Comment by levlandau | Hacker News Reader

Comment by levlandau | Hacker News Reader

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"Musk is no different from the huge number of people involved in startups except that he is investing more money. Many of us are investing all of our valuable time and money in risky ventures instead of saving and taking the rational path in life."

Seriously? Like Are you actually serious when you write this? You seriously believe that the only difference between Musk and the huge number of people working on startups is that he is investing more money?

You do not think that it has something to do with working on hard problems that nobody thinks are worthwhile until later on. You also do not think it has to do with him actually solving said hard problems. You also do not think it has anything to do with him being smart enough to manage multiple fields like a physics, computer science, engineering and design and have in depth discussions about rockets and space explorations at the same level as he can about electric cars and software? You also seriously believe that someone who is motivated by money would go and try to start a private rocket company that can deliver people to Mars and is reusable? Seriously? They wouldn't just go make some web app and "flip it"? This response is atypical for me but it's hard for me to read this sort of response and respond normally.

Not to mention, risking everything when you have $10k in the bank is a hell of a lot different than risking everything when you have $50M. In the first case, if you fail, oh well, you get a job for a year or two and earn it back. In the second case, the impact is rather... more significant.

Honestly? The person with $50M is risking a lot less.

If you only have $10k to your name, that $10k might the difference between being homeless or not. If you have $50M, even in an extreme worst-case scenario (say your investment suffers a 99% loss) you still have $500,000, more than most people accumulate in a lifetime!

As someone who actually did start a company with a few grand in the bank, it felt like a lot less of a risk than it would now to put 99% of my savings into a new venture. I had a couple engineering degrees, and could have easily gotten a new job if I'd failed. If I risked my savings now and failed it would have a much more significant impact on my life.

One way to understand this is to include employment capital in your calculations. A person with $10k in the bank has considerably more employment capital than investment capital. A person with $50M in the bank has insignificant employment capital compared to their investment capital. So risking 99% of their investment capital would be considerably more, as a percentage of their total capital, than the first person risking their entire $10k.

> If I risked my savings now and failed it would have a much more significant impact on my life.

Is that really true? I guess I've never been that rich, so I don't have any personal experience, but it seems to me like the lifestyle impact of going from $10M to $1M would be a lot less significant than going from $10k to $1,000.

I agree with your analysis of "total capital", but I think you're neglecting the real lifestyle factors.

I can only speak for myself, and I'm not at $10M, but I can definitely say that for me the lifestyle change would be much greater in that case than in the 10k to 1k case.

$10M is, as they say, 'FU money'. $1M could be, maybe, but with a much different standard of living. Where I live you could easily blow the million just on a fairly standard upper middle class house. Losing most of your 10k on the other hand, while unfortunate, would hardly be life changing because it's not enough to do much with in the first place.

Now, if you reliably earn $1M a year, then sure, losing the 9M probably wouldn't be a huge issue. But that isn't the case if you're sitting on $10M from selling your startup.

> because it's not enough to do much with in the first place.

Uh...I mean, $10k would pay my rent for slightly more than a year (I don't live in SF). That's more than enough time for me to find a new job. On the other hand, $1,000 would pay my rent for less than 2 months. That's plenty of time for me to get evicted and be out on the street.

alternately, you could not be a fool, and risk 47 million or so instead of every dime.

Yes, of course, initially. The risking it all period isn't when you're considering spending a few million to buy some rockets. But then the day comes when you're this close to finally succeeding, but you're running out of cash. You need more now to make payroll, and there's nowhere else left to get it. Sure, you could cut your losses and walk away with 3 million, but then a) you probably wouldn't have risked the 47M in the first place, and b) you likely wouldn't end up where Musk is now.

This isn't a hypothetical. As the article describes, there was a point when he was begging or borrowing every cent he could. I don't know what his personal financial situation would have been had it failed, but I doubt he held much back.

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