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I'm shaking my head right now because I can't believe people at the top is still susceptible to sampling/survivorship bias.

I've tried searching but cannot find a good empirical study of privilege and entrepreneurship correlation. However, I've found an essay paper [0] that exactly predicted this twitter drama; that entrepreneurs simultaneously present and erase this conversation about class and entrepreneurship.

The paper also concluded:

> Whereas gender, together with race, have long been foregrounded in studies of entrepreneurial identity and difference, class may be a more powerful organizing discourse, though certainly one supported by discourses of gender and race.

[0] https://journals.sagepub.com/doi/pdf/10.1177/135050841246489...

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The only data I can get is this: https://www.kauffman.org/what-we-do/research/2009/04/educati...

93% had a degree, with 30% having a masters, That would suggest to me that you'd need a decent wedge of cash.

Now, what is interesting, is that in 2016 at least, the US created gross 960k new companies (there is some smoothing here, so +- 100k) The UK created 460k. Seeing as how the UK is 60 million, versus 300 million people, either the US is under performing, or the UK is wildly over performing. (https://www.sba.gov/sites/default/files/advocacy/2018-Small-... and https://researchbriefings.files.parliament.uk/documents/SN06... for stats)

Perhaps, as we don't have to worry about healthcare or no competes, that might be a factor.

Registering a company in the UK, and keeping it running, is both simpler and cheaper than in the US.

Registering a company takes a few minutes and costs less than $30. Compulsory annual filing costs less than $20. If your company's revenue is below some threshold, you don't need to register for VAT (similar to sales tax). And there's another (even higher) threshold below which you can file very simple annual accounts (unaudited, and including neither income statements nor cash flow).

Agreed, I founded a UK company on a whim one day so I can bill for some freelancing work. It made a few thousand a year and everything was hassle-free, basically "pay $50/yr and file some stuff that tells us you're active, and when you get large enough to afford a good accountant they'll take care of it".

Eh, in my state in the US it is like $85 every 2 years for a LLC and essentially no paperwork if a simple pass-thru. Not everyone needs a Delaware C-Corp from day 1.

Nice. That's a lot simpler than CA. Here there's paperwork, more complicated taxes and $800/yr for a single-member LLC.

Based on those differences I'd wager that a lot more people in the UK would register their side gigs whereas in the US the trade-offs are rarely worth it unless you intend to make it a "legitimate business" at some point.

That's about the process in Texas. Incorporating is a different story, but you don't have to incorporate to register a business (and it's probably a waste of money if you are the sole owner with no employees).

Does the simpler option provide limited liability?

The UK also makes company formation very easy and still slightly advantageous for sole traders, which may be a factor. I did check the criteria and they do include "must be listed for VAT or PAYE", so they're all real businesses to some extent and not just shells.

The US would do well to look at its business licensing requirements to see if they could be simplified in terms of paperwork.

The smaller businesses can file with a flat-rate VAT (not itemized) which often means 5-10% tax benefit.

The UK also has universal free healthcare for residents, so no need for private insurance when you leave an employer and set-up on your own.

It's also cheap and trivial to form a UK company with bank account - no matter whether UK citizen/resident or not.

Filing for a company was trivial when I did it, but not many banks would give it an account (NatWest/Barclays/etc wouldn't). Has this changed?

There are quite a few non-legacy bank accounts that you can apply for a company account with in a very painless manner. Monzo, Starling and Tide spring to mind. I use Monzo as part of their business banking trial, but I previously have used Tide and (unfortunately) RBS.

Most company formation agents offer a free "bank introduction service". I have no idea how the logistics work, but I was able to open an account with Santander in a matter of minutes.

Interestingly, only a quarter of the businesses are employers in UK, so most of the company creation is presumably basically city of London financial engineering :-)

1) It's very easy for a sole trader or freelancer to incorporate. There's a slight tax advantage to drawing dividends from a limited company rather than paying yourself a salary, so a lot of these one-man-band companies technically have no employees.

2) A UK limited company is a flexible financial wrapper for all sorts of organisations, many of which aren't businesses in the traditional sense. A significant number of community groups are registered as limited companies rather than charities, even if they are run on an entirely voluntary basis.

3) The extreme convenience of the British system and relatively favourable tax rates mean that a lot of foreign companies choose to incorporate in the UK, even if they have no presence there. Until the introduction of the mini-GmbH in 2008, many German small businesses chose to incorporate in the UK, because dealing with the cross-border issues was easier than dealing with German bureaucracy. If I were a startup founder based in a developing or middle-income country, my first impulse would be to open a UK limited company - it takes about 20 minutes, costs about £20 and gives you a sound basis to operate as an international business.

4) The annual returns for a small limited company are so straightforward that it's often easier to keep a company dormant rather than formally wind it up.

Ah, yes, fortunately the source document where I got that stat from discounted all companies with no employees.

what's with justifying an existence of a company by having employees? If a company is profitable and you as an owner are doing well financially, does it really matter?

For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies.

This produces the result that publicly traded company Tesco PLC has a great many sub-companies [1]. This is at odds with a lot of expectations about how companies are counted.

[1] https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3Jd...

Tax is the usual one. That list also includes a lot of closed or dormant subsidiaries. Perhaps it's best to think of them as being like AWS VMs that get provisioned and de-provisioned, some with short lives. Tesco is complicated by takeovers that haven't been fully incorporated; I see a lot of familiar brand names in that list, and a whole other pile of fragments of Booker (giant wholesalers recently taken over)

I tried https://beta.companieshouse.gov.uk/company/07530494/filing-h... based on "EBT" in the name (tax shelter scheme), but it's a dormant empty shell.

TESCO GREY (2LP) LIMITED https://beta.companieshouse.gov.uk/company/FC027196 registered in the Cayman Islands? Obvious tax shelter of some sort. Also closed.

> For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies

One of the common reasons for subdividing firms (in general, not particularly the UK) is to take advantage of liability limitations, which work as well for corporation as shareholder as for natural persons as shareholders. If it is less onerous to set up firms in the UK, you'd expect UK firms to do more of this, because the cost/benefit analysis would favor more of the cost is lower.

I believe the general thought is that at a very simple level, operating as a company provides for a number of protections for the owners/operators. At a societal level, the broad justification for allowing unnatural beings with those benefits is that it still provides a net benefit to society through things like employment opportunities, taxes and the encouragement of economic activity. If the concept of a company no longer provides any non-trivial benefit to society (for example, no jobs or taxes), why should society collectively provide laws that allow them in the first place?

Shell companies are not the same as a person working as a "one man band"

For example a company I worked for had a structure where the employees and customers (~250 employees and £50million turnover) were mostly interacting with the named company, but there were three other companies that "onion skinned" the company with the name.

This was done to manage debt, primarily, which then allowed manipulation of taxes.

The UK used to (?) be a haven for Ltd creation because of low costs, low bureaucracy and quick reactions. It's what lead to Germany's laws regarding UGs (Unternehmergesellschaft, literally entrepreneur company), much more comparable to the Ltd regarding easier access, much lower startup costs than the typical GmbH.

It will be interesting to see where these numbers move post-brexit.

Suggesting one variable explains such differences is incredibly reductive. Plus, The US is not a single country, there is federalism and you should treat all states differently since setting up a business in NY is supposedly a lot harder than in other states.

Indeed, and lots of companies have shells in Delaware. Because its lower taxes & "better" company law.

> Because its lower taxes

Lower taxes is irrelevant unless all your operations are in Delaware. It's a great trick for IP holding "companies" that are just a couple lawyers in Wilmington, but otherwise you are paying taxes to whatever states you actually generate revenue in anyway.

Why do you need "a decent wedge of cash" to have a degree?

There are plenty of universities that are affordable. For instance, City University of New York (CUNY) offers four year undergrad degrees for $6,730 a year [0]. You can get a room share in an outer borough for maybe 500 - 1.5k a month or Jersey for even less [1]. And this is one of the most expensive cities in the world. If you're smart, avoid unnecessary expenses, you can probably get by on 20k a year in expenses, which comes out to 26 hours a week at $15/hr, ignoring taxes. Taxes at about 15% at that low income means you'll probably want to earn closer to 25k to have 20k net which means 31 hours a week. But realistically you'll probably want to work full time or over time during the months school is not in session and closer to 20 hours a week at other times. Or try to find a job that pays more.

Don't know much about health insurance so that's also something you'll have to consider getting maybe through the school or some city program or just go without it.

Or just move to a more affordable city and probably cut everything above in half while hopefully only giving up a bit of the wage you'll earn

[0] https://www2.cuny.edu/financial-aid/tuition-and-college-cost...

[1] https://newyork.craigslist.org/d/rooms-shares/search/roo

So, working a four day week, and studying full time to do a degree. Yes, I can see that allowing lots of time to form a network and come up with business ideas.

I was replying to the specific claim that getting a degree requires a lot of money.

Undergrad programs are what, 3 to 4 years. That means enough money to replace 30 hour per week job for four years. With uncertain healthcare status. That is a lot of money. Over here studies are basically free, about 100 EUR incl. public transport per semester. And even then working full-time to be able to finance all of that is hard.

> Over here studies are basically free, about 100 EUR incl. public transport per semester. And even then working full-time to be able to finance all of that is hard.

Who needs to work full time to afford €200/year?

Housing, food, clothing, etc... Unfortunately that's not included :-)

So studies are tuition free. I suspect university costs are not being compared fairly then, because the loans people take out in the US generally cover most of that as well.

Health care is not needed. Undergrads are mostly young, and without kids. It is unusual for them to visit a doctor - maybe they get an infection, a $30 visit to a "minute clinic" and $20 in antibiotics, but that is a one time thing.

For the cheaper universities you can support yourself working 30 hours a week, if you make your degree a 5 year program you can cut your classes down enough that you can live on your income and have enough to pay for class. You don't get any "fun money", but all your time is focused on class so that won't matter. You are also living in the cheapest room you can find, and cooking your own meals of rice and beans (the cheapest food).

Maybe you don't want to live that way, but you could.

> Health care is not needed. Undergrads are mostly young, and without kids. It is unusual for them to visit a doctor.

Jesus Christ. Please don't take this as a personal attack but it boggles my mind that in 2019 this is a situation accepted as perfectly normal by a large number of people.

In many countries in the west, this is not even a question that arises. I assume you are based in the US?

That someone has to make a choice between potential financial ruin in case of an unforeseen illness or "saving" on insurance and staying solvent to pay for shelter and food in the most powerful country in the world beggars belief.

So what if I fall down some stairs and get multiple complicated fractures? I can just as well call it a day and shutter all my hopes for making it in life because the hospital bill will be punitive.

Sure, it's unlikely to happen, but the discussion here is about the fact that if a person has money (and insurance) then this would be "merely" a painful experience, whereas if they "saved" on insurance and paid for food, shelter and education instead then they are pretty much done for.

Last I checked, in the US you remained on your parent's heath insurance while in college (or until 25?). Its been that way for years.

It doesn't matter what country you live in, if you are between 15 and 30, and don't have kids: you are extremely unlikely to need a doctor at all. These are the healthiest years of your life.

That would be what I call a bet, a very risky one at that. Especially if you are not filthy rich already.

No health insurance? Sport accidents, serious illness, traffic accident, children,... Honestly, I still can't wrap my head around the fact someone would choose to live without coverage. That some are forced to in developed countries is shitty enough!

I didn't say it was the best idea, but the idea isn't unreasonable. Sports accidents are easy to prevent (don't play risky sports). I said no children as a prerequisite for good reason. While serious illness is possible, it is extremely rare in this age group. You can't afford to drive in my scenario, so traffic accidents are not a big worry.

I'd still want health insurance, but the odds are in your favor if you choose to not have it.

Not sure this is reasonable.

Young people are actually pretty sick which is understandable because time is needed to adapt immune system to external ambient. The lowest period of sickness must be between 30-50 yo (no data, just informed guess).

I did exactly this; went to Hunter College CUNY and paid my way through with a part time job. Mom and Dad payed all of freshman year tuition and I did live at home. End result: no student debt. But I still needed that safety net to make that possible.

I don't know what kind of life you've lived where you think $6,730 a year is affordable, but it's a lot. Most people I know would have greatly improved prospects if they had that much money to spare. Education would be low on the list. First would be fixing their failing cars/homes.

$560/month to spare would change my life. I already got a good STEM degree on Georgia's HOPE Scholarship (traditional job prospects wiped out by SaaS), so it would go to a good used car, a proper studio computer, and some clothes that aren't years old and falling apart. Plenty of people I know found themselves in debt with degrees no one would hire them for without experience. Not even stereotypically useless degrees. They were pushed into it by everyone they were supposed to be able to trust, sometimes even outright manipulated and lied to by family.

> Why do you need "a decent wedge of cash" to have a degree?

I can’t shake the feeling, though, that after a certain point, in certain (important) circles, “affordable” degrees (like the one I have) are effectively the same as having no degree at all.

Why is that? Perhaps I don't operate in these supposedly important circles, but I have never found my affordable state degree to be a handicap in anything that mattered. Granted, that's because it's an engineering degree and, as my neighbor and fellow engineer once put it, after your first job people care more about what you've done than where you went to school.

> class may be a more powerful organizing discourse

Yes! Yes! Yes!

Other things contribute to class, but it remains a class issue.

I'm reminded of this: "If your feminism isn’t intersectional, it isn't feminism.".

We need something similar for those who think the issue is one-dimensional - "the poor".

Because why someone is poor, and what conditions and circumstances result from being poor... poverty (which includes the psychological impact of being poor)... deeply affect the individuals affected, and some of those factors have wider societal causes (racism, homophobia, xenophobia, perceived sex, sexual identity, etc).

In the US, Class is a pretty good proxy to wealth, far more than say the UK.

I'd say class in the US is solely based on your wealth, whereas int he UK it's based on your heritage/background. There isn't much of an aristocracy in the US.

It's okay to call yourself a feminist if you're not okay with biological males demolishing female sports records. It's okay to not go down the infinite intersectional/deconstructionist rabbithole to the point where it's normative for 8-year-olds to dress in drag and do sexually suggestive stripteases while men throw money. It's okay to retain your common sense.

>I'm shaking my head right now because I can't believe people at the top is still susceptible to sampling/survivorship bias.

Why the disbelief? They are the one who are primed to be the most susceptible to that!

There are studies that show that welfare increases entrepreneurship. https://www.theatlantic.com/politics/archive/2015/03/welfare...

So providing more people with safety nets increases entrepreneurship. Having a strong safety net is a form of privilege.

You are totally on spot. Survivorship bias is the ban of any honest discussion on this.

In which direction is causality flowing here, and how do you justify it? We didn't choose our brains––so how do we differentiate the privilege we got from our "class" from the traits we were born with?

Does privilege imply that you got it from your "class"? This seems like a classic nature/nurture fallacy.

>In which direction is causality flowing here, and how do you justify it? We didn't choose our brains

No, but our privileged parents did contribute to them, and their our upbringing, early months, lack of childhood stress over things as food and war, familial support, good schools, and so on.

Brains is hardly the best contributor to entrepreneurial success. In fact a plot of IQ vs success I've seen plotted looked like random noise except below a certain threshold (obviously seriously cognitive impaired people will have much more trouble becoming entrepreneurs). But aside from that, whether you are 105 or 120 or 150 didn't seem to make much of a difference.

Induction gets you nowhere though: where did our privileged parents get their brains from? You're proving my point here: we inherit roughly 50% of our traits through our parent's genes.

I never claimed IQ was the best measure (surprised it looked like random noise though), but certainly our cognitive traits matter. So to my question: How do you distinguish that privilege from the privilege you got from your "class"?

Edit: Sorry if I came across snarky here, I appreciate your answer!

>Induction gets you nowhere though: where did our privileged parents get their brains from? You're proving my point here: we inherit roughly 50% of our traits through our parent's genes.

Well, of people with equal IQs, isn't a potential 0-50% penalty from nurture/privilege still huge enough to make points about "self-made men taking risks" (and implying that others are "lazy" or whatever) moot?

Where do the other 50% of our genes come from?

I guess you're smart enough to realize that was a typo :)

Yes, :)

You get 50% of your parents genes, the other 50% isn't passed on to you at all. They might be passed on to your siblings.

Privilege is not a trait. You cannot look at a person in isolation and say whether they have it or not. It's a property of how other people relate to them in society.

White skin is something you're born with. White privilege is what happens when you live in a society that assumes that black people are more likely to be criminals than white people, so you get a more favourable reception when you walk in a room.

Do you really think someone's ending point as an adult is largely limited to their "brains"? Like, how are you going to completely exclude the upbringing environment and the scarcity and struggle for resources that some folks face.

It's not "what I think", it's what we know. One of the most well established facts in sociology is that IQ is the best predictor for life success: Firkowska-Mankiewicz, Anna, and Jerzyna Słomczyńska. Intelligence (IQ) as a Predictor of Life Success. https://www.jstor.org/stable/20628656

You reiterate my question in the second sentence: How do we weight these different privileges?

A quote from paper that cites the one you link,

>For instance, IQ was believed to be one generic measure of human intelligence, on which Young’s meritocracy was based. But a century of research on IQ and life success has largely dispelled the once widely spread myth about the importance of IQ (Arrow et al., 2000; Gardner, 1983; Goleman, 1995; Gould, 1996; Zhao, 2016). Based on longitudinal studies on IQ and life’s success that lasted multiple decades, researchers conclude that: “the value of the IQ scores should not be overestimated” (Firkowska-Mankiewicz, 2002, p. 41).

https://spssi.onlinelibrary.wiley.com/doi/pdf/10.1111/josi.1...

Besides that, even if an analytical weighting cannot be given, it doesn't mean we can't examine the effects qualitatively.

>The results demonstrate that intelligence is a powerful predictor of success but, on the whole, not an overwhelmingly better predictor than parental SES or grades. Moderator analyses showed that the relationship between intelligence and success is dependent on the age of the sample but there is little evidence of any historical trend in the relationship.

https://www.sciencedirect.com/science/article/pii/S016028960...

is that IQ is the best predictor for life success

Perhaps, but the paper also concludes "that the importance of the role of IQ in predicting life success should not be overestimated". Furthermore while IQ did to some degree predict objective life success it does not seem to predict subjective life success, ie how happy you are with how your life turned out.

Also, they only compared those who scored very low to those that scored very high. The study says nothing about the predictive power of IQ for those who are within 'normal' ranges. All you can really conclude is that 13-year-olds with a WISC score above 130 tend to do better in life than kids with a WISC score below 85. It says nothing about if we can extrapolate that to conclude the kids scoring 115 do better than kids scoring 95.

You are misinterpreting that research.

It’s the best individual predictor when compared against other predictors, but not very predictive on its own.

I.e. Iq is more predictive than inherited wealth, but iq + inherited wealth is more predictive than either individual factor.

And again we're back at my original question... This is just a never ending loop. My whole point is this: How do we separate our inherited traits from the privilege brought on by our "class"?

IQ is the strongest individual predictor, but much smaller than the aggregate of class traits.

Class traits are of course inherited, but there is a distinction to be made between cultural inheritance and generic inheritance.

Which are you talking about?

IQ is an output of environmental factors.

If you take the word of some gender studies person over his, OK... So fine, don't do a startup. Take up gender studies instead.

Class may also mean you have no examples of entrepreneurship in your environment.

I don't think PG claimed that poor people are as likely as rich people to become successful founders. That's not the same thing. He says you don't have to be rich to succeed.

Sure but he’s making a category error, and it’s so obvious as to be irresponsible coming from a person in his position.

All it takes is one person who succeeds who is not defined as rich for his statement to be technically true, even if every other poor founder fails and dies in poverty.

What do you mean by category error? All he says is that poor people can succeed at startups, too. How is that making a category error?

It’s not all he said. He also included his anecdote about the AirBnB founders.

It’s a category error in that his statement is a binary one i.e. true/false, which he is using to defeat arguments which are about continua.

That is a category error.

It’s also a common method of deceptive persuasion - i.e. a dark pattern, but I don’t think PG was doing that on purpose, hence my assumption that it was an error.

You mean the issue is that the AirBnB founders were not really poor, and the category error is using them as an example for "poor"?

And isn't he just providing one example, it seems too much nitpicking to me to then go on claim he made a categorcial assumption based on an example of one?

Maybe the AirBnB founders were comparatively poor. You can always find somebody poorer, and even too poor to do a startup. Like if you have no money, no arms, can't talk, you may be so poor that doing a startup might become difficult. Yeah - OK. Poverty that makes it impossible to do a startup does exist. Doesn't mean that most people couldn't do a startup.

Ok - so you have just made the claim that most people could do a startup.

That’s much better than PG, and doesn’t fall into the category error because instead of a yes/no, you are talking about a continuum and you have made a claim about one of the bounds.

Your claim is that at least 50% of people are above the level of poverty required to succeed at a startup.

If true this would be very informative guidance.

So - can you justify your claim with any data at all?

Why is it surprising? There’s a combination of blindness, and inflated sense of self worth. America romanticizes the “self-made man”, and so any help is discounted. (Famously, a $1M family loan in 1975 (4.8M in 2019 dollars) was described as “small”.) Not coincidentally, these is a strong correlation with ascribing their success to a meritocracy, even though luck has been repeatedly shown more influential factor in success.[0]

[0] https://www.fastcompany.com/40510522/meritocracy-doesnt-exis...

It's romanticized because the majority of Americans had someone in their family throw caution to the wind and get on a boat and cross the Atlantic with zero knowledge of what was going to happen.

Well, that was at a time when those places where at war, famine, turmoil, and the US economy was rising. Easy to "throw caution to the wind" when all you have is some small plot of land struck by drought.

Even easier when you know you can go back to whatever job you're currently doing if your entrepreneurial idea doesn't pan out.

That seems pretty silly to me. My family has such stories, from the 1860s. Why should I lionize the self-madeness of someone from almost 200 years ago and pretend that the same social factors are at work?

And you'd think Americans would think fondly of people who try and do that today, but instead we separate them from their kids then throw them all in internment camps.

many slaves.

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