7 ms·

Completely missed one of the most important points: It's easier to take risks, if those risks actualizing will not destroy your life. In the US, there's very l

by nikanj 9y ago

Completely missed one of the most important points: It's easier to take risks, if those risks actualizing will not destroy your life. In the US, there's very little social safety net to catch you. If you get sick before the startup is big enough, it means personal bankruptcy - and no medical treatment. Missing revenue targets can mean missing student loan payments, missing rent, etc. There's real risk you'll end up homeless in the end. In Sweden, you might end up poor, but the poor are still taken care of. You get your medical treatment, the state pays your rent, and you are guaranteed enough income to buy groceries.

deleted 9y ago
[deleted]
jgamman 9y ago
i think one of the interviewees said literally that. down near the end though so tl;dr ?
djrobstep 9y ago
That can't be right, Paul Graham sez that if you don't treat the poor like garbage you'll get fewer startups.
- deleted 9y ago
  [deleted]
fc003153 9y ago
If your startup was venture-backed, wouldn't the risk lie on the VCs instead of you?
- electic 9y ago
  Getting of the ground is key. Before you can raise VC money, you have to have traction. This increasingly includes seed financing as well. So either way, you have to take a huge risk to start a company where the outcome is uncertain. When you run into a founder or work for one in the US, realize the absolute big risk they are taking. People in Sweden have a safety net to catch them. The result is people are more willing to take risks to start something and you also see more innovative startups that would otherwise be considered high risk in the US by founders.
  - burntrelish1273 9y ago
    TL;DR - Validation<- ->expansion treadmill.
- stevenwoo 9y ago
  In the USA, paid health insurance is tied to one's choice of employment, unless one declines the employer's coverage. Whom are you expecting to pay for health insurance if one hypothetically quits working for Google and starts their own one man/woman company? Or is this not factor in as a risk in your opinion?
  - em3rgent0rdr 9y ago
    The fact that health insurance is tied to employment in the us is just as much an argument for getting rid of the taxes and other incentives which led to employers being the dominant provider of health insurance.
    - labster 9y ago
      Which will in turn largely get rid of health care benefits for employees. Problem solved!
    - KGIII 9y ago
      Unless I'm not getting what you're saying, they did. Employers, in the US at least, started including health insurance during WWII. Because of the government needing to exert some control on the effective labor force, they government set a maximum amount a company could pay. Because of this, companies needed to find additional benefits, non-monetary, to give to employees, both to keep and attract employees. So, they started to offer medical insurance. Well, it stuck and medical insurance has been tied to employment ever since. But, that incentive has long-since been removed from the books and employers can now happily pay as much as they can afford. As for other incentives, I don't know of any incentives offered to employers that offer insurance, at least until recently. The current incentive is a fine, if they are meet the criteria and don't offer insurance. Other than that, a perverse incentive that does exactly opposite of what you're asking, there is nothing else. I suppose you could be referring to the employer not being taxed on money spent on insuring their employes, but taxes are based on profits and the personnel expenses are not on that side of the ledger. There's no incentive, the money just isn't taxed because we tax profit, not revenue.
  - 9y ago
- NetStrikeForce 9y ago
  How do you get VC investment before you have a prototype or a working product? Building those take time. Time which you invest in not working and earning a steady paycheck. Savings are finite, sadly.
- burntrelish1273 9y ago
  That's conflating different risks. Personal income stream of worker/s (of which founders, angels and investors are also workers) is one thing, capital as fuel for growing a sustainable company from nothing is another.
adventured 9y ago
> In Sweden, you might end up poor, but the poor are still taken care of. You get your medical treatment, the state pays your rent, and you are guaranteed enough income to buy groceries. Way to propagate an ignorant myth. The US has a massive welfare state and social safety net. The average poor person in the US can typically draw $25,000 to $30,000 in benefits per year depending on the state they live in. Those benefits include free healthcare, housing, food, work training, etc. For some states, such as Hawaii, it's nearly $50,000 per year. Just drawing on several of the most common welfare benefits programs in the US, gets you near $20,000 per year. According to a fact check by the Washington Post in 2014, the median total individual welfare benefits package in the US was $28,800. Let's put it another away. These welfare benefits numbers are so high, they exceed the median income in all but a few very wealthy nations.
- fish_fan 9y ago
  You’re only addressing half the comparison. Yes, the US has welfare, but it’s conditional and often insufficient.
  - lovich 9y ago
    Social pressure as well. Most people are going to treat you as a piece of shit if they find out that you are gaming the system to live off of welfare so that you can create your own company instead of working if you can.
  - adventured 9y ago
    Of course it's conditional, as it should be. If you're at or below the poverty line you can draw on the most welfare benefits, if you're earning a median income the benefits you can utilize are diminished. Proclaiming it's often insufficient is a comically loaded premise. How often? In which states? Under which circumstances? I've got the perfect response for that: it's often sufficient. According to the OECD's numbers, the US poor live better than almost any other poor people on the planet save for those in a select few countries (eg Canada, Norway, Sweden, Australia). [1][2] [1] https://www.forbes.com/sites/timworstall/2013/06/01/astonishing-numbers-americas-poor-still-live-better-than-most-of-the-rest-of-humanity https://www.forbes.com/sites/timworstall/2013/06/01/astonish... [2] https://mises.org/blog/poor-us-are-richer-middle-class-much-europe https://mises.org/blog/poor-us-are-richer-middle-class-much-...
kiith_naabal 9y ago
Fun fact: most Swedes are covered by unemployment insurance, which gives you 70-80% of the income from your last job for a year.[1] I imagine this helps, as it's not only a safety net if your startup tanks, but also a runway for starting risky ventures. [1] https://www.justlanded.se/english/Sweden/Sweden-Guide/Jobs/Unemployment-Insurance https://www.justlanded.se/english/Sweden/Sweden-Guide/Jobs/U...
- thesmallestcat 9y ago
  In the US you can't collect unemployment if you quit and you have to demonstrate that you're looking for a job. Are either of those the case in Sweden?
  - fastbeef 9y ago
    If you quit, as opposed to being fired, you have to wait three months before being able to apply. You have to prove applying for jobs as well.
    - ImSkeptical 9y ago
      Doesn't that just encourage people to get fired instead of quitting?
      - hobofan 9y ago
        (German here, but pretty much the same situation.) Not really. It's really hard to try and get fired, since the employees are protected pretty well. So in order to get fired you would have to mess up pretty bad, to a point where you would usually leave a lot of scorched earth, so very few people do that. If you are on good terms with the company you can also "get fired" (I've heard of that in a few startups), so you can collect the benefits, but that only works in a small set of companys I think.
      - KGIII 9y ago
        If you're fired for cause, they deny unemployment benefits. You can't just stop doing your job, show up drunk, and yell obscenities at your boss all day. Well, you can, but you probably won't get unemployment benefits.
deleted 9y ago
[deleted]
skrebbel 9y ago
I'm an entrepreneur and I'm strongly in favour of these policies for this exact reason. It often surprises people that there are entrepreneurs who're in favour or more, not less, social spending. But I think that in the long term, making to feasible for anybody, not just rich kids, to start companies is good for the economy. I wish we (the Netherlands) had a system more similar to the Scandinavian countries. We have social security, but it has gaps and holes all over the place and once you get stuck in one of those gaps there's virtually no way out. Notably, having been an entrepreneur puts you in one of those gaps. I'm a (sufficiently) rich kid though, so no biggie.
- jackvalentine 9y ago
  > Notably, having been an entrepreneur puts you in one of those gaps. Do you mind expanding? Is this something to do with having been ‘unemployed’ while working on your company?
  - skrebbel 9y ago
    No. Only when you're an employee somewhere part of your taxes are marked as "paying premium for social security". But as an entrepreneur, I'm only covered for health, not unemployment. Note that many entrepreneurs agree with this policy: they rather pay as little tax/premium/whatever and just sort things out themselves. The thing that bothers me is that I can't even choose to pay the same state unemployment premium as my employees are forced to pay. But when you're not entitled to unemployment money (also happens if you've never had a job more than x months in a row), you're not entitled to all the extra benefits you get when trying to get out of unemployment. Eg you don't get day care support for kids because you're home all day, right. No matter that you're trying to reeducate yourself to get a new job - you're not costing the state any money so it's your problem. However if you are entitled to unemployment benefits and then working on reschooling yourself, then you get day care support for your kids as if you had a job. NL is very American in that respect. The social security is designed from the perspective of the treasury, not the people's well being.
    - bjelkeman-again 9y ago
m1sta_ 9y ago
I agree with your first paragraph. The US has very entrepreneurial may generous bankruptcy law. That’s relevant here too.
ThomPete 9y ago
If that was the case then all Scandinavian countries would be doing as well, they aren't. It's much more complex than that.
- beagle3 9y ago
  I have visited Denmark and Sweden, and the most obvious change when you cross the border is that Danes rarely smile walking down the street (or talking to you), whereas Swedes look generally happy. It is likely a cultural thing, as young (4-6 year old) Danes on the street do some happy, unlike their older siblings and parents; I am aware that this contradicts surveys that conclude Danes are the happiest people and Swedes aren’t - just recounting my personal impression These kind of things matter and are very rarely captured in statistics
  - ivm 9y ago
    But why do you need to look happy when you are happy? Asking as an Eastern European.
    - SirZimzim 9y ago
      As an Eastern European living in America. These days I smile so much for no reason during the simplest interactions with people that I feel like an idiot. I'm not happy at all.
      - beagle3 9y ago
        Where do you live? Having lived quite a few years in NYC I would say New Yorkers don’t smile much; at least not as much southern Californians.
  - ThomPete 9y ago
    My theory (as a Dane) is that Danish people get votes the happiest people because they are complacent.

by nikanj 9y ago

deleted 9y ago

[deleted]

jgamman 9y ago

i think one of the interviewees said literally that. down near the end though so tl;dr ?

djrobstep 9y ago

That can't be right, Paul Graham sez that if you don't treat the poor like garbage you'll get fewer startups.

deleted 9y ago
[deleted]

fc003153 9y ago

If your startup was venture-backed, wouldn't the risk lie on the VCs instead of you?

electic 9y ago
Getting of the ground is key. Before you can raise VC money, you have to have traction. This increasingly includes seed financing as well. So either way, you have to take a huge risk to start a company where the outcome is uncertain. When you run into a founder or work for one in the US, realize the absolute big risk they are taking. People in Sweden have a safety net to catch them. The result is people are more willing to take risks to start something and you also see more innovative startups that would otherwise be considered high risk in the US by founders.
- burntrelish1273 9y ago
  TL;DR - Validation<- ->expansion treadmill.
stevenwoo 9y ago
In the USA, paid health insurance is tied to one's choice of employment, unless one declines the employer's coverage. Whom are you expecting to pay for health insurance if one hypothetically quits working for Google and starts their own one man/woman company? Or is this not factor in as a risk in your opinion?
- em3rgent0rdr 9y ago
  The fact that health insurance is tied to employment in the us is just as much an argument for getting rid of the taxes and other incentives which led to employers being the dominant provider of health insurance.
  - labster 9y ago
    Which will in turn largely get rid of health care benefits for employees. Problem solved!
  - KGIII 9y ago
    Unless I'm not getting what you're saying, they did. Employers, in the US at least, started including health insurance during WWII. Because of the government needing to exert some control on the effective labor force, they government set a maximum amount a company could pay. Because of this, companies needed to find additional benefits, non-monetary, to give to employees, both to keep and attract employees. So, they started to offer medical insurance. Well, it stuck and medical insurance has been tied to employment ever since. But, that incentive has long-since been removed from the books and employers can now happily pay as much as they can afford. As for other incentives, I don't know of any incentives offered to employers that offer insurance, at least until recently. The current incentive is a fine, if they are meet the criteria and don't offer insurance. Other than that, a perverse incentive that does exactly opposite of what you're asking, there is nothing else. I suppose you could be referring to the employer not being taxed on money spent on insuring their employes, but taxes are based on profits and the personnel expenses are not on that side of the ledger. There's no incentive, the money just isn't taxed because we tax profit, not revenue.
- 9y ago
NetStrikeForce 9y ago
How do you get VC investment before you have a prototype or a working product? Building those take time. Time which you invest in not working and earning a steady paycheck. Savings are finite, sadly.
burntrelish1273 9y ago
That's conflating different risks. Personal income stream of worker/s (of which founders, angels and investors are also workers) is one thing, capital as fuel for growing a sustainable company from nothing is another.

adventured 9y ago

> In Sweden, you might end up poor, but the poor are still taken care of. You get your medical treatment, the state pays your rent, and you are guaranteed enough income to buy groceries. Way to propagate an ignorant myth. The US has a massive welfare state and social safety net. The average poor person in the US can typically draw $25,000 to $30,000 in benefits per year depending on the state they live in. Those benefits include free healthcare, housing, food, work training, etc. For some states, such as Hawaii, it's nearly $50,000 per year. Just drawing on several of the most common welfare benefits programs in the US, gets you near $20,000 per year. According to a fact check by the Washington Post in 2014, the median total individual welfare benefits package in the US was $28,800. Let's put it another away. These welfare benefits numbers are so high, they exceed the median income in all but a few very wealthy nations.

fish_fan 9y ago
You’re only addressing half the comparison. Yes, the US has welfare, but it’s conditional and often insufficient.
- lovich 9y ago
  Social pressure as well. Most people are going to treat you as a piece of shit if they find out that you are gaming the system to live off of welfare so that you can create your own company instead of working if you can.
- adventured 9y ago
  Of course it's conditional, as it should be. If you're at or below the poverty line you can draw on the most welfare benefits, if you're earning a median income the benefits you can utilize are diminished. Proclaiming it's often insufficient is a comically loaded premise. How often? In which states? Under which circumstances? I've got the perfect response for that: it's often sufficient. According to the OECD's numbers, the US poor live better than almost any other poor people on the planet save for those in a select few countries (eg Canada, Norway, Sweden, Australia). [1][2] [1] https://www.forbes.com/sites/timworstall/2013/06/01/astonishing-numbers-americas-poor-still-live-better-than-most-of-the-rest-of-humanity https://www.forbes.com/sites/timworstall/2013/06/01/astonish... [2] https://mises.org/blog/poor-us-are-richer-middle-class-much-europe https://mises.org/blog/poor-us-are-richer-middle-class-much-...

kiith_naabal 9y ago

Fun fact: most Swedes are covered by unemployment insurance, which gives you 70-80% of the income from your last job for a year.[1] I imagine this helps, as it's not only a safety net if your startup tanks, but also a runway for starting risky ventures. [1] https://www.justlanded.se/english/Sweden/Sweden-Guide/Jobs/Unemployment-Insurance https://www.justlanded.se/english/Sweden/Sweden-Guide/Jobs/U...

thesmallestcat 9y ago
In the US you can't collect unemployment if you quit and you have to demonstrate that you're looking for a job. Are either of those the case in Sweden?
- fastbeef 9y ago
  If you quit, as opposed to being fired, you have to wait three months before being able to apply. You have to prove applying for jobs as well.
  - ImSkeptical 9y ago
    Doesn't that just encourage people to get fired instead of quitting?
    - hobofan 9y ago
      (German here, but pretty much the same situation.) Not really. It's really hard to try and get fired, since the employees are protected pretty well. So in order to get fired you would have to mess up pretty bad, to a point where you would usually leave a lot of scorched earth, so very few people do that. If you are on good terms with the company you can also "get fired" (I've heard of that in a few startups), so you can collect the benefits, but that only works in a small set of companys I think.
    - KGIII 9y ago
      If you're fired for cause, they deny unemployment benefits. You can't just stop doing your job, show up drunk, and yell obscenities at your boss all day. Well, you can, but you probably won't get unemployment benefits.

deleted 9y ago

[deleted]

skrebbel 9y ago

I'm an entrepreneur and I'm strongly in favour of these policies for this exact reason. It often surprises people that there are entrepreneurs who're in favour or more, not less, social spending. But I think that in the long term, making to feasible for anybody, not just rich kids, to start companies is good for the economy. I wish we (the Netherlands) had a system more similar to the Scandinavian countries. We have social security, but it has gaps and holes all over the place and once you get stuck in one of those gaps there's virtually no way out. Notably, having been an entrepreneur puts you in one of those gaps. I'm a (sufficiently) rich kid though, so no biggie.

jackvalentine 9y ago
> Notably, having been an entrepreneur puts you in one of those gaps. Do you mind expanding? Is this something to do with having been ‘unemployed’ while working on your company?
- skrebbel 9y ago
  No. Only when you're an employee somewhere part of your taxes are marked as "paying premium for social security". But as an entrepreneur, I'm only covered for health, not unemployment. Note that many entrepreneurs agree with this policy: they rather pay as little tax/premium/whatever and just sort things out themselves. The thing that bothers me is that I can't even choose to pay the same state unemployment premium as my employees are forced to pay. But when you're not entitled to unemployment money (also happens if you've never had a job more than x months in a row), you're not entitled to all the extra benefits you get when trying to get out of unemployment. Eg you don't get day care support for kids because you're home all day, right. No matter that you're trying to reeducate yourself to get a new job - you're not costing the state any money so it's your problem. However if you are entitled to unemployment benefits and then working on reschooling yourself, then you get day care support for your kids as if you had a job. NL is very American in that respect. The social security is designed from the perspective of the treasury, not the people's well being.
  - bjelkeman-again 9y ago

m1sta_ 9y ago

I agree with your first paragraph. The US has very entrepreneurial may generous bankruptcy law. That’s relevant here too.

ThomPete 9y ago

If that was the case then all Scandinavian countries would be doing as well, they aren't. It's much more complex than that.

beagle3 9y ago
I have visited Denmark and Sweden, and the most obvious change when you cross the border is that Danes rarely smile walking down the street (or talking to you), whereas Swedes look generally happy. It is likely a cultural thing, as young (4-6 year old) Danes on the street do some happy, unlike their older siblings and parents; I am aware that this contradicts surveys that conclude Danes are the happiest people and Swedes aren’t - just recounting my personal impression These kind of things matter and are very rarely captured in statistics
- ivm 9y ago
  But why do you need to look happy when you are happy? Asking as an Eastern European.
  - SirZimzim 9y ago
    As an Eastern European living in America. These days I smile so much for no reason during the simplest interactions with people that I feel like an idiot. I'm not happy at all.
    - beagle3 9y ago
      Where do you live? Having lived quite a few years in NYC I would say New Yorkers don’t smile much; at least not as much southern Californians.
- ThomPete 9y ago
  My theory (as a Dane) is that Danish people get votes the happiest people because they are complacent.