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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

#311

Earlier quoted context omitted.

It is a bit of koolaid, but I believe we are closer to a meritocracy than we ever have been. Some people will always have it easier, but in software the capital cost to start a company has approached zero. What's left is time, and that is the main thing my post tried to hone in on.

"I believe we are closer to a meritocracy than we ever have been" While it has always been true that the strongest factor in a successful life is rich parents, I understand that it is more true today in the US than it has been for the last fifty years. That would suggest that we are further from a meritocracy than we were, and moving away from it.

I don't agree with the money angle. What is hurting the US isn't money, but the complete break down of the family structure. And no, I'm not talking about the religious 1 man 1 woman family, but the 2 parent family. Kids need discipline and someone to guide them to make good choices early on. I don't see that as much anymore and you get to where we are today.

I grew up without much of anything. Neither parent finished college and both worked all the time. Yet somehow they drilled into me hard work, education, and don't get a girl pregnant while in high school. I am by no means rich, but have done much better than my parents.

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

#312

Earlier quoted context omitted.

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 t…

I didn't say anything about motivation. That sort of hardship redefines the failure threshold.

For most people, who have never had their expectations reset, cramming your whole family into a rented studio apartment and eating mainly ramen and beans and rice might be considered a failure. But in comparison to fleeing halfway around the planet to avoid being murdered for no good reason, it's only the smallest possible success.

When you know that whatever you do, the worst that can happen is that you drop back down to the minimum level of success, you can take more risks. You can start a business, then lose it due to market changes and go back to regular jobs, like in the ancestor post.

Some people never take that risk, because in order to start that business, they would have to put their own retirement fund or their kids' college funds on the line. It never occurs to them that having their kids hunted down by partisan thugs to be killed is worse than having to take out student loans. Their failure threshold is higher.

Your grandparents wouldn't say that. They might say that you take all the great things you have for granted, and that even if you lost most of them, you would still be a success by their definition. And it wouldn't just be because they're your grandparents. It would be because about everyone you encounter in your daily life has a 2000 kcal diet, clean drinking water, flush toilets, high rates of public vaccination, multiple channels of broadcast radio and television, a very broad range of rights that are usually respected, usable public transportation in most cities, and tax-funded public education all the way up through high school.

Even if you lose absolutely everything you own, you can still get all that, with little more effort than putting up with some bureaucratic hassle or some religious preaching. As long as you are not literally insane or a professional criminal, it's not tremendously difficult to just survive in any American city.

So they already provided a better life for themselves and their families. If you can visit a family on public assistance in subsidized housing and still tell yourself that it is better than failing in your country of origin, you can risk every last penny you have on your business, right up until it goes bankrupt, because in America, that's as bad as it gets for anyone willing to follow all the rules.

It isn't just immigrants that take advantage of that lower risk threshold. There are plenty of non-immigrant hustlers that come out of poor areas with their low-investment businesses. Most of their business is technically illegal, such as selling homemade tamales for cash out of your uninspected home kitchen, and not reporting the income. Or selling bottled water in heavy traffic on a hot day. Or braiding hair in your apartment without a beautician's license. Those businesses cannot grow past a certain point, because they usually can't invest in fixed capital or hire employees, but they still exist. And every so often, you get John Paul DeJoria, or Harold Simmons, or Larry Ellison, or Howard Schultz, or Oprah Winfrey.

http://www.theatlantic.com/politics/archive/2015/03/welfare-...

http://www.washingtonpost.com/news/wonkblog/wp/2015/03/26/wo...

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

#313

Earlier quoted context omitted.

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 -- so…

I have to take you back to the title of the article: "Entrepreneurs don’t have a gene for risk – they come from families with money" That is patently false in but a very small percentage of cases. The millions of businesses launched every year overwhelmingly do NOT come from families with money. Here, "money" being understood as mid to upper class (financially speaking). That, in general terms, was my point, lost as…

We have two groups -- entrepreneurs with money and entrepreneurs without money.

They are part of an overall group -- entrepreneurs.

Picture them as bacteria in a petri dish.

The article simply says that entrepreneurs with money tend to survive longer (by having the freedom to take the risks that allows that survival) in addition to this group entering the petri dish more often because people tend to have a pretty good understanding for their appetite for risk -- an appetite largely dependent on their built in food supply -- available cash. It is not saying that people without money cannot become entrepreneurs or are not good entrepreneurs, just that the petri dish population tends to be covered more by those species that have advantages than those that don't.

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

#314

Earlier quoted context omitted.

Absolutely. What I think some stating that this is all "common sense" miss is that for many people it's NOT. All the advantages some have are advantages they believe that others have. Couldn't go to university because you had to work? Why didn't your parents help you? What? Nowhere to live? What about your old bedroom? You've supported yourself since you were a teenager? Where were your parents! No money left? Huh? N…

The world isn't fair or just. But we all control our attitude and our decisions. Some attitudes and decisions get you a house and food. Some do not. Speaking as somebody who's been there, I'm really concerned with this "poor changes your mind" thing I'm seeing. Buddhists manage to live and be happy not having much at all. For the vast majority of history, great men lived in conditions much worse than the average poor…

That's great that you had the mental fortitude to make it through that. For many, being broke and homeless is the very bottom and is psyche-destroying (people are so afraid of it, we even have a phenomenon named for it - Last Place Aversion: http://www.scientificamerican.com/article/occupy-wall-street...) You may not like the poor changes your mind thing, and why would anyone? That doesn't make it wrong. For example:

http://opinionator.blogs.nytimes.com/2013/09/25/escaping-the...

http://www.nytimes.com/2011/08/21/magazine/do-you-suffer-fro...

I'm also referring to the incredible narrowing of choices that you're left with (this one I've experienced first-hand, and by a read of these comments many here have experienced it as well), which you are surely well aware of. Don't let "what you don't like" or "what should/should not be" dictate your interpretation of the reality. I don't like that stuff either, but I'm not going to deny its real effects. It's not only callous, it's not correct.

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

#315

Earlier quoted context omitted.

Damn man, people really wanted to prove your point.

What do you mean?

Just the two other replies to your comment seemed to be pretty typical HN posts regarding sexism/privilege etc.

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

#316
post #304

Earlier quoted context omitted.

> There are many occupations that really only require hard work and little risk that has big payout. Such as?

Medicine.

You need quite more than just hard work to become a doctor.

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

#317
post #17

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…

> It is very hard to take risks when you are not financially secure There's a caveat here. It depends on your responsibilities. If you have children, fixed expenses, then absolutely. If you have nothing to your name and no responsibilities, it's very easy to take risks without anything to fall back on. After all, you have very little to lose.

Agreed. It always seemed to me that people with nothing to lose can take can take the biggest risks.
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