Please... massive redistribution of wealth to the already wealthy strangles both potential entrepreneurship and the customer base it would have attracted since they don't have disposable income. Let's not play stupid here.
The extreme downvoting probably reflect the affluent upbringing of a large portion of the HN community.
For me, many of the risks I took to get to this point would've involved either bankruptcy or my death if they had failed. When I talked to my coworkers on how they feel people should rise up the ladder, they didn't seem to get that the people that made it simply had a good roll of the dice.
For example, Bill Gates had a solid financial backing when he left Harvard: http://philip.greenspun.com/bg/
> [Bill Gates' Great-Grandfather] Maxwell founded Seattle's National City Bank in 1906. His son, James Willard Maxwell was also a banker and established a million-dollar trust fund for William (Bill) Henry Gates III.
Bezos' parents kicked money into what would become Amazon:
> The first initial start-up capital for Amazon.com came primarily from my parents, and they invested a large fraction of their life savings in what became Amazon.com
> After [Musk's parents] divorced in 1980, Elon mostly lived with his father, who says he owned thoroughbred horses, a yacht, several houses and a Cessna. One of their homes was in Waterkloof, a leafy suburb of Pretoria that was popular with foreign diplomats.
> Wanderlust ran on both sides of the family. On holidays, Errol [Musk's Dad] and his kids would travel, he said: to Europe, Hong Kong, throughout the United States. Or they’d take the plane to Lake Tanganyika, where Errol had a stake in an emerald mine. Elon would later get his own pilot’s license, but he no longer has time to fly.
> While wealthy South Africans typically hired maids and gardeners, Errol decided that his children would do chores and cook their own food, taking shifts.
Michael Dell: http://www.notablebiographies.com/news/Ca-Ge/Dell-Michael.ht...
> In 1984, as a first-year college student in Austin, Texas, Michael Dell borrowed $1,000 from his parents to start a computer accessories business.
To put this in perspective, in 2015 less than 30% of Americans have $1000 in their savings: https://www.gobankingrates.com/banking/savings-account/62-pe...
Kalanick's parents: https://www.recode.net/2017/5/27/15705290/bonnie-kalanick-mo...
> From teaming over complex science projects like building a real electrical transformer to giving him his first experience programming computers, [Kalanick's dad] had been the one to bring home early computers for his tech-curious son to fiddle with.
I don't entirely understand why people do this. It just seems pitiable. Rather than learn from others, people seem more interested in trying to look for reasons why they can't achieve.
If you don't have to do anything else with that money.
My parents couldn't have spared 1000 bucks just because when I was younger.
Musk grew up wealthy. He's the child of rich white south africans.
This is why pointing to these people is futile because not only did they have large advantages that many others did not, but they are also largely the exception to the norm. It's the survivorship bias in action.
And in that regard it's not really an economic issue as much as a social issue. People that come from families with no value for education, or individuals that themselves don't take their education seriously are obviously going to struggle. But those actions are something beyond socioeconomic reasons - as the same is true of somebody born into a rich family - though granted in that case the individual will obviously have more resources to rely on to subsidize his failure.
While I'm sure your circumstances may have dictated such, I'm not really understanding what you're talking about with such a high cost of failure. When I failed, and I did, it simply meant it was time to get a job and work myself up to be able to take shot #x. When one 'sticks', you're set and can use that to enable your future shots.
Years ago I did some real estate deals together with a few guys from rich families. The first deal went bad leaving me with debt that lasted more than 10 years to pay off. The other guys got more money from family, did a few more deals that went well and are now successful businessmen. When you don't have money you often can't afford to fail in the same way wealthy people can. The consequences are much more severe.
My bottom was having very little money in my name, with parents that were poor and disabled as a result of the hardships of being fishermen. I had barely enough to take care of my family and go to college (with financial aid) as a result of other very personal circumstances. Even then, I had to make a choice.
I could either spend some of that money on my failing health and never graduate from college, or focus on my education and hope I can fix it later. I went with the latter. Financial aid can only go so far when you're one medical issue away from disaster.
When I finally got a career I had to have multiple rotting and infected teeth extracted because I couldn't afford to get them fixed prior. My family had a history of bad dental issues and I managed to hit it hard.
This is what I mean by the bottom. If my dental issues had gotten worse, then I would've been screwed. This is the reality for a lot of people that grow up in poverty. It doesn't necessarily matter if we can get financial aid when there are other circumstances stopping us, affecting our education or worse.
There were no universities near me that offered treatment and believe me, that was one of the first things I tried. You were lucky that you had the opportunity to get that free treatment; an option I didn't have. I'm sorry your parent had to deal with cancer, thankfully that's one way my parents have been lucky so far in.
And there is no reason to be sorry for anything I went through. As bizarre as it is, I would not have had my life any other way and I doubt even my parent would have. No doubt as a part of the cancer it caused them to reevaluate their life and after I had gone off to college they started taking night classes at a community college for nursing, and succeeded and have now worked their way up to very comfortable middle class, starting with little more than a high school degree in their late 30s. Also caused them to catch the Jesus a bit hard, but hey if it completes their life then more power to them.
You don't find these reasons compelling because you can't seem to understand that a lot of options are entirely circumstancial. For people that even do have the option to take a bus, you're effectively asking them to lose their job or stop taking care of their family for possibly an entire day. An option a lot of people don't have when they live paycheck to paycheck.
The beautiful thing about this country is that there are practically infinite possibilities and opportunities. Obtaining them can often involve a good deal of blood, sweat, and tears - but they're there. That's the thing that I find frustrating - sayings like 'when opportunity knocks' are idiotic. Opportunity doesn't knock. It's something that must be aggressively sought out, captured, and then chased after once it escapes which it frequently will - like tricky little bastard it is. People seem to believe that others just have things happen for them, or that they were born into fortunate circumstance. In some cases that's true. In the vast majority, it is not. Things are not given, they are taken.
Anyway, I feel ya. I lucked out on my teeth but I didn't see a dentist for 15 years and when I did I had a dead tooth and some root canals to be done.
No, it's just hardcore techno-libertarian insanity.
One of you works a job that provides income and benefits for both of you, while the other works on a startup. Assuming most of what you need is a time investment, this is an approach that works for a lot of households to bootstrap.
Higher startup costs make it tougher though.
The same is true for other franchisee's we've met (1 remains the breadwinner). If you bought into an existing one that already generates revenue, then sometimes both spouses work there full time. But that means you need to have had $$$ in the first place.
We know of one franchisee who's wife is a stay at home mom. He quit his job to start one...less than a year with slow growth, he closed the center and went back to a traditional salaried job. He didn't pick a good location for exponential growth, but IMHO he had enough steady growth and would have been profitable if he could stick around for another few months.
[1] https://blog.approvedindex.co.uk/2015/06/25/map-entrepreneur...
The wasted potential economic energy in
this country is a tragedy of colossal proportions.
Now hypothetically lets imagine for the sake of argument we've a safety net of the likes of somewhere on the spectrum between France and one of the Scandinavian countries.
All else equal, do you think the American entrepreneurial dynamism you see now would still be around if we had one such welfare state-lite?
Or do you think people would grow lackadaisical? Have there been studies on this sort of thing?
I'm not implying that its necessarily bad but this comes up a lot in discussions of UBI and such. Tangentially, just last week there was a discussion on how labor laws make life difficult for startups in France.[1] The discussion there makes you wonder perhaps the issues surrounding what actually spurs the indomitable entrepreneurial instinct is more complex than it seems on the surface.[2]
[1]
Macron Vowed to Make France a ‘Startup Nation.’ Is It Getting There? (nytimes.com)
https://news.ycombinator.com/item?id=17169314
[2]
It is "easier" to start a business in the US, but it is riskier because of the general weakness of the social safety net (healthcare, social helps, free childcare, etc.).
The majority of startup founders are immigrants[1], benefiting from the longtime American ideal that America welcomes immigrants. Smart potential immigrants can start companies in other countries.
[1]https://www.statista.com/chart/14065/countries-of-origin-of-...
This nuance is important.
Perhaps for you the distinction is important, but in terms of policy, there is no difference at all.
If you start kicking out all the people who are brown or muslim or otherwise different, you hurt the society and make it harder for the legal high-skilled immigrants to live here.
(Not to mention that for three decades American politicians and corporations encouraged immigrants to come here and work without status. And that Irish and Italian immigrants came here 100 years ago before there was any immigration law; if today's republicans existed in 1900-1930, they would have demonized Irish and Italians for votes too.)
As a brown person it's become abundantly clear that the Stephen Miller, Steve Bannon view on immigration is certainly mad about something - and it's not skill.
What's really going on is that Californian tech companies have a very hard time getting American talent from outside California to destroy their quality of living by relocating to California.
What's left is the purposeful manipulative lie that foreigner talent is needed in the United States beyond whatever level of immigration is current. The lie part is that they really mean California, not the United States.
Disclaimer: that conjecture above is something I learned from a straight-talking American executive in Qualcomm ~14 years ago after relocating from Motorola Labs, outside California.
Those smart people come to America in part because of its multicultural society. You can come from India or Germany or Japan and live your life in the US (again, presently, but it's changing) much more easily than in other, more homogeneous countries.
That multiculturalism is what is being destroyed, to the United States economy's great detriment.
(The H-1B visa situation is orthogonal. Yes, the lottery system needs reform, and no America shouldn't be importing young mid-to-low level tech employees from abroad to lower the pay of other tech employees. But the war on immigration has a much larger arc than that. Sergey Brin's parents came to the US for its acceptance of immigrants and its values. THAT is what is being destroyed.)
>(The H-1B visa situation is orthogonal. Yes, the lottery system needs reform, and no America shouldn't be importing young mid-to-low level tech employees from abroad to lower the pay of other tech employees. Eliminate it already. The H-1B is massively abused by corrupt companies that exploit their workers and lobby to increase quota limits. The O visas have no quota, if they're exceptional people as these companies claim then use that.
>But the war on immigration has a much larger arc than that. Sergey Brin's parents came to the US for its acceptance of immigrants and its values. THAT is what is being destroyed.
As did Steve Job's parents. They came to America and became Americans, as it should be, and they also didn't over stay a visa or sneak in. Conflating those that do with those that don't is immensely dishonest. It seems like anything less than amnesty and open borders is a "war". It's all about exploitation, especially for the undocumented.
What is the proof for it. Evidence shows that the US is one of the worst countries for 'moving up'
https://en.wikipedia.org/wiki/Social_mobility#/media/File:Th...
http://publications.credit-suisse.com/tasks/render/file/inde...
Moving up requires people from lower wealth backgrounds moving up and the evidence clearly demonstrates that the US is one of the western countries where this happens the least.
>Moving up requires people from lower wealth backgrounds moving up and the evidence clearly demonstrates that the US is one of the western countries where this happens the least. 1,000,000+ people annually immigrate. Clearly it's a terrible place for your family.
If you want to compare immigration figures as a measure of how great a place is then lets take the EU. The EU is roughly similar to the US in terms of GDP. In 2016 there was about 2,000,000+ immigrants from outside the EU to the EU suggesting that it's a more popular destination. If however we take a more realistic measure of net migration (migration as a percentage of population) then the US is 29th on the list behind many European countries but also such noticeably desired locations such as the UAE.
Migration are not a great measure of whether a country is a great place to move up through society.
https://www.cia.gov/library/publications/the-world-factbook/...
In your opinion which European country is best for startups?
I'm not sure how they generated their list or numbers, but it does not seem well supported. I'm also unsure how they picked their 87 companies given that their are hundreds of companies with revenues north of $1 billion (which was their metric), that were of course all at one time or another just a twinkle in somebody's imagination.
[1] - http://nfap.com/wp-content/uploads/2016/03/Immigrants-and-Bi...
[2] - https://en.wikipedia.org/wiki/Mu_Sigma
Note that all of those came through Stanford or MIT. America's elite universities are hotbeds of immigrant talent that other countries would like to siphon off.
The current war on america's multiculturalism (in pursuit of votes and political power) threatens to deeply damage America's universities, and thus its tech economy.
Can Snapchat compete with Facebook/Instagram stories? Can a startup compete with Google Analytics? Can OfferUp compete with eBay? The list goes on...
You definitely can compete with huge companies that have no or automated support; you probably cannot beat them, but you can sustain a good profitable company for a long time and they might buy you in the end if they see you grow in your region while they do not.
Think of it this way, if there was two hundred of you all working together, would he still be adding more value than you?
Put it this way:
- Would you feel comfortable investing your money with a company run by 200 engineers?
- Would you feel comfortable entering into a contract or purchasing agreement with a company run by 200 engineers?
Its totally not because the 1% has captured all the value created by increased productivity over the past 50 years. Definitely not.
What exactly do you think separates companies like Oracle and Microsoft? Oracle has hundreds of very talented engineers. But their position in the market is stagnating.
This is hard for HN types to accept, but Engineers are not the people in software companies producing value. No individual person is producing value. Its a combination of the leadership who can lay down a plan toward something that produces value, and the line workers who can actually produce it. Both are necessary.
Here's the difference: If you need to replace an engineer, go for it. Who cares. There are millions of us. We're code-monkeys. If you need to replace a CEO, you better be careful. Github couldn't even find a good CEO, so they sold out. If you're not careful, you might get a Larry Ellison or a Marissa Meyer instead of a Satya Nadella or a Tim Cook.
Successfully leading companies legitimately requires personality characteristics that are present in less than 1% of the population. I would guarantee that if we dissected the brains of enough C-suite people from successful companies, we'd see some sort of genetic or brain matter similarities, probably something resembling sociopathism.
As a lower-level employee, sometimes you think that the company would be successful without a leader, or even is successful in spite of poor leadership - while that may sometimes be true, much of what happens at that level is hard to understand unless you've been there
Here are some examples: I've worked in the gaming industry at big company for 5 years. I've seen a ton of games fail and few succeed. I was on the most successful game team that made hundreds of millions of dollars. And, I don't believe our team was more talented than all the other teams. We simply had the right market timing with exactly the right game, inexorably leading to an enormous success. Within this company many other teams built clones, executed just as well if not better and yet, none of those games received the success as the first one with the right timing.
Market acceptance controls whether a company might fail. It doesn't control whether a company might succeed.
At least with an engineer, you can be hired by someone who could more-or-less do the job you're being hired for. Senior engineers hire entry-level devs. The CTO hires team leads. Who hires the CEO?
Often, there's no one in the company who is adequately prepared for that role, because the role doesn't have a job description. It doesn't have bullet points of what you do every day. Your job is to lead the company, set the expectations, set the results, for everyone else. That's the role of the c-suite.
Absent any, I think it is much more reasonable to conclude that there's little to no justification for current CEO compensation and that they draw their current compensations mostly "because they can".
EDIT: So collusion amongst CEOs explains why boards agree to it. Why do shareholders?
The his focus on CEO pay is nothing more than old-fashioned class warfare jealousy. Think how much more money workers could make if we cut payroll taxes by 20% — a lot more than if they paid the CEO $1. But those on the left complaining about CEO pay would go apoplectic just discussing tax cuts. Because the issue isn’t really about pay, it’s an ideological thing.
I'm sure Louis XVI was thinking the same thing right before the public summarily removed his head from his body.
You can't count the upsides for the shareholders without counting the downsides as well.
That's not to say that investors shouldn't be compensated for their initial risks when an actual funds injection is required, mind you; but them being compensated ad vitam eternam - and more generally, them actually owning the structure - makes very little sense morally for me (and beyond "morally", I don't see how this can result in anything else than progressive concentration of wealth society-wide in the long term).
You also assume people can "move on to another job" without too much trouble; again, that may hold true in tech or similar popular domains but it's far from true for a lot of people.
>I'm free to find other work.
A corporation is a model of communist dictatorship. The higher-ups control the means of production, they take your labor according to your ability and give to you your need (as determined by them.) In the sense that existing in a communist dictatorship is 'voluntary' then your work for the company is voluntary. And in the sense that being able to move from one communist dictatorship to another communist dictatorship is free then you are free.
That explains why communists revered Marx! He explained to them how it all works!
Because many software developers in SV might make over 100K (most do) but have vastly less money left over to actually save compared to someone earning less than half that in other places.
I recently considered an opportunity in SV and after getting over the initial shock of how much they thought I was worth, I realized I as in better economic shape staying where I am and earning what appears to be a lot less. And I'm not what I'd consider wealthy at all.
I recently saw an article here on HN about a guy who worked for Google for 10 years then quit and started his own company. He says in that decade he saved 100K, and my thought was, that's all, for 10 years at Google? I earn a lot less than he did, but I'm saving at nearly triple that rate.
2) $100k could be liquid savings in cash, with the rest in GSUs or diversified investments.
https://qz.com/848181/half-of-all-adults-in-the-world-have-l...
That's just not true.
If you're working in SF on 100k/year, your pay after tax is 5750. Spending 2k/month on rent leaves you with 3750/month, which is almost the pay before tax of someone on half that.
> many software developers in SV might make over 100K (most do) but have vastly less money left over to actually save compared to someone earning less than half that in other places.
Not that he couldn't afford to buy a substantial house in SF.
[0] https://www.zillow.com/homedetails/411A-Lincoln-Way-San-Fran...
Frankly a realistic number is $3000/mo for a 1BR and my point is that you could own an incredible home in most of the country for that price. People in SV have Stockholm Syndrome and justify the horrendous cost of living, rampant homelessness, insane working hours etc. with their cries of "but look at all my stock options!"
Meanwhile their counterparts in places like Austin make over $100k, can easily own a substantial home, have excellent life-work balance and shocker... have SUBSTANTIAL SAVINGS as well.
I'm not just talking about rent (which, incidentally, for my family, 2K per month is much lower than the rent we were looking at to accommodate our kids and private life without roommates in SF), but also about how much you spend on your transportation or gas every day, your healthcare premiums and deductibles, cost of groceries and entertainment, auto mortgages and/or insurance for 2 cars (because 1 car for a family wouldn't cut it there).... and the answer becomes obvious.
Otherwise, dream on.
A lot of professions make more: all doctors/dentists, 50% of lawyers, higher-level university administrators, most MBAs (mid-management and up).
Heck, even some cops in large metropolitan areas can pull 200K+ (with overtime)
How much of any of that do you think goes into lining the pockets of the highest person in the corporate food chain?
If you don't see the issue you are being willfully ignorant.
Stop it.
Or if you left your job, would you be legally required to delete all your work and have to pay tax money on an illiquid second-class asset that only has a percentage chance of payout(the startup scam).
As for HN, I love engineers and have been on HN for over a decade, but this site is the same as startups and ycombinator in general. Built for VCs to extract value out of engineers and the public.
When the inevitable blowup happens (like in 2008), then these people keep their bonuses of tens or hundreds of millions of dollars while the losses are socialized, which means you're on the hook and your tax money is used to bail out "too big to fail" banks, insurance companies and auto companies.
10 years later people are still talking about a "recovery".
The money supply has been diluted via money printing (so-called "quantitative easing") which is still being done in EU and Japan on a massive scale.
The already wealthy are positioned much closer to the money spigots (by being able to get money at much lower interest rates), and can therefore do "carry-trades". Basically a license to print money.
Money printing and interest rates kept at an artificially low rate deprives from savers and pensioners of income they would otherwise have.
Maybe there's an argument to be made that they're investing these stupid ideas in lieu of other options that could be more desirable by one metric or another, but the excess of money is I think, without question, what drove the meteoric rise in entrepreneurship. When nobody has the surplus of money to invest in ideas, it's tough to get the capital to go out and try to make them happen.
Also, it has ALWAYS been a tremendous risk and challenge starting your own venture. Likely always will be, because there is also tremendous rewards for making it happen. If anything, right now seems like one of the easiest / best times to start a high tech venture in history. Plentiful angel and VC capital. Incredible resources and examples teaching you how to do it (YC, incubators, internet). Flexible tools that can scale up and down depending on company size / need (AWS, open source technologies, facebook / google ads).
To put things in context, I just finished Shoe Dog - the story of Phil Knight / Nike - back in the 60's they didn't even have the concept of VC. His biggest challenge was just getting someone to loan him a little cash so he could finance his inventory which was flying off the shelf! The point is that entrepreneurship is destined to be about tackling a very hard problem that nobody else has solved before - in the 60's that was simply getting financing to fund expansion. Today it's something different. In both cases though, it requires being on the edge and pushing the boundary. I would rather be alive today, playing this game. While the gatekeepers are still around, they have much less power than they used to.
While it is true that there are many Americans with little or no disposable income, that does not apply to the majority of Americans.
It seems the productive end up paying immense tax and rent burdens to the unproductive tending moats and establishing political capture and networks, for the supremely undesirable service of making everything worse.
Hint: They’re not letting it sit idle in their savings account.
Stop being jealous— what someone else has doesn’t affect you. You can still create your own wealth.
Who said anything about high IQ? You think kids who inherit their parent's money have high IQs?
>However, some janitor’s kid could become a millionaire if he can execute on good ideas.
He could win the lottery too.
>Some milkionaire’s kid
Freudian slip.
>what someone else has doesn’t affect you.
Maybe so, maybe not, but if I have something a rich kid wants, like say a software idea, they can easily ruin me through lawsuits.
>can become broke if she doesn’t manage the money well.
Yes, but I'll bet bad choices from a millionaire's kid has a less likelihood of ruin than bad choices from a janitor's kid.
Meanwhile, some millionaire's kid is also unlikely to end up broke even if they criminally mismanage (see current POTUS as a prime example)
I agree with you, that some of the money is being reinvested and "average" people benefit from it. The statistics however are speaking against you. The rich are getting richer and the poor are getting poorer in nearly all first world countries. Trickle-down economics don't work.
Or are you aware of Marx's concept of dialectical contradictions in capitalism eventually leading to its downfall?