Entrepreneurs Aren’t a Special Breed – They’re Mostly Rich Kids

Yeah, the more general pattern seems to be that you're more likely to start a business if you're at the fringe of society one way or another. That is, you don't really fit in with the common culture.

One way to find feedback without investing into coding - talking to potential customers or people inside targeted market. This I wish I done while I where on work visa :)

Ultimately, it's cheaper for whoever owns the tent to let one person win every once in a while then to just let everybody lose.

I may be stretching the analogy but yeah.

This article is the typical BS that assumes "entrepreneurs" only do SV startups or want a big exit. The actual reality is that there are millions of small businesses out there, full of hard working entrepreneurs who saved and sacrificed, and are perfectly happy growing modestly and providing for their family. That's the prize that many chase, and many do end up winning.

It might just be cultural. Rich successful people encourage their children to be successful like they were. It could be genetic. Those immigrants I mentioned go through a fairly difficult and selective process to get into the country. They have higher IQs and conscientiousness than average. Factors which are both fairly heritable, and correlate very well with success in life. Meritocracy rewards the most able and driven. But no one said ability and motivation were distributed fairly.

We have a generation of people that thinks every person can be rich, successful or famous... and if they aren't then they are a victim somehow.

Perhaps they are. But the issue I have is that this type of thinking is fundamentally unproductive. The barriers that have been broken have been done so by achieving success despite the odds, and becoming a role model ... not through whining. Equality is only achieved when people obtain power and change things. Power requires being successful and valuable to whatever society exists, not complaining.

EDIT: I guess I take issue with the fact that "life" is being compared to a dart game. It's just not the case. You can reduce it down to "throwing darts" ... but that is a very pessimistic way of viewing the world ... and it's quite sad. I've seen so many "rich kids" who were total nut cases and poor kids who were able to overcome the odds through their character. Reducing the human condition down to the amount of wealth is excessively simplistic. I agree that rich kids might get a few percentage points of help (maybe 5-10%) but if you come from a middle class background you can still become a billionaire and sometimes even if you're dirt poor. What other country let's you do that? yes my screenname is "Stanfordkid"... I came from a very poor family and am not some entitled brat. The fact that that was the first thing people pointed out I think speaks to the way in which people are trying to reduce everything down numbers or labels that are in fact, very complex.

Not rich? Work smarter - you probably have a much better perspective on what the masses need / use than a rich person does. Convince a money man to invest in your ideas.

Rent is too high? Consider the chances your SV startup will make you a millionaire are near 0. You may want to live elsewhere.

Don't like your elected officials? Tough shit, 50% of the country does or doesn't.

Your boss or management sucks? Chances are they think you suck too. Find a new job you enjoy and are appreciated. Work culture is like dating and not everybody is compatible.

Nature and the universe aren't fair. Don't expect anything to be given to you.

I just wish this site was about technology and ingenuity, now it just sounds like a bunch of grovelling losers, upset they won't hit a 1M+ active daily users.

The "poor kids" working at the carnival get unlimited free throws.

Because that's what it's like in Software right now. There has never been an industry before where the market rate is so high for individual contributors, and the real cost of starting a business are so low.

Software is a Perfect Storm of near-zero overhead and near-infinite execution leverage as compared to pretty much any other type of business.

So sure, you're right that a poor kid working at a Shoe Store can, over the course of his lifetime, open between zero and one shoe stores. But a poor kid who takes his self-taught programming skills and gets a job writing code 40 hours a week can moonlight out several hundred Minimum Viable Products if necessary until something hits big.

So yeah, it's darts. But if you throw lots of them, you'll probably hit something.

However, it is true that rich people can afford to take more risks (and therefore stand to gain more) for the same amount of hard-work.

Fuck you, you live in a nice house, drive a nice car and drink expensive drinks, and I can barely afford to live a comfortable lifestyle.

When we talk about entrepreneurs, it is important to distinguish between those who start from scratch, those who have upper middle class parents and those who are born truly rich. For the latter two buckets, it is not that those folks made jumps; its just that their parents accumulated enough wealth over time that they were able to provide their kids with enough cushions.

> I do think it is unfair though to say that only the wealthy are entrepreneurs

Many people don't have personal dollar reserves to take that kind of risk in the first place. While you might argue that people who aren't wealthy have personal dollar reserves, I think that having enough money to be able to forgo income for long enough to get a business off the ground and live of savings is a pretty good definition of wealth

Look, if you're a VC who goes to those "clubs", and you trust the people there and are comfortable giving them your money, _great_. Why should they be handing it out to you, with your no-revenue company and no prior associations?

Naturally you can expect more top school people to do well because they're smart overachievers.

Is there data you have on this? How big is the difference in funding uptake for students from Harvard versus students from low-class schools like Caltech?

I hope his grandfather also got a nice ROI :P

Above all, people deal very poorly with confronting their own failings. Getting their kid to criticize their financial and economic decisions (which is what this will do) ... that's going to go down VERY badly.

In enterprise, trust and the relationship matters a lot, since the buyer is generally taking a big risk on you as a vendor. In smaller b2b, customers will be righfully concerned about depending on you when they can't be sure you'll be around in 2 years. These are both legitimate and important factors that are outside the scope of core product.

In consumer, even a great product will often get blown out of the water if a competitor with a worse but good enough product has a deep, deep marketing war chest. (the 'ol, "if you space has a VC backed competitor, you have no choice but to also raise money and fight a war of attrition") You probably still have the best chance in consumer by creating something with inherent virality (honestly the only way to not have a huge sales and/or marketing cost in any sort of business).

It's not even a sinister conspiracy at play or anything like that. It's just a truth that non-core value propositions are important in business, and are often even part of the true "product".

It explains why those with access to capital or people with capital are more likely to succeed as a result of being able to play the lottery over and over.

Google & Facebook founders did not come from a struggling American family (Sergei or Larry's family comes from the Soviet elite) and none of the "ivy league dropouts" had any pressure (twitch.tv justin's comment how he was unmotivated throughout uni) to be something their socioeconomic class determined for them.

Finally, Theranos is a clear illustration of economic lineage taking place--having a rich powerful daddy with other daddies tends to produce consistent wins, often through sheer will and structural reinforcements that inevitably sets conditions for even the most incompetent children of the elite to succeed.

It's starting to feel like, a lot of us are getting into the startup game and realizing it's just another vehicle of transferring wealth generated with your life so they can buy a horse ranch or private plane.

> provides anecdote as counterevidence

An awful lot of entrepreneurs don't succeed the first time, but eventually figure it out.

Now imagine you're married to someone who just folded a company that ate two years of their life and most of their savings. How enthusiastic are you for the next run? I don't call that a psychological effect. The partner is right - there is a very real risk of failing again, with worse outcomes. If, however, you have enough zeros in the bank (or an account at the Bank of Mom&Dad), eh, it is "just" a failure.

That isn't my story, but somewhat close. Started a company, we never quite "hit", but we hit profitability, were growing organically at a healthy clip and never had to take money. Made a mistake around the end of year three that killed us in year five. And that's how I spent 15 years of savings. I've come close to trying again, but I'm now at an age where that's increasingly stupid without a substantial cushion in the bank, unless you happen to like the taste of cat food.

That may be fine as an approach for the individual. But articles such as this are also meant to inform public policy and opinion. Social mobility in the US is at an all-time low, and that won't change just by preaching the prosperity gospel.

Even if you are not a victim of this imbalance yourself, you have an interest in fixing it: for every Google, Facebook, and Microsoft started by rich kids, there are four similarly-successful startups that never get founded because their potential founders weren't in the top 20%. And eventually, people will notice that, no, it's not (just) their fault that they can't get ahead in life. At that point, social cohesion will vanish: rules will only be respected where they are enforced by violence, the military will no longer find poor people willing to die for the country, employees will casually sabotage the startups they work at etc.

Conclusions and advice are easy to spout off when you declare facts and evidence as irrelevant...

Alright, I run a business, so let's talk some numbers in the modern day environment. As a pass-through entity, all business income is considered personal income for the consideration of taxes. In addition, to federal income tax, which can range up to 28% for sub $100k income, business owners pay both halves of their FICA, which is 15.3%. Then, there's state income tax. Now, it's hard to just add tax numbers due to deductions, which will change with the GOP tax rules, but my overall rate last year was 28%. Of course, this doesn't cover things like healthcare. I live in a low cost area, but I pay $447 a month for a policy with an out of pocket max of $2800. That means, that I have to budget around $8k/year right now to account for medical ailments, which means that I have to account for up to a 40% loss of income when factoring in medical and taxes. What does this mean in aggregate? You need to be in a business that makes a fair amount of money before it's possible to be stable financially.

Now, is someone who comes from an impoverished situation it a place where they can generate that kind of money from get get go? Probably not. Alright, so we can then work a job and save money in order to create the necessary buffer to start a business. Great, but what kind of jobs pay that kind of money? Generally, one that requires a fair amount of education especially in the modern economy. Getting that degree is difficult and expensive. Fine, so we can take a loan to get the education necessary to get the job necessary to save the money necessary to start the business. However, then we have debt in order to repay when we need to be saving money to bootstrap. Further, the current tax proposal disallows deductions for student loan debt in addition to taxing tuition waivers for graduate students. Of course, instead of bootstrapping, we could raise money from investors in order to start the business. Great, but that's also difficult without the right connections. Where do we get them? There are actually some really good resources in a few select cities that connect business people with tech people. However, generally speaking, these connections are formed by growing up in the right communities or going to school in the right places. I received a wonderful education at a state tech school and keep in good contact with my former classmates. That said, they didn't come from money and are not a resource to draw from for investor money. On the other hand, students that go to Ivy League schools likely have a background that could raise that capital.

Anyway, that's a long response to a simple question, but I very much contend that there are significant barriers to entry for becoming successful at business. Technically, it's all doable, but the chance of that happening, especially when coming from poverty, is very small.

[1]: https://www.cnbc.com/2017/03/24/a-record-number-of-americans...

Literally the argument the article is making!

They aren't making the decision because of the stat, the stat is simply reporting behavior that already exists.

Stop reifying entrepreneurial success in this 'passionate' way because it misattributes reality. That type of self-reinforcing narrative allows this stat to continue to be a thing, and keeps outlier cases outlier cases rather than doing anything to change the underlying variables that make it a reality.

I'm going to assume many other people share my thought process as well. Hell, I'm willing to bet health insurance is 95% of the reason why most people won't take chances when it comes to entrepreneurship. Compound this with States that didn't expand medicaid and other politicians that are trying to cut back on healthcare by cutting funding to programs like medicaid and the ACA, it's very easy to understand why the rich and the elite have a massive advantage when it comes to starting businesses.

What you are posting goes against the reality many people face, if I could fail into success without paying for rent and healthcare I would but I can't so I won't.

Also calling people "special" for succeeding seems very dehumanizing to other people that aren't "special."