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Although not completely related to the article - the headline triggered a reaction in me: Why do we need a less risky approach to entrepreneurship in software

by kken 13y ago

Although not completely related to the article - the headline triggered a reaction in me: Why do we need a less risky approach to entrepreneurship in software development? I believe that of all start-up opportunities, software development is already the least risky one. Why? Almost zero unvestment required. Absolutely flexible working ours. All value creation is through your mind work. No external milestones and so on and so on... The fact that Software development has become synonymous with entrepreneurship is almost ridiculous. Just compare the risks you are taking with that of your mom-and-pop shop around the corner (or the one that was there 30 years ago)...

vinceguidry 13y ago
While there's practically zero capital risk, there is a lot of career risk involved if you fail. Many employers avoid failed entrepreneurs like the plague.
- deleted 13y ago
  [deleted]
  - hansgru 13y ago
    > That is entirely false. In mainland Europe this is entirely true. Even more, this has implications not only when searching for jobs or gigs, but also on the social/personal level: the stigmata and marginalization that comes with it it's incredible here. I now lie about my previous failed startups.
    - billmalarky 13y ago
      Note to self: Never live in mainland Europe. Maybe I'm viewing the world through rose tinted glasses, but it seems entrepreneurs are very respected in the US.
    - sokoloff 13y ago
      US employer here (who all hires for some EU-based roles): I view failed entrepreneurs very positively, assuming the candidate can reflect reasonably on what went well and what went poorly. PS: you probably mean stigma, not stigmata: http://en.wikipedia.org/wiki/Stigmata http://en.wikipedia.org/wiki/Stigmata
    - bjelkeman-again 13y ago
      I think it varies quite a lot across countries. I don't think it would be a problem being a failed entrepreneur in the Netherlands. I had two belly flops, two marginal and one boring startup under my belt before I took on the latest one. I have never met any stigma in the Netherlands, UK or Sweden. The last two are of course not mainland Europe, but anyway.
- ericingram 13y ago
  Quite the opposite, in my experience.
- mikkelewis 13y ago
  I disagree. When reviewing resumes, I'm always impressed when I see candidates starting their own company. It shows ambition, and the will to wear multiple hats... something that startups are always looking for.
- yesimahuman 13y ago
  Any examples? In my experience it's been the complete opposite.
michaelochurch 13y ago
I would like to see a more wholesome path to financing, especially for the mid-risk businesses that VCs decry as "lifestyle" businesses. Software is inherently mid- to high-risk. "Low-risk" just doesn't exist in a world where half of all projects fail, and some fail for reasons not due to a lack of merit (but because they were built to a specialized purpose for which there was demand, but the situation changed). So bank loans, which require personal liability are completely out. On the other hand, VCs want to play in the high-risk space where the mean (expected) return is high but the median is failure. That appeals to some people, but it shouldn't be the only game in town. Right now, there isn't a mainstream funding outlet for the mid-risk businesses oriented toward 10-40% per year growth, even though that's a great space for software engineers, since it approximately matches the acceleration curve of our capability, with hard work.
- BWStearns 13y ago
  >> Software is inherently mid- to high-risk. "Low-risk" just doesn't exist in a world where half of all projects fail Risk is a function of both the likelihood and consequences of failure. If you can try and fail a hundred times without quitting your job and only take that plunge when it is derisked (by increased information derived from operation) then it is inherently low risk. Sure throwing 100% into a startup from the beginning makes that individual effort more likely to succeed while being much more risky, but nights/weekend projects can evolve to sustainable businesses without increasing your risk profile. This is because the consequences of failure are near zero, and even a failed effort may be "profitable" in the net sense of connections and marketable skills gained.
  - kamaal 13y ago
    >>Risk is a function of both the likelihood and consequences of failure. Only in a mathematical argument. Failures are difficult to deal with personally, especially if you have to deal with them repeatedly without any sign of success around. The typical result is frustration gradually turning into a form of burnout and depression.
    - 13y ago
GrinningFool 13y ago
" Why? Almost zero unvestment required. Absolutely flexible working ours. All value creation is through your mind work. No external milestones and so on and so on..." Not all costs are monetary. When you have a family to provide for and responsibilities beyond those to yourself, your threshold for acceptable risk drops much lower.

by kken 13y ago

vinceguidry 13y ago

While there's practically zero capital risk, there is a lot of career risk involved if you fail. Many employers avoid failed entrepreneurs like the plague.

deleted 13y ago
[deleted]
- hansgru 13y ago
  > That is entirely false. In mainland Europe this is entirely true. Even more, this has implications not only when searching for jobs or gigs, but also on the social/personal level: the stigmata and marginalization that comes with it it's incredible here. I now lie about my previous failed startups.
  - billmalarky 13y ago
    Note to self: Never live in mainland Europe. Maybe I'm viewing the world through rose tinted glasses, but it seems entrepreneurs are very respected in the US.
  - sokoloff 13y ago
    US employer here (who all hires for some EU-based roles): I view failed entrepreneurs very positively, assuming the candidate can reflect reasonably on what went well and what went poorly. PS: you probably mean stigma, not stigmata: http://en.wikipedia.org/wiki/Stigmata http://en.wikipedia.org/wiki/Stigmata
  - bjelkeman-again 13y ago
    I think it varies quite a lot across countries. I don't think it would be a problem being a failed entrepreneur in the Netherlands. I had two belly flops, two marginal and one boring startup under my belt before I took on the latest one. I have never met any stigma in the Netherlands, UK or Sweden. The last two are of course not mainland Europe, but anyway.
ericingram 13y ago
Quite the opposite, in my experience.
mikkelewis 13y ago
I disagree. When reviewing resumes, I'm always impressed when I see candidates starting their own company. It shows ambition, and the will to wear multiple hats... something that startups are always looking for.
yesimahuman 13y ago
Any examples? In my experience it's been the complete opposite.

michaelochurch 13y ago

I would like to see a more wholesome path to financing, especially for the mid-risk businesses that VCs decry as "lifestyle" businesses. Software is inherently mid- to high-risk. "Low-risk" just doesn't exist in a world where half of all projects fail, and some fail for reasons not due to a lack of merit (but because they were built to a specialized purpose for which there was demand, but the situation changed). So bank loans, which require personal liability are completely out. On the other hand, VCs want to play in the high-risk space where the mean (expected) return is high but the median is failure. That appeals to some people, but it shouldn't be the only game in town. Right now, there isn't a mainstream funding outlet for the mid-risk businesses oriented toward 10-40% per year growth, even though that's a great space for software engineers, since it approximately matches the acceleration curve of our capability, with hard work.

BWStearns 13y ago
>> Software is inherently mid- to high-risk. "Low-risk" just doesn't exist in a world where half of all projects fail Risk is a function of both the likelihood and consequences of failure. If you can try and fail a hundred times without quitting your job and only take that plunge when it is derisked (by increased information derived from operation) then it is inherently low risk. Sure throwing 100% into a startup from the beginning makes that individual effort more likely to succeed while being much more risky, but nights/weekend projects can evolve to sustainable businesses without increasing your risk profile. This is because the consequences of failure are near zero, and even a failed effort may be "profitable" in the net sense of connections and marketable skills gained.
- kamaal 13y ago
  >>Risk is a function of both the likelihood and consequences of failure. Only in a mathematical argument. Failures are difficult to deal with personally, especially if you have to deal with them repeatedly without any sign of success around. The typical result is frustration gradually turning into a form of burnout and depression.
  - 13y ago

GrinningFool 13y ago

" Why? Almost zero unvestment required. Absolutely flexible working ours. All value creation is through your mind work. No external milestones and so on and so on..." Not all costs are monetary. When you have a family to provide for and responsibilities beyond those to yourself, your threshold for acceptable risk drops much lower.