20 ms·

Jon Stewart: Lower entrepreneurial risk

211 points by kdsudac 14y ago

scottchin 14y ago
One of the key comments made by Jon Stewart: What we need to do in this country is make it a softer cushion for failure. Because what they say is the job creators need more tax cuts and they need a bigger payoff on the risk that they take. … But what about the risk of, you’re afraid to leave your job and be an entrepreneur because that’s where your health insurance is? … Why aren’t we able to sell this idea that you don’t have to amplify the payoff of risk to gain success in this country, you need to soften the damage of risk?
3143 14y ago
Humans are complacent and humans are risk-averse. Increasing reward and decreasing risk play to different aspects of human nature.
- Renaud 14y ago
  True but that doesn't mean there is no place for those who just want to build a small business without having to sacrifice their personal life to it. Decreasing risk is also beneficial to society at large if a larger portion of people are allowed to build businesses that provide jobs. There is also the thought that lowering the personal risk to you and your family allows you to take more chances with your business ideas and become more innovative.
dmix 14y ago
We'll the USA already has the highest corporate tax rate in the world. Maybe if they were paying less in taxes, startups would have more money for health insurance for their employees? All entrepreneurs know that they can get better employee retention with health care policy. If companies could afford it, then would there not be a higher incentive to provide it? That being said, I believe national health insurance is a good idea. Assuming government spending is significantly restricted in other areas.
- heyjonboy 14y ago
  Startups don't forgo health insurance because it's expensive, they forgo it because purchasing health insurance is a gigantic, time-consuming pain in the ass.
  - tomkinstinch 14y ago
    To be fair, it is damn expensive. The BLS lists benefits as roughly 30% of total compensation[1]. Much of that goes to healthcare. So for a developer earning $100k in total compensation (say $70k salary, $30k benefits), healthcare costs for that one employee might be $25k+. Providing a good policy for employees (and their families) is expensive. Worth it to care for the team, but still expensive. To the people skipping coverage in the US: it's stupid and not worth the risk. You may be healthy, but you cannot control everything that impacts your health. Infectous disease happens. Car crashes happen. Skipping coverage is playing Russian roulette. That said, I'm young and am fortunate to still be covered under the policy of my parents. Perhaps the college years and shortly after are best for trying a startup--while family coverage is still in effect. Then, or after you're married to someone and are under his or her policy. 1. http://www.bls.gov/news.release/pdf/eci.pdf http://www.bls.gov/news.release/pdf/eci.pdf
- thaumaturgy 14y ago
  Every business owner I've discussed this with -- and at this point I do have a statistically significant sample to work from -- isn't bothered by taxes nearly as much as they're bothered by not enough paying customers. High taxes really only seems to be a problem for a certain class of businesses which are at the high end of the SME spectrum, and are already making good profit, and want to make more, but can't yet afford a creative accountant to exploit the kind of loopholes that our country's biggest businesses take advantage of.
- jspaur 14y ago
  We have a high corporate tax rate if you have terrible accountants. Almost EVERYTHING you do as a business drops your effective tax rate. Then there is the whole S corp, I'm going to tax 3million in revenue at the 80k rate thing.... it isn't nearly as bad as that top number - take a look at effective rates and it isn't nearly as high as one would think
thaumaturgy 14y ago
OK, so, I am ardently socially liberal, and I've had a man-crush on Jon Stewart that hasn't waned ever since his appearance on Crossfire. But. I don't think that decreasing risk will result in more entrepreneurship. I would support a wider social safety net for entrepreneurs -- er, business owners -- on principle alone, because I think what we should be saying is that these people are vitally important to our economy and to our nation's future, just as much as larger enterprise is, and we should support that. But the thing is, most people don't want to run their own business no matter how safe you make it. I've spent the last few years encouraging people around me to start or run or improve their businesses, but so many of them just want to be a professional in their field; they don't want to deal with all of the other aspects of running a business. So don't lower entrepreneurial risk because you think it will open more businesses, because you think that the guy with a good paying job and some savings is worried about his health insurance. If he (or she!) wants to open or run a business, he (or she!) will do that regardless. It's one of the few probably universal aspects of entrepreneurship that the people who will do well at it aren't really happy working for other people anyway, they have this itch that they can't scratch unless they strike out on their own, risks or not. But do lower entrepreneurial risk because you recognize the value of entrepreneurs and you want to make sure that small business owners with families can still get good health care and dental care and afford a modest living.
- graeme 14y ago
  > most people don't want to run their own business no matter how safe you make it. So? That's like saying "most people won't become olympic athletes, so supporting olympic athletes won't lead to more participation in the olympics. We only need to care about the population of people who might start their own businesses. Not every potential entrepreneur is an entrepreneur. I'm in Canada. The fact that I don't have to worry about any major health costs was a big factor when I decided to start on my own. I might fail, but there's less risk of a catastrophic failure scenario. I'm not the only one who weighs risk this way.
- Nogwater 14y ago
  I agree that starting a business isn't for everyone. I'm doubtful that I would enjoy it, but I would like to be an early employee at a company. If that company can't afford health coverage, then I can't take that risk for my family. It just baffles me that health coverage is so tied to where you work. What if you could only send your kids to the schools that your employer selected, or eat at the restaurants the your company had a deal with? It's just weird. I don't know if government provided insurance is the solution, but employer provided just doesn't make sense as the only solution.
tlianza 14y ago
I think it's a fair point. But - what problem are we solving? Do we think there are too few entrepreneurs, and this will help create more? How many is enough, and how much should we spend to create them? The problem Stewart seems to be solving is that he'd prefer to remove ammunition from his opponents' argument, which isn't an actual problem.
jcromartie 14y ago
Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is. But, as far as I can tell, health insurance really is the biggest factor keeping people from starting new companies. For myself and my peers, with new families and houses and student debt, etc., it's the one thing that scares us more than anything else. The prospect of a business going under is nowhere near as terrifying of getting caught off guard without health insurance. It's positively paralyzing, knowing that it is something that could be essentially impossible to recover from, unlike simply writing off a failed venture. Hopefully the Affordable Care Act will mitigate some of that.
- _delirium 14y ago
  I think I agree with where you're going, but it doesn't seem like a huge paradox to me. As I understand it, it may be that all else being equal, a better social safety net (such as healthcare available outside of a corporate group plan) encourages more entrepreneurship, but all else isn't really equal: we don't have a version of the USA that is mostly the same except that it has a national healthcare system. Instead, we have countries that differ on dozens of axes, ranging from governmental policy to culture to physical land to history to language, and are trying to assign blame/credit to each of those axes. You could even do that within the USA: why are there no big tech companies out of Alabama or Ohio, despite their governmental systems being generally American-style? I do agree that the American healthcare situation is a major problem, speaking as an American expat in Denmark who hopes to move back to the US someday, and sees healthcare as one of the major barriers. I'm cautiously hopeful that PPACA will solve the worst of the problems, enabling me to buy individual health insurance. But I think it's hard to prove that either way based on cross-country comparisons.
- kdsudac 14y ago
  "Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is." I was wondering whether this was the case. Is there actual data to back this up, or is it just anecdotal?
  - jcromartie 14y ago
rayiner 14y ago
I absolutely support this. I think a lot more experienced people would do startups if they didn't have to risk their families' health in the process. And I think there is a lot of benefit to experienced people doing startups versus young kids who can tolerate the risk because they have little to lose.
cmcbride 14y ago
or we could remove the tax break for employers that provide health insurance. If health insurance was tied to the individual it would stay with them in between jobs. You could also find plans with lower premiums and higher deductibles/less coverage if there was a market for insurance.
- EvanAnderson 14y ago
  A thousand times this. We've distanced the individual from the costs associated with all things medical and, in so doing, have removed a lot of the power of having a free market.
digisth 14y ago
This is the essence of the Peltzman Effect (http://www.angrybearblog.com/2012/01/peltzman-effect-why-economic-growth-has.html http://www.angrybearblog.com/2012/01/peltzman-effect-why-eco... and http://en.wikipedia.org/wiki/Risk_compensation http://en.wikipedia.org/wiki/Risk_compensation) "Risk compensation (also Peltzman effect, risk homeostasis) is an observed effect in ethology whereby people tend to adjust their behavior in response to perceived level of risk, behaving less cautiously where they feel more protected and more cautiously where they feel a higher level of risk. The theory emerged out of road safety research after it was observed that many interventions failed to achieve the expected level of benefits but has since found application in many other fields."
- dmfdmf 14y ago
  The industry joke at the time this research came out was that if the regulators were serious about auto safety they should mandate a sharp dagger sticking out from the steering wheel aim directly at the driver's chest. People would drive very carefully!
  - ktizo 14y ago
    If you did that some people would regard the dagger as the perfect place to attach their mobile phone on long journeys.
    - dxbydt 14y ago
      You know, this is why I keep coming back to hn ..even the comedy is mindblowing.
blago 14y ago
So sad that in the US people like him host comedy shows.
- blaines 14y ago
  Strangely enough, I wouldn't take him seriously on a different network. Comedy Central is the only outlet I'm aware of where it's okay to take Romney, Oprah, Blago, Kim Jong-il, or Obama and ask anything from "Why didn't you take the stand at your own trial?" to "Are you planning a surprise party for us?". Look at South Park... they aren't exactly journalists, but they aren't afraid to ... well you know. The point is they definitely aren't trying to sleep with their sponsors. The Daily Show is comedy, yes, but my grandma will trust Jon Stewart before anyone on Fox or CNN. Because Jon doesn't make shit sandwiches. http://en.wiktionary.org/wiki/shit_sandwich http://en.wiktionary.org/wiki/shit_sandwich
- dxbydt 14y ago
  I don't know what you are talking about. The Daily Show is not comedy. Its where everybody under the age of 30 gets the news from. Fox News - now that's comedy. Seriously, they crack me up. And if you want tragedy, there's always MSNBC. CNN - I don't know what that is - maybe comedians trying their hand at tragedy. You see their chief mascot Anderson Cooper standing knee deep in flood water, or being blown around by stormy winds, or sweating it out in tropical weather, and seriously wonder about his health and well being.
  - skylan_q 14y ago
    http://www.dailymail.co.uk/news/article-2005632/Jon-Stewart-loses-cool-Fox-News-host-Chris-Wallace-You-insane.html http://www.dailymail.co.uk/news/article-2005632/Jon-Stewart-... Mr Stewart erupted: 'You're insane... Here's the difference between you and I. 'I'm a comedian first. My comedy is informed by an ideological background, there's no question about that. Stewart has a large audience, and he's feeding people his brand of BS. With such a large viewership, he has a great responsiblity but he is acting as if he doesn't. He cops out by saying "I'm just a comedian" The suggestion of a "social safety net" for entrepreneurs can only come from such a man who doesn't take on responsibility and who isn't an entrepreneur. A real entrepreneur starts a company, takes responsibility for it, and assumes the risks. Putting up a safety net for this will just tax middle-class families that much more, and make it even harder for someone to start up a company and be dedicated to it.
dools 14y ago
I agree entirely. I'm only one data point but I've only been able to get as far as I have in business because of the good graces of the Australian tax, welfare and health system. Perhaps this is why the model for entrepreneurship in the US is so heavily geared towards huge, VC funded worldbeaters with far less "mircopreneurship" - a trait of the Australian economy that is said to be a mainstay of economic resilience.
netmau5 14y ago
This addresses a larger issue, but the specifics discussed hit home with me. I started my company several months ago and lost my health insurance. After paying into the system for the last 8 years, I feel like I've just been giving my money away. I had always been under the impression that I could never be denied for insurance if I had an existing policy but obviously that was misguided. I'm overweight, I'm a smoker, and I have high blood pressure. Starting a company could literally kill me (on top of aforementioned dumb decisions). The rich used to pay 90% taxes and we still had Vanderbilt, Carnegie, and Morgan.
- arbuge 14y ago
  No... Those folks had no income tax. Income tax came later. The 90% bracket was extremely high when it existed and snared very few people.
  - zecho 14y ago
    Could you elaborate? The 16th Amendment was ratified in 1913 and from what I can tell the top marginal rate was in the 90s until 1964... http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...
    - arbuge 14y ago
      The 3 billionaires mentioned were pre-1913. Morgan might have had a little bit of overlap. The 90% tax rate was indeed in effect but very few people fell victim to it: http://almostclassical.blogspot.com/2011/03/90-tax-rate-myth.html http://almostclassical.blogspot.com/2011/03/90-tax-rate-myth...
    - chubbard 14y ago
      Remember they all made their fortunes pre-1913 so those monies weren't subject to taxes when they earned them. They lived well past 1913, but by then they were giving most of it away. Post 1913 they paid income tax on the money they earned it was just being giving away.
- 14y ago
arohner 14y ago
The US already has the most lenient bankruptcy law in the world. It already has the highest "social tolerance" for entrepreneurial failure. I'm in great health, and young, so I'm not worried about saving for retirement (yet). But starting a company is still really damned hard. It's years of hard work, too much time at the office, too much time away from friends and family. Too much fear that tomorrow no customers will show up, or they'll go to your competitors or you'll find our your DB backups don't work and you have to go out of business. It's fear that you're not managing employees correctly, or not hiring the right people, or not prioritizing the right things. The government can't make any of those things go away. And the only issue it could help is money, which has terrible downsides to go along with it.
- shykes 14y ago
  As an entrepreneur I agree that it's very hard and not everybody is cut for it. But I also believe a lot of people who are cut for it might never find out, because they are not given an opportunity to try. Improving healthcare coverage for aspiring entrepreneurs would level the playing field and expand the pool of potential entrepreneurs. And that would in turn create more wealth for all of us to enjoy.
  - arohner 14y ago
    I agree we need a better healthcare system. My point was that starting a successful company would still be hard, even if health insurance was taken out of the equation. It'd probably still be hard even if making rent was taken out as well.
- jeffool 14y ago
  Speaking of bankruptcy laws, I wonder how the ballooning student debt (which cannot be dismissed through bankruptcy) plays into that. Anecdotal, but, did (m)any people here on HN graduate and then start a business while still in debt with student loans?
  - jacoblyles 14y ago
    I started a business with a ton of student loans (almost 6 figures). I actually took out an extra student loan I didn't need and put it into Apple stock, using the gains to last another two months. And then I went into credit card debt. I don't recommend doing all that. You can put away $20k pretty easily working in the Valley. That would be much less stressful.
pinchyfingers 14y ago
Consider the organizational qualities that create successful startups: agility, speed and clear vision. Entrepreneurs live and die by efficiency and effectiveness. This is the exact opposite of what government programs give us. Believing that any government initiative will enable entrepreneurship is naive. Founders relying on a government cushion to lower risk will be inviting unnecessary encumbrance. Government programs across the board, from corporate tax credits to welfare programs are universally gamed. Creating a government net to catch failing entrepreneurs will only increase the cost of doing business, while slowing down the pace of entrepreneurship. Is the goal here to promote new businesses, or is that just an excuse to push for socialized health care? If the goal is provide health care, then the best option is to lower the barrier of entry for new businesses in the health field, whether insurance providers, healthcare practitioners or pharmaceutical companies. This is another topic, but there are many safe and legitimate ways to do this by cutting out corruption and waste.
- pinchyfingers 14y ago
  Honestly, how is this downvoted? wtf?
- kalleboo 14y ago
  If government programs are so inefficient, why is U.S. healthcare the most expensive per capita in the world? I just don't buy the argument that governments do everything terribly.
  - skylan_q 14y ago
    Many complicated reasons. The biggest is supply and demand vs. price controls. With a shortage of medical services in the US, the price has been driven up. Other countries just impose their shortages and have no market to actually drive prices up or down.
    - njs12345 14y ago
      What do you mean by "shortage"? I am from the UK and I have observed no shortage. If you really don't want to wait for treatment you're welcome to buy private health insurance, and even if you do this (and still pay for the NHS through some portion of your tax) it will be far less expensive than the average cost of healthcare in the US.
sodafountan 14y ago
I think that this would result in hundreds of thousands of bad ideas hitting the marketplace and then the government having to bail out all of the crap that didn't succeed. Risk is there for a reason, it's to stop you from doing something stupid, to make you think twice about the decision you're about to make. I don't believe that we need government to bail out risk takers... not with the amount of national debt that we already have. You know what happend the last time there was no risk? Banks lended out sub-prime mortgages to just about anyone with a job that walked in the door. You know why they were able to do this? Because those sub-prime loans where bundled up and then sold off to investment banks which then packaged them as mortgage-backed securities. We all know how that one turned out... Risk is a necessary part of life, we need to accept it.
- Hermitian 14y ago
  I do agree that risk is essential and ought to be accepted. After all, I think I am more defined by my failures than anything else. But that deviates from the main discussion. I think the main discussion revolves around healthcare, or the lack of healthcare for start-ups. It is one thing to take risk yourself, but it is another to jeopardize your family's health services. I think that's the main arguments.
- PatentTroll 14y ago
  As someone who started a company and failed, I can attest to the power of a safety net. I relied heavily on family when I was picking up the pieces, and I was acutely aware of my good fortune of having that backstop. Without it I would have literally been destitute. So many people don't have a family safety net to fall back on, and those people are basically foreclosed from taking a big risk like starting a company without risking being homeless and bankrupt. Consider wealthy ivy-leaguers: Bill Gates and Mark Z's backstop was to go back to Harvard and probably get some support from their upper middle class families. Their plan B was way better than most people's plan A. I'd argue that they had comparatively little risk when starting out. I don't see it as a government bail-out, but as a way to enable a whole swath of the population to take risks that they cannot otherwise. Something as simple as healthcare would make a huge difference for many people.
tristan_juricek 14y ago
Better social nets probably would create much higher wages as employees think "screw this I'm gonna at least try it on my own", so companies have to up the ante. But I don't see more entrepreneurs turning into economic growth. That takes a specific, rare entrepreneur that focuses on building growth, rather than replacing a paycheck. On the flip side, I don't see less taxes becoming economic growth either. Taxes have to be pretty damn high to change your operations. The amounts usually talked about are not going to cause a company to say "hey let's build a new product". The question should be "what's preventing companies from growing" instead of this class warfare framework. In the US, I see big companies being limited from growth by their own C-level executives' eye on their stock take - which makes no sense until you realize the amount of money they can gain from short term manipulation. But I see more of a problem due to bad skill sets - too many people have the wrong set of skills. A retail store clerk is not going to help anyone grow these days.
akurilin 14y ago
Without some kind of medical safety net, quitting your job to start a business becomes the luxury exclusive to the really healthy, the single, the really rich or the really lucky. If you have any kind of condition that requires continuous oversight, you're screwed unless you have a ton of money saved up to afford a very expensive insurance plan. If you're initially healthy, but suddenly get seriously ill, you might be set back by 7-10 grand before your cheapo $100/mo insurance plan kicks in. Even then you might still have to fight against the insurance company to have the necessary care approved and covered. You might hit the limits of your coverage. If you have a family, you better hope that your spouse's job provides you with a comprehensive family-wide coverage, otherwise you'll have to deal with the exorbitant costs of insurance. It's clearly sub-optimal, but the conservative side will often argue in favor of this system. I've (anecdotally) been told that if we provide everybody with universal health care then the masses will all start shooting up heroin all day and we, the hard working citizens, will have to foot the bill.
- Evbn 14y ago
  Or the very poor or old who quality for Medicare/Medicaid.
martythemaniak 14y ago
The funny thing is, you can lower entrepreneurial risk without lowering the rewards, at least in this case. The US is by far the most wasteful healthcare spender in the world, with vast amounts of money producing very mediocre outcomes. But as we saw, the political will is barely there, perhaps in another decade or two.
- josephlord 14y ago
  > The US is by far the most wasteful healthcare spender in the world, with vast amounts of money producing very mediocre outcomes. I'm a proponent of free/social healthcare but do those results stack up if you look at where the spending goes? What I mean is do 40% spend 80% of that money and get the best healthcare in the world and the 20% spent on the other 60% of the people buy poor enough healthcare to bring the stats down? I also get the impression that doctor's salaries are high and that might need to be factored in to the cost comparison (e.g. do the healthcare spend comparison in units of doctor's salary. US doctor's salaries may be necessary incentive to get them to take on US scale student debts for the duration of the medical degree, I'm not saying that they are necessarily greedy but that unless doctors can be cheaper it may not be possible to spend the same and get equal medical outcomes as other countries. It might take more than political will, outcomes may decline for the best off and doctor's pay may have to fall for the same spend to get world class results for the same money. I would still be a proponent of such a system if all people could be treated humanely, not bankrupted for injury/illness even for some reduction in quality of care for the currently well covered. *All numbers are examples. Lawsuit costs are also often cited as a reason for the high overall costs so that may be fixable to some extent although other forms of regulation and safety net's for victims may be required.
skylan_q 14y ago
who is going to provide this safety net?
deleted 14y ago
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tomkinstinch 14y ago
Hypothetical question: A US citizen wants to move to a country with public healthcare, socially liberal policies, and an environment that welcomes small business. Which country does this person choose? Is emigration required, or is a visa available for starting up there?
superdude 14y ago
I would love to quit my current day job and work on my business full time if I could be guaranteed health insurance. When I graduated, more than anything I wanted a job with good health care. I could not risk joining a company that would drop me or not cover me if I got some major health problem. So I got a job with not the highest income but a very low likelihood of losing health insurance...state government.
elchief 14y ago
for the Canucks: http://www.thecomedynetwork.ca/shows/thedailyshow?videoPackage=123198 http://www.thecomedynetwork.ca/shows/thedailyshow?videoPacka...
deleted 14y ago
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ComputerGuru 14y ago
I have to respectfully go against the crowd here and disagree. When you're leaving your job to start a business, the assumption is that you have some money saved. You're guaranteed not to be turning profit for a certain period of time. Depending on how lucky and how good you/your idea are, that could be anywhere from a month to a year or two. Not having government health insurance just means you'll have to get your own. I am speaking here from experience: I quit my job, posted about it on HN, bought myself health insurance, and started my own software company. How much did the health insurance cost me? 200 dollars a month. (Edit: yes, this is in the USA. IL to be exact.) Yes, 200 dollars is not nothing. Yes, it would be nice to not have to pay that. But then again, I'm paying 1200 for my apartment, 80 for my cellphone, 80 for electricity, and I'm sure I can come up with some other monthly obligations that I have. Health insurance is maybe ~10% of my "maintenance costs" that I can't avoid. Why aren't we arguing that the government should provide apartments for everyone so they don't have to worry about finding a place to live when they take the risk of leaving their jobs? Or require special restaurants that are publicly funded so that you don't have to worry about that, either? I know a lot of people will take issue with this, but, keep in mind, I am not saying I'm against government health insurance. I'm saying that this isn't a very good reason for it. Going off on your own is and always will be a risky situation, unless you're already independently wealthy. By definition, it involves giving up a cushy job and steady pay for the chance of striking it rich on your own or (as in my case) doing what you love. That's the nature of the beast, and that's why we have both entrepreneurs and employees.
- wh-uws 14y ago
  Can you please say from who? I'm gearing up for this and I wouldn't hesitate at 200 a month.
  - ComputerGuru 14y ago
    Blue Cross Blue Shield IL.
- OldSchool 14y ago
  Note that in the US, health insurance you can actually use, for a family (two adults plus one or more children), is no less than $1000/mo edging closer to $1500/mo. Getting pregnancy/childbirth covered at all on an individual policy is often difficult too. You can get a high-deductible policy if you generally don't need insurance but you personally can't control what your family members will decide they need routinely. That's part of why being an entrepreneur in your 20's is so ideal.
elviejo 14y ago
It's interesting when I lived in the US it was surprising how many of my coworkers on their early twenties were averse to risk... they wouldn't start a new business venture and their reasons were: - I have student loans - I need health insurance - I need to build a foundation so that my kids can go to college. - After the economic crisis, it isn't worth it.... But living in a contry were: - You don't have student debt - Your health services are warranted - Your kids can go to college and even great colleges for free... Makes being an Entrepreneur SO much easy... that you wouldn't believe.
- rglover 14y ago
  What country are you located in?
rglover 14y ago
I started my own business right out of school. As a result, I better be damn successful considering I have a lot of student loan debt to mop up. I have wondered, why not offer advantages in these situations to people who start businesses (say a window of ~6-12 months after graduation)? Either some sort of tax break or little to no interest rate on my debt would be handy. Another big one is health insurance. I've been swimming in open waters without insurance for about a year now. The only plans that I can get are abysmal with 5k plus deductibles (please direct me to a better deal if I'm being naive and something exists). Even though I've taken the leap to build a business ahead of my peers, I'm getting the crap end of the stick. Does seem a bit unbalanced.
theinformantguy 14y ago
Jon just nailed the problem in the head: frankly I'm tired of hearing rich kids talking about how easy it is just to leave everything you are doing and make a startup, and to add insult to injury the new buzzword is to say that you don't even need an idea. Yeah sure you can leave your job or college and just start throwing darts at post-its to come up with an app idea if you have a rich dad who is willing to bankroll your adventure in the Bay Area. You need at least $36k a year just to rent a decent flat in that place, some families, not just people but actual families, live on less than that in this country. I had friends on highschool who had tremendous hacker potential, but they also had problems, REAL problems like bad health and a poor family. Most of them are quite happy right now working for the evil corporations that pay them those $75k a year salaries that the rich kids laugh at. They depend on company healthcare and can't even dream to let that and their paychecks go just to give startups a try. And that is just one side of the problem, the other is the facade of equal opportunities in startups, the idea that everyone applying to YC or other incubators is in the same level. The social network movie made a lot of generic hacker culture statements but it forgot to mention that the zuck had a private programming tutor paid by his parents. Seriously, how many of you here had parents who could afford that? I tried to hire a Java tutor when I was in highschool and it was incredibly expensive, more than hiring several tutors for most of my school subjects. I have met entrepreneurs with amazing companies that didn't get into YC, yet the guys from diaspora, the same guys who burned through a quarter of a million and did next to nothing, they got in, and with what? a meme app, because that's important, another memegenerator clone. I'm using a throwaway account because I know this is going to be downvoted to hell, many of these rich kids make an overwhelming clique in HN and other sites, and they don't like when it when someone speaks up and shatters their BS. The irony here is that this country is fast becoming like the third world hellholes that immigrant entrepreneurs where escaping from. The stories you hear from those places are becoming eerily familiar: a guy from South America told me how over there all entrepreneurs are rich kids, legacies from generations of crony capitalism and favoritism. Practically none are coders or hustlers, they get their parents to bankroll a clone a cookie-cutter startup and take advantage of the wage slave condition of engineers over there, after all what are those poor souls going to do? they can't afford to make a startup and don't have any connections to investors, so what is left for them? get a visa and come here? nice try... And that is what America is becoming, a place not of opportunity but of class lockdown, social mobility is at an all-time low and everywhere you hear pundits whose idea of equality in America is actually that of Sweden's, which ironically is a socialist country. But go ahead, keep believing we are all in the same league, by all means try to defeat my point by saying how you help other less fortunate entrepreneurs with your link-bait blog full of empty advice, keep saying that all of us who are not in the same position than you are a bunch of envious and resentful pricks, or that you are where you are right now because you worked for it when actually you are where you are right now because you were half the way ahead to being with.
goggles99 14y ago
The risks that exist today "weed out" failures before they ever exist (failures are very expensive/bad for the economy). Most people realize that they do not have a good enough concept, enough time/dedication/work ethic lack a high level of life/business/leadership/social skills/self confidence.I could go on and on here. If people have little/no risk to follow a venture, we will see a lot more people quitting their 9-5s and starting garbage businesses. HMM - This sounds a lot like people getting home mortgages who have no business getting them... I know that John was a big fan of the affordable housing act as well. Why does John Stewart stop there? why not lower entrepreneurial risk even more and guarantee that if someones startup business fails that they get money to live on from the govt for the next 18 months? Oh wait we already have that (unemployment) How about I become a full time entrepreneur then? I could probably make more money per year starting failed business after failed business. I have money to live on and free health care so why not? This sounds great for the economy. This Stewart guy is sure a genius!!!
vinhboy 14y ago
A lot of people are talking in terms of "leaving" their jobs to start businesses. For me, it's the opposite. I am considering leaving my business to get a job. Why? Healthcare and retirement. So I agree with the article. If we had universal healthcare, I don't think I would ever consider leaving my business.
margaux 14y ago
FYI if you live in San Francisco and make less than 54k a year you can get Healthy San Francisco (http://www.healthysanfrancisco.org/ http://www.healthysanfrancisco.org/). It can be free depending on how much you're making. When I had a startup I broke my arm and had to get surgery, it was only $100 bucks.
chubbard 14y ago
Great Scott! It's just crazy enough it might just work! I've always felt that America's psyche is evolving us to a "Everybody's a CEO." mentality. With the introduction of 401K we upped the risk taking, driving white collar workers into consulting away from full time employment with benefits of incorporating, tax benefits of corporations, preferential tax treatment of capital gains vs salaries. These are all incentives to create your own corporation over being a salaried employee, but they all involve taking more risk. We are rewarding risk more and more while devaluing safety. Not passing judgement per se, but making an observation that America might be interested in this if they understood it. And that America might need this anyway because we are pushing more people into accepting the risk without their choice. (see 401K as an example). Another side benefit to this is it might drive up competition for workers because more people might be interested in working for smaller companies because benefits are more equalized. Driving competition for workers means higher salaries too on a whole as they compete for the talent. That's the real societal benefit. Now, if I could just figure out a way to pay myself entirely in dividends over a salary I think they might give me an honorary 1%'er membership. :-) But on the other hand. All I know is that it won't be that much fun when everyone is doing it. It never is.
bcx 14y ago
We can pretty clearly see that lowering risk is increasing the number of software startups. You can see a pretty clear micro example of this just by looking at YC applications. The number of YC Applicants has increased as the risk of doing YC has gone down. When someone going into YC had an expected outcome of basically $25000, less people were willing to leave jobs to go start companies. Think about pre 2009 YCombinator. Now consider post 2009 Ycombinator. As the process became less risky: more guaranteed capital (the Ron Conway, Yuri Milner portfolio strategy), and more Acquahires. The value of the average company went up, the downsides went down, and the risk to starting a company went down. Thus, more people were willing to apply to YC, and Paul and the YC partners were able to accept more companies. You could probably argue that this was a function of the popularity of YC. I believe that founders are rational, and the popularity of YC again decreased their risk. How many founders do not quit their jobs until they get into YC? (many) This is a separate argument from whether or not we need government healthcare, but I think it's pretty clear that risk evaluation is absolutely part of being an entrepreneur. (As an aside, dealing with healthcare is just one of many things that we as founders have to do that provides very little net benefit to our business. The less of this BS we have to do, the better we will deploy capital and the more focused we will be on important problems)

211 points by kdsudac 14y ago

One of the key comments made by Jon Stewart: What we need to do in this country is make it a softer cushion for failure. Because what they say is the job creators need more tax cuts and they need a bigger payoff on the risk that they take. … But what about the risk of, you’re afraid to leave your job and be an entrepreneur because that’s where your health insurance is? … Why aren’t we able to sell this idea that you don’t have to amplify the payoff of risk to gain success in this country, you need to soften the damage of risk?

3143 14y ago

Humans are complacent and humans are risk-averse. Increasing reward and decreasing risk play to different aspects of human nature.

Renaud 14y ago
True but that doesn't mean there is no place for those who just want to build a small business without having to sacrifice their personal life to it. Decreasing risk is also beneficial to society at large if a larger portion of people are allowed to build businesses that provide jobs. There is also the thought that lowering the personal risk to you and your family allows you to take more chances with your business ideas and become more innovative.

dmix 14y ago

We'll the USA already has the highest corporate tax rate in the world. Maybe if they were paying less in taxes, startups would have more money for health insurance for their employees? All entrepreneurs know that they can get better employee retention with health care policy. If companies could afford it, then would there not be a higher incentive to provide it? That being said, I believe national health insurance is a good idea. Assuming government spending is significantly restricted in other areas.

heyjonboy 14y ago
Startups don't forgo health insurance because it's expensive, they forgo it because purchasing health insurance is a gigantic, time-consuming pain in the ass.
- tomkinstinch 14y ago
  To be fair, it is damn expensive. The BLS lists benefits as roughly 30% of total compensation[1]. Much of that goes to healthcare. So for a developer earning $100k in total compensation (say $70k salary, $30k benefits), healthcare costs for that one employee might be $25k+. Providing a good policy for employees (and their families) is expensive. Worth it to care for the team, but still expensive. To the people skipping coverage in the US: it's stupid and not worth the risk. You may be healthy, but you cannot control everything that impacts your health. Infectous disease happens. Car crashes happen. Skipping coverage is playing Russian roulette. That said, I'm young and am fortunate to still be covered under the policy of my parents. Perhaps the college years and shortly after are best for trying a startup--while family coverage is still in effect. Then, or after you're married to someone and are under his or her policy. 1. http://www.bls.gov/news.release/pdf/eci.pdf http://www.bls.gov/news.release/pdf/eci.pdf
thaumaturgy 14y ago
Every business owner I've discussed this with -- and at this point I do have a statistically significant sample to work from -- isn't bothered by taxes nearly as much as they're bothered by not enough paying customers. High taxes really only seems to be a problem for a certain class of businesses which are at the high end of the SME spectrum, and are already making good profit, and want to make more, but can't yet afford a creative accountant to exploit the kind of loopholes that our country's biggest businesses take advantage of.
jspaur 14y ago
We have a high corporate tax rate if you have terrible accountants. Almost EVERYTHING you do as a business drops your effective tax rate. Then there is the whole S corp, I'm going to tax 3million in revenue at the 80k rate thing.... it isn't nearly as bad as that top number - take a look at effective rates and it isn't nearly as high as one would think

thaumaturgy 14y ago

OK, so, I am ardently socially liberal, and I've had a man-crush on Jon Stewart that hasn't waned ever since his appearance on Crossfire. But. I don't think that decreasing risk will result in more entrepreneurship. I would support a wider social safety net for entrepreneurs -- er, business owners -- on principle alone, because I think what we should be saying is that these people are vitally important to our economy and to our nation's future, just as much as larger enterprise is, and we should support that. But the thing is, most people don't want to run their own business no matter how safe you make it. I've spent the last few years encouraging people around me to start or run or improve their businesses, but so many of them just want to be a professional in their field; they don't want to deal with all of the other aspects of running a business. So don't lower entrepreneurial risk because you think it will open more businesses, because you think that the guy with a good paying job and some savings is worried about his health insurance. If he (or she!) wants to open or run a business, he (or she!) will do that regardless. It's one of the few probably universal aspects of entrepreneurship that the people who will do well at it aren't really happy working for other people anyway, they have this itch that they can't scratch unless they strike out on their own, risks or not. But do lower entrepreneurial risk because you recognize the value of entrepreneurs and you want to make sure that small business owners with families can still get good health care and dental care and afford a modest living.

graeme 14y ago
> most people don't want to run their own business no matter how safe you make it. So? That's like saying "most people won't become olympic athletes, so supporting olympic athletes won't lead to more participation in the olympics. We only need to care about the population of people who might start their own businesses. Not every potential entrepreneur is an entrepreneur. I'm in Canada. The fact that I don't have to worry about any major health costs was a big factor when I decided to start on my own. I might fail, but there's less risk of a catastrophic failure scenario. I'm not the only one who weighs risk this way.
Nogwater 14y ago
I agree that starting a business isn't for everyone. I'm doubtful that I would enjoy it, but I would like to be an early employee at a company. If that company can't afford health coverage, then I can't take that risk for my family. It just baffles me that health coverage is so tied to where you work. What if you could only send your kids to the schools that your employer selected, or eat at the restaurants the your company had a deal with? It's just weird. I don't know if government provided insurance is the solution, but employer provided just doesn't make sense as the only solution.

tlianza 14y ago

I think it's a fair point. But - what problem are we solving? Do we think there are too few entrepreneurs, and this will help create more? How many is enough, and how much should we spend to create them? The problem Stewart seems to be solving is that he'd prefer to remove ammunition from his opponents' argument, which isn't an actual problem.

jcromartie 14y ago

Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is. But, as far as I can tell, health insurance really is the biggest factor keeping people from starting new companies. For myself and my peers, with new families and houses and student debt, etc., it's the one thing that scares us more than anything else. The prospect of a business going under is nowhere near as terrifying of getting caught off guard without health insurance. It's positively paralyzing, knowing that it is something that could be essentially impossible to recover from, unlike simply writing off a failed venture. Hopefully the Affordable Care Act will mitigate some of that.

_delirium 14y ago
I think I agree with where you're going, but it doesn't seem like a huge paradox to me. As I understand it, it may be that all else being equal, a better social safety net (such as healthcare available outside of a corporate group plan) encourages more entrepreneurship, but all else isn't really equal: we don't have a version of the USA that is mostly the same except that it has a national healthcare system. Instead, we have countries that differ on dozens of axes, ranging from governmental policy to culture to physical land to history to language, and are trying to assign blame/credit to each of those axes. You could even do that within the USA: why are there no big tech companies out of Alabama or Ohio, despite their governmental systems being generally American-style? I do agree that the American healthcare situation is a major problem, speaking as an American expat in Denmark who hopes to move back to the US someday, and sees healthcare as one of the major barriers. I'm cautiously hopeful that PPACA will solve the worst of the problems, enabling me to buy individual health insurance. But I think it's hard to prove that either way based on cross-country comparisons.
kdsudac 14y ago
"Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is." I was wondering whether this was the case. Is there actual data to back this up, or is it just anecdotal?
- jcromartie 14y ago

rayiner 14y ago

I absolutely support this. I think a lot more experienced people would do startups if they didn't have to risk their families' health in the process. And I think there is a lot of benefit to experienced people doing startups versus young kids who can tolerate the risk because they have little to lose.

cmcbride 14y ago

or we could remove the tax break for employers that provide health insurance. If health insurance was tied to the individual it would stay with them in between jobs. You could also find plans with lower premiums and higher deductibles/less coverage if there was a market for insurance.

EvanAnderson 14y ago
A thousand times this. We've distanced the individual from the costs associated with all things medical and, in so doing, have removed a lot of the power of having a free market.

digisth 14y ago

This is the essence of the Peltzman Effect (http://www.angrybearblog.com/2012/01/peltzman-effect-why-economic-growth-has.html http://www.angrybearblog.com/2012/01/peltzman-effect-why-eco... and http://en.wikipedia.org/wiki/Risk_compensation http://en.wikipedia.org/wiki/Risk_compensation) "Risk compensation (also Peltzman effect, risk homeostasis) is an observed effect in ethology whereby people tend to adjust their behavior in response to perceived level of risk, behaving less cautiously where they feel more protected and more cautiously where they feel a higher level of risk. The theory emerged out of road safety research after it was observed that many interventions failed to achieve the expected level of benefits but has since found application in many other fields."

dmfdmf 14y ago
The industry joke at the time this research came out was that if the regulators were serious about auto safety they should mandate a sharp dagger sticking out from the steering wheel aim directly at the driver's chest. People would drive very carefully!
- ktizo 14y ago
  If you did that some people would regard the dagger as the perfect place to attach their mobile phone on long journeys.
  - dxbydt 14y ago
    You know, this is why I keep coming back to hn ..even the comedy is mindblowing.

blago 14y ago

So sad that in the US people like him host comedy shows.

blaines 14y ago
Strangely enough, I wouldn't take him seriously on a different network. Comedy Central is the only outlet I'm aware of where it's okay to take Romney, Oprah, Blago, Kim Jong-il, or Obama and ask anything from "Why didn't you take the stand at your own trial?" to "Are you planning a surprise party for us?". Look at South Park... they aren't exactly journalists, but they aren't afraid to ... well you know. The point is they definitely aren't trying to sleep with their sponsors. The Daily Show is comedy, yes, but my grandma will trust Jon Stewart before anyone on Fox or CNN. Because Jon doesn't make shit sandwiches. http://en.wiktionary.org/wiki/shit_sandwich http://en.wiktionary.org/wiki/shit_sandwich
dxbydt 14y ago
I don't know what you are talking about. The Daily Show is not comedy. Its where everybody under the age of 30 gets the news from. Fox News - now that's comedy. Seriously, they crack me up. And if you want tragedy, there's always MSNBC. CNN - I don't know what that is - maybe comedians trying their hand at tragedy. You see their chief mascot Anderson Cooper standing knee deep in flood water, or being blown around by stormy winds, or sweating it out in tropical weather, and seriously wonder about his health and well being.
- skylan_q 14y ago
  http://www.dailymail.co.uk/news/article-2005632/Jon-Stewart-loses-cool-Fox-News-host-Chris-Wallace-You-insane.html http://www.dailymail.co.uk/news/article-2005632/Jon-Stewart-... Mr Stewart erupted: 'You're insane... Here's the difference between you and I. 'I'm a comedian first. My comedy is informed by an ideological background, there's no question about that. Stewart has a large audience, and he's feeding people his brand of BS. With such a large viewership, he has a great responsiblity but he is acting as if he doesn't. He cops out by saying "I'm just a comedian" The suggestion of a "social safety net" for entrepreneurs can only come from such a man who doesn't take on responsibility and who isn't an entrepreneur. A real entrepreneur starts a company, takes responsibility for it, and assumes the risks. Putting up a safety net for this will just tax middle-class families that much more, and make it even harder for someone to start up a company and be dedicated to it.

dools 14y ago

I agree entirely. I'm only one data point but I've only been able to get as far as I have in business because of the good graces of the Australian tax, welfare and health system. Perhaps this is why the model for entrepreneurship in the US is so heavily geared towards huge, VC funded worldbeaters with far less "mircopreneurship" - a trait of the Australian economy that is said to be a mainstay of economic resilience.

netmau5 14y ago

This addresses a larger issue, but the specifics discussed hit home with me. I started my company several months ago and lost my health insurance. After paying into the system for the last 8 years, I feel like I've just been giving my money away. I had always been under the impression that I could never be denied for insurance if I had an existing policy but obviously that was misguided. I'm overweight, I'm a smoker, and I have high blood pressure. Starting a company could literally kill me (on top of aforementioned dumb decisions). The rich used to pay 90% taxes and we still had Vanderbilt, Carnegie, and Morgan.

arbuge 14y ago
No... Those folks had no income tax. Income tax came later. The 90% bracket was extremely high when it existed and snared very few people.
- zecho 14y ago
  Could you elaborate? The 16th Amendment was ratified in 1913 and from what I can tell the top marginal rate was in the 90s until 1964... http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...
  - arbuge 14y ago
    The 3 billionaires mentioned were pre-1913. Morgan might have had a little bit of overlap. The 90% tax rate was indeed in effect but very few people fell victim to it: http://almostclassical.blogspot.com/2011/03/90-tax-rate-myth.html http://almostclassical.blogspot.com/2011/03/90-tax-rate-myth...
  - chubbard 14y ago
    Remember they all made their fortunes pre-1913 so those monies weren't subject to taxes when they earned them. They lived well past 1913, but by then they were giving most of it away. Post 1913 they paid income tax on the money they earned it was just being giving away.
14y ago

arohner 14y ago

The US already has the most lenient bankruptcy law in the world. It already has the highest "social tolerance" for entrepreneurial failure. I'm in great health, and young, so I'm not worried about saving for retirement (yet). But starting a company is still really damned hard. It's years of hard work, too much time at the office, too much time away from friends and family. Too much fear that tomorrow no customers will show up, or they'll go to your competitors or you'll find our your DB backups don't work and you have to go out of business. It's fear that you're not managing employees correctly, or not hiring the right people, or not prioritizing the right things. The government can't make any of those things go away. And the only issue it could help is money, which has terrible downsides to go along with it.

shykes 14y ago
As an entrepreneur I agree that it's very hard and not everybody is cut for it. But I also believe a lot of people who are cut for it might never find out, because they are not given an opportunity to try. Improving healthcare coverage for aspiring entrepreneurs would level the playing field and expand the pool of potential entrepreneurs. And that would in turn create more wealth for all of us to enjoy.
- arohner 14y ago
  I agree we need a better healthcare system. My point was that starting a successful company would still be hard, even if health insurance was taken out of the equation. It'd probably still be hard even if making rent was taken out as well.
jeffool 14y ago
Speaking of bankruptcy laws, I wonder how the ballooning student debt (which cannot be dismissed through bankruptcy) plays into that. Anecdotal, but, did (m)any people here on HN graduate and then start a business while still in debt with student loans?
- jacoblyles 14y ago
  I started a business with a ton of student loans (almost 6 figures). I actually took out an extra student loan I didn't need and put it into Apple stock, using the gains to last another two months. And then I went into credit card debt. I don't recommend doing all that. You can put away $20k pretty easily working in the Valley. That would be much less stressful.

pinchyfingers 14y ago

Consider the organizational qualities that create successful startups: agility, speed and clear vision. Entrepreneurs live and die by efficiency and effectiveness. This is the exact opposite of what government programs give us. Believing that any government initiative will enable entrepreneurship is naive. Founders relying on a government cushion to lower risk will be inviting unnecessary encumbrance. Government programs across the board, from corporate tax credits to welfare programs are universally gamed. Creating a government net to catch failing entrepreneurs will only increase the cost of doing business, while slowing down the pace of entrepreneurship. Is the goal here to promote new businesses, or is that just an excuse to push for socialized health care? If the goal is provide health care, then the best option is to lower the barrier of entry for new businesses in the health field, whether insurance providers, healthcare practitioners or pharmaceutical companies. This is another topic, but there are many safe and legitimate ways to do this by cutting out corruption and waste.

pinchyfingers 14y ago
Honestly, how is this downvoted? wtf?
kalleboo 14y ago
If government programs are so inefficient, why is U.S. healthcare the most expensive per capita in the world? I just don't buy the argument that governments do everything terribly.
- skylan_q 14y ago
  Many complicated reasons. The biggest is supply and demand vs. price controls. With a shortage of medical services in the US, the price has been driven up. Other countries just impose their shortages and have no market to actually drive prices up or down.
  - njs12345 14y ago
    What do you mean by "shortage"? I am from the UK and I have observed no shortage. If you really don't want to wait for treatment you're welcome to buy private health insurance, and even if you do this (and still pay for the NHS through some portion of your tax) it will be far less expensive than the average cost of healthcare in the US.

sodafountan 14y ago

I think that this would result in hundreds of thousands of bad ideas hitting the marketplace and then the government having to bail out all of the crap that didn't succeed. Risk is there for a reason, it's to stop you from doing something stupid, to make you think twice about the decision you're about to make. I don't believe that we need government to bail out risk takers... not with the amount of national debt that we already have. You know what happend the last time there was no risk? Banks lended out sub-prime mortgages to just about anyone with a job that walked in the door. You know why they were able to do this? Because those sub-prime loans where bundled up and then sold off to investment banks which then packaged them as mortgage-backed securities. We all know how that one turned out... Risk is a necessary part of life, we need to accept it.

Hermitian 14y ago
I do agree that risk is essential and ought to be accepted. After all, I think I am more defined by my failures than anything else. But that deviates from the main discussion. I think the main discussion revolves around healthcare, or the lack of healthcare for start-ups. It is one thing to take risk yourself, but it is another to jeopardize your family's health services. I think that's the main arguments.
PatentTroll 14y ago
As someone who started a company and failed, I can attest to the power of a safety net. I relied heavily on family when I was picking up the pieces, and I was acutely aware of my good fortune of having that backstop. Without it I would have literally been destitute. So many people don't have a family safety net to fall back on, and those people are basically foreclosed from taking a big risk like starting a company without risking being homeless and bankrupt. Consider wealthy ivy-leaguers: Bill Gates and Mark Z's backstop was to go back to Harvard and probably get some support from their upper middle class families. Their plan B was way better than most people's plan A. I'd argue that they had comparatively little risk when starting out. I don't see it as a government bail-out, but as a way to enable a whole swath of the population to take risks that they cannot otherwise. Something as simple as healthcare would make a huge difference for many people.

tristan_juricek 14y ago

Better social nets probably would create much higher wages as employees think "screw this I'm gonna at least try it on my own", so companies have to up the ante. But I don't see more entrepreneurs turning into economic growth. That takes a specific, rare entrepreneur that focuses on building growth, rather than replacing a paycheck. On the flip side, I don't see less taxes becoming economic growth either. Taxes have to be pretty damn high to change your operations. The amounts usually talked about are not going to cause a company to say "hey let's build a new product". The question should be "what's preventing companies from growing" instead of this class warfare framework. In the US, I see big companies being limited from growth by their own C-level executives' eye on their stock take - which makes no sense until you realize the amount of money they can gain from short term manipulation. But I see more of a problem due to bad skill sets - too many people have the wrong set of skills. A retail store clerk is not going to help anyone grow these days.

akurilin 14y ago

Without some kind of medical safety net, quitting your job to start a business becomes the luxury exclusive to the really healthy, the single, the really rich or the really lucky. If you have any kind of condition that requires continuous oversight, you're screwed unless you have a ton of money saved up to afford a very expensive insurance plan. If you're initially healthy, but suddenly get seriously ill, you might be set back by 7-10 grand before your cheapo $100/mo insurance plan kicks in. Even then you might still have to fight against the insurance company to have the necessary care approved and covered. You might hit the limits of your coverage. If you have a family, you better hope that your spouse's job provides you with a comprehensive family-wide coverage, otherwise you'll have to deal with the exorbitant costs of insurance. It's clearly sub-optimal, but the conservative side will often argue in favor of this system. I've (anecdotally) been told that if we provide everybody with universal health care then the masses will all start shooting up heroin all day and we, the hard working citizens, will have to foot the bill.

Evbn 14y ago
Or the very poor or old who quality for Medicare/Medicaid.

martythemaniak 14y ago

The funny thing is, you can lower entrepreneurial risk without lowering the rewards, at least in this case. The US is by far the most wasteful healthcare spender in the world, with vast amounts of money producing very mediocre outcomes. But as we saw, the political will is barely there, perhaps in another decade or two.

josephlord 14y ago
> The US is by far the most wasteful healthcare spender in the world, with vast amounts of money producing very mediocre outcomes. I'm a proponent of free/social healthcare but do those results stack up if you look at where the spending goes? What I mean is do 40% spend 80% of that money and get the best healthcare in the world and the 20% spent on the other 60% of the people buy poor enough healthcare to bring the stats down? I also get the impression that doctor's salaries are high and that might need to be factored in to the cost comparison (e.g. do the healthcare spend comparison in units of doctor's salary. US doctor's salaries may be necessary incentive to get them to take on US scale student debts for the duration of the medical degree, I'm not saying that they are necessarily greedy but that unless doctors can be cheaper it may not be possible to spend the same and get equal medical outcomes as other countries. It might take more than political will, outcomes may decline for the best off and doctor's pay may have to fall for the same spend to get world class results for the same money. I would still be a proponent of such a system if all people could be treated humanely, not bankrupted for injury/illness even for some reduction in quality of care for the currently well covered. *All numbers are examples. Lawsuit costs are also often cited as a reason for the high overall costs so that may be fixable to some extent although other forms of regulation and safety net's for victims may be required.

skylan_q 14y ago

who is going to provide this safety net?

deleted 14y ago

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tomkinstinch 14y ago

Hypothetical question: A US citizen wants to move to a country with public healthcare, socially liberal policies, and an environment that welcomes small business. Which country does this person choose? Is emigration required, or is a visa available for starting up there?

superdude 14y ago

I would love to quit my current day job and work on my business full time if I could be guaranteed health insurance. When I graduated, more than anything I wanted a job with good health care. I could not risk joining a company that would drop me or not cover me if I got some major health problem. So I got a job with not the highest income but a very low likelihood of losing health insurance...state government.

elchief 14y ago

for the Canucks: http://www.thecomedynetwork.ca/shows/thedailyshow?videoPackage=123198 http://www.thecomedynetwork.ca/shows/thedailyshow?videoPacka...

deleted 14y ago

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ComputerGuru 14y ago

I have to respectfully go against the crowd here and disagree. When you're leaving your job to start a business, the assumption is that you have some money saved. You're guaranteed not to be turning profit for a certain period of time. Depending on how lucky and how good you/your idea are, that could be anywhere from a month to a year or two. Not having government health insurance just means you'll have to get your own. I am speaking here from experience: I quit my job, posted about it on HN, bought myself health insurance, and started my own software company. How much did the health insurance cost me? 200 dollars a month. (Edit: yes, this is in the USA. IL to be exact.) Yes, 200 dollars is not nothing. Yes, it would be nice to not have to pay that. But then again, I'm paying 1200 for my apartment, 80 for my cellphone, 80 for electricity, and I'm sure I can come up with some other monthly obligations that I have. Health insurance is maybe ~10% of my "maintenance costs" that I can't avoid. Why aren't we arguing that the government should provide apartments for everyone so they don't have to worry about finding a place to live when they take the risk of leaving their jobs? Or require special restaurants that are publicly funded so that you don't have to worry about that, either? I know a lot of people will take issue with this, but, keep in mind, I am not saying I'm against government health insurance. I'm saying that this isn't a very good reason for it. Going off on your own is and always will be a risky situation, unless you're already independently wealthy. By definition, it involves giving up a cushy job and steady pay for the chance of striking it rich on your own or (as in my case) doing what you love. That's the nature of the beast, and that's why we have both entrepreneurs and employees.

wh-uws 14y ago
Can you please say from who? I'm gearing up for this and I wouldn't hesitate at 200 a month.
- ComputerGuru 14y ago
  Blue Cross Blue Shield IL.
OldSchool 14y ago
Note that in the US, health insurance you can actually use, for a family (two adults plus one or more children), is no less than $1000/mo edging closer to $1500/mo. Getting pregnancy/childbirth covered at all on an individual policy is often difficult too. You can get a high-deductible policy if you generally don't need insurance but you personally can't control what your family members will decide they need routinely. That's part of why being an entrepreneur in your 20's is so ideal.

elviejo 14y ago

It's interesting when I lived in the US it was surprising how many of my coworkers on their early twenties were averse to risk... they wouldn't start a new business venture and their reasons were: - I have student loans - I need health insurance - I need to build a foundation so that my kids can go to college. - After the economic crisis, it isn't worth it.... But living in a contry were: - You don't have student debt - Your health services are warranted - Your kids can go to college and even great colleges for free... Makes being an Entrepreneur SO much easy... that you wouldn't believe.

rglover 14y ago
What country are you located in?

rglover 14y ago

I started my own business right out of school. As a result, I better be damn successful considering I have a lot of student loan debt to mop up. I have wondered, why not offer advantages in these situations to people who start businesses (say a window of ~6-12 months after graduation)? Either some sort of tax break or little to no interest rate on my debt would be handy. Another big one is health insurance. I've been swimming in open waters without insurance for about a year now. The only plans that I can get are abysmal with 5k plus deductibles (please direct me to a better deal if I'm being naive and something exists). Even though I've taken the leap to build a business ahead of my peers, I'm getting the crap end of the stick. Does seem a bit unbalanced.

theinformantguy 14y ago

Jon just nailed the problem in the head: frankly I'm tired of hearing rich kids talking about how easy it is just to leave everything you are doing and make a startup, and to add insult to injury the new buzzword is to say that you don't even need an idea. Yeah sure you can leave your job or college and just start throwing darts at post-its to come up with an app idea if you have a rich dad who is willing to bankroll your adventure in the Bay Area. You need at least $36k a year just to rent a decent flat in that place, some families, not just people but actual families, live on less than that in this country. I had friends on highschool who had tremendous hacker potential, but they also had problems, REAL problems like bad health and a poor family. Most of them are quite happy right now working for the evil corporations that pay them those $75k a year salaries that the rich kids laugh at. They depend on company healthcare and can't even dream to let that and their paychecks go just to give startups a try. And that is just one side of the problem, the other is the facade of equal opportunities in startups, the idea that everyone applying to YC or other incubators is in the same level. The social network movie made a lot of generic hacker culture statements but it forgot to mention that the zuck had a private programming tutor paid by his parents. Seriously, how many of you here had parents who could afford that? I tried to hire a Java tutor when I was in highschool and it was incredibly expensive, more than hiring several tutors for most of my school subjects. I have met entrepreneurs with amazing companies that didn't get into YC, yet the guys from diaspora, the same guys who burned through a quarter of a million and did next to nothing, they got in, and with what? a meme app, because that's important, another memegenerator clone. I'm using a throwaway account because I know this is going to be downvoted to hell, many of these rich kids make an overwhelming clique in HN and other sites, and they don't like when it when someone speaks up and shatters their BS. The irony here is that this country is fast becoming like the third world hellholes that immigrant entrepreneurs where escaping from. The stories you hear from those places are becoming eerily familiar: a guy from South America told me how over there all entrepreneurs are rich kids, legacies from generations of crony capitalism and favoritism. Practically none are coders or hustlers, they get their parents to bankroll a clone a cookie-cutter startup and take advantage of the wage slave condition of engineers over there, after all what are those poor souls going to do? they can't afford to make a startup and don't have any connections to investors, so what is left for them? get a visa and come here? nice try... And that is what America is becoming, a place not of opportunity but of class lockdown, social mobility is at an all-time low and everywhere you hear pundits whose idea of equality in America is actually that of Sweden's, which ironically is a socialist country. But go ahead, keep believing we are all in the same league, by all means try to defeat my point by saying how you help other less fortunate entrepreneurs with your link-bait blog full of empty advice, keep saying that all of us who are not in the same position than you are a bunch of envious and resentful pricks, or that you are where you are right now because you worked for it when actually you are where you are right now because you were half the way ahead to being with.

goggles99 14y ago

The risks that exist today "weed out" failures before they ever exist (failures are very expensive/bad for the economy). Most people realize that they do not have a good enough concept, enough time/dedication/work ethic lack a high level of life/business/leadership/social skills/self confidence.I could go on and on here. If people have little/no risk to follow a venture, we will see a lot more people quitting their 9-5s and starting garbage businesses. HMM - This sounds a lot like people getting home mortgages who have no business getting them... I know that John was a big fan of the affordable housing act as well. Why does John Stewart stop there? why not lower entrepreneurial risk even more and guarantee that if someones startup business fails that they get money to live on from the govt for the next 18 months? Oh wait we already have that (unemployment) How about I become a full time entrepreneur then? I could probably make more money per year starting failed business after failed business. I have money to live on and free health care so why not? This sounds great for the economy. This Stewart guy is sure a genius!!!

vinhboy 14y ago

A lot of people are talking in terms of "leaving" their jobs to start businesses. For me, it's the opposite. I am considering leaving my business to get a job. Why? Healthcare and retirement. So I agree with the article. If we had universal healthcare, I don't think I would ever consider leaving my business.

margaux 14y ago

FYI if you live in San Francisco and make less than 54k a year you can get Healthy San Francisco (http://www.healthysanfrancisco.org/ http://www.healthysanfrancisco.org/). It can be free depending on how much you're making. When I had a startup I broke my arm and had to get surgery, it was only $100 bucks.

chubbard 14y ago

Great Scott! It's just crazy enough it might just work! I've always felt that America's psyche is evolving us to a "Everybody's a CEO." mentality. With the introduction of 401K we upped the risk taking, driving white collar workers into consulting away from full time employment with benefits of incorporating, tax benefits of corporations, preferential tax treatment of capital gains vs salaries. These are all incentives to create your own corporation over being a salaried employee, but they all involve taking more risk. We are rewarding risk more and more while devaluing safety. Not passing judgement per se, but making an observation that America might be interested in this if they understood it. And that America might need this anyway because we are pushing more people into accepting the risk without their choice. (see 401K as an example). Another side benefit to this is it might drive up competition for workers because more people might be interested in working for smaller companies because benefits are more equalized. Driving competition for workers means higher salaries too on a whole as they compete for the talent. That's the real societal benefit. Now, if I could just figure out a way to pay myself entirely in dividends over a salary I think they might give me an honorary 1%'er membership. :-) But on the other hand. All I know is that it won't be that much fun when everyone is doing it. It never is.

bcx 14y ago

We can pretty clearly see that lowering risk is increasing the number of software startups. You can see a pretty clear micro example of this just by looking at YC applications. The number of YC Applicants has increased as the risk of doing YC has gone down. When someone going into YC had an expected outcome of basically $25000, less people were willing to leave jobs to go start companies. Think about pre 2009 YCombinator. Now consider post 2009 Ycombinator. As the process became less risky: more guaranteed capital (the Ron Conway, Yuri Milner portfolio strategy), and more Acquahires. The value of the average company went up, the downsides went down, and the risk to starting a company went down. Thus, more people were willing to apply to YC, and Paul and the YC partners were able to accept more companies. You could probably argue that this was a function of the popularity of YC. I believe that founders are rational, and the popularity of YC again decreased their risk. How many founders do not quit their jobs until they get into YC? (many) This is a separate argument from whether or not we need government healthcare, but I think it's pretty clear that risk evaluation is absolutely part of being an entrepreneur. (As an aside, dealing with healthcare is just one of many things that we as founders have to do that provides very little net benefit to our business. The less of this BS we have to do, the better we will deploy capital and the more focused we will be on important problems)