Safety Nets for Startups
theatlantic.com
theatlantic.com
Life is not without risk. I can minimize it by being smart about things. I could get hit by a car when crossing the street. So I look both ways and then hustle across. I want to start my own business. So I read books and running a company for awhile. I find a problem to solve. I come up with a plan. Then I attempt to execute it. I may fail, but that's life. I learn. I get a job to pay off any debts I ran up. Then I try again.
The one thing I can say I did agree with is the need to stop favoring large established companies over smaller ones. These laws and regulations need to be tackled at all levels of government: federal, state , and local. But to do that requires a fundamental attitude change about risk. Small companies are risky. Big companies are not as risky. Ultimately it needs to be about people educating themselves and deciding accordingly.
Obviously I'd much rather have that same money spent on making life at home better, but at least you're creating jobs either way.
However, the reason it public school is a good thing (who runs the school - private businesses or public servants is a seperate matter) is because it creates human capital. Startup launching - or entrepreneurial "education", should be included in that human capital creation function that governments provide.
It's not a similar argument: people don't chose who their parents are, or where they grow up. The quality of life of a person who receives education (even if our education system isn't perfect) is definitely greater than the quality of life of a person who stays uneducated. It can actually reduce crime rates and improve the overall standard of living.
Startups are a little different, because the risks are optional, and there is a huge reward for success already built into the system. There are already tons of VC's making money helping entrepreneurs make money. It's a system that attracts people, and it's optional.
That doesn't mean we shouldn't teach entrepreneurship and creativity, but the human capital of the startup world is more of a luxury than a basic education. I would prioritize fixing our current education system before adding another layer of complexity.
If we can teach our kids in a way that allows them to be creative and inventive with already-established tools (writing, math, arts, etc.), they will definitely be better entrepreneurs. But they can also be better lawyers, better doctors, or better anything.
Already established tools were not already established when they were first implemented - the three R's. In our modern world we need to add a few more R's - computer programming, marketing/personal branding, and entrepreneurship should be a skill everyone is taught by societal funding.
My own health (and that of my wife) isn't perfect, but it's reasonably good enough that we can afford our own private health policy, but only reasonably as a high-deductible variant of $5k or so. And... while it's not great to have to deal with large bills now and then, it's still doable.
We had $3300 in premiums last year, and $4300 in out of pocket expenses (roughly). That's $7600 - divided by 12 is $633/month. But we only had $3300 in premiums the year before - $280/month. That's the nature of insurance - we take some risk. Not everyone can do it, of course, but I have friends who are chained to jobs partially (mostly) because of employer-provided healthcare. For a family of 5, high-deductible insurance may be something like $600/month, with a potential extra $5k+ out of pocket, but that's a risk. Instead, they're usually paying more than that in premiums (either they are or the employer is sharing it), so that money's getting definitely being spent either way, instead of only potentially being spent.
What might be interesting is to get employers to start offering high-deductible plans, but putting x% extra in to a pool, then sharing a portion of that as a bonus each year to employees who don't use it, but it's there to help if employees need to access it - perhaps something like 50% of your out of pocket deductible could be paid by the company.
But... that's just really confusing over time, imo. Just make it easier for people to buy insurance in the open market - get away from employer-sponsored health insurance. We've moved away from employer-provided retirement packages - make the same move on health insurance.
Then, your employer gives you $5k/yr tax-free into your HSA account; if you don't use it, it's basically equivalent to a Roth IRA. It's actually better to spend cash out of pocket and then leave the full amount in the HSA, since it can be invested tax-free forever, and all gains are themselves tax-free. You can easily end up with a few hundred thousand dollars extra.
This accomplishes the useful goal of getting people to be price conscious for their medical services, but doesn't impoverish them. The one thing it might do is promote time shifting expenses (if I know I'm over the $5k limit in one year, I'll get all my other elective stuff done that year), but it's not a big deal otherwise.
IMO, the HSA thing was one of the best reforms in health care in a long time, and one of the (few) good things GWB did.
I don't think that is a good thing. We frequently discuss here on HN to fail fast and try again. That seems to be the opposite.
"We should focus on minimizing the downside of losing so that startup roulette feels less risky. After all, startups shouldn't just be for rich kids who can afford to take a chance on a big idea."
If more risk averse people began starting companies - would the ratio of success to failure change? My guess is that it would. Who knows in which direction.
There's always some BS stat in these articles about the percentage of entrepreneurs that succeed. Without a definition for what a successful entrepreneur is. How is that defined?
Most entrepreneurs I know didn't take any crazy risks. They knew they'd be ok if their startup failed. Many people don't have that luxury.
I don't see the govt supporting people who don't want to get a corporate job and instead choose to chase their dreams.
It'd be great if things were different, but they're not going to change anytime soon. Why would anybody put up with dead-end jobs if they could just work on their passion their entire lives?
Part of the problem is that health can even be thought of as a 'perk' in the first place. Most of the safety net effect could be achieved simply by removing the link between health cover and employment. Just do what most of the rest of the world does (where employment status is irrelevant to health cover) and a major disincentive to innovation is removed.
Unless of course, the objective is to entrench dependency to large organizations. In that case, the present system works just fine.