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I strongly disagree with your second point. There are quite a few very successful entrepreneurs who have started companies while being mired in terrible financial circumstances. In fact, it's very common for these circumstances to be the stimulus that gets people moving in the direction of their own company. There are many, many stories of this, to the point that it's a cliché.

I myself started my first business at a time when I had virtually no money in the bank, and my car was literally repossessed one month before my business became profitable. If I had stopped and said "I can't afford this" and just given up and gone to get a job, I would have never seen the success that came later.

Also, you point out particular entrepreneurs who came from rich families. You completely leave out the wide array of entrepreneurs who did not. John Paul DeJoria, for example, was living on a friend's property because he was homeless and had almost no money. He started his business in those circumstances. He's estimated at somewhere in the ballpark of 3 billion net worth presently. There are quite a few stories of people with virtually no money building empires out of the rubble.

While I agree that there are a number of factors that feed into whether a startup is successful or not, I would kindly submit to you that one's attitude towards whether or not it can be accomplished is a very massive part of the picture. It takes focus and determination to get most businesses off the ground. Once you begin listing the reasons you can't accomplish it, you've begun setting up the circumstances such that you won't.

Truth is, the list is very personal.

For me (formerly well-paid executive at IT companies in the US, originally from Italy), #2 (plus, some reserve money) was absolutely necessary to convince myself to leave my last job and start a company, last year.

It seems that you were fortunate that the burden of your decision was light, but this would not be the case, generally I would have thought.

>>I strongly disagree with your second point. There are quite a few very successful entrepreneurs who have started companies while being mired in terrible financial circumstances

Textbook example of self-selection bias and survivorship bias.

Even if you compiled a list, it would tell you nothing about the number of people who would have started companies had they not been mired in terrible financial circumstances.

If you compiled a list of all successful entrepreneurs and it was overwhelmingly full of ones who were poor when they started, it would suggest that such circumstances raise the chance of being able to succeed as an entrepreneur. More analysis of different stats would have to be done to elevate that beyond just a suggestion. Personally I feel that at least to some degree it could be the case. (Necessity is the mother of invention, and limitation actually helps creativity far more than abundance) I didn't grow up poor necessarily, though there were times growing up that things were limited quite a bit. I do believe these times are disproportionately responsible for my abilities today, as well as happiness.

It doesn't hurt to be wealthy and/or well connected.

https://www.inc.com/minda-zetlin/do-you-need-a-wealthy-backg...

5) Not start a 'startup' that requires funding or hotshot coders to grow at 10x every month, but instead start a regular tech-oriented business that doesn't require any of the 4 other points.

Tech entrepreneurs do not necessarily have to start 'startups' in the HN sense of the word and I know there are plenty on HN who have taken the slower, bootstrapped path without rich friends, lack of debt, or even being based in ideal countries.

I don't really see how you separate tech from other entrepreneurs? Entrepreneurship is vast and mostly outside of tech and high-paying organic-vegan-glutenfree-catering tech-startups. If you run a hair salon your education level will most likely be much worse than most tech founders and your "seed money" is a high-interest rate from your local bank. Your margins are so slim that at the end of the month you are indeed an entrepreneur but paid under minimum wage on an hourly basis. To me tech founders seem to be in a much better position to start a company - all things equal - contrary to your description.

This is plain wrong. You don't need to create a billion dollar company to be a successful entrepreneur, even though that's what investors want you to think. By Steve's definition, you just need to make more than you would at your corporate gig.

1) The world is moving towards remote work. You don't need to be in a rich country with talent. So long as there's good Wi-Fi.

2) If you have debt then you'll have to raise money and take a salary.

3) You don't need to do a friends and family round, or raise at all. We're bootstrapped, never raised a dollar.

4) I've met many entrepreneurs with young children or wanting to start families. Certain startups (eg. SaaS) can have very reliable income once you get your first several customers.

No remote work allows you to outsource "bog standard" work you aint going to get to the c suite that way

You see everything from a US centric perspective, I have a contrarian view:

1) Not clear what you call a rich country but Argentina has a lot of entrepreneurs and it is considered an underdeveloped country.

2) Best universities here are free and everyone in the world can study here. The average student study and work at the same time.

3) Lots of bootstrapped companies, limited access to capital.

4) Obviously age and family matter but you don't need to be the first founder who take all the risks. It is possible to join an existing company as a cofounder starting part time if you have critical skills to contribute.

Not saying that starting a company is easy, just saying that the world offers many different perspectives to the same problem.

Argentina is not an underdeveloped country. It used the be the richest country in south America. It became poor again but thats nothing comparable to a country that never knew development.

Argentina has 70 years of economical decadence. You can check this article [1] (in Spanish).

[1] https://www.infobae.com/opinion/2018/04/18/siete-decadas-de-...

> Not saying that starting a company is easy, just saying that the world offers many different perspectives to the same problem.

The number of famous and wildly successful startups outside of the US says otherwise :(

> The number of famous and wildly successful startups outside of the US says otherwise :(

You are not understanding this thread. The discussion was about the difficulties people find starting a company that are mainly connected to economical issues. If you look at the successful companies, the major part had access to capital that eliminates this line of reasoning.

Nonsense.

I have a mortgage, student debt, and do not know anyone particularly well off, I quit a very stable job, and am in the middle of launching a tech startup.

People get so hung up on privilege these days that they lose sight of the power of merit and strategy. I think it is a dangerous mindset.

Yeah sadly true.

1) Australia, but we started it in Canada.

2) Again true, lots of friends opted to buy houses etc, but i felt it was going to limit me so i avoided this form of debt, and thankfully so as servicing it would have probably prevented me from starting the company.

3) Affluent co-founders in my case.

4) I was 24. Just old enough to know enough, young enough to be dumb enough to try + have the freedom to try.

I'd also add a 5th) You need a solid chunk of savings (Ideally a year or two worth). I dropped my income by 76% to work on the startup and saw no increase from pre-startup income for a while thereafter. But 6 years later my salary income (forget the buyout portion of money) was up 1191% from where it was before i left my job.

Buying a house in your early 20s is very common in Europe. It's also the most stupid thing one can do, in my view.

You will get an infinitely higher return on reinvesting money in yourself than putting up a deposit to purchase a pile of bricks.

$50k in the bank might give you 5 shots at starting a $100-200-300k a year business.

Yeah, that is how I saw it too. But honestly, not everyone thinks the same or wants to start a company...for some people not buying right away could just cost them more in the long run i suppose. Personally I feel even in that case the life experience of renting and moving around is probably healthy, but each to their own!

Add to that: once you've had one "hit" (even if it's a small one off $100k exit) then you're basically hooked for life.

You'll realise it's almost always easier to make money from a successful business (no potential constraint on earnings if you solve a large enough problem) than it is working a job (time limited, limited opportunities for promotion based on age or company, etc)

But I agree, not everyone is made to be an entrepreneur.

A lot of startups seem to be started by groups of people tired with the bullshit bureaucracy at large firms who want to make real projects and sell that. I wonder if feeling frustrated like that is an important motivation as well.

I’ve worked at companies of different sizes. I think the important realization is seeing how much people are paying for something you’ve built, and that you’re getting very little of it.

AAMGF tech behemoths make almost a million per employee, yet the median salary is 15% of that.

Going it along, you could probably build a better product in another niche market and take a bigger cut. It’s a risk/reward bet.

In the Us, if you have the income FHA is 3.5% down and you could buy a double so most if not all of your mortgage could be paid for. Not saying there wouldn't be hassles/distractions but its an option for some.

> Buying a house in your early 20s is very common in Europe

"Citation needed", also, it varies a lot between places.

Throwing money away in rental is far, far, far dumber. In my case I would have had to pay more money for the rental than what I’m paying now with a mortgage. The difference is that in a couple of years I don’t have to pay anymore and I will own an house that already doubled in price, while if I was renting my rent would have skyrocketed. And with 50k$ in the bank I probably could have survived for 1 year here.

That's only true if you live in a place with an unsustainable market, i.e. permanently growing rents and house prices. There are places with stable house and rental prices, and in those - buying tends to be a worse choice financially.

And many would argue that places with skyrocketing property prices are going to run into significant issues in the future (if they aren't already at breaking point, hi bay area).

The comment I answered to was expressing a very narrow minded opinion on how everyone that buys an house instead of renting is doing the most stupid thing in the world. I proved to everyone that is not true and that most likely he is not as smart as he reckons if this is what he believes.

The tax man takes a cut of money you get from creating things, but money from living in a pile of bricks is tax free.

The tax man also (depending on the country) levies stamp duties upon purchase and annual property taxes.

Owning a house also generally means low liquidity (should you want to sell), money going to repairs that you could otherwise just forward to the landlord and the requisite of putting up a deposit (money that can't be invested in say the stock market -- meaning you lose out on yield).

2) Buying a house is not necessarily a bad decision. I bought a place an year ago. My mortgage + housing related expenses are less than renting.

Rent went up from $1600-$2500 in a couple of years. My mortgage remains almost fixed except for property taxes.

So I think it’s a decent risk. My plan is to moonlight to a minimum delightful product. Once I have validation, and my feet touch the floor, I can quit my job and go

Entrepreneurship I agree is all about managing risk/reward.

This version of 2,3,4 are one set of possibilities focusing on younger entrepreneurs. As was noted recently https://news.ycombinator.com/item?id=1679422

"Our primary finding is that successful entrepreneurs are middle-aged, not young. The mean founder age for the 1 in 1,000 fastest growing new ventures is 45.0."

2,3,4 can be more generalized to be: "have access to sufficient capital to address the opportunity". Which in general I would guess that there are more 45-year olds with access to entrepreneurial capital in some form than there are younger entrepreneurs in the original stipulation of 2,3,4.

You can look even further ahead. Because the past few decades have been so strongly concentrating wealth upwards, one might predict that there will be fewer individuals with the personally owned capital to start businesses so the number and the 'risk level' of ventures to be shifting downward over time. The risk level would go down because the commitments of capital become more committee based the more people need to approve of it - and so you get fewer Elon Musk type investments, and more safe-looking investments in better paperclips (or the next social network ad app...).

Your points about family are largely correct. If you make that choice, your responsibilities are quite set, until you either have enough savings (or raise investment) to take a risk or your children become adults.

You do not have to be free of debt. Your monthly debt payments have to be reasonable, something you can pay as part of routine monthly bills.

You absolutely do not need affluent friends or family. That's the least of all requirements anyone needs to start a tech company. First of all, it often doesn't take much capital to get started with tech companies these days. Second, your premise precludes someone having even a modest amount of savings (your theoretical person must be from a rich country, but they must have no money saved despite working a cushy job, odd combination).

You do not have to be a particular age. You're assuming everyone has children or a big mortgage. Birth rates in the developed world are at all-time lows, a lot of people are forgoing children or pushing it off until much later. You don't need a big mortgage, you can rent; most of the US does not look like NYC, SF, LA, Seattle in terms of cost of living.

You most certainly do not need to own a home. Multiple of your points put the theoretical person into that position.

> Looking at the most popular entrepreneurs in the world

Popularity is a pretty terrible reference point (why would that matter?). There's this group:

Larry Ellison grew up in a very broken home, his family didn't have much money. Paul Allen comes from an entirely ordinary middle-class background. Michael Dell's success required no special setup for what he did other than his own effort (assembling & selling custom PCs out of his bedroom, paid for out of his own savings), he grew up in an upper-middle class family. Elon Musk boot-strapped everything he did after moving to Canada, lived poorly and on a shoe-string budget after moving to the US. Jensen Huang of nVidia, was a first generation immigrant from Taiwan, with the deck stacked against him if anything; got his first degree from Oregon State University. Mark Cuban, who is more famous than Spiegel, grew up in an entirely middle-class background in Pittsburgh, and entirely boot-strapped his first success (MicroSolutions), which then paid for him to found Broadcast.com. Mark Andreessen grew up in farm country in both Iowa and a tiny town of 2,000 people in Wisconsin, his family had no special financial position. Ev Williams grew up on a farm in Nebraska, his family had no special financial position. Jack Dorsey grew up in a middle-class family in St. Louis, his family had no special financial position.

Maybe that's why most startup founders are at 45 years on average, by that age kids are maturing, family finance should be relatively stable, you might be reaching on your career ceiling, and you're getting older but yet not too old -- so you want to give it a shot. All combined the 45-average-founder-age makes sense to me.

Not to mention the most important part in my opinion, having the experience in your field to create a successful startup. Having a light bulb idea when you're young is all well and good, but without the experience I would imagine your odds of failing are much higher.

About being 'not too old': 45 is an average, meaning there will be more or less just as many around 60 as there will be 30. At ~55 the kids will be gone, giving you even more time to start up something.

I think your list is mostly correct, but I don't think there's any reason it needs to stay that way. Technology is about lowering barriers to entry, and digital goods and services have high margins and very little (if any) marginal cost.

Maybe in the next 10-15 years we can convince high schoolers that if they spent their free time programming they could be capable of creating a revenue generating asset at 18.

The combined power of a nation of kids that could create rails SaaS sites or reusable 3D models would be an awesome sight to behold. It's a skill they would keep and even pass on.

Tech is largely new, and we really haven't bothered to teach it yet.

> I don't think there's any reason it needs to stay that way

There is actually a very good reason, namely that acquiring knowledge, skills, wisdom, etc. is at odds with acquiring assessment signals. The only way to become a good entrepreneur is to basically become unemployable.

I don't think they're at odds. They are definitely not 100% overlapping though.

I would disagree that the only way to become a good entrepreneur is to become unemployable. The best way is, as you say, to have knowledge and skill to create a useful product. Then, having a market that allows you to easily get paid for your work helps.

I mentioned high school specifically because I know that I would have loved something interesting to work on. It's a perfect time to work on skills rather than assessment signals. Lots of kids don't even bother with the assessment signals...

> The best way is, as you say, to have knowledge and skill to create a useful product.

Sure. Once you've actually created a product that's useful, or at least impressive from a technical and/or design perspective, then you're easily employable at that point. But for most people there is still going to be a several year gap between when they start focusing on acquiring those skills and when they've actually built something impressive enough to function as its own signal.

I have seen this over and over with people that have eventually built incredible products or services. The company/product/service etc. can work as a signal eventually. An “entrepreneur” is a lot like a scientific researcher. It isn’t until after the experiment has been shown to work that your risk is then rewarded. The people with high agency that have a fair amount of confidence in their abilities and don’t view themselves as a statistic tend to be able to weather this period the best emotionally.

"Be free of debt, either from student loans or mortgage" ... if the price of your mortgage is the same as renting, why is your statement true? If you run out of money, mortgage or rent, you've got a problem.

When you run out of rent money, your landlord kicks you out, and you move in with your parents, or couch-surf until you get your shit in order, or become homeless. The net hit to your finances is maybe a thousand dollars, or however much a moving truck or a plane ticket costs.

When you run out of mortgage money, your home is seized and sold, you will piss away tens of thousands of dollars of equity in foreclosure, realtor, and legal fees. Hundreds of thousands of dollars if you're in a down market, and you go underwater. You'll get to enjoy a ruined credit score... And, on top of that, all the other problems that you face when you can't pay rent.

I'd much rather be locked into a $1000/month rent for 30 years, then a $1000/month interest-mortgage for 30 years.

You can rent out the home/condo you own

Which carries other costs. The average tenant is a decent person, but a bad tenant will be a complete nightmare to deal with.

Another reason is that the housing market is grossly inflated (UK). I would get a better house to rent for £1000/month rent than a house for £1000/month interest-mortgage, in addition to the professional "flexibility" off not having the mortgage "to loose". I am a contractor, so I move around with the work, and certainly earn more income doing so also. The long term, is that I make it big, and then outright buy a house. All or nothing! And in the meantime, I pick up the phone when the house needs maintenance :)

It's also worth taking into account the level of finish. As a landlord it’s almost always not worth spending more for good quality items, as they usually won’t increase your returns. It’s more important how the property looks, than the quality, which I’d say is why IKEA is so popular nowadays.

If you want an induction hob, a good mattress, proper ventilation system so the windows don’t have condensation and something other than paper thin walls, you are pretty much out of luck in the UK. On the other hand if you are fitting out your own place, upgrading to better quality items like this doesn’t really cost that much more (e.g. £200 for an induction hob vs £100 for a ceramic hob).

I would add that all sorts of houses are available for rent. I am not talking about student housing etc.

Errrrr ... you can always sell your house. In the last 5 years prices have almost doubled in many Livable cities.

Suppose you bought a house for $300k, paid down $100k of it and sold for $600k. You’d be walking away with a decent amount of cash. In rental when you get kicked out, you get nothing.

Renting is paying someone else’s mortgage. If you know you’re gonna stay in one place for a long time, and the market is stable or booming, buying always makes sense.

If you had 100k to throw down on a down payment, how are you not able to make rent?

You're comparing two different scenarios.

One is an expense, the other is an investment.

I think your first point is the only one that bears truth. There are huge numbers of tech founders for whom 2, 3, and 4 are not true - sometimes all at once.

I think if you have access to capital from 1 then 2,3,4 fall away as issues.

I started with less than $100 18 years ago, now Im in the 0.1%.

Also not born in a first-world country (though immigrated to one at a very young age).

Also nobody funded me until much later in my life, by which time I was already a millionaire.

I've been an entrepreneur for years, and when I got started, I wasn't free of debt, and I wasn't "the right" age. However, I don't disagree that a certain amount of affluence and particular set of circumstances are huge contributors to entrepreneurial success.

I agree with your points, but is it realistic or are those excuses? Has anybody quantified actual entrepreneurship? Yes, your example are complete home runs but most entrepreneurs would end up with a small business and not unicorns.

I agree with everything you are saying... but sometimes you try and do it anyway.

Don't forget:

  1) Healthcare costs (especially for a family)
  2) Non-compete & IP assignment agreements (unless you are in CA)