Comment by Aurornis

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.

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

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.

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.

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.

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%.

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).

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?

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.

If you don’t have a fall back, you have no choice but to make it work.

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)

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.

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.

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.

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.

Well, how many non-successful entrepreneurs and business owners do you know?

> 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.

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!

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.