This is just common sense but amazingly this bit of common sense is ignored in the valley. Probably because too many want to believe in the dream that the successful were "just smart enough" or "just risky enough" when the majority were simply able to gamble with minimal risk.
Entrepreneurs don’t have a gene for risk – they come from families with money
81–90 of 317 posts
Re: Entrepreneurs don’t have a gene for risk – they come from families with money
#82Ten years back, when I was fresh out of college, I joined a startup - not as a founder but as the first employee. A lot of it was driven by reading Paul Graham's essays, and I was naive and immature enough to believe that I was doing something great (as an aside, I came from an economically disadvantaged family; and every cent of my assets today is something I have earned and not something which I have inherited or o…
I have a very similar story, except I'm on part one. Recent graduate, very modest family, and drank all the Paul G koolaid which got me to jump into the whole scene just to realize I'm mostly surrounded by upper middle class types where there's still risk being taken just not nearly as much. This has taught me to always consider the source of advice more rigorously. I still think he's a great thinker, but some of the…
A suggestion for the disclaimer:
*this advice only applies to upper middle class white males based in Silicon Valley(or at least the US), who own trendy startups that have raised some VC funding
Re: Entrepreneurs don’t have a gene for risk – they come from families with money
#83In other words, starting a business isn't much different than it was in the past - capital and connections are essential. Sure, there're exceptions when someone with little money and hard work managed to grow their business, but they're that - exceptions. The older I am the more I realize how naive thinking "I just need to create something better than my competitors!" really is. You can have a mediocre product but wi…
I think it's quite different in the software startup industry. You usually don't need much capital, it's more that you need to have a failsafe in case you go bust to not end up unemployed and unable to pay bills.
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Re: Entrepreneurs don’t have a gene for risk – they come from families with money
#84In other words, starting a business isn't much different than it was in the past - capital and connections are essential. Sure, there're exceptions when someone with little money and hard work managed to grow their business, but they're that - exceptions. The older I am the more I realize how naive thinking "I just need to create something better than my competitors!" really is. You can have a mediocre product but wi…
I think it's quite different in the software startup industry. You usually don't need much capital, it's more that you need to have a failsafe in case you go bust to not end up unemployed and unable to pay bills.
>I think it's quite different in the software startup industry. You usually don't need much capital
You still need a distribution channel. That requires either capital or connections.
Re: Entrepreneurs don’t have a gene for risk – they come from families with money
#85In other words, starting a business isn't much different than it was in the past - capital and connections are essential. Sure, there're exceptions when someone with little money and hard work managed to grow their business, but they're that - exceptions. The older I am the more I realize how naive thinking "I just need to create something better than my competitors!" really is. You can have a mediocre product but wi…
> Sure, there're exceptions when someone with little money and hard work managed to grow their business, but they're that - exceptions. My grandfather (and father) were that person.
Hmmm if your grandfather was successful in some significant way then your father benefited from that security which is exactly what the article is about. So claiming both were those exceptions is a bold claim indeed.
Re: Entrepreneurs don’t have a gene for risk – they come from families with money
#86Step 1: Spend less than you make.
Step 2: Take risks when you have enough of a safety net.
Step 3: Fail/retry or succeed.
You don't need to be from a rich family to do these things.
Re: Entrepreneurs don’t have a gene for risk – they come from families with money
#87Earlier quoted context omitted.
From a disadvantaged family (no initial savings) and perhaps student loans (ill-advised, but not uncommon) -- it's not unthinkable that he hasn't hit "soft retire" numbers after 10 years. But your sentiment is correct: If you're debt-free, you should be able to "soft retire" after 10 years as a software engineer in today's markets.
Can you elaborate on what you mean by "soft retire"?
Build a sufficiently large investment portfolio such that annual income from investments approximately equals annual expenses. Note that this may require moving to an area with lower cost of living (eg. working in SFBA for 10 years and then moving to the midwest).
The approximate rule of thumb (not accounting for investment variability, so be careful!) is that you can extract 4% of your investments annually without affecting the basis (while adjusting it for inflation). So if you can live off that 4% (ie. $40k off a $1M investment portfolio), then you can "soft retire."
There are entire communities dedicated to this notion (eg. http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...)
Re: Entrepreneurs don’t have a gene for risk – they come from families with money
#88Ten years back, when I was fresh out of college, I joined a startup - not as a founder but as the first employee. A lot of it was driven by reading Paul Graham's essays, and I was naive and immature enough to believe that I was doing something great (as an aside, I came from an economically disadvantaged family; and every cent of my assets today is something I have earned and not something which I have inherited or o…
I have a very similar story, except I'm on part one. Recent graduate, very modest family, and drank all the Paul G koolaid which got me to jump into the whole scene just to realize I'm mostly surrounded by upper middle class types where there's still risk being taken just not nearly as much. This has taught me to always consider the source of advice more rigorously. I still think he's a great thinker, but some of the…
The lesson from this is don't drink anyone's kool aid consciously. PG has a huge incentive to wax heroic about the "risk takers" "makers" and "founders"; it's the Silicon Valley cargo cult, and should be compensated against in the mind of the reader. Always be brutally critical of applying the question of qui bono-- always, no exceptions, ever.
PG has little incentive to explicitly qualify ideas that are his foundation (regarding the prerequisites for the above), and frankly it'd kind of break up the nice flow his pieces have anyway if he did. His target audience doesn't want to be told that they started life on second base, and honestly it's quite annoying to have someone tell you so with the intention of taking you down a peg.
Re: Entrepreneurs don’t have a gene for risk – they come from families with money
#89Earlier quoted context omitted.
if you have no life outside work, sure ;)
No, that's if you take home $100k and 'only' spend half of it (which already represents the median household income in the US)
OK, but how many developers in the US get $100k? Throughout the first 10 years of their career?
And I'm sorry, I should explain - I live and work in the EU, in Germany right now. So I can't compare. In any case, one can certainly save, and I'm not gonna lie, I could certainly spend less without losing too much :) But a claim like "10 years is enough to retire" seems a bit extreme.
Re: Entrepreneurs don’t have a gene for risk – they come from families with money
#90Every third world country I have been too is filled with entrepreneurs hustling to make a buck. Having money helps with big scale business; having no money means you are buying a bag of oranges and selling them off individually on the street corner.
I do not come from a family with money. I grew up below the poverty line in fact. This article is crap. It is like saying "Entrepreneurs are all white males" because a lot of entrepreneurs are - but it marginalizes all the people, the many many people, who have succeeded as entrepreneurs despite starting from a very small seed (and who weren't white males of privilege).
I have a company because I couldn't imagine working for someone else. I have tried a couple times for a few months, but in the end I can't do it. So I work for myself, and have for 25 years. I start companies because I can't not do it. I have too many ideas, and I want to see if they work so I do little experiments that sometimes turn into viable projects.
While I agree I can't take on Tesla unless I had a spare billion laying around, that ignores that there are lots of businesses that can be started for a few dollars. This article ignores all of those business too. Not every business has to be the next Uber.