Jon Stewart: Lower entrepreneurial risk • Hacker News Board

Re: Jon Stewart: Lower entrepreneurial risk

#31

Post by arohner » Fri, Oct 19, 2012, 1:24 AM UTC

The US already has the most lenient bankruptcy law in the world. It already has the highest "social tolerance" for entrepreneurial failure.

I'm in great health, and young, so I'm not worried about saving for retirement (yet). But starting a company is still really damned hard. It's years of hard work, too much time at the office, too much time away from friends and family. Too much fear that tomorrow no customers will show up, or they'll go to your competitors or you'll find our your DB backups don't work and you have to go out of business. It's fear that you're not managing employees correctly, or not hiring the right people, or not prioritizing the right things.

The government can't make any of those things go away. And the only issue it could help is money, which has terrible downsides to go along with it.

Re: Jon Stewart: Lower entrepreneurial risk

#32

Post by dmfdmf » Fri, Oct 19, 2012, 1:26 AM UTC

digisth wrote: post #17

This is the essence of the Peltzman Effect ( http://www.angrybearblog.com/2012/01/peltzman-effect-why-eco... and http://en.wikipedia.org/wiki/Risk_compensation ) "Risk compensation (also Peltzman effect, risk homeostasis) is an observed effect in ethology whereby people tend to adjust their behavior in response to perceived level of risk, behaving less cautiously where they feel more protected and more cautiously whe…

The industry joke at the time this research came out was that if the regulators were serious about auto safety they should mandate a sharp dagger sticking out from the steering wheel aim directly at the driver's chest. People would drive very carefully!

Re: Jon Stewart: Lower entrepreneurial risk

#33

Post by pinchyfingers » Fri, Oct 19, 2012, 1:27 AM UTC

Consider the organizational qualities that create successful startups: agility, speed and clear vision. Entrepreneurs live and die by efficiency and effectiveness. This is the exact opposite of what government programs give us. Believing that any government initiative will enable entrepreneurship is naive. Founders relying on a government cushion to lower risk will be inviting unnecessary encumbrance.

Government programs across the board, from corporate tax credits to welfare programs are universally gamed. Creating a government net to catch failing entrepreneurs will only increase the cost of doing business, while slowing down the pace of entrepreneurship.

Is the goal here to promote new businesses, or is that just an excuse to push for socialized health care? If the goal is provide health care, then the best option is to lower the barrier of entry for new businesses in the health field, whether insurance providers, healthcare practitioners or pharmaceutical companies. This is another topic, but there are many safe and legitimate ways to do this by cutting out corruption and waste.

Re: Jon Stewart: Lower entrepreneurial risk

#34

Post by Alex3917 » Fri, Oct 19, 2012, 1:29 AM UTC

jcromartie wrote: post #9

Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is. But, as far as I can tell, health insurance really is the biggest factor keeping people from starting new companies. For myself and my peers, with new families and houses and student debt, etc., it's the one thing that scares us more than anything else. The prospect of a business going under is…

"Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is."

I don't think that has any relevance to the question at hand. If we eliminated wasteful medical spending then we could literally insure every uninsured person at least 10x over. (Medical waste is ~700B per year, whereas it would cost about 50B to insure everyone.)

Re: Jon Stewart: Lower entrepreneurial risk

#35

Post by _delirium » Fri, Oct 19, 2012, 1:37 AM UTC

hotpockets wrote: post #25

thaumaturgy wrote: post #5

OK, so, I am ardently socially liberal, and I've had a man-crush on Jon Stewart that hasn't waned ever since his appearance on Crossfire. But. I don't think that decreasing risk will result in more entrepreneurship. I would support a wider social safety net for entrepreneurs -- er, business owners -- on principle alone, because I think what we should be saying is that these people are vitally important to our economy…

Facing a potential health crisis without insurance has got to be one of the biggest disincentives to starting a business. Even if that disincentive is irrelevant to most entrepreneurs, you still have potential entrepreneurs with health issues. If X% of potential entrepreneurs have managed but costly health problems, the disincentive to starting a business must be much higher.

I know a few such people myself, and I don't even really know that many people. One category is people with issues from birth: one friend of mine has a congenital heart defect, which is well managed, but completely disqualifies him from buying health insurance on the open market as an individual. So he is basically forced, against his will, to work for a large corporation, so he can qualify for their group health plan. Note that this is due to something that happened before he was even born. To me, that's not how things should work in a country with real individual freedom and equality of opportunity.

Re: Jon Stewart: Lower entrepreneurial risk

#36

Post by JonLim » Fri, Oct 19, 2012, 1:39 AM UTC

abbasmehdi wrote: post #23

jcromartie wrote: post #9

Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is. But, as far as I can tell, health insurance really is the biggest factor keeping people from starting new companies. For myself and my peers, with new families and houses and student debt, etc., it's the one thing that scares us more than anything else. The prospect of a business going under is…

Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is. This could also be a culture thing. When I was in Canada until 5.5 years ago the golden ticket was to work for a big co. I was an ECE major and the top employer of choice was, even for me, BC Hydro (power company). I have no idea anymore why I'd have thought like that, but maybe now I am brainwa…

In my opinion, this state of mind still exists in Canada. Entrepreneurship is being celebrated, but the default for many, many students is to get a job with a large corporation and get your stripes.

Re: Jon Stewart: Lower entrepreneurial risk

#37

Post by MichaelApproved » Fri, Oct 19, 2012, 1:40 AM UTC

Alex3917 wrote: post #34

jcromartie wrote: post #9

Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is. But, as far as I can tell, health insurance really is the biggest factor keeping people from starting new companies. For myself and my peers, with new families and houses and student debt, etc., it's the one thing that scares us more than anything else. The prospect of a business going under is…

"Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is." I don't think that has any relevance to the question at hand. If we eliminated wasteful medical spending then we could literally insure every uninsured person at least 10x over. (Medical waste is ~700B per year, whereas it would cost about 50B to insure everyone.)

Can you please cite sources for those numbers?

Re: Jon Stewart: Lower entrepreneurial risk

#38

Post by EvanAnderson » Fri, Oct 19, 2012, 1:40 AM UTC

cmcbride wrote: post #16

or we could remove the tax break for employers that provide health insurance. If health insurance was tied to the individual it would stay with them in between jobs. You could also find plans with lower premiums and higher deductibles/less coverage if there was a market for insurance.

A thousand times this. We've distanced the individual from the costs associated with all things medical and, in so doing, have removed a lot of the power of having a free market.

Re: Jon Stewart: Lower entrepreneurial risk

#39

Post by jandrewrogers » Fri, Oct 19, 2012, 1:41 AM UTC

jcromartie wrote: post #9

Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is. But, as far as I can tell, health insurance really is the biggest factor keeping people from starting new companies. For myself and my peers, with new families and houses and student debt, etc., it's the one thing that scares us more than anything else. The prospect of a business going under is…

I can confirm that offering good health insurance is an important part of compensation when hiring, particularly for older candidates. At my startup, a generous health benefit was implemented early on in an effort to attract more senior employees. Often people in their 20s find it less valuable.

Health insurance tied to employment is a bad idea generally but that is the state of USian reality and so we make the best of that. Employer-based health insurance was a side effect of government regulation during the second World War that lingered long after the regulation has disappeared.

As a practical matter, the ACA is unlikely to help. The net effect is that it seems to be increasing overall costs per employee to maintain the status quo, and there are costs down the road that have not even been implemented yet. A company like mine can hide the cost but I can see why it would be problematic for businesses that are sensitive to total employee costs. As long as businesses are paying for health insurance, the math of the ACA is pretty grim; all it did was move the costs around and add some new ones. It is disappointing that it sort of ended up being the worst of both worlds.

Re: Jon Stewart: Lower entrepreneurial risk

#40

Post by arbuge » Fri, Oct 19, 2012, 1:41 AM UTC

jcromartie wrote: post #9

Countries with much broader safety nets for entrepreneurs are not producing the risky innovative companies that America is. But, as far as I can tell, health insurance really is the biggest factor keeping people from starting new companies. For myself and my peers, with new families and houses and student debt, etc., it's the one thing that scares us more than anything else. The prospect of a business going under is…

I second this. Just went down with appendicitis - doctors call this a "routine" surgery. Well, the bill came to $50,000+...