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Towards an Untrepreneurial Economy? Rise of the Veblenian Entrepreneur (2019) (ssrn.com)
147 points by npalli on June 19, 2020 | hide | past | favorite | 81 comments



This is fascinating. In passing, they mention how the highly privileged may conspicuously consume 'immaterial' goods for status, and the less privileged do more traditional conspicuous consumption of expensive goods.

So if wantrepreneurism is a form of conspicuous consumption for the privileged - or those who desire to become so - what's the equivalent for the less privileged?

I think it has to be MLM and Instagram influencing. The wantrepreneur wants to be a mini-Jobs, but the MLM/Insta dreamer wants to be a mini-Kardashian, hawking products with a glamorous image. But their desire is exploited ruthlessly by a system that promises success but will mostly drain their wallet. Nevertheless a lot of them feel the need to keep going, largely because they've publicly bought into the image.

Maybe it's about what forms of success one is exposed to and what one sees is popular among one's peers?


> So if wantrepreneurism is a form of conspicuous consumption for the privileged - or those who desire to become so - what's the equivalent for the less privileged?

> I think it has to be MLM and Instagram influencing. The wantrepreneur wants to be a mini-Jobs, but the MLM/Insta dreamer wants to be a mini-Kardashian, hawking products with a glamorous image. But their desire is exploited ruthlessly by a system that promises success but will mostly drain their wallet. Nevertheless a lot of them feel the need to keep going, largely because they've publicly bought into the image.

Interesting idea, with the sad conclusion that whilst the average wantrapreneur suffers the opportunity cost of missing out on salary, they might well actually be able to pay themself from some sort of funding and come out with an enhanced CV and personal network, whereas the MLM dreamer who's less able to afford it probably spends more on inventory than they earn on sales and burns their personal network with irritating sales pitches.


I think the negatives are often underappreciated.

I know founders who ruined their credit, destroyed their friendships, ended lifelong relationships, lost their sanity, and in one case, probably committed suicide. Some do move on to other things and have a lingering sense they are failures, because they knew one or two people who exited with millions who seemed no better than they were. And they don't think they can talk to anyone about any of this, because who would have sympathy?

I don't have data, but I think the negative or ambiguous outcomes hit the founders from middle-class or working class backgrounds way harder. This was their one shot. Someone who falls back to their parents' millions will get other chances.


I think this is true and nearly referenced the psychological downsides in my OP, I'm just perhaps uncharitably assuming the 'wantrapreneur' class dreams of riches and enjoys pitch sessions but has less commitment than most founders to actually executing their idea and hitting targets, and fewer staff and customers to feel they've let down.


> Maybe it's about what forms of success one is exposed to and what one sees is popular among one's peers?

Fashion is fashion. For some it's a rebellion, a coming of age story, for others it's a way to blend in with the peers, be one of the cool guys.

On a tangent: many (most?) investors are playing the same game, only by proxy. This is why the VC industry is losing money as a whole - they aren't there for the money.


IMO the VC industry as a whole is losing money because a large fraction of them suffer from luck/survivorship bias & lack the wisdom to recognize that was the key to their past successes, and they all have a serious case of FOMO. A lot of tech hype is just hype and the reality is, if you don't understand a technology and if/why it really is superior to existing solutions, you almost certainly aren't going to make money off it.


>if you don't understand a technology and if/why it really is superior to existing solutions, you almost certainly aren't going to make money off it.

Something closely related, but if you do understand a technology, and if/why it really is superior to existing solutions, you would almost certainly already be making money with that technology.

So you do need to question a lot of investments into technology firms that have no revenue? They have no enormously expensive hardware component. (Like there is with, say, concentrated solar thermal technology.) There is often no onerous federal regulatory framework they need to navigate. (As exists for FDA compliant health care tech for instance.) Why are people laying out these enormous investments if not something of a combination of vanity and entertainment?


I always thought that VC funds always had a bit of a cargo cult atmosphere around them.


Before coming to CA, I worked for financial traders. It was a commonplace that investors are herd animals. VCs are no exception.

The cargo cult thing makes a lot of sense to me, honestly. Venture funding is a field where the feedback loops are long and noisy. It takes literal years to see results, and a lot more years to see if somebody is truly good, instead of glib and lucky. By that point, the technologies and trends have changed so much that there's not a lot of reason to think they're still good.

And I think the way stakes have gotten larger since Bubble 1.0 makes it so much worse. The amount of money really increases the incentive to do, say, think absolutely anything that might get you a slice of the expected returns.


>Maybe it's about what forms of success one is exposed to and what one sees is popular among one's peers?

I wonder if this particular cancer is not more widespread than that?

What I mean is this - What if there is a very real perception among the populace, that insta-youtube-dreaming is, in actuality, a good way to make money? Maybe the problem is deeper than simple "peer pressure"? Maybe the issue is that at this point, having seen so many seemingly successful people doing this, the populace has come to believe this is how you can make a living? Just as previously the lower socioeconomic side of the populace believed the way to make a living was to go out and get a job at the town's factory. While working at a grocer was something you did only until you got that job down at the plant. Today, working at Starbucks may be getting viewed as something you do only until your Twitch-Youtube-InstaFaceChat channel gets enough followers.

It's a bit depressing when you think about it.


Eh, I think most people are aware that the odds are long - imo a more apt comparison would be kids of the past dreaming about being pro athletes or rock stars.


Ha, I really like this analysis. Has a Venkatesh Rao feel to it.


So universities are conspicuous consumption, internships are conspicuous consumption, entrepreneurship is conspicuous consumption.

Perhaps the simple fact is that most people are motivated by the need for social validation, and only a tiny tiny fraction of the population is driven instead by things like intellectual curiosity, desire to help others / solve societal problems, etc. So any class of activity that becomes open to a sufficient number of entrants will eventually turn into a form of conspicuous consumption.

Now scientific research is conspicuous consumption (MIT Media Lab?), book authorship is conspicuous consumption, and political candidacy is conspicuous consumption. Are there any activities left that doesn’t function as a form of conspicuous consumption?


Surely anything is conspicuous consumption if you do it conspicuously and consumptively enough?

(That's a joke, but it also isn't - in a media panopticon society everything is conspicuous, and in an industrial/consumerist society everything is consumption .. that leaves only activities which are productive or collective but done privately. That leaves .. a few of the religions? Someone should break out the Baudrillard at this point, we are not the first to address this question)

Edit: I forgot the major media event of the time, duh; protesting, while very conspicuous, is intrinsically anticonsumerist, and getting injured and teargassed as part of it is sacrificial rather than consumerist.


>Are there any activities left that doesn’t function as a form of conspicuous consumption?

I would guess anything that doesn't involve exchanging money for an object or experience, in which the quality and/or duration of the object/experience increases with increased cost.

Some ideas off the top of my head:

- Volunteering your time locally in your community (soup kitchen, tutoring underprivileged kids, coaching youth sports, etc.)

- Building interpersonal relationships with new people

- Putting work in to maintain existing interpersonal relationships

- Meditation, mindfulness

- Building a tangible skill that takes intense study/practice over a time scale of multiple years to be considered an expert (craftsmanship, visual arts, martial arts, athletics, etc.)


Time and money are both resources you have, why is spending time valued higher than spending money?

I believe this widely held view comes from people who have more money than time, so they value time more.


> universities are conspicuous consumption, internships are conspicuous consumption, entrepreneurship is conspicuous consumption

> scientific research is conspicuous consumption (MIT Media Lab?), book authorship is conspicuous consumption, and political candidacy is conspicuous consumption

Is the paper making all these claims? I don't see them.


Sometimes people write comments relaying their own opinions.


Never said it does, was it confusing? Maybe my English needs more work.


> Never said it does

Then I don't understand who this question is supposed to be directed at:

> Are there any activities left that doesn’t function as a form of conspicuous consumption?

My answer would be that none of the activities you list (with the possible exception of the kind of wannabe entrepreneurship the paper is talking about) are conspicuous consumption. But it seemed like you were directing the question at the authors of the paper, not me.


> Then I don't understand who this question is supposed to be directed at:

To the HN community of course.

> My answer would be that none of the activities you list (with the possible exception of the kind of wannabe entrepreneurship the paper is talking about) are conspicuous consumption.

That’s a valid response, although I don’t agree. Note that I’m not regarding these activities to be entirely about conspicuous consumption, just like the paper doesn’t claim all of entrepreneurship is veblenian. Fwiw the paper does cite another work that claims some internships can be viewed as a form of conspicuous consumption.


> Note that I’m not regarding these activities to be entirely about conspicuous consumption

If your definition of an activity being conspicuous consumption is that somebody, somewhere, can use it for conspicuous consumption, I think you're right that it's going to be hard to find an activity that isn't "conspicuous consumption" by this definition. But I would say that's a problem with your definition.


Well surely it's a matter of degree (and also chronological trends) we're talking about here. My writing may not be perfectly clear but other commenters seem to understand my point, nuanced discussions may be difficult but not impossible if we're engaging in good faith.


I think it was a rhetorical question directed at me. I got a chuckle out of it, it made me go 'hum...', and brightened my day about one micromort's worth.


Medics, fictions, anything that is not considered cool


No. All human endeavour is social signalling.

https://en.wikipedia.org/wiki/Signalling_theory


I'm naturally suspicious of this kind of reductionism, because it so easily shades into unfalsifiability.

"Everything you do is either because of X, or you believe it's for some other reason but your subconscious does it because of X anyway."


I read the actual research and it seems to me the authors are confounding a lot of things. I believe people with a decent background in business and economics should see this. A few things that jumped out at me:

1- The rise of specialized services that lower the entrance bars for many industries.

2- The rise of the wantrepreneur.

3- "Inefficient market offerings" that reduce innovation.

The answer to these:

1- Yes by lowering the entrance bar with SAAS products, regular people can create companies more easily. This means many people that shouldn't be company owners are now. But this is hardly a bad thing. The converse to this is that many people who should be entrepreneurs that weren't are.

2- This is really complex. And yes, the ease of starting a business and businesses that service businesses will always play into this segment. But it's hard to blame mailchimp for the rise of the wantrepreneur, which seems to be a logical conclusion if we follow the premise of the study. Since that's not a logical conclusion, it follows the study's premise isn't very sound.

3- As I understand it, inefficiencies in the production of services means more people offering a service than can be sustained by the demand of such services. Such events are normal when industries are in flux. It's actually a good thing, as it fosters competition and the surviving brands are stronger, leaner and smarter than they would be if there wasn't such 'inefficiencies'.

I'm really not sure what people see in this study. Even the language used is... emotional? lacking? I mean, it's just not language that lends to nuance and understanding. It's almost marketing like. And I say this as someone who is a digital marketeer, so I'm not using it as an insult. It just feels out of place, I expect analytical language in a study.


I've read Veblen's "The Theory of the Leisure Class", and I don't see that it applies here. The author writes:

"This rapidly growing industry has transformed the nature of entrepreneurship and encouraged a particular form of low-quality entrepreneurship. It has done so by leveraging the Ideology of Entrepreneurialism to mass-produce and mass-market products that make possible what we term Veblenian Entrepreneurship."

I'd agree with the first sentence, but not the second.

We really do have "entrepreneurship as a service" now. Or did, pre-epidemic. Wannabe writes a pitch deck or a white paper, and convinces VCs, Kickstarter users, or ICO investors to put in money. Get space from WeWork, technology infrastructure from AWS, and turn traffic into revenue with Google Ads. Show the traffic climbing and you're a success, even if not profitable. Some such businesses even succeed in the end.

The question is, is this diverting people from doing hard, useful things? Like refurbishing buildings in bad neighborhoods. Installing solar panels and inverters. Tree trimming near power lines as a service. Automating meat-cutting plants. Don't know. We don't have enough of the latter, though. Those things have no low-probability big upside, which is what VCs want.


I'm not sure why you disagree with the second sentence, especially given your followup paragraph.

It doesn't need to divert people from doing 'hard, useful' things to be a form of conspicuous consumption, it just needs people who are willing to accept less than they might otherwise earn in salary to have the social cachet of being a Founder CEO and investors [and sometimes even acquirers] willing to accept lower risk adjusted return to be associated with people and ideas they see as innovative or play golf with other investors in.

If Veblen was born a century he'd be dripping with snark - justified and otherwise - about everything to do with the Valley, probably including a lot of the successful exits.


Many hard useful things, which once we're more accessible to small-scale entrepreneurs, have became scalable industries by using technology and free money.

Solar installations certainly seems that way - it probably runs by big companies/platforms, hiring freelance salesman and installers and offering better financing, web marketing, QA, brand, etc.

And of course this ties to "freelancers on demand" platforms, replacing many entrepreneurs.

Same could go for tree trimmings, maybe by using sat images to find opportunities, and automating the legal, marketing processes.

As for automating plants, there's robots-as-a-service, so this probably creates an opportunity for proven robotic service companies to grow and less for new entrepreneurs.

It may just be that the world just needs far fewer entrepreneurs.


Is it possible that veblenian means in the context of a veblen good?


> it's hard to blame mailchimp for the rise of the wantrepreneur, which seems to be a logical conclusion if we follow the premise of the study

Not mailchimp, because mailchimp, as a business, is not focused on providing services to entrepreneurs. It's much more general. The paper is talking about businesses that focus specifically on providing services to entrepreneurs, what it calls the "Entrepreneurial Industry".

I do think the paper suffers from a lack of specific examples; I would have liked to see some actual examples of companies that the paper considers to be in the Entrepreneurial Industry.


There does seem to be a glut of net-negative "entrepreneurship" resources like low-quality bootcamps, pay-to-pitch events, useless networking events, endless motivational/advice content, etc. Many of these are specifically targeted at convincing people to "live the dream", although I suspect they're more misguided than intentionally scammy.


I find the premise to be rather Baudrillardian than Veblenian, or perhaps it's simply that Baudrillard encompasses Veblen. In essence: the meta consumption of the symbol of entrepreneurship, on the assumption that it increasingly holds more social value than any economic output, imo extends the behavior beyond mere Veblenian, i.e. conspicuous, consumption.


> And society derives no obvious benefits from a profusion of poorly performing ventures.

This is where the paper goes from research to opinion piece. It is easily argued that without the failures, there won't be successes. One can also see that while there are many many business failures, there are also unicorns the likes of which the world has not seen before. It is not obvious at all that not having more failed entrepreneurs is a bad thing. Lower life-time earnings is hardly a social cost. If these entrepreneurs ended up on welfare, then perhaps there is an argument. But if they find a fulfilling life doing what they do, and the consequence is they earn less... what problem is it of mine? Why do I need to derive a benefit from them? That seems to be putting my desire for 'stuff' (intangible or not) over their right to do whatever they want with their life.

More examples of editorializing:

> In contemporary society, the infatuation with entrepreneurs is such that they “are seen as almost having a magical effect on economies—alchemists, whose innovative capacity allows for water to be turned into wine, lead into gold.” (Greene et al, 2008; p. 3). -- citing a source does not make it true


I've been seeing a lot of that lately on Twitter: accounts post inspirational quotes/images about being an entrepreneur and 'transparency' about how much money they've made. Always followed by a link to their Gumroad: "Pay me to tell you how to take advantage of people like you, who just paid me."


Grades are inflated. Ambitious high school juniors are running bogus charities and non-profits. The smart kids do track and cross country so they can be two sport athletes. Harvard has the same curriculum as Penn State honors. Instagram lives are fabulous and fake. Wantrepreneurs start shell companies to put on their resume.

It's all down to our increasing ability to satisfy human material needs. Instead of allocating stuff so people can survive, the economy allocates status so people can be popular. It's an economy of likes rather than an economy of needs.


We need a grand strategy. Our first order of business should be to end the burning of fossil fuels, second order being to establish permanent presence beyond Earth.

Otherwise it feels like we are just twiddling our thumbs, redistributing wealth (upwards), and slowly dying.


I want space colonies as much as the next guy, but we really need to try to end homelessness, poverty, and extreme gaps in wealth inequality. Otherwise the rich will just fly off into the sky after they are done with the planet anyway.

The production is there. The money is there. If we simply won't do this, we aren't worth preserving as a society.


The willpower and genetic heritage of the poor and homeless isn't there. Most people at the very bottom are in that position because of mental or genetic problems. You cannot continue to throw money at it - you will end up with an endless burden. Instead just fund planned parenthood so that the cycle doesn't continue.


This perspective is a tragedy, and is just not the case.

Guess what--It's hard to get a good job with a criminal record, and it's easy to have a criminal record when you are black/brown.

So you take a bad job. And with that job, you remain so poor that you cannot handle the slightest emergency. A huge bill or disaster in your life (medical; car; legal) can pretty much end you. If you don't have a strong network to support you, you become homeless.

How do you reconcile the fact that most homeless people have some sort of family structure that is not homeless? I've never seen any evidence that homelessness is an inherited condition.

You blame both will power and genetics. Why are you so anxious to believe that society has no role in creating or solving this problem? If you make access to education equitable; if you don't ruin people's ability to engage with the economy with drug offenses that statistically appear quite racist in their skew; if you treat mental problems with medical assistance rather than criminal justice systems; if you regulate housing markets to prioritize making housing affordable rather than prioritize generating passive income for upper classes-- you can have a meaningful reduction of homelessness.


Is it more desirable to "actually want to create real economic value" and less desirable to "doing this just so I can tell people I'm an entrepreneur"? Maybe there's some value in "people who shouldn't be owning companies" owning companies, as it demonstrates a kind of economic freedom in a society. Whether a small business is able to make a dent in the economy or even an industry or a vertical is probably another topic of discussion. It's not actually that easy to start and run a business, there's a lot of yak-shaving admin work. Again, this is something that can be solved by throwing money at it (accountants, attorneys). So it does seem like entrepreneurship is prone to be used as social signaling by those who are already privileged. I don't know what argument I'm getting at, but I just know to be more discerning between the two types of entrepreneurs in my own networking activities and the people I choose to build relationships with, so I don't waste time.


Some fascinating observations here. What they describe perfectly explains the rise of places like IndieHacker. IndieHacker is basically a website for Veblenian Entrepreneurs to show off how successfully they are, and how far along they are to being real entrepreneurs. It is a place where their real desires (success, social status, etc.) can be easily signaled to other people.

The increasing number of innovation hubs, incubators, development grants, boot camps, etc. are taken together, what the article terms the "Entrepreneurial Industrial Complex". An entire industry now exists around making money off people that want to be entrepreneurs, or posturing so that they can profit from the potential success of unicorns (e.g. Incubators that take a cut). SaaS that let's you make a SaaS to provide people with tools for SaaS creation anybody?

As others have said here before, in a gold rush, it is the tool makers that make the money. And I think in this current "unicorn rush" that's exactly what we're seeing.


what this also reminded me of is a story about "fake influencers" I read which are people on Instagram and so on who pretend to be paid influencers, they go on trips, shoot photos but actually nobody is paying them at all. On the one side, of course, there is a real financial motivation to become more famous, but on the other hand like the entrepreneurs, they just seem to want to consume the influencer lifestyle and for a while just pretend like they're engaging in the actual activity.


Another commenter posted:

> It's simple, demand "pulls" the economy far better than supply pushes it, and we are a rotten insecure society with no demand.

I'm not sure it's so simple. In certain industries, we have a ton of demand that isn't really met: housing, education, healthcare, to name three.

But the reason we don't meet the demand for these (now highly-inflationary) goods and services is political, not economic.

1. We know how to build lots of really nice housing for not that much, but the most in-demand regions prevent that construction through the political process. Any innovation in construction tech has to contend with not just limits on construction in in-demand areas, but also requirements ("all new construction needs rooftop solar!" -- I love solar, but the costs are way, way lower at utility-scale) that increase costs.

2. High-quality, public education used to be ~free, a reality that applied significant downward pressure on private college tuition as well, but state funding has entirely dried up as costs (often non-teaching-related) have soared, in part thanks to (1)!

3. Due to somewhat well-meaning regulation, healthcare has become a disaster of hidden price signals, requiring a team of bureaucrats weeks to months to decide how much money to exchange for a service already provided. Powerful political organizations limit the number of new practitioners trained in the US,

There are good and totally justifiable path-dependent reasons why we are where we are in the three industries above. But they are now the largest category of consumer cash outflows, pushing innovation to the margins (cell phones! computers! ads!). The reason housing, education, and healthcare are so expensive is because demand vastly exceeds supply, and supply is limited by politics.


I've watched this kind of thing unfolding around where I am now - good to be given words for the somewhat uncomfortable feeling I was having. I'd realised that entrepreneurship was no longer some crazy people in a shed, but instead now an established industry - but I hadn't quite elucidated the precise identity and nature of the customer.

The most egregious example I'd seen was a clearly smart and talented guy ready to torch his budding medical career in order to launch a tourism related startup. Deeply ironic considering subsequent events.


It's simple, demand "pulls" the economy far better than supply pushes it, and we are a rotten insecure society with no demand. VC as a solution to chronicle too small capital expenditures is like pushing a rope.


I genuinely believe most of the entrepreneurs who "make a dent" went in with the best of intentions. I sort of feel that once the wrong investors get involved (or the entrepreneur gets sucked into bad terms) the whole thing (from an outsider's perspective) starts looking more like a ponzi scheme than a traditional business that creates real value for consumers.


There are two kinds of 'wantrapreneurs': one who wants to build a business that provides services or goods to the public at large and another who wants to build a business that provides services or goods to other wantrepreneurs to increase their social standing. The internet seems filled with the latter, but in reality, there are probably more of the first, methinks.


I couldn't get all the way though it, it's almost as bad as the circle jerk that is the start up 'industry'.

Reading it I just think why does it matter either way? You're either looking for profit, looking for scale, or looking for someone to bankroll you to do those things. The rest is all noise, so much noise.


Veblenian academics.


Truly a miracle it is to witness the birth of new jargon.

For academics working on understanding things like societal/economic dynamics, perhaps take a moment to consider that for the work to have any real impact, it needs to be understood by laypeople? Biologists can get away with naming things all sort of nonsense because the everyday person doesnt interact with it, but if you're trying to highlight destructive dynamics in the entrepreneurial sector, saying "this is an example of Veblenian Entrepreneurship!" doesn't communicate anything. Most of the writing that actually influenced the field use terms that are understandable and communicable build on terms already understood by practitioners, like minimum viable product or strategic inflection point. Making an argument with a whole bunch of jargon like "Ideology of Entepreneurialsm" or "Veblenian" just means anyone that wants to engage with the text has to go look up a bunch of random terms to figure out that you're referencing some 1800s era economist that coined the term "conspicuous consumption." It also makes you wonder if this level of being divorced from the actual practice impacts the analysis and if the findings are based on an actual understanding of the field or just an academic bubble. If, as they say at the end of the paper, this should be used as a catalyst to change entrepreneurship education- I wonder if they understand first how many people start companies because they majored in entrepreneurship, and second if they understand just how accessible this terminology and jargon is and if it would be getting in the way of making actual impact on curriculums


"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."

https://news.ycombinator.com/newsguidelines.html

Reflexive, generic comments are much more boring to read than they are to write, and they take threads in uninteresting directions. With a submission like this, if you don't find something to engage with in the article, there are lots of other things to read on HN's front page.


I didnt mean this as a shallow dismissal. I tried to write examples into the comment and discuss how the way the article was framed is counterproductive to it's own stated goals in its conclusion paragraph of generating change in how entrepreneurship is taught. I apologize if it came across as shallow, but I spent time trying to make it substantive by including counterexamples etc.


I hear you, and I know it stings to get a moderation reply like that, so I hope you won't take it personally or feel discouraged.

I'm not really seeing other examples in the comment. In any case, the main problem is that its core point is a misunderstanding. As other users have pointed out, the term "Veblenian entrepreneurship" means a lot: it instantly communicates the idea of entrepreneurship as a status signal, rather than for an economically productive purpose. In fact, if there's a problem with the term, it might be exactly the opposite: it already communicates so much that the mind could start to assume that it's a thing, and then find rationalizations for believing it.

That's the reason I called the comment a shallow dismissal: it dismissed an entire field based on a misreading. Also, there was snark at the beginning.

By the way, the problem with such comments is not that they're so bad in themselves—it's that threads are sensitive to initial conditions and they tend to choke out better, more specific discussion. This has something to do with the reflexive/reflective distinction: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...


What you are demonstrating is one of many ironies that one can see in academic writing. Here, the writing criticizes the rise of Veblenian entrepreneurship and the fall of innovation entrepreneurship, but ironically, this kind of a paper could be considered an instance of Veblenian entrepreneurship!

Perhaps that could be because Veblenian entrepreneurship, like most entrepreneurship, is made possible through higher margins. I always parade out this 2S Ventures post about the importance of margins [1] because it really drives the point home. On the contrary, "innovation" based businesses require a large variety of environmental factors to succeed, ranging from cultural ones to regulatory and logistic ones. And there is indeed no guarantee that an innovative business is necessarily one with higher gross margins than an incumbent whose products/services it would seek to unseat even if there is societal benefit, so the business may not intrinsically be attractive to investors.

So it is with this piece here. Its explanations of new business formation targeted at conspicuous consumption are targeted towards academics concerned with earlier explorations of these areas, rather than practitioners. I think the possibility of it being thought provoking for the first group while common sense for the second group is where the irony comes in -- presumably, it was intended to be the other way around!

[1] https://twosigmaventures.com/blog/article/why-gross-margins-...


FWIW, I am only interested in economics as a hobby, and I knew immediately what Veblenian meant. It's a pretty common reference in the field.

I think you raise a valid point about the impact of overly academic work, but I also think it's not unreasonable for academics to expect that their primary audience will have a passing familiarity with the major figures in the field.


Perhaps you are not in the intended audience? This is a social science paper.

I know a little bit about economics and social science, and for me the phrase "Veblenian Entrepreneur" was immediately meaningful and helpful. It gives me a theoretical frame for understanding a whole constellation of behaviors I've personally observed, and the incentives that drive them.

What I think this paper contributes is the idea of the entrepreneurial industry itself; that the low quality of ventures isn't a bug, but a feature. It's an integrated system to provide necessarily expensive social and signalling needs.

Some famous investors have questioned universities for the same reasons. The irony is that it might also be happening to technology ventures too.


Please stop throwing around the word "science" here. I see no science in this whatsoever. Science is formula for validating information requiring experiments and controls, which this does not have. Science falls within the domain of research, but not all research uses science


Please don't take HN threads on generic ideological tangents. They lead nowhere new or interesting.

This is in the site guidelines: https://news.ycombinator.com/newsguidelines.html. Plenty of past explanation here:

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...


TBF this is an academic article though. Why should total accessibility of language to non-experts be a goal in that venue exactly? Isn't it reasonable to expect that other educated people will check the citations?

Also in this case it looks like the authors are from business schools. Business buzzwords are a well known and common absurdity. On the other hand, I might be freaked out if random names for stuff started coming out of logic or maths circles.


It's really no more obtuse than people trying to change the world of entrepreneurship by writing about getting 'ramen-profitable' or 'fuck you money' or 'bikeshedding'.

Someone writing Medium blogs about startups probably expects the target audience to have at least a passing familiarity with what comparing an approach to Steve Blank might imply, and academic business schools referencing Veblen aren't very different.


Complaining about jargon in a publication for professionals is like complaining you don't know who this Torvalds guy is during a discussion on the linux kernel dev mailing list.

It's not like Veblen is an obscure figure nobody has heard of in the field of economics.


The complaint is about the entire field. There's a reason pop psych is separate from "real" psych - if fields don't learn how to communicate to the population at large and just keep research within ivory towers, then you'll just end up with increasing disconnect with the rest of the world while the narrative is increasingly controlled by unqualified but charismatic "thought leaders." This is a publication for academics, but not for all professionals, since "professionals" include a lot of practitioners that never stepped foot in an econ class but are still immensely powerful int he entrepreneurial environment. There's an entire set of stakeholders left out.


This is a common dynamic in many areas. As applied to programming languages, you can consider it as either the language complexity (learning curve), or terseness of terms. In that context, it also becomes clear what the paper gets from using those terms, more accurate communication of the concepts in question, but to an reduced audience. An extreme example of this is APL. For APL programmers, a show APL program can communicate a concept to other APL programmers which is for the most part illegible to others. If the idea is to communicate to other APL programmers, little explanation might be needed. For you and I, comment explaining the gibberish we're seeing would be appreciated. But if the goal is for other APL programmers to read it (as in a code base of APL), then perhaps that comment is sometimes superfluous.

As a more direct example staying with the theme of computer science but using English communication, in the context of programming I can can use the term isomorphism and the subset of people I'm communicating to (or expecting to) will know what it means, or after looking it up likely quickly understand what I'm communicating. For a novice or non-programmer, that may be significantly less likely. Am I better off replacing the term isomorphism with "running the same code on the client and server" all over the place? It depends on my audience and goals.

So, what's the purpose of this paper? To be widely distributed to the general public, or to be spread between business and economics academics for further research and discussion? I suspect writing your academic papers to the lowest common denominator is a good way to get your ideas dismissed by peers, as it both takes them longer to wade through the extra (unnecessary, for them) words which are also less clear, as an oft-used community term will carry more meaning than is easily expressed by the words you can replace it with in usage in a sentence.


You know that you're in essence saying "While I'm uneducated in the field, I demand all dialogue happens at my level", right?

This is not how science works. Never has, never will. Like any specialty, it will - inevitably - develop its own jargon. Not as gatekeeping, but because shorthand matters for efficient communication.

If you'd like to understand topics at a more layperson level, science papers are not what you want to read. You want to look to science communicators, who do the work of breaking it down, dejargonizing, and making it understandable for a wider audience.

Demanding science is conducted at the lowest common denominator level makes science impossible.


I find it sad that after people have learned to read, they think they are 100% literate, or that looking up words from dictionary is considered a bad thing. Demanding that everything should be written in basic reading level is celebrating low literacy and ignorance.

I'm not an economist or social scientist but I understood what Veblenian means from Veblen goods and conspicuous consumption seemed familiar so I looked it up.


do you not find it ironic that on a 'hacker entrepreneur' site that has played at least some small part in inspiring the culture of 'untrepreneurship'

(if only in a 'copycat' fashion, lest I insult anyone here)

that someone from outside the field of economics would complain about the lack of accessability of a formal paper in the field of economics to the 'average', 'casual' entrepreneur?

fairly certain this is kind of what they are getting at..

also:

'Ideology of Entepreneurialsm' is about as plain-english as you can get

'Veblenian' / the concept of 'conspicuous consumption' is fairly well known in pop culture, at least among the bourgeois/intellegensia/dropping-the latest-malcom-gladwell-or-thinker-du-jour-theory-over-cocktails set; i personally have encountered it many times in casual reading (e.g. time, economist, new yorker sorts of publications) and it was presented 2-3 times to me in various 101-level academic courses


It's weird to see stuff like this published as a "paper", as if it were a scientific endeavour, when there doesn't seem to be any experiment, mathematics, or even data involved. Just a lot of conjecture sprinkled with citations. It seems like the epitome of Feynman's cargo cult science. I'm actually very sympathetic with the idea being advanced, I'm just not sure what really separates this and a blog post.


"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."

https://news.ycombinator.com/newsguidelines.html

Reflexive, generic comments are much more boring to read than they are to write, and they take threads in uninteresting directions. With a submission like this, if you don't find something to engage with in the article, there are lots of other things to read on HN's front page.


Historians write papers. As do philosophers and classicists. There are papers in literary criticism, law, music theory, and theology, and none of them have experiments, mathematics, or data (at least in the scientific sense of the word). I don't think that makes those endeavors invalid.

The difference between an academic paper and a blog post is that an academic paper needs to fit into the context of the academic literature through its format (particularly through citation of prior work), and it needs to undergo some form of peer review. None of that is any guarantee of quality, of course. There are lots of terrible academic papers and lots of excellent blog posts. But you don't need to be a scientist to write an academic paper.


But this is economics, not music theory. And while a history paper titled 'Hitler did not start world war 2' may not have any data to back up its claim, if it didn't then it wouldn't be a very good one.


I haven't read this paper, but...

What separates a good paper from a blog post is the attention it devotes to second and third order consequences, its discussion and dismissal of likely counter-arguments, and the author's framing of the new idea in the context of existing literature. This is true for social science papers and law-review articles as much as it is true for machine learning and engineering papers.

These are the hallmarks of careful analysis that are generally lacking in hot-take blog posts.


A paper needs an idea that is well-thought-out and well-cited. Outside of math or the natural sciences, it does not need experiments, mathematics, or data.


If you label one sector of economy as harmful and another one as beneficial, why not use actual data to support your claim? Unlike thesis like "goto considered harmful" there are enough data out there. Authors even mention the actual size of the untrepreneurial industry in $, but don't dig any further.


Yeah, I tend to agree with you there. I get the impression that was just more work, or not the focus of this specific paper. For what it's worth, they do say

> Rather, we seek to provide a description of a subset of the population of ventures which appear to be growth-oriented entrepreneurship but on closer inspection are not. The exact size of this sub-set is a matter for further empirical study.

So, I'm looking forward to the follow up I guess :)


Ouch. But it also seems that the quality of research is falling? I guess it's cause I come from a technical field but a paper with a bunch of text, citations, and a general concept can be called research in the business field? Is it any wonder there is so much bs out there?


"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."

https://news.ycombinator.com/newsguidelines.html

Reflexive, generic comments are much more boring to read than they are to write, and they take threads in uninteresting directions. With a submission like this, if you don't find something to engage with in the article, please find something else to read that you do find interesting.


Unfortunately yes - bullshit is how many make their living in business. You would expect separation between doing and studying however, it is quite looked down upon for field researchers to maul sheep along with the wolves when studying livestock-wildlife interactions.

As for research as a whole it would require a metanalysis of a lot of papers over the year. It is possible it was always distributed about the same, or there were other filtering effects like stinkers didn't propagate as far in the past with higher publishing costs so we can't tell for sure.

Snark aside it is more like a clickbait article in making assertions and failing to either provide qualatative justifications or properly constrain them to the subset actually examined. Most businesses fail and dissolve in their first year period. A qualatative study that looked at numbers of "great outliers" may be more permissible but one which tries to make broad claims.

It isn't even consistent with the definitions, and axiomatically assumes low quality and waste for veblen goods. There have long been whole markets out there for high status "green" or "socially conscious" goods that cost more than the commodity as effective status signaling as an effect (whether it is primary or secondary depends on the individuals involved and their sincerity and consistency of action).

Low quality is also poorly defined. They imply cheap goods upsold but that doesn't make it poor enterpenuariship - going bankrupt in an easily preventable way and failing would be though.

It appears to be yet another tedious academic political axe grinder.


Seems better than sprinkling it with misleading false-quantification through scientism based charts and figures.




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