5 ms·

The Sobering Reality of Entrepreneurship in the U.S.

32 points by wherespaul 16y ago

_delirium 16y ago
As defined in this article (% of people self-employed / owning small businesses), I think there are some other factors involved. I only know about Greece first-hand (about half my family lives there), but one reason there is that regulations and incentives generally discourage large corporations from entering a whole lot of markets, though they've been relaxed somewhat recently. For example, Greece's high self-employment rate includes a lot of one-man grocery store or fruit/vegetable stand operations, because large supermarkets were more or less banned until recently. More generally, there were (again, recently relaxed) regulations on how many hours you could have a retail establishment open per week, and what hours they could be, intended to make it easier for small businesses to compete with the large ones: a one-man store can't reasonably be open more than maybe 60 hours/week, so the law generally banned businesses from being open more than a certain number of hours a week, and required them to close at least one or two days a week (depending on market segment). That made it much easier for small operations to compete with the large ones, because your mom-and-pop store open 6 days a week, 8 hours a day, wasn't up against a 24/7 chain store. Some though is perhaps just cultural. When a rich Greek builds a vacation villa, for example, he'll typically get a independent architect to design it and oversee its construction, rather than going with a big design/architecture/construction corporation, which is seen as too cookie cutter / less prestigious. I bet just architects alone account for several thousand of the self-employed Greeks, whereas most American architects work for corporations (exceptions only on the very high end of world-famous architects). It even extends to commercial real-estate: the typical 6-story office or apartment building in Thessaloniki or Athens is designed and built by a small independent firm.
jellicle 16y ago
One large reason is the lack of universal health care in the United States. Should you or your family be hit with a major illness while you're busy being entrepreneurial, you are sunk. One of the best things the United States could do to promote entrepreneurship would be to implement proper universal healthcare. Sadly, it's unlikely to happen in the near future.
- crikli 16y ago
  If that's what's holding a person up they probably don't have the necessary risk tolerance to be an entrepreneur.
  - abstractbill 16y ago
    Or perhaps they just got genetically unlucky. Say someone has a chronic condition and would never be able to afford insurance outside of a group plan. Does that mean the world should be deprived of their entrepreneurial efforts?
  - petercooper 16y ago
    The article is really talking about "self employed" people. It would be erroneous to assume that self employed people all need to have a high risk tolerance. There are more self employed low paid and menial workers than there are schmoozy, Valley "entrepreneurs" and I wouldn't expect a self employed cleaner, nanny or au pair to be adopting a high risk profile.
- patrickgzill 16y ago
  Isn't this supposition a little broad? There is no magic bullet, in anything.
- natrius 16y ago
  Easy access to insurance that isn't provided by an employer is important for entrepreneurship, but if by "proper universal healthcare" you mean single-payer insurance, I disagree. The individual insurance market sucks in America because of preexisting conditions and the higher taxes on individual insurance than on employer-provided insurance. The former is getting fixed. I'm not sure if the latter actually made it into the final bill, but I don't think it did, and that's a shame. Beyond that, the only advantage single-payer systems have is the lower prices that result from wielding monopsony power. I don't think it's possible to maintain the quality and pace of improvement of health care when people are funding it less than they would be willing to. Health care is expensive because we value it so much that we throw tons of money at it. People try to provide better care in order to get some of that money, and if you take some of the money away, there will be less people advancing the industry, which isn't what people want.
crikli 16y ago
Entrepreneurship ain't for everyone. You will: - work more hours. - deal with so much more stress. - flirt with financial ruin at least once. - struggle to balance work and family. But some folks are just cut out to do it. It's like a genetic predisposition that can't be denied. And if one can learn to cope with the issues I mentioned (and more) being an entrepreneur is one of the most rewarding life experiences out there.
deleted 16y ago
[deleted]
lawrence 16y ago
Self employment in Mexico City is a bit different than the startups you find in San Francisco. No, it's not a bit different. It's completely different. It's another universe. The vast majority of self employment in DF is a fruit stand or selling cigarettes at traffic lights (not that there's anything wrong with that). I spent some time with an Italian entrepreneur a few weeks ago and he told me "we have three VCs in our country. and two are out of money." The Sobering Reality of Entrepreneurship in the US is that we have it better than everybody else in the world, and even more so if you are an entrepreneur in SF, NY, Boston, Austin, etc.
- holdenc 16y ago
  Yes, the US economy is better than most places where entrepreneurship is a necessity. But it's also a world of paperwork, high tax and stifling administrative work -- and that's if you happen to be making a profit. The problem is that the US is hostile to small businesses. Are you a single member LLC? Then you are personally liable for claims against your business. Want health insurance? Get ready to pay through the nose. How about at tax time? You'll have self-employment tax, and most likely special state taxes on businesses (NY has this) to look forward to. The list goes on. If you have a successful software business and don't need to be in the US it's actually better to leave and run it elsewhere.
  - yardie 16y ago
    Do you think it's better anywhere else in the world. Up until a year ago, the country I am in made it inconceivable to be an entrepreneur. And they invented the fking word! You think paying taxes at tax time is bad. How about paying taxes before you are allowed to start your company. If people could do a startup elsewhere you don't think they would already. Taxes, liability, and health care are the least of the problems for a startup. You might as well be saying people should emigrate to country other than the US. There are far easier entry ports, yet the US still manages to be #1 no matter how many hoops they make you jump through. While this infograph is inconclusive it gives an accurate picture overall http://grasshopper.com/img/blog/entrepreneurism-us-europe.PNG http://grasshopper.com/img/blog/entrepreneurism-us-europe.PN...
sh1mmer 16y ago
"Self-employment" doesn't mean what we think of entrepreneurship. PG has the great metaphor two saplings, one of them is a redwood sapling, it's expecting to grow. On that measure we don't create self-employment with entrepreneurship we create jobs. HNers want to create a lot of employed people when they are succeeding.
petercooper 16y ago
Turkey, Greece and Mexico had the highest self-employment rates as a percentage of total employment. I bet Mali or Niger have an even higher rate, given most of the working population are subsistence farmers. Further, many countries don't have the laws that, say, the US and UK do to prevent abusing "self employed" workers by treating them as employees without benefits.
tptacek 16y ago
And now, a word about entrepreneurship in Greece: http://network.nationalpost.com/NP/blogs/fullcomment/archive/2010/04/28/greece-is-one-giant-ponzi-scheme.aspx http://network.nationalpost.com/NP/blogs/fullcomment/archive... (and, less humorously: http://online.wsj.com/article/SB10001424052702304252704575156023250923324.html http://online.wsj.com/article/SB1000142405270230425270457515...)
- dennisgorelik 16y ago
  The first link doesn't look humorous at all. The article is pretty serious.
  - Locke1689 16y ago
    I don't know, the comment at the end of the article is pretty funny.
usaar333 16y ago
entrepreneurship is stressful? Other countries, especially developing ones, have more small businesses? This might be one of the least insightful articles ever on mint life.
softbuilder 16y ago
I read this book and while the statistics were interesting the author's complete disregard for correlation!=causation was extremely disappointing. It was mostly conjecture and hand waving. Also if you're a minority woman, don't read this book. It will seriously bum you out.
known 16y ago
I think America is saturated and suitable for people who will live on http://en.wikipedia.org/wiki/Passive_income http://en.wikipedia.org/wiki/Passive_income

32 points by wherespaul 16y ago

As defined in this article (% of people self-employed / owning small businesses), I think there are some other factors involved. I only know about Greece first-hand (about half my family lives there), but one reason there is that regulations and incentives generally discourage large corporations from entering a whole lot of markets, though they've been relaxed somewhat recently. For example, Greece's high self-employment rate includes a lot of one-man grocery store or fruit/vegetable stand operations, because large supermarkets were more or less banned until recently. More generally, there were (again, recently relaxed) regulations on how many hours you could have a retail establishment open per week, and what hours they could be, intended to make it easier for small businesses to compete with the large ones: a one-man store can't reasonably be open more than maybe 60 hours/week, so the law generally banned businesses from being open more than a certain number of hours a week, and required them to close at least one or two days a week (depending on market segment). That made it much easier for small operations to compete with the large ones, because your mom-and-pop store open 6 days a week, 8 hours a day, wasn't up against a 24/7 chain store. Some though is perhaps just cultural. When a rich Greek builds a vacation villa, for example, he'll typically get a independent architect to design it and oversee its construction, rather than going with a big design/architecture/construction corporation, which is seen as too cookie cutter / less prestigious. I bet just architects alone account for several thousand of the self-employed Greeks, whereas most American architects work for corporations (exceptions only on the very high end of world-famous architects). It even extends to commercial real-estate: the typical 6-story office or apartment building in Thessaloniki or Athens is designed and built by a small independent firm.

jellicle 16y ago

One large reason is the lack of universal health care in the United States. Should you or your family be hit with a major illness while you're busy being entrepreneurial, you are sunk. One of the best things the United States could do to promote entrepreneurship would be to implement proper universal healthcare. Sadly, it's unlikely to happen in the near future.

crikli 16y ago
If that's what's holding a person up they probably don't have the necessary risk tolerance to be an entrepreneur.
- abstractbill 16y ago
  Or perhaps they just got genetically unlucky. Say someone has a chronic condition and would never be able to afford insurance outside of a group plan. Does that mean the world should be deprived of their entrepreneurial efforts?
- petercooper 16y ago
  The article is really talking about "self employed" people. It would be erroneous to assume that self employed people all need to have a high risk tolerance. There are more self employed low paid and menial workers than there are schmoozy, Valley "entrepreneurs" and I wouldn't expect a self employed cleaner, nanny or au pair to be adopting a high risk profile.
patrickgzill 16y ago
Isn't this supposition a little broad? There is no magic bullet, in anything.
natrius 16y ago
Easy access to insurance that isn't provided by an employer is important for entrepreneurship, but if by "proper universal healthcare" you mean single-payer insurance, I disagree. The individual insurance market sucks in America because of preexisting conditions and the higher taxes on individual insurance than on employer-provided insurance. The former is getting fixed. I'm not sure if the latter actually made it into the final bill, but I don't think it did, and that's a shame. Beyond that, the only advantage single-payer systems have is the lower prices that result from wielding monopsony power. I don't think it's possible to maintain the quality and pace of improvement of health care when people are funding it less than they would be willing to. Health care is expensive because we value it so much that we throw tons of money at it. People try to provide better care in order to get some of that money, and if you take some of the money away, there will be less people advancing the industry, which isn't what people want.

crikli 16y ago

Entrepreneurship ain't for everyone. You will: - work more hours. - deal with so much more stress. - flirt with financial ruin at least once. - struggle to balance work and family. But some folks are just cut out to do it. It's like a genetic predisposition that can't be denied. And if one can learn to cope with the issues I mentioned (and more) being an entrepreneur is one of the most rewarding life experiences out there.

deleted 16y ago

[deleted]

lawrence 16y ago

Self employment in Mexico City is a bit different than the startups you find in San Francisco. No, it's not a bit different. It's completely different. It's another universe. The vast majority of self employment in DF is a fruit stand or selling cigarettes at traffic lights (not that there's anything wrong with that). I spent some time with an Italian entrepreneur a few weeks ago and he told me "we have three VCs in our country. and two are out of money." The Sobering Reality of Entrepreneurship in the US is that we have it better than everybody else in the world, and even more so if you are an entrepreneur in SF, NY, Boston, Austin, etc.

holdenc 16y ago
Yes, the US economy is better than most places where entrepreneurship is a necessity. But it's also a world of paperwork, high tax and stifling administrative work -- and that's if you happen to be making a profit. The problem is that the US is hostile to small businesses. Are you a single member LLC? Then you are personally liable for claims against your business. Want health insurance? Get ready to pay through the nose. How about at tax time? You'll have self-employment tax, and most likely special state taxes on businesses (NY has this) to look forward to. The list goes on. If you have a successful software business and don't need to be in the US it's actually better to leave and run it elsewhere.
- yardie 16y ago
  Do you think it's better anywhere else in the world. Up until a year ago, the country I am in made it inconceivable to be an entrepreneur. And they invented the fking word! You think paying taxes at tax time is bad. How about paying taxes before you are allowed to start your company. If people could do a startup elsewhere you don't think they would already. Taxes, liability, and health care are the least of the problems for a startup. You might as well be saying people should emigrate to country other than the US. There are far easier entry ports, yet the US still manages to be #1 no matter how many hoops they make you jump through. While this infograph is inconclusive it gives an accurate picture overall http://grasshopper.com/img/blog/entrepreneurism-us-europe.PNG http://grasshopper.com/img/blog/entrepreneurism-us-europe.PN...

sh1mmer 16y ago

"Self-employment" doesn't mean what we think of entrepreneurship. PG has the great metaphor two saplings, one of them is a redwood sapling, it's expecting to grow. On that measure we don't create self-employment with entrepreneurship we create jobs. HNers want to create a lot of employed people when they are succeeding.

petercooper 16y ago

Turkey, Greece and Mexico had the highest self-employment rates as a percentage of total employment. I bet Mali or Niger have an even higher rate, given most of the working population are subsistence farmers. Further, many countries don't have the laws that, say, the US and UK do to prevent abusing "self employed" workers by treating them as employees without benefits.

tptacek 16y ago

And now, a word about entrepreneurship in Greece: http://network.nationalpost.com/NP/blogs/fullcomment/archive/2010/04/28/greece-is-one-giant-ponzi-scheme.aspx http://network.nationalpost.com/NP/blogs/fullcomment/archive... (and, less humorously: http://online.wsj.com/article/SB10001424052702304252704575156023250923324.html http://online.wsj.com/article/SB1000142405270230425270457515...)

dennisgorelik 16y ago
The first link doesn't look humorous at all. The article is pretty serious.
- Locke1689 16y ago
  I don't know, the comment at the end of the article is pretty funny.

usaar333 16y ago

entrepreneurship is stressful? Other countries, especially developing ones, have more small businesses? This might be one of the least insightful articles ever on mint life.

softbuilder 16y ago

I read this book and while the statistics were interesting the author's complete disregard for correlation!=causation was extremely disappointing. It was mostly conjecture and hand waving. Also if you're a minority woman, don't read this book. It will seriously bum you out.

known 16y ago

I think America is saturated and suitable for people who will live on http://en.wikipedia.org/wiki/Passive_income http://en.wikipedia.org/wiki/Passive_income