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

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

#161

Post by jdiez17 »

cardine wrote: post #137
crdoconnor wrote: post #125

Earlier quoted context omitted.

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.

There are a million free or extremely cheap distribution channels on the internet. My current business with 7 figures ARR was launched almost exclusively on industry forums and there are no connections required to create an Adwords account. There are countless businesses that started on Reddit or even here on Hacker News with a $0 advertising budget.

It's a matter of effort/reward. Yes, you can advertise for free or very cheap on the Internet, but it's harder to achieve the same amount of success as if you were paying and requires you to put in more work, like engaging with the community (which is not trivial).

Of course it's possible to get extremely good ROI on free advertising (especially if your product is excellent or unique), but it's the exception, not the rule.

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

#162

Post by [deleted] »

cryoshon wrote: post #88
lint_roller wrote: post #34

Earlier quoted context omitted.

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 foundati…

[deleted]

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

#163

Post by crdoconnor »

eugenekolo2 wrote: post #152
crdoconnor wrote: post #84

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.

Networking is still invaluable, but capital isn't a necessity in software startups. I do think that either bravery or a nesting egg to fall back on is though.

It depends upon the market. You couldn't really do health-care software without connections or capital, for instance. Same for anything finance related.

Also, the markets that require the least capital/connections tend to be low margin and flooded with competition.

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

#166

Post by ThomPete »

api wrote: post #160
ThomPete wrote: post #159

I wonder how that explains the fairly high risk averseness in the Scandinavian countries? It's literally safe to fail yet failing is frowned upon. I don't think that article is telling the right story.

Correct me if I'm wrong, but don't those countries have a massive amount of micromanaging regulations around things like employment practices? If that's the case, that certainly will stifle entrepreneurship even if everything else is in line.

Not for startups. For larger institutions with unions etc. sure, but startups aren't regulated very tightly, it's easy to hire and fire too.

You can start a company in less than a week. All digital.

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

#167

Post by cardine »

jdiez17 wrote: post #161
cardine wrote: post #137

Earlier quoted context omitted.

There are a million free or extremely cheap distribution channels on the internet. My current business with 7 figures ARR was launched almost exclusively on industry forums and there are no connections required to create an Adwords account. There are countless businesses that started on Reddit or even here on Hacker News with a $0 advertising budget.

It's a matter of effort/reward. Yes, you can advertise for free or very cheap on the Internet, but it's harder to achieve the same amount of success as if you were paying and requires you to put in more work, like engaging with the community (which is not trivial). Of course it's possible to get extremely good ROI on free advertising (especially if your product is excellent or unique), but it's the exception, not the…

I was responding to the original claim that a distribution channel requires capital or connections, which from my own experience is a false statement.

You are right that free advertising requires work like engaging in the community, but all startups require a considerable amount of work, and if you have a little bit of online savviness engaging with a community is very easy.

I know that from the time I went from $0 to $10,000 MRR I spent about $100 in online advertising, and I know countless other businesses that have done the same. Maybe if your plan is to create the next Facebook it is harder, but if you have a high quality niche startup, being able to effectively and cheaply advertise yourself for free is hardly an exception. You can always broaden your scope later.

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

#168

Post by clavalle »

rebootthesystem wrote: post #144
clavalle wrote: post #120

Earlier quoted context omitted.

You seem to think that by 'wealth' they mean access to millions of dollars. Even 'sustain comfort' and have a little something leftover levels of wealth is not available to a sizable percentage of people in the US.

No I don't. As many have pointed out in this thread, the world is full of entrepreneurs who come from very little and make it happen. To me saying "I have nothing" is just an excuse. Particularly in the US. If you want to make something happen, you can, it will not be handed to you, but you can. What these studies never look at (because it is virtually impossible) are the massive numbers of businesses that start from…

Money is a tool, sure, but it is the Universal Tool. It can be applied toward nearly every problem in business. Can people still mess up and misuse the tool? Sure. It success a better bet if you have access the Universal Tool? Most definitely.

We can come up with counterexamples all day long, but the question is not whether an individual can succeed without much money or can fail with a ton of money -- I know people that fall into both camps as well -- the question is in aggregate does more money shift the overall curve toward success in entrepreneurship over time?

I'd bet big that it does.

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

#169

Post by doyoulikeworms »

alexfisher wrote: post #86

Step 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.

Well, it should be noted that "rich" is something of a relative term. For many people, being able to take a risk and forgo income for a time is, indeed, to be rich.

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

#170

Post by myth_buster »

The risk taken by risk takers (entrepreneurs) is disproportionate as partly expressed in the article.

Apart from financial risk, there is the risk of employebility once you are off the radar and are asked for references once you try to join the workforce.

For immigrants the risk of maintaining the status to stay in the country. This is perhaps a major reason why graduates go back to their home country to start companies.

Additionally there is conscious/subconscious biases at play when startups filter people based on "fit" which is to say "birds of a feather flock together". Hence it could be rather daunting for people from a different demographic to gain relevant experience which paves their way to a successful startup. Once the startup grows, they usually become more accepting in this regard.

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