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Obviously a one person web based start up that doesn't pay wages is going to be a lot less risky than a 40 employee business that is buy supplies in advance for

• cmos 17y ago
  Perhaps more tragic is that in his industry he often get's a down payment of 30-50%, which is often enough to cover the costs of the equipment. Scaling up to 40 people in the custom home installation market is very difficult. Cash flow is a big deal, and the number of rich people who won't pay you the final payment, often for reasons that are outside of your control, is staggering. (i.e. I paid you $100k and my satellite dish keeps going out on me) There's not much you can do about it when your customer has 5 lawyers on retainer. You can make a lot more money with 2-4 talented people. This is an industry with 0% margin on flatpanel TV, 50% margin on wire and 70% margin on inwall speakers.
• mr_luc 17y ago
  I don't understand the downvotes here. I mean, obviously, you're correct. But the NYT just said that entrepreneurship means caring more about your dreams than a house for your family. Really? That's the decision people have to make to start a business? If you don't do that, you aren't an entrepreneur? It's a great cautionary tale, but as you yourself point out, not all kinds of business have that risk. And as others point out, his problems were avoidable. So, the NYT is wrong. Right?