13 ms·

A corollary to this may be that those who get many chances are more likely to succeed. This is often the case for people that have a safety net of some sort com

A corollary to this may be that those who get many chances are more likely to succeed. This is often the case for people that have a safety net of some sort compared to those that don't when it comes to, for example, starting businesses. Those with a safety net can fail and try again and again and eventually tell the story of how 'gumption and spirit' made them a success while those that didn't have a safety net 'just didn't try hard enough'. I know I have been exceptionally lucky in that I have been given many chances to fail, and taken them! Without those opportunities to fail safely I wouldn't have the success I have now.

deleted 3y ago
[deleted]
zwnow 3y ago
This is a good argument. In Germany, if you take a loan to open up a business, you can pretty much ruin your whole life and financially never recover if it fails once. It's a little different with tech, as you usually don't have as high costs early on, but still. There is an extremely high risk involved that most people simply can't afford.
- pier25 3y ago
  Isn't this the same in most countries?
  - zwnow 3y ago
    It is, but in Germany your taxes on wage is very high. It's easier to save up a financial safety net in countries with higher wages and less taxes.
    - jowdones 3y ago
      Well it's high in Europe in general. And seems quite similar like in the US. That is you can use a rough estimate of 40%, meaning half the time you're working for the state. So the problem is not taxation as much as low wages. Germany has lower wages than US, Romania has lower wages than Germany. State skims half what you make anywhere. It's the absolute amount you are left with that makes the difference and that's why Americans have more money to spend on businesses than Europe and Europe has more than Asia and Asia more than Africa.
      - zwnow 3y ago
        I agree, it's difficult in most countries. Germany has tons of additional laws regarding taxation too. I for myself wouldn't even want to try opening up a business solely due to the taxation expertise I'd have to look up into. Don't get me started on international business too... It's just too much. Kudos to whoever manages to get through all that as a one man business owner.
        ido 3y ago
        As someone running a business in Germany I think you're overestimating it. I have a steuerberater (accountant/tax-advisor) who is also doing my bookkeeping and he takes care of all that. When my UG was young paying him was a few €100s per year overhead. Today (when my company is turning over several €100Ks per year) it's a couple €1000s per year (so relatively negligible expense for my business). There's still plenty to complain about regarding bureaucracy and red tape but don't let this alone deter you from running a business (especially not a software startup).
        zwnow 3y ago
        I might do, it's just way more work than in other countries. 90% of which I really don't want to bother with.
        ido 3y ago
        I'm pretty sure it's pretty much like that in most other countries (at least most other European countries). I believe its the US/UK that are unusually easy to open a company in.
      - yobbo 3y ago
        > That is you can use a rough estimate of 40% No. But it's complicated ... For example, income tax is charged on the employee, after the employer has been charged employer/social fees of 30-40%. And then, sale of most goods are charged ~20% VAT. The total taxation pressure "per hour worked" is far above 40%.
- tristramb 3y ago
  "In Germany, if you take a loan to open up a business, you can pretty much ruin your whole life" So instead you ruin other people's lives?
  - hgomersall 3y ago
    The bank? The ones whose job is literally to turn risk into premium on loans?
    - jurgenaut23 3y ago
      Yes, exactly. It's amazing how people don't see that the _whole_ point of banks is to aggregate defaulting risks across a very large number of loans to power the economy.
      - eru 3y ago
        Banks have more than one point and function. Eg they also provide 'checking' accounts. There's no conceptual reason why that function needs to be bundled with the 'aggregating default risk' function; but it happens to be so in many countries. To illustrate, on the one hand, think of an institution that takes deposits and lets you transfer money to pay your rent etc, but doesn't make any 'real' investments: all they do is park the deposits in government loans. On the other hand, think of exchange traded funds that invest in a wide array of bonds (or even equities). They diversify defaulting risk across the economy, without taking deposits, like your typical bank does.
        hgomersall 3y ago
        The ability to provide loans from nothing is the special feature of a bank, which is why they are so heavily regulated. The deposits are just the opposite half of the loan creation. No bank invest deposits - they're a liability to the bank.
        eru 3y ago
- raincole 3y ago
  What's the alternative tho? If you take a loan, in most countries you're expected to pay it back, no? Do you think people should be able to default without consequence?
  - jurgenaut23 3y ago
    Short answer: yes, but. Without consequence, of course not. But you should be able to 'separate' your professional and personal life, even as an entrepreneur. I would NEVER found my own business if I knew that going bankrupt would take away my kid's house. This is why instruments such as limited responsibility companies have been invented.
    - jeffreygoesto 3y ago
      Knew a guy who tried to outsmart tax rules and founded the company as his wife's. Also had a big mortgage on their house. She fell in love with the local butcher (no joke) and one afternoon they emptied the bank account and flew to Goa. That guy lost his wife, his company and his house in one afternoon and went straight to ER with a heart attack.
      - WalterSear 3y ago
        And his butcher.
        filoleg 3y ago
        That too. Doesn’t seem like a big deal, but I imagine if you have your own butcher in the first place, you are somewhat particular and specific about what you want (kind of similar to a lot of people clinging onto their usual hair stylist/barber for their dear life, once they find one that does things the way they like). And I would bet that the number of barber options around would be much larger than that for butchers.
    - PurpleRamen 3y ago
      > But you should be able to 'separate' your professional and personal life, even as an entrepreneur. Why? In case of success, you have the personal benefit from it. So why should other people and society take the bill in case of your fail? Or how exactly is this supposed tor work?
- hgomersall 3y ago
  Does GMbH not afford limited liability for loans?
  - zwnow 3y ago
    It does, but it's about 10k€ and you need to meet certain requirements. Recovering from a 10k€ loss will take some time in a country with extremely high taxes.
    - 0x073 3y ago
      And there is UG if you have no 10k€
    - FinnKuhn 3y ago
      Then use a "UG (haftungsbeschränkt)"
  - heisenbit 3y ago
    Bank's tend not go give loans to newly formed GmbH without a real person being on the hook.
    - fransje26 3y ago
      I've also heard first hand of banks requiring from business owners to be personally liable for the loans even for well-established, successful businesses. And when you are trying to extend your facilities, the loans are not in the 10k range.. It was mind-boggling..
      - badpun 3y ago
        If the banks gave cheap credit to businesses without any collateral or any real liability, they would quickly go out of business because of people taking advantage of them. Credit without collateral is available (e.g. credit cards), but it’s not cheap, and it’s limited in size.
        3y ago
- geraldhh 3y ago
  please elaborate how germany is different in structuring risk of business failure
- deleted 3y ago
  [deleted]
- FinnKuhn 3y ago
  From what I could find it bankruptcy in Germany takes 3 years after a change in 2020, which I find is pretty reasonable and is the same length as in the US...
acron0 3y ago
This is critical and often overlooked when it comes to fully appreciating socio-economic factors that influence a person's capacity to "succeed". People with the resources are simply allowed to fail and recover more times than those without.
abtinf 3y ago
This has nothing at all to do with the article.
K0balt 3y ago
This was really my takeaway as well. The finality of decisions is highly situational. The article doesn’t hold true for me, I have used myriad chances to fail, and have so far lived 3 distinct epochs in my life, each one a life unto itself. I owe this to the simple decision of my father to buy 5 acres of raw land a couple of miles out of town and teach me to use tools. On the basis of that I have never had to rent, I have had my own shelter (starting with a simple cabin and an outhouse) from the age of 16, and I have never been overly dependent on a job to where I wasn’t willing to walk away. Having simple shelter made it so I could fuck around and find out until I found something that worked a little, then iterate. I spent many years of my life intermittently in poverty, getting my food from food banks and buying expired surplus from food thrifts, gardening, etc and relying on social programs for medicine, but I was never at risk of being homeless. Always a place to fall back to. I have parlayed that into a pretty good life, comfortable, productive, and a small economic engine that provides for several families in the community. My advice for anyone having children: buy land if you can. Not structures, but land. A few miles out of town is fine, because vehicles and bicycles exist. Teach your kids basic carpentry, electrical, mechanical, and masonry skills. Those are the basis of civilisation. Move to where you can do this if your local environment is too expensive or restrictive. Move to a new country if needed. I have done this with my children and because of that, they enjoy the same benefits that I had, and are finding their way having known nothing but self determination as the fundamental principle of their lives. Debt -Free Land you control without many restrictions, not “real estate” is what makes it possible to live better than most people do while technically being in “poverty” by income. That is what makes it possible to take risks. Risks are what makes it possible to find a working solution. Of course, if you are born into financial privilege, that’s also a great start, but that wasn’t my case. I often struggled to even pay the (very low) property tax. Without the freedom and willingness to take risks, and the resilience and willingness to endure hardships, you may have to endure being a servant to someone unless you are very lucky, and luck works better if you can make your own. This might read like a “pull yourself up by your bootstraps “ rant, but it is not. For most people, they are trapped in a situation designed to keep them in service of some goal not their own. It is very difficult to escape, and impossible without the proper training for self sufficient action and the complete lack of debt (or the willingness to lose anything you owe money on) You also might have to sacrifice your comfort, security, and literally risk your life or health to obtain the foothold from which you can launch a self determined life. That is a position of extreme privilege, but it is one that can be obtained if you want it bad enough and are willing to roll the dice, and accept the finality of failure if you do not succeed (looping back to the article). My point is that that kind of privilege is more within reach that most people understand. But you might’ve have to be willing to give up everything at first to use it. Most people are simply not prepared for the hardship and sacrifice that entails. Land is still cheap all over the world. Unless you live on an island, You can probably get an acre of land for a months wages at a fast food place (in the USA) within a weeks bicycle ride of where you are. But that won’t do you any good unless you know how to turn that into a place to live and work from.
renegade-otter 3y ago
The clown car eventually drives into a gold mine, given enough gas.
baursak 3y ago
https://news.ycombinator.com/item?id=15659076 https://news.ycombinator.com/item?id=15659076 "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."
mgh2 3y ago
The myth is not in 2nd chances; our ability to adapt and be resilient is hard but doable - ex: 1st time immigrants chasing the American dream. The myth is in our ability to make "choices" which shifts the narrative to "hard work" rather than luck, perpetuated by survivorship bias and those "who have made it". Is the typical attribution error. [1] https://medium.com/@trendguardian/free-will-a-rich-fairy-tale-4fecf8095812 https://medium.com/@trendguardian/free-will-a-rich-fairy-tal... [2] https://www.youtube.com/watch?v=3LopI4YeC4I https://www.youtube.com/watch?v=3LopI4YeC4I
- linearrust 3y ago
  > The myth is not in 2nd chances; our ability to adapt is sometimes hard but doable - ex: 1st time immigrants searching for the American dream. Isn't that an example of a 2nd chance? A person fails in his own country and gets another chance (2nd chance) in another country?
eleveriven 3y ago
And you simply can learn from failure

deleted 3y ago

[deleted]

zwnow 3y ago

This is a good argument. In Germany, if you take a loan to open up a business, you can pretty much ruin your whole life and financially never recover if it fails once. It's a little different with tech, as you usually don't have as high costs early on, but still. There is an extremely high risk involved that most people simply can't afford.

pier25 3y ago
Isn't this the same in most countries?
- zwnow 3y ago
  It is, but in Germany your taxes on wage is very high. It's easier to save up a financial safety net in countries with higher wages and less taxes.
  - jowdones 3y ago
    Well it's high in Europe in general. And seems quite similar like in the US. That is you can use a rough estimate of 40%, meaning half the time you're working for the state. So the problem is not taxation as much as low wages. Germany has lower wages than US, Romania has lower wages than Germany. State skims half what you make anywhere. It's the absolute amount you are left with that makes the difference and that's why Americans have more money to spend on businesses than Europe and Europe has more than Asia and Asia more than Africa.
    - zwnow 3y ago
      I agree, it's difficult in most countries. Germany has tons of additional laws regarding taxation too. I for myself wouldn't even want to try opening up a business solely due to the taxation expertise I'd have to look up into. Don't get me started on international business too... It's just too much. Kudos to whoever manages to get through all that as a one man business owner.
      - ido 3y ago
        As someone running a business in Germany I think you're overestimating it. I have a steuerberater (accountant/tax-advisor) who is also doing my bookkeeping and he takes care of all that. When my UG was young paying him was a few €100s per year overhead. Today (when my company is turning over several €100Ks per year) it's a couple €1000s per year (so relatively negligible expense for my business). There's still plenty to complain about regarding bureaucracy and red tape but don't let this alone deter you from running a business (especially not a software startup).
        zwnow 3y ago
        I might do, it's just way more work than in other countries. 90% of which I really don't want to bother with.
        ido 3y ago
        I'm pretty sure it's pretty much like that in most other countries (at least most other European countries). I believe its the US/UK that are unusually easy to open a company in.
    - yobbo 3y ago
      > That is you can use a rough estimate of 40% No. But it's complicated ... For example, income tax is charged on the employee, after the employer has been charged employer/social fees of 30-40%. And then, sale of most goods are charged ~20% VAT. The total taxation pressure "per hour worked" is far above 40%.
tristramb 3y ago
"In Germany, if you take a loan to open up a business, you can pretty much ruin your whole life" So instead you ruin other people's lives?
- hgomersall 3y ago
  The bank? The ones whose job is literally to turn risk into premium on loans?
  - jurgenaut23 3y ago
    Yes, exactly. It's amazing how people don't see that the _whole_ point of banks is to aggregate defaulting risks across a very large number of loans to power the economy.
    - eru 3y ago
      Banks have more than one point and function. Eg they also provide 'checking' accounts. There's no conceptual reason why that function needs to be bundled with the 'aggregating default risk' function; but it happens to be so in many countries. To illustrate, on the one hand, think of an institution that takes deposits and lets you transfer money to pay your rent etc, but doesn't make any 'real' investments: all they do is park the deposits in government loans. On the other hand, think of exchange traded funds that invest in a wide array of bonds (or even equities). They diversify defaulting risk across the economy, without taking deposits, like your typical bank does.
      - hgomersall 3y ago
        The ability to provide loans from nothing is the special feature of a bank, which is why they are so heavily regulated. The deposits are just the opposite half of the loan creation. No bank invest deposits - they're a liability to the bank.
        eru 3y ago
raincole 3y ago
What's the alternative tho? If you take a loan, in most countries you're expected to pay it back, no? Do you think people should be able to default without consequence?
- jurgenaut23 3y ago
  Short answer: yes, but. Without consequence, of course not. But you should be able to 'separate' your professional and personal life, even as an entrepreneur. I would NEVER found my own business if I knew that going bankrupt would take away my kid's house. This is why instruments such as limited responsibility companies have been invented.
  - jeffreygoesto 3y ago
    Knew a guy who tried to outsmart tax rules and founded the company as his wife's. Also had a big mortgage on their house. She fell in love with the local butcher (no joke) and one afternoon they emptied the bank account and flew to Goa. That guy lost his wife, his company and his house in one afternoon and went straight to ER with a heart attack.
    - WalterSear 3y ago
      And his butcher.
      - filoleg 3y ago
        That too. Doesn’t seem like a big deal, but I imagine if you have your own butcher in the first place, you are somewhat particular and specific about what you want (kind of similar to a lot of people clinging onto their usual hair stylist/barber for their dear life, once they find one that does things the way they like). And I would bet that the number of barber options around would be much larger than that for butchers.
  - PurpleRamen 3y ago
    > But you should be able to 'separate' your professional and personal life, even as an entrepreneur. Why? In case of success, you have the personal benefit from it. So why should other people and society take the bill in case of your fail? Or how exactly is this supposed tor work?
hgomersall 3y ago
Does GMbH not afford limited liability for loans?
- zwnow 3y ago
  It does, but it's about 10k€ and you need to meet certain requirements. Recovering from a 10k€ loss will take some time in a country with extremely high taxes.
  - 0x073 3y ago
    And there is UG if you have no 10k€
  - FinnKuhn 3y ago
    Then use a "UG (haftungsbeschränkt)"
- heisenbit 3y ago
  Bank's tend not go give loans to newly formed GmbH without a real person being on the hook.
  - fransje26 3y ago
    I've also heard first hand of banks requiring from business owners to be personally liable for the loans even for well-established, successful businesses. And when you are trying to extend your facilities, the loans are not in the 10k range.. It was mind-boggling..
    - badpun 3y ago
      If the banks gave cheap credit to businesses without any collateral or any real liability, they would quickly go out of business because of people taking advantage of them. Credit without collateral is available (e.g. credit cards), but it’s not cheap, and it’s limited in size.
      - 3y ago
geraldhh 3y ago
please elaborate how germany is different in structuring risk of business failure
deleted 3y ago
[deleted]
FinnKuhn 3y ago
From what I could find it bankruptcy in Germany takes 3 years after a change in 2020, which I find is pretty reasonable and is the same length as in the US...

acron0 3y ago

This is critical and often overlooked when it comes to fully appreciating socio-economic factors that influence a person's capacity to "succeed". People with the resources are simply allowed to fail and recover more times than those without.

abtinf 3y ago

This has nothing at all to do with the article.

K0balt 3y ago

This was really my takeaway as well. The finality of decisions is highly situational. The article doesn’t hold true for me, I have used myriad chances to fail, and have so far lived 3 distinct epochs in my life, each one a life unto itself. I owe this to the simple decision of my father to buy 5 acres of raw land a couple of miles out of town and teach me to use tools. On the basis of that I have never had to rent, I have had my own shelter (starting with a simple cabin and an outhouse) from the age of 16, and I have never been overly dependent on a job to where I wasn’t willing to walk away. Having simple shelter made it so I could fuck around and find out until I found something that worked a little, then iterate. I spent many years of my life intermittently in poverty, getting my food from food banks and buying expired surplus from food thrifts, gardening, etc and relying on social programs for medicine, but I was never at risk of being homeless. Always a place to fall back to. I have parlayed that into a pretty good life, comfortable, productive, and a small economic engine that provides for several families in the community. My advice for anyone having children: buy land if you can. Not structures, but land. A few miles out of town is fine, because vehicles and bicycles exist. Teach your kids basic carpentry, electrical, mechanical, and masonry skills. Those are the basis of civilisation. Move to where you can do this if your local environment is too expensive or restrictive. Move to a new country if needed. I have done this with my children and because of that, they enjoy the same benefits that I had, and are finding their way having known nothing but self determination as the fundamental principle of their lives. Debt -Free Land you control without many restrictions, not “real estate” is what makes it possible to live better than most people do while technically being in “poverty” by income. That is what makes it possible to take risks. Risks are what makes it possible to find a working solution. Of course, if you are born into financial privilege, that’s also a great start, but that wasn’t my case. I often struggled to even pay the (very low) property tax. Without the freedom and willingness to take risks, and the resilience and willingness to endure hardships, you may have to endure being a servant to someone unless you are very lucky, and luck works better if you can make your own. This might read like a “pull yourself up by your bootstraps “ rant, but it is not. For most people, they are trapped in a situation designed to keep them in service of some goal not their own. It is very difficult to escape, and impossible without the proper training for self sufficient action and the complete lack of debt (or the willingness to lose anything you owe money on) You also might have to sacrifice your comfort, security, and literally risk your life or health to obtain the foothold from which you can launch a self determined life. That is a position of extreme privilege, but it is one that can be obtained if you want it bad enough and are willing to roll the dice, and accept the finality of failure if you do not succeed (looping back to the article). My point is that that kind of privilege is more within reach that most people understand. But you might’ve have to be willing to give up everything at first to use it. Most people are simply not prepared for the hardship and sacrifice that entails. Land is still cheap all over the world. Unless you live on an island, You can probably get an acre of land for a months wages at a fast food place (in the USA) within a weeks bicycle ride of where you are. But that won’t do you any good unless you know how to turn that into a place to live and work from.

renegade-otter 3y ago

The clown car eventually drives into a gold mine, given enough gas.

baursak 3y ago

https://news.ycombinator.com/item?id=15659076 https://news.ycombinator.com/item?id=15659076 "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."

mgh2 3y ago

The myth is not in 2nd chances; our ability to adapt and be resilient is hard but doable - ex: 1st time immigrants chasing the American dream. The myth is in our ability to make "choices" which shifts the narrative to "hard work" rather than luck, perpetuated by survivorship bias and those "who have made it". Is the typical attribution error. [1] https://medium.com/@trendguardian/free-will-a-rich-fairy-tale-4fecf8095812 https://medium.com/@trendguardian/free-will-a-rich-fairy-tal... [2] https://www.youtube.com/watch?v=3LopI4YeC4I https://www.youtube.com/watch?v=3LopI4YeC4I

linearrust 3y ago
> The myth is not in 2nd chances; our ability to adapt is sometimes hard but doable - ex: 1st time immigrants searching for the American dream. Isn't that an example of a 2nd chance? A person fails in his own country and gets another chance (2nd chance) in another country?

eleveriven 3y ago

And you simply can learn from failure