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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

#271

Post by rebootthesystem »

clavalle wrote: post #168
rebootthesystem wrote: post #144

Earlier quoted context omitted.

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…

I disagree. Business is hard. People are what matter.

I started a business in my garage with $5,000. I had the right ideas, market and product. I grew it to a pretty good size, employed lots of people and sold it.

Years later, I started another business with $325,000 of my own cash. I still had the right ideas, market and product. It failed miserably. Why? I didn't know enough about the industry and lost focus. I eventually restarted it (with more money) and got it going nicely.

Money couple with the right people, product and market AT THE RIGHT TIME can light things up in a major way. Money by itself is useless. And not, money does not shift the curve towards success. That's just not a sensible conclusion.

Money does nothing other than allow you to push on the accelerator once you have a formula that is ready for success. This is how money should be used. That's why the mantra in tech circles is to test an MVP with a few thousand dollars (or less if possible). Why? Because if you throw money at something that has no engagement you'll just burn it. It doesn't shift the curve toward success. The curve already has to be shifted in that direction AND THEN you throw money at it.

That's is precisely why so many people with easy access in capital fail. They think exactly as you are proposing: If we just throw money at XYZ we improve our probability to succeed. And then they fail.

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

#272

Post by acqq »

lint_roller wrote: post #34
radmuzom wrote: post #11

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…

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…

I like what JWZ wrote about the related topics:

http://www.jwz.org/blog/2011/11/watch-a-vc-use-my-name-to-se...

"I did make a bunch of money by winning the Netscape Startup Lottery, it's true. So did most of the early engineers. But the people who made 100x as much as the engineers did? I can tell you for a fact that none of them slept under their desk. If you look at a list of financially successful people from the software industry, I'll bet you get a very different view of what kind of sleep habits and office hours are successful than the one presented here."

The whole text is worth reading.

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

#273

Post by icedchai »

aianus wrote: post #68
bakhy wrote: post #61

Earlier 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)

As I mentioned in another unrelated thread, most people do not have the discipline to do this. It is simply unrealistic... but, yes, it can be done.

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

#274

Post by rebootthesystem »

logfromblammo wrote: post #171
rebootthesystem wrote: post #109

I'm sorry, I am going to call this nonsense. I am second generation from immigrants who arrived at these shores with nothing but the clothes on their backs. They escaped Genocide and other horrors. When they got here they grabbed whatever job they could. They had nothing. They saved their money. And when they could, they started their own small businesses (yes, both of my grandparents behaved the same way without kno…

People emigrating to escape genocide have a different definition of failure which makes them more risk-tolerant. When someone whose definition of failure is getting buried in an unmarked mass grave is competing against someone whose definition of failure is sleeping in their car for a few months, that first guy will risk more to win. I recall from the movie Gattaca, when the natural-genes protagonist had a swimming c…

I'm sorry. You have it wrong.

Genocide isn't a motivation to bust your ass. Genocide is what placed my grandparents and those of many into abject poverty. Their day-to-day motivator wasn't "well, this is better than being in an unmarked grave". That wasn't even in their radar. As in, not at all. Saying "never again" doesn't mean you are going to drown to swim out to a buoy.

Genocide doesn't turn someone into a risk taker. That's a preposterous idea. I couldn't even imagine my grandparents saying "well, I am going to go all out on this because I could have died in the Genocide". It sounds silly just to say it.

No, their motivation was to improve their lives and provide for their families. And lacking the command of the language or much of an education they concluded the best bet was to try to start some kind of a business, any business. And that's what they did.

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

#275

Post by orky56 »

Whether it's your savings or capital from investors, spare cash gives you the leg up to artificially scale faster than you would organically. This increases the risk but also helps you capitalize on timing when an opportunity is short-lived.

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

#276

Post by mindcrime »

arcfor wrote: post #250
mindcrime wrote: post #193

Wow, talk about an article that is completely devoid of value. That stands out as soon as you see "cult of the entrepreneur" in the first sentence. OK, now we know that most entrepreneurs come from "families with money" (according to their definitions anyway). Great, so what do I do with that particular bit of information? I'm most definitely not from a family of means, so do I just quit now? Have I been deluding mys…

It's part of the movement toward a more realistic view of "entrepreneurs". Wishing to be a wealthy aristocrat with a sea of sharecroppers isn't a commendable goal, regardless of your background. This article just points out that aristocrats tend to beget aristocrats.

It's part of the movement toward a more realistic view of "entrepreneurs".

I guess that's one way of looking at it. To me, it feels more like an attack on the very notion of entrepreneurship, and a way of discouraging people from pursuing that path. I feel like this kind of article originates with the same people (and the same thinking) that are always proclaiming "it's all luck, nothing you do really matters".

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

#277

Post by clavalle »

rebootthesystem wrote: post #271
clavalle wrote: post #168

Earlier quoted context omitted.

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…

I disagree. Business is hard. People are what matter. I started a business in my garage with $5,000. I had the right ideas, market and product. I grew it to a pretty good size, employed lots of people and sold it. Years later, I started another business with $325,000 of my own cash. I still had the right ideas, market and product. It failed miserably. Why? I didn't know enough about the industry and lost focus. I eve…

Everything you said is true but missing the point.

$5000 is a wad of cash that many, many people don't have access to.

Living on savings while building and selling a product is not an option for many more.

Money just doesn't allow for acceleration but also pays for you to get in the car to begin with.

And that's not a precise statement either: having the ability to live while earning nothing build your business -- something that often takes some amount of cash, is what can mean the difference between success and failure.

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

#278

Post by walshemj »

zeveb wrote: post #129
aianus wrote: post #117

Earlier quoted context omitted.

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.

What with one of Tommy Flowers colleagues moving there post ww2 :-)

Read Cryptonmicon and you can work out who Randy's' family is based on

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

#279

Post by walshemj »

millermp12 wrote: post #258
chrisbennet wrote: post #136

Earlier quoted context omitted.

Don't forget the unpaid internships. Only wealthy kids can take advantage of those.

Or protected classes http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3155774/

er Chris was talking about the really high status Jobs in the creative liberal arts professions its not a so much a problem in STEM fields.

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

#280

Post by blakeyrat »

eloff wrote: post #252
lhc- wrote: post #219

Earlier quoted context omitted.

It sorta spits at the idea of social mobility ("the american dream") though. The biggest rewards are only really available to those who can take risks like starting a business, and if you restrict that to only those who are already well-off, you remove most chances for the poor to ascend to the higher classes.

There isn't that much social mobility, there's plenty of statistics that prove that. The American dream is just that, a dream. Like most dreams, the odds are long. You can reduce those odds, but don't kid yourself that it will be easy.

Maybe so, but there's no point in making the situation worse. If we can make it better, we should.
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