person to fund you and many who are rich today got there without a dime invested by anyone else.

The article is talking about entrepreneurs, which are people who start businesses. The amount of people starting SV startups is insignificant compared to business owners around the world. You seem to be assuming something about economic growth and some connection to SV, but I see no such statement in the article itself.


> Life isn't fair.

Why not?


Nature isn't fair. Death is the norm for most life. Eat or be eaten. Kill or be killed. The fact you are alive now, and are intelligent ,and have enough resources to contribute to this discussion is already extreme luck. Things are not evenly distributed. There is a natural pattern of fractal distribution in almost every measure of things. Wealth, power, populations, you name it, will concentrate. To reduce the ladder of success to a flat plane is to introduce something unnatural and nature abhors mono cultures. Where nature does allow for a plethora of success is in the discovery of new environments either through disaster or creation. Take the latest bitcoin craze for instance. The block chain is a new environment. Those early enough to get in, and if they stayed in, are now owners of vast fortunes. Unfortunately, we have no way to predict where the next big environment is or where one will appear. While the wealthy will have more ability to dive into those environments, recognizing where they will occur is a skill that can be learned by anyone. Trying to make life fair is to fight nature; you will loose. Ride the waves, don't fight them.


Disparities in fairness create opportunities for one group to advance their short-term interests at the long-term expense of another group.

Unfortunately, education levels in the general population are not yet at a level where the majority of groups are able to routinely identify threats to their long-term interests caused by optimising for short-term gains.


What reasons are there for expecting life to be fair? Where would this hypothetical "fairness" come from?


One of the basic functions of society is to make life fairer than the default. If your neighbour is sick, you help him out, knowing he will return the favour. For both of you, life gets fairer.

You may argue that "fairness" is "unnatural". Then it is also "unnatural" e.g. that people physically stronger than you can't just kill you and take your wife and all your stuff. Would you rather we go back to a completely "natural" system like that? Complete all-out Mad Max-style anarchy? Of course not.


I'm not arguing that we shouldn't work to make things less unfair. I fully support such endeavors. Obviously, it is a difficult task that should be done with great care.

I meant to show that "perfectly fair" is an unobtainable non-sequitur. We need to know what we are up against when we attempt to balance out some of the indifferent harshness of the universe, at least in our little patch of space.

I do find it interesting that you thought my previous comment implied such things. I suppose it did sound a bit like certain shibboleths.


Life could be fair-er. Artificially made so. Hypothetically made so. Do we have to rest on social Darwinism as the organizing principle of society simply because it is natural? Human history is in part a gradual divorce from such naturalism, a gradual mitigation of the base suffering of animals.


Because the universe, which we are born from and live within briefly, is not fair.

A single instant in time which we do not understand led to an unimaginable expansion where the tiniest of fluctuations at the quantum level led to matter randomly collecting and coalescing into stellar clusters of billions of galaxies with trillions of stars with planets, and we know of only one that led to life.

Fairness, a completely human societal concept, has no impact on the reality of our universe and unless you can change that, life will never be fair.


Because life and the rules of the universe are not a human creation. Fairness is a human concept, in which we decide what that means, and it tends to vary decade to decade and culture to culture. Also worth noting, rules are not necessarily fairness (lots of animals in nature have automatic instinctual systems or rules of how they exist, without a consciously thought-out system of defined fairness).

It's a matter of the order of things. Life can't be fair by default because it's not subservient to fairness, it's the other way around. The concept of fairness derives from existence, it doesn't come before it. It takes a great effort to create and sustain large systems of fairness as entropy is constantly acting to undermine our efforts and destroy us (while we simultaneously deal with irrationality, chaos, scarcity, injury, etc etc). On this planet, only humans expend such immense energy attempting to accomplish elaborate systems of fairness, while trying to strive toward even greater fairness (learning from and applying, attempting to improve over time; our charitable systems for example have radically improved over the last few hundred years).

When a dolphin murders a porpoise for fun, or a troop of chimps raids another territory and murders competing chimps, is it fair? Fairness has no role to play, because it's a human concept. Humanity is still subservient to the greater rules and limitations of the universe, which means our best efforts at applying fairness can inherently never be perfect or ideal. Just the fact that we act against an erosion by entropy at all times guarantees that outcome (to say nothing of the inefficiency thrown into the equation by routine imperfect human judgment).


Do you argue that hospitals shouldn't provide emergency treatment to people with heart attacks on the same grounds?

I'm also going to call bullshit on your entropy argument: the accumulations of wealth we see are unnatural, and a product of artificial social choices about policing. Your entire argument is nonsense post-hoc rationalization about what's "natural".

In a natural setting, things would be fairer because we'd have already murdered a bunch of rich people.

In stark contrast to your claims, it's the inequality and present social order that's artificial and unnatural.


Couldn't agree more.

Not to mention other mammals, certainly primates, DO seem to have an innate notion of fairness.

https://www.youtube.com/watch?v=2BYJf2xSONc

Anybody who starts in with the 'natural' order of things argument usually starts off on the wrong foot, in my experience. It's such a loaded word.


I'm confused by your comment. It feels like you're upset about the parent advocating for unfair life, but I think they're merely pointing out what they're observing, not making any moral arguments of what should be.

Are you saying that life is actually fair, and thus the parent is arguing in the wrong direction? Or do you agree with the parent that life is unfair, but think that alternative arguments should be used to argue for it?


I think primates are innately fairer than modern society is, though they're not totally fair. I don't think we even want things to be totally fair (I don't for instance)... Just fairer.

If you poll people, almost everyone thinks things should be more fair -- to the point that some are nearing violence over the issue. I think it's quite unnatural for things to be this unfair, and requires elaborate orchestration to keep it so.

I also don't think the idea was a principled attempt to model the situation -- I think it was a post-hoc justification for why it should be as we see, and not an actual attempt to explain why things as they are. Nobody raises "well, it's just natural" for why we shouldn't try to stop heart attacks (and particularly, I've never heard it for why we shouldn't try to reduce the number of heart attacks, as it was used here about unfairness) -- only things like equality, gay marriage, etc. Which happen to all be things that align with the speakers' beliefs (either for or against; I've heard it both ways).


I think pointing out facts like primate fairness is missing the forest for the trees. [1]

To me the crux of the argument is that the environment of a new lifeform isn't constant. Indeed, it's pretty much guaranteed to be different for every live entity. One beetle may live a happy resourceful life, another one may get hit by an asteroid.

Lifeforms aren't provided equal opportunity by the universe. The default state is one of unfairness. However some intelligent lifeforms like primates, and indeed humans, have taken it upon themselves to artificially move the needle towards more fairness.

I too would like to see more fairness. I also think that things are unfair by default, and I don't consider this as moral justification for social policies that keep it in the natural unfair state or worse. While I don't know @adventured's moral policies of whether unfairness is justified, I have re-read the comment a few times and I still see it as purely a description of the situation with no moral judgement at all.

--

[1] It's possible that we're having trouble here due to semantics. When answering why life isn't fair, both my arguments and seemingly @adventured's entropy argument are talking about life as a sub-phenomenon of existence (which is to say, the widest scope). However if we're talking about life as limited to social structures, then I can see how any talk about natural unfairness can seem absurd.


You're wrong in your broad, abstract argument in a really obvious and shallow way:

It doesn't explain why the predominant strategy of life at all scales is mutualism and synergy between scales and kinds of life.

In no particular order, your "technical" argument fails to explain: eukaryotic structure, multicellular life, the interplay of fungii and roots, forests (which are more than adjacent trees), and really just about anything we see in the natural world. (Ed: I've thought of another 5 or 6 examples if you want to protest those -- mutualism is pretty easy to pick out in nature.)

And that's because you've failed to account for localized regions of stability able to ratchet themselves to greater and geater levels of stability -- and these metastable systems are the model we see on every scale of existence. Life does this as well, which means that we always see stable collaborations outpace competition (and unfairness) on an asymptotic scale. You literally failed to account for how life does work in your argument.

So I still don't believe you're advancing either a genuine observation (ie, it doesn't match fact to say it's unfair in general) or a principled theory (ie, it doesn't actually seem an internally consistent model -- at least, if you believe in physics).

I think you're trying to build a post-hoc justification for the human system being as it is.


I never set out to explain strategies of life, and I'm not sure why you thought otherwise. My argument is much more simpler than that. Like I said, it's about the environment. It doesn't really matter what strategy a beetle or its friends take, if it gets hit by an asteroid it didn't get equal opportunities compared to beetles who didn't, and that's not fair.

I am getting the impression that when you're talking about fairness in life, you're talking about how one lifeform treats another. Am I right? Life as an actor vs. life as a state of existance. When I'm talking about fairness of life, I'm talking about the latter, so I also include all the non-live entities (e.g. asteroids, or sulfuric acid if you want something more common) and how they affect the fairness.

Looking at this whole discussion in summary, I'm increasingly feeling like we don't really disagree on much. As best as I can tell, we both think life is unfair. Perhaps we even agree on the amount of unfairness. It feels more like you're describing the situation as a cup half full, and don't like that I describe it as half empty.


Its almost comical to watch Trump threatening all these wars when at the end of the day social inequality is so bad that effectively there is no one to draft. The typical cannon fodder of yore have been so beat down they would last 15 minutes or less on a battlefield. The only ones healthy enough to serve have parents rich enough to by their way out of a draft. You can't do a ground invasion with just drones manned by chubby kids with joysticks in a bunker. Corporate America has been so ruthlessly effective at pushing through such brutal levels of inequality that its actually become an existential threat to national security.


Is the obesity rate among the under 30 crowd really that high that a draft wouldn’t be feasible? I’m not sure about that stat. Care to back it up?


The effects of poor health in the otherwise-eligible pool recruit pool has been a concern for a few years. As I recall, the health of WWI recruits, especially from the south (mostly due to poor nutrition and parasites), had similar implications for readiness, and this was the spur for a number of public health interventions.

There are other potentially problematic indicators, such as the fact that grip strength in young men has plummeted over the last few decades (avg 18yo male is not as strong as avg 35yo woman was at his age). Grip strength is a good indicator of overall fitness.

https://www.militarytimes.com/news/your-military/2016/09/11/...

https://www.google.de/amp/amp.timeinc.net/time/2938158/youth...


That's because poor people are fat and we have a volunteer military. A draft would solve that problem, by drafting richer healthier people and also by forcing fat poor people to exercise and eat better.


Current state of the world.


Just because it's life.

Even if everyone had the same amount of wealth, there are those that will be born good looking, or tall, or physically fit, or any other thing that would give someone an advantage over others.


we've limited means at the moment to influence our physical characteristics or our intellect or talent at birth, this we have to take as a given I agree. But money for businesses does not fall from the sky. How large the starting gap between poor and rich entrepreneurs is, how the environment looks in which we grow up, how easy we make it for people to perpetuate wealth without effort, that's a matter of choice.


Because some people do better than others and that's OK.


Ha, my 7yr old twins could explain that one to you. It's just not. You have to make the most of the gifts you are given.


> Ha, my 7yr old twins could explain that one to you. It's just not.

That's not an answer to his question.


The answer is: > It's just not.

Because really, "Why isn't life fair?" is not a valid question. "Life" is unique. Why are two unique items not the same? Because unique and same are antonyms.

The 7yr old part is the context for my initial answer from my world view.

No matter how hard we try, it's impossible to make life fair for our twins. We do our best to treat them fairly, but while they are the same age, they are not the same. They are not the same physical size and they have different mental strengths and weaknesses. They are not evenly matched in all/many areas. That can make things feel unfair.

On the other hand, maybe it is fair, we just do not have enough context to do a proper measurement.


Capitalism.


Interesting question.

What makes you think anything should be fair?


> What makes you think anything should be fair?

Because it helps the human race maximize their collective potential. Imagine how many Einsteins we've had over the millennia, there may have been hundreds/thousands of them but they never had the chance to shine because they were born a serf or a slave.

It doesn't have to be 100% fair, but being somewhat egalitarian produces better results for everyone on the economic scale.


>> It doesn't have to be 100% fair, but being somewhat egalitarian produces better results for everyone on the economic scale.

Why did you perceive my question to be anti-egalitarian?

I understand that a more equal society == better collective potential. BUT, our whole species (and life on this planet) is based on inequality. It started right from evolution (other animals got extinct) and it goes on until today because not all genes are equal.

Now this doesn't mean that we shouldn't remove/reduce artificial barriers to equality but we gotta realize that inequality is inherent. What makes humans awesome is that we have a brain and can strive for the collective good.


What is collective good? Is it denying handicapped people a livelihood? Is it ostracizing the mentally ill?

Personally I believe that our striving for advancement is something that's deeper than our daily brain-oriented struggle. Our evolution is being driven at the cellular level, so we don't need to translate that into attempting to personify an egotistical concept of progress.


Does your idea of fairness only apply to monetary issues?

If some good looking but dumb guy is getting too many partners, should the government/society try to level the playing field to allow the smart but socially inept guy to make some more "Einsteins?"


If you solve the monetary issues then those things are within an individuals control to a certain extent and at worse can be mitigated. Ugly people can have plastic surgery or tooth realignment if they can afford it, or the can work out enough to either become good looking or compensate. The socially inept can learn to be more social.

Those are choices for individuals though, not society as a whole. Society doesn't decide the attributes you were born with, but they do decide if your money has any real value.


"This article is the typical BS that assumes "entrepreneurs" only do SV startups or want a big exit." I don't think it assumes that, and I don't think we should just resign to the fact that rich kids get rich.


So ex-bankers are starting your local bakeries and notaries and hair salons? 10s of millions of small businesses and most of them are started by rich guys? It clearly says "in silicon valley" at the end so yes it's limited to the typical example of VCs and exits.

The rich do get richer (up to a point anyway) but what I'm saying is that you don't need to be rich at all to be an entrepreneur, and some of those who start with nothing do go on to become rich as well.


All startups start small, but not all small businesses are startups. Startups are characterized by fast growth cycles and usually are intended to end in getting acquired or sold.

Bakeries and such don't fall under this description, usually.


Entrepreneurs start businesses. A small fraction of those businesses are SV startups, but the vast majority are not - so this article talking about "entrepreneurs" doesn't apply to the vast majority of them, has no sources for what it claims, and is thus rather useless.


Most small businesses fail. They fail because the founder doesn't have enough money to survive the dips and bumps. Being rich gives you an edge in making money, it's pretty cut and dry.


Most fail for lots of reasons, insufficient capital is only one of them. Another large reason is incompetent accounting - i.e. having a poor grasp of their financial situation. This is often confused with insufficient capital.

Besides, anyone can start a business with essentially zero capital. One can mow lawns, do babysitting, maid service, write apps, write a novel, etc. The only capital I invested in my own business startup was buying a computer.

Search Amazon books for "starting a business with no money" for lots of ideas.


I like this metaphor, with one modification:

The "poor kids" working at the carnival get unlimited free throws.

Because that's what it's like in Software right now. There has never been an industry before where the market rate is so high for individual contributors, and the real cost of starting a business are so low.

Software is a Perfect Storm of near-zero overhead and near-infinite execution leverage as compared to pretty much any other type of business.

So sure, you're right that a poor kid working at a Shoe Store can, over the course of his lifetime, open between zero and one shoe stores. But a poor kid who takes his self-taught programming skills and gets a job writing code 40 hours a week can moonlight out several hundred Minimum Viable Products if necessary until something hits big.

So yeah, it's darts. But if you throw lots of them, you'll probably hit something.


> There has never been an industry before where the market rate is so high for individual contributors, and the real cost of starting a business are so low.

Well you still need to pay your rent, your food, etc.


Sounds like you missed the word "moonlighting" in the post you're responding to.

You keep your day job writing software and do your entrepreneuring on nights and weekends. Try things out until one of them is matching your day job's income, then quit and go full time.

That's what I did. And come to think of it, it's yet another factor to throw into that Perfect Storm I mentioned above, because you can't really moonlight out a brick and mortar store while keeping your day job at another one.


Then you agree their isn't any unlimited free throws, but you get a few free throws with a severe handicap.

Glad to see it worked for you despite that handicap !


Microsoft, Facebook, and Google were created by rich kids, who got investment funding because they have wealthy friends. Not randos with laptop.

Apple was a little better.


Right, and letting everybody see some lucky person win once in a while sort of perpetuates the delusion that it could be you, the guy standing on the sidelines.

Ultimately, it's cheaper for whoever owns the tent to let one person win every once in a while then to just let everybody lose.

I may be stretching the analogy but yeah.


I think this analogy has legs; for example, what of the town surrounding the carnival? Does the carnival hold lotteries enthralling the adult villagers who otherwise turn their nose at throwing darts?

If nothing else, bread-and-circuses-made-literal is useful for storytelling.


That is a brilliant analogy. I would add that some kids may naturally have a better arm, so success is not solely correlated with number of tries you can afford.


Some rich people can patent the dart board so no one else can throw darts at it.


And some kids are born with more darts.


> I would add that some kids may naturally have a better arm, so success is not solely correlated with number of tries you can afford.

This is the opposite of what he's saying.


Indeed. The original poster was saying something more akin some kids getting more shots at the target or able to buy more than 1 dart and try to hit the bullseye many times.


Exactly. Some kids might be born with physical gifts, like elite sports athletes. I'm sure no matter how hard an average person tries, they will never be at an NBA-level basketball player.

Some kids might be born with phenomenal musical talent, or incredibly high IQ.

Heck, some kids might be born so they grow up to be extremely attractive and become models or actors.

Being born into a wealthy family isn't the only stroke of luck.


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.


Maybe this comic would help you understand if it is that difficult: http://thewireless.co.nz/articles/the-pencilsword-on-a-plate


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 and a nice in depth essay here http://slatestarcodex.com/2016/05/19/teachers-much-more-than...


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.


>Then why are such a high percentage of entrepreneurs immigrants from poor countries

Not sure about other immigrants but for me it's probably because life itself has been so challenging that startup life doesn't seem that hard. I have been running my own startup with challenges of getting customers, employees, development done, customer outreach, interns and all that wham-bam with no investors and also trying to keep my family sane for more than an year.

But one thing is for sure, I won't give up till the very end. My bipolar startup has been an year of yo-yos but hopefully tomorrow is a better day


I think you both make important points. Coming from a blue collar family and having started my own business only to go bankrupt, I can say there is a strong culture of avoiding risk in my family and those sort of lessons rub off on you regardless of your intelligence. It makes you less apt to take subsequent risks, or even take the risk in the first place.


One basic reason is that immigrants often find it easier to open a business than interview for jobs. It's hard to answer the question "tell me about yourself" in a culturally relevant way when you are still learning the basics of your new non-native language. Opening a business requires a nominal amount of money in fees and filling out a form. Living off of your savings while trying to impress people who don't seem to be hiring you gets unattractive pretty fast, so if you're gonna work hard, you may as well do it for yourself.


What percentage of those entrepreneur immigrants are already well off?


A really, really high percentage. Being born from a poor country doesn't mean you are poor. Even the most impoverished place has an upper class that lives really well - they form the bulk of your immigrants to the first world.


what percentage of people from poor countries manages to emigrate? any correlation between the traits needed to want to emigrate from your poor country and the traits needed for entrepreneurs? any correlation between being able to emigrate in the first place and general genetic advantage (you are not going to emigrate if you have a disability, are chronically ill, were not lucky enough to go to school and learn to read/write/fill the appropriate forms)?


It's not just about Cost of Living. When you're an immigrant you know very little outside of your own family/community. The options are either be your own boss or be underemployed forever because you can't get hired to match your skill level.

And if you look at the founders of companies that eventually go public (or at least have the revenue that they could do so), they are pretty much all started by people who had connections and access to their own capital early on.

I'm not saying the American dream is dead, but it's never been as great as people make out and it's only getting worse.


> it's not that difficult to live cheaply for awhile to pursue a business if you are motivated.

The immigrants from poor countries may have the relative advantage that living cheaply feels more acceptable to them, and is more socially acceptable in their community.

Most people spend all the money they make. If the average salary in your community is e.g. $1000 a month, then to look "normal", you have to spend approximately $1000 a month. You can cut corners here and there, but if you do it too much, you will suffer social consequences. Either your friends will start seeing you as a "loser", or you will stop participating at some of their more expensive activities. In such situation, most people won't push too far. Maybe it wouldn't even be a good idea to burn your social capital, because if your business fails, you will need a Plan B.

If you are an immigrant from a poor country, your social circle probably mostly consists of people coming from the same place. They won't judge you for not having expensive hobbies; it's "normal" not to have them. They are probably saving the extra money, and so are you. Maybe you only spend $500 a month on yourself, so if you have a brother, you can make a deal like "one of us goes to work for $1000 and pays for both, while the other tries to start a family business". Or parents work hard and live cheaply in order to provide their children a better future. The second generation is much less likely to live like this, because they already made friends in the majority culture, and start doing the expensive things to fit in.

Social pressure is a thing. It is much easier to live the way people around you do. Sure, it's also about conscientiousness; I am not saying it's either-or, just that "conscientious and living in a subculture that encourages saving" is better than "conscientious and living in a subculture that encourages spending" for starting your own business.


> If you are an immigrant from a poor country, your social circle probably mostly consists of people coming from the same place. They won't judge you for not having expensive hobbies; it's "normal" not to have them. They are probably saving the extra money

I think you'll find that this is very cultural. Middle easterners (who aren't of minority religion status) are poor (on average, just like everywhere else), but have the opposite attitude. You won't have money, and there are large social consequences to not spending. So they drive a 20 year old mercedes, for example.

It is a cultural thing. Some places are large enough to have multiple cultures, and both people who save everything they have and people who overspend are a popular thing. Popular in the sense that there's millions of people living like that. India and China are such places.

Even starting a business by itself has cultural stigma associated with it. Starting a business, for instance, may immediately cause people to judge you (because you're "obviously" dodging taxes and therefore "stealing from them", and destined for bankruptcy or prison, is the best explanation I've heard). I've seen this attitude in Western Europe. Better to be an employee. Even better to be a "respectable" money maker like a doctor or lawyer. Starting a company will have social consequences just by itself.

And of course to some extent, you'll find both attitudes everywhere.


"Then why are such a high percentage of entrepreneurs immigrants from poor countries?"

Is this true? I mean, most immigrants to America are from places like Mexico and India and China ... so it makes sense we don't see a lot of 'French immigrant entrepreneurs'.


I think they meant P(entrepreneur | immigrant from poor country) > P(entrepreneur | U.S. citizen), not P(entrepreneur | immigrant from poor country) > P(entrepreneur | immigrant from rich country)


Because they have nothing to lose. When you have nothing to lose, you will take big risks.


Yup, if you want to hit the big time, you have to try, and try, and try again and again and again, and never give up. This is what I'm repeatedly told. Trying again is expensive though.


To extend the metaphor even further, sometimes the ones with the money spend so much winning the prize that they could have simply bought it outright.


this analogy completely breaks-down at the beginning and at the end, as it implies that poor people are somehow running a scam to rip-off the rich! Everyone knows that carnival games are rigged, like casinos.

However, it is true that rich people can afford to take more risks (and therefore stand to gain more) for the same amount of hard-work.


The really interesting cases, to me, are the Jan Koums and J K Rowlings of the world.


I'm just shocked at what this message board has become. All I see now are endless stories and comments on high rent, inequality and politics. Just yesterday tons of people were complaining about how much money a startup was spending on marketing as if development should be the only expense.

Not rich? Work smarter - you probably have a much better perspective on what the masses need / use than a rich person does. Convince a money man to invest in your ideas.

Rent is too high? Consider the chances your SV startup will make you a millionaire are near 0. You may want to live elsewhere.

Don't like your elected officials? Tough shit, 50% of the country does or doesn't.

Your boss or management sucks? Chances are they think you suck too. Find a new job you enjoy and are appreciated. Work culture is like dating and not everybody is compatible.

Nature and the universe aren't fair. Don't expect anything to be given to you.

I just wish this site was about technology and ingenuity, now it just sounds like a bunch of grovelling losers, upset they won't hit a 1M+ active daily users.


> Not rich? Work smarter - you probably have a much better perspective on what the masses need / use than a rich person does. Convince a money man to invest in your ideas.

So how many people have the cognitive abilities or the educational background to 'work smarter"? Looking down from the ivory tower telling the factory worker or the sales assistant to "work smarter" to "get rich" is a nasty mix of ignorance and arrogance. For mosylt people the only option to keep their head above the water is to work harder.

> Rent is too high? Consider the chances your SV startup will make you a millionaire are near 0. You may want to live elsewhere.

Yeah, everyone can move whenever they want. Who cares about family, friends and maybe the job you like. The rent is higher now, so just move where you and people like you belong.

> Don't like your elected officials? Tough shit, 50% of the country does or doesn't.

Bullshit. While there are countries that run some perverted version of democracy, most developed countries are pretty good building governments with way higher approvals.

> Your boss or management sucks? Chances are they think you suck too. Find a new job you enjoy and are appreciated. Work culture is like dating and not everybody is compatible.

Yeah, with a job market like the current one you, the employee, have all the power. /s A LOT of people are happy to have a job and just quitting because their boss is a dick? Not gonna happen because not possible.

> Nature and the universe aren't fair. Don't expect anything to be given to you.

And that's why we give money to the elderly and disabled, make education accessible to everyone, have social welfare, pay doctor's bills for people who cannot afford it and try to counter ghettofication by subsidizing flats in more expensive areas. At least some countries do that, and guess what - those are the ones with the highest living standards for everyone.


They don't call your generation entitled for nothing! Let's add victim to that, "entitled victims" is more descriptive. There are many cases where people need assistance and subsidy, but what most people are complaining about on this board is bullshit. If the way we do things here in the US is so bad, why does everybody still want to migrate here? Surely something is going right.


The board got diluted with a lot more regular folks vs the super early gang of people centered around YC who were all doers/believers in the startup space. The more regular folks you let in, the more of the usual limiting beliefs you'll see echo chambered here. The people who are actually getting shit done, instead of whining about the world not being fair, will just move to a different discussion space.


"Farnsworth, Farrrnsworth! The peasants are in the gardens again, rrrelease the hounds!"


How many throws did Mark Zuckerberg have? Sergey and Larry? Elon Musk? I'm not saying life is fair, but you shouldn't generalize like this.


Zuckerberg went to Harvard and his father is a dentist. He was and is a rich kid.

Larry Page's parents were renown computer scientists in the 70s and 80s. Thus no doubt they were more then middle class. Now Segrey Im not sure, but if you have one founder that is rich then well...

Elon Musk's father was also a computer scientist back in the day.

None of the people you mention grew up middle class ... rather the next level above .. either between middle class or flat out rich.


Are you sure you aren't moving the goal posts of middle class? I would say that dentists and computer scientists still belong perfectly to the middle class.


This comment highlights the victim mindset that seems to be more and more common these days... I've been on Hacker News for 6 or 7 years and it is only the past 2 or 3 that the notion that everything should be "fair" has taken such a deep hold. It is one of the major reasons I am starting to lose faith in this country.

We have a generation of people that thinks every person can be rich, successful or famous... and if they aren't then they are a victim somehow.

Perhaps they are. But the issue I have is that this type of thinking is fundamentally unproductive. The barriers that have been broken have been done so by achieving success despite the odds, and becoming a role model ... not through whining. Equality is only achieved when people obtain power and change things. Power requires being successful and valuable to whatever society exists, not complaining.

EDIT: I guess I take issue with the fact that "life" is being compared to a dart game. It's just not the case. You can reduce it down to "throwing darts" ... but that is a very pessimistic way of viewing the world ... and it's quite sad. I've seen so many "rich kids" who were total nut cases and poor kids who were able to overcome the odds through their character. Reducing the human condition down to the amount of wealth is excessively simplistic. I agree that rich kids might get a few percentage points of help (maybe 5-10%) but if you come from a middle class background you can still become a billionaire and sometimes even if you're dirt poor. What other country let's you do that? yes my screenname is "Stanfordkid"... I came from a very poor family and am not some entitled brat. The fact that that was the first thing people pointed out I think speaks to the way in which people are trying to reduce everything down numbers or labels that are in fact, very complex.


The fact that this comment was written by "stanfordkid" is almost too ironic to believe.

At first, you take aim at the "victim" mindset -- a mis-characterization of the analogy of the OP. However, you then go on to even concede that the perpetuators of this mindset may even hold well-founded "complaints."

Of course people from all backgrounds try to become entrepreneurs, engineers, artists and whatever else. Nevertheless, it's clear that people from some backgrounds face more difficulties than others -- that's all. The fact that merely pointing out this fact gets you slapped with a "victim" label is hilarious. Of course people from all backgrounds should continue to work hard and pursue their goals -- but as a society, we should also strive to lower un-equal barriers where possible.

Your comment is just a mess of generalizations and grand-standing. You're losing faith in this country because you've seen a "victim" mindset emerge in the past two months on hacker news -- a pretty niche website in the American demographic -- even while recognizing that the grievances contributing to this mindset may be legitimate. Forgive me if I don't take your loss of faith seriously. Furthermore, I have to say, if anyone is victim-baiting here, it's clearly yourself.


I just want to point out your user name: Stanfordkid... Ironic? I'll let the readers decide...

I agree with you that "complaining" by itself is unproductive and a waste of time. However, it would be super presumptuous to say that the complainant is not doing "something" about it in meatspace. Not that there is a lot to do, which is to say: Realistically, a few people control the overwhelming majority of monetary resources in the present world.

Should we contemplate that?

I don't. I am content with my status. I can, however, understand others are not. From an objective POV, it is super ridiculous that so few control so much. Does it affect me on a daily basis? Not that I am aware of, so I press on...


Unfortunately, reality contains a lot of victims, and they deserve more help than they get. A realistic mindset is a mindset that is cognizant of victims. And it is untrue that this process -- of becoming aware of our advantages, and the needs of others -- is unproductive. C.f. the ACA, social security, medicare, medicaid, and surely more backstops like these in the future.


Some envision success as improving society so that it is better, more fair, and offers more opportunities to more people.

Some apparently can only envision success as achievement for oneself despite society being what it is.

Clamor for change is inevitably part of societal change.

And anyways, you're right: the nature of fairness or lack thereof is not always about money--but that cuts both ways.


I didn't see OP as whining, just illustrating the reality of the situation.

If you're middle class you should still make that one throw you can afford, and if you're poor you should be taking all the damn fluffy animals and candy you can stuff in your pocket when you finish work without being caught.


All this talk of justice is driving the country straight into the ground!


Fairness and opportunity != justice.


Eh, in some sense, I am an entrepreneur. I am simultaneously quite poor and insanely successful.

Life is complicated.


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.


Almost every business owner I've met (a few notable exceptions) gave off this exact vibe. "If this doesn't work out, I'll just scoop into the money vault and try something else. No biggie!" Most of us get three strikes at bat so we go for the safe base hit. These guys get to keep swinging so obviously they all go for the home run.


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.


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.


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


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.


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).


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.


I had a CEO like this. "Hopefully we can afford pay rises next year", he said.

Fuck you, you live in a nice house, drive a nice car and drink expensive drinks, and I can barely afford to live a comfortable lifestyle.


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.


> 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.

When we talk about entrepreneurs, it is important to distinguish between those who start from scratch, those who have upper middle class parents and those who are born truly rich. For the latter two buckets, it is not that those folks made jumps; its just that their parents accumulated enough wealth over time that they were able to provide their kids with enough cushions.


I'd like to be successful enough to give my kids that kind of cushion. Shouldn't they be able to take advantage of it since I worked for it and gave it to them? So the 'jump' is a team effort over a couple generations, does that make it less valid?


It's not about validity and it isn't making a claim that it's wrong to use the resources given to you.

It's simply saying that capital is more important than people think.

Business and entrepreneurship is honestly worse than religion. Thousands of garbage blogs saying "don't give up" is the key to everything. Self help books, videos of motivational navy seal speeches, "following your passion." When the reality is most of them simply had access to capital. I would imagine most entrepreneurs are hard workers already or are already motivated. But capital is what really matters.


> Shouldn't they be able to take advantage of it since I worked for it and gave it to them?

I don't think anyone is suggesting that they shouldn't.

> does [their advantage] make it less valid?

Less admirable, maybe. I'm not sure what you mean here by 'valid'.


>Shouldn't they be able to take advantage of it since I worked for it and gave it to them?

Let's turn that around. Imagine your business starts out well, you have a kid or two and then it fails. And you're broke. And your kids have no cushion. Should your kids now have a worse start into life?

Assuming we know nothing about you and knowing how many businesses fail, it's quite likely that this second situation might happen. And if you come out ahead, it happens to countless of people starting a business. Should their kids be at a disadvantage? I don't consider this reasonable.


Why bring "valid" into it? That really misses the point.


> It could put your personal dollar reserves in jeopardy.

> I do think it is unfair though to say that only the wealthy are entrepreneurs

Many people don't have personal dollar reserves to take that kind of risk in the first place. While you might argue that people who aren't wealthy have personal dollar reserves, I think that having enough money to be able to forgo income for long enough to get a business off the ground and live of savings is a pretty good definition of wealth


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


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.


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.


When you do a startup, if its not your wife you fail


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.


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?


> [...] 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.


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.


> 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.


Solomon Hykes. Another inspiring example of an "outsider" succeeding in Silicon Valley.


I don't know about successful - Docker still has to prove that it can build a large sustainable business. Obviously I am bullish on the opportunity :)

I definitely was a complete outsider when I moved to Silicon Valley: first generation immigrant, with no affiliations or credentials whatsoever, no traction, and a lot of personal debt. If YC hadn't taken a chance on us and written that $17,000 check, we probably would have never made it this far. And I had it easy compared to other outsiders: I had US citizenship, my english doesn't betray I'm a foreigner, and of course I'm a white male.


Why not base it on the actual product and skills/experience of the founders, like they claim they do?

Palmer Luckey would have trouble getting funded with his VR headset in his hands, based on his background. VCs would sooner fund anyone that went to the same school they did.


The thing is that you can sell a good product without VC money, even it's a high-capital product.


As someone who went to top school/s but didn't major in CS (or business) and has trouble making friends, I certainly wish that credential was all it took. Then the playing field would almost be more accessible and meritocratic than it actually is. But presumably there's further layers of segregation and inaccessibility within those institutions.


Eh Linus Torvalds father Nils is a politician and member of the European Parliament, not exactly a coal miner all though Nils might've had maoist sympathies as a kid.


Not sure is Larry Ellison is a role model for any human. For deities, maybe.


For those not in on the joke, there's a biography titled "The Difference Between God and Larry Ellison: God Doesn't Think He's Larry Ellison".

https://www.amazon.com/Difference-Between-God-Larry-Ellison/...


Sure he is. He just has flaws like anyone. Einstein treated women badly.


It's really weird reading this when the first people I can think of that got funding didn't go to a top school, didn't have traction.

Naturally you can expect more top school people to do well because they're smart overachievers.

Is there data you have on this? How big is the difference in funding uptake for students from Harvard versus students from low-class schools like Caltech?


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).


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


Damn, good on him!


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!


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.


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?"


The rest of the quote: "and use that to get a loan from the bank on the company you want to leverage a buyout, then charge that company 'management fees' and take the rest of their money all the way to your bank, while the shell of a former company burns to cinder."


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.


Also there is a government scheme where: A) you get fortnightly welfare payments B) formal training and a tafe certificate C) access to mentors and resources

If you qualify for welfare and instead of looking for a job, you choose to start a business.


And there is decent free healthcare.

But nobody really starts companies here....


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


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.


Not sure if that’s a real quote but in my case it could read: “anyone can start a business, just borrow 1 years salary from your step-mom bus driver”


This is the quote.

>This kind of devisiveness, this attack of success, is very different than what we’ve seen in our country’s history. We’ve always encouraged young people: Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.

The context was Jimmy John's (the sandwich chain) started with a $20,000 loan from the owners parents.... That's $20,000 in 1983 dollars. (~$50,500 in 2017 dollars)


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?


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.


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.


My high school had a personal finance class (I recall it was required) where you had to pick an occupation, research a typical salary, and then put together a monthly budget based on that salary.


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?


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


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.


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.


I find that posters on this board generally overvalue the inherent merits of the core product vs other business factors.

In enterprise, trust and the relationship matters a lot, since the buyer is generally taking a big risk on you as a vendor. In smaller b2b, customers will be righfully concerned about depending on you when they can't be sure you'll be around in 2 years. These are both legitimate and important factors that are outside the scope of core product.

In consumer, even a great product will often get blown out of the water if a competitor with a worse but good enough product has a deep, deep marketing war chest. (the 'ol, "if you space has a VC backed competitor, you have no choice but to also raise money and fight a war of attrition") You probably still have the best chance in consumer by creating something with inherent virality (honestly the only way to not have a huge sales and/or marketing cost in any sort of business).

It's not even a sinister conspiracy at play or anything like that. It's just a truth that non-core value propositions are important in business, and are often even part of the true "product".


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.


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


I'm missing information on what being a Jew in USSR entails so I concede that they may not have been part of the elite (I thought working for USSR propaganda machine would put you far ahead of the pack). I just thought being able to afford a commodore 64 back then already put you well ahead of the curve, in the 80s, but again this was after they arrived in the US, not much info on this.


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



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


Soviet elite? You gotta be fucking kidding me. The reason Sergey's and Larry's parents even came to America was why USSR collapsed - the system started putting spikes on the roads of talented (or presumably talented) people. How many excuses can you make?


That's a bizarre conclusion to reach. Another conclusion is if that you have a long enough runway, you get more at-bats, which leads to a higher probability of a hit.


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.


Here's a paper that says the exact same thing (that most entrepreneurs come from wealth), but with much more data: http://www.nber.org/papers/w19276.pdf


> "This is an opinion article"

> provides anecdote as counterevidence


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


Evidence accumulates, it does not spring into existence.


it seems like your evidence, that of a small sample of entrepreneurs, you ran into multiple youth from prominent families, suggests that rich kids are at least substantially over-represented, although most likely not 100% of entrepreneurs.


None of the "youth" (two) were rich-kids.

Most however, had significant education and work experience (MIT, Stanford, Amazon, Google, MSFT).


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.


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.


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.


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.


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.


>>cat food

Why would you buy cat food though? It is not that much cheaper than some really cheap pasta. In college I was always on the lookout for the pasta specials at the supermarket. Pasta and some cheap olive oil is enough to get you by when times are tough . And if times were looking a bit good you could add some Feta and Ragu [1].

[1] https://www.ragu.com/


It was a reference to a common shorthand/cliché - "cat food retirement" is one variation.

I was a rice and beans fan.


For some reason in the United States we have a cult of moral-kombat-individual responsibility that doesn’t value community. It reminds me of the Est “radical responsibility” seminars in the late 70’s that would say provocative things like “it’s your responsibility you got cancer!”. There are definitely many good things that can come from a focus on individual responsibility, but where does it end? Why not make college free if you’re rich, and you pay full price if you’re lower income? If everything is individual responsibility, does it even matter? Why believe in God? Does community matter?


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.


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).


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


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.


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.


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!


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.


> Who cares about statistics.. if it's possible, just harder, for you to be a wealthy entrepreneur, still you should do it!

That may be fine as an approach for the individual. But articles such as this are also meant to inform public policy and opinion. Social mobility in the US is at an all-time low, and that won't change just by preaching the prosperity gospel.

Even if you are not a victim of this imbalance yourself, you have an interest in fixing it: for every Google, Facebook, and Microsoft started by rich kids, there are four similarly-successful startups that never get founded because their potential founders weren't in the top 20%. And eventually, people will notice that, no, it's not (just) their fault that they can't get ahead in life. At that point, social cohesion will vanish: rules will only be respected where they are enforced by violence, the military will no longer find poor people willing to die for the country, employees will casually sabotage the startups they work at etc.


Wow that escalated quickly!


Reality cares about statistics?

Conclusions and advice are easy to spout off when you declare facts and evidence as irrelevant...


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


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


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.


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


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.


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.


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?


The rags to riches dream was always a fairy tale, at least from a statistical perspective. It was always the exception to the rule.


Most research I've seen says that you are much more likely to stay in the social class you were born in than you are to significantly rise. Wikipedia has links to some studies https://en.wikipedia.org/wiki/Socio-economic_mobility_in_the...


Those are less likely to be the high status, sexy startups. Surely there are lots of people getting wealthy via alternate paths. I think the startup ecosystem skews toward high status class members mainly because of the ease in obtaining better funding (and more leverage) by doing so (all else being equal) and because of the importance of education networks in hiring for tech.


I'm more curious about when this was a reality beyond lifting someone out of direct poverty.

Alright, I run a business, so let's talk some numbers in the modern day environment. As a pass-through entity, all business income is considered personal income for the consideration of taxes. In addition, to federal income tax, which can range up to 28% for sub $100k income, business owners pay both halves of their FICA, which is 15.3%. Then, there's state income tax. Now, it's hard to just add tax numbers due to deductions, which will change with the GOP tax rules, but my overall rate last year was 28%. Of course, this doesn't cover things like healthcare. I live in a low cost area, but I pay $447 a month for a policy with an out of pocket max of $2800. That means, that I have to budget around $8k/year right now to account for medical ailments, which means that I have to account for up to a 40% loss of income when factoring in medical and taxes. What does this mean in aggregate? You need to be in a business that makes a fair amount of money before it's possible to be stable financially.

Now, is someone who comes from an impoverished situation it a place where they can generate that kind of money from get get go? Probably not. Alright, so we can then work a job and save money in order to create the necessary buffer to start a business. Great, but what kind of jobs pay that kind of money? Generally, one that requires a fair amount of education especially in the modern economy. Getting that degree is difficult and expensive. Fine, so we can take a loan to get the education necessary to get the job necessary to save the money necessary to start the business. However, then we have debt in order to repay when we need to be saving money to bootstrap. Further, the current tax proposal disallows deductions for student loan debt in addition to taxing tuition waivers for graduate students. Of course, instead of bootstrapping, we could raise money from investors in order to start the business. Great, but that's also difficult without the right connections. Where do we get them? There are actually some really good resources in a few select cities that connect business people with tech people. However, generally speaking, these connections are formed by growing up in the right communities or going to school in the right places. I received a wonderful education at a state tech school and keep in good contact with my former classmates. That said, they didn't come from money and are not a resource to draw from for investor money. On the other hand, students that go to Ivy League schools likely have a background that could raise that capital.

Anyway, that's a long response to a simple question, but I very much contend that there are significant barriers to entry for becoming successful at business. Technically, it's all doable, but the chance of that happening, especially when coming from poverty, is very small.


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


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

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


possibly always was, but definitely is mostly a fairy tale now. not that people won’t or shouldn’t strive


As long as parents do their best to help their own children, rags to riches will be a fairy tale. For poor and rich kids to grow up and do as well as each other, rich parents will have to treat their kids as badly as poor parents do, because the opposite is impossible.


That's a strange equivalence of prosperity and morality...

Poor people don't uniformly treat their children poorly. But startup founders profit from three advantages only rich people can provide: (1) the money for an Ivy League education, (2) the knowledge that there's some security to fall back on in case of failure, and (3) the knowledge how to make small talk, what to wear etc. when meeting investors and other stakeholders.

All these can be solved by policy: university scholarships for (1) and, through that, a bit of (3), plus (3) some form of social safety net that allows everyone to fail without fearing to starve.


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


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


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


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


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


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.


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.


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?


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...


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.


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?


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.


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.


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


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.


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


Work a tech job for 5-10 years saving money for when you quit, avoid expensive relationships / having dependents or have a spouse who can support you, save enough to live on ramen in the middle of nowhere for a couple of years with a bunch of roommates. Is that really Andrew Carnegie level of wealth?

Many of us have done exactly that, it just takes years of planning and being fortunate enough not to have severe medical conditions or loves ones you need to take care of with all of your finances.

Again, most people would much rather tell themselves that the reason why they're not entrepreneurs is because they're not Bill Gates rich, rather than making the sacrifices most entrepreneurs have to make to get things going.


I think the problem is that if you work a tech job for 5-10 years you are way out of the middle class. Middle class is generally 50-100k/year. 5-10 years of experience in tech should put you well past 100...

Your idea of "saving money for when you quit" doesn't work for middle class as the amount you save is not enough for "living on ramen for a few years" -- it will likely not be enough to even pay rent.


Ok, so what percentile are we talking about here? The top 30% ? Seems like the whole conversation is around where exactly to plant that flag.


Per https://en.wikipedia.org/wiki/Household_income_in_the_United...

If you were earning more than 100k you were in the top 7% (in 2014)

More than 75k puts you in the top 13% or there abouts.

Tech is wealthy


Really depends on where you live, though. If you make 75k-100k in the Bay Area, you're far from wealthy, I believe poverty line was 100k for a family of 4 there as of this year.

100k in Dallas is a different conversation though.


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.


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.


Yes, this is what I meant but better stated.


> they're just regular people who are in a privileged position

Literally the argument the article is making!


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.


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.


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


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.


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?


I'd love to start a business but I rely on my employer to give me health insurance and money to pay for rent and food. While I have a modest savings account compared to the average American, trying to justify it on a risky business venture where it would be literally fail into poverty or get moderate success isn't a chance I want to take.

I'm going to assume many other people share my thought process as well. Hell, I'm willing to bet health insurance is 95% of the reason why most people won't take chances when it comes to entrepreneurship. Compound this with States that didn't expand medicaid and other politicians that are trying to cut back on healthcare by cutting funding to programs like medicaid and the ACA, it's very easy to understand why the rich and the elite have a massive advantage when it comes to starting businesses.

What you are posting goes against the reality many people face, if I could fail into success without paying for rent and healthcare I would but I can't so I won't.

Also calling people "special" for succeeding seems very dehumanizing to other people that aren't "special."


> I'd love to start a business but I rely on my employer to give me health insurance and money to pay for rent and food

I understand if you don't "get it", but this is the reality for most entrepreneurs who start companies. The only difference from them to you is that they start despite the reality, and you don't. If you want to learn more, read up on what AirBnB guys had to do to survive in the early days.

I'm not writing this to offend you, I am just stating the fact, hoping that this would encourage you if you were made to believe otherwise all your life.

This comes from my own experience and many of my friends who are founders. I know of many friends who have lived off of couchsurfing (or lived off of someone else's closet, i'm not making this up) until their company took off. I know this may sound like a fiction but just want to let you know that this world does exist, it's just that the rest of the world (including those journalists and many people on HN with comfy life) don't know and will never understand why they do it.


Why do you suppose it's fair to say they're a special breed?




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