5 ms·

> Could it be that the cost barrier is lower today than in the past, but there is much more money to be made as an educated employee today than 25 years ago? O

> Could it be that the cost barrier is lower today than in the past, but there is much more money to be made as an educated employee today than 25 years ago? One big confounding factor could be the cost of student debt. You can't tell your student loan company to defer payments until your business gets off the ground. Also, I think in general, enthusiasm for capitalism (and with it, entrepreneurship) is waning.

Alex3917 8y ago
> One big confounding factor could be the cost of student debt. Student debt has increased, but not that much. Only a few thousand dollars over the last 25 years.
- chrisbennet 8y ago
  As of 2016, median student debt increased 163% (adjusted for inflation) over 25 years. https://www.huffingtonpost.com/entry/3-charts-student-debt-crisis_us_56b0e9d0e4b0a1b96203d369 https://www.huffingtonpost.com/entry/3-charts-student-debt-c...
  - Alex3917 8y ago
    Hmm. The collegeboard numbers are significantly different than that: https://trends.collegeboard.org/student-aid/figures-tables/cumulative-debt-bachelor-degree-recipients-four-year-institutions-over-time https://trends.collegeboard.org/student-aid/figures-tables/c... E.g. Collegeboard has the average debt per graduate being $12,300 in 2000-01, whereas your source has it as being $22,500ish the same year. Maybe your numbers are including for-profit colleges? (Which isn't really appropriate, since they were very uncommon in 1990.)
    - mercutio2 8y ago
      Huge numbers of people don’t graduate, and the people who don’t graduate are more likely to struggle to pay down their debts, so they might have higher debt burdens. Also, why in the world would one want to exclude for-profit colleges? Kids get told to go to college, and the least qualified kids go to for-profit colleges. Excluding this group of students seems like cherry picking, and it really doesn’t seem reflective of the national story.
dv_dt 8y ago
There is a declining intersection of people with the capital with the the people who have the inclination to make a start on a venture. Both in the trait within s single individuals, and as social mixing. The number of plain small business starts have also been on a long decline for much the same reasons.
ravenstine 8y ago
That's why loans can be a trap; you have to pay them back eventually regardless of outcome. I remember Mark Cuban saying it's foolish to take out a loan to start a business, and while I do think there's a time and a place to do that, there's a nugget of truth to what he said. A lot of people such as myself have nothing to lose in starting a business, that is besides the debt which has become further and further normalized in our society. Loans are great and I've used them for a variety of things, but it's fascinating when there are unintended and perhaps unintuitive consequences.
- s73v3r_ 8y ago
  Wouldn't the loan be under the business, and not you personally? In that case, wouldn't it be better to take the business loan than give up part of your company to VCs who also demand that their money get paid back?
  - xemdetia 8y ago
    I feel like he is more pointing out the clear mismatch of priorities. As soon as you have the mortgage requirement that bill is there and asking for money every month forever and you getting paid RIGHT NOW when that bill's over your head starts to become a dominating factor in business decisions. A lot of the arguments in the comments here have to do with this kind of problem- we keep trapping ourselves in financial instruments that require more regularity than any early business or even early-mid business can provide. Student loans are one, but so are home mortgages and so on. I know I am trapped by this right now- the clock that takes a good chunk of my monthly net makes you risk adverse.
  - deadmetheny 8y ago
    Business loans generally require at least one personal signature, exactly for that reason - if the business tanks and can't make payments itself, then someone is on the line to repay the loan.
  - skinnymuch 8y ago
    A business likely needs a reputation and such to get a loan on its own. In this case if it’s a new-ish startup, no one will be giving the company a loan without someone backing the loan. Which would likely be you.
usaar333 8y ago
> One big confounding factor could be the cost of student debt. You can't tell your student loan company to defer payments until your business gets off the ground. But how many prospective tech start-up founders are saddled with student debt? Granted I went to school (public university) 10 years ago, but in my experience the majority of the students in the CS program all come from the following cohorts: * professional parents paying for school * Students receiving massive amounts of grant money, with minimal loans needed * Students able to get top internships/TA positions during the school year, which more than offset school cost. I agree loan debt is a problem in general, but among the population that has produced VC-funded startups, it feels minimal. (The actual "problem" I see is that opportunity cost of a start-up is now higher for these would-be founders because large companies pay so much.)
- wilsonnb2 8y ago
  According to this site, 71% of graduates in 2012 had some kind of student loan debt [1]. I think it's probably more accurate to assume that the number of CS students is pretty close to that number, instead of assuming that your anecdotal remembrance from 10 years ago is universal. [1] https://ticas.org/sites/default/files/pub_files/Debt_Facts_and_Sources.pdf https://ticas.org/sites/default/files/pub_files/Debt_Facts_a...
  - usaar333 8y ago
    I don't see why it is reasonable to treat CS students the same. The average debt for graduates per your citation is about $30k. Two programming internships will more than offset that and very few other students can command even $10k in a summer, let alone $20k.
    - wilsonnb2 8y ago
      Well, if you don't want to use those aggregate numbers, then you are going to need numbers of your own. What percentage of CS students have paid internships? What's the average pay of those internships? That sort of thing.

Alex3917 8y ago

> One big confounding factor could be the cost of student debt. Student debt has increased, but not that much. Only a few thousand dollars over the last 25 years.

chrisbennet 8y ago
As of 2016, median student debt increased 163% (adjusted for inflation) over 25 years. https://www.huffingtonpost.com/entry/3-charts-student-debt-crisis_us_56b0e9d0e4b0a1b96203d369 https://www.huffingtonpost.com/entry/3-charts-student-debt-c...
- Alex3917 8y ago
  Hmm. The collegeboard numbers are significantly different than that: https://trends.collegeboard.org/student-aid/figures-tables/cumulative-debt-bachelor-degree-recipients-four-year-institutions-over-time https://trends.collegeboard.org/student-aid/figures-tables/c... E.g. Collegeboard has the average debt per graduate being $12,300 in 2000-01, whereas your source has it as being $22,500ish the same year. Maybe your numbers are including for-profit colleges? (Which isn't really appropriate, since they were very uncommon in 1990.)
  - mercutio2 8y ago
    Huge numbers of people don’t graduate, and the people who don’t graduate are more likely to struggle to pay down their debts, so they might have higher debt burdens. Also, why in the world would one want to exclude for-profit colleges? Kids get told to go to college, and the least qualified kids go to for-profit colleges. Excluding this group of students seems like cherry picking, and it really doesn’t seem reflective of the national story.

dv_dt 8y ago

There is a declining intersection of people with the capital with the the people who have the inclination to make a start on a venture. Both in the trait within s single individuals, and as social mixing. The number of plain small business starts have also been on a long decline for much the same reasons.

ravenstine 8y ago

That's why loans can be a trap; you have to pay them back eventually regardless of outcome. I remember Mark Cuban saying it's foolish to take out a loan to start a business, and while I do think there's a time and a place to do that, there's a nugget of truth to what he said. A lot of people such as myself have nothing to lose in starting a business, that is besides the debt which has become further and further normalized in our society. Loans are great and I've used them for a variety of things, but it's fascinating when there are unintended and perhaps unintuitive consequences.

s73v3r_ 8y ago
Wouldn't the loan be under the business, and not you personally? In that case, wouldn't it be better to take the business loan than give up part of your company to VCs who also demand that their money get paid back?
- xemdetia 8y ago
  I feel like he is more pointing out the clear mismatch of priorities. As soon as you have the mortgage requirement that bill is there and asking for money every month forever and you getting paid RIGHT NOW when that bill's over your head starts to become a dominating factor in business decisions. A lot of the arguments in the comments here have to do with this kind of problem- we keep trapping ourselves in financial instruments that require more regularity than any early business or even early-mid business can provide. Student loans are one, but so are home mortgages and so on. I know I am trapped by this right now- the clock that takes a good chunk of my monthly net makes you risk adverse.
- deadmetheny 8y ago
  Business loans generally require at least one personal signature, exactly for that reason - if the business tanks and can't make payments itself, then someone is on the line to repay the loan.
- skinnymuch 8y ago
  A business likely needs a reputation and such to get a loan on its own. In this case if it’s a new-ish startup, no one will be giving the company a loan without someone backing the loan. Which would likely be you.

usaar333 8y ago

> One big confounding factor could be the cost of student debt. You can't tell your student loan company to defer payments until your business gets off the ground. But how many prospective tech start-up founders are saddled with student debt? Granted I went to school (public university) 10 years ago, but in my experience the majority of the students in the CS program all come from the following cohorts: * professional parents paying for school * Students receiving massive amounts of grant money, with minimal loans needed * Students able to get top internships/TA positions during the school year, which more than offset school cost. I agree loan debt is a problem in general, but among the population that has produced VC-funded startups, it feels minimal. (The actual "problem" I see is that opportunity cost of a start-up is now higher for these would-be founders because large companies pay so much.)

wilsonnb2 8y ago
According to this site, 71% of graduates in 2012 had some kind of student loan debt [1]. I think it's probably more accurate to assume that the number of CS students is pretty close to that number, instead of assuming that your anecdotal remembrance from 10 years ago is universal. [1] https://ticas.org/sites/default/files/pub_files/Debt_Facts_and_Sources.pdf https://ticas.org/sites/default/files/pub_files/Debt_Facts_a...
- usaar333 8y ago
  I don't see why it is reasonable to treat CS students the same. The average debt for graduates per your citation is about $30k. Two programming internships will more than offset that and very few other students can command even $10k in a summer, let alone $20k.
  - wilsonnb2 8y ago
    Well, if you don't want to use those aggregate numbers, then you are going to need numbers of your own. What percentage of CS students have paid internships? What's the average pay of those internships? That sort of thing.