Entrepreneurs who regret starting businesses
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Middle class kids can afford one throw. Most miss. A few hit the target and get a small prize. A very few hit the center bullseye and get a bigger prize. Rags to riches! The American Dream lives on.
Rich kids can afford many throws. If they want to, they can try over and over and over again until they hit something and feel good about themselves. Some keep going until they hit the center bullseye, then they give speeches or write blog posts about "meritocracy" and the salutary effects of hard work.
Poor kids aren't visiting the carnival. They're the ones working it.
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Original comment from notacoward here: https://news.ycombinator.com/item?id=15659076
There aren't that many entrepreneurs who failed multiple times before succeeding at a business. If you look at the big businesses that dominate the US tech economy, they're all first time founders (Amazon, Apple, Google, Microsoft etc).
There are also very few entrepreneurs bootstrapping their own business. Even rich kids go to VC, they aren't usually risking their own funds.
Finally, if you try multiple times, learn something important from each failure, and then succeed, it seems reasonable to claim that this is now due to the skills you developed and not mere luck. You can't even claim it's privilege - it might be, but as this article argues, being an entrepreneur isn't being handed a nice life on a plate even if you're successful.
For sure there are counter-examples where some rich kid spent their parents money trying and failing over and over, then got lucky without learning anything, somehow had an incredibly easy life from that point on and then started talking about merit. But they're going to be the exceptions that prove the rule. The carnival analogy therefore feels like ideologically motivated reasoning of the most common Marxist kind (claiming hard work and risk taking don't matter, that all success in life is the inherited privilege of capital).
Additionally, VC plays are often are parasitic endeavors that try to acquire monopoly positions by flooding the market to corner it (ie kill all competition) before raising prices (eg Uber prices raise to pretty close to taxis once the local taxis have been run out of business). If you prevented flooding the market as a tactic, the entrepreneurship model would change drastically. And that is something we used to try to prevent but for some reason we only did it once for the commodities market but let it continue unabashed everywhere else.
For this analysis to be complete you'd have to look at all companies, not an arbitrary selection of tech companies.
Furthermore, tech is unique (and so is the list of your companies) in that one couldn't have started a similar company before the ones you listed since modern tech literally had just begun.
A better example would be to look at the new generation of tech companies, such as OpenAI, if you want to focus on tech.
Finally, let's look at your companies:
Microsoft - was not Bill Gates' first company.
Amazon - It's true the name was the same, but the company pre and post 1998 (Amazon as a bookstore, and then Amazon as an ecommerce site, and then the development of what is known as AWS in the early 2000s) was fundamentally different. The only real similarity is the name.
Google - it's true Brin and Page started this company first, but they had effectively done all the work for "free" as part of their PhD (at Stanford, no less). Keeping up with the parent post analogy, there was not much risk here.
Apple - Similar to Amazon in that Apple as a name and company had continuity from now to its beginning, but Steve Jobs started Next which you could argue is the DNA of modern Apple (it merged back with the almost then defunct Apple), as well as Pixar.
> Apple - Similar to Amazon in that Apple as a name and company had continuity from now to its beginning, but Steve Jobs started Next which you could argue is the DNA of modern Apple (it merged back with the almost then defunct Apple), as well as Pixar.
These two do not really support your point. The grandparent said:
> There aren't that many entrepreneurs who failed multiple times before succeeding
Starting a successful company and then used that basis to branch out into another successful company does not disprove this point.
Your analogies don't refute his claims the way you think they do.
When you look at the FAANGs you're implicitly viewing from $$'s of the overall pie (top 99.99999%??) where as the parent comment is looking at it from they're just 5 founders amongst a sea of them (top 0.000001%?). Also, the founders of those companies aren't rags to riches they came from upper middle to upper class families.
His quoted analogy stands well and yours generally helps it.
That seems counter-intuitive. You are looking at incredibly large corporations that came full form in a few decades only, and I'd wager their founder succeeding at the first try might be part of the whole miracle. Companies that mildly succeed could come from less miraculous founders who needed a few more tries.
> Even rich kids go to VC
It's more on whether they can effort to "waste" a few years in a startup instead of trying to build a career in a more stable company.
They also don't need social branding: if you're trying to get a loan for your mortgage, working at IBM will help a lot compared to some random stealth startup.
It's the same reason you'll find more well-off kids trying to make it as actors. It's just a risk most poor kids won't take.
> due to the skills you developed and not mere luck
It doesn't have to be a dichotomy of one or another. Just don't publish a book to tell the world "look at me: just work hard enough and everything is possible"
The Fannie Mae underwriting manual and software[1] they use makes no mention of company prestige, age, etc.
Simply, is there consistent pay stub history, do the bank accounts agree with the pay stub history, do the filed 1040s agree with job and bank account.
If you have a non-average mortgage broker that cares about the name, then you’re in an SVB-like situation and we’ve all seen how that played out.
1: https://singlefamily.fanniemae.com/applications-technology/d...
Rich kids have a golden parachute for a smoother fall than all the other kids. In addition, most rich kids belong to wealthy, well-connected parents who have already built a network for them. Middle-class to poor kids do not have these resources. However, that doesn't mean bootstrapping will not work. But it is harder for them than rich kids to build a multi-million business.
You could get be the "lucky" person either tomorrow or 10 years from now, question is how long can you afford to continue.
In my experience, the stress and mental aspects are the hardest because each has to decide what to give up for potentially nothing in return.
I don't like pointing out 'privilege', but this is it.
Many of us have to spend weekends and evenings looking after kids, or ill parents. Family responsibilities in other words.
Some of us have jobs that demand more than standard 9/5.
And some have to work a second job to make ends meet.
Not having responsibilities is not a sign of privilege - but just a sign of a different phase of life. So that means one has to be tactical to pick the opportunity that matches what effort & energy one can put towards that opportunity.
I’m going to be honest. You don’t sound super privileged but you are more privileged than a lot of people and you don’t seem to realize it.
There is nothing wrong with privilege and there are definitely lazy people but it gets ridiculous when you keep posting “if I could do it, why can’t everyone else?”
Co-foudned a startup a few years ago, was good fun, didn't end up going anywhere. Got a decent bit of parental help with childcare. Now childcare has gone up a ton and I'm in a market-rate dev job with no intention to change.
Co-founder came from money, and is definitely under no such constraints in starting another business.
True. But the advantage is broader than that. They also have more able networks. Their parents more likely to know someone who can help who might know someone else who can help. The (support) network matters.
But that's not the difference marker. It's WHAT they throw those darts at that matters. True story...
A few years ago I attended (as a spectator) a hackathon at Princeton Univ. It was mostly PU teams but there were a handful of outsiders.
On day one each team presented their ideas. The team from Rutgers' idea had to do with drinking. An app that figured out the amount of alcohol in your glass or something like that. I honestly don't recall the PU ideas but I know they didn't center around partying.
It was then I realized the difference between those two schools. It's not the quality of the education per se. It's WHAT you think about and HOW you think about it.
Rich kids are exposed to a way of thinking (and role models) that is 100x more rare in the middle class or below. Sure you can claw up from the middle/bottom but it's 100x easier from the top.
As for thinking differently, I can't speak much to that, but I've met quite a number of rich people with average and below-average thinking capabilities.
I went to RU as well so I know what that edu and campus experience is like. I grew up in central NJ so I am familiar with Princeton. I went to public school. I had friends who went to private schools (e.g., Hun).
There IS a differnce, and it ain't just income.
You're absolutely right. It's a small sample size. Nonetheless the contrast was stark and obvious. Network, environment and role models all matter. They are things a lack of money can't buy.
There's a difference been thinking about and having lunch with Aunt X and Uncke Y the successful biz owners and the new Marvel movie and associated video game.
There's a difference between being smart about your body (read: food and exercise) and indulgening in anything advertised on TV. Spend a day in Princeton, there is a noticeable lack of excess weight and obesity.
Why? Because they think (and act) different.
Or at they rich because they act differently?
Come on, if you had the money it's 10x easier to "let yourself go", right? Yet how often does that happen?
Your thoughts drive your decisions and actions. That's not bullshit. That's life. Suck it up cupcake :)
>The best things in my life have come from when I faced adversity, not when I was in a position of privilege
Does that hold for kids hungry and unable to finish school because their parents don't make enough then? (Or much worse situations)?
And no it doesn't, this is not an argument against assistance programs.
Which is exactly why it is important to have an accurate assessment of who is truly an entrepreneurial genius, contributing to society, and who is starting another Juicero.
Gotta disagree with this. As someone who grew up middle class, I was fortunate, in a lot of ways, to also learn to be prudent with money. I started bootstrapping microbusinesses with almost no monetary investment. This eventually allowed me to support myself (on a very low budget), and then, later, on a slightly larger budget. Eventually, one of these businesses became successful enough to support a family comfortably with an "upper" middle class income.
The mistake a lot of people make is that they need to spend significant time and/or money to start a business. You don't. You can work on low-risk businesses, building your skillset so that your odds of success improve over time. No need to aim for the "center" bullseye, either. This is a case where low ambition can be helpful. Instead of trying to grow a huge startup, I was ecstatic when I was able to afford rent in my cheap apartment (with a roommate.)
Of course, the situation may be different now for middle class kids. Maybe they don't have some of the same luxuries my family was able to give me: a couple of years of college paid for, attending a few business/marketing conferences as a teenager, examples to follow from my dad and brother. I suspect some of this is true; I sense a lot of pressure on young adults that I didn't feel when I was young. I also recognize that "middle class" in the states is definitely a case of "wealth" in comparison to other parts of the world.
Also, when I was young, and learning the ropes, I was young. I didn't have responsibilities; just being able to afford a crappy apartment and food was more than enough.
> Gotta disagree with this. As someone who grew up middle class, I was fortunate, in a lot of ways, to also learn to be prudent with money.
You said you are fortunate, that actually proves rather than disproves the parent comment, no?
I was fortunate, because I knew better than to "throw" all of my money at an opportunity, not because I wasn't middle class.
My main point is that it is actually possible start a business with almost no risk and almost no capital. Not that you'll succeed. And if you don't that's OK.
Failure is an option, and if you're smart, it's an option you can easily recover from.
Honestly, I think I learned half of this attitude from playing competitive video games in the late 90s. You just keep trying stuff. If it doesn't work, you can do another round. (Gah -- I'm in awe of how much free time I used to have.)
But no, they meant that not having unlimited funds meant having to be creative or having to focus on business ideas where huge budgets were unnecessary.
I'll take their assessment of their life ("lived experience" in modern parlance) over a bad analogy any day.
This can work even with poor people who have connections and status within their community.
Status not only gets buy-in from others for business operations, but gets buy in from customers, which is required for any business to survive and thrive.
I've had Adam Neumann, in particular, in mind while reading this thread. He famously had multiple shots. Some of these may have been while just a child of the upper middle class, but his most recent big ones were because of his connection to status within the upper class.
It's kind of like the failing upward of executives of broken companies. Once you get past a certain level of status it's really, really hard to lose it all so much that you can't get buy in from others.
https://www.theatlantic.com/magazine/archive/2020/11/wework-...
> What distinguished Neumann, along with his ambition, was “his connection to capital,” Wiedeman writes. Neumann had married Rebekah Paltrow, a wealthy cousin of Gwyneth Paltrow and a kabbalah devotee. She invested part of a $1 million nest egg in WeWork and introduced her husband to Manhattan’s Kabbalah Centre, where he met other well-off backers.
That's still a random individual outcome. What matters is aggregate outcomes, what happens to most middle class kids who want to be enterpreneurs for example, and how many chances they get.
There's also the matter of the quality of those chances (what kind of changes you get with $300K in the bank and dad's rich people connections vs $0 in the bank and middle class connections).
That's even before considering the chances afforded to middle class kids now versus then.
Do you think other poor people trying to start businesses don't try to do it with "almost no monetary investment"? Not only they try that, that's the only way they can afford to try anyway.
Still no match for a big monetary investment, and still much much harder for them to get the same outcomes as an enterpreneur coming from privilege. Notice also how the claim isn't that it's impossible (or inversely, that the rich always succeed to build a succesful business), but that it is much much harder, and the upper middle class/rich/connections people have it much easier.
This system is very repeatable. I'm 13 years in.
Of course people with privilege have it easier. The whole world runs on the Matthew Effect because it's too lazy to do anything else. It isn't just or fair. Until you can fully accept that truth and do things despite that, you're stuck.
Me? As someone who rarely is fully confident about things, I'm fully confident I'll achieve some moderate success in bootstrapping if only because I have internalized the meta-belief that I can learn, adapt, persevere, and work toward the future I want, regardless of how long it takes, how successful I am, or any other external indicators. Agency is a powerful meta-belief. In that sense, I've already won, I'm just enjoying the journey and what I'm learning. And, one day I'll start cutting the strings of trading time for money.
Nobody is arguing for unbridled optimism.
Nope, just reality described as is.
>Of course people with privilege have it easier. (...) Until you can fully accept that truth and do things despite that, you're stuck.
That, on the other hand, is fatalism described as realism.
Nothing ever changed without outrage about how things are.
And even less by people accepting them and trying to get by "despite that".
Plus, every starry-eyed, la-la land, Polyanna thinks themselves not naive!
It goes along with another of my favorite quotes: everyone seems crazy when you don't understand their point of view.
As an example, in the aggregate people with non-CS or math backgrounds are very unlikely to make $400k+ a year as a software developer. On an individual level, I have repeatedly been able to get others to that level inside 5 years if those people are willing to do straightforward but difficult work. However, this is only possible because so many people won't do the work, if everyone was aware of the opportunity and had the gumption to pursue it diligently the opportunity would quickly be exhausted.
This same pattern of "plenty of opportunity for individuals, but not enough for the group" seems common in many other ventures. Talking to very successful people it seems to be one of the reasons so many people who make it view lack of success as a failing, they've acquired the skillset to see these opportunities and wonder why no one is taking them (but often fail to notice there aren't enough for everyone).
In the aggregate, nobody starts a business. It's hard work with lots of risks. Most everyone prefers to exchange their time and labor for a stable income.
In that context, counting where the number of attempts is 0 doesn't add anything to the thesis.
I can't think of a truly successful business, for an adult, that didn't require money to start. Money being a bare minimum.
I did things like buy a domain name, pay for cheap web hosting, etc. I was already knew the basics of coding, and some understanding of marketing. My biggest investment was a $97 eBook about marketing. I found one idea in that book that I used to do some successful SEO. This was circa 2003, when SEO was pretty much as easy as picking fruit from a tree, if you knew the right things. Anyways, that's how I got things launched. I also bought and read quite a few business books, which certainly weren't free.
This type of investment was very do-able for most middle class kids. Many of whom, at the time, could afford their own home built computers.
Also -- what I started with is very much not where I ended up, though there is certainly some relationship to it. For example, SEO is still an important part of the business, but the SEO strategy is much more about human relationships and service, than it was about "gaming the system," which was my perspective as a 21 year old.
[1]"First, you fire bullets (low-cost, low-risk, low-distraction experiments) to figure out what will work—calibrating your line of sight by taking small shots. Then, once you have empirical validation, you fire a cannonball (concentrating resources into a big bet) on the calibrated line of sight. Calibrated cannonballs correlate with outsized results; uncalibrated cannonballs correlate with disaster. The ability to turn small proven ideas (bullets) into huge hits (cannonballs) counts more than the sheer amount of pure innovation."
[1] https://www.jimcollins.com/concepts/fire-bullets-then-cannon...
As middle class you can't fail with your dart, you are either lucky or good with it. Maybe you are part of the latter, but if you miss your shot you are fucked in either case.
Wealthy people can be damn bad with it but keep trying until it works, and if you are rich enough you don't even need to hit the center once and keep going.
No nights or weekends after the j.o.b. - each has to decide if that is worth it to them.
The value of what you are saying is that an individual can't change their circumstance, only make the best of it. This is true.
The value of what the OP is saying is that we should be aware of how our circumstances affect our chances. Be kind to ourselves if we fail, when it's so likely for us. And also that we should, if possible, change the circumstances for those who come after us.
- You have to give up something
- You don't have to give up anything
If you're middle class, maybe you can't take shot after shot at the full distance, but you can start close to the target and incrementally step further away. To mix analogies, there's nothing in business that says you have to swing for the fences on your first attempt.
As most commenters note, the youth aspect is a big differentiator for the middle class. All this is hard as soon as a family is in the picture, health concerns go up, etc. (And for some, those happen even sooner, but not most.) Frustratingly, most successful entrepreneurs are much older, so a case of "youth is wasted on the young."
Source: Had a 5 figure income in the bay area for years and it was fine until it wasn't.
Ex: I can argue that VC funding is much worse than having paying customers in your space and the luxury to pivot & explore until things work. Having to double down your growth bet every 18mo or die trying is a real killer. People get confused by thinking the VC path is awesome because VCs only fund good companies, but that doesn't mean it helps them, just that the company was good. Back to my main point, I wouldn't say VC funding is the kiss of death, but it a bad fit for many and arguably most companies ;-)
My point was that part-time pure paid consulting while trying to start an (under-)funded product business is one of the worst things you can do. Would-be founders end up never needing to commit to the riskier venture and having a hard time disentangling form consulting. Source: decades of startup founding and employment experience.
At some point the middle class becomes unlanded gentry.
Back in the mid 90s, I had the opportunity to join a small startup. I took a 50% pay cut and took a big risk; but I got a healthy chunk of founder's stock so if it worked out, I would be rewarded. Turned out to be one of the best decisions I ever made; but I also made it when I was young and single with no one to take care of but myself. I seriously doubt I would have done that just a few years later when I was married and had a couple young kids.
Rich people can afford to take more risk and do it more times than can people with more modest means. It is certainly possible for the middle class to make it work; but they have to be more strategic and careful and thanks for pointing out a few ways to do that.
The label is aspirational by design, and they buy into the whole culture, which explains why everyone thinks a startup has to be an all-or-nothing unicorn taking VC funding for a glorified CRUD app where they're just making up the requirements as they go while praying for product/market fit.
In short, it's about status and pop culture, not solving the problems of real users. Which is a shame, cause actually solving problems for users is really, really interesting even if TechCrunch doesn't get excited about it.
They don't. And that counts as pretty well off today.
Success is the intersection of luck (having college paid for, a supportive family) and preparation (learning business skills early on).
Starting young (at 20 years old or earlier) gives you over a decade to explore and discover your entrepreneurial path with low risk. Stop making excuse.
Middle class have 3 paths out:
- Single shot entrepreneurship
- Repeated entrepreneurship with a job (no free nights or weekends)
- Long term, multi generational wealth building over the course of 40-100 years with a mixture of stable career or above
A wealthy family did the above but a generation or two before you or yours & someone else is reaping the benefit. Don't get mad at someone else because of your own families path.
Just as one can't judge a person who's on the streets - one can't judge a wealthy person with such lenses.
Do you have any evidence for this?
[edit] Of course, you'll likely be able to find a single case and that's any evidence. So how about is there sufficient evidence to support your conclusion that "old money" is getting all the VC funding?
https://techcrunch.com/2021/08/29/diversifying-startups-and-...
Maybe it is just a confusion over the definition of "multi generational wealth".
Many if not most people consider getting a house, inheretence, or small business "multi generational wealth", especially in economic literature.
You dont need an 8+ figure inheretence to be upper class in the US.
Anyone else is taking on risk of becoming destitute if they repeatedly try to start businesses. Even a small business can drain a million dollars very quickly.
> You dont need an 8+ figure inheretence to be upper class in the US.
I think you do since that's about the level where you don't have to work anymore, especially if you're talking about passing that money down to multiple children and keeping them in the upper class.
That said, I agree eight figures is about the right number for when a family would not have to work assuming that the capital assets are managed appropriately.
I think high value labor is the main path between lower class and middle class. High value labor plus smart investment of surplus capital gets families from middle class to high class. The path from high class to Capital class, as you call it is, primarily return on Capital management.
To get from Capital class to Kennedy class requires a significant windfall or luck, as you would expect for tail end of a Pareto distribution.
A family house is generational wealth. Most people who at age 65-75 are worth over $1 million dollars didn't get there by using the power of law to stay on top or profiteering from slavery or genocide. That's insane.
NIMBYism is the power of law. Mortgage interest deduction is the power of law. Without either, that million dollars of wealth, much of it in the home, would be a lot less.
I think there's a basic misunderstanding here. If I say that you are in the 80th percentile, that doesn't mean anything other than you are, right at this moment, in the 80th percentile. It doesn't say anything about your position in the future, and even if it says that the 80th percentile will still be there in the future you may not be in it. You can't use the fact that I have described your position to maintain your position.
Did you not read what you linked? It deals with the causes of power laws in economics, it does not by any means say that power laws cause stagnancy among the relevant population. It does not say this because that would make no sense.
Power laws when applied to economics are an indicator that there are underlying processes (effective barriers with capital may be one) that cause the distribution to look this way. They are an illustration, not a cause.
https://www.forbes.com/sites/eriksherman/2023/03/26/financia...
> The reason most people don’t get the mortgage interest benefit is because claiming it requires itemizing tax deductions rather than using the standard deduction. But to itemize, you need enough deductions. In 2019, the Tax Foundation estimated how many people itemized after those big tax changes in 2017 that made it harder for most taxpayers to do so. It was 13.7%, or more than 17 percentage points lower than before the 2017 law.
> Desmond pointed to a National Bureau of Economic Research study from 2015. Even at that point, about $195 billion of the $270 billion the federal government spent on housing was in the form of these tax code-based deductions. The remaining $75 billion is spent on the poor, or less than a third as much.
> That $195 billion now is for the people who can claim it on their taxes, or less than 14% of the tax paying population.
This was actually the point I was trying to make. It depends on how you look at it, but by one measure, taxes on net are slowing the wealth accumulation of everyone who pays more than the national average tax. Those who pay less than the average are typically living hand to mouth and not accumulating wealth. When you look at where tax revenue comes from, it is mostly the high earners that are paying for everything, offsetting the their wealth accumulation. Even despite factors like itemized tax deductions, your high earner will still be paying far more than your low earner. For example, the federal rate of 37% on income over 500k will still be far more than 12% on less than 41k, even with tax deductions.
There are of course some factors that offset this, like maintaining the rule of law, education, and property rights which help lift all boats, rich and poor.
The mortgage interest deduction in particular now helps the top 20% or so afford their homes. And afford to continue paying more for homes in their range. Thus boosting property values and prices. While the lack of mortgage interest deduction for additional homes increases the cost of homes which are let out as rentals, which directly impacts the cost of renters, and indirectly boosts the costs of renters through the rise in property values.
I haven't studied this, and lack the ability to do an economic analysis of the yoyoing of increasing home prices versus new construction. But there's probably a regressive effect on wealth even for some of those who aren't living hand-to-mouth.
It looks like the mortgage interest tax deduction did decrease from interest on up to $1 million in loans to interest on up to $750 thousand with the 2017 tax change. This should help reduce the effect on house prices a little bit on the margin.
> it is mostly the high earners that are paying for everything, offsetting the their wealth accumulation.
To an extent this is true. But this argument is also used to say that renters don't pay property taxes. Maybe not, but property taxes have a direct, proportionate effect on the rent that they pay.
>To an extent this is true. But this argument is also used to say that renters don't pay property taxes. Maybe not, but property taxes have a direct, proportionate effect on the rent that they pay.
When you have makets with a gap between production cost and the market price, there is the possiblity that the seller simply eats the cost.
Imagine wallmart selling widgets with a profit. If the price of the widget is already set where the marginal profit for increasing the sticker price is zero, This holds true even if production costs go up. i.e., raising the price still results in fewer sales and less profit, independent of production cost.
In terms of housing, if nobody can afford higher rent, landlords cant raise it without more vacancies. In that case, tax might come out of their profit and not be passed on.
Yes, this is true. Some landlords merely use rent to offset the cost of the house, not to cover it entirely. But over enough years, the majority of rental property has to be paying its way, or it gets sold off.
For middle class adults living with their parents?
Should I get mad at my family? This part is not clear to me.
You are also saying this like it's possible for everyone to become wealthy, if only they were picking one of these three options. Not every family can be wealthy - the wealthy make sure of it. It's a zero-sum game (well, more of a negative-sum game? as wealth becomes more concentrated at the top).
Actually, the more I think about it, the less I see how these are three different options. For me as an individual, #3 comes down to inheriting wealth that someone else generated with #1, which is just #2 + luck.
If everyone owns 5 houses, to be rich you have to own 500
The most risk tolerant people are also the most likely to immigrate to a new country? The more conservative people buckle in for a life at the fruit stand or whatever they have in their home country. Maybe not a great life, but it's steady and they know it keeps them fed.
A dual income couple can accomplish a lot if they communicate, plan and support each other.
The fallacy here lies in assuming that every startup requires capital. Capital greases the wheels, sure. But far too many people think entrepreneurship is just dumping money into an "idea" until it works, and that's actually the worst possible way to go about building a business.
I've been building businesses since I was 10. Very low income family. They certainly weren't funding anything (nor was I in middle-school). But the spirit of entrepreneurship has always been there.
Aren't many first-generation immigrants (Koreans etc.) in the US entrepreneurs? They're certainly not middle class, and yet they make in it the business world.
Being the recipient of the sacrifice of two capable people is not a state of poverty.
You see this most often in many of the immigrant families
First generation are janitors.
Second generation are accountants/engineers.
Third generation are doctors/lawyers
Fourth generation are entrepreneurs
That's not really what a meritocracy is supposed to be.
Also in Britain, surprisingly, you can register a takeaway anywhere, even at your home, and if you don't handle animal products, there is no requirements to meet at all. You don't have to show your hygiene rating to customers either.
"When you start a new food business or take over an existing business, you must register with your local authority.
It’s free to register, and your registration cannot be refused.
You should register at least 28 days before opening. If you’re already trading and have not registered, you need to do this as soon as possible."
I see this story repeated over and and over again on the internet, but I don't really see it playing out the same way in the real world.
I've seen a lot of "rich kids" try to start businesses, but then quickly realize that it's a huge amount of work and not guaranteed success. Then they look around and see all of their opportunities for safe, high-paying jobs that leverage their expensive education and their parents' network, and decide that taking one of those jobs is a much easier way forward.
I lived near a highly ranked MBA school for a while. I would constantly get LinkedIn requests from stereotypical "rich kid" MBA grads who banded together and wanted to "do a startup", but they just needed a few engineers to actually do all the work. It was funny to hear the pitches about how they'd give me 1-5% for doing all of the tech work of their company while all of them (up to 7, in one case) would handle the business side of things for me. No thanks.
There are definitely some "rich kid" startup founders out there, but a lot of the founders I've worked with over the years came more from the end of the spectrum where they grew up learning how to work hard, that money doesn't come easy, that they can't rely on parents to bail them out, and so on.
It simply implies that in a case where both have considerable skills and effort, the 'rich kid' will get much farther
Well if you assume everything is equal but you give one person more money then, sure, that person has a higher chance of success.
But that's missing the point: Many important things are not equal between the two groups, and it doesn't always benefit the wealthier one when it comes to starting companies.
This is how elite colleges work. They connect elite kids with talented kids they can take advantage of.
The other path I've seen rich kids take is get a good enough job in sales and marketing where they're doing fine, but not as good as their parents.
Revision to the mean is real.
It's also like the three-generation rule for family businesses. The first builds it, the second maintains it, the third loses it.
Alternatively,
> My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel
If they kept trying, someone else probably said yes.
I think this is wrong and that it trivializes people’s accomplishments and hard work as nothing but random chance.
There are tons of examples of entrepreneurs who came from nothing that spent long periods of time living with their parents and eating ramen, grinding until they finally made it.
Random chance is a dominant factor in life, in some walks of like it's The Dominant Factor. Look at Olympic champions, they all work hard but for every athlete that succeeds, there are 100 that worked just as hard and did not. If you were not randomly allocated the right genes, your chance of winning the Olympics is 0% no matter how hard you work.
Or look at traders, they work 100 hours a week, consume cocaine, some die of overwork, some die of overdose. And we have research to prove that random chance is the dominant factor in their work. Working hard for them is a necessity to stay in the game, but it does not assure success.
Tonya Harding would like a word with you.
More seriously, luck beyond can help beyond genetics. Such as having local access to a world-class trainer. Or changes to the rules of a competition (I have heard that Simone Biles' 10s are partly possible because of changes in scoring which value her skillset more than they did previously).
More like upper middle class or if you are in the right country.
True, but those throws are still expensive, and the prize is worth less than the cost to play. This is what downward mobility looks like. It's a kid who grew up wealthy, but ended up upper middle class because they weren't as lucky/ambitious/talented as their parents. It happens a lot, but it isn't dramatic, and the outcome isn't "bad," so it doesn't get much attention, but downward mobility absolutely happens.
> Poor kids aren't visiting the carnival.
This doesn't agree with my experience. I grew up poor, and by the time I hit middle class income levels, had already thrown the dart more than once. At middle class, I also threw the dart a few times.
One of the things people misunderstand about starting businesses is that they think you need a lot of money to do it. You don't. Adequate funding makes the experience more comfortable (fewer nights going without eating, the ability to hire people to help, etc.), and perhaps makes the venture more likely to succeed (although that's a matter of legitimate debate), but isn't necessary.
What's necessary -- regardless of monetary resources -- is an almost pathological drive to do whatever it takes to make the business work. I've found, personally, that the single factor that makes the difference between success and failure is being in a position where failure would mean complete and total personal disaster. Then my survival instincts kick in and help.
Yeah, if. The old military adage about capability and intent comes to mind. Rich kids do have more raw resources, but they may, at the same time, lack motivation. What do they have to gain by throwing, and especially by learning to throw accurately and at a desirable target?
Motivation is quite a big factor in success. Motivated people fail, too, but unmotivated people rarely succeed; there is always enough distractions around to spend money and time on (sports, sex, travelling, gambling, drugs etc.).
By most standards, this was a resounding success. I won't have to work again ever if I don't want to. This being my first company, I was obsessed with it. Towards the end, I burnt myself out, I had neglected my wife and kids for years, and I was just so miserable. I used to love programming, but I could not concentrate anymore. I started developing resentment against the entitlement of the software engineers I would hire. My heart was broken every time I would read articles/comments on HN about how working for a start up is a scam that only benefits the founders.
It was time to get out. I was lucky that I sold in 2021, when the multiples were higher than ever. But I have lost my marriage along the way, and I have definitely lost a few years of life expectancy.
I really wonder if it was really all worth it. I know at the end of the day though I had to go through that. I had to see it with my own eyes.
In the end, things worked out for me. I can't even fathom how I would feel if the whole thing had failed. I really came to the conclusion that most of the time, starting a company is for suckers.
buying expensive shit is awesome for a while but it gets old. especially if you already have a home you actually like living in and the 'expensive toys and experiences' itch has been scratched for a while because your business was already successful by the time you sold it. i don't want a huge house and i don't need another car or overpriced workstation computer.
it makes me wonder what drives billionaires to keep going. they're probably just bored when they're not working. it really might be as simple as that.
I don't think it's a mystery; if you want to do a good job, then you'll continue to want to do a good job, even if you're already succeeding at doing a good job.
Everyone has goals; if nothing else, to obtain the physical necessities of life: food, water and whatever clothing and shelter are made necessary by the climate. But the leisured aristocrat obtains these things without effort. Hence his boredom and demoralization.
Nonattainment of important goals results in death if the goals are physical necessities, and in frustration if nonattainment of the goals is compatible with survival. Consistent failure to attain goals throughout life results in defeatism, low self-esteem or depression.
Thus, in order to avoid serious psychological problems, a human being needs goals whose attainment requires effort, and he must have a reasonable rate of success in attaining his goals.
But not every leisured aristocrat becomes bored and demoralized. For example, the emperor Hirohito, instead of sinking into decadent hedonism, devoted himself to marine biology, a field in which he became distinguished. When people do not have to exert themselves to satisfy their physical needs they often set up artificial goals for themselves. In many cases they then pursue these goals with the same energy and emotional involvement that they otherwise would have put into the search for physical necessities. Thus the aristocrats of the Roman Empire had their literary pretensions; many European aristocrats a few centuries ago invested tremendous time and energy in hunting, though they certainly didn’t need the meat; other aristocracies have competed for status through elaborate displays of wealth; and a few aristocrats, like Hirohito, have turned to science.
Please read paragraphs 33 through 41, or better yet, the full text for context https://www.washingtonpost.com/wp-srv/national/longterm/unab...
Thanks to this thread for introducing me to this manifesto. I have heard of it, but I didn't know it was a critique of our industrial world from a "madman" wishing to return to more primitivistic roots. As someone going through the same concerns, without the violence, this essay seems right down my alley.
If we're looking at billionaires, it's a very different situation from the rest of the rich.
Billionaires carve out and control portions of civilization. I mean any business or other venture does this to a degree, but when you're working with billions of USD, you're playing a different game entirely. It is about power.
Why? Genuinely curious. Stress can lower life expectancy?
I'm undoing the damage now - but I can tell I've been physically aged by the process.
1: https://www.goodreads.com/book/show/18693771-the-body-keeps-...
> I really wonder if it was really all worth it.
Wait, are you saying you don't think you'd have lost the marriage if you didn't do the startup? Surely it wasn't worth it if so?
You concede your marriage suffered and suggest the impact on your health was negative, but both of these things could have happened if you were just surviving in a low paid regular job.
Don't be so hard on yourself and enjoy your success.
> You concede your marriage suffered and suggest the impact on your health was negative, but both of these things could have happened if you were just surviving in a low paid regular job.
This isn't really a good way of thinking. Where will it end? You might as well do anything, since any negative outcome isn't necessarily inclusive of the thing you did.
You're absolutely right that it's worth weighing the chances looking forwards because it can guide your future choices.
But when looking back and thinking "if only I'd done this or that differently, everything would have gone well," that's torturing yourself with a imaginary timeline that never happened and for which there is a non-zero chance could have been worse.
It's easy to choose destroying your relationships and risking your health when the alternative is poverty. It's not so easy when the alternative is still making twice what the average American makes working in a cubicle at worst.
I've worked for a few start-ups now from early-stages to IPO and it definitely feels like this. Most opportunities for any amount of valuable equity is complete lies. I have been personally responsible for creating quite a few millionaires - without being one myself.
> I started developing resentment against the entitlement of the software engineers I would hire
You probably know this already - but you are nothing without your engineers and they usually know it. I recently worked for a financial start-up which completely imploded just pre-IPO because the founder thought that they were beyond the point of needing an engineering team (!).
year 1: https://maxrozen.com/2018-review-starting-an-internet-busine...
year 2: https://maxrozen.com/2019-further-reflections-trying-to-star...
year 3: https://maxrozen.com/indiehacking-3-year-review
year 4: https://maxrozen.com/2021-strangers-paid-my-macbook
year 5: https://maxrozen.com/2022-just-keep-shipping
In the end, my business has been described as an "internet laundromat", it's definitely not a unique idea, it was a pain in the ass to get here, but I don't regret it.
But i still came here for the comments!
Anyone who tells you being a C-level person in a startup is fun and glamorous isn't running a real startup.
Being a founder is certainly not fun. The good parts are there, like earning money, interacting with your team and seeing them grow, the first round, the first sale. But the job is quite painful itself.
Please note that not all startups and founders are / want to be funded with billions of dollars. The true story is that you are going to be overworked and fail 99% of times.
It is closer to the type of "hard fun" one has training and running a marathon, than the "easy fun" of watching a movie or playing a game.
He now has a consultancy called "Business Model Hackers LLC".
One of his books is titled: "Vision, Mission, Values, Aspirations, Do They Matter?: A Business Professionals’ Guide to Drafting Vision/Mission Statements and Their Purpose in Modern Organizations".
I wrote a couple of paragraphs and deleted them, because really, there is nothing left to say.
I started a self-funded SaaS business fairly late (in my 40s). I was tired of being dependent on others, especially as others mostly failed me in the past. I wanted to be independent: no investors, no bosses, no employees. Just me.
It took five years of slow growth to get to a stage where I didn't have to worry about revenue.
Do I regret it? Hell no! It's the best decision I've ever taken in my life.
I am now very happy with where I am: I have a business that depends on very few external factors and runs well. I don't have to worry about investors doing crazy investory things. I don't have to worry about employees pulling crazy employee stunts (believe me, I've seen a good number of those in the past, and the entitlement of many employees is absolutely crazy). I don't have to worry about user numbers, only about paid subscribers and maintaining slow revenue growth. Nobody pushes me for crazy growth.
Most importantly, the business model is simple: my customers pay me because my software improves their workflows. That's it. There is no "monetization", no shove-it-down-your-throat marketing, no tracking, none of that unpleasantness that seems to be dominating today's world. If they like the software, they pay a subscription fee, if they don't, well, they don't, and I have a problem. But so far it seems they do :-)
The only thing I had to carefully manage was my engagement: it's easy to get pulled in and work crazy hours, because in a single-person business there is always much more to do than you can possibly ever do. You have to become good at prioritizing, which means identifying the single (ONE!) most important thing at this moment and focusing on that. But you also have to accept that most things will not get done and be OK with it. That was hard for me, but I learned, and I keep sane hours and a good work-life balance.
I'm posting this just to provide a counterpoint to many negative comments.
PS: if I were to provide one bit of advice to aspiring entrepreneurs, it would be: look for a business that delivers high value to customers with money. So don't start a B2C business that does something easily replicable with a low value. B2B is where it's at.
I'm starting a B2B SAAS business (the dream) on the side where I also plan to work on my own (no investors, no employees) and maybe be helped by my wife.
My question to you is: Do you have experience with free tiers?
I'm thinking about having a free tier to lure in customers and allow them to play around with the app without having to commit their credit-card right away.
Focus on what exactly your customer would be paying for, and build that, as opposed to what may look interesting to some random visitor to your site.
In general, I would strongly discourage a free tier in B2B SaaS. Nothing that has value is free. If you need to offer something for free to "lure in" customers, then I'd say your main offering does not provide enough value. Also, you will be "luring in" customers who expect and want free stuff, this is not the kind of customer you want.
Do not get caught in the race to the bottom with your pricing. Do not listen to pricing advice on HN: people here are not your customers. Many expect B2B SaaS to offer $19/month plans, which is impossible. In my opinion, any B2B SaaS with an ARPU lower than $50/month is doomed to fail. If you find a counter-example, it will be a company burning through VC money to get "user growth", or a loss leader from a big corporation. Think about it this way: at $19/month you are looking at $228/year revenue from a customer. Ignoring all other costs, if you spend ONE HOUR PER YEAR supporting that customer, you are already losing money.
Build something that provides real value to businesses, price your service fairly, err on the high side, and see what happens.
Trying without having to commit is important, but that's what free trials are for. I had free trials with a credit card required for the first few years, because I was afraid of the support load. Then I switched to free trials with no credit card required and in retrospect I should have gone with that from the beginning, since the niche I'm operating in is fairly small and most of my customers are smart engineers, so support load wasn't an issue.
You can find lots of examples for a BCP on any search engine, and in my experience so far it's more important to show that you've thought about it and at least have a plan in place to take care of business continuity, should something happen to you, in the future.
Another thing to keep in mind is, even if you had staff who could keep a platform going, until you're running quite a large operation, even finding someone who'd want to take over should something happen to you is going to be difficult. I'm eyeing a buyout by a large competitor in the distant future for that, because this is a really niche space and requires a lot of technical knowledge and people skills.
I sometimes explain that I've been doing this for eight years now and this is my life's work, which is a much better guarantee of stability than a VC-funded hotco startup, where winds can change any day. I also sometimes explain that if you are the customer of a VC-funded startup, something is certain to happen in a couple of years, and there is no outcome that is good for you, the customer. The startup could be sold to a bigco (bad, they will ruin the service or shut it down outright), go for an IPO (bad, huge pressure on user base growth at the expense of maintaining existing features), have another investment round (bad, increasing pressure on user base growth), or simply get shut down.
But these kinds of discussions are very rare, in general I haven't found this to be a problem. Or, in other words, I have enough paying customers for this not to be a problem :-)
I am not saying, product business is easy either. But, consulting business is relatively easier to start and lures you into thinking that it will also be easy to scale, which is an easy trap to fall into. With entrepreneurship, the kind of ship you're driving matters. I don't think there's much to regret when you're running a profitable software business with 80% gross margins and <10 employees. In today's economy, it's not an impossible dream.
Like any skillset, you can build a career out of it. And, just like any career, you could end up on the scale of loving it to hating it. I'll admit it's quite a bit harder than any other career though since often you can't look to your peers for advice or examples of success. It's largely a game of taking on risk to provide value to people who will pay for it.
If you've never promoted yourself online, how do you expect to learn enough marketing chops to get people to the value you provide with your business; how do you expect to learn enough sales chops if you've never sold anything to anyone before.
As for me, I'm just a lowly independent consultant, so make of this what you will, but I understand that I'm slowly getting better at sales and marketing, and understanding the value I can provide to my clients, and what makes my consulting different (and hopefully better) than others. Like a natural career progression, I hope to give myself a promotion by creating and selling digital products one day using the skills I've built at the bottom of the ladder.
It's not even clear that it's a good deal, when you factor in opportunity costs, hours worked, and chances of success.
So, it if you don't have to do it, don't do it. You're not going to succeed unless you are just the kind of person who can't be happy going down another path.
It all sounds harsh, but it's actually a lot better than the risk/reward offered in many other fields: acting, writing, sports, etc.
This is just how professions with tournament-style payouts work, and you either buy in or you don't. Know thyself...it never pretended to be anything else.
The whole story is never a sample-size of one.
Hacker News is pretty good at portraying those who failed five times in a row, those who give up after trying for years, those who seem to get it, and those who persevere.
My dad had successful business he started in his 40s, but it failed in his mid 50s. He was engineer before, so it wasn't like he could just go back in the job market. Those were very difficult years.
I mean, surely it's unsurprising to anyone with some life experience that, as with any career choice, some people regret entrepreneurship, and here are two examples of that, and -- so what... ?
At this point, they're probably equally risky.
Things have changed for the worse and we might as well give it a shot.
Or maybe it’s better to say that starting a successful company is extremely reliant on your ability to have insight into what need in the market isn’t being filled and how to monetize that need (or what needs can be created, if you’re extremely ambitious). If you can learn quickly, navigating “what skills will existing businesses pay a premium for” takes much less insight in comparison.
Want to have relaxing end-of-year holidays? Don't start a B2B SaaS company in which you're going to close a huge % of your yearly revenue in the last few days of the year.
Want to be able to travel? You're probably better off with an internet business than a brick-and-mortar store.
Want to be able to eventually step back? You need to make sure that there's a path to lessening your involvement over time without hurting the business.
I started mine during the pandemic and got it to profitability. It's not world-shifting money, but it produces solid cashflow. At that point, rather than trying to raise money and aggressively scale, I automated as much as I could. Got a manufacturer to make the products. Found a 3PL to handle fulfillment. Went through all the common types of support emails I got and made sure those questions were addressed proactively in the product or emails, so I get basically no support emails. Handed off bookkeeping to a professional.
Some of that has changed (the 3PL was terrible and for now I'm doing some fulfillment myself and using Amazon for the rest), but overall I'm only spending a few hours a week on the business. I write marketing emails, ship some product and place orders for stuff as needed.
The really nice thing is that I can move things on or off of my own plate as my workload changes. I'm working a full time PM job that I'm loving, and my wife just had a baby, so I might offload the marketing emails soon (but honestly they're super quick and I often just reuse last year's, so that's tough to justify). If I leave my job, I could definitely move manufacturing in house to expand margins.
I think more than anything, it's those qualities of the business that make it great for me (definitely more than the product).
> Want to have relaxing end-of-year holidays? Don't start a B2B SaaS company in which you're going to close a huge % of your yearly revenue in the last few days of the year.
Can you tell me more about where this point comes from please?
I'm not sure if it's a US-UK cultural difference, but if ever, business tends to close around the financial year ends here (early April), not christmas. If you haven't got something signed in November, it usually doesn't happen till January and UK workers take quite long christmas breaks. Or have I not experienced what you are talking about it?
One thing I wish someone told me early was that being consistent is the key. I spent the first ten years of my tech career looking for hacks to just realize the best hack is to just doing things consistently and speak to new people all the time. Once you have your pace set, just running with it and sticking with it results in things to start happening.
I think it may also be reflective of the culture and mentality at the BBC specifically, though. It's well known their staff is completely dominated by Guardian readers. These are people whose idea of success in life is taking control of a powerful pre-existing institution. The sort of people who make wild bets on unintuitive beliefs and end up disrupting industries are pretty much opposed to that value system and it shines through in all sorts of subtle ways.
When in fact there were many people saying that the massive state spending programs during coronavirus, were going to contribute to a high rise in inflation, and that policies such as paying the wages of the entire middle class were not going to come without a cost.
The BBC manufactured consent for those state policies, then now act like inflation is some random incident, like the weather.
Yeah as if that happens every day. This sob story was clearly written by someone who has no clue what running a business means.
Careers are long, and I think the key is to try things, learn what suits you, and generally try to evolve towards things that are a better fit for you.
I’m fortunate in that the business does really well, but…. I just can’t stand it anymore. The stress, the boring, the frustrating, the getting taken advantage of, the weekend hours….
I suppose I fell a little bit into the trap of someone wanting to open a cafe because they like being at a cafe… well I like programming, I like solving problems… but running a business (and a successful one at that) is tough.
I can see why most CEOs are non-technical, because it’s a special type of sadistic person who would ask for this.
I’ve tried steering the ship towards some goal or task that would maybe make things better but there’s no point. The business is on autopilot.
The business is like it’s own person with its own wants, needs, desires… and they come first. They always come first. Bending over backwards to keep something running, get some bug fixed, satisfying some customer, putting out fires… takes higher priority than friends, family, personal time, etc…
It has to. I can’t let the business suffer. People depend on its success, most of all my family.
I can understand why the rich suffer so.
I’ve been thinking of starting my own business and I hadn’t heard of this before. It sounds draining. If you’re comfortable, would you mind sharing an example of how people try to take advantage of you?
But I've always wanted to start a business.
At the least I could have something to regret.
As an overemployed worker, you will work less than an entrepreneur but probably start making far more money than them right away. Overemployment is also more friendly to failure. If you fuck up a job and lose it, it takes little effort to just find a new one. You might even have a severance as a bonus. The entrepreneur will probably just drink beer and spiral into depression as they wrestle with the choice of starting yet another business or finding some kind of job they can tolerate.
Overemployment will also force you to have incredible time management, and the high you get from running your day like a well oiled machine delivers far better satisfaction than the terrifying uncertainty that comes with entrepreneurship.
Furthermore, overemployment allows you to truly “turn off” in a way entrepreneurship doesn’t. At the end of the day, since you’re just working for another company, your responsibilities are limited. You can push away from your desk and live life stress free.
You could be grossing around $500k a year easily as an overemployed worker, meaning that with prudent saving and investment you will have amassed millions in the span of a decade, almost guaranteed. The entrepreneur probably has to work a decade just to maybe get the chance at a similar pay day someday, and for many that day never comes.
Entrepreneurship doesn’t carry the same prestige it used to. Nowadays there’s a lot of “entrepreneurs” out there and the term has become a bit derogatory, hence the need for quotes. Indeed, someone is more likely to be a charlatan or just a fucking loser if they call themselves an entrepreneur, rather than an actual successful business owner.
Overemployment on the other hand is gaining prestige. Most people are immediately impressed when you tell them you have two six figure jobs at the same time. Imagine how eyes would nearly pop out of people’s heads if you told them you worked at Facebook and Google, at the same time. You can’t bullshit overemployment the way you can bullshit entrepreneurship: two jobs is two jobs.
So all you young men take this advice: build the most valuable skill set and knowledge base you can, and get multiple six figure jobs with decent tech companies. The world doesn’t really need another shitty business idea, it needs people who want to work.