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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”

#331

Post by SeanAppleby »

bumby wrote: post #329
SeanAppleby wrote: post #299

Earlier quoted context omitted.

They're interested in making money, not providing a social service. There's certainly a problem there, but it's not the VCs' responsibility. You are more likely to succeed in your business if you have the experience of building scalable systems, like at google, and if you have a similar friend group to recruit talent from, which is extremely hard at an early startup unless you already know the kinds of people you dis…

> it's not the VCs' responsibility You make some valid points, but I really dislike the above comment. When used it seems like a convenient way to diffuse responsibility, often to selfish ends. There's lots of examples where this type of single-minded attitude isn't acceptable. - A civil engineer cannot just have making money be the sole pursuit when designing or building a bridge - A doctor cannot just have making m…

Most VCs I've met do have some kind of value system other than making money that permeates their investment decisions, it's just usually one that is easier to align or at least doesn't run contrary to their business interests, like making large systems more efficient or spreading access to goods and services traditionally restricted to the rich by driving down costs.

Socioeconomic mobility is really much easier to pull on with policy and the education system.

Some people do work on trying to democratize entrepreneurship though, like YC with startup school, or Stripe with Atlas.

They do it by spreading information and reducing barriers, not by giving money to higher risk people though, since that's easier to align with their place in the system.

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

#332

Post by bubblewrap »

KaiserPro wrote: post #132
bubblewrap wrote: post #57

Most people, even poor people, have parents who would help them out in case of need. They seem to be discussing a pretty low bar here. And of course it is a "privilege" to have supporting parents. So what? If you don't have that privilege, what are you supposed to do? Kill yourself? I think such privilege discussions are rather silly. What's the point? That people should be showered with tax payer money to even out t…

I'd suggest you think more deeply. All parent, regardless of class/richness want to be supportive. the question is what support can they offer? Sure, a sofa, most people have that. But thats not a long term solution. What if your parents don't have any savings, how will they help you with that debt? They can't Its not an issue of will, its an issue of possibility. Now, I intensely dislike the use of "privilege", as i…

I was thinking of the basic "moving back in with the parents fallback".

Of course different people have different advantages and disadvantages.

Paul Graham's children will probably have an enormous head start in becoming entrepreneurs. They'll have "startup privilege" en masse. But so what? Should we begrudge them having it? Should we compensate children of other parents for the non-privilege of not being Paul Graham's children? And if so, how? What amount of money would be appropriate? Or should we punish his children to take away their unfair advantage?

I just think the whole "privilege" mindset is unhelpful and unproductive.

Try to make the most of what you have. Can only PG's children become successful founders? I think not. Maybe your children will only become millionaires if the become founders, and PG'S children will become billionaires. Cry me a river.

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

#333

Post by ricardobeat »

dantheman wrote: post #144
ricardobeat wrote: post #130

Earlier quoted context omitted.

The “rich kids” qualifier came from his own tweet. I think it shows a big disconnect with how average the average potential-startup-entrepreneur is, and how privileged most successful ones are.

What percentage of potential start up founders don't have a 'safety net'?

I don’t live in the US, but some numbers from a quick search for ages ~18-35:

- average pay 35k - 78% of people live paycheck-to-paycheck (zero savings)

In other countries the situation can be a lot worse. Even excluding the 12% below the poverty line, the vast majority can not afford to leave their jobs even for a couple months without going homeless. Being able to experiment with business that has a 90% chance of failure, even for a short while, is out of reach for most people unless sacrifices much larger than “moving back in with parents” are made.

It should be possible to motivate people to be entrepreneurs without being insensitive to reality. “Rich kids” might be a stretch, but hyperbole is an effective form of communication.

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

#334

Post by Consultant32452 »

zepto wrote: post #323
Consultant32452 wrote: post #279

Earlier quoted context omitted.

Yep, some things are a little bit harder than they might have been in the very recent past for some people, but overall life is better than it has ever been in the history of the world. Telling kids to stay in their lane because it's hard to do otherwise it's terrible leadership in my opinion.

Nobody is telling kids to stay in their lane, so that’s a straw man. However some people are proving that they don’t understand the risks other people face, and recommending that they take them anyway. Advising someone to take a risk that you don’t understand is not leadership.

Is high achievement possible for poor people or not? That's the only thing in question here. Arguing that it's harder for people who start off disadvantaged in some way is a tautology, and in context does nothing but discourage people. People don't need you to tell them about their risks, they live them every day. What they need is for people to shine a light on their opportunities. Because that's the part that's harder to see if they aren't in an environment where other people are succeeding.

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

#335

Post by gubbrora »

csomar wrote: post #315

> “It’s hard to take risks if you don’t have a safety net” Okay, here is a twist: How much do poor people spend on lottery/gambling activity? How much is that proportionally to their income? From looking at small casinos, betting shops, lottery and online sites (sports) it seems that poor people are risk takers. One reason, in my opinion, is that they have little to lose. They also have really shitty lives and are lo…

Here is a crazy thought I had. If you're poor and save a bit money you get less aid. So saving is meaningless. You are stuck in a feedback loop. But if you buy lottery tickets as a way of "savings", you either lose and get full aid, or you win big to achieve poverty escape velocity.

I'm not saying this is true for all poor people, but I wonder if it could be true for some.

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

#336

Post by kragen »

bluGill wrote: post #166
njepa wrote: post #80

Earlier quoted context omitted.

It isn't like 3 or 4 percent though. Starting a startup ranges from a largely risk free career move to impossible. Most people today start at negative. Want to live in a decent sized city? That's at least $2k a month. An education? Might very well be $50k in debt. Job security? Need to put in the hours young. Otherwise there is a very real chances of getting evicted, not being able to find a decent job, not being abl…

Cost to live in a decent sized city are much less than that in most cities. Sure Silicon Valley is going to be more. Also every city has rich areas that are more. However in most cities there are poor neighborhoods where rent is under $1000, and you can share that with a few roommates. If you tastes are to a stove that you don't need to light with a match, sidewalks that are even, and other nice things: that will cos…

> in most cities there are poor neighborhoods where rent is under $1000

Average income is about US$11000 a year: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28no...

And most people make less money than that, because the distribution isn't symmetric.

The fact that "rent under $1000" seems low to you indicates that you live in a bubble.

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

#337

Post by noelsusman »

csomar wrote: post #313
snowwrestler wrote: post #159

PG seems worried that tweets saying you have to be rich to do a startup will discourage non-rich folks from trying a startup. This doesn’t give those folks much credit. It implies that a few tweets will have a bigger impact on their decision-making than their own detailed understanding of the constraints and anxieties of their own lives. I don’t think PG is in a good position to understand those constraints and anxie…

I'm not an expert on the subject but according to "science", the reason that woman do not go to engineering fields in the US is a byproduct of their environment not a difference in their genetics. If I got it right, Robert Sapolsky claims that the way to make more woman into tech is to make young girls believe that they can do tech. They already have the cognitive capacity. In this same sense, PG might be hitting the…

They won't try because the consequences for them could be disastrous. It's not even about how much money is in your bank account, though that obviously helps. It's more about how stable and reliable your support structure is. Without that the consequences of failure can be devastating.

I think it's dangerous to encourage people to gamble their lives on a low probability outcome if they don't have a strong network of friends and family to fall back on. If you have that, then go for it, but don't pretend that anybody can pull themselves up by their bootstraps and do what you did (I'm using the royal you here). That attitude is what the criticism is aimed at.

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

#338

Post by c0vfefe »

humanrebar wrote: post #81
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.

Rather, the difference between "a founder can be anyone" and "anyone can be a founder."

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

#339

Post by kragen »

bsenftner wrote: post #263
vorpalhex wrote: post #185

Earlier quoted context omitted.

> An education? Might very well be $50k in debt. You can get a perfectly decent degree from your community college for very affordable prices. Likewise you may not be able to live in downtown manhattan, but you can probably live anywhere in a whole bunch of the square states on $1k a month.

A practical problem with community colleges are the plain fact that high ambition people tend not to be there. People with ambition tend not to be there, or are operating from a disadvantage and community college is the best they can get, at that time in their lives. This defines the initial network of a community college attendee, as well as their operating environment. There is quite a bit of invisible help that ar…

It also defines how you get treated.

If you need to use the bathroom, you're very often better off walking into a lawyer's office than walking into a restaurant, because the restaurant workers have the expectation that a certain percentage of customers are going to shit on the floor, and the lawyer's secretary doesn't, so you don't have to work as hard to combat that expectation.

The same thing happens with community colleges, which have all kind of policies designed to protect the college from the students. Everything down to when you can be there and whether you can talk with a friend in the library is subject to much more negative expectations than in a real university. You can get a lot out of community college in terms of learning, but it's generally more of a struggle.

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

#340

Post by tracker1 »

ergothus wrote: post #267
vorpalhex wrote: post #185

Earlier quoted context omitted.

> An education? Might very well be $50k in debt. You can get a perfectly decent degree from your community college for very affordable prices. Likewise you may not be able to live in downtown manhattan, but you can probably live anywhere in a whole bunch of the square states on $1k a month.

Community college is a great deal. But $12-15k for a bachelor's degree, not to mention any hit to income because your work availability is limited when attending school and doing assignments, is not something every person can wave off as no big deal. That assumes the community college offers a four year degree and is within reasonable travel distance (oh, you do have a car, right? Because that college might not be on…

Here's a question.. why the fuck is college even a requirement here? I'm not saying it doesn't have value. But, if you are creating a startup and are that young, does college even matter at that point?

The fact is, that for many things, a lot of people are perfectly capable of spending a few hours a day on a project above and beyond actually working a full time job. Yeah, people have advantages and others don't. There are risks and rewards. Are you willing to pay them? (you, being the hypothetical startup creator).

In the end, this is how economics works. This is how you make things happen. Nothing is without risk, and anything that is probably isn't worth much to someone that doesn't already have huge means to live without doing it. Creating something is WORK and means not doing something else.

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