Parents' income, not smarts, key to entrepreneurship • Hacker News Board

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

#151

Post by Valgrim » Thu, Jan 28, 2021, 6:28 PM UTC

BluePen8 wrote: post #137

abhiyerra wrote: post #20

Earlier quoted context omitted.

Healthcare and Basic Income would do a lot to encourage entrepreneurship. I had to also wait till I paid off my student loans. There are a whole lot of shackles if you come from a humble background to starting a company full time. On the other hand it has never been cheaper to start a side hustle.

With the caveat that as long as it doesn't require physical space. With the cost of space in any major city, anything that requires a workshop, working space, or significant storage space is out of the window nowadays for anyone in a major city. When I was a teenager my side hustle was buying, fixing, and selling used cars. My dad's was the same with small fishing boats. The story of these billion dollar companies be…

Exactly, starting out in a garage sounds like starting out from nothing, but in reality it means that your parents have a house with a garage that they lend out to you for free, where you can do whatever you want (so forget condos undergound garages), and that house is probably not very far from a large city so you have access to clients, employees and resources.

You don't need your parents to be millionaires to get that, but in today's terms this is definitely upper middle class.

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

#152

Post by fwip » Thu, Jan 28, 2021, 6:28 PM UTC

anonuser123456 wrote: post #136

Income is also correlated with deferred gratification and risk appetite. Did these studies normalize for those confounding variables, because both are heritable.

Ironically, the type of studies you're citing make the same mistake in not controlling for the effects of income.

One reason that poor children are likely to "fail" the marshmallow test is because growing up in poverty means that promises made to you are less likely to work out - so, having learned from experience, they make the rational choice.

https://bigthink.com/mind-brain/new-marshmallow-experiment

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

#153

Post by m463 » Thu, Jan 28, 2021, 6:29 PM UTC

makes sense.

If you're concerned about paying for living expenses, you will find it an uphill climb to risk entrepreneurial things.

If your living expenses are taken care of, you can think more strategically, look to higher goals, and look for meaning in them.

I can definitely say my life changed the first time I got ahead of my bills instead of reacting to them. I would imagine a similar sort of change with a sense of set for life (although it could also work against you)

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

#154

Post by steveBK123 » Thu, Jan 28, 2021, 6:30 PM UTC

UBI takes care of the financial risk component, less so the parental knowledge of the rules of the game, connections or free capital to invest.

I think this is all obvious if you dig just below the surface of most ultra successful people in NY/CA Finance & Tech space. These people are largely smart, well educated, but also raised in a particular way with connections that you only have from being in the top 5% at birth. There is the financial backing that allows these people to take large risks because they aren’t worried about a paycheck, the capital to invest in their ventures, and the connections to clients/partners/other investors.

The founder of the last firm I worked told a story about his father giving him the option of a big party when he came of age in middle school or to have the cash value of the party to invest. He chose to invest, and that is how he launched his investment career, he told us proudly.

Cool story, until you inflation adjust the dollar figure was something like $100k at the age of 14. So he started his young adult life +$100K whereas my wife&I started our adult lives (post college) -$100K in debt.

Another place I worked the founder started in his 20s with $1M equivalent in capital... etc etc

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

#155

Post by omgwtfbyobbq » Thu, Jan 28, 2021, 6:30 PM UTC

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…

This, times a large number.

It doesn't have to primarily be UBI either. Given where we are technologically, it could be PV/wind/demand management/batteries on every roof, a semi-automated garden in every yard, etc... With a little bit of UBI for whatever people aren't able to do at home (eg TP).

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

#156

Post by JKCalhoun » Thu, Jan 28, 2021, 6:31 PM UTC

SilasX wrote: post #106

JKCalhoun wrote: post #73

Earlier quoted context omitted.

I imagine UBI would be good for landlords.

Henry George held that belief on steroids and thought that, unless you taxed away the site value of land, then almost all of the benefits of any good policy or improved economic activity would accrue to landowners.

And never mind that Big Money is following the business plan that the future of America is all of us are renters.

Well, you know, everyone but the uber-wealthy.

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

#157

Post by AZRS » Thu, Jan 28, 2021, 6:33 PM UTC

Aunche wrote: post #135

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…

In that case, you would except a lot more entrepreneurs from Saudi Arabia. Instead, you have a bunch of freeloaders who outsource their work to foreigners. They started a UBI program a few years ago. Before that, they had a jobs program that essentially functioned as UBI, since it was nearly impossible to fire a Saudi citizen.

Not really, it can be multi factor, with a set of minimum values in several metrics being required before parental wealth becomes the dominant factor.

To be glib, some people leave millions to their cats but I don't see any entrepreneur kittens.....

That is, the baseline genetic, cultural, and environmental potential for entrepreneurship probably needs to be in place before familial wealth becomes so important.

Given that Saudi Arabia has entirely different ethnic groups, with an extremely different culture, and a very different climate and business environment, I am not surprised at all that the principle factor in north American derived populations entrepreneurship isn't that in the Saudi Arabian population.

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

#158

Post by snarf21 » Thu, Jan 28, 2021, 6:33 PM UTC

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…

This is all very true but UBI isn't the solution.

The middle class can win this game with a perspective change. Instead of saddling their kids with school loans and pressuring them to "get a job" right out of school, they should give them 5 years where they "angel" them in their own houses for a stake in the company. Get four young sharp kids a couple of years with no bills to pay and I bet they could create something viable.

This is the difference. Entrepreneurs need funding and encouragement. Parents could play this role instead of VCs and they could bank big when funding comes. You don't need $MM to fund a start-up if you approach it will bootstrap principles.

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

#159

Post by dbingham » Thu, Jan 28, 2021, 6:33 PM UTC

umvi wrote: post #77

abhiyerra wrote: post #20

Earlier quoted context omitted.

Healthcare and Basic Income would do a lot to encourage entrepreneurship. I had to also wait till I paid off my student loans. There are a whole lot of shackles if you come from a humble background to starting a company full time. On the other hand it has never been cheaper to start a side hustle.

> Healthcare and Basic Income would do a lot to encourage entrepreneurship Would it though? From what I understand EU has way better social safety nets, yet much smaller entrepreneurship rates compared to USA. Counter-intuitively, limitations drive innovations. When your resources are limited, you are forced to innovate. When you have infinite resources, you tend to waste it. Ever notice that when you have infinite t…

1. Europe has healthcare but not basic income.

2. Innovation and entrepreneurship are not the same thing. Innovation is coming up with something new, entrepreneurship is starting a new business to make money. The former does not always lead to the latter, and the latter does not always require the former (in fact, it rarely does).

3. What the research in this study shows is that limitations of the financial and survival sort do not drive entrepreneurship.

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

#160

Post by chaganated » Thu, Jan 28, 2021, 6:34 PM UTC

fwip wrote: post #149

chaganated wrote: post #145

Correlates? Sure. Causes? I strongly doubt it. Drop a million bucks on Joe Blow and see how things turn out. I see the milieu of having semi-affluent parents--being steeped in the ins-and-outs of business, law, assets, broader social ties, and higher social standing--as a far more powerful edge than a wad of cash.

Drop a small loan of a million dollars on an idiot, and he ends up being President for 4 years.

1) This is ideological bullshit rather than a good faith argument. 2) Adjusted for inflation, I'm sure this description fits more than one president, so you'll need to be more specific. 3) Whichever example it may be, I'm sure that president also had a wealth of credentials, connections, shibboleths, etc. of greater value than a mere one-million fiats.