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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”

#101

Post by coldtea »

michaelmcmillan wrote: post #93
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…

In which direction is causality flowing here, and how do you justify it? We didn't choose our brains––so how do we differentiate the privilege we got from our "class" from the traits we were born with? Does privilege imply that you got it from your "class"? This seems like a classic nature/nurture fallacy.

>In which direction is causality flowing here, and how do you justify it? We didn't choose our brains

No, but our privileged parents did contribute to them, and their our upbringing, early months, lack of childhood stress over things as food and war, familial support, good schools, and so on.

Brains is hardly the best contributor to entrepreneurial success. In fact a plot of IQ vs success I've seen plotted looked like random noise except below a certain threshold (obviously seriously cognitive impaired people will have much more trouble becoming entrepreneurs). But aside from that, whether you are 105 or 120 or 150 didn't seem to make much of a difference.

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

#102

Post by kstenerud »

It's easy to take risks when there's little to lose.

If the only fallout is wasting some family money and at worst delaying your entry-level career by a couple of years for some experience that many employers consider valuable anyway, there's little downside to throwing the dice.

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

#103

Post by KaiserPro »

ekianjo wrote: post #42
KaiserPro wrote: post #16

Earlier quoted context omitted.

The only data I can get is this: https://www.kauffman.org/what-we-do/research/2009/04/educati... 93% had a degree, with 30% having a masters, That would suggest to me that you'd need a decent wedge of cash. Now, what is interesting, is that in 2016 at least, the US created gross 960k new companies (there is some smoothing here, so +- 100k) The UK created 460k. Seeing as how the UK is 60 million, versus 300 million pe…

Suggesting one variable explains such differences is incredibly reductive. Plus, The US is not a single country, there is federalism and you should treat all states differently since setting up a business in NY is supposedly a lot harder than in other states.

Indeed, and lots of companies have shells in Delaware. Because its lower taxes & "better" company law.

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

#104

Post by coldtea »

huffmsa wrote: post #65
jonathankoren wrote: post #17

Earlier quoted context omitted.

Why is it surprising? There’s a combination of blindness, and inflated sense of self worth. America romanticizes the “self-made man”, and so any help is discounted. (Famously, a $1M family loan in 1975 (4.8M in 2019 dollars) was described as “small”.) Not coincidentally, these is a strong correlation with ascribing their success to a meritocracy, even though luck has been repeatedly shown more influential factor in s…

It's romanticized because the majority of Americans had someone in their family throw caution to the wind and get on a boat and cross the Atlantic with zero knowledge of what was going to happen.

Well, that was at a time when those places where at war, famine, turmoil, and the US economy was rising. Easy to "throw caution to the wind" when all you have is some small plot of land struck by drought.

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

#105

Post by shafyy »

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…

The problem is PG says that you don't have to be a rich kid, and then takes Airbnb as an example where the founders are definitely rich kids compared to the rest of the nation and world (not rich as in "daddy has a private jet", but definitely in the top couple of percent).

Of course PG is right that you don't need to be a rich kid, but he chose his anecdote poorly.

PS: Also Sam recently said (in the StrictlyVC interview) that most founders at YC are from upper middle class families, so there's your data.

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

#106

Post by michaelmcmillan »

coldtea wrote: post #101
michaelmcmillan wrote: post #93

Earlier quoted context omitted.

In which direction is causality flowing here, and how do you justify it? We didn't choose our brains––so how do we differentiate the privilege we got from our "class" from the traits we were born with? Does privilege imply that you got it from your "class"? This seems like a classic nature/nurture fallacy.

> In which direction is causality flowing here, and how do you justify it? We didn't choose our brains No, but our privileged parents did contribute to them, and their our upbringing, early months, lack of childhood stress over things as food and war, familial support, good schools, and so on. Brains is hardly the best contributor to entrepreneurial success. In fact a plot of IQ vs success I've seen plotted looked li…

Induction gets you nowhere though: where did our privileged parents get their brains from? You're proving my point here: we inherit roughly 50% of our traits through our parent's genes.

I never claimed IQ was the best measure (surprised it looked like random noise though), but certainly our cognitive traits matter. So to my question: How do you distinguish that privilege from the privilege you got from your "class"?

Edit: Sorry if I came across snarky here, I appreciate your answer!

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

#107

Post by [deleted] »

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?

[deleted]

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

#108

Post by cbanek »

Pretty disappointed in PG's response:

"I would ordinarily just let your bullshit go, but this myth that you have to be a rich kid to start a startup is terribly dangerous, because it discourages people who aren't from trying it. Brian Chesky's parents were social workers. That is not a rich kid."

As if having two parents with stable jobs isn't considered a safety net. I agree, you don't need to be rich, but I also agree if you are struggling to work enough to eat, you aren't really working on making a startup.

There are huge swaths of people with a much less stable safety net than the example he provided.

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

#109

Post by huffmsa »

lotsofpulp wrote: post #88
huffmsa wrote: post #76

Earlier quoted context omitted.

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.

There's less risk today. If your company fails, you're in debt, but you probably won't die in a ditch.

So why not jump feet first into what you want to do? To quote the eminent Shia LeBouf "It's you're life, don't let your dreams be dreams. Just do it"

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

#110

Post by huffmsa »

coldtea wrote: post #104
huffmsa wrote: post #65

Earlier quoted context omitted.

It's romanticized because the majority of Americans had someone in their family throw caution to the wind and get on a boat and cross the Atlantic with zero knowledge of what was going to happen.

Well, that was at a time when those places where at war, famine, turmoil, and the US economy was rising. Easy to "throw caution to the wind" when all you have is some small plot of land struck by drought.

Even easier when you know you can go back to whatever job you're currently doing if your entrepreneurial idea doesn't pan out.
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