This is why having a safety net and resources to try again is so powerful. Given enough chances you will make it, big. That means the #1 factor in success is the number of chances you get to fail and try again, not necessarily how inherently good you are. I try to remind myself of this often. I have been given so many chances, and I took them.
This always sounded intuitively correct to me, but looking back over the past two decades basically all of the successful entrepreneurs and business owners I know didn’t come from families with a lot of resources and didn’t have much of a safety net. They just went all in on their goals when they were young and had many years ahead of them to start over if it all went wrong.
Contrast this with some of the people I grew up who came from wealthy families: A lot of their parents pushed them toward entrepreneurship and funded their ventures, but to date I can only think of one business from this cluster of friends that went anywhere. When you come from such resources and wealth that you don’t need to succeed and you can drop the business as soon as it becomes difficult, it’s a different situation.
I don’t know exactly what to make of this, other than to remind myself to keep pushing through the difficult times for things I really want even when I could fall back to an easy path and give up.
Who are you thinking of? Bezos, Zuckerberg, Gates, Musk all came from wealthy families. They all had the safety net of their family wealth if their business didn’t work out. Even someone who had parents to pay their student loans is relatively privileged, not everyone starts their 20’s debt-free and able to take financial risks.
Bezos’ mom had him at 17, his biological father owned a bike shop, and his mother remarried when Bezos was 4 to a Cuban immigrant who came to the country at 16 and ended up working as a petroleum engineer.
They wound up middle class after all that, but I certainly wouldn’t say Bezos came from a “wealthy family”.
Bezos' parents lent him $250k to start Amazon. The point is that by the time Bezos started Amazon they were wealthy and could provide him this safety net. Not many middle class families would be able to loan their kid that much money.
That $250k was their life’s savings. They made a huge bet on their son.
His mom took night classes while raising him so she could finish her education while working to support a family.
okay but $250k is still $250k right? Most people in the world, for most parts of the world, don't see that kind of money in an entire lifetime of work. Most people think privilege means a trust fund, but a $250k loan of US dollars (life-savings or not) is also a privilege that most people don't have.
Do you have a source for that being their life savings?
Most of your points have nothing to do with their wealth. Why would it suggest they’re poor if his mom had him at 17 and was taking night classes while raising him? She wasn’t employed, that just sounds like she herself was still able to take risks beyond her means probably because her father was wealthy.
Do you have a source for that not being their life savings? It sounds like you're just making assumptions and guesses as well; if you're going to assert Bezos came from wealth in the first place, you have to back that up. Perusing the "early life" section of Bezos' Wikipedia page doesn't suggest to me that he came from money, at least. But I don't see anyone on either side of the argument presenting anything beyond that.
> Do you have a source for that not being their life savings?
Do you have a source for the $250 not being from the invisible pink unicorn?
Because my understanding it was from the invisible pink unicorn
> Do you have a source for that not being their life savings?
I mean there are many sources that talk about the $300k he received from his family to start Amazon, it's a famous story. None of those sources mention that it was his family's life savings. I don't really know how to provide a source that says it wasn't his family's life savings, but I also can't provide a source that says he wasn't an alien from Zeta Reticula. This is generally the problem with proving a negative and why the onus is usually on the person making a positive assertion.
> if you're going to assert Bezos came from wealth in the first place, you have to back that up.
I did, I'm saying that a family that can give their son $300k to start a business in 1993 is wealthy. That would be about $674k today.
isn't this an argument against the original post: that the more dice rolls the greater likelihood of success?
Yep, my father, with no business training or college was funded by my grandfather and was in business for years, decades. He ultimately failed without any savings and died in poverty. Being a small business owner was the only job he ever had.
My grandfather was similar--he was the first one to leave the farm life and tried several different careers and businesses. He worked for a railroad, was a realtor, owned a lumber yard, and lastly owned a delicatessen. The lumber yard nearly destroyed the entire family because he would sell on credit and then contractors failed to pay up on time. It was a huge disaster and the the thing is, this was way before the Home Depot national type chains or the "84 Lumber" regional type chains and if he had had any business acumen at all, he could have been the franchise. People don't know what they don't know. Anyways, my dad worked for my grandfather for free for several years and screwed up his life quite a bit doing so in order to "save the family" and I think my dad has told me this damn story every single time I have called him on the telephone for at least the past 30 years. His complex over the whole situation must be enormous!
This is why I never started a business myself. I figured it was a family curse to fail at business.
Bezo’s maternal grandfather worked for the Department of Energy and owned a ranch in Texas. They were wealthy enough to have $300k to give to Jeff in 1993.
Those people you mention may be examples of the exception, not the rule. Certainly many new businesses work out when they are founded by someone from a wealthy family; it would be strange if that was never the case.
But maybe it's more common that successful businesses are started by founders coming from more modest means. Page & Brin, and Jobs & Wozniak come to mind (none came from poor families, but they weren't rich either). I'm sure there are many other examples, and those are just the famous ones; there are many successful companies started by people we've never heard of.
You really need to be connected and have resources to succeed or the machinery will eat you alive.
Yeah they aren't like, outlier wealthy though. They all had lawyer/doctor/banker parents.
If having your student loans paid off for you is enough, then there are 10s of millions of people in their shoes. Why did they not succeed if that is what it takes?
I didn’t say they need to be outlier wealthy, I’m disagreeing with the assertion that it just takes focus and grit to be successful. I agree with the initial comment that it has more to do with how many chances you get to take, and being able to take chances throughout your 20’s is a relatively rare and privileged opportunity. Most people need to find gainful employment immediately after college, they can’t take 5-10 years making no money on long shot bets.
Where are you getting the figure that there are 10’s of millions of college grads in their 20’s with no debt? There are only 2 million undergraduate grads in the US every year. I think you’re probably off by a couple orders of magnitude.
>> Why did they not succeed if that is what it takes?
short answer: it's might be necessary but not sufficient.
Alex Honnold, the rock climber with some pretty spectacular solo / speed ascents was asked why no-one else has free soloed El Cap, replied "it's hard." he spent a lot of time (years) building up to it and finishing other routes, and no one else has taken these first steps yet. He goes on that they may have the talent or disposition, but not the motivation or an experience that pushes them in another direction. His perspective (similar to general outlier success) is others will do it but it takes a bunch of things all coming together, including luck.
Contacts.
Bill Gates mother worked with IBM CEO. Without her maybe IBM would choose other company than Microsoft.
And Bill Gates father was in banking and was a millionaire
And he had access to a computer terminal at his high school in 1968.
> Who are you thinking of?
It’s pretty clear that @Aurornis is talking about people they know personally. They literally mention that they’re talking about people they grew up with.
Whereas you are talking about a completely different group of people: Bezos, Zuckerberg, Gates, Musk are the survivorship bias set.
You’re talking at cross purposes with the person you’re responding to.
Why would anyone base their debate on "people they know"?!
What kind of conversation is worth having with someone who doesn't understand observation bias and has a main character complex?
You can choose to think that op meant only the most insanely rich billionaires. I thought they meant their actual experiences with peers. Cut out the outliers and be realistic and I think it’s easier to understand the point without the extremism. The range of what people consider success is quite large.
Yes, it's a bit forced trying to turn someone's anecdotes that spur some food for thought into some kind of a categoric stance.
They asked the parent who they were thinking of, a more recent example of an "up and coming" billionaire would be Palmer Luckey, whose life experience seems to be at least consistent with his stance against optionality.
Edit: Ref
"A lot of my peers in the tech industry do not share this philosophy … They’re always pursuing everything with optionality. ’Oh, I need to be able to raise money from anybody. I need to be able to sell my business in any way. I need to have liquidity in any way. I need to make sure that I’m not closing myself off to future romantic partners. I need to make sure I’ve got my options open. I need to make sure that I’m not going to buy a house and settle down in one place and lock myself down. Oh, having children. I don’t know. Maybe I’m not ready to commit to that path."
Puer Aeternus,,,
I chose those examples because they’re well known and public. I asked for counter examples and no one seems to be able to share any.
I posted some as a reply to one of your other posts.
Why do we need well-known, public examples? I think it would be absurd to assert that there are very few successful founders that don't come from wealthy families. (Just as it would be absurd to suggest there are few that do come from wealthy families.)
These are outliers.
Think of motivation. Most people who live financially comfortable lives will want little more in the way of wealth when balanced against risk and effort. They also have something to lose. Their circumstances shift the incentives.
Now think of the temperaments of people who chase wealth. If they come from money, then the comfort they live in is not going to satisfy them. If they come from financially less than stellar backgrounds, they may be more likely to crave that kind of attainment; money is a kind of unfamiliar blank canvas onto which they can project all sorts of fantastic expectations (most of which are bogus). And unlike the better off, they have less to lose. Add to all this an inferiority complex that can compel compensation behavior. They may have a tougher start financially, but psychologically, they are more compelled by their circumstances than their wealthier counterparts.
So we should avoid being reductive.
And we should stop reducing “success” to money.
I don't think anyone in this particular thread was necessarily reducing or equating success to money, they were merely pointing out examples in which certain folks attained financial success. The parent-most comment was referring to the importance of a safety net in order to get more chances (whether it's risking it to become a business owner, or going back to school, or whatever your definition of success is).
And it's true. If you have a good financial safety net then you can take more chances and increase the odds that your next risk will be the one that works out.
Of course, the most easily quantifiable definition of success is usually financial, and on and off HN, it's probably the most common definition of success.
For me myself, I'm grateful to be doing well financially. I grew up in an upper middle class family. But I still do want to grow my wealth. I am not going to take wild risks to do so, but I'll work hard and use my current wealth wisely to grow it. What will more wealth get me? Financial security, freedom. It'll give my wife and me the freedom to choose if we want to stay at home with the kids. It'll let us easily fund their college, or whatever education or path they decide to pursue. The goal isn't being a billionaire. It's freedom and security.
I think that's success for a lot of people, and it usually manifests itself as just having more money because that's the first step. But it's not always the end goal.
Musk came to Canada with a few hundred dollars to his name. Worked on farms. Never got a loan from his dad, afaik.
It’s probably true that he could have somehow gone back to South Africa as a “safety net” if you will, but I believe that would’ve been the last thing he would have wanted.
If you’re really poor, you can’t take a plane to another country and start a new life, sure. But out of those people who could, if they scraped their resources together, how many do?
This isn’t to blame anyone. I would suppose that the vast majority of people would not want to be Elon Musk. Would not want that kind of life. But for the claim that he is what he is because it was served to him on a silver platter by his family just isn’t supported by any facts.
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What was Musk families net worth?
I hear this conspiracy theory that he's was super rich. But owning a mine could mean anything from a basically bankrupt speculator to the De Beers. There's claims he gave Musk $28k ... that's not evena decent college fund.
They had this amount of money
> As a result of this, the teenage Elon Musk once walked the streets of New York with emeralds in his pocket. His father said: “We were very wealthy. We had so much money at times we couldn’t even close our safe,” adding that one person would have to hold the money in place with another closing the door. “And then there’d still be all these notes sticking out and we’d sort of pull them out and put them in our pockets.” [1]
[1] https://www.independent.co.uk/space/elon-musk-made-money-ric...
The pocket emerald story that comes before that "we were very wealthy" line is even more telling. It's missing from that Independent article, but that article's based on this Business Insider interview: https://www.businessinsider.com/elon-musks-dad-tells-bi-abou...
> Elon, by his father’s recollection then probably 16 years old, and his brother Kimbal, decided to sell emeralds to Tiffany & Co. on Fifth Avenue in New York – one of the world's most famous jewelers – as his father lay sleeping. "They just walked into Tiffany’s and said, ‘Do you want to buy some emeralds?’" Errol recalled in an interview with Business Insider South Africa. "And they sold two emeralds, one was for $800 and I think the other one was for $1,200."
> A few days later the family returned to the store to find that Tiffany was selling the $800 emerald, now set in a ring, for $24,000 -- a markup of 30 times the price Elon had received for the gem.
> Errol has used the story as on object lesson in how retail works ever since. He was surprised but not concerned by the incident, Errol says, because money was plentiful.
> “We were very wealthy,” says Errol. “We had so much money at times we couldn't even close our safe.”
So, selling-emeralds-to-Tiffany's-at-16 rich.
So his dad was so poor he kept his money in a safe ...
You can fit maybe 2 million in a safe. Maybe less if it's poorly packed, small denominations, other items in storage (id, etc). A safe full of money is like having an investment property, it's not really a sign of unreal wealth.
It's like some 20 year old on TikTok flexing a Rolex with aftermarket "diamonds" - it isn't dirt poor but it's not what you'd exactly call generational wealth. You don't even hear Trump bragging about having a ton of cash - even the crassest most trashy rich person wouldn't brag about a safe full of cash.
Half the posters here probably have parents with more assets.
Just look at how insanely biased people are here. Elon once allegedly stole $2k worth of emeralds from his dad, and they're gushing over what fabulous wealth that is.
$2k is a phone or a laptop. Elon was so madly rich he stole something as valuable as a laptop from his dad, and this is somehow evidence that he's basically a de Beers?
I can't tell if this is rage bait or not.
What do you disagree with?
1. A safe would hold less than $2M.
2. Someone bragging about less than $2 million in assets is not unbelievably rich.
3. People talk about Musk in a way that suggests his parents were extremely rich.
Not 2 million assets. 2 million cash.
> What do you disagree with?
His parents are telling you they were very wealthy and you somehow managed to come to the conclusion that Elon grew up poor.
I guarantee you the median American isn't so wealthy their safes are overflowing with cash.
Over $2 million in assets about the time Musk was matriculating would have put in the top 0.1%, e.g. 1 in 1000. That would be fairly rich to me
That seems pretty silly. Why keep your wealth as cash in a safe?
(And why not use a fraction of the money to buy a second safe, if you really have to keep it in a safe at home.)
I know nothing about this specific situation, so I'm not speak to that. I am speaking to "why keep your wealth as cash in a safe?"
I'm old enough that grandparents lived through the great depression. I know they kept wealth in a safe. A lot of their kids did as well. The grandparents had their gold money taken away, or their cash disappeared in banks. A lot of their kids followed along.
Being gen X, Elon has parents/grandparents that lived through the great depression and world war. That along with any other local factors makes keeping wealth in a safe not that unusual.
Elon Musk grew up in South Africa.
To keep it away from the tax man.
Maybe. But wouldn't you rather hire a good accountant and lawyer instead of bothering with cash at home?
A good accountant or lawyer would tell you to pay the taxes you can't avoid.
The trick is to make as many taxes as possible avoidable.
That was probably just their pocket money.
Well, there might have been some weirdness about South Africa at the time. Perhaps financial institutions had some weird weaknesses.
> That seems pretty silly. Why keep your wealth as cash in a safe?
Was it during the apartheid boycotts?
From his dad's Wikipedia page:
>His lucrative engineering business took on "large projects such as office buildings, retail complexes, residential subdivisions, and an air force base." He also owned an auto parts store, at least half a share in an emerald mine, and even "one of the biggest houses in Pretoria."[12] His ex-wife Maye's book recalls that at the time of their divorce in 1979, he owned two homes, a yacht, a plane, five luxury cars, and a truck.[13]
Elon was 8 in 1979.
Only 2 homes? What a loser...
Musk took low wage jobs when he arrived in the US.
Is this some type of founders myth?
Musk left Canada at 17, went to college in the US and sold is first business in 1999.
But I also worked at low minimum wage job at 18 at Radio Shack while living at home with my parents driving the car my parents bought me. I assure you if I have lost my job, it wouldn’t have hurt. I would just spend more time hanging out with my friends and on my $4K Mac setup.
Musk was not going to be homeless if he failed.
Feel free to read a biography of him.
> Musk was not going to be homeless if he failed.
Right. He'd just get a job and rent an apartment.
I had a friend who started company after company starting in high school. Some were more successful than others, but he never lost his enthusiasm for the next company. The last time I saw him, he was living out of a trailer because he put everything he had into his next company. (Sadly, he passed a few years ago from an accident.) He left behind a large wake, and his memorial service was packed.
(He grew up in poverty.)
I'm not sure what point is being made here. AIUI, Musk comes from a wealthy family. Are you saying a biography would say otherwise?
I think the point people are making about the low wage jobs is that it's irrelevant. People from wealthy backgrounds take low paid jobs sometimes, so having done so doesn't imply he's a rags-to-riches story.
I'm saying Musk's company was not founded on family wealth. Even if it was, where are all the other trillion dollar companies given that lots of families have wealth?
> People from wealthy backgrounds take low paid jobs sometimes, so having done so doesn't imply he's a rags-to-riches story.
It does in Musk's case. Why not read a biography of him? It's more interesting than speculation.
Nobody said his company was "founded on family wealth". They said he had that wealth available as a cushion to fall back on should his ventures fail. They also never said "every person from a rich family can make a trillion dollar business". They claimed that those who found successful businesses are disproportionately from wealthy backgrounds, and provided a supposed mechanism: a greater ability or willingness to take financial risks knowing there is a limit to how far they can fall if they don't pan out.
Personally, I don't have any view on whether that is correct or not but it's obviously the claim that was made. It seems plausible but I'd want to see some actual data to believe it, not just anecdotes about a few of the most famous founders. Your points about low wage jobs and other trillion dollar companies are simply not relevant to it, and if biographies of Elon Musk contain information that would refute it you haven't said what or how.
Knowing you are an extremely accomplished man and fully capable of parsing this, I have to wonder why you seem blind to it.
> Right. He'd just get a job and rent an apartment.
I'm not sure if you're suggesting homeless people are homeless simply because they refuse to go out and get a job and an apartment. But as someone who's been homeless and someone who's a friend of people who've been homeless, a very large number of homeless people bust their asses at work. Things beyond their control go wrong and they have no social safety net to fall back on.
Elon Musk could've vacationed barefoot in Southeast Asia for 5 years and still returned to be given some executive job offer, just as many other children of rich kids do. Most people don't have that level of good fortune.
> Elon Musk could've vacationed barefoot in Southeast Asia for 5 years and still returned to be given some executive job offer, just as many other children of rich kids do.
Except that is not what happened. He started doing menial jobs in Canada. He was never given some executive job offer.
You can do any job you want and take any sort of risk when you have a rich family. It's not exactly unusual for rich kids to do menial jobs to "build character" or get some experience before rocketing off to some other venture, knowing they have essentially unlimited money behind them to absorb any mistakes they might make.
> Musk was not going to be homeless if he failed.
I think I can safely say that about every single person I know from college with most being normies. No sane parent is gonna not put up their college student kid till they figure out their next step.
There is a huge difference between
1. “Son, here is $5000 to cover your rent, utilities and food for one month while you look for another job in San Francisco” and keep doing that for 6 months
And
2. “We can’t afford to help you pay your rent so you are going to have to break your lease and come back home to East MiddleOfNowhere Nebraska. You might be able to get a job at “Big John’s Fish Tackle and WordPress Shop” and maintain the local church’s blog.
I knew my parents would be able to do a cheaper version of #1 s/Atlanta/SFO and s/Small town South GA/Nebraska.
I had a friend who I graduated with who was the oldest of three or four kids and whose mom was a single mother who couldn’t afford to subsidize him.
I was able to move to Atlanta and get a lower paying job as a computer operator based on an internship the year before because I knew that’s where I needed to be. My parents did subsidize me for the first year while I hustled my way to a better job through networking. I couldn’t have done that in small town South GA.
He ended up moving to a slight bigger small town on the border of GA and Alabama that paid more, lower cost of living and lower opportunities
There’s no way you didn’t know anyone whose parents couldn’t put them up for a year. There are lots of people who go to college who’s parents don’t have 30k spending money
Putting up your son on the couch is not expensive.
And then they are in the MiddleOfNowhere Nebraska and having to maybe move from where the jobs are and where they can network. It is expensive to subsidize their living away from home.
Go to the books section in Amazon and search for "how to start a business with no money"
Yes, and usually the only people who make money doing it are the people selling the books…
If all you do is look for failure, it's easy to find.
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Laughable that you believe this. Do you still after seeing all the counter evidence? Do you sit back and ask yourself, "I wonder if the world's richest man has a PR firm, one so effective it has me working for it part time spreading the lies."?
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I read his biography. Which one did you read?
Of course you did, his PR team knew exactly who to market it to.
What's your source of information?
Agiography, you mean?
Zuckerberg’s salary today is $1 :)
I've seen quite a few of these funded entrepreneur-lifestyle kids now; I've worked (briefly) with many of their companies. Many of them are making enough of a real go at it such that I can't tell them from others, but quite a few don't know enough about how a default alive business works and deliver a DoA even when the core idea or a short pivot works and has traction - these guys need so much better PMF to succeed.
The best businesses I've seen parents find for their children are lettings agents (urgh) and basic manufacturing (last mile door assembly etc.). You can get the business model in a six month course, the staff are minimum wage, the product is high margin. If your parents buy the building you are so close to default alive its a joke. Grow the business, flip it, and try the big idea.
There is also survivor bias at play here.
Succeeding without safety net is hard -> only the best can do it -> the best entrepreneurs you know did not had a safety net
Then let’s control for that. Among people with a decent safety net, can we correlate eventual success with number of tries?
The answer seems self evident, but idk for sure, and I would like to know the Gini coefficient of successes vs failures among safety netters be that of non-safety netters. Wouldn’t we expect the successes within the safety net to be massively larger on average than those of the non-safety netters, given that a safety net affords you so many more swings to take? Your comment suggests that this is not the case, driven by the selection/survivor effect within non-safety net
I mean Gates, Musk, Bezos, etc all had a safety net.
Also need to define what successful means because a lot of trades people are successful solo-prenuers but don't make more than say a doctor.
In a thread about survivor bias, and you fall for the same trap. How many people coming from wealthy background end up failing?
Take Bill Gates, his father cofounded a law firm, and his mother was a board members of several firms. That is a very wealthy background, but not outrageously so. How many people of the same level of wealth became successful businesspeople? It's said that his mom being on the same board as IBM's CEO at the time was a more instrumental factor to his eventual success than his family's wealth, and his own effort of course.
> It's said that his mom being on the same board as IBM's CEO at the time was a more instrumental factor to his eventual success than his family's wealth, and his own effort of course.
This sounds a lot like "his family's wealth was a more instrumental factor than his family's wealth" since "being on a board" is pretty rarified air. It's not Gates-himself-level wealthy, but what percentile is that? 90th? 95th? 99th?
> but not outrageously so
Compared to 99.99% of the 8.3bn people on the planet, yes.
HN never ceases to amaze me with its conception of what "wealthy and successful" means.
> his mom being on the same board as IBM's CEO
When IBM came knocking, Bill Gates referred them to Gary Kildall. Kildall (for whatever reason) muffed the deal, and Gates didn't pass on that opportunity again. Gary had the opportunity, and came from a middle class company. He invested in his company with his own resources.
Gates received $5000 from his family for his business.
I've read accounts of Microsoft's early days. It was self-sustaining very quickly.
I also know something about compilers and interpreters. BASIC of that era was simply not difficult to create. Yes, Gates & Allen had access to a PDP-10 at Harvard which helped. But it was not required, as Woz proved by writing Apple BASIC in a notebook and hand assembled it.
I also know that Hal Finney wrote a BASIC in 1978 or so that fit in a 2K EPROM (for Intellivision). As I recall, it didn't take him very long.
So no, Microsoft is simply not a result of massive infusions of money. An awful lot of people had the ability to create Microsoft, what they lacked was vision, drive, and willingness to risk.
And no, Gates and Allen were not going to starve if they failed, even without their parents' money.
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Okay can you name one successful modern day tech company whose founders didn’t come from money?
Not the OP, but I can name many: Andy Grove (Intel) , Steve Jobs (Apple), Larry Page, Sergei Brin (Google), Reed Hastings (Netflix), Michael Dell (Dell).
They all seem to come from solidly middle or upper middle class, so no poverty but not different than many of us on HN.
The argument was not that you had to be rich, just that you had a safety net so you could take risks and know you had a fallback without being homeless and hungry.
But the Google cofounders specifically both had parents who were early computer scientists or mathematicians
In all fairness, I haven’t been consistent between “coming from enough money that your parents can be your angel investors” and “you can afford to fail and call your parents for help with the rent”.
Your question is naming just one not coming from money. None of the people I listed did.
Wealthy background surely helps immensely, but other factors such as environment are vital as well. Google founders met at Stanford, in the heart of Silicon Valley, at the height of the dotcom era. That’s more important than their background.
Being wealthy is not the most important factor to one’s success. 50% of US population is middle class. Even if those I listed were all upper middle class, that would still be perhaps 5% of US population, or millions of people. Yet only a few rise to the top.
While not a tech company founder, Oprah Winfrey created a media empire. She was born to a teenage mother in rural Mississippi (and poverty).
If someone wants a story about overcoming one's lot in life through grit, hard work and making the most of situations/opportunities her story is one you'll want; maybe not as relatable as the Bezos, Dell, Jobs, Musk etc but a story that poverty->billionaire entrepreneur can happen. There is also a reason she is the only one I can think of that fits description.
NVidia
Jensen Hung’s father was an engineer and his mother was a teacher. He wasn’t going to be homeless and on the street if he failed.
And he didn’t come straight out college either. He worked at AMD and I’m sure he had established some type of financial foundation and I’m sure he could have easily found a job if Nvidia failed with his background.
>>Jensen Hung’s father was an engineer and his mother was a teacher. He wasn’t going to be homeless and on the street if he failed.
So now the goalposts are "isn't desperate" while a while ago it was "came from money". Having caring parents and being raised in culture that value education help. No one is arguing that.
>>And he didn’t come straight out college either. He worked at AMD and I’m sure he had established some type of financial foundation and I’m sure he could have easily found a job if Nvidia failed with his background.
He needed to get a job first like a average person before starting his own company. Privilege!
We have been talking about a safety net this entire thread and how you can make mistakes if you have one more easily than if you don’t
Huang's family must have had interesting connections if you consider that the daughter of his cousin is running AMD. And both were born in Taiwan and then went to MIT, which seems unlikely to happen without family money.
People, it wasn’t just a safety net.
Bezos’s mom was his first investor, giving him $300K.
Then he also had connections to millionaires through his family
Bill Gates’ mother, Mary Gates, was instrumental in securing Microsoft's first major deal with IBM through her connections. His family was wealthy and provided connections and support
Bezos's mom giving Bezos 300k was more of a favor to the mom, not the kid. He was already VP at DE Shaw at the time.
What about Replit? Two guys in a coffee shop in Jordan, you cannot be much further from Silicon Valley. They got turned down four times from YC and decided never to try again. But pg fell in love with the startup and urged him to try again. Then during the interview one of them got into a heated argument with Michael Siebel and thought for sure he had failed.
Yet he got in without a wealthy family and an American Ivy League degree. There are lots of other examples, I can even think of a one in Michigan.
And how many of the thousands of YC companies have disappeared in to obscurity?
How many of these do you think will see a successful exit?
https://docs.google.com/spreadsheets/d/1Uy2aWoeRZopMIaXXxY2E...
And “raising funding” is not a successful business. Having an exit where you as the founder makes an outsized return is.
Another definition is being profitable. Any idiot can sell dollars for $0.95 backed by VC’s hoping to find the “greater fool”
Sure, but if Bill Gates was a drug addict with no software, there would have been no deal and he certainly wouldn't have been successful.
Whenever I see the topic of success, people LOVE to talk about 'survivorship bias' as a way to somehow discredit the person that is successful and also give an excuse as to why they might not be successful.
It's pretty destructive in a community that's supposed to be about startups and building businesses. This is why I originally came here years ago, but it seems like the mindset has shifted to anti-capitalist group think.
No one is discrediting his success. It’s just the banal idea of if you have “grit” and work really hard, you are somehow guaranteed success or even have more than a slim chance.
What is the other way of going about things? Assuming you will fail and never trying?
Find companies that make a lot of money and convince them to give you some of that money in exchange for your labor if you want the best risk/reward ratio.
I would much rather be in the position of an intern I mentored who at 22 made over $700K in gross income between cash and RSUs (that could easily be converted into cash unlike “equity” in private companies) their first four years out of college than some struggling founded trying to start yet another AI company so grateful they got $200k from YC while still eating beans and rice that they had to split among three founders.
"It’s just the banal idea of if you have “grit” and work really hard, you are somehow guaranteed success"
When has anyone ever said this? I can study for a test and still fail, but not studying ever will guarantee failure.
"Grit" and hard work may not always equal success, but it will improve your odds to the point where success is very possible.
> giving him $300K
Yes, and cities are filled with $300K and up houses. The idea that Bezos started Amazon with unusual vast wealth is wrong.
Yes. But how many can and will give their children $300K in cash? Did she refinance her house and use the cash to give to her son?
If you can buy a house for $300k, you can invest the money instead. If you choose "house", you're going to have a much harder time accumulating wealth.
I wish I hadn't bought a house instead of investing it all in MSFT. I know people at the time who borrowed every dollar they could and plowed it into MSFT. They became very, very wealthy. I was too chicken. Bwaaack, cluck cluck!
Or you could have invested in every YC company that went public.
https://medium.com/@Arakunrin/the-post-ipo-performance-of-y-...
You never hear about the people who made bad investments.
Or everyone who invested their life savings, refinanced their house, withdrew everything from their 401K and still failed.
If you have a paid off house you have some place to live, the alternative is to be paying rent that goes up every year.
My rent in 2016 before I had my house built was $1800. My mortgage was $2300. By 2024, rent had gone up at the same place to $2400. My mortgage besides property taxes and insurance won’t go up nearly as much[1]
It reminds me of people in BigTech that don’t sell their RSUs as soon as they vest and diversify. I make just as much now in cash as I did in BigTech with the difference being 40% was in RSUs. Why would I keep 40% of my income in AMZN any more than I would take 40% of my cash income and put in AMZN?
[1] Anecdotely I sold in 2024 at exactly twice the price I had a built for in northern Atlanta and bought a condo in state tax free central Florida for half the price.
If you don't want to take the risk, then don't do it. But criticizing others who do take the risk, and succeeded, isn't fair.
A general rule is the more risk you're willing to take, the more potential for gain.
I am criticizing the idea that all it takes is “grit” and if you work really hard you will succeed.
Thought experiment: 10 people out of college take “huge risks and work really hard”. A second set of 10 people just get boring enterprise Dev jobs and the third set all work in BigTech for 10 years. Rank the three groups in the order of expected median total income over the decade?
> I am criticizing the idea that all it takes is “grit” and if you work really hard you will succeed.
Ok, but I did not suggest that.
Working hard is not good enough. It's necessary to work at the right things - and it is hardly obvious which are the right things. Taking risks is also necessary. The bigger the risks, the bigger the potential gains.
But nothing is guaranteed.
Spending one's youth playing video games diminishes your chances of financial success to around zero.
> It reminds me of people in BigTech that don’t sell their RSUs as soon as they vest and diversify. I make just as much now in cash as I did in BigTech with the difference being 40% was in RSUs. Why would I keep 40% of my income in AMZN any more than I would take 40% of my cash income and put in AMZN?
I mean, I didn't sell my RSUs as soon as they vested, because I worked for a BigTech company that I believed was on the upswing, and I was willing to take that risk of not selling.
Sure, it is an equivalent of buying those shares on your own, but again, it still felt way safer (and way more flexible/liquid, as I could sell my shares at any moment) to me than working at a startup with extremely illiquid equity. And I was already pretty much broke with no safety net (my internship over the summer back then made me more than my entire family combined earned in ~6 months; this is not an internship flex, there were plenty that paid more, this is just to illustrate the gap between some bigtech internship salaries and what my family was making), so I was willing to take the risk.
The risk ended up paying off, and that BigTech company went from ~$60/share to $300+/share in barely 5 years, turning my initial stock grant into a lifechanging amount for someone in my position. No, it isn't even close to being enough to buy a house outright or retire, but it is my (and my family's) safety net now. I can afford to help my sister pay rent with zero "can i actually afford it" thought in my mind.
TLDR: yes, not diversifying is risky. However, you cannot make lifechanging money without taking risks, whether it is through joining a promising startup or not diversifying your investments or anything else. I am not advocating anyone to do what I did, as I agree with you that selling RSUs on vest is the most safe option. There are no totally safe options for making lifechanging (whatever that means for you) amounts of money, so you gotta pick your poison, if that's something you want. For me personally, making bigtech salary at a company that I believed was on the upswing (and saving a good amount of it), while keeping all vested RSUs in my account (and selling no more than 5% of it each year), was an acceptable level of risk (that I wouldn't regret doing, even if the price of those shares ended up dying significantly).
Why wouldn’t you at least cash it all out and diversify into all of the Big 5 then or Mag 7 now?
Look at success in buckets. 10x , 100x, 1000x etc
I wouldn't assume size of success is correlated with "having success or not." It's notoriously hard to predict what business ideas will succeed at all, let alone be mega-billion-success-stories. Many things could've gone differently leading to Bezos being a ten- or hundred-millionaire vs a multi-billionaire even in worlds where Amazon was successful. AWS, for instance, was not in the original plan.
I think the strongest correlations would be between:
"has safety net" and "has success" - one major factor here is not having a poverty mentality that would lead to panicking and quitting early
as well as between "has safety net" and "takes multiple swings if no initial success", for the direct reason of "can afford to do so."
Citation needed that panicking and quitting early is a "poverty mentality".
I believe we all intuitively push whatever our advantages are, often without even knowing it. The advantage that the wealthy have are connections, capital, and familial support. These advantages lend themselves to activities such as starting businesses with high capital requirements, accumulating assets (“investing”), working through elite colleges to land a prestigious position, heading a philanthropy or charity, etc.
That advantage comes with a disadvantage. Because the wealthy do not have to work to earn their start, they never learn what hard work is capable of producing, and never build the “when the going gets tough, the tough get going” habit. What they have in money, they lack in grit. When they are faced with a challenge, they habitually say “what can I buy to solve this problem?”, “who can I consult to help me with this problem?”, etc.
Contrast that with folks who are working class. They know that they don’t have the advantage of money. They learn that hard work is the behavior that yields the best outcome. They put themselves in fields where what you get is proportional to what you put in, such as the trades, where working long, hard hours can generate quite good income.
When folks who were raised working class are faced with adversity, they handle the situation like Boxer from Animal Farm: “I will work harder”. It’s what they know how to do. While they don’t have copious sums of money to fall back on, or other natural advantages, their own work ethic is one of the few things that cannot be taken away from them, and so they leverage that.
That advantage also comes with disadvantages. Someone who works very hard will likely be overly self reliant. They might not get as much done as they could have had they spread the load across other people. They might burn themselves out, injure themselves, work to the exclusion of all other goals in life, etc.
These are vast generalizations that obviously won’t hold in all circumstances, but I think it’s useful to illustrate the point. People use the tools at their disposal, whether that be money or otherwise. Those strategies all have advantages and disadvantages. The net result of those is likely visible in the outcomes of various people, I’d bet.
This is literally survivorship bias. All the successful ones you know of, because the unsuccessful ones failed, by definition.
Growing up I thought that my family was rich because my parents were still together, we owned a home with a foundation with help from the bank, and my family was clean. It turns out the bar was real low in my hometown.
"...didn’t come from families with a lot of resources and didn’t have much of a safety net" As someone who grew up considered both a dirt poor hick by the city slickers and simultaneously a carpet-baggin outsider, this is often a relative perspective, how do we calibrate against a larger population?
These are the sorts of things I picked up on growing up: Could they go to college if they wanted to? Did their parents go to college? Did they live homeless, apartments, trailers, multi family, single family homes, McMansions? 0/1/2 parents around?
I suspect HackerNews may have some survivorship bias compared to national averages, (and especially where I grew up).
Good to share, but n=1 I suppose. For me (also n=1) it's the opposite in my circle. The ones without resources never went anywhere and reproduced their parents' class. The ones with resources that went into entrepreneurship (and had the possibility of failing and still being fine) are the most successful.
Agreed on your final point though! Tenacity probably is the biggest driver.
If most successful entrepreneurs are from ordinary backgrounds, one explanation is that most entrepreneurs, successful or unsuccessful, are from ordinary backgrounds. Another is that wealthy families might be pushing kids into entrepreneurship who lack the talent or taste for it.
> over the past two decades basically all of the successful entrepreneurs and business owners I know
This very much sounds like survivorship bias to me.
But more importantly, I think the discussion is going off the track. The important ones are the 0.1%, not the 1% or 10%. The "normal" millionaire business owner usually actually worked for it (unless they are pure finance or something similar). They are also not the ones shifting a whole country's politics with their enormous influence. They don't have any over-inflated influence over anything. They are not the problem.
But they also don't serve as examples for the masses, because that would be confusing "anyone can do this" with "everyone can do this" - their successes don't scale. You can only have that many successful businesspeople and entrepreneurs, the majority must be their worker bees by necessity.
I see such discussions as distractions. If you talk about normal entrepreneurship you will not get to the core of our problems, not at the very top (the super rich), not at the bottom (why are so many so poor).
If you want to come up with an idea that works at scale you can't use one that only works for some no matter what. If you want to come up with a solution for the enormous imbalances looking at those normal entrepreneurs does not help either.
I suggest to develop an instinct to use in these kinds of discussions: For every concrete example, imagine it at scale. Thinking at individual examples when you talk about big things is a mismatch. Those examples are only useful if you use them to extrapolate upwards, what would actually happen if everybody did this?
If the most important factor in survivorship is number of chances you can take; and the number of chances is proportional to how much wealth you have; then the survivorship bias should go the other way. Otherwise it’s overwhelmed by something else, perhaps the sheer ratio of the differing populations.
When did you meet the successful entrepreneurs and business owners? Because unless you met them when they were starting out survivorship bias would account for that.
I also disagree with the GP (with the definitive explanation; it's probably at least partially true), but this:
>> basically all of the successful entrepreneurs and business owners I know didn’t come from families with a lot of resources and didn’t have much of a safety net.
is not statisically accurate; you're only looking at survivors. The successful Gates/Zucks/Musks might outnumber the poor Indian kids; we need both the failure counts and some sort of qualitive definition of success/failure (i.e. a rich-kid failure is probably not life destroying)
If you don’t have a fall back, you have no choice but to make it work.
Or fail miserably…
Which we don't hear about. Except maybe via GoFundMe.
You know what?
Peter used to say, that every successful company could look back at a defining moment early on, where they would have died had it not been for the courage, and the tenacity, and maybe the insanity of one visionary person who put it all on the line, even though it seemed like a huge mistake at the time.
A moment where all the metrics and the numbers didn't mean anything.
It was all about the emotion. It was about belief, rational or irrational.
And I think...
I hope that I just witnessed that.
On the other hand, no matter what you do, you can’t invest like Warren Buffett.
https://www.forbes.com/sites/adamhartung/2014/11/19/why-you-...
The whole idea of succeeding by “grit” makes way too many people too idealistic and unrealistic.
Don’t get me wrong, Peter Drucker (hopefully that’s the Peter you are referring to) had some great actionable advice. But believing in yourself and having grit is about as banal as “thoughts and prayers”
I hope it’s Peter drucker instead of Peter griffin
At one point in Tesla's path, Musk was down to a net worth of $200k or so. He laid his entire fortune on the line. How many of us would be willing to do that? Not me.
Is that courage or ketamine? I'm not sure there's anything aspirational there, or just a huge streak of vanity. Just look at all the plastic surgery.
If you think taking drugs is the key to success, well, it's not a path I'd try.
I did say, "I'm not sure there's anything aspirational there."
But clearly it does have a chance at success, as evidenced by Elon. Or, as it always turns out, it's difficult to fail anywhere but up when you're wealthy.
Always? Why aren't there more trillionaires?
The usual arc is the first generation makes it, the second spends it, and the third is back in the middle class.
Clearly? He's probably drunk some alcohol. Does that mean alcohol is clearly the path to success?
This is distorting my words in such tiny, pedantic, strawmanful ways I don't see a point in replying properly. I'm clearly not going to be the person to break through your illusion.
At a young age and knowing I could easily get a job and rebuild? Why not? $200K to get back is a year a two in Silicon Valley just working in a tech company.
By 2010 with a combination of divorce and over investing in real estate before the financial crisis I had a negative net worth of over $200K at 36 years old and absolutely no money in the bank. I really didn’t stress at all. They were just numbers.
I had a job, a home and parents who could help me out a little when needed mostly for unexpected expenses because my credit was also shot by 2013 with 5 foreclosures/short sales.
At 51, remarried for 15 years and grown (step)kids and working remotely, and a lot of other quality of life changes, we are good.
Going from $200 million to $200 thousand in a few months is a terrifying drop.
No, you cannot make $200m overnight from $200g.
The question was whether I would take a chance with my last $200K.
Musk did. Most wouldn't.
Young and knowing your future earning potential? That’s. I different than paying $200K for college. That’s only slightly more than the average new grad makes working at any of the BigTech companies their first year.
What else was he going to do? Hoard it in a High Yield Savings account?
You know what? This is indeed where courage, tenacity, and risk-taking make a difference.
But what makes the difference in whether or not we hear about it is pure luck and survivor bias.
If their luck was just right that with all that push in the right time the deal came through or the product sold, then we hear about what a great success it was, and how important was their grit.
And many smart determined people with all the courage, tenacity, and risk-taking in the world have also taken the big risk, but dice did not roll their way, or the hill was just so steep it didn't work, so we hear nothing of them. And their number likely vastly exceeds the few for whom it did work.
And if making it by hoping really really hard doesn't work, try suicide or something?
Cortez burning^Wscuttling his ships.
Of the people, did any fail?
If so, this is one of the questions that matters most when assessing whether or not there was a safety net— in failing, did they either wind up at the destitute/homeless/food-bank level, or a mountain of unpaid debt holding back future endeavors?
If the ones who met with failure didn’t face these things or something comparable then they did have safety nets.
Reminds me of the whole you can only succeed when you don’t have the reassurance of a safety net weighing you down idea from dark knight rises.
The defeatist attitude in the reply’s to this comment are unreal. Try hard or don’t. It’s up to you. At least with the one way you might have a chance.
Acknowledging e.g. people who grow up in multilingual households usually have an easier time learning a new language than someone who didn't shouldn't just be about what decision an individual should make for themselves, it's about identifying what stimulates that kind of growth so we get more of that success overall. I.e. making a decision or not to go for the chance myself is a different topic than trying to find ways to increase the chances for everyone.
Economic growth is not a 0 sum game so why talk about the situations around it from only an individual gain perspective. If a lot of individuals are saying some situational factor makes the choice unreasonably hard then that's something worth focusing on rather than dismissing.
Acknowledging reality isn't defeatist. It's very likely that successful entrepreneurs statistically do come from richer families. We shouldn't ignore this fact because it's more fun and emotionally rewarding to us to pretend otherwise
Most attempts fail and if you get into debt you don’t get to try again.
I agree that it takes a special kind of person to try and try again, but it clearly is not for everyone.
A lot has to come together, you need to be alone, have a very supportive partner or be a sociopath (willing to drag your family down with you). You need to be in the right place (or have the means to move there). This usually works when you are young, so definitely having starting capital from somewhere works. This was much easier in the marking moments of technology where any simple tool or game could be transformed into cash. Nowadays you really need to luck out.
Europe has generally better safety net and much less entrepreneurship spirit for example. So it pushes both ways.
I guess one last thing is this weird thing in the US where investors somehow like people who previously failed. Like Elizabeth Holmes who reportedly went from prison right back into the game. With that environment of course it makes sense to just try again.
> looking back over the past two decades basically all of the successful entrepreneurs and business owners I know didn’t come from families with a lot of resources and didn’t have much of a safety net
There’s probably some truthyness to this but it doesn’t account for survivorship bias. And there’s a baseline amount of resources necessary to take a risk and be able to try again (e.g., good luck taking a risk when preoccupied by [lack of] health, housing, food).
That's kind of true. If you have a safety net, you kind of make the wrong decisions, optimize stuff that doesn't cut through the noise and leave something on the track. It's like that scene in Dark Knight Rises where he only makes the impossible jump out of the prison when he doesn't have the safety rope.
I’d expect it to stratify based on the kind of business.
Typical small businesses (plumbing, HVAC, restaurants, convenience stores) I’d expect to come from poorer families. These businesses are a potential avenue to success without traditional credentials, and they’re not the sort of thing somebody is likely to start as a passion.
From wealthy families, I’d expect vanity businesses. There wouldn’t be as much motivation for the annoying aspects of a real business. And anyone who is interested in business can probably get a nice start in something their family owns or has a major stake in.
Moonshot companies I’d expect to come from the upper middle class, children of doctors and such. Not fabulously wealthy, so the potential for making millions can still be a big motivator. But comfortable enough to get advanced schooling and be willing to aim big with a chance of failure, rather than going for something mundane you know is always in demand, like fixing pipes.
Off the top of my head, Gates, Page, and Zuckerberg all fit that mold.
Every single western "entrepreneur" who starts making a little more than 100k/year likes to tell itself this story.
Did you have any (real, not GenZ) mental or physical disability?
Did you have a house to come back to every day? Did you have a hot meal waiting for you whenever you wanted?
Did you have a community that supported you through your business?
Did you have a legal structure around you that allowed you not to worry about getting kidnapped/killed? A structure that enforces getting paid after you've earned your money?
98% of what you have was given.
I do agree, however, that a lot of people don't even bother to put in the remaining 2%.
“Can you start a business without $10m of family capital” is a societal question.
“Can you start a business on an empty stomach without a roof over your head” is not the same debate. A roof over your head is a prerequisite to almost everything else in life - starting a business is WAY down the list. Better to have societies work to provide food and roofs - which they do, with varying degrees of success.
It is the exact same debate.
People without those things cannot play the lottery as many times as those who have them. They might not even get to play it once.
If everyone around you has all of those basic human needs met, you are the exception.
But of course people don't like to hear this, because their whole meritocracy myth (which has always been trash) comes falling down and they might be forced to admit that, please excuse me for making this outrageous statement, ... you're just an average person with slightly better luck than others.
(It is true, however, that "luck" compounds through your life and even more through generations, though. But that even detracts from the meritocracy myth even more, as the family you're born in greatly defines what you'll achieve.)
Becoming an entrepreneur happens most of the times merely for advancing one's personal financial success. But, another side of it, which doesn't usually get attention, is that you become a beneficial factor for the society at large, because you are assumed to be doing something good and appreciated by others to earn that money. (Otherwise, earning money without being willingly paid, would make you just a criminal). You are right, this "compounds through your life and even more through generations". Especially through generations. This is how the prosperous societies got here - people doing all sorts of things that led to prosperity. If you don't not live in a society like that, then your business should be building a society first. Put your brick in the wall.
It also means that, unless the state of the environment you're in has some "force majeure" as a cause, then the people that were before you haven't done that of a good job building one either. That's not an individual failure, that's generations of failure, don't you think?
And lastly, if the environment you described is the one you're residing in, that means you're far removed from that of the entrepreneur's (you're casting judgement on) and from his/her stance. How can that lead to a caracter judgement worth anything?
>If you don't not live in a society like that, then your business should be building a society first. Put your brick in the wall.
Totally agree.
I don't think anyone believes the idea of meritocracy applies to starving homeless slaves.
Luck is often the deciding factor in meritocracy, but we also make our own luck. You can have all the privleges in the world and still end up as a failson, it happens all the time.
What’s even funnier when I hear that my thought is “congratulations I guess??”. They are now making less than an average mid level developer doing CRUD enterprise dev 3 years out of school in any major metro area in the US.
That’s not even considering that the intern I mentored in 2021 is now making in the low $200s as an SA at BigTech at 25.
All of those things are great and should be afforded to every Person. In many places, they are.
Would be interesting to run the priors on this and say what is the probability of startup success given "rich" "middle class" and "poor".
Otherwise maybe more poor people try startups so success will be biased towards them (rich will take over daddy or mommy business... maybe take a shot at a startup for fun but say meh lets try the business, plus there are waaaaay fewer rich).
Or to put it another way: Most people who live >100 are also from modest backgrounds too. As are olympic gold winners. Us paupers are the best!
Well, how many non-successful entrepreneurs and business owners do you know?
you can extend that to all Silicon Valley and the US in general.
It has one of the weakest social security systems. Not even proper healthcare is guaranteed. Yet it out innovates all of Europe, Canada, Australia, other places that have incredible social "safety nets".
I agree with the other commenter: safety nets and multiple tries are always good to have, but persistence and grit are even more important, and these come more from necessity.
> Yet it out innovates all of Europe, Canada, Australia, other places that have incredible social "safety nets".
Probability: highly unlikely.
Speaking for Europe, I see a lot of silent innovation. No press, no LinkedIn posts, not an article on their website. There are a lot of US firms that shop in Europe for high tech. (I know of instances were the US company buys the IP from the EU supplier + take public credit for it + forbids the supplier for showcasing their success in public.)
What is different is:
1) the amount of money available in the US. The US enjoyed a very beneficial position post-WOII, enabling them to run high deficits.
2) the US has a positive attitude to entrepreneurship. You are not a failure when your company goes bankrupt, you learn from it and you go-go-go.
Also the EU lacks a unified capital market where infinite VC money can be pooled together into any new hype. I would argue this the biggest reason.
EU countries also have very high tax rates, which feels like the community is the primary beneficiary of your business, not you the entrepreneur. This alone severely reduces the financial incentive of starting a business. There's also some weird cultural stigma in the EU's more socialist countries (like France), where the system is way more comfortable for you as an employee rather than a risk taker. Let's call a spade a spade.
The way you say it, it sounds like the EU shouldn’t have any companies at all, but that is not true. In fact, the EU is very good at boring tech, which is the reason why the US is imposing high tariffs.
What is silent innovation? Do you think there are no silent innovation in the US?
Productivity is lacking in those other countries. That said, I don't think it has to do with safety net, which is not much different in the U.S.
You can have all of the “grit” you want to and still fail. You just never hear about the failures.
Most of the US graduates have their degree and a network to fall back on. It's nice to have actual money in the bank, but it can also be acceptable to have a high chance of getting a rewarding job if the moonshot doesn't work.
In other words, human capital.
Most of the entrepreneurs I meet are not going to be homeless if things don't work out. They'll be employed.
Exactly this many also have parents who can help subsidize them, stay on their parents health insurance until they are 26 and worse case move back home. This isn’t just the privilege rich, this can also be your mid to mid upper income couple who can help their kids out.
Yep, and most of these fallbacks are insurance-like: you can always say you never asked your parents for anything. Like me. Thing worked out, so I didn't need their money. But if they hadn't, I would have a place to sleep and eat.
"But if they hadn't, I would have a place to sleep and eat."
Forgive me for asking, but (if it's acceptable to reduce it to that) isn't joining the army or something gets one covered? The army service would come with the added bonus of not letting you go soft in perseverance and risk taking areas.
/sarcasm
Necessity is too fallible though, if Bezos was driven by necessity he would have sold Amazon in 1996 and retired.
That level of success requires either just pure psychopathic drive or some kind of deep anger that forces you to keep proving yourself again and again.
Beyond the lack of safety nets, etc., we just have a culture in the USA where you continually have to compete to prove your value as an individual.
There was some story I read where Farmers wanted to get immigrant laborers to work longer hours, so they offered a temporarily increased hourly rate. Like for the next month we pay $5/hr instead of just $3. The thought was workers would work like mad to hoard as much of the increased rate as they could. The opposite happened, they started working less because they just wanted $X/month and then to relax the rest of the time. That always stood out to me as a stark example that our American psychology is not at all universal, and is kind of perverted in certain lights.
Europe innovates. What it creates less are large monopolies. What America creates much more then Europe is winner takes all markets with little competition and large powerful companies on top.
> Not even proper healthcare is guaranteed.
…except it is. Health insurance is available on a sliding scale based on income and essentially free for most low income people.
In some areas and for some people, Medicaid probably does count as proper healthcare. But it certainly doesn't for other people / other places. Imagine there being one doctor within a multi-million person metro area who takes Medicaid for some sub-specialty. 90 minutes away from you by car. And you don't have a car. This is the reality for millions of Medicaid recipients, including ones I know personally in Chicago.
Not Medicaid, subsidized ACA. I know a lot of young healthy people that just take the chance of not having health care. Worse case you can’t squeeze blood out of a turnip if you have to go the emergency room.
I don’t think my older (step)son has had insurance since he got off our plan at 26 over two years ago.
Sure, although in some areas healthcare is effectively unavailable to Medicaid plan members because providers have stopped accepting those patients. Being insured doesn't mean much if you can't schedule an appointment.
https://www.wsj.com/health/healthcare/medicaid-insurers-doct...
Is this statistically true or just your experience? I'd be very surprised if it was more than just anecdotal.
> They just went all in on their goals when they were young and had many years ahead of them to start over if it all went wrong.
Lots of well-resourced kids do this and more can do this. By the law of averages they should be overrepresented in successes here.
> When you come from such resources and wealth that you don’t need to succeed and you can drop the business as soon as it becomes difficult, it’s a different situation.
Does needing to succeed make businesses succeed? I don't think so, tbh.
It's like a baseball game. Most people are benched their whole lives. They never get a chance at the plate. More privileged people with a lucky combination of the right family, the right education, the right timing, and the right opportunity get an at-bat, and they'll either strike out, or hit the ball. A few very lucky people will get to stand at the plate maybe once or twice more.
The wealthy get infinite at-bats. They get to stand at the plate for however long they want, and swing and swing until they get their home run. I worked with a founder like this. He would always talk about his business's humble beginnings, starting from a garage and so on--you know the story. What he would neglect to admit was this was like his 7th try. Every time he failed, he'd just chill on his family's couch, dreaming up his next startup idea.
I think it was Outliers (Malcolm Gladwell) that talked about a similar concept as well. Ignoring the 10k hour thing, it also talks abut small compounding advantages that later add up to more opportunity (for those that take it).
To go with the sports analogy, (paraphrasing, been awhile since I read it) it mentions how birth date coinciding with the youth sport season was a strong determiner of success at that sport because being ~11 months older in the same age group meant they were bigger faster more experienced and would be played more, compounding increases in skill.
There was also a similar concept floating around about darts, where the poor get maybe one dart to throw, middle class a few and wealthier get many. But I can't remember where I saw or read that
Baseball isn't popular world-wide. The most popular game here is football (that sport which USA calls soccer).
Darts would be a funny way to make the analogy. It is very much a sport performed by people from the low class, since it is relatively easy to perform and practice in pubs. But you still need to have some money to buy a beer at a pub, ie. it ain't the homeless playing. The most poor people can barely afford their rent, and work off their ass doing so. Single mother with three jobs has near 0% to start a successful business.
I'm not sure why analogies are needed.
There's an old saying: Time is money. Flip that around: Money is time.
If you have money, you have more time, more opportunities to try things in order to find success.
You can read all about how to play an instrument, or how a bike works, but you'll never learn to ride or play without time to practice.
Thanks for the book mention. Adam Grant also talks about the age-group concept, but leans on it for a different end, in Hidden Potential.
The description sounds like a part 2 or updated approach/angle to Mindset (Carol Dweck), a book that made a changing impact when I first read it, but reading the updated edition years later left me wanting more. I had also read a couple of Adam Grant's earlier books and enjoyed them, will definitely check out Hidden Potential.
This is not true. No matter how many different teams I try out for, I as a 51 year old short male with a limp will never be a star basketball player or ever make it to even the D leagues.
There are plenty of people who tried repeatedly to “succeed” in their own company and failed. Let’s say I did try to start my own company at 22 10x and spent 3 years at each one. I’m now 52 and would have been better off just working those 30 years and saving and investing with a lot less stress
> Let’s say I did try to start my own company at 22 10x and spent 3 years at each one. I’m now 52 and would have been better off just working those 30 years and saving and investing with a lot less stress.
Some people would succeed eventually, others wouldn’t. I think it’s really hard to effectively gauge what the chances are cause you’ll see a lot of survivorship bias and a bunch of grifters with courses and blogs and stuff that try to pass it off as a reproducible skill.
I wonder what dataset would show real world outcomes well, especially since failed startups won’t be catalogued as well as people trying to enter the dining business and most of them going under.
At 52, how large would my success have to be to make up for all of the years and compounding I could have made just working at a 9-5?
Depends on the 9-5 and the country you work in.
If you'd work for decades in the Baltics, let's not even assume just software development, in absolute terms you wouldn't make that much: the median salary is below 2k EUR per month, the taxes also make a dent, as do the expenses.
You can look at the mean disposable income figures for Latvia here, for example: https://data.stat.gov.lv/pxweb/en/OSP_PUB/START__POP__MI__MI...
Effectively, the savings rate for most of the households is pretty bad: https://eng.lsm.lv/article/economy/economy/23.11.2023-latvia...
So with living relatively frugally and having 1000 EUR of disposable income per month, and a similarly optimistic savings rate of 5%, each month you'd be able to put away about 50 EUR, or 600 EUR per year. You can calculate how that might compound with investments but you're putting away 6k per decade.
Obviously it's better for software developers, but there might also be unexpected expenses along the way, and so on but the overall trajectory is clear - depending on the life circumstances, working a 9-5 will ensure you live pretty poorly and that might lead to higher risk tolerance for entrepreneurship (or crime, go figure).
As for those born (or living) in a prosperous country, good for you! The equation shifts there a whole bunch, as well as depending on class or other opportunities.
You as a short 51 year old could create your own league. Be a star. But no you cannot play in other leagues with younger players.
See my other comment about being able to create a product and not having a go to market strategy or sales is like thinking just because I can dribble doesn’t mean I would succeed in the NBA.
I think the level of success one wants also require having a check for delusion and realism. If a "51 year old short limp" thinks they are going to be a star basketball player, they are delusional and no longer realistic.
How many people right here on HN have you seen over the years who built something and had no idea about marketing or a go to market strategy or knew anything about sales?
That’s the equivalent of a 51 year old with a limp not being self aware enough to know that I don’t have the skills to be a basketball player just because I can dribble.
So you agree with the parent commenters actual point and counter-example, great!
Completely Agree.
Both Romans and Mongols have lost/retreated many battles. They just had to regroup and raise another army over and over again. Some of their opponents could not even afford the war even after winning over them multiple times.
The other sides simply were more fragile, where you were defending and once your city falls, you are done.
Avoid risk of ruin. Keep the ability of taking multiple shots with upside in your favor.
If your energy is finite (which is normally the case), the effect may also depend on the energy per shot you spend. A birdshot allows you to hit great many possible targets, but only very weakly. A buckshot hits fewer targets, but packs a bit more punch. A FMJ bullet shot from a sniper rifle allows you to hit an exact target with a great force, but you have to choose carefully.
What worked for me best was looking around a lot, identifying a few worthy targets, and aiming well.
You need to have the money, the energy, and patience to experiment until you get it right.
Money: do it while you’re young and don’t need a lot. Or get first rich. Or collect enough money on a dream.
Energy: again being young helps. Having 2 smalls kids and old parents doesn’t.
Patience: that’s the more esoterical part. It’s hard to know when to keep on grinding and when to quit.
The key ingredient is the courage to try, not the safety net. Countries lauded for their strong safety nets are not overflowing with people taking ambitious risks. Often quite the opposite; the strong safety net reflects a cultural aversion to risk.
People with the courage to try don’t need a safety net to do it. In practice they seem to be almost inversely correlated.
An important aspect not mentioned is feeling like you will be adequately rewarded if your calculated risks pay off. This seems to be more pertinent than safety nets in practice.
Look at the founders of the top 100 most valuable companies in the US. How many of them came from poverty?
That is insightful. Courage to take risks means higher standard deviation in outcomes, more visible successes, but also more hard failures. Risk averse cultures have more stable outcomes, no big successes, but also less financially crippling failures. A personal or social safety net may or may not make you risk averse. Taking semi-calculated risks seems like a skill that needs to be learned for successful entrepreneurship.
Not sure I 100% agree. First: you can temper you ambition and thus the risk. You do not need to go ALL IN for almost anything. It may take longer or be fractional vs. the initial ambitions but probably also far more realistic. Second: the counter example of succeeding because you NEED to; the "burn the ships!" approach. If you know you can fail it inevitably tempers your efforts too. You might not want to do this if you're the sole bread winner for an entire family, but when you're young and independent? Maybe. Combine this with the first and I think there's lots of paths to success.
That said, being inherently good also helps. I know (several) people who knocked it out of the park with literally their first attempt out of university in their early 20s. It wasn't just luck, they are genuinly unusually talented.not necessarily how inherently good you areSure, but this argument will never mention those that were just as good that failed. Simply to selection bias.
It's interesting how the American narrative changed from "hard work will make you succeed" to "only privilege will make you succeed".
I think the newer iteration is just setting the country for failure and is an excuse why being lazy is okay
How is (the assumption one needs) trying multiple times "lazier" than once?
The underlying subtext if I read it correctly is I had a lot of chances because I was lucky to be born into a specific background
when you start subscribing to determinism (i was ordained by my parents to succeed), the logical next step is not to try hard
Out of curiosity (not accusation, I promise) how did you make it?
I dunno... based on having worked for ~10 small to midsize companies now and getting to interact frequently with the founders at almost all of them, I wouldn't say a safety net was the common thread.
They were however all highly driven, a bit sociopathic, insanely confident and had some kind of chip on their shoulder. A few wanted to "beat daddy", some had wealthy wives and wanted to fit in with their in-laws, and others just seemed mad at something or someone in their industry and wanted to outdo them.
The #1 factor for success imo is being angry with reality and being arrogant enough to think you should impose your will on it. People who are given infinite chances will just fail a few times and settle into a safe life.
If safety net was the key ingredient, European startups should killing it. And yet US without a safety net is doing so much better.
Well said, this is the real game to pursue. Best of continued luck.
That sounds good, but with a safety net, are you really going to be hungry enough to make sure your one shot at getting out of the ghetto doesn't fail? The entrepreneur that says to themselves, if this doesn't work, I'll just ask mom for another $300k at St Barts over Christmas doesn't sound like the one sleeping under the desk at the office to get the demo ready for TechCrunch Disrupt. Or maybe they are (to prove daddy wrong). The human condition contains multitudes.
Gates, Bezos, Buffet, Musk all had enough hunger to beat out literally everyone else
And they also all came from money.
> doesn't sound like the one sleeping under the desk at the office to get the demo ready for TechCrunch Disrupt
For what? Their garbage SaaS that barely works and is just a thin veneer for advertisers to gorge on my data?
Ahh yes, classic HN: "People only succeed/work hard if their only other option is death"
My wife and I are starting to test this theory. We are putting our kid in an expensive school, then starting a business to support our lifestyle. If we fail, our kid’ll have to go to a cheaper school and we’d have lost a few years of school fees. If we succeed, yay.
By the time, our are faced with the choice, our kid will be embedded in school so ripping them out of it is going to be a tough choice.
So, yeah, we’re essentially burning our boats and fighting to survive.
Don't live above your means because an unexpected event is likely to happen. Plus creating a situation where all peers are rich and only your kid is not doesn't open the doors to future success compared to if they were at their peers lifestyle level.
We grappled with this too but in the end, our decision was influenced by our parents choosing to live beyond their means to put us through good schools and college. If they could grit their teeth and sacrifice for us, we can do the same for the next generation.
Our choice us somewhat made easier because we didn’t like any of the schools near us except this one. The others were focused on exams/results and were larger in size so felt more “corporate”.
I too have made this choice with my family.. and its one hell of a positive force-factor. My mom immigrated from Kiev, with nothing and a dream for her son to have a better life in NYC. Im now taking the same risks as a 5-time entrepreneur..now living in Buenos Aires as a single dad. Enjoy the ride - its short - live your dream - steer your ship or it will be steered for you.
More power to both of us!
> This is why having a safety net and resources to try again is so powerful.
The idea of a safety net is a silly idea. The whole world had very little safety net just 100 years ago, and we still managed fine to make progress and to get out of poverty (on average).
On the contrary, when you know you have very little safety net, you tend to try harder and to persevere a lot more.
> The idea of electricity is a silly idea. The whole world had very little electricity just 100 years ago. and we still managed fine to make progress
This is just an argument from tradition and not even a good one. It's debatable (and maybe impossible to prove) if it's even true. 100 years ago, the global economy fell into a huge decline that led to more global safety nets. Then, were there even less safety nets 50 years ago? And did that lack of existence not hinder progress?
> you tend to try harder
Is there any actual evidence for this? If I don't have a social net, I can't do anything about it. I'm not going to try harder at my risky, innovative product. I'm going to give up and do something 'safe' that only marginally increases economic output.
Would you like a golden sticker?
That's a cliche and it sucks. A safety net and family resources correlate with nothing related to entrepeneurship and risk taking.
This is definitely not true. How many people for instance can go into journalism and do unpaid internships without family support?
The entire idea of most entrepreneurs pulling themselves up by their bootstraps in tech is a myth. Out of all of major tech companies now, how many of the founders came from disadvantaged backgrounds?
Safety net and resources correlates heavily in almost all aspects of your life, having a better life helps immensely in any project you do in your life, including entrepreneurship
> A safety net and family resources correlate with nothing related to entrepeneurship and risk taking
You might be on to something, just look at the examples here. Being successful in tech and a well-known risk taker seems strongly related to having a 4-5 letter last name. Bezos, Brin, Dell, Gates, Page, Jobs, Musk, Thiel...Zuckerberg, okay an outlier, but everyone just says Zuck -- so tossup?/s