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Entrepreneurs Aren’t a Special Breed – They’re Mostly Rich Kids

• averagewall 9y ago
  Does it matter who entrepreneurs are? They exist to serve society by providing new products and services that didn't exist before. We pay the winners well to motivate them to do that. It's not charity for their own good so it doesn't matter if there's bias in choosing them or some classes of people are excluded. It's not for them.
  • plandis 9y ago
    You also need to consider the opportunity cost. If more people were willing to take the risk of starting a business perhaps that would lead to a more prosperous society.
• mrbigelsworth 9y ago
  trying to explain why society should have more mechanism for ensuring “fairness” or “equality” to a society that has been bred to compete and fulfill their own self interest at the expense of others is like telling your wife she is wrong and expecting her to believe it. a wise man once said: those who have will even take from those who don’t have. the rugged individualism and ruthless competition is starting to show its hidden traits and people are starting to realize that there are other ways to think. :)
• emsal 9y ago
  It's interesting that the speculation (the hope?) that the internet could allow entrepreneurs to create businesses that don't rely on these connections, that could sustain themselves just by reaching out to enough consumers directly, seems to have been wrong. It seems that the well-connected and savvy old guard has proven better at reaching ordinary people than an unconnected newcomer entrepreneur can, no matter how good the product may be.
  • hkmurakami 9y ago
    I find that posters on this board generally overvalue the inherent merits of the core product vs other business factors. In enterprise, trust and the relationship matters a lot, since the buyer is generally taking a big risk on you as a vendor. In smaller b2b, customers will be righfully concerned about depending on you when they can't be sure you'll be around in 2 years. These are both legitimate and important factors that are outside the scope of core product. In consumer, even a great product will often get blown out of the water if a competitor with a worse but good enough product has a deep, deep marketing war chest. (the 'ol, "if you space has a VC backed competitor, you have no choice but to also raise money and fight a war of attrition") You probably still have the best chance in consumer by creating something with inherent virality (honestly the only way to not have a huge sales and/or marketing cost in any sort of business). It's not even a sinister conspiracy at play or anything like that. It's just a truth that non-core value propositions are important in business, and are often even part of the true "product".
  • david927 9y ago
    That's a bizarre conclusion to reach. Another conclusion is if that you have a long enough runway, you get more at-bats, which leads to a higher probability of a hit.
  • pwaai 9y ago
    The other conclusion is that running a business is fucking hard for most people and that these businesses are started by do gooders, opportunists but ultimately playing the lottery. It explains why those with access to capital or people with capital are more likely to succeed as a result of being able to play the lottery over and over. Google & Facebook founders did not come from a struggling American family (Sergei or Larry's family comes from the Soviet elite) and none of the "ivy league dropouts" had any pressure (twitch.tv justin's comment how he was unmotivated throughout uni) to be something their socioeconomic class determined for them. Finally, Theranos is a clear illustration of economic lineage taking place--having a rich powerful daddy with other daddies tends to produce consistent wins, often through sheer will and structural reinforcements that inevitably sets conditions for even the most incompetent children of the elite to succeed. It's starting to feel like, a lot of us are getting into the startup game and realizing it's just another vehicle of transferring wealth generated with your life so they can buy a horse ranch or private plane.
• balls187 9y ago
  This is an opinion article. No sources made for the claims in the article what-so-ever. I was in Techstars. There were some founders who came from prominent families, but there were others from the working class.
  • teekno 9y ago
    > "This is an opinion article" > provides anecdote as counterevidence
    • darawk 9y ago
      Anecdotes are a perfectly valid counter-argument to anecdotes. They're both meaningless.
      • moseandre 9y ago
        Evidence accumulates, it does not spring into existence.
  • jnbiche 9y ago
    Here's a paper that says the exact same thing (that most entrepreneurs come from wealth), but with much more data: http://www.nber.org/papers/w19276.pdf http://www.nber.org/papers/w19276.pdf
  • deleted 9y ago
    [deleted]
  • CobrastanJorji 9y ago
    it seems like your evidence, that of a small sample of entrepreneurs, you ran into multiple youth from prominent families, suggests that rich kids are at least substantially over-represented, although most likely not 100% of entrepreneurs.
    • balls187 9y ago
      None of the "youth" (two) were rich-kids. Most however, had significant education and work experience (MIT, Stanford, Amazon, Google, MSFT).
• danschumann 9y ago
  I think wealthy parents will teach their children to be wealthy. Perhaps its easier to have a giant safety net when starting a big company.. but I wouldn't listen to this article unless the writer is himself a successful entrepreneur. It's probably better to case-study people who were broke when they started. Who cares about statistics.. if it's possible, just harder, for you to be a wealthy entrepreneur, still you should do it!
  • pas 9y ago
    It's easy to learn to "manage money" (or be successful), when you get a lot of money, and you can try again, and again, and again.
    • ejnulls 9y ago
      Or you know, just pay highly educated people to manage your money for you.
  • matt4077 9y ago
    > Who cares about statistics.. if it's possible, just harder, for you to be a wealthy entrepreneur, still you should do it! That may be fine as an approach for the individual. But articles such as this are also meant to inform public policy and opinion. Social mobility in the US is at an all-time low, and that won't change just by preaching the prosperity gospel. Even if you are not a victim of this imbalance yourself, you have an interest in fixing it: for every Google, Facebook, and Microsoft started by rich kids, there are four similarly-successful startups that never get founded because their potential founders weren't in the top 20%. And eventually, people will notice that, no, it's not (just) their fault that they can't get ahead in life. At that point, social cohesion will vanish: rules will only be respected where they are enforced by violence, the military will no longer find poor people willing to die for the country, employees will casually sabotage the startups they work at etc.
    • jryan49 9y ago
      Wow that escalated quickly!
• BadassFractal 9y ago
  Seems like selection bias. Anecdata, but most entrepreneurs I've ever met were regular middle class joes with the drive to do the journey. Even most YC founders, as far as I can tell, are not exactly Winklevosses, they're just regular people who are in a privileged position to be able to take a couple of years off and live on savings or very meager early stage funding to test if their business model will work.
  • smogcutter 9y ago
    The regular middle class joes you know who took "A couple years off to live on savings" are not, in fact, middle class joes.
    • BadassFractal 9y ago
      Work a tech job for 5-10 years saving money for when you quit, avoid expensive relationships / having dependents or have a spouse who can support you, save enough to live on ramen in the middle of nowhere for a couple of years with a bunch of roommates. Is that really Andrew Carnegie level of wealth? Many of us have done exactly that, it just takes years of planning and being fortunate enough not to have severe medical conditions or loves ones you need to take care of with all of your finances. Again, most people would much rather tell themselves that the reason why they're not entrepreneurs is because they're not Bill Gates rich, rather than making the sacrifices most entrepreneurs have to make to get things going.
      • olliej 9y ago
        I think the problem is that if you work a tech job for 5-10 years you are way out of the middle class. Middle class is generally 50-100k/year. 5-10 years of experience in tech should put you well past 100... Your idea of "saving money for when you quit" doesn't work for middle class as the amount you save is not enough for "living on ramen for a few years" -- it will likely not be enough to even pay rent.
        • BadassFractal 9y ago
• grandalf 9y ago
  While the headline is true, I think the important factors to consider are: - Doing something that has a high probability of failure is also likely something that is highly leveraged, meaning that if it does not fail the person doing it is much better off than if he/she had chosen a less risky alternative. - Sadly, VC selection processes (including YC) are heavily biased toward wealth signals such as ivy league enrollment. Attendance at the ivies is strongly dominated by one factor alone, which is the wealth of one's parents. - The reason YC and others bias toward ivies and wealthy parents is not because it doesn't work. Raising an angel round and being able to truly give a startup 100% of one's life energy is something that is much easier when you have parents willing to support it financially and possibly via networking connections with other wealthy family members. - The interesting statistic would be this: Of all the rounds YC has participated in, how many have been participated in by relatives of the founder. My guess is that this number is over 80%. - But on the other hand, being rich increases the chances that a kid will have received a top quality education and will be prepared to face the many challenges and blows to the ego that doing a startup can entail, and will be friends with others who can become key hires because they too had a top quality education. - Ironically, dropping out of college makes even more sense when your K-12 education was so good that you realize that you already have the tools needed to pursue higher goals. - The punchline is that in an ideal world we'd all be rich and have the good education, supportive family, and ability to take risks that rich kids do. So the descriptive fact that many entrepreneurs happen to be rich is along the same lines as the descriptive fact that many well-educated people happen to have had well-off upbringings. Why bother achieving wealth if it can't buy these kinds of very obvious and very useful luxuries?
• PakG1 9y ago
  So I see a lot of comments here about how it's probably mostly middle class and rich kids together. I find it curious that nobody is mentioning the lesser well off. Is the rags to riches dream a fairy tale now?
  • averagewall 9y ago
    As long as parents do their best to help their own children, rags to riches will be a fairy tale. For poor and rich kids to grow up and do as well as each other, rich parents will have to treat their kids as badly as poor parents do, because the opposite is impossible.
    • matt4077 9y ago
      That's a strange equivalence of prosperity and morality... Poor people don't uniformly treat their children poorly. But startup founders profit from three advantages only rich people can provide: (1) the money for an Ivy League education, (2) the knowledge that there's some security to fall back on in case of failure, and (3) the knowledge how to make small talk, what to wear etc. when meeting investors and other stakeholders. All these can be solved by policy: university scholarships for (1) and, through that, a bit of (3), plus (3) some form of social safety net that allows everyone to fail without fearing to starve.
  • disantlor 9y ago
    possibly always was, but definitely is mostly a fairy tale now. not that people won’t or shouldn’t strive
  • mac01021 9y ago
    Well, there's Jack Ma. But he's a rarity.
    • PakG1 9y ago
      I think that's a funny example because he's on record saying that if you're not rich, it's your own fault. Which is of course absurd, just thought it was a funny coincidence given my question and your reply. https://news.ycombinator.com/item?id=8377924 https://news.ycombinator.com/item?id=8377924 edit: Apparently, Alibaba put out a statement saying that this oped with the tone-deaf statement was not written by Jack Ma. https://news.ycombinator.com/item?id=8378020 https://news.ycombinator.com/item?id=8378020
• cabaalis 9y ago
  Having started now a couple of businesses, one of which is doing well, I can say: There is a ridiculously high bar to vault in order to break through to a self-sustaining income valuable enough to employ multiple people. This is why vcs/investors hold so much power in the equation, and maybe why the studies are skewed wealthy. Trying to do this is indeed a risk, as it is not only a lot of work but it could very easily change you and your personality. It could put your personal dollar reserves in jeopardy. In my case, it cost me a wife. I don't blame the work for that, I recognize that I am a very different man than I was before I took the leap. I do think it is unfair though to say that only the wealthy are entrepreneurs, because that wealth came at some point through someone themselves making the jump. At the same time, I also think the barrier to entry needs to be looked at somehow.
  • cheez 9y ago
    Would you share what you would do differently or the cause of the loss of your wife?
    • deleted 9y ago
      [deleted]
    • BatFastard 9y ago
      When you do a startup, if its not your wife you fail
    • cabaalis 9y ago
      I spent many evening hours working, and did not foster the relationship. I stayed up late at night, she was going to bed alone. Even good relationships need constant work. Secondly, I think working for myself somewhat transitioned me from "boy to man" so to speak, not in a good way. I became less inherently trusting of other people, and sometimes the stress wore on me and I became distant.
      • nbanks 9y ago
        It's probably quite common. This is the part of Elon Musk's story which people rarely mention. Divorce is a high cost for any business, and I'm sorry you went through it. I've read it takes a couple hours a day to maintain the feeling of romantic love in a relationship (according to Willard F. Harley). If you're in love this is pleasurable time spent rather than constant work, but it's really easy to let other stuff get in the way.
• icantdrive55 9y ago
  I grew up with rich kids, and they needed to screw up badly, in order to not be millionaires now. Every very successful--financially, person I knew, had a rich, sympathetic father. I live in the Rich Kids capital, aka Marin County. This county has produced so many rich people, and the one thing they all have in common is that wealthy, understanding father. You know those white dental picks you see everywhere. If you knew the backstory on the invention, and success; you'd be shocked. Gavin Neusome would be homeless, or a Waiter, if not for that family, and then the back up family--The Getty's family. (He is a nice man, but he was so privileged.) I can run through my year books, and tick off the successful people. I don't think one, is from a blue collar family, or from a poor family. (Financially successful--it takes a strong stomach to hang with most of these people. Sorry, but the denial is nauseating.) For some reason, it's taboo to talk about the benefits one gets from being from a wealthy family, and genes have nothing to do with the equation. Rich family==can take on risk. Plus they gave the honest useful, wisdom from that father.
• cbhl 9y ago
  I recall that Kik co-founder Ted Livingston tried to take a step toward changing this. He said he never would have been able to start his company without CAD$25,000 from his grandfather, so he donated CAD$1M to a local university, so they could give out CAD$25,000 to a student team every term (so, three times a year).
  • Cyph0n 9y ago
    Good on him for recognizing his grandfather's contribution and giving back to his community. It's easy to lose sight of where you began once you become successful. I hope his grandfather also got a nice ROI :P
  • Balgair 9y ago
    Damn, good on him!
• WheelsAtLarge 9y ago
  It's a psychological bar that's easier for people with money to cross. If you always feel like you're lacking then it's hard to make the jump towards entrepreneurship. You don't necessarily need to be a rich kid but you have to have the confidence that ultimately you won't end up homeless and penniless. If you were raised in an affluent/economically protected home it so much easier to start a business - even if you don't have the contacts.
  • deleted 9y ago
    [deleted]
  • Top19 9y ago
    For some reason in the United States we have a cult of moral-kombat-individual responsibility that doesn’t value community. It reminds me of the Est “radical responsibility” seminars in the late 70’s that would say provocative things like “it’s your responsibility you got cancer!”. There are definitely many good things that can come from a focus on individual responsibility, but where does it end? Why not make college free if you’re rich, and you pay full price if you’re lower income? If everything is individual responsibility, does it even matter? Why believe in God? Does community matter?
  • _jal 9y ago
    It isn't just psychological. There is very real risk involved. An awful lot of entrepreneurs don't succeed the first time, but eventually figure it out. Now imagine you're married to someone who just folded a company that ate two years of their life and most of their savings. How enthusiastic are you for the next run? I don't call that a psychological effect. The partner is right - there is a very real risk of failing again, with worse outcomes. If, however, you have enough zeros in the bank (or an account at the Bank of Mom&Dad), eh, it is "just" a failure. That isn't my story, but somewhat close. Started a company, we never quite "hit", but we hit profitability, were growing organically at a healthy clip and never had to take money. Made a mistake around the end of year three that killed us in year five. And that's how I spent 15 years of savings. I've come close to trying again, but I'm now at an age where that's increasingly stupid without a substantial cushion in the bank, unless you happen to like the taste of cat food.
• kgilpin 9y ago
  It’s easier to swing from one vine to the next vine, than to one 5 vines in front of you.
• musgrove 9y ago
  I would say strictly speaking from the title, that would make them exactly a special breed. There aren't many of them.
• peterburkimsher 9y ago
  Mark Zuckerberg made this point in his Harvard Commencement speech earlier this year, and he associated that "cushion" with an endorsement for Basic Income. https://www.voicetube.com/videos/52098 https://www.voicetube.com/videos/52098 I have several reasons for not starting a company. I need a work visa, and that means I need a job. I also need to collect years of work experience in order to be eligible for Permanent Residency in future. On the other hand, my job doesn't keep me busy. I have a lot of time when I must sit in the office, but actually have no useful projects to do for the company. So I work on my own personal projects (and I have many ideas). The problem with personal projects is that my visa won't allow me to have a second source of income, so everything must be free. That's fine, I like open source. The budget for these personal projects is zero, though, and that means I can't do marketing. I struggle to get even a little bit of feedback, and I have a tendency to move on to other new ideas when I realise that nobody cares. Although providing the finance for me to pursue my dream would be great, I don't think it's enough. It takes a community where it's easy to share project ideas and get useful feedback. Example project in question: a Chinese-to-Pinyin word by word translator. https://pingtype.github.io https://pingtype.github.io
  • genbit 9y ago
    I had work visa and had similar thoughts and was deferring starting a business until green card. I was wrong. Building business takes time, and there are a lot of tasks that could've done on work visa, even without idea: - networking (future customers, employees, investors) - market analysis - marketing (content marketing through blog, twitter) One way to find feedback without investing into coding - talking to potential customers or people inside targeted market. This I wish I done while I where on work visa :)
    • peterburkimsher 9y ago
      I enjoy coding, and that's the part I want to pursue. I have no idea about marketing. What is networking? I know how to make friends through communities (e.g. the CouchSurfing meetup, church, volunteer groups), and I've have 3900 Facebook friends who I met face to face. But they don't have money, either as customers or investors. They're just friends. What is market analysis? Do you mean looking at the Facebook Likes of my friends, and trying to build something that they will enjoy? I already have my ideas, but I don't think anybody is interested in them. (education tools, some deep learning research, calendar/map data management system). Where should I post a blog? I wrote some blogs for Pingtype, but they didn't attract any traffic. What should I use? Wordpress.com? Medium? https://pingtype.github.io/docs/blog.html https://pingtype.github.io/docs/blog.html
• angryasian 9y ago
  I don't think anyone really mentioned how important that safety net is to when it comes to high risks ventures and failure
• ringaroundthetx 9y ago
  There are 13,000,000 millionaires in the world. They have children. A representative distribution of them create more wealth with the resources they already have which can have a disproportionate impact than the same distribution of attempted wealth creators that start off with less. Did that really need to be spelled out?
  • Y7ZCQtNo39 9y ago
    CNBC [1] says there are 10.8 millionaires in the U.S. alone. 13 seems a little low for the total worldwide count. [1]: https://www.cnbc.com/2017/03/24/a-record-number-of-americans-are-now-millionaires-new-study-shows.html https://www.cnbc.com/2017/03/24/a-record-number-of-americans...
    • ringaroundthetx 9y ago
      also not the point, this is about a representative sample of the population having the same entrepreneurial tendencies as any other segment of the population and having disproportionate impact from starting off with more, or having so many chances to fail with little consequence. The survivorship bias will lean towards those that can survive financially longer without taking decades of their life to recoup losses and stability.
      • Y7ZCQtNo39 9y ago
        I think getting the facts right is important. If the number of millionaires is "not the point", why even include the figure in a comment in the first place?
        • ringaroundthetx 9y ago
          because I could have put a tilde, or the source I used, and its not important when we hit these ranges of number relative to the population. The message is more important. The figure is for perspective. Your problem only revealed that the number was too low, which only strengthens the actual message. Thats very unproductive and not healthy.
• cocktailpeanuts 9y ago
  Let's say this is 99% true--that 99% of the successful entrepreneurs are rich kids and 1% are self-made. If you look at this stat and decide not to start a business, that's fine, because that's what most people do. But those who don't care about this stat--maybe because they care so much about what they're trying to build, or maybe because they're irrationally confident that they can succeed--I think it's fair to say they are a special breed. Special isn't always great, but all great things are special.
  • sidlls 9y ago
    Why do you suppose it's fair to say they're a special breed?
  • avs733 9y ago
    It's not about the stat dictating behavior its about the structures and systems that cause people to by necessity internalize that mental model of risk. They aren't making the decision because of the stat, the stat is simply reporting behavior that already exists. Stop reifying entrepreneurial success in this 'passionate' way because it misattributes reality. That type of self-reinforcing narrative allows this stat to continue to be a thing, and keeps outlier cases outlier cases rather than doing anything to change the underlying variables that make it a reality.
    • cocktailpeanuts 9y ago
      I'm just stating my own experience. Take it or leave it. Don't play victim man.
      • avs733 9y ago
        I'm not playing the victim. To be transparent I grew up in the class of children who are empowered and have the fiscal/social stability and network to participate in entrepreneurship...which I did. I went to a fancy ass private high school with one of the reddit cofounders, a school that (by nature largely of the socioeconomic status of the students' parents) has produced a number of other founders as well. I've founded/co-founded multiple startups and the most notable quantity of my entrepreneurial friends is that they have a fall back option (not plan...option). That freedom has heavily influenced how I make choices throughout my career in ways that leveraged a safety net that I had and others didn't. Again, I'm not the victim here I'm the victor...but that doesn't preclude me from calling a bad argument a bad argument. There is actual research on this. Expert entrepreneurs evaluate risk based on what would happen in the worst case scenario (the downside risk) as opposed to the potential profit. You flipped the interpretation of the evidence on its head and tried to make poor people feel stupid.
• Aron 9y ago
  Entrepreneurs are good so I guess we need more rich kids. I'll assume that was the conclusion.
  • the_cat_kittles 9y ago
    not sure if you are having a laugh, but it made me think of something: i dont understand the thinking that says "entrepreneurs are good" prima facie. it matters what kind of businesses they start. its so weird how we ignore this. if most entrepreneurs start predatory payday loan companies, we wouldn't want that. i guess this is obvious, but sometimes i wonder about the balance of "entrepreneurs". i guess this similar to a critique i have with how people use money as the sole metric of success. its the same thing! it matters what you did! in both cases, i think the mistake is using a more general measure in place of more specific ones. specific should always dominate general.
    • Aron 9y ago
      People generally don't give money away for nothing, and spend it carefully, so when someone figures out how to get a lot of people to pay them for something, I figure that's pretty high evidence they've done something helpful. Certainly exceptions exist.
• jorblumesea 9y ago
  I worked for a startup for 2 years. The CTO was one of the nicest, realest people I've met. Very down to earth. But I just knew part of the reason he could stick his neck out far was because of his family. Even if the startup exploded and crashed (it's not doing great last I checked) he would be fine as he was part inheritor of a $300 mil fortune. For many of the employees they had invested years of their lives, many hours away from their family and more importantly, a possible later retirement due to lower income and lack of matching retirement. We also lost many quality candidates due to this fact. I often felt like I was just part of some rich person's game, where win or lose the stakes were so much higher for myself than for anyone who stood to make the real money if we ever went public. If we went bust I stood to lose big, while the people who ran the company would go off and do something else.
  • chii 9y ago
    This is why early employees take more risk then the founders, and i would like to see this acknowledged with more compensation commensurate with the extra risk.
    • manigandham 9y ago
      How does that story support your comment at all? Early employees are still employees and get paid for their time, they are nowhere near the risk level of the founders.
      • sidlls 9y ago
        People like to pretend the strictly finance industry definition of "risk" is what this discussion is about, but it's rarely that simple.
        • manigandham 9y ago
          In that case it's completely subjective and up to the individual to make the call, although founders still have to shoulder more "risk" to create the opportunity for an early employee to even consider as a choice.
• staunch 9y ago
  It's shocking how class-based Silicon Valley is. You would assume investors look for innovative ideas and capable people to execute on them, but nope. Ideas don't matter and it turns out when investors say "team" they mean "what club memberships does your team have?" Silicon Valley investors basically just invest randomly in people based on their membership in a club. It's only because a small percentage of them turn out not to be complete idiots that it works at all. The smartest of the 99% receive no funding, while the entirety of the 1% wealthiest do. It's an insider's club built around the "top schools" (as they call themselves). You're either in the club or you're an outsider, and only a handful of token outsiders are needed for display purposes. If you want help in Silicon Valley, you must have either: 1) a rapidly growing business (traction) 2) been accepted into a "top school" (pedigree) It's not a conspiracy per se, it's just a result of rampant cronyism and nepotism. How do you think investors get their jobs after all... Some notable examples of non-rich founders, that the rest of us can hope to emulate: Steve Jobs, John Carmack, Palmer Luckey, Linus Torvalds, Larry Ellison.
  • JetSpiegel 9y ago
    Not sure is Larry Ellison is a role model for any human. For deities, maybe.
    • kornish 9y ago
      For those not in on the joke, there's a biography titled "The Difference Between God and Larry Ellison: God Doesn't Think He's Larry Ellison". https://www.amazon.com/Difference-Between-God-Larry-Ellison/dp/0060008768 https://www.amazon.com/Difference-Between-God-Larry-Ellison/...
    • staunch 9y ago
      Sure he is. He just has flaws like anyone. Einstein treated women badly.
  • crush-n-spread 9y ago
    OK so your post boils down to "VCs want to see growth or prestige". It's actually that they want to see customers and revenue, not necessarily growth. And so the sentence "VCs want to see revenue and customers or prestige" is completely reasonable. Look, if you're a VC who goes to those "clubs", and you trust the people there and are comfortable giving them your money, _great_. Why should they be handing it out to you, with your no-revenue company and no prior associations?
• notacoward 9y ago
  Entrepreneurship is like one of those carnival games where you throw darts or something. Middle class kids can afford one throw. Most miss. A few hit the target and get a small prize. A very few hit the center bullseye and get a bigger prize. Rags to riches! The American Dream lives on. Rich kids can afford many throws. If they want to, they can try over and over and over again until they hit something and feel good about themselves. Some keep going until they hit the center bullseye, then they give speeches or write blog posts about "meritocracy" and the salutary effects of hard work. Poor kids aren't visiting the carnival. They're the ones working it.
  • EGreg 9y ago
    The really interesting cases, to me, are the Jan Koums and J K Rowlings of the world.
  • osrec 9y ago
    That is a brilliant analogy. I would add that some kids may naturally have a better arm, so success is not solely correlated with number of tries you can afford.
    • BatFastard 9y ago
      And some kids are born with more darts.
      • deleted 9y ago
        [deleted]
    • owens99 9y ago
      > I would add that some kids may naturally have a better arm, so success is not solely correlated with number of tries you can afford. This is the opposite of what he's saying.
      • deleted 9y ago
        [deleted]
• citizenpaul 9y ago
  Yep. Deep down everyone knows this but wants to hold onto the delusion that their "unique" skills and ideas are what made/will make them rich.
• deleted 9y ago
  [deleted]
• astura 9y ago
  There's an old saying "you gotta have money to make money." It's absolutely true. As I get older the more money I have the easier it is to make more. It actually feels like the game is rigged. That being said, just having money doesn't guarantee you'll make money, of course. It takes skill, knowledge, ambition, and luck. Wasn't it Mitt Romney that said something like "anyone can start a business, just borrow $20,000 from your family?"
  • plandis 9y ago
    Not sure if that’s a real quote but in my case it could read: “anyone can start a business, just borrow 1 years salary from your step-mom bus driver”
    • astura 9y ago
      This is the quote. >This kind of devisiveness, this attack of success, is very different than what we’ve seen in our country’s history. We’ve always encouraged young people: Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business. The context was Jimmy John's (the sandwich chain) started with a $20,000 loan from the owners parents.... That's $20,000 in 1983 dollars. (~$50,500 in 2017 dollars)
  • quickthrower2 9y ago
    In Australia you can get that $20k by working minimum wage for a year. You just need some family to provide food and shelter for that year, which might be less of an ask. Ramen & a tent would do the trick.
    • Gatsky 9y ago
      And there is decent free healthcare. But nobody really starts companies here....
      • quickthrower2 9y ago
        ?? Of course people start comapnies. Of course property investment is super popular.
• unlmtd1 9y ago
  In a world where failure is perpetually bailed out and real entrepreneurs are constantly squeezed out... Who would a known?
• alansmitheebk 9y ago
  No shit Sherlock.
• EGreg 9y ago
  I have a different perspective on entrepreneurship, having done full time work, consulting, and ran a small business employing others. When you are an employee, you sell your time for money. When you are a contractor, you take more risk but you have more freedom. You can charge based on how much value you provide, by virtue of the fact that you can name different prices for new clients. When you run your own shop, you can productize you services reap the benefits of re-using everything. Not only that, but you provide employment others, who do the actual work. But all these are not the best way to accumulate a lot of wealth. Instead, if you can partner with some capital, some expertise, and in general launch a rocketship, do it. Start a startup and give away enough equity to make sure it succeeds. Make sure to only do it if the startup a decent salary from the beginning. Keep doing this until you hit a big exit. Then you have it set. You can keep doing this without being rich. What you need is to have access to capital. Preferably capital that's looking to fund ideas. There is more and more of that capital every day. Such as crowdfunding. You lose very little to make a camapaign or an ICO.
• abhinai 9y ago
  This answer will get me negative points but I must speak my mind. (1) Yes, coming from a rich family helps. A lot. You get the cushion and above all you get the right life advice. Your probability of success increases. (2) Yes, coming from a poor family hurts. You get neither the cushion nor the advice. But that's it. These factors simply impact the probabilities for success. They do not eliminate your chance or hope for success. Agreed that if you come from a middle-class or poor family you have to work harder and sacrifice more when compared to rich kids. And I know life is not fair. But guys, for god's sake, do not think for a second that you can't do it. There are enough examples of middle-class kids doing amazingly well. Think about AirBnb founders. Please do not quit trying just because rich kids have a better chance than you!
  • mlvljr 9y ago
    Amen!
  • anotheryou 9y ago
    It still can lift the bar out of reach of what is worth risking. Someone not rich could try to bootstrap something and work more than 40h/week etc., but at a much higher cost in quality of life on top of the lower probability of success.
• Fricken 9y ago
  Those fucken rich kids. Immigrants too, who conventionally start out at the other end of the class spectrum: they are 13% of the population, yet start a quarter of all new businesses. Of course, they come from places where subsisting on the proverbial ramen isn't a temporary insult, but a way of life. https://www.inc.com/magazine/201502/adam-bluestein/the-most-entrepreneurial-group-in-america-wasnt-born-in-america.html https://www.inc.com/magazine/201502/adam-bluestein/the-most-... I'm in Canada, and a friend and I walked into once of these sketchy looking African Immigrant bars for a beer. We sat down, we didn't get to pay for our beer, someone bought them for us. We invite the guy to sit down with us and he talks (in broken English) about how he came to Canada 5 years ago as a refugee from Somalia, started working in a tire shop, learned a bit about cars, then started buying junkers on Kijiji, fixing them up and reselling them at a profit, and how he's looking for a place to open up his own shop. He had nothing but good things to say about Canada and the opportunities it's given him and kept thanking us. It's like no, don't thank us, we're just a couple of spoiled white whiny millenials. This country was built by people like you (And my great grandparents, who also came here and made something out of nothing a long time ago).
  • cJ0th 9y ago
    > Those fucken rich kids. Immigrants too, who conventionally start out at the other end of the class spectrum Yeah, the more general pattern seems to be that you're more likely to start a business if you're at the fringe of society one way or another. That is, you don't really fit in with the common culture.
    • kamaal 9y ago
      People who have already have a lot generally worry about preserving what they have, than making say 10% more. Also if you have luxury for a while, you can get used to it. Some one coming from worse off conditions is likely to work harder.
• contingencies 9y ago
  First of all I don't think most entrepreneurs that pass the 2 year mark on a business are kids, they are probably middle aged. Second while access to capital is clearly a requirement for many business types, it is not for others. If you don't have money to start something, use charm, motivation and time, and maybe take early investment at worse terms. In short, hustle. You can always start another business under better capital availability conditions later. Branson is a great example of a hustler. Personally I worked instead of going to university then started my first business with $30k and lots of time (years) living in a (very) cheap place. A few ventures later, I am self funded and probably spend half of that a month. While this is still paltry versus what many SV startups spend, it's a lot more than most people can afford, and I am both personally aware and deeply thankful for the opportunity to develop ideas and lead a team. My gut feeling is that people who feel everyone starting a business is an entitled prick haven't met many entrepreneurs.
• Animats 9y ago
  A key point is that it often takes inherited wealth to start a company early in life. In earlier eras, people tended to start up companies much later. After they'd had a career with a big company, they'd go off on their own. Silicon Valley started that way. Look up the history of Fairchild Semiconductor and its successors. That's because they were doing something really hard technically, and they needed senior technical people to make it go.
• starchild_3001 9y ago
  What if having born to rich parents is correlated with genetic disposition to higher intelligence and risk taking? Evolution endows offspring of successful parents with successful traits. From an evolutionary perspective, the findings are totally expected.
  • ntsplnkv2 9y ago
    The article is arguing that it is the access to capital that makes entrepreneurs more likely to be successful, not genetics.
• WalterBright 9y ago
  It also stands to reason that the children of wealthy parents are also taught how to handle money, etc. See the book "Rich Dad Poor Dad" by Kiyosaki. It's really too bad that public schools teach nothing about accounting, finance, the time value of money, the basics of how business operates, stock market fundamentals, taxes, etc. They graduate kids who are wholly unequipped to function in a free market economy.
  • blacksmythe 9y ago
    My high school had a personal finance class (I recall it was required) where you had to pick an occupation, research a typical salary, and then put together a monthly budget based on that salary.
  • candiodari 9y ago
    You can read in this very thread how people react to that. This wouldn't work. Parents would revolt if you taught kids that. Above all, people deal very poorly with confronting their own failings. Getting their kid to criticize their financial and economic decisions (which is what this will do) ... that's going to go down VERY badly.
• erik_landerholm 9y ago
  Fine, but some of us aren’t so...what?
• stretchwithme 9y ago
  Our public schools are designed to make people work jobs, not take risks. And who's going to these schools? The rich? If you look at who's an entrepreneur where there is no public education, you will see plenty of poor people. They haven't been trained to sit, obey and avoid risk. I think the entrepreneur is the natural state of man. What is hunting and gathering if not a hustle? For that matter, what is every wild animal doing? Exploiting every opportunity that comes along or waiting for some to tell them what to do?
  • stretchwithme 9y ago
    Robert Kiyosaki covered this topic pretty thoroughly in Rich Dad, Poor Dad.
• m3kw9 9y ago
  Rich kids with some brain and brawns. I just want to be fair with the rich kids
• paul7986 9y ago
  What are some Silly Valley entrepreneurs who hit the big time and came from complete and utter poverty? Also your rich parent social networks (other rich people) are going to fund your startup. A personal example my uncle through marriage... his brother was a CEO of a huge well known company and he had TONS of money but would never give me the time of day...my startup was even pursued by Google for potential buy out. Yet his friends invested in Elizabeth Holmes/Theranos and so did he(lol).
  • shortnamed 9y ago
    Jan Koum of WhatsApp. He brought Soviet-issued notebooks to the US cause the family was too poor to buy US ones.
• hoodoof 9y ago
  Well it depends if you are saying "all western people are rich".
• aussieguy1234 9y ago
  Bill Gates had to pay rent hire employees and pay for expensive computer equipment. Not to mention servers for the old website. Facebook would have had similar challenges in the beginning. Nowdays, I could serve one million requests for a functional product over AWS lambda for around $5-$10.
• roman_savchuk 9y ago
  It also has a lot to do with "being born into context" [0] of money. I can imagine kids observing good skills (like money management or business communication) of their parents will develop these skills for themselves rather easily. [0] Quote from Alan Kay's talk for YC https://youtu.be/1e8VZlPBx_0 https://youtu.be/1e8VZlPBx_0
• throw2016 9y ago
  Capitalism requires the illusion of social mobility and equality but it is inherently wealth favoring, hence the name, a perfect system for the feudals to advocate as it maintained their power and influence via accumulated wealth. The modus operandi is to highlight a few successes to create an illusion while millions fail or fall by the wayside. Those who succeed are too invested in the system and celebrating themselves and become perfect advertisements for the illusion. Immigrants who are desperate with nothing to lose and a few who grow essentially via a long struggle and trade are old favorites. But let's look at software. The average company could take a minimum of 2-5 years, just building the product or service could take a year or more at the minimum. Outreach, marketing and trying to build a user base and customers is going to take significantly longer. And you need some luck. Thinking of revenue is premature. Either you need ample savings to sustain for this kind of period without any certain outcomes or a secure family background. The stress without a secure family background is going to be overwhelming, you need to be fit and healthy to put in long hours without interruption for sustained periods without any family or health issues. Any single incident here can completely derail you. Your life is going to be at a complete standstill while you make this attempt. Your immediate family and relationships are going to take a huge toll as you struggle single mindedly to build something from scratch, relationships are going to be under intense strain. If you have kids you should ask yourself whether you can even afford to take this kind of risk and devote years to something with completely uncertain outcomes. If you don't you certainly can't afford them now or the next 5 years. A significant chunk of your life is at stake. That's why the only realistic way is to have a rich background or have a VC. And you need a pretty decent education, experience and profile to begin with ie some level of privilege to interest a VC. So mobility and entrepreneurship is not as clear cut as it looks.
• endlessjoys 9y ago
  This fucking headline. The second sentence literally disproofs the first.