Re: Entrepreneurs

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The linked article makes a lot of sense, except for one point: University of California, Berkeley economists Ross Levine and Rona Rubenstein analyzed the shared traits of entrepreneurs in a 2013 paper, and found that most were white, male, and highly educated. "If one does not have money in the form of a family with money, the chances of becoming an entrepreneur drop quite a bit," Levine tells Quartz.

Most of that makes sense. Most entrepreneurs are white - well, most wealthy families are white. Most are highly educated - well, having a higher education probably actually makes you a better entrepreneur, but also it correlates pretty well with family wealth. If you're from a wealthy family and not highly educated, you're probably pretty dim. But male? Don't wealthy families have daughters? Why aren't they entrepreneurs?

And there's another very interesting point in the paper that the article doesn't cover. Entrepreneurs tend to have another important trait in common - they are juvenile criminals. "For
example, the incorporated self-employed are twice as likely as salaried workers to report having taken something by force as youths; they are almost 40 percent more likely to have been stopped by the police; and, the incorporated self-employed have an overall illicit activity index (standardized for the full sample), which is measured when they were between the ages of 15 and 22, that is 21 percent greater than the index for salaried workers."

Which is very interesting indeed.

So, here's a thought. The rate of new business formation in the US has been falling now for many years. Since the early 80s, in fact. And maybe that's all due to changes in the business climate or regulatory problems or whatever - but maybe it's due to the fact that there are just fewer people in the US, specifically fewer young people, who are prepared to start new businesses.

And this study suggests that the sort of person who starts a new business is basically "juvenile criminal" + "family money". Makes sense in personality terms, right? Intuitively?

Well, the number of wealthy families out there certainly hasn't dropped since the 80s; inequality's been rising. But we know that the rate of juvenile crime definitely has been dropping. And if an entrepreneur is basically a juvenile criminal with the right family background, then you'd expect from that that the rate of startups would be dropping too.

And we all know what's behind the fall in juvenile criminality, don't we? Lower environmental lead!

LEAD FREE PETROL IS KILLING THE AMERICAN ECONOMY.


Posted by: ajay | Link to this comment | 04-13-17 7:24 AM
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Steve Jobs.


Posted by: chris y | Link to this comment | 04-13-17 7:29 AM
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I hadn't really thought about owning a business as a form of collecting rent or skimming off the top.

Most business ownership, in the form of listed equity, is entirely rent collection. Or, I guess, rent collection and speculation on future rent collection. But certainly not involved in the day to day management. And in the case of Snap Inc, having literally no rights whatsoever to influence said management.


Posted by: Ginger Yellow | Link to this comment | 04-13-17 7:41 AM
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This sounds dismissive, and I don't mean it that way because my own education is completely, but completely sketchy in this area. But aren't you approaching talking about the Marxist concept of surplus value as what it is that owners derive from businesses? This is confounded a little by the fact that for small businesses, owners often provide some, or a great deal of, useful labor as well, but there's no fundamental reason why that has to be a part of business ownership.


Posted by: LizardBreath | Link to this comment | 04-13-17 7:47 AM
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It's the kind of thing that came up constantly when we were discussing Piketty, and I think I've heard of it via Marx, too, but it clicked in a new way for me, in this context.

Also I'm totally losing my memory, so when I say "I never thought about this before," what I mean is, "it felt fresh and novel in the moment."


Posted by: heebie-geebie | Link to this comment | 04-13-17 7:50 AM
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I hear you on the world being an exciting, fresh new experience every day.


Posted by: LizardBreath | Link to this comment | 04-13-17 7:54 AM
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"I hadn't really thought about owning a business as a form of collecting rent or skimming off the top."

Isn't that what profits are? I buy Apple stock and get dividends without doing any work. (Some of the profits Apple makes
are not distributed as dividends, but re-invested.)


Posted by: Robert | Link to this comment | 04-13-17 8:23 AM
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Oh, true.


Posted by: heebie-geebie | Link to this comment | 04-13-17 8:27 AM
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I just raised a bunch of seed VC money for my startup. I was honestly pretty surprised -- probably I shouldn't have been -- by the degree to which that world is both impressed with and drawn from traditional -- i.e. Ivy League -- centers of influence and also by the number of random rich kids who claim enormous respect just by virtue of having hung around and made some lucky investments. I think I imagined that somebody like Marc Andreessen (who is hardly laudable, obviously) would be more the model -- techies who had made a bundle and then moved to the other side of the desk. But even among people who fit that category many of them were born into a level of privilege that greatly exceeded what I (and, just to be clear, I'm no slouch in the "lucky breaks" department) had really encountered before. Anyhow, AMA.


Posted by: President Business | Link to this comment | 04-13-17 8:39 AM
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Surely you should be President "The business of America is business" Coolidge?


Posted by: LizardBreath | Link to this comment | 04-13-17 8:40 AM
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It's a tribute to our treasury secretary.


Posted by: President Business | Link to this comment | 04-13-17 8:42 AM
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I think what makes it fresh is linking it specifically to the word 'entrepreneur'.

I for one don't have any particular trouble* thinking of idle collection of ownership rents in connection with words like 'businessman', 'investor' or 'yogurt shop magnate'.

But 'owning a business' in the 'entrepreneur' sense tends to connote an image of a hard working individual intimately involved with all aspects of their business 24/7. It's not exactly astonishing that this probably often isn't true, but it's definitely not something we notice all the time.

Also I find I'm not that surprised to hear that 'entrepreneurs' tend to be privileged rich kids with poor impulse control. Depressed, but not surprised.

I just read something this morning quoting Tyler Cowen as saying Americans are lazy because they're risk averse and not entrepreneurial enough these days. I wonder how that fits in.

---
* Well, maybe I have a little trouble - it occurs to me that a lot of effort is put into building a popular image that these sorts of people are all hard-working workaholics. I might think they're assholes, but at least they're supposedly industrious assholes.

But of course that's got to be at least partly a total myth. I wonder how much the disassociation of the words 'idle' and 'rich' is doing to the whole wealth inequality debate...


Posted by: jack lecou | Link to this comment | 04-13-17 8:54 AM
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As part of the hunting trip IHDMB, I got into a discussion with the libertarian about wages and what people are 'worth'. He argued that people with higher wages worked harder and therefore deserved it (he's also a man who started a business that let him retire at some ungodly young age). I apparently startled him by arguing that the well paid people I knew (of) were actually workaholics and should be paid less per hour because they were obviously not working for the money. Therefore you could totally get away with paying them less because they're really just in it for the work*. I'm not entirely convince of this idea, and was basically playing left-wing devil's advocate.

Anyway, this ties into Heebie's story because the entrepreneur group also thinks that their hard work entitles them to high pay but really their work level is probably independent of how much they're paid (they're just paid a lot for other reasons). But maybe not. What do really well paid people do all day? I mean not like Meyer at Yahoo, but like a person at an investment firm. The only day-breakdown I've seen was in like Refinery and seemed pretty cushy to me.

*And now that I think about it again, obviously academics are the model of this. It's not like we're paid well but we certainly work like we're making millions (myself excluded)


Posted by: hydrobatidae | Link to this comment | 04-13-17 9:08 AM
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Well, the number of wealthy families out there certainly hasn't dropped since the 80s; inequality's been rising.

This could still explain a fall in the number of 'entrepreneurial' rich kids though:

Just subdivide the wealthy families up into, say, 'rhodium', 'gold', 'silver' and 'bronze'. Assume the first two are too rich to even bother with things like making their kids run gyms, so the entrepreneurs are drawn primarily from silver and bronze.

Then note that rising inequality means the number of silver and bronze families must be dropping -- inequality *within* the top 1%, 0.1%, 0.01%, etc. is rising too. (IIRC, it's even faster than between those groups and the rest of us.)

So as wealth accumulation accelerates, those families either bubble up to gold and rhodium levels, or fall down into the 99%. Either way, they stop producing so many 'entrepreneurs'.


Posted by: jack lecou | Link to this comment | 04-13-17 9:10 AM
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The weekly breakdown for a $230,000 salary: http://www.refinery29.com/money-diary-new-york-ny-vice-president-budget


Posted by: hydrobatidae | Link to this comment | 04-13-17 9:11 AM
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The Marxist notion of surplus value is weird to me. If I make a tool (a hammer, say) and then sell it to you, is the money I make surplus value? Let's say instead of buying it for 100 dollars a year, and you lease it for 1 dollar a year, and the current interest rate is exactly 1%. Is the money I make surplus value? If I start a firm, and give you access to the tool, where you make the exact same amount of money that you would if you bought the tool, then I think a Marxist would definitely call that surplus value. But all three situations seem basically the same to me. If even the first scenario is surplus value, and if surplus value is exploitation, then why would anyone make tools?


Posted by: Walt Someguy | Link to this comment | 04-13-17 9:14 AM
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Getting back to the OP, if someone worked really hard at a day job, and saved up to start their own Crossfit studio, it wouldn't bother me. It's the fact that people with rich parents can do it without putting in that work that bothers me.


Posted by: Walt Someguy | Link to this comment | 04-13-17 9:16 AM
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I'd be more favorably inclined toward X and trainer A in Heebie's story if I thought they'll be able to refrain from pontificating about "pulling yourself up by your bootstraps" and "no one ever gave me a handout" & etc. in later life.


Posted by: AcademicLurker | Link to this comment | 04-13-17 9:22 AM
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It's probably a cult anyway.


Posted by: Moby Hick | Link to this comment | 04-13-17 9:24 AM
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I think I imagined that somebody like Marc Andreessen (who is hardly laudable, obviously) would be more the model -- techies who had made a bundle and then moved to the other side of the desk. But even among people who fit that category many of them were born into a level of privilege that greatly exceeded what I (and, just to be clear, I'm no slouch in the "lucky breaks" department) had really encountered before. Anyhow, AMA.

Among the people with enough money to throw it at startups, there are going to be a lot more people who were born with that money, or who were born with a bit less money but enough to get on the Ivy League-->Investment Bank-->Hedge Fund-->VC track, than there are people who started with nothing and made it big, of which there are very few. For many of the reasons discussed in the OP. And, I guess, Piketty.


Posted by: Ginger Yellow | Link to this comment | 04-13-17 9:24 AM
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16: I think the situations are distinguishable (first two not surplus value, third one is) -- by stipulating that the worker makes the same amount in each case, you make them look similar, but there are all sorts of reasons why the experience would be different for the worker, including but not limited to how much money they'd be likely to make.

In the first two situations, the worker controls their manner and amount of work, and assumes the risk of finding a market for their output, and so on. More control, more risk, potentially more reward. In the last situation, the owner of the tool can adjust compensation levels and working conditions on an ongoing basis in response to market conditions, so as to extract the maximum value from the worker's labor.


Posted by: LizardBreath | Link to this comment | 04-13-17 9:29 AM
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The conventional idea is that it isn't unfair for the investor to get profits whereas non-investors don't, even when the investor isn't involved in managing the company, because the investor is taking a risk. This is then implicitly combined with a move to saying it isn't inimical to virtue either, because courage and skill at choosing cannily are virtues. You quietly ignore the question of why the same argument doesn't making gambling virtuous. The 'skill' bit is doing a lot of work here. (This is quite apart from the fact that with the wealthy kid being bought a company, it's the parents who are taking the risk.)


Posted by: One of Many | Link to this comment | 04-13-17 9:29 AM
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It is left as an exercise for the reader to speculate on how Brother Y came to own several nutrition shops in his mid-twenties.


Posted by: heebie-geebie | Link to this comment | 04-13-17 9:31 AM
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The other thing small business owners provide is risk cover or backup: "What are we going to do if..." stuff. And direction, extra capital, possibly basic knowledge and marketing etc. Thinking about the small businesses I know, nail and hair salons are mostly owned by women (and WOC at that, especially in non-suburban areas) delis and bodegas obviously not by white males and so on. I think there's enough discrepancy to call the article's conclusions into question or at least to ask to see their definitions and methodology. Funnily enough, I am white, male, from a wealthy background and pretty well educated but got no capital for either of the businesses I started from my family. NOt to say that there weren't other advantages, there certainly were, but not capital.


Posted by: John | Link to this comment | 04-13-17 9:32 AM
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22 to no-one in particular, and before seeing most of the thread.


Posted by: One of Many | Link to this comment | 04-13-17 9:33 AM
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16: I'm a bit thrown by the syntax, but those scenarios do not seem to be economically equivalent. In the case of an outright sale, unless you're describing some kind of deferred purchase price, then the buyer has to fund the full acquisition cost (and the seller gets the benefit of the lump sum to reinvest). In the lease situation, conversely, the lessee only has to fund 1% of the value of the tool in a given year, but (presumably) on the other hand doesn't have legal title to the tool, so they can't sell it or use it as security for a loan. Finally in third scenario, not only do they not have title to the tool, their usage right is (again, presumably) contingent on employment by the owner. But I may be misunderstanding the scenarios.


Posted by: Ginger Yellow | Link to this comment | 04-13-17 9:33 AM
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26: I think you read them all the same way I did.


Posted by: LizardBreath | Link to this comment | 04-13-17 9:37 AM
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History of nail salons as a major industry. Up from hard circumstances, but there was definitely some capital endowment involved.


Posted by: Minivet | Link to this comment | 04-13-17 9:57 AM
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20: No, of course. As I said, I probably shouldn't have been surprised. The degree to which VCs were universally impressed with fancy degrees (on the part of founders) I feel more justified in being surrpised by. For all that the people with the money are, well, people with money, I had bought it more than in retrospect I should have to the idea that VCs were looking for indicators of potential for success at least orthogonal to "well, I went to Stanford". But not only was the fanciness of schools an important criterion, it was a criterion that was used openly and without hedging or any sign of embarrassment.


Posted by: President Business | Link to this comment | 04-13-17 10:04 AM
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The OP is great. A very clear example of something that is easily visible (heck, I work for a small business started by a white guy who has family money) but which I don't think about often.

On preview 29 is interesting and engaging.


Posted by: NickS | Link to this comment | 04-13-17 10:13 AM
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Well, you know how to tell if someone went to Harvard, right?


Posted by: CharleyCarp | Link to this comment | 04-13-17 10:18 AM
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How?


Posted by: heebie-geebie | Link to this comment | 04-13-17 10:19 AM
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I started drafting basically 22. Some small businesses are shitty (say the bar in Always Sunny In Philadelphia), but I basically believe that the modal little shop provides something people want. Keeping a place clean, stocked, and functional is pretty easy, but setting it up takes some work and is definitely a risk of capital. That is, drop the ball on setting up or running the nutrition shop and that money is gone, the family now can't fund as many possibilities as before.

Maybe my ground perspective comes from living now and for most of my life in basically middle class neighborhoods where the places to live and work that come out of individual people's choices work out well on average. To the gambling question-- I see capital allocation as something challenging to do well, not necessarily a normative ideal, certainly not the only one, certainly not intrinsically. Tangentially: in soviet Russia, playing chess well was actually seen as a worthwhile moral ideal, an atheistically sound way of building character.

All of that said, markets can stay irrational for a long time-- if the local bigshot is horrible, the city's newspaper and nutrition shanties may suck and local minorities be treated horribly for decades.


Posted by: lw | Link to this comment | 04-13-17 10:20 AM
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32 They'll tell you.


Posted by: CharleyCarp | Link to this comment | 04-13-17 10:21 AM
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I certainly wasn't trying to make the point that national chains are superior to locally-owned businesses. Nor that opening up a business isn't incurring a risk.


Posted by: heebie-geebie | Link to this comment | 04-13-17 10:24 AM
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There's an element of water being wet here: starting most any business requires a significant sum of money up front, and most any lender isn't interested in financing 100%. So, businesses are mostly started by people who already have some money. And more than that, enough money that if they lose it on some particular venture, they'll still be ok.

Obviously, one feels differently about taking a risk where the upside helps out a child than taking a risk where the upside helps a stranger. Enough of a difference that a parent is way more likely to finance 100% of start-up costs than any arms-length lender.


Posted by: CharleyCarp | Link to this comment | 04-13-17 10:32 AM
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Fair enough. I tend not to think about individuals' personalities but rather about systems. Both perspectives matter.


Posted by: lw | Link to this comment | 04-13-17 10:32 AM
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A friend of mine actually makes a living advising people who want to start their own business. His slogan is, "Freedom from Bosses Forever!" He says only a tiny minority want to be the next Bill Gates; most people just want to make a living on their own terms. But my friend takes such people very seriously as entrepreneurs. One of his most basic pieces of advice, though, is, "Bootstrap, don't borrow". Even if you have to work another couple of years in your shit job to save the seed money, it's better than starting out in debt. He bangs that drum hard. (This guy couldn't care less about trustafarians blowing a bit of their capital on vanity projects, he's all about people who want to escape the cubicle farm by running their own hairdressing salon or hot dog van.)


Posted by: chris y | Link to this comment | 04-13-17 10:33 AM
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Somebody has a van-based dog grooming business. If you used the blow drier, it was also a hot dog van.


Posted by: Moby Hick | Link to this comment | 04-13-17 10:35 AM
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21: The question isn't if a person can distinguish between them, but if a Marxist would, and if so, what the Marxist reasons would be for distinguishing them. Your distinction between the second and third cases is pretty much how I would define exploitation, but I don't think that's the Marxist definition. Marxism is full of analysis in terms of the labor theory of value. "Capital is dead labor", as Marx put it.

If you were indifferent between renting the tools and working for the firm, then it wouldn't be exploitation, right? Exploitation enters because the firm has market power that allows it to either pay us less, or impose additional costs on us. But that's not a Marxist notion -- it's the mainstream economic notion of market power. This is the current leading mainstream theory on why the impact of minimum wages is so small -- even your local corner shop owner has some market power to push wages down.


Posted by: Walt Someguy | Link to this comment | 04-13-17 10:36 AM
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Fair enough. I tend not to think about individuals' personalities but rather about systems. Both perspectives matter.

I was trying to make a systemic point? Not a point about individual personalities?

That, given the background of what CharleyCarp says in 36, this is what the system looks like when it's working. Wealth perpetuates wealth. I don't have a better solution - I don't think X should have been prevented from opening the gym, nor should A have been prevented from purchasing the gym.


Posted by: heebie-geebie | Link to this comment | 04-13-17 10:36 AM
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As far as I know, Marxism doesn't recognize or deal seriously with the prospect of planning failure or of new information. To me, this means that beyond some useful historical insights and the helpful distinction of the capital and labor as politically unified and distinct usually opposed entities, actual detailed analysis within that framework is useless. Monads are more entertaining to think about.


Posted by: lw | Link to this comment | 04-13-17 10:40 AM
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26: In the second scenario you don't have the legal right to the tool, but you don't need it. You have the hundred dollars you didn't spend. The third scenario would require competitive firms to be comparable, where you can freely switch. I think a Marxist would still call that exploitation.


Posted by: Walt Someguy | Link to this comment | 04-13-17 10:41 AM
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The third scenario would require competitive firms to be comparable, where you can freely switch. I think a Marxist would still call that exploitation.

I think a Marxist would deny that it's a broadly plausible real world situation. Sometimes workers are choosing freely between comparable employment on the basis of how competitive the offer is with minimal transaction costs, but really, really rarely.

That is, maybe it's not unrealistic at one instant in time, that a worker might have multiple job offers to choose between. Over a period of time, though, how often can that worker change, when their boss changes their conditions of work? Imagining frictionless competition between employers for employees is an important falsification of any plausible real world situation.


Posted by: LizardBreath | Link to this comment | 04-13-17 11:04 AM
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Tech founders are overwhelmingly male and elite-educated, but there does seem to be a larger percentage of non-white elite-educated males (mostly immigrants) compared to the overall pool of entrepreneurs.


Posted by: Criminally Bulgur | Link to this comment | 04-13-17 11:11 AM
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https://techcrunch.com/2015/07/27/dear-investors-fund-more-underrepresented-founders-in-tech/

That link doesn't seem to backup 45. I'll fallback on it maybe being true of engineers in startups.


Posted by: CB | Link to this comment | 04-13-17 11:16 AM
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FWIW, I'm surprised by 29. Some of my feeling about fancy colleges is tied to family history*, but I've always viewed being impressed by a degree from e.g. an Ivy** as either a result of alienation from higher education {e.g. "You must be smart!") or else being an insufferable snob. I mean, 29 sort of indicates that the people are, indeed, insufferable snobs; I just wouldn't expect it to be so widespread and flagrant. Like, most of the start-ups in SV are, presumably, started in part by people who went to very good schools; who the hell goes to CMU and gets wowed by an MIT degree? It's not a room full of people who went to teachers colleges and in walks a Harvard man.

*my dad, sister, and I all went to very good schools that aren't bywords for "very good school". That's changed a bit for my alma mater since I graduated, but I'm pretty sure it's still the case that, if my sister drops "Highest-in-elevation Seven Sister College" in a room on the west coast, it's 50-50 whether anyone will be impressed. Point being, our family is directly invested in the idea that big name college ≠ best possible education.

**beyond an assumption that, OK, this person is most likely smart and knowledgeable about something


Posted by: JRoth | Link to this comment | 04-13-17 11:17 AM
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44: In Marxism, profits come from exploitation. The theory that you are giving -- that part of profits are like leasing tools, and part come from market power of the firm -- is a mainstream theory. Lickspittles for capital would claim that second part is zero, but mainstream economic theory allows it to be nonzero.


Posted by: Walt Someguy | Link to this comment | 04-13-17 11:24 AM
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29: I think part of that is that VCs are looking not just at how impressed they are by the founders, but how easy it will be to get other people (their partners, future company employees, potential co-investors, investment bankers who could take the company public, people who would buy into the eventual IPO) impressed with the founders. Having founders with easily-recognized credentials makes the potential elevator pitch much simpler.

So it's not just their personal opinion of the founders at stake, but their opinion of what other people's opinions will be, which makes it harder to break the mold.


Posted by: Dave W. | Link to this comment | 04-13-17 12:24 PM
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I've mentioned before that elite schooling is more relevant in Biglaw hiring for an applicant's network (future more than current) than for any supposed enhanced ability. Just like no big company gc ever gets in trouble for hiring a big deal NYC lawfirm for their big deal matter, no one ever got in trouble for hiring the Harvard grad instead of the Villanova grad.

This plays out all over the place.


Posted by: CharleyCarp | Link to this comment | 04-13-17 12:33 PM
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Thank god there are shitty plebian jobs that Harvard people don't bother to apply to, or else the rest of us shmucks would be hosed.


Posted by: heebie-geebie | Link to this comment | 04-13-17 12:35 PM
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Schmuck, Wolverine. I always heard they were the same.


Posted by: Moby Hick | Link to this comment | 04-13-17 12:44 PM
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We're the Mighty Fighting Shmucks, the Harvard of the Midwest.


Posted by: heebie-geebie | Link to this comment | 04-13-17 12:46 PM
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The ASPCA has worked to outlaw schmuck fighting.


Posted by: Moby Hick | Link to this comment | 04-13-17 12:48 PM
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Notes on a Balinese Schmuck Fight.


Posted by: Moby Hick | Link to this comment | 04-13-17 12:51 PM
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Michigan is a T14 law school, so it's marginally acceptable to be seen hiring grads from there. The Harvard guys are going to need minions . . .


Posted by: CharleyCarp | Link to this comment | 04-13-17 1:00 PM
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Also I find I'm not that surprised to hear that 'entrepreneurs' tend to be privileged rich kids with poor impulse control. Depressed, but not surprised.

My feels-fresh-but-probably-isn't thought for today: the way we valorize entrepreneurs seems comparable to how we valorized warrior classes in previous times.

47.*: Huh, I would have thought Westmass or the middle Hudson would be higher than the Delaware Valley.


Posted by: dalriata | Link to this comment | 04-13-17 1:03 PM
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(T14)


Posted by: CharleyCarp | Link to this comment | 04-13-17 1:04 PM
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T-14


Posted by: ajay | Link to this comment | 04-13-17 1:07 PM
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59 I've been out of law firm hiring for a while, so maybe standards have changed!


Posted by: CharleyCarp | Link to this comment | 04-13-17 1:09 PM
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T14: Once you allow time travel, you don't need to worry much about a consistent story line across way too many sequels.


Posted by: Moby Hick | Link to this comment | 04-13-17 1:10 PM
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the way we valorize entrepreneurs seems comparable to how we valorized warrior classes in previous times.

I don't think this is true, but I'd need to think about why I say that.


Posted by: NickS | Link to this comment | 04-13-17 1:12 PM
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62: I wasn't looking at it from any deep level, just that the demographics (young, male, rich, poor impulse control) are similar. But I'm happy if this inspires one of your long, well-thought-through posts.


Posted by: dalriata | Link to this comment | 04-13-17 1:22 PM
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Turning armed warriors into business leaders is a thing in "Connecticut Yankee in King Arthur's Court."


Posted by: Moby Hick | Link to this comment | 04-13-17 1:24 PM
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God, that's a terrible book. I mean most of Twain is terrible - that dreadful thumping humour that you get in mid 19th century novels - but Connecticut Yankee is one of the worst.


Posted by: ajay | Link to this comment | 04-13-17 1:30 PM
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American humor is too deep for the rest of the world.


Posted by: Moby Hick | Link to this comment | 04-13-17 1:36 PM
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It turns out that Connecticut Yankee is an easy book report.


Posted by: Moby Hick | Link to this comment | 04-13-17 1:37 PM
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63: I don't have any deep thoughts but, off the top of my head, the biggest overlap is just people vaporizing success -- "look that person has succeeded, they must be a good person."

But, thinking about, "most people just want to make a living on their own terms" (from 38), I think that has superficial similarity to the idea of somebody striking out on their own to survive based on their wits (and strong sword-arm). But, looking at a list of factors of job satisfaction several of those are things that we would associate with entrepreneurship (I would list: 1. Achievement , 2. Feedback, 3. Control, 6. Recognition, 9. Relationship to immediate supervisor) but those attributes are not necessarily going to correlate with "poor impulse control." In a lot of cases a person will be more successful at achieving those states if they are good at fitting in.

And, more importantly, part of the valorization of entrepreneurs is just a reflection of how many people don't feel like they can achieve those in their current work and are attracted to the fantasy of escape.


Posted by: NickS | Link to this comment | 04-13-17 1:40 PM
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Ok I'll bite. It's completely true that most entrepreneurs are privileged rich kids that like to think of themselves as having some special risk-tolerance superpower. Those people are jerks and deserve to be shamed. I appreciate and and all efforts to do this, and applaud the OP on that basis. That said, there is a class of entrepreneur that doesn't come from money. When you look at those individuals


Posted by: urple | Link to this comment | 04-13-17 1:43 PM
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Without impugning C's honesty, I wouldn't be surprised if owner Y's absentee status has some effect on how tightly the business is run. Even if not skimming, open late sometimes or close early, let pita things slide. I know that if it were a restaurant and I were in C's position, my weekly grocery bill would drop.


Posted by: No Longer Middle Aged Man | Link to this comment | 04-13-17 1:47 PM
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I think about this quite a bit. Partly because I've considered creating a company myself in the past, and partly because one of the people who works for me just resigned to work for himself.

The reality is, that there's simply no way I could take the risk of starting a company without significant amounts of money in the bank. I'm fairly risk averse anyway, but even if I wasn't, there's just no conceivable way to do it without enough capital to keep me going for six months to a year, and cover some (small) startup costs. And, the business itself wouldn't be _that_ risky. I have international level expertise in what I do and have a fairly decent network, too.*

Whereas the employee who just resigned is the kind of person that lives a relatively frugal student-style life, has a family with some money, and is -- without wanting to be overly harsh -- delusionally overconfident about his own worth.

* as it happens, I also have a non-compete clause in my contract, so I couldn't exploit all of that network.


Posted by: nattarGcM ttaM | Link to this comment | 04-13-17 2:11 PM
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57.last: referring to name, not topography.


Posted by: JRoth | Link to this comment | 04-13-17 3:03 PM
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57: "Bryn Mawr" supposedly means "big hill", so it arguably wins on both counts, for piedmont values of "big." But point taken.


Posted by: dalriata | Link to this comment | 04-13-17 3:32 PM
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there's just no conceivable way to do it without enough capital to keep me going for six months to a year, and cover some (small) startup costs

In case it's interesting to hear what we did, we came out of academia, and were able to bootstrap ourselves both by neglecting our academic work and by getting a (small) government grant designed for small businesses working at the cutting edge of research. That said, we had to take laughably low salaries for an extended period of time, at a level that would not have been compatible with, say, having a house and family absent other support (like a spouse with a high-paying job).

delusionally overconfident about his own worth

This is also important.


Posted by: President Business | Link to this comment | 04-13-17 5:25 PM
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My delusions are all non-revenue maximizing.


Posted by: Moby Hick | Link to this comment | 04-13-17 5:30 PM
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having a house and family absent other support (like a spouse with a high-paying job).

A time-honored strategy. Or at least a reasonably well-paying, reliably stable job, I say as someone who spent a long time married to an entrepreneur. Not that he didn't always make money, but being married to a safe salary changed his risk tolerance.


Posted by: LizardBreath | Link to this comment | 04-13-17 5:35 PM
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That said, there is a class of entrepreneur that doesn't come from money.

No question there are entrepreneurs who don't come from money, who don't have dads who can buy them a gym so that they can call themselves 'players' and 'entrepreneurs,' and so on.

It's just really, really irritating, though, that the American mythos is all about this, probably-a-minority-of-entrepreneurs, Horatio Alger class, when so many business owners achieved, and continue to achieve, their ownership through inherited wealth (just 'a very, very small loan from my father' of a million dollars, as 45 once depicted his entry into the business of real estate). And not just irritating, but a significant (and not at all politically neutral) form of obfuscation about the significance of inherited wealth and privilege in American life.


Posted by: Just Plain Jane | Link to this comment | 04-13-17 5:59 PM
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75: SOMEBODY has to think cob is cutting-edge, right?

When Lee was teaching at the community college, many of her students were what I'd certainly consider entrepreneurs or people who aimed be, a hairdresser wanting to have her own salon or a dance teacher saving for a studio. I made sure she had strong connections to responsible business incubators and so forth to make sure these people could get appropriate training beyond their associate's degrees. But that's not what Prez Biz is talking about at all and not exactly what heebie's looking at either.


Posted by: Thorn | Link to this comment | 04-13-17 7:13 PM
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I thinking of starting a rural broadband business. I think there would be a modest long-term profit, but mostly I want an economical way to get a fiber optic line out to my house in the sticks.


Posted by: Spike | Link to this comment | 04-13-17 9:12 PM
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I'll huff and I'll puff and I'll blow your house down.


Posted by: Opinionated Wolf | Link to this comment | 04-13-17 9:22 PM
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RLECs are everybody's favorite. You should totally do it!


Posted by: Thorn | Link to this comment | 04-13-17 9:31 PM
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People it is now bitterly clear to me that the advocates of roll-it-up packing live exclusively in jeans and t-shirts.


Posted by: dairy queen | Link to this comment | 04-13-17 9:36 PM
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I only pack things that bring me joy.


Posted by: Moby Hick | Link to this comment | 04-13-17 9:55 PM
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COB!


Posted by: Thorn | Link to this comment | 04-13-17 9:57 PM
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82 Guilty as charged but Chani does roll-it-up packing and she mostly wears dresses.


Posted by: Barry Freed | Link to this comment | 04-13-17 9:58 PM
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Cob is the future and the past. After we've eaten the last tree.


Posted by: Moby Hick | Link to this comment | 04-13-17 10:10 PM
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certain pleated things ... i just cannot roll them. nope. but it seems to be going okay thus far. no cob yet.


Posted by: dairy queen | Link to this comment | 04-13-17 10:22 PM
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I've wondered if I'd be happy* doing contract/consulting work, but I'd never go into business doing that myself, I'd want to work for a company that did it, so the contract work is between companies, not something I'd be directly selling.

*And, frankly, paid enough to afford more. I wouldn't even be wondering about this if being able to save a reasonable amount wasn't a concern. I don't really want to look for new work, I just don't see how what I'm doing where I live will ever be sustainable.


Posted by: fake accent | Link to this comment | 04-14-17 12:41 AM
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re: 88.1

That's basically what I do now. I work for a software consultancy, and lead a team of consultants. I do have to generate new business. I'm the one front and centre at conferences, and doing a lot of community/open source stuff, so it's pretty likely that it'll be me or my boss that first talks to new customers. But my job is primarily technical and managerial.

It would be nice to take home a higher percentage of the amount that gets charged out to clients for my time, but I'm realistic that that's the price for job security, pension, and a predictable income every month.


Posted by: nattarGcM ttaM | Link to this comment | 04-14-17 1:52 AM
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delusionally overconfident about his own worth

Having spent quite a lot of time working in procurement, my sense is that this won't be a problem for them. If somebody can pitch their goods or services well and confidently then, providing the delivery doesn't become the sort of scandal that hits the papers, they'll do OK. It's almost impossible to get a referee to tell you honestly that they bought a pile of crap, because that reflects on their competence too.


Posted by: chris y | Link to this comment | 04-14-17 4:28 AM
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re: 90

This person is very good at their core skill, so that isn't the issue.* They just think that their technical competence translates into competence in all other areas. It's classic engineer syndrome.

They fail to recognise how much they are being saved from themselves, as they tend to be quite strongly opinionated about a lot of things, and extremely resistant to being told what to do, and have embarrassed themselves in front of clients more often than would be comfortable. And for some time they've had people running interference for them, and handling all of the 'business-y'** bits on their behalf, and smoothing things over.

Their ideal situation for them would be working for a consultancy (like the one they just left, ahem), or working with a partner who can handle a lot of the things they are bad at. I'm just not sure they have enough self-awareness in that particular area to recognise it.

* and there will always be clients willing to overlook their other failings because of their technical skill.
** where business-y bits aren't just sales/management/billing, etc. but also, 'finding out what the customer wants', etc.


Posted by: nattarGcM ttaM | Link to this comment | 04-14-17 6:09 AM
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When I started Reynholm Industries, I had just two things in my possession: a dream, and six million pounds.


Posted by: Denholm Reynholm | Link to this comment | 04-14-17 9:45 AM
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Posted by: Lederhosen | Link to this comment | 08-11-17 1:15 PM
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