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“It’s hard to take risks if you don’t have a safety net”

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Re: “It’s hard to take risks if you don’t have a safety net”

#81

Post by humanrebar »

DevX101 wrote: post #37

They're talking past each other. Thing is, they're both right. Paul seems to be saying you don't have to be rich to do a startup. Matthew is saying lots of founder have some resources (family home, savings, great education, i.e. middle-class) that made doing a startup feasible Both these positions are true and aren't incompatible. Being middle class (Matthew's position) and prudent with savings can afford you probabl…

It's the difference between "a founder can be anyone" and "a founder can come from anywhere" to paraphrase Ratatouille.

Re: “It’s hard to take risks if you don’t have a safety net”

#82

Post by adamlett »

tomp wrote: post #58
adamlett wrote: post #21

Earlier quoted context omitted.

Idk, it seems to me that PG is just wrong about this. Not categorically and in every single instance, but on the whole. It's like saying women are physically stronger than men, and pointing to some woman who is clearly an outlier. You could word it less strongly and say that some women are stronger than some men. But then what would be your point?

He's saying more something along the lines of "women can be elite performers too " (and that being genetically/on average less strong shouldn't stop them from trying) - which isn't entirely wrong, especially since we're already talking about like 0.01% of the population (successful entrepreneurs / elite sports(wo)men).

Don't get blinded by the analogy. There's an important difference between it and the problem we're discussing: We can't actually change the fact that woman generally are not as strong as men. We can however as a society change the fact that many people don't have a safety net. I appreciate that Paul G's intended meaning was different, but it's kind of hard not to interpret what he wrote, as no, we don't actually have to change society [which has worked well for me], poor or underprivileged people just have to try harder.

Re: “It’s hard to take risks if you don’t have a safety net”

#83

Post by mlthoughts2018 »

praptak wrote: post #14

A poor person betting everything on their startup is definitely good for pg - it increases the pool of people whose work he can profit from. It's not that obvious if it's good for the poor person. I guess that everybody has their own risk aversion threshold.

It is probably not actually good for PG, because the majority of such people will fail and end up destitute, casting bad publicity (rightly or wrongly, doesn’t matter) on whatever start-up churner generated that outcome.

Additionally, founders who already come from wealth or have political connections, etc., are probably much more likely to succees in the financial senses that PG wants.

The only limited sense in which it’s good for PG is if there is a lottery winner he can claim credit for, a rags-to-riches story to whip up blind support for some ludicrous tech millionaire idealism.

Re: “It’s hard to take risks if you don’t have a safety net”

#84

Post by Jhsto »

jacquesm wrote: post #2

How do countries with good social safety nets factor in here? In EU people are definitely not nearly as likely to start their own business as in the US, and many people that would otherwise be labelled 'jobless' (or on the dole) are 'self employed' instead.

My anecdote is from a Finnish perspective: First things first, some people make more money being unemployed than working (though for only short periods of times, to my knowledge max. couple months). This is related to entrepreneurship because owning a company, whether it makes any money or not, labels you to the workforce. This is problematic because it obliterates your unemployment aids. In some circumstances, this can be extended into your close family. Now, if you own a company, you (and in some cases your close family) do not get the same social safety net as others! Bad! This also extends (to the entrepreneur) to other class of social safety net, which is living aid. For entrepreneurs, the living aid is calculated from the (mandatory!) retirement account (which are a mess by itself, the public sector chooses private companies which handle this money, with no control of the individual to seize the money before government defined retirement age) contributions. If you have little to no contributions (e.g., your company makes little money and you rather pay yourself salary), you cannot get living aids. Further, taxes are higher. First, entrepreneurs pay 5% more taxes than the same bracket in income as an employee. Next, if your company becomes profitable, the system incentivizes you to increase your personal income hence the tax bracket, because otherwise, the company gets taxed 20% of the money left into the company.

The reality is much like pictured here https://imgur.com/a/o5MGARc for entrepreneurs. That is, in Finland, we do not need to have this Twitter discussion, because by default entrepreneurship is a viable option for the ones who can patch up the holes in the safety net that the government has removed.

Re: “It’s hard to take risks if you don’t have a safety net”

#85

Post by buro9 »

PandaRider wrote: post #8

I'm shaking my head right now because I can't believe people at the top is still susceptible to sampling/survivorship bias. I've tried searching but cannot find a good empirical study of privilege and entrepreneurship correlation. However, I've found an essay paper [0] that exactly predicted this twitter drama; that entrepreneurs simultaneously present and erase this conversation about class and entrepreneurship. The…

> class may be a more powerful organizing discourse

Yes! Yes! Yes!

Other things contribute to class, but it remains a class issue.

I'm reminded of this: "If your feminism isn’t intersectional, it isn't feminism.".

We need something similar for those who think the issue is one-dimensional - "the poor".

Because why someone is poor, and what conditions and circumstances result from being poor... poverty (which includes the psychological impact of being poor)... deeply affect the individuals affected, and some of those factors have wider societal causes (racism, homophobia, xenophobia, perceived sex, sexual identity, etc).

Re: “It’s hard to take risks if you don’t have a safety net”

#86

Post by adamlett »

ekianjo wrote: post #31
praptak wrote: post #14

A poor person betting everything on their startup is definitely good for pg - it increases the pool of people whose work he can profit from. It's not that obvious if it's good for the poor person. I guess that everybody has their own risk aversion threshold.

A poor person not betting on anything is bound to stay poor. Your point is?

To you it may seem there is little difference between being poor and being financially wiped out. To the person experiencing it, the difference is huge. Among other things, it can mean the difference between struggling to make rent, and not being able to.

Re: “It’s hard to take risks if you don’t have a safety net”

#87

Post by DreamSpinner »

sheeshkebab wrote: post #78
sfifs wrote: post #32

Earlier quoted context omitted.

Interestingly, only a quarter of the businesses are employers in UK, so most of the company creation is presumably basically city of London financial engineering :-)

what's with justifying an existence of a company by having employees? If a company is profitable and you as an owner are doing well financially, does it really matter?

I believe the general thought is that at a very simple level, operating as a company provides for a number of protections for the owners/operators. At a societal level, the broad justification for allowing unnatural beings with those benefits is that it still provides a net benefit to society through things like employment opportunities, taxes and the encouragement of economic activity. If the concept of a company no longer provides any non-trivial benefit to society (for example, no jobs or taxes), why should society collectively provide laws that allow them in the first place?

Re: “It’s hard to take risks if you don’t have a safety net”

#88

Post by lotsofpulp »

huffmsa wrote: post #76
watwut wrote: post #72

Earlier quoted context omitted.

Most of immigration happened during high risk dangerous and unstable times. Most immigrants were not bored of super safe and stable life where they came from. They were running away, because original place was dangerous.

So then you're comparing the know risks of war and famine to the unknown risks in the target country. Which for a lot of American history has been war and crop failure.

Comparing your great grandfather’s situation to a poor person today doesn’t make sense to me.

Their choices, consequences, and access to information are vastly different.

Re: “It’s hard to take risks if you don’t have a safety net”

#89

Post by KaiserPro »

jacquesm wrote: post #20
KaiserPro wrote: post #10

Earlier quoted context omitted.

This is demonstrably untrue. Looking at the official docs here: https://www.sba.gov/sites/default/files/advocacy/2018-Small-... for the US and here: https://researchbriefings.files.parliament.uk/documents/SN06... for the UK (both are PDFs) In the USA for the first quarter of 2016, there were 240,000 new companies. So just million in a year, assuming that trend. Also, that is all companies, including those with no emp…

The UK and quite a few other places require gig economy operators to register as an independent business.

A sole trader is not the same as a limited company.

Re: “It’s hard to take risks if you don’t have a safety net”

#90

Post by Retra »

huffmsa wrote: post #76
watwut wrote: post #72

Earlier quoted context omitted.

Most of immigration happened during high risk dangerous and unstable times. Most immigrants were not bored of super safe and stable life where they came from. They were running away, because original place was dangerous.

So then you're comparing the know risks of war and famine to the unknown risks in the target country. Which for a lot of American history has been war and crop failure.

But also free land, and a reliable market for the goods produced on it.
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