8 ms·

In a slightly older thread concerning this topic, at https://news.ycombinator.com/item?id=11306290 https://news.ycombinator.com/item?id=11306290 I made some obj

by dalke 11y ago

In a slightly older thread concerning this topic, at https://news.ycombinator.com/item?id=11306290 https://news.ycombinator.com/item?id=11306290 I made some objections to this analysis. I think there's a fundamental problem in how to interpret this analysis. It says that a company is founded by an immigrant if there is at least one immigrant founder. This means that if 1 of 10 founders is foreign born, then it classified as immigrant founded. An aggregate calculation like this is very likely to give a number which is higher than the more important number, the over- or under- representation of immigrant founders relative to the immigrant population. For example, if every company has 10 founders, and every company has 1 immigrant founder, then by the given definition, 100% of the companies would be founded by an immigrant. However, only 10% of the founder population would be an immigrant. As immigrants make up about 13% of the US population, this would mean that immigrants would be proportionally less likely to be founders of $1B valuated startups than non-immigrants. Curiously, and I believe significantly, the study does not give this population information, and it makes it difficult to determine that ratio. I did not find an explicit count of the number of immigrant founders. Table 4 has a list of all of the name, and Table 3 has a count of immigrants from a given country, so it's possible to figure this out. I am perturbed that the first contains 60 people and the second 61. Perhaps I have miscounted, but I believe there is an error in the report. (I double checked the report by searching for "60" or "61", but found no explicit total of the number of immigrant founders.) I did not find an explicit count of the total number of founders, which means I have to compute that myself from the list of companies. I did not find an explicit list of companies, which means I have to go to the original WSJ data source. Which I did, though my count was off by one from the report's count. It would have been much better if the report included the explicit list of companies and founder counts. I took the current WSJ list of 106 companies and picked a few in the top, middle, and bottom range. (Statistical sampling would have been better, I know.) I found founder counts of 65 of them before tedium kicked in. I found 161 founders. This gives an estimated total founder size of 161/65x87 = 215.5, and implies that about 60/215.5 = 28% of founders are immigrants. This number, while twice as large as expected from the general immigrant population of the US, is also around half of the eye-catching 51%. The next step would be to do a sensitivity analysis to give an idea of error bars. I do not know anything beyond basic statistics, but will point out that 60 is a very small number compared to the number of foreign visa, and hardly representative. Speaking of statistics, while 28% is twice as large as 13%, there's likely also a form of p-hacking, or "garden of forking paths" going on. With enough sampling, you will be able to find very unrepresentative subgroups in your data. Why was this population of $1B startups chosen? Do the results change with $2B? Do they change for companies that go public? For a more specific example, last year there was an analysis going around which pointed out that "Most high tech companies are founded by founded by First/2nd gen immigrants". This is definitely in the same vein, though with different measures. See https://news.ycombinator.com/item?id=9085970 https://news.ycombinator.com/item?id=9085970 for my observation that this is almost exactly what you would expect given the immigrant population in the US. Since I can point to two reports related to the topic, how many more negative and thus unpublished correlations are there? Finally, the report includes the suggestion that diversity among the founders helps improve the success of the company. If that were the case, then should we not exclude companies where the all founders are from the same foreign country, as in Nutanix where all three founders are from India?

tonyhb 11y ago
Conversely, if a two person company were founded by two immigrants it would beat the odds. The chances of two founders meeting, working together, then creating a 1B+ company in the adversary of worse contacts is smaller. In fact, moving to this country and making a 1B+ country takes more work than being born here. Take a look at statistics at people from well-off backgrounds or with contacts vs people with nothing.
- dalke 11y ago
  I do not believe that adversity builds strength which leads to success, which I believe is your argument. I won't believe it until we start seeing the schools of the children of the successful put arbitrary and even petulant roadblocks in the way of the students, and deliberately teaching to far below the level the students can handle. Anecdotally speaking, as an American immigrant to Sweden, I do not think the adversity I faced has made me as successful as I would have been had I stayed the US. Certainly some succeed despite adversity, and even draw strength from it, but to highlight those few is to make faceless the many who did not. In any case, the report argues that diversity leads to robustness which leads to success. This is a very different view, designed more, I think, to appeal to the current pro-diversity trend rather than a group which might prefer the meaning behind "spare the rod, spoil the child."
  - mahyarm 11y ago
    Educated ambitious people of other countries move and work to somewhere where the opportunities are greater, and are willing to do so, leaving their home countries and families. This is a filter which causes these immigrants to be successful compared to the average disadvantaged unmotivated american. It's the old high vs low skill immigration debate.
    - dalke 11y ago
      I agree that it's nice to think that. However, you've now introduced a third axis. Axis #1, from the report, is that nationality diversity is important, in which case a white Protestant Canadian from Toronto brings more diversity than a Russian Orthodox Tlingit from rural Southeast Alaska. Axis #2, from tonyhb, is that adversity leads to success. In which a highly educated medical doctor from Iraq who, as a refugee, ends up in Sweden and works as a taxi cab driver in order to support his family, instead of spending two years to learn the language and get recertified, has excellent changes for financial success. Or not. Now your #3 is "Educated ambitious people". But you have two baselines: "somewhere where the opportunities are greater" than in the home country is one, "successful compared to the average disadvantaged unmotivated american" is another. These are not the same. The US brings in agricultural workers from Mexico. The opportunities are greater in the US. But they are less successful financially than 'disadvantaged unmotivated american', because the Mexican worker is going to return to Mexico, where the cost of living and retirement is lower, while the American will stay in the US so needs a higher pay. Thus the long tradition of, say, South Africans going to work in London, suffer for a few years to save up a nest egg, and move back to South Africa. That doesn't mean the local English are disadvantaged and unmotivated, only that they have different motivations. Or the educated ambitious doctor from Iraq who drives a taxi, because the opportunity to be alive driving a taxi is better than being dead back in Iraq. Two different baselines, yes? Each of these three axes leads to different policy. All of them have some truth. All are based on factors which are hard to identify in a 22 year old other than "comes from a family with money." Now to point out another worrisome aspect of your comment - why do you highlight 'average disadvantaged unmotivated american'? The report compares immigrants to founders of high tech companies. Very view people, including educated ambitious Americans, do that. To then insert 'disadvantaged unmotivated' makes it sound like you are thinking of something else, but the only reason I can think of is anti-poor and anti-minority viewpoints, which surely you don't mean. Could you clarify why it was important to add those qualifiers? Does it also guide your thinking about how to accept refugees?

by dalke 11y ago

tonyhb 11y ago

Conversely, if a two person company were founded by two immigrants it would beat the odds. The chances of two founders meeting, working together, then creating a 1B+ company in the adversary of worse contacts is smaller. In fact, moving to this country and making a 1B+ country takes more work than being born here. Take a look at statistics at people from well-off backgrounds or with contacts vs people with nothing.

dalke 11y ago
I do not believe that adversity builds strength which leads to success, which I believe is your argument. I won't believe it until we start seeing the schools of the children of the successful put arbitrary and even petulant roadblocks in the way of the students, and deliberately teaching to far below the level the students can handle. Anecdotally speaking, as an American immigrant to Sweden, I do not think the adversity I faced has made me as successful as I would have been had I stayed the US. Certainly some succeed despite adversity, and even draw strength from it, but to highlight those few is to make faceless the many who did not. In any case, the report argues that diversity leads to robustness which leads to success. This is a very different view, designed more, I think, to appeal to the current pro-diversity trend rather than a group which might prefer the meaning behind "spare the rod, spoil the child."
- mahyarm 11y ago
  Educated ambitious people of other countries move and work to somewhere where the opportunities are greater, and are willing to do so, leaving their home countries and families. This is a filter which causes these immigrants to be successful compared to the average disadvantaged unmotivated american. It's the old high vs low skill immigration debate.
  - dalke 11y ago
    I agree that it's nice to think that. However, you've now introduced a third axis. Axis #1, from the report, is that nationality diversity is important, in which case a white Protestant Canadian from Toronto brings more diversity than a Russian Orthodox Tlingit from rural Southeast Alaska. Axis #2, from tonyhb, is that adversity leads to success. In which a highly educated medical doctor from Iraq who, as a refugee, ends up in Sweden and works as a taxi cab driver in order to support his family, instead of spending two years to learn the language and get recertified, has excellent changes for financial success. Or not. Now your #3 is "Educated ambitious people". But you have two baselines: "somewhere where the opportunities are greater" than in the home country is one, "successful compared to the average disadvantaged unmotivated american" is another. These are not the same. The US brings in agricultural workers from Mexico. The opportunities are greater in the US. But they are less successful financially than 'disadvantaged unmotivated american', because the Mexican worker is going to return to Mexico, where the cost of living and retirement is lower, while the American will stay in the US so needs a higher pay. Thus the long tradition of, say, South Africans going to work in London, suffer for a few years to save up a nest egg, and move back to South Africa. That doesn't mean the local English are disadvantaged and unmotivated, only that they have different motivations. Or the educated ambitious doctor from Iraq who drives a taxi, because the opportunity to be alive driving a taxi is better than being dead back in Iraq. Two different baselines, yes? Each of these three axes leads to different policy. All of them have some truth. All are based on factors which are hard to identify in a 22 year old other than "comes from a family with money." Now to point out another worrisome aspect of your comment - why do you highlight 'average disadvantaged unmotivated american'? The report compares immigrants to founders of high tech companies. Very view people, including educated ambitious Americans, do that. To then insert 'disadvantaged unmotivated' makes it sound like you are thinking of something else, but the only reason I can think of is anti-poor and anti-minority viewpoints, which surely you don't mean. Could you clarify why it was important to add those qualifiers? Does it also guide your thinking about how to accept refugees?