5 ms·

It’s easy to get lucky several times when you have a rich family that keeps you from truly failing

lordnacho 3y ago
Basically the "no-life-risk" thesis. I don't think it's entirely crazy either, Elon was going to be comfortable whatever he did, and some people in that position will roll the dice several times, and some of those guys will win several times. Still takes some skill, I don't doubt that. But the main ingredient is risk.
coldtea 3y ago
And yet I don't any great percentage of people from a "rich family" making multi-billion dollar companies. I'm also pretty sure with his first company sale he made much more money than his family ever had to begin with.
- SketchySeaBeast 3y ago
  > And yet I don't any great percentage of people from a "rich family" making multi-billion dollar companies. Because of the rarity of multi-billion dollar companies it makes more sense to flip the question - what are the demographics of those who found those companies? If the odds of doing something are 1:100 who is going to have better odds at succeeding - the person who gets 1 throw or 10 throws? Neither are guaranteed to succeed, but they both have a chance and one is much more likely than the other. That's what's at play here.
  - zeroonetwothree 3y ago
    There’s a lot more non-rich people though. So even at 1 throw each you’d expect them to be most of the successes under this theory. Of course there’s also hereditary factors at play that people like to ignore.
    - SketchySeaBeast 3y ago
      > There’s a lot more non-rich people though. So even at 1 throw each you’d expect them to be most of the successes under this theory. Well, this is why we have to look at the numbers. And it depends on the odds. If it's one in a billion and the rich get ten million throws and the poor get 1 each then the fact there are a lot of non-rich people isn't as impactful. > Of course there’s also hereditary factors at play that people like to ignore. Yes, like having cash to throw around and a safety net to rely on so that those shots can be taken as well as easier access to potentially important connections and resources.
  - deleted 3y ago
    [deleted]
- kergonath 3y ago
  He is an outlier, nobody is disputing that. Regardless of the odds to end up a multi-billionaire from a wealthy background, the odds of doing that from the working class are much lower. It does not mean that it never happens, I am sure there are examples. > I'm also pretty sure with his first company sale he made much more money than his family ever had to begin with. Well yeah. But he got there partly because he had some money to invest in the first place, and partly because he had useful connexions.
inglor_cz 3y ago
"It’s easy to get lucky several times when you have a rich family that keeps you from truly failing" This hypothesis is somewhat testable statistically. There are approximately 25 thousand people worth 100 million dollars+ in the world, with more than a third of that number residing in the US. [0] I think we can safely say that people worth 100 million and more are rich. If it is easy to get lucky several times with a rich family, you would expect some nontrivial share of Musk equivalents among them or their kids. Say, two hundred? Not observed. Either the willingness to risk own money in engineering startups is < 1 per cent among those, or it is not that easy. [0] https://www.thenationalnews.com/business/money/2022/10/18/us-has-highest-number-of-super-wealthy-worth-100m-or-more/ https://www.thenationalnews.com/business/money/2022/10/18/us...
- ethbr0 3y ago
  > Either the willingness to risk own money in engineering startups is < 1 per cent among those Maybe? The thing about having a rich family is... you're already rich. That removes one of the prime motivations to take serious risks, of the sort that paid off for Musk; namely, to become rich. I'm sure you get a lot of people who invest, or toss some money into this or that. But I'd be surprised if a significant number invested their entire net worth and time into a single endeavor.
  - inglor_cz 3y ago
    "But I'd be surprised if a significant number invested their entire net worth and time into a single endeavor." AFAIK Musk was a relative nobody in the millionaire world when he poured a majority of his wealth into SpaceX (2002). They were very close to bankruptcy during the Falcon 1 experiments and if the fourth launch failed, they would have joined a fairly extensive graveyard of defunct space startups, together with Carmack's Armadillo Aerospace and a few hundred others.
    - ethbr0 3y ago
      By that point, he'd already been CEO of PayPal for a bit (after co-founding X.com that merged into the company that became PayPal) and made $175M for his stake when eBay bought it. Then $100M went to found SpaceX. But that does seem like a very large bet that millionaires don't often make.

Basically the "no-life-risk" thesis. I don't think it's entirely crazy either, Elon was going to be comfortable whatever he did, and some people in that position will roll the dice several times, and some of those guys will win several times. Still takes some skill, I don't doubt that. But the main ingredient is risk.

coldtea 3y ago

And yet I don't any great percentage of people from a "rich family" making multi-billion dollar companies. I'm also pretty sure with his first company sale he made much more money than his family ever had to begin with.

SketchySeaBeast 3y ago
> And yet I don't any great percentage of people from a "rich family" making multi-billion dollar companies. Because of the rarity of multi-billion dollar companies it makes more sense to flip the question - what are the demographics of those who found those companies? If the odds of doing something are 1:100 who is going to have better odds at succeeding - the person who gets 1 throw or 10 throws? Neither are guaranteed to succeed, but they both have a chance and one is much more likely than the other. That's what's at play here.
- zeroonetwothree 3y ago
  There’s a lot more non-rich people though. So even at 1 throw each you’d expect them to be most of the successes under this theory. Of course there’s also hereditary factors at play that people like to ignore.
  - SketchySeaBeast 3y ago
    > There’s a lot more non-rich people though. So even at 1 throw each you’d expect them to be most of the successes under this theory. Well, this is why we have to look at the numbers. And it depends on the odds. If it's one in a billion and the rich get ten million throws and the poor get 1 each then the fact there are a lot of non-rich people isn't as impactful. > Of course there’s also hereditary factors at play that people like to ignore. Yes, like having cash to throw around and a safety net to rely on so that those shots can be taken as well as easier access to potentially important connections and resources.
- deleted 3y ago
  [deleted]
kergonath 3y ago
He is an outlier, nobody is disputing that. Regardless of the odds to end up a multi-billionaire from a wealthy background, the odds of doing that from the working class are much lower. It does not mean that it never happens, I am sure there are examples. > I'm also pretty sure with his first company sale he made much more money than his family ever had to begin with. Well yeah. But he got there partly because he had some money to invest in the first place, and partly because he had useful connexions.

inglor_cz 3y ago

"It’s easy to get lucky several times when you have a rich family that keeps you from truly failing" This hypothesis is somewhat testable statistically. There are approximately 25 thousand people worth 100 million dollars+ in the world, with more than a third of that number residing in the US. [0] I think we can safely say that people worth 100 million and more are rich. If it is easy to get lucky several times with a rich family, you would expect some nontrivial share of Musk equivalents among them or their kids. Say, two hundred? Not observed. Either the willingness to risk own money in engineering startups is < 1 per cent among those, or it is not that easy. [0] https://www.thenationalnews.com/business/money/2022/10/18/us-has-highest-number-of-super-wealthy-worth-100m-or-more/ https://www.thenationalnews.com/business/money/2022/10/18/us...

ethbr0 3y ago
> Either the willingness to risk own money in engineering startups is < 1 per cent among those Maybe? The thing about having a rich family is... you're already rich. That removes one of the prime motivations to take serious risks, of the sort that paid off for Musk; namely, to become rich. I'm sure you get a lot of people who invest, or toss some money into this or that. But I'd be surprised if a significant number invested their entire net worth and time into a single endeavor.
- inglor_cz 3y ago
  "But I'd be surprised if a significant number invested their entire net worth and time into a single endeavor." AFAIK Musk was a relative nobody in the millionaire world when he poured a majority of his wealth into SpaceX (2002). They were very close to bankruptcy during the Falcon 1 experiments and if the fourth launch failed, they would have joined a fairly extensive graveyard of defunct space startups, together with Carmack's Armadillo Aerospace and a few hundred others.
  - ethbr0 3y ago
    By that point, he'd already been CEO of PayPal for a bit (after co-founding X.com that merged into the company that became PayPal) and made $175M for his stake when eBay bought it. Then $100M went to found SpaceX. But that does seem like a very large bet that millionaires don't often make.