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This always sounded intuitively correct to me, but looking back over the past two decades basically all of the successful entrepreneurs and business owners I kn

• jbs789 1y ago
  If you don’t have a fall back, you have no choice but to make it work.
  • JustExAWS 1y ago
    Or fail miserably…
    • fragmede 1y ago
      Which we don't hear about. Except maybe via GoFundMe.
    • b112 1y ago
      You know what? Peter used to say, that every successful company could look back at a defining moment early on, where they would have died had it not been for the courage, and the tenacity, and maybe the insanity of one visionary person who put it all on the line, even though it seemed like a huge mistake at the time. A moment where all the metrics and the numbers didn't mean anything. It was all about the emotion. It was about belief, rational or irrational. And I think... I hope that I just witnessed that.
      • raw_anon_1111 1y ago
        On the other hand, no matter what you do, you can’t invest like Warren Buffett. https://www.forbes.com/sites/adamhartung/2014/11/19/why-you-cant-invest-like-warren-buffett-and-shouldnt-try/ https://www.forbes.com/sites/adamhartung/2014/11/19/why-you-... The whole idea of succeeding by “grit” makes way too many people too idealistic and unrealistic. Don’t get me wrong, Peter Drucker (hopefully that’s the Peter you are referring to) had some great actionable advice. But believing in yourself and having grit is about as banal as “thoughts and prayers”
        • anukin 1y ago
          I hope it’s Peter drucker instead of Peter griffin
      • toss1 1y ago
        You know what? This is indeed where courage, tenacity, and risk-taking make a difference. But what makes the difference in whether or not we hear about it is pure luck and survivor bias. If their luck was just right that with all that push in the right time the deal came through or the product sold, then we hear about what a great success it was, and how important was their grit. And many smart determined people with all the courage, tenacity, and risk-taking in the world have also taken the big risk, but dice did not roll their way, or the hill was just so steep it didn't work, so we hear nothing of them. And their number likely vastly exceeds the few for whom it did work.
      • WalterBright 1y ago
        At one point in Tesla's path, Musk was down to a net worth of $200k or so. He laid his entire fortune on the line. How many of us would be willing to do that? Not me.
        • jdiff 1y ago
          Is that courage or ketamine? I'm not sure there's anything aspirational there, or just a huge streak of vanity. Just look at all the plastic surgery.
  • wat10000 1y ago
    Cortez burning^Wscuttling his ships.
  • WJW 1y ago
    And if making it by hoping really really hard doesn't work, try suicide or something?
• zmmmmm 1y ago
  you can extend that to all Silicon Valley and the US in general. It has one of the weakest social security systems. Not even proper healthcare is guaranteed. Yet it out innovates all of Europe, Canada, Australia, other places that have incredible social "safety nets". I agree with the other commenter: safety nets and multiple tries are always good to have, but persistence and grit are even more important, and these come more from necessity.
  • bequanna 1y ago
    > Not even proper healthcare is guaranteed. …except it is. Health insurance is available on a sliding scale based on income and essentially free for most low income people.
    • nradov 1y ago
      Sure, although in some areas healthcare is effectively unavailable to Medicaid plan members because providers have stopped accepting those patients. Being insured doesn't mean much if you can't schedule an appointment. https://www.wsj.com/health/healthcare/medicaid-insurers-doctor-networks-appointments-72f9c11f https://www.wsj.com/health/healthcare/medicaid-insurers-doct...
      • deleted 11mo ago
        [deleted]
    • agf 1y ago
      In some areas and for some people, Medicaid probably does count as proper healthcare. But it certainly doesn't for other people / other places. Imagine there being one doctor within a multi-million person metro area who takes Medicaid for some sub-specialty. 90 minutes away from you by car. And you don't have a car. This is the reality for millions of Medicaid recipients, including ones I know personally in Chicago.
      • raw_anon_1111 1y ago
        Not Medicaid, subsidized ACA. I know a lot of young healthy people that just take the chance of not having health care. Worse case you can’t squeeze blood out of a turnip if you have to go the emergency room. I don’t think my older (step)son has had insurance since he got off our plan at 26 over two years ago.
• moralestapia 1y ago
  Every single western "entrepreneur" who starts making a little more than 100k/year likes to tell itself this story. Did you have any (real, not GenZ) mental or physical disability? Did you have a house to come back to every day? Did you have a hot meal waiting for you whenever you wanted? Did you have a community that supported you through your business? Did you have a legal structure around you that allowed you not to worry about getting kidnapped/killed? A structure that enforces getting paid after you've earned your money? 98% of what you have was given. I do agree, however, that a lot of people don't even bother to put in the remaining 2%.
  • LPisGood 1y ago
    All of those things are great and should be afforded to every Person. In many places, they are.
  • cadamsdotcom 1y ago
    “Can you start a business without $10m of family capital” is a societal question. “Can you start a business on an empty stomach without a roof over your head” is not the same debate. A roof over your head is a prerequisite to almost everything else in life - starting a business is WAY down the list. Better to have societies work to provide food and roofs - which they do, with varying degrees of success.
    • moralestapia 1y ago
      It is the exact same debate. People without those things cannot play the lottery as many times as those who have them. They might not even get to play it once. If everyone around you has all of those basic human needs met, you are the exception. But of course people don't like to hear this, because their whole meritocracy myth (which has always been trash) comes falling down and they might be forced to admit that, please excuse me for making this outrageous statement, ... you're just an average person with slightly better luck than others. (It is true, however, that "luck" compounds through your life and even more through generations, though. But that even detracts from the meritocracy myth even more, as the family you're born in greatly defines what you'll achieve.)
• konaraddi 1y ago
  > looking back over the past two decades basically all of the successful entrepreneurs and business owners I know didn’t come from families with a lot of resources and didn’t have much of a safety net There’s probably some truthyness to this but it doesn’t account for survivorship bias. And there’s a baseline amount of resources necessary to take a risk and be able to try again (e.g., good luck taking a risk when preoccupied by [lack of] health, housing, food).
• enaaem 1y ago
  There is also survivor bias at play here. Succeeding without safety net is hard -> only the best can do it -> the best entrepreneurs you know did not had a safety net
  • hammock 1y ago
    Then let’s control for that. Among people with a decent safety net, can we correlate eventual success with number of tries? The answer seems self evident, but idk for sure, and I would like to know the Gini coefficient of successes vs failures among safety netters be that of non-safety netters. Wouldn’t we expect the successes within the safety net to be massively larger on average than those of the non-safety netters, given that a safety net affords you so many more swings to take? Your comment suggests that this is not the case, driven by the selection/survivor effect within non-safety net
    • lesuorac 1y ago
      I mean Gates, Musk, Bezos, etc all had a safety net. Also need to define what successful means because a lot of trades people are successful solo-prenuers but don't make more than say a doctor.
      • hammock 1y ago
        Look at success in buckets. 10x , 100x, 1000x etc
      • jryle70 1y ago
        In a thread about survivor bias, and you fall for the same trap. How many people coming from wealthy background end up failing? Take Bill Gates, his father cofounded a law firm, and his mother was a board members of several firms. That is a very wealthy background, but not outrageously so. How many people of the same level of wealth became successful businesspeople? It's said that his mom being on the same board as IBM's CEO at the time was a more instrumental factor to his eventual success than his family's wealth, and his own effort of course.
• Normal_gaussian 1y ago
  I've seen quite a few of these funded entrepreneur-lifestyle kids now; I've worked (briefly) with many of their companies. Many of them are making enough of a real go at it such that I can't tell them from others, but quite a few don't know enough about how a default alive business works and deliver a DoA even when the core idea or a short pivot works and has traction - these guys need so much better PMF to succeed. The best businesses I've seen parents find for their children are lettings agents (urgh) and basic manufacturing (last mile door assembly etc.). You can get the business model in a six month course, the staff are minimum wage, the product is high margin. If your parents buy the building you are so close to default alive its a joke. Grow the business, flip it, and try the big idea.
• hooverd 1y ago
  Well, how many non-successful entrepreneurs and business owners do you know?
• an0malous 1y ago
  Who are you thinking of? Bezos, Zuckerberg, Gates, Musk all came from wealthy families. They all had the safety net of their family wealth if their business didn’t work out. Even someone who had parents to pay their student loans is relatively privileged, not everyone starts their 20’s debt-free and able to take financial risks.
  • wisty 1y ago
    What was Musk families net worth? I hear this conspiracy theory that he's was super rich. But owning a mine could mean anything from a basically bankrupt speculator to the De Beers. There's claims he gave Musk $28k ... that's not evena decent college fund.
    • wnevets 1y ago
      They had this amount of money > As a result of this, the teenage Elon Musk once walked the streets of New York with emeralds in his pocket. His father said: “We were very wealthy. We had so much money at times we couldn’t even close our safe,” adding that one person would have to hold the money in place with another closing the door. “And then there’d still be all these notes sticking out and we’d sort of pull them out and put them in our pockets.” [1] [1] https://www.independent.co.uk/space/elon-musk-made-money-rich-b2212599.html https://www.independent.co.uk/space/elon-musk-made-money-ric...
      • eru 1y ago
        That seems pretty silly. Why keep your wealth as cash in a safe? (And why not use a fraction of the money to buy a second safe, if you really have to keep it in a safe at home.)
        • prerok 1y ago
          That was probably just their pocket money.
          • 1y ago
• wat10000 1y ago
  I’d expect it to stratify based on the kind of business. Typical small businesses (plumbing, HVAC, restaurants, convenience stores) I’d expect to come from poorer families. These businesses are a potential avenue to success without traditional credentials, and they’re not the sort of thing somebody is likely to start as a passion. From wealthy families, I’d expect vanity businesses. There wouldn’t be as much motivation for the annoying aspects of a real business. And anyone who is interested in business can probably get a nice start in something their family owns or has a major stake in. Moonshot companies I’d expect to come from the upper middle class, children of doctors and such. Not fabulously wealthy, so the potential for making millions can still be a big motivator. But comfortable enough to get advanced schooling and be willing to aim big with a chance of failure, rather than going for something mundane you know is always in demand, like fixing pipes. Off the top of my head, Gates, Page, and Zuckerberg all fit that mold.
• nrhrjrjrjtntbt 1y ago
  Would be interesting to run the priors on this and say what is the probability of startup success given "rich" "middle class" and "poor". Otherwise maybe more poor people try startups so success will be biased towards them (rich will take over daddy or mommy business... maybe take a shot at a startup for fun but say meh lets try the business, plus there are waaaaay fewer rich). Or to put it another way: Most people who live >100 are also from modest backgrounds too. As are olympic gold winners. Us paupers are the best!
• satvikpendem 1y ago
  This is literally survivorship bias. All the successful ones you know of, because the unsuccessful ones failed, by definition.
• NoLinkToMe 1y ago
  Good to share, but n=1 I suppose. For me (also n=1) it's the opposite in my circle. The ones without resources never went anywhere and reproduced their parents' class. The ones with resources that went into entrepreneurship (and had the possibility of failing and still being fine) are the most successful. Agreed on your final point though! Tenacity probably is the biggest driver.
• directevolve 1y ago
  If most successful entrepreneurs are from ordinary backgrounds, one explanation is that most entrepreneurs, successful or unsuccessful, are from ordinary backgrounds. Another is that wealthy families might be pushing kids into entrepreneurship who lack the talent or taste for it.
• aprilthird2021 1y ago
  Is this statistically true or just your experience? I'd be very surprised if it was more than just anecdotal. > They just went all in on their goals when they were young and had many years ahead of them to start over if it all went wrong. Lots of well-resourced kids do this and more can do this. By the law of averages they should be overrepresented in successes here. > When you come from such resources and wealth that you don’t need to succeed and you can drop the business as soon as it becomes difficult, it’s a different situation. Does needing to succeed make businesses succeed? I don't think so, tbh.
• HWR_14 1y ago
  When did you meet the successful entrepreneurs and business owners? Because unless you met them when they were starting out survivorship bias would account for that.
• keepamovin 1y ago
  That's kind of true. If you have a safety net, you kind of make the wrong decisions, optimize stuff that doesn't cut through the noise and leave something on the track. It's like that scene in Dark Knight Rises where he only makes the impossible jump out of the prison when he doesn't have the safety rope.
• bear141 1y ago
  The defeatist attitude in the reply’s to this comment are unreal. Try hard or don’t. It’s up to you. At least with the one way you might have a chance.
  • yoz-y 1y ago
    Most attempts fail and if you get into debt you don’t get to try again. I agree that it takes a special kind of person to try and try again, but it clearly is not for everyone. A lot has to come together, you need to be alone, have a very supportive partner or be a sociopath (willing to drag your family down with you). You need to be in the right place (or have the means to move there). This usually works when you are young, so definitely having starting capital from somewhere works. This was much easier in the marking moments of technology where any simple tool or game could be transformed into cash. Nowadays you really need to luck out. Europe has generally better safety net and much less entrepreneurship spirit for example. So it pushes both ways. I guess one last thing is this weird thing in the US where investors somehow like people who previously failed. Like Elizabeth Holmes who reportedly went from prison right back into the game. With that environment of course it makes sense to just try again.
  • aprilthird2021 1y ago
    Acknowledging reality isn't defeatist. It's very likely that successful entrepreneurs statistically do come from richer families. We shouldn't ignore this fact because it's more fun and emotionally rewarding to us to pretend otherwise
  • zamadatix 1y ago
    Acknowledging e.g. people who grow up in multilingual households usually have an easier time learning a new language than someone who didn't shouldn't just be about what decision an individual should make for themselves, it's about identifying what stimulates that kind of growth so we get more of that success overall. I.e. making a decision or not to go for the chance myself is a different topic than trying to find ways to increase the chances for everyone. Economic growth is not a 0 sum game so why talk about the situations around it from only an individual gain perspective. If a lot of individuals are saying some situational factor makes the choice unreasonably hard then that's something worth focusing on rather than dismissing.
• haritha-j 1y ago
  Reminds me of the whole you can only succeed when you don’t have the reassurance of a safety net weighing you down idea from dark knight rises.
• nosianu 1y ago
  > over the past two decades basically all of the successful entrepreneurs and business owners I know This very much sounds like survivorship bias to me. But more importantly, I think the discussion is going off the track. The important ones are the 0.1%, not the 1% or 10%. The "normal" millionaire business owner usually actually worked for it (unless they are pure finance or something similar). They are also not the ones shifting a whole country's politics with their enormous influence. They don't have any over-inflated influence over anything. They are not the problem. But they also don't serve as examples for the masses, because that would be confusing "anyone can do this" with "everyone can do this" - their successes don't scale. You can only have that many successful businesspeople and entrepreneurs, the majority must be their worker bees by necessity. I see such discussions as distractions. If you talk about normal entrepreneurship you will not get to the core of our problems, not at the very top (the super rich), not at the bottom (why are so many so poor). If you want to come up with an idea that works at scale you can't use one that only works for some no matter what. If you want to come up with a solution for the enormous imbalances looking at those normal entrepreneurs does not help either. I suggest to develop an instinct to use in these kinds of discussions: For every concrete example, imagine it at scale. Thinking at individual examples when you talk about big things is a mismatch. Those examples are only useful if you use them to extrapolate upwards, what would actually happen if everybody did this?
  • renewiltord 1y ago
    If the most important factor in survivorship is number of chances you can take; and the number of chances is proportional to how much wealth you have; then the survivorship bias should go the other way. Otherwise it’s overwhelmed by something else, perhaps the sheer ratio of the differing populations.
• lumb63 1y ago
  I believe we all intuitively push whatever our advantages are, often without even knowing it. The advantage that the wealthy have are connections, capital, and familial support. These advantages lend themselves to activities such as starting businesses with high capital requirements, accumulating assets (“investing”), working through elite colleges to land a prestigious position, heading a philanthropy or charity, etc. That advantage comes with a disadvantage. Because the wealthy do not have to work to earn their start, they never learn what hard work is capable of producing, and never build the “when the going gets tough, the tough get going” habit. What they have in money, they lack in grit. When they are faced with a challenge, they habitually say “what can I buy to solve this problem?”, “who can I consult to help me with this problem?”, etc. Contrast that with folks who are working class. They know that they don’t have the advantage of money. They learn that hard work is the behavior that yields the best outcome. They put themselves in fields where what you get is proportional to what you put in, such as the trades, where working long, hard hours can generate quite good income. When folks who were raised working class are faced with adversity, they handle the situation like Boxer from Animal Farm: “I will work harder”. It’s what they know how to do. While they don’t have copious sums of money to fall back on, or other natural advantages, their own work ethic is one of the few things that cannot be taken away from them, and so they leverage that. That advantage also comes with disadvantages. Someone who works very hard will likely be overly self reliant. They might not get as much done as they could have had they spread the load across other people. They might burn themselves out, injure themselves, work to the exclusion of all other goals in life, etc. These are vast generalizations that obviously won’t hold in all circumstances, but I think it’s useful to illustrate the point. People use the tools at their disposal, whether that be money or otherwise. Those strategies all have advantages and disadvantages. The net result of those is likely visible in the outcomes of various people, I’d bet.
• ineedasername 1y ago
  Of the people, did any fail? If so, this is one of the questions that matters most when assessing whether or not there was a safety net— in failing, did they either wind up at the destitute/homeless/food-bank level, or a mountain of unpaid debt holding back future endeavors? If the ones who met with failure didn’t face these things or something comparable then they did have safety nets.
• skeeter2020 1y ago
  I also disagree with the GP (with the definitive explanation; it's probably at least partially true), but this: >> basically all of the successful entrepreneurs and business owners I know didn’t come from families with a lot of resources and didn’t have much of a safety net. is not statisically accurate; you're only looking at survivors. The successful Gates/Zucks/Musks might outnumber the poor Indian kids; we need both the failure counts and some sort of qualitive definition of success/failure (i.e. a rich-kid failure is probably not life destroying)
• bobmcnamara 1y ago
  Growing up I thought that my family was rich because my parents were still together, we owned a home with a foundation with help from the bank, and my family was clean. It turns out the bar was real low in my hometown. "...didn’t come from families with a lot of resources and didn’t have much of a safety net" As someone who grew up considered both a dirt poor hick by the city slickers and simultaneously a carpet-baggin outsider, this is often a relative perspective, how do we calibrate against a larger population? These are the sorts of things I picked up on growing up: Could they go to college if they wanted to? Did their parents go to college? Did they live homeless, apartments, trailers, multi family, single family homes, McMansions? 0/1/2 parents around? I suspect HackerNews may have some survivorship bias compared to national averages, (and especially where I grew up).