I find the discussion here more interesting than the article.
I'd like to see the same study conducted in the US and - separately - in Europe as well.
Parents' income, not smarts, key to entrepreneurship
171–180 of 291 posts
Re: Parents' income, not smarts, key to entrepreneurship
#172UBI 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 birt…
I would add that simply having been raised rich doesn’t guarantee any sort of success, it just makes it easier if the aptitude is there.. which is why so many of the ultra ultra rich come from ultra rich families who came from rich families who... Capital accumulates over time as long as the inheritor has some aptitude.
I live in a condo in NYC that is owned almost equally by three groups - investors, trust funders, rich worker bees.
The trust funders are an interesting lot to observe. We have the child of a minor politician in an oil rich countries in one of our most expensive units. My neighbor has never to my knowledge had any sort of a job in his life, but owned 4 apartments before age 30, before selling all of them at a loss in the last year. We have people in their 20s with job titles like “makeup artist”, “political organizer/activist”, “personal assistant”, “journalist”, etc living in paid-off $1M apartments.
Even the “investor” units are interesting as more than half of them are owned by some combination of the developer, the developers children, the developers silent partner, the developers lawyer, etc..
Re: Parents' income, not smarts, key to entrepreneurship
#173I'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…
It definitely makes a huge difference to have savings if you want to be an entrepreneur. But these days, a decent programmer can save up a year or more of runway and build industry connections just by working for a few years and not spending outlandishly. If the startup doesn't work out, a new cushy job is waiting for you.
So yeah, startups are risky and favor the wealthy, but let's not overstate the case. I'm in favor of basic income and I agree it would be a boon to entrepreneurship, but people with the skills to build a tech startup have already won the lottery. We're not the ones in need.
Re: Parents' income, not smarts, key to entrepreneurship
#174All entrepreneurial people in my age (35), that I know, have (at least) better off parents.
Most of their success stems from the fact that they could live with their parents for an extended amount of time and found&crash a bunch of companies before they were 25.
Even the most average person knows how to run a company after they tried and failed often enough.
People joke around how Trump got "a small loan of one million dollars" from his dad.
But it doesn't even have to be that much money, just enough so you don't have to work for 2-3 years.
Re: Parents' income, not smarts, key to entrepreneurship
#175Earlier quoted context omitted.
> 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…
>Counter-intuitively, limitations drive innovations. When your resources are limited, you are forced to innovate. If this was true you'd see people from poor families being more entrepreneurial than those from rich.
Well, as another commented pointed out, there is a difference between innovating and starting companies. So I would argue that you do see more innovation from poor families than rich families. After all, rich families have no need to innovate, they just throw money at problems until they go away. Poor people are financially constrained and have to think outside the box to solve their problems. But you also see more companies started by rich people. Not necessarily innovative companies, mind you, just companies.
Re: Parents' income, not smarts, key to entrepreneurship
#176All my attempts at entrepreneurship have been via moonlighting, and have failed. There just aren't enough hours in the day. But I can't just quit my day job and take my income down to $0 to pursue a startup.
I find your comment amusing because, of course you can. And famously, the people that made it big did just that. But I get it, I'm like you. Also had a college loan to pay off, later kids.... So I stuck to the day-job, read about the high-flyers and work instead on trying to get-rich-slowly.
> And famously, the people that made it big did just that.
And not so famously the 90%+ of entrepeneurs who failed and lost everything.
Survivorship Bias is sooo rampant in SV.
Re: Parents' income, not smarts, key to entrepreneurship
#177I'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…
As a programmer, it's possible to do the same, just one decade later. Jack Ma argues in some talk that people should gain experience before starting a company. This mirrors the numbers that show that older founders have a much higher success rate. After having worked for a decade, there can be enough money to handle some years without income. Bill Gates was not successful because he started young, but because his mot…
No aspect of a massively successful person's path can be meaningfully analyzed and replicated other than in general principles that are already obvious (be ambitious, proactive, etc.)
Re: Parents' income, not smarts, key to entrepreneurship
#178I'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…
Why are we using Bill Gates as an example here? He is an extreme outlier that is far beyond the goal post of what most entrepreneurs would see success as. It doesn't require the seminal upbringing and kismet growth environment of Bill Gates just to get into entrepreneurship.
Re: Parents' income, not smarts, key to entrepreneurship
#179ha ha ha ha ha. Ok. As a grizzled founder, who is becoming numb to the entitlement that is easy startups, easy funding, easy results.
I know many founders - and they were broke, broke, broke (and went broke to bootstrap). This 'finding about your parents' can make those straight out of college who don't stick with it feel better.
Reality is... entrepreneurship is an incredibly hard game that takes years of grinding away after hours, or eating away at your own savings and your free time.
Founders I know (including myself): - One worked years on the side to grow it enough just to get seed. With newborn kids, then quit his CompSci job to live off his teachers wife salary for years. - One was on foodstamps for 6 years, and kids on medicaid to pull his shop through - One saved for years, and spent most of his money to get through the rough spots and is coming out the other side just now. - One failed 4 times - each attempt taking a few years, entered bankruptcy to try on a 5th attempt. - One lived at poverty means for years with a family while bootstrapping.
So.... lets stop the entrepreneurship is easy pr0n. It sucks so hard you'll hate your life. If blowing all your time and money getting there isn't worth the suffering you'll feel - don't try.
Re: Parents' income, not smarts, key to entrepreneurship
#180I'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…
> rich district school computers (in the '70s)
Gates went to Lakeside, often considered the top private school in Washington state.