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Parents' income, not smarts, key to entrepreneurship

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Re: Parents' income, not smarts, key to entrepreneurship

#61

Post by brundolf »

elliebike wrote: post #5

I suspect a large part of this is due to the fact that those with wealthy parents are more likely to have a) family money to fall back on if things go wrong and b) family investment in the early days Everyone else has to seriously consider the (high) risks of their startup failing and not being able to afford rent, or whether their idea is worth burning their life savings.

Your parents don't even have to be wealthy. Just having parents who are financially stable, own their house, could literally keep you off the streets and give you food if you fell on truly hard times, makes an enormous difference compared to not having that.

Re: Parents' income, not smarts, key to entrepreneurship

#62

Post by JKCalhoun »

osullivj wrote: post #48
rchaud wrote: post #38

I've heard a great deal about Bill Gates in my lifetime, but it wasn't until I read Paul Allen's 2011 autobiography that I learned that Bill's mother (a director at a bank) introduced him to IBM chairman John Opel in 1980. They both sat on the board for United Way[0]. It really struck me how these kinds of connections are less of a twist of fate, and more about environment and proximity. Even now it feels remarkable…

Not surprising to a British reader. Sutton Trust research [1] finds that positions of influence in the UK, and the professions generally, are dominated by the 7% who were privately educated. Conclusion: networks and connections are everything. [1] https://www.suttontrust.com/our-research/elitist-britain-201...

I'm not so sure.

I think to put a finer point on it, if you grow up in an environment where your family expects you to succeed and be wealthy, where your peers are expected to also succeed and be wealthy it gives you both the training, the knowledge, and drive to succeed. Never mind the means (dosh) to higher education.

In the U.S. my parent's were working class, broken home. Neither parents had ever invested, knew anything about 401Ks, Roth IRAs, neither owned their own home, knew about mortgages....

So I was beginning at square one and had to teach myself all these things, pay for my own college, etc.

Unless "networks and connections" allow you access to the Next Level (and I have observed this may in fact be true, allowing some to "fail upward") I think the bigger hurdle is not having the environment that gives you an investing and monetary success mindset.

I have taught my children as best I can. We'll see how this experiment plays out with the next generation....

Re: Parents' income, not smarts, key to entrepreneurship

#63

Post by Abishek_Muthian »

'If You're So Smart, Why Aren't You Rich?'

Every now and then an article about research on that topic pops up which attributes success from 'Chance'[1] to 'Personality'[2] and everything in between[3].

[1]https://www.technologyreview.com/2018/03/01/144958/if-youre-...

[2]https://www.bloomberg.com/opinion/articles/2016-12-22/if-you...

[3]https://www.forbes.com/sites/rogerkay/2015/02/02/if-youre-so...

Re: Parents' income, not smarts, key to entrepreneurship

#64

Post by akhilcacharya »

jeffreyrogers wrote: post #42
AlchemistCamp wrote: post #16

Earlier quoted context omitted.

Fields like finance and medicine require both a good amount of intelligence and an exceptional work ethic. Perhaps if the source of the parents' money were lottery winnings, the correlation with entrepreneurial success would vanish.

Yes, except I'm mostly talking about Harvard grads, so everyone is smart with a good work ethic.

"Everyone"? Isn't that the community college that Jared Kushner went to?

Re: Parents' income, not smarts, key to entrepreneurship

#66

Post by epistasis »

iguy wrote: post #58
epistasis wrote: post #21

Earlier quoted context omitted.

Rents only get pumped up if we don't have enough housing to go around... in which case regular incomes do the same thing.

But we do have lots of housing, it's just located in places people don't want to live. Rents are high in places they do want to be, and that's partly a positional thing -- if you want to live where the top-10% of earners live, you need to bid against them for housing.

From this angle, a UBI is even more powerful, in that it will go a lot further in areas that are less economically productive, and let us use "surplus" housing there.

Ideally we'd just let more people live closer together like they want to, but the elites won't let more people get close to them.

Re: Parents' income, not smarts, key to entrepreneurship

#67

Post by yunesj »

tolbish wrote: post #9

Wired covered the "myth of meritocracy" as it pertains to entrepreneurship and Silicon Valley 8 years ago: https://www.wired.com/2013/11/silicon-valley-isnt-a-meritocr...

> But if the tech scene is really a meritocracy, why are so many of its key players, from Mark Zuckerberg to Steve Jobs, white men?

I disagree with the author that Jobs and Zuckerberg are evidence that meritocracy is a myth. According to Wiki:

> ... Zuckerberg excelled in classes. After two years, he transferred to the private school Phillips Exeter Academy, where he won prizes in mathematics, astronomy, physics, and classical studies.

> By the time he was ten, Jobs was deeply involved in electronics and befriended many of the engineers who lived in the neighborhood. He had difficulty making friends with children his own age, however...

Later in life, they had great ideas, took huge risks (both dropping out of school), and worked hard.

Re: Parents' income, not smarts, key to entrepreneurship

#68

Post by danilocesar »

methyl wrote: post #43
JoeAltmaier wrote: post #4

I've known this for decades. When Bill Gates started publishing Smart Basic (or whatever) in magazines, I got a copy and saw what crap it was. I could do better. Why didn't I? That was my very first thought. The reason was, I had to work halftime to pay tuition and buy food. I was mired in working to live. Ol Bill had a family to support him as he bought resources (ads in magazines etc), recruited staff, took meeting…

> pay tuition Going to college is not required to become a successful entrepreneur.

While you have a few examples of drop outs (Zuck, gates, etc) the vast majority of those famous entrepreneur went to college.

Not a requirement, but increases your chances a lot.

Re: Parents' income, not smarts, key to entrepreneurship

#69

Post by cmrdporcupine »

elliebike wrote: post #5

I suspect a large part of this is due to the fact that those with wealthy parents are more likely to have a) family money to fall back on if things go wrong and b) family investment in the early days Everyone else has to seriously consider the (high) risks of their startup failing and not being able to afford rent, or whether their idea is worth burning their life savings.

It's also highly cultural; if the people around you that you see as role models are serious about business, connections, management, etc. that's what you pursue. And higher management comes more naturally to people who have spent their childhood in an ethical framework that divides people into manageable units, too.

My working class / middle class parents just didn't have room in their worldview for having employees, nor would they feel comfortable delegating their household aspects to maids and the like. When we had kids my wife and I couldn't imagine having a nanny (despite being able to afford it) while many of those around us didn't blink at it.

I remember working at a startup in the 00s and having to peel out of the office every day at 5:30 to get my daughter from daycare and my (silver spoon raised) boss saying something like "we need to pitch into get you a nanny" and it struck me then how that kind of thing was really tied to "entrepreneurship." I didn't _want_ a nanny, I liked my daughter's daycare, and I very much enjoyed picking her up and getting my hug at the end of her day of play and learning with a group of kids.

Connections, money, yes, but also a managerial/directive ethic, no qualms about telling other people what to do and paying as little as possible for it.

Re: Parents' income, not smarts, key to entrepreneurship

#70

Post by DC1350 »

adenozine wrote: post #28
elliekelly wrote: post #22

Earlier quoted context omitted.

This was mentioned in Outliers , I think. I wonder what the equivalent one-in-a-billion “head start” technology is for kids today.

Call me crazy, but I think if there's any HS classes or earlier, teaching algorithmic thinking, those kids are have a crazy head start if they choose CS. I don't mean these classes where they get out and write class Dog(Animal): def bark(self): print("a Dog is barking!") but if there's young people being taught the difference between quadratic/exponential/polynomial algorithms, that's going to stew in their brains an…

There’s already a trend in certain high schools where kids start doing competitive programming, hackathons, blog writing, etc. way before university starts. By the time they’re college freshmen they’re ahead of the average new grad already when it comes to interview skills. These kids end up interning for FAANG or unicorns in freshman or sophomore year. There’s thousands of them.
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