Live data from Hacker News

Entrepreneurs don’t have a gene for risk – they come from families with money

qz.com

121–130 of 317 posts

Re: Entrepreneurs don’t have a gene for risk – they come from families with money

#121
While it is clear that one's access to capital is an important consideration, the article is weak, because it overlooks several important points, some which have been mentioned here by others. I'll mention two that I haven't seen being pointed out elsewhere in this discussion. I hope they are of interest.

1. The article states:

    ... and found that most were white, male, and highly 
    educated. “If one does not have money in the form of a 
    family with money, the chances of becoming an 
    entrepreneur drop quite a bit,” Levine tells Quartz.
Given that the daughters of rich families are just as well-off and educated as the sons, and have as much access to parental/familial capital, having a wealthy family background cannot be the whole story. We can have long discussions about why this is, but the key point is that this disparity really undermines the article, regardless of cause.

2. The article doesn't reflect on the what exactly entrepreneurship is. One could argue that poor people in the developing world are much more entrepreneurial because most of them are in some form or other self-employed, ie. are entrepreneurs: the cigarette and waterbottle seller on the street corner, the coconut seller on the beach, the fisherman fishing with his own boat and net, the garbage picker who sells empty plastic bottles by the kilo for recyling ... They often are not employed. In a sense it's poverty that forces them into Entrepreneurship. It's the absence of large structured firms with the stability of employment that provide that's missing. By cherrypicking specific forms of glamorous entrepreneurs, they arrive at a skewed conclusion that more careful analysis would undermine.

Re: Entrepreneurs don’t have a gene for risk – they come from families with money

#122

Earlier quoted context omitted.

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.

The internet?

Re: Entrepreneurs don’t have a gene for risk – they come from families with money

#123
post #95
post #32

Earlier quoted context omitted.

You can always lose your own life, pretty much. If you can go back to your old room at your parent's room while you find a job and start earning again, sure, it's easy to take risks (I've done it this way). On the other hand, if you come from a rather poor background and have no one to fall back on, finding yourself with a failed company, in debt, maybe kicked out of your place because you can't pay rent, I'd say tha…

> in debt, maybe kicked out of your place because you can't pay rent, I'd say that rather terrifying. There are two types of businesses out there. Those that make money from day 1 and simply need to be scaled up. Those that require substantial investment and time before you even make a penny. For anyone who isn't financially secure, doing the latter is idiotic. There are plenty of business models that you can pursue…

While it is true that you have profitable businesses from day 1 or almost, it still reduces your chances to be able to be an entrepreneur coming from the bottom. This article doesn't say it's impossible. Just that it's less likely/harder. That's a hard truth. You can build around all you want, there is no denying it.

Re: Entrepreneurs don’t have a gene for risk – they come from families with money

#124
I can understand the argument of money means you're more likely to start a company. But the article is titled at addressing risk. Perhaps I'm just being pedantic with semantics, but if you have the money then doesn't that actually reduce the risk? "when you know you have a safety net, you are more willing to take risks." If you have a safety net, it's arguably not a risk then. Perhaps a better way to look at it would be, if you have money, what is a risk to someone else is less of a risk to you.

I still feel like risk aversion as a whole can hold us back from things we would enjoy in life. What is this? "a 31-year-old woman who runs in social entrepreneurship circles in New York, and asked not to be named, told Quartz" This could be any random person with an opinion on startups. We have no idea what influenced this view point or where she is coming from. Blindly listening to it sounds dangerous.

Re: Entrepreneurs don’t have a gene for risk – they come from families with money

#125

Earlier quoted context omitted.

>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.

The internet?

No. A well trafficked website or ads are distribution channels. Getting a mention in a newspaper likewise.

Just putting something up on the Internet and hoping will get you nowhere.

Re: Entrepreneurs don’t have a gene for risk – they come from families with money

#126
The article is arguing as if Social Darwinism is an accepted theory of business success. Is it really? I don't think so. I followed several of the links the article was using to support the Social Darwinism claim. One only was actually making that claim (inc.com) and it was obvious pseudo-science, it has the wonderful line: "Self-employment income is heritable".

To the people taking offense to this because they didn't start out with a lot of money: the article is talking about probability, not possibility. Just because most entrepreneurs start with some money doesn't mean there is no-one who starts without family financial support. And it's talking about genetics vs financial support, and not about the people who challenge the odds with hard work.

Re: Entrepreneurs don’t have a gene for risk – they come from families with money

#127
post #50

Ten 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…

> Now after ten years mostly working in large companies, I have some savings which will allow me to last two years in case I lose my job. After 10 years of being a software engineer you should have enough to retire forever (albeit in some third world country).

.... what planet do you live on? That certainly isn't the case for the vast majority of developers, even if their lifestyle involves a studio apartment and ramen noodles.

Re: Entrepreneurs don’t have a gene for risk – they come from families with money

#128
That makes sense: they have a better tolerance for risk because they inherited their money, and thus are young enough to take slightly foolish chances (someone who has made his money the hard way is more likely to be responsible with it).

Which leads one to wonder what the unintended consequences of tinkering with gift, inheritance and other family-related tax rates might be. For that matter, if Mike Markkula had not received all those stock options at Fairchild & Intel and been able to retire, would we all have smartphones and personal computers today, or would we be stuck with an OSI/ITU-type centralised consumer-only network?

Re: Entrepreneurs don’t have a gene for risk – they come from families with money

#129
post #117
post #103

Earlier quoted context omitted.

well, a full answer to the question would also need the percentage of college graduates that land jobs in big companies in the valley... P.S. I don't think we'll get far with this... i just noticed, e.g., "median household income in the US" - that seems a tricky thing to compare with, given that many ppl in the US don't have health insurance, or live in trailer parks eating off food stamps...

I think almost all my (upper-year) classmates got offers to at least one of Amazon/Microsoft/Google/Facebook/Twitter/Palantir/Uber. And I went to a school in Canada that nobody's ever heard of (University of Waterloo).

> And I went to a school in Canada that nobody's ever heard of (University of Waterloo).

Erm, that's well-known as an excellent school. Top-tier, really. My only qualms about inviting in a Waterloo man for an interview would be that our work might not be interesting enough.

Re: Entrepreneurs don’t have a gene for risk – they come from families with money

#130
post #50

Earlier quoted context omitted.

> Now after ten years mostly working in large companies, I have some savings which will allow me to last two years in case I lose my job. After 10 years of being a software engineer you should have enough to retire forever (albeit in some third world country).

.... what planet do you live on? That certainly isn't the case for the vast majority of developers, even if their lifestyle involves a studio apartment and ramen noodles.

GDP per capita in Vietnam is $2k. I think you're overestimating how much it costs to retire. Even $500k would be enough that you'd never touch the principle.
Post reply on HN