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Parents' income, not smarts, key to entrepreneurship

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

#211

Post by Axsuul »

Arainach wrote: post #184
Axsuul wrote: post #178

Earlier quoted context omitted.

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.

....but it helps a huge amount. That's the point of this article. It's much easier to risk doing a startup when you know that no matter what, you won't have to go hungry or homeless because there's family who will help you. You're a lot less worried about pouring dollars into your 401k at age 22 if you know that you stand to eventually inherit a few million from your parents, so whatever.

I'm not denying it helps and isn't significant. But why do you need to inherit a few million just to feel secure enough to pursue entrepreneurship? Being an entrepreneur doesn't mean you have to go big or go home. There is just as much entrepreneurship with immigrants as there is with the US-born, with the former less likely to have a comfortable safety net.

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

#212

Post by sudosysgen »

ch4s3 wrote: post #193
sudosysgen wrote: post #41

Earlier quoted context omitted.

I live in a rent-restricted area. There is quite a bit of construction, and the average person moves almost once every two years. The effects of rent-restriction you quote are theoretical effects. In the real world, it does work, as long as the rent-restrictions are well-thought-out.

> and the average person moves almost once every two years Are you sure? There's lot of research n rent control and it basically all highlights decreased housing mobility, event he pro rent control authors mention it asa downside.

In my province, the rent office arranges for two measures to counterbalance and increase mobility. Firstly, most rental agreements are made to end on July 1st - legally up to 1974 but now mostly out of tradition. This allows for much less friction, as everyone can change housing without any downtime with access to the full market.

Secondly, landlords are allowed to evict if they do sufficient improvements to the property, which allows a safety valve.

There are so many people that move in the month of July, that over 7% of the entire population - including people who don't rent - moves out on that day. It's pretty much impossible to get a rental truck to move for the entire month of July.

The statistics are that, around July 1st alone, 250 000 out of 900 000 people move. Add in people that don't move in this period, and you get almost half of renters in the entire city moving, despite strict rent control.

You just need to do your rent control carefully. There will be some reduction in mobility, but if you counterbalance them, you can have minimal impacts in mobility and large impact in affordability.

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

#213

Post by Sevii »

chaganated wrote: post #167
jcadam wrote: post #8

All 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.

There was a guy who owned a recording studio. His observation was that artists who had menial jobs eventually made it. The ones with professional jobs all struck out. Brain energies may be in shorter supply than hours.

I definitely have more energy for personal projects when I’m not coding at work all day.

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

#214

Post by raizinho »

ed25519FUUU wrote: post #65

The causation v correlation here just raises more questions, wouldn’t “smart” people inclined towards entrepreneurship become smart parent and reinforce the tradition?

It's even hinted at in the article: "A significant connection between the parents’ level of education and entrepreneurship was also noted." The clickbait title confirming people's priors isn't surprising though.

If I had to guess at the causal graph it would something like:

smart -> income smart -> entrepreneurship entrepreneurship -> income income -> entrepreneurship

And even without the last two connections the smart confounding variable would induce a relationship between income and entrepreneurship.

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

#215

Post by walshemj »

adsche wrote: post #110
umvi wrote: post #77

Earlier 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…

Regarding the entrepreneurship rates, are gig economy workers considered entrepreneurs? Also, where did you find these numbers indicating such a big difference?

Exploited working class people who have no other choices I think you mean

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

#216

Post by tsimionescu »

iguy wrote: post #144
PeterisP wrote: post #93

Earlier quoted context omitted.

Thing is, requirement for on-site employment requires you to live where lots of people live; only the very wealthy can afford to live in places without jobs nearby - as UBI decouples income from where you live, then it would be a pressure to equalize rents, as underemployed people - the demand for whose labor is decreasing and will decrease further - can afford live in the many places which are currently shedding pop…

Maybe. But the counter is that entrepreneurship has strong network effects, it really pays to be around other talented people and hear about the future they're busy inventing. Maybe we'd see the opposite, people leaving a stable job which ties them to some unexciting place, to try to make it in NYC.

> But the counter is that entrepreneurship has strong network effects, it really pays to be around other talented people and hear about the future they're busy inventing.

The actual powerful network effects are essentially a somewhat benign form of cronyism, not mere inspiration from other entrepreneurs. People do more business with less haggling with friends than with strangers.

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

#217

Post by umvi »

tsimionescu wrote: post #210
umvi wrote: post #175

Earlier quoted context omitted.

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 c…

> 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. This is not something to argue about, this is something that that we should measure.

And how do you measure innovation in poor families? Does jerry-rigging your car to work using duct tape and aluminum cans count?

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

#218

Post by mrcartmenez »

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…

Sweden, for example, has much better safety nets and better income equality than the US, and is rated as being much easier than the US to start a business.

Essentially, Swedes have far greater economic freedom due to greater economic equality. Despite not having UBI.

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

#219

Post by bumby »

aksss wrote: post #194
bumby wrote: post #129

Earlier quoted context omitted.

I really appreciate Jack Goldstone’s perspective on this. Instead of perpetual UBI, he’s in favor of a larger single lump sum paid out after a period of time post-civil service. The idea being instead of the slow morphine drip of $1k a month for life, you can get, say, $25k-$50k in a lump sum after serving a year or two in the Peace Corps, AmeriCorps etc. The advantage being service builds a stronger sense of communi…

I’m not sure that’s a good plan with such a huge dependency on financial wisdom. Look at Alaska - they have the PFD every year (well, mostly) and people just use it to buy TV’s, quads, and all the rest. You could say it frees up other income to pay bills, but I think generally people indulge themselves with lump sums of cash unless they are really struggling and have some good sense. In Alaska there are people who wo…

I think the rationale is that between UBI and his plan, his has more upside. I don’t think AK is a good analogy because, as you state, it’s a nearly annual re-supply of cash

1) not everybody will use it because they won’t want to do the civil service part

2) those who do won’t have perpetual payments. Once you use it (unlike Alaska) it’s gone. If you squander it, at least there is an upper limit to your benefit as opposed to a plan that acts as an open-ended annuity. I actually think this may help foster better decisions because for many, this is their one chance at such a windfall. Of course there will be some who squander it regardless

3) As opposed to UBI, the rest of society will get some benefit in the form of service.

To elaborate on the financial wisdom aspect, he advocated for putting the money in a trust fund payable at around 25 years old. Similar to the GI Bill, you could also have strings attached as to what it could be used for (the GI Bill, for example, can be used to open a business, go to university, go to a vocational school, but not just a check for “free” money)

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

#220

Post by ch4s3 »

sudosysgen wrote: post #212
ch4s3 wrote: post #193

Earlier quoted context omitted.

> and the average person moves almost once every two years Are you sure? There's lot of research n rent control and it basically all highlights decreased housing mobility, event he pro rent control authors mention it asa downside.

In my province, the rent office arranges for two measures to counterbalance and increase mobility. Firstly, most rental agreements are made to end on July 1st - legally up to 1974 but now mostly out of tradition. This allows for much less friction, as everyone can change housing without any downtime with access to the full market. Secondly, landlords are allowed to evict if they do sufficient improvements to the prop…

Ahh, are you in Quebec?

> landlords are allowed to evict if they do sufficient improvements to the property

This is a REALLY unusual provision in rent stabilization laws in the US and as far as I know the EU which normally don't allow evictions like this and severely cap rent increases for improvements.

If you are in Quebec, the RDL is really unique as a form of rent control in that it doesn't set prices or cap increases but rather acts as an arbiter for rent increase disputes. I understand that there are some local criticisms of the system, but I'm not very well versed on the subject.

I think most HN comments about rent control are referring the type that exists in SF where prices are more or less locked in place or otherwise set by the government.

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