This is what I’ve seen, among my friends/acquaintances. It’s almost 100% true.
And the failure rate is very, very high.
It’s generally a combination of bad luck and insufficient capitalization that takes them down, from what I’ve seen.
I do have one friend who started his own pay-phone repair business in the late 90s, which was a little stupid.
Yes it is a good idea for those who already have wealth to encourage those with less means to manipulate the system to their favor to take risks. The risk that they assume in advising others to do so is minimal while the risk of the others is much higher.
When I see people like Romney encouraging others to take risk, I picture a casino owner telling a guest ‘go ahead take all your savings and bet it all. There is a chance you’ll hit it rich!’
“And have your parents mortgage their house and lay that on the bet too.”
This is exactly the sort of image I have in mind when I hear stuff like this as well. It just feels like self-serving advice made against the best interests of everyone else – unrealistic.
I had an uncle who was very wealthy; made his money in stocks. Several years ago he decided to start his own business with his brother. He poured a ton of money into it, and eventually it just went tits up and he lost, well, a fortune. The visible result of this was that the family had to sell the huge estate with the tennis court and the lake and the 10-bedrooms (or whatever) and move into a plain-old super nice house in Connecticut.
“Boo-fucking-hoo,” I’m sure is reflex reaction from many, but it caused a lot shame and depression, and almost certainly contributed to the breakup of his 35-year marriage, which immediately followed. So, there is risk – what good is the money if you’re miserable?
As to the larger issue of not being able to start a business without resources: yeah, of course. Usually it’s just not an option unless you have some money saved up, or at least some investors. So it’s hardly advice that everyone is an a position to take, but it’s also not a bad thing to aspire to, and ultimately we all benefit if people are taking risks and trying new things and offering new services.* Besides which, it’s not purely a financial wager: putting together one’s own business is apparently a lot more satisfying than being alienated from your labor as a cog in someone else’s machine.
I disagree with this. I feel that entrepreneurs do work hard for their success and they’ve earned their reward in that sense. If there’s an inherent unfairness in the system it’s an inequality of opportunities. Wealthier people can afford to take risks that poorer people have to forego.
I disagree with this also. It is good for society in general to have people out there taking risks and starting up new businesses. We all benefit from this.
But we should acknowledge that not everyone can afford to take this risk. It’s nice to think about the successes but we have to remember the failures. And some people basically can’t afford to have a failure - and consequently they can’t take the risk needed to achieve success.
Having to move into a smaller house that doesn’t have a tennis court is an affordable failure. Losing the only house you have and not being able to afford to rent a place to live is not an affordable failure.
I’m not against people taking risks and agree people taking chances can benefit us all.
I have an issue with those who can easily absorb a loss encouraging those that can’t to take risks.
Sorry, that’s indeed my reaction. I’d MUCH rather risk being miserable and rich than miserable and poor – the latter case has a very profound form of misery in this case. I’m much more likely to lose my marriage if I wind up on the street than if I have to downsize into a still-comfy house. Tack onto that needing to sell off your belongings/moving out because you can’t afford rent/food anymore… the picture’s arguably much, much bleaker.
I’m not saying rich people don’t take risks or that they’re immune to risk. I’m saying they can better absorb it, and this isn’t really a disputable point IMO – it’s just a factual statement. When you have more money, you can absorb more financial blows by definition. When you can absorb more blows, it is much easier to take risks. And I think it’s unhealthy to encourage people to take on more risk than they can manage.
But who’s doing that? Can’t we just take it as a given that when someone tells a crowd of people to “take a risk, start a business,” implicit in that advice are the words “if feasible”? Certainly they don’t mean “take a STUPID risk! Throw caution to the wind!” Doesn’t it go without saying that you should weigh the risks and rewards? Should the advice be if you think you have a great idea for a business you actually have no clue what you’re talking about and should just keep your day job? (Sure that’s more realistic in many cases, but can you imagine the uproar if a politician – especially a Republican – expressed that sentiment?)
And let’s be clear on something else: almost no one is starting their business, failing, then being forced “out on the streets.” If it all goes HORRIBLY wrong you fuck up your credit, have a bunch of debt, possibly declare bankruptcy … but then you go back to having a salaried job and slowly, painfully work your way back. Maybe you even have to move in with friends or family for a time, but how many people do you know who aren’t even in a position to do that? I’m sure this has happened before, but it’s exceedingly rare.
Very understandable, and there are a lot of students in your position. I honestly do sympathize and think it’s a huge societal problem.
Having said that: nobody made you go to college and get in debt. As I noted, the most successful entrepreneur I know dropped out, and the other ones I know all finished college with little if any debt. It can be, and is, done. One of the defining traits of entrepreneurs is the willingness to chart their own course. If you went to college because its what your parents/guidance counselors told you to, you don’t have an entrepreneurial mentality (I sure don’t).
But that’s not lying, unless they’re hiding or minimizing that help. It may be an “easy for you to say” kind of thing, but that’s not dishonesty.
It’s relatively easy for someone like me, whose parents and siblings all have stable long-term marriages, to say that someone should stick out the rough patches in a relationship. Someone whose family history is full of affairs and divorce and abuse might well point out that it’s hard to overcome that legacy. And they’re right. Is it wrong or dishonest of me to advocate marital fidelity?
I think you have a point. I think that three kinds of people start businesses.
People who don’t have much other choice - they get laid off from their job and they start consulting because it will bring in some money. Or they start a home daycare because they want to be home with their own kids and they still need an income. Sometimes these turn into fairly big business - the guy who started Clif Bars was laid off and started making energy bars in his mother’s kitchen.
People who have some sort of safety net. They know what they are doing - the neighbor makes a good living in the “starting or saving businesses and selling them” line - but his family is fairly wealthy, and when he started this, it was using family money. A friend is self employed as a writer and now makes a fairly good living at it - but for twenty years his wife supported him while he got “started.” Another friend owns a PR firm - his wife has always held the “health insurance and pay the mortgage” job. The neighbor owns a successful salon - her husband and her saved for years and bought the functional business from the owner of the salon she was at - in fact, when she went to “rent her chair” she looked specifically for a shop that she could buy out the owner in the timeframe she was looking at. The founder of my former company started in his garage, working nights and weekends on his company - while he held a day job. Micheal Dell or Mark Zuckerberg didn’t need to start their companies, their companies were ambitious larks, but if they failed, well, there was always college to finish. And then there is the safety net of venture capital…use someone else’s money.
People who just don’t know the risk and jump in blindly. This isn’t really a business, but our bookclub read “Kabul Beauty School” and what struck us was how Deborah Rodriguez would have never headed off to Afghanistan if more the two clues were running in her head. She just jumped in. How much more exciting life would be if I didn’t throw opportunities out the door because they carried “too much risk?!.”
You might be a combination case. But if you are a Category 2 business founder with a safety net you have a little more time to develop your business. If you are a Category 1 business founder, you might have no choice but to keep going in it, especially if you are freelancing, even if it isn’t quite paying your bills and if it were a more traditional business based off something other than your labor, you’d be bankrupt. Category 3 businesses are nuts or naive - but that doesn’t mean that there aren’t wild success stories.
I feel this is another example of people being shown a path to success and the sdmb shouting it down with some variations of “fuck you! Not everyone can be successful!”
Starting a business is not for everyone and I don’t think it was ever implied otherwise.
If you are a comp sci student at mit thinking about how to get that job at facebook or google after graduation, maybe you might want to see where that web site of yours can go.
If you are an executive with 20 years experience looking for your next challenge, you might want to try starting your own business.
If you have a particular skill or expertise and it makes financial sense, you might want to start your own business.
If have a passion to run your own business, you might want to try starting your own business.
If you are not in a financially sound position, are generally risk averse, don’t really have an idea for a business, or are the sort of person who blames others for their lack of success, starting a business isn’t for you.
I guess we might as well condemn every commencement speech ever given. Except, of course, all the ones that warned students to play it safe, keep their noses clean, and make sure they have a nice cubicle a MegaCorp to show up to everyday.
I think in a certain minority GOP political rhetoric, it IS implied otherwise. “I did it (or I know someone who did it), there isn’t any reason you can’t, unless you are just lazy.”
(Not to pick on the GOP because the Dems have some definitely stupid implied or stated rhetoric as well, sometimes based off the same flawed premise.)
I think the OP is responding to a common device used whenever people start to kvetch about their lack of unemployment:
“Quit yer whining and stop waiting for someone to hire you! Be your own boss! Your problem is that you are waiting for a hand-out. You’ll get nowhere with that attitude! Be a real American and start your own business, just like I did!”
This attitude was a lot more rampant a few years ago than it is now. On the surface it sounds like feel-good positive thinking, but really it’s just another way of blaming the victim.
I think it’s a good analogy in the sense of “Hey, I have been married for X years, so sticking out those rough patches is worth it! Don’t break up – work it out, instead!” Sometimes this is good advice, but sometimes it’s not. I once worked hard at a relationship that was, in hindsight, extraordinarily toxic and it caused a lot more harm than good trying to make such an incompatible thing work out.
Similarly, sometimes advocating that people go out and take risks can do a lot more harm than good. This is why I think the advice is at least partially dishonest, if only because it seems like a lie by omission. Yes, starting a business is a good idea… if you’re in the right place for it. I think if someone is going to give advice, they need to mold it to the context. If our economy is tanking, it’s not helpful to give people unrealistic expectations that they can go out and take risks when in reality they can’t absorb the variance and will lose out on the whole.
You should take heart: in the long view, statistically speaking, going to college is very unlikely to have been a bad investment for you or any other particular person. To wit:
And so on. As Brooks points out, your college degree establishes (or confirms) you as a member of, in a sense, the elite, with all the expected, concomitant benefits. On average, that is.
I absolutely agree that political rhetoric in general – and conservative political rhetoric in particular – greatly overemphasizes the role of hard work, ingenuity, etc. in whether someone becomes a professional success, relative to the real world. I don’t think you’ll ever see a politician who doesn’t give short shrift to the importance of circumstance, opportunity, connections, and luck in determining who makes money and attains status and who doesn’t.
That said, this is pretty understandable, isn’t it? First, there’s obvious problem of simple politics: these guys are trying to get elected, and “it’s all a big crap-shoot” isn’t the kind of message that inspires people to flock to their polling places. However, there also might be good, practical, unselfish reasons for this behavior.
I was watching C-SPAN at 3 AM a couple months ago, and they were broadcasting a a lecture given to a small class at the U.S. Naval Academy at Annapolis. The professor pointed out to the cadets that most every study of the role of luck and circumstance in war, or for that matter the real world, has tended to show that context, opportunity, etc. plays a much larger role in our outcomes than we generally imagine, while leadership, skill, etc. plays a smaller role. But, he continued, that’s not the lesson that the cadets would have pounded into them at the academy, and it’s not the sort of fact that a a military officer will be emphasizing to his subordinates. Why? Because someone who thinks of his tasks from that point of view might tend to be more passive. An officer who thinks, “Well, we’ll either win or lose here, and anything my unit does or doesn’t do is unlikely to affect the outcome” may well have a more accurate, better informed perspective than the guy who’s convinced that he can turn the tide through sheer force of will. However, his actions *might *affect the outcome, and in any event the group as a whole is better off if everyone acts as if, and tries their hardest to mold the situation to their intentions.
I think the economy and the world in general are in the same basic situation. Again, that’s not to say one shouldn’t try to mitigate risk, or that entrepreneurship is feasible for most people. But, on balance, personal, economic risk taking – even sometimes to the point of negative expectation for individuals – is like the rising tide: it lifts all boats.
Most of the small business owners I’ve met didn’t start their company until they were in their forties. They worked for a long time building their experience and paying down their debt before taking the leap. It seems to me that the people who say “take a risk; start a business” are talking to people like, that the inexperienced kid out of high school or college loaded with debt and with not experience is going to have a lot of problems and would be crippled for life by the failure.
My dad just started in own consulting company after working for the corps of engineers for 30 years. He had a lot of things going for him to mitigate the risk; he has his penguin to fall back on as well as health insurance and he’s been doing large project management all around the world for 30 years. He has been in high demand since starting his business but I give him credit for spending 30 years mitigating his risk so that he could start his company.
I graduated from college with only 40k in student loans thanks to scholarship but I was a total whore coming out of school and paid off my loans in 4 years. I’m now getting my company to finance my MBA. Here in another 5 years I’ll have all the credentials I need to go off on my own and be debt free. Sure I won’t be taking the risk that I would have been coming out of school but if I fail I could still lose everything. I think mitigating risk is an important aspect of being able to start a business.
I guess we should ammend the saying to “If you’re smart or luck, take a risk; start a business.” but I don’t think the end result would be any different.
If you put a weight set out, and some people work out, there will be different results for different people. Some will have more time, or be in a better starting position. However the total fitness will be greater than without the weight set. The total fitness is the success.
Think about how that applies to infrastructure.
ETA:
Also an individual getting buff from the set is an example of the success of the set. Since people getting buff is a goal.