4 ms·

And often, getting credit card debt is not a material risk, but a minor embarrassment when they ask their family to bail them out and/or move in the guest house

And often, getting credit card debt is not a material risk, but a minor embarrassment when they ask their family to bail them out and/or move in the guest house for a few months, rent-free. When poorer folk take the "same" risk, they can be ruined for decades.

jjeaff 6y ago
It's also a privilege to even have a significant amount of unsecured credit available to you in the first place.
santoshalper 6y ago
At least in the United States, we have a bankruptcy system that blunts the worst outcomes somewhat. Not sure that applies everywhere.
hpcjoe 6y ago
Here here. When you empty your 401k to build your business, and don't contribute to it for 15 years while you are building, as you simply don't have the cash, and cannot afford it ... Yeah. The implicit assumptions of the "live in poverty" of the OP, are wrong. I'm 54, and I was financially wiped out at 51. I will not ever recover from this. No family wealth to fall back on. I do not believe I will ever be able to retire. And noting that there is a bit of ageism in this space, makes the threat of potential long term unemployment even worse for folks like me. Sort of an inverse Ozymandias. Gaze upon my flaming cratered company, and beware. Here be demons. That you cannot control. I had skin in the game. And I lost it.
- jngreenlee 6y ago
  Have you blogged or told your story anywhere? I'm curious to learn more!
  - hpcjoe 6y ago
    Not all of it. I blog here[1]. The post where I talked about the end is here[2]. Note the 'laws' I quote at the end of the post. My first post is here[3]. There I talk about the HPC market, accelerators, and some of our plans. We were working on board level inexpensive accelerators before these were a thing. We gave up trying to get funding for this in 2006. I did say, you have to be at the right place, at the right time. And be lucky. We got 2 of 3. Luck eluded us. [1] https://scalability.org https://scalability.org [2] https://scalability.org/2017/03/requiem/ https://scalability.org/2017/03/requiem/ [3] https://scalability.org/2005/10/venture-capital-and-high-performance-computing/ https://scalability.org/2005/10/venture-capital-and-high-per...
    - infinite8s 6y ago
      Oh man, I remember reading your blog when I was in grad school (mid-2000s) doing molecular simulations on HPC systems (and not really enjoying the science aspect, but I did like working on the tools), thinking that you were a great example of being able to bootstrap a business in the HPC space. Sad to hear it didn't work out.
      - hpcjoe 6y ago
        Thanks! I've gone to visit sites and heard a few people whispering near me "its the scalability.org guy". Blew me away. I still write, albeit less frequently, and I have to keep to a narrower range of topics.
    - magicalhippo 6y ago
      > Or when you go visit customers, they love your product, the benchmark results are mind blowing … and then the CIO/CFO kills the deal because, you know … you are too small. We've been in similar situations several times. We're serving a niche, but this niche is a core piece of our customers business. Without software like ours, their whole operation stops. Anyway, we'd have demos. Department heads were on fire, wondering if we could install same day we had demo, all smiles, everything looked great. And then we lost because someone higher up decided we were "too small". We're small, but we're pretty much the best in our niche and we have had very solid financials for decades. Those we lost went with bigger, supposedly "safer" competitors and had some very sub-par years with them before they had to pay their way out of those contracts and come back to us.
- Lordarminius 6y ago
  > ...I'm 54, and I was financially wiped out at 51. I will not ever recover from this.... You need a fighting spirit to achieve great things. Many people have overcome far greater problems. Never give up you are only one transaction away from financial success. Good luck
  - hpcjoe 6y ago
    (really not sure why this was down voted ... it is a good comment) Thanks. I'm aware of others struggles. I figure that my story could be a cautionary tale for some, and others may take lessons from it. When I say in other fora, never, ever take debt financing of anything if you can avoid it, this is coming from personal agonizing experience. If I go back into the startup world, I'm going with a very clear perception of what is what. No rose colored glasses. No "if you build a better mousetrap" mentality. I know how things can go horribly wrong. I know where the traps and mines are.
adventured 6y ago
> When poorer folk take the "same" risk, they can be ruined for decades. In the vast majority of circumstances that's an extreme exaggeration. Speaking from past personal experience with poverty (ie being "poorer folk"), you can default on every possible type of debt - wait about seven years (can vary slightly by state, but it's typically around that), and you're free from it. My credit rating went from 800, to 480, back to 760 in that process over eight years, without requiring any special effort. I defaulted on numerous credit cards, I defaulted on medical debt; it all vanished, one after another as time ticked by, and my credit rating jumped as each item fell off. Every negative mark falls off your credit report after N years. It's very unpleasant to have your credit rating wrecked for years. To say that it will ruin you for decades, that's reaching into the land of absurdity. I'm sure it happens, some people get stuck in a vicious cycle for ... decades, however it's not rocket science to properly utilize the negative mark credit cycling to your advantage and reboot. It doesn't take more than an hour or two of reading to self-educate at zero cost about how the system works.
redisman 6y ago
If you're actually poor you can't even get a credit card. Because of a lack of credit history the only card I could get at one point was a $300 credit card where I had to send in $300 as a deposit to the bank. Let me just pay a couple of employees a somewhat livable wage on that... I really hate this condescending "if you really wanted it the money shouldn't matter" coming from millionaires.
sealthedeal 6y ago
True statements, fact of the matter is, this is not a fair world in which we live in. We are all created equal, but it doesn't mean that we are all given the same privilege.

jjeaff 6y ago

It's also a privilege to even have a significant amount of unsecured credit available to you in the first place.

santoshalper 6y ago

At least in the United States, we have a bankruptcy system that blunts the worst outcomes somewhat. Not sure that applies everywhere.

hpcjoe 6y ago

Here here. When you empty your 401k to build your business, and don't contribute to it for 15 years while you are building, as you simply don't have the cash, and cannot afford it ... Yeah. The implicit assumptions of the "live in poverty" of the OP, are wrong. I'm 54, and I was financially wiped out at 51. I will not ever recover from this. No family wealth to fall back on. I do not believe I will ever be able to retire. And noting that there is a bit of ageism in this space, makes the threat of potential long term unemployment even worse for folks like me. Sort of an inverse Ozymandias. Gaze upon my flaming cratered company, and beware. Here be demons. That you cannot control. I had skin in the game. And I lost it.

jngreenlee 6y ago
Have you blogged or told your story anywhere? I'm curious to learn more!
- hpcjoe 6y ago
  Not all of it. I blog here[1]. The post where I talked about the end is here[2]. Note the 'laws' I quote at the end of the post. My first post is here[3]. There I talk about the HPC market, accelerators, and some of our plans. We were working on board level inexpensive accelerators before these were a thing. We gave up trying to get funding for this in 2006. I did say, you have to be at the right place, at the right time. And be lucky. We got 2 of 3. Luck eluded us. [1] https://scalability.org https://scalability.org [2] https://scalability.org/2017/03/requiem/ https://scalability.org/2017/03/requiem/ [3] https://scalability.org/2005/10/venture-capital-and-high-performance-computing/ https://scalability.org/2005/10/venture-capital-and-high-per...
  - infinite8s 6y ago
    Oh man, I remember reading your blog when I was in grad school (mid-2000s) doing molecular simulations on HPC systems (and not really enjoying the science aspect, but I did like working on the tools), thinking that you were a great example of being able to bootstrap a business in the HPC space. Sad to hear it didn't work out.
    - hpcjoe 6y ago
      Thanks! I've gone to visit sites and heard a few people whispering near me "its the scalability.org guy". Blew me away. I still write, albeit less frequently, and I have to keep to a narrower range of topics.
  - magicalhippo 6y ago
    > Or when you go visit customers, they love your product, the benchmark results are mind blowing … and then the CIO/CFO kills the deal because, you know … you are too small. We've been in similar situations several times. We're serving a niche, but this niche is a core piece of our customers business. Without software like ours, their whole operation stops. Anyway, we'd have demos. Department heads were on fire, wondering if we could install same day we had demo, all smiles, everything looked great. And then we lost because someone higher up decided we were "too small". We're small, but we're pretty much the best in our niche and we have had very solid financials for decades. Those we lost went with bigger, supposedly "safer" competitors and had some very sub-par years with them before they had to pay their way out of those contracts and come back to us.
Lordarminius 6y ago
> ...I'm 54, and I was financially wiped out at 51. I will not ever recover from this.... You need a fighting spirit to achieve great things. Many people have overcome far greater problems. Never give up you are only one transaction away from financial success. Good luck
- hpcjoe 6y ago
  (really not sure why this was down voted ... it is a good comment) Thanks. I'm aware of others struggles. I figure that my story could be a cautionary tale for some, and others may take lessons from it. When I say in other fora, never, ever take debt financing of anything if you can avoid it, this is coming from personal agonizing experience. If I go back into the startup world, I'm going with a very clear perception of what is what. No rose colored glasses. No "if you build a better mousetrap" mentality. I know how things can go horribly wrong. I know where the traps and mines are.

adventured 6y ago

> When poorer folk take the "same" risk, they can be ruined for decades. In the vast majority of circumstances that's an extreme exaggeration. Speaking from past personal experience with poverty (ie being "poorer folk"), you can default on every possible type of debt - wait about seven years (can vary slightly by state, but it's typically around that), and you're free from it. My credit rating went from 800, to 480, back to 760 in that process over eight years, without requiring any special effort. I defaulted on numerous credit cards, I defaulted on medical debt; it all vanished, one after another as time ticked by, and my credit rating jumped as each item fell off. Every negative mark falls off your credit report after N years. It's very unpleasant to have your credit rating wrecked for years. To say that it will ruin you for decades, that's reaching into the land of absurdity. I'm sure it happens, some people get stuck in a vicious cycle for ... decades, however it's not rocket science to properly utilize the negative mark credit cycling to your advantage and reboot. It doesn't take more than an hour or two of reading to self-educate at zero cost about how the system works.

redisman 6y ago

If you're actually poor you can't even get a credit card. Because of a lack of credit history the only card I could get at one point was a $300 credit card where I had to send in $300 as a deposit to the bank. Let me just pay a couple of employees a somewhat livable wage on that... I really hate this condescending "if you really wanted it the money shouldn't matter" coming from millionaires.

sealthedeal 6y ago

True statements, fact of the matter is, this is not a fair world in which we live in. We are all created equal, but it doesn't mean that we are all given the same privilege.