It isn't like 3 or 4 percent though. Starting a startup ranges from a largely risk free career move to impossible. Most people today start at negative. Want to live in a decent sized city? That's at least $2k a month. An education? Might very well be $50k in debt. Job security? Need to put in the hours young.
Otherwise there is a very real chances of getting evicted, not being able to find a decent job, not being able to keep your friends or start a family. Plenty of people who are successful today have their parents pay for university, their first apartment and/or a safety net. And that is just to have a normal career.
Even the privileged YC founders seem to have made some sacrifices early on, like living on Ramen, sleeping in their office and sharing a rented space with many people. Must admit that "want to live in a decent city" is not really something that triggers my empathy.
These days you can also do Kickstarters, apply for money from YCombinator, and other ways.
And you don't have to sacrifice everything. You can try the startup for 3 years and still get an education if it fails.
You can get a perfectly decent degree from your community college for very affordable prices. Likewise you may not be able to live in downtown manhattan, but you can probably live anywhere in a whole bunch of the square states on $1k a month.
Community college is a great deal. But $12-15k for a bachelor's degree, not to mention any hit to income because your work availability is limited when attending school and doing assignments, is not something every person can wave off as no big deal. That assumes the community college offers a four year degree and is within reasonable travel distance (oh, you do have a car, right? Because that college might not be on the bus route you take to work). If you have to move to attend college, you sacrifice whatever job you currently have, plus all the expenses of moving (but apparently we're expecting them to move across states anyway)
Along with that job, we then talk about health insurance. It's great if you are young enough and have parents with insurance that you can be on, but not one of those criteria can be assumed, so if you aren't working a full-time job, you will have limited access to health-care (plus the issues of paying for it if you have access).
Just because some of the high end cost estimates can be undercut doesn't mean there isn't considerable expense and threat.
Here's a question.. why the fuck is college even a requirement here? I'm not saying it doesn't have value. But, if you are creating a startup and are that young, does college even matter at that point?
The fact is, that for many things, a lot of people are perfectly capable of spending a few hours a day on a project above and beyond actually working a full time job. Yeah, people have advantages and others don't. There are risks and rewards. Are you willing to pay them? (you, being the hypothetical startup creator).
In the end, this is how economics works. This is how you make things happen. Nothing is without risk, and anything that is probably isn't worth much to someone that doesn't already have huge means to live without doing it. Creating something is WORK and means not doing something else.
This is the whole point of the discussion here: For many people the risk is dramatically higher or lower than other people. Capitalism suffers if we don't let everyone actually participate in roles other than the menial worker.
That is a given though and you cannot be expected to normalize for it. Someone fresh out of secondary school isn't in the same position as someone in their mid 40's with kids. And isn't the same as someone sleeping on a friend's couch.
Depending on what you are trying to do/build also has varying risk/reward. Want to start a new aircraft manufacturing company? Good luck with that, unless you have multi-billionaire parents. Want to start a new SaaS? you have very little excuse not to start/try.
It doesn't take a lot of risk to try in most cases. All the griping in the world doesn't make someone who won't try succeed. Most excuses are just that. I didn't go to an ivy league school... I grew up poor... meh. The fact is that drive, motivation and effort count for more, more often than anything else given a baseline level of skill, intelligence and aptitude.
Do you also want to normalize professional sports? Let short and fat people play in the NBA?
> The fact is that drive, motivation and effort count for more, more often than anything else given a baseline level of skill, intelligence and aptitude.
I don't know if you've failed to follow the point here or are deliberately trying to avoid it. We're not talking about comparing someone "fresh out of secondary school" with someone "in their mid 40's with kids", and we're not trying to compare someone "with drive" to someone just giving excuses.
Fact is, someone with drive and a baseline of money is far, FAR safer when taking risks in capitalism than someone without. I'm not looking for excuses for myself - I'm looking to reap the benefits of a well-functioning market. A market that enables everyone to participate according to their drive, and doesn't expect that they have to sacrifice, health, education, or future ability to be employable to do so.
Today I see a large number of people of above average wealth and opportunities, plus one or two that had plenty of luck while "bootstrapping" themselves all looking down on anyone unable to participate as if they are simply lazy.
We're not trying to get "short and fat" people into the NBA, we're trying to get the people who have to work 60hr/week jobs to somehow have time on the court. "Drive" doesn't begin to cover the problems.
> Fact is, someone with drive and a baseline of money is far, FAR safer when taking risks in capitalism than someone without. I'm not looking for excuses for myself - I'm looking to reap the benefits of a well-functioning market. A market that enables everyone to participate according to their drive, and doesn't expect that they have to sacrifice, health, education, or future ability to be employable to do so.
What you are talking about will ALWAYS be part of the risk equation, unless you are talking about normalizing everything across all nations in the world and one global government, with a single base income for all? I'm not sure that I would want to live in such a world given all the side effects of such a government/system.
There will ALWAYS be more risks for some than for others. Someone who has two parents that would let them live at home vs. and orphan with no supportive family. You can NOT have that level of equality without tyranny. And even if you did, you'd have already removed any or at least most of the rewards for any innovation.
Edit: looking at your cartoon, I definitely was raised closer to the, "disadvantaged" woman on the right. That isn't to say that some don't have advantages, but that will always be true, and isn't a net wrong. Even then drive and input are far bigger indicators, and removing the rewards of others won't increase innovation.
For better or for worse, VCs need heuristics to filter the likelihood of you pulling off what you're claiming you can, and prestige and depth of education is one of those factors, as well as employment history which also selects on those education factors.
An associates from a community college isn't going to get you a meeting with a VC, nor is it going to get you past the resume screen at google to run around the education filter.
This is also able to be circumvented by network, which is very easy to do if you are already at a high end university which will hold your hand grooming you for meetings with VCs they introduced you to, or where you can at least just ask your friend from college for an intro.
They're interested in making money, not providing a social service. There's certainly a problem there, but it's not the VCs' responsibility.
You are more likely to succeed in your business if you have the experience of building scalable systems, like at google, and if you have a similar friend group to recruit talent from, which is extremely hard at an early startup unless you already know the kinds of people you disproportionately meet at top universities and tech companies, and if you have family/friends that can help you out while you're struggling at the beginning of the startup, etc.
You are less likely to succeed if you have the financial encumberances that are common outside of the upper middle class, or if you have an unstable family structure that leans weight on you, if you don't have a safety net to lean on to get you through rough periods without personal income, and if you don't have the kind of network that a top school, top company, or connected family brings.
I came from a working class background, taught myself how to build products, made my own connections and raised some money for a startup and had to leave and return the money because there was a nonzero chance I'd have to adopt my nephew to keep him from the foster system, and couldn't possibly do that with the hours and volatility of that game. It is perfectly logical to avoid startups that have those kinds of additional risks when the game is already risky.
We absolutely should try to assuage those biases to improve economic mobility, but the answer isn't just to yell at VCs for trying to make money.
You make some valid points, but I really dislike the above comment. When used it seems like a convenient way to diffuse responsibility, often to selfish ends.
There's lots of examples where this type of single-minded attitude isn't acceptable.
- A civil engineer cannot just have making money be the sole pursuit when designing or building a bridge
- A doctor cannot just have making money be the only goal when treating a patient
- A government worker cannot be only concerned on how to maximize their individual gains when awarding contracts
- A financial adviser is expected to act in their client's best interest, rather than their own
We're used to expecting certain levels of ethical behavior from some professions acting within a larger societal framework. I don't know why investing is so often left off the hook in this regard. Maybe it's naive, but I think we'd be better of if people told themselves it WAS their responsibility when making these decisions.
Leveling society's playing field is a far different scale of responsibility than a civil engineering designing a safe bridge or a doctor looking out for their patient. Societal level problems need societal level organizations to solve, such as governments.
We should be voting for policies that strengthen the nation as a whole. A VC giving up a few % point in return in exchange for betting on poorer people is not going to change anything, other than that VC losing investors. We want to fix families? Well let's guarantee parents have time home with their children, let's guarantee they have sick leave and parental leave and vacation leave to spend with their families. Let's provide more transit and infrastructure and education to communities that need it.
To be clear, I'm not saying it's VC's job to create a solution of that scale. My position was that it's a weak position to wash one's hand of any responsibility because their stance is that they have a singularly focused job.
I would hope, for instance, that Boeing software engineers wouldn't take the stance that their job is to code to requirements and the safety engineers job to make sure the requirements are safe. I would hope everyone has the onus to look at the greater landscape for the impacts of their decisions rather than using a myopic view to skirt responsibility because it's convenient or easy.
Most VCs I've met do have some kind of value system other than making money that permeates their investment decisions, it's just usually one that is easier to align or at least doesn't run contrary to their business interests, like making large systems more efficient or spreading access to goods and services traditionally restricted to the rich by driving down costs.
Socioeconomic mobility is really much easier to pull on with policy and the education system.
Some people do work on trying to democratize entrepreneurship though, like YC with startup school, or Stripe with Atlas.
They do it by spreading information and reducing barriers, not by giving money to higher risk people though, since that's easier to align with their place in the system.
Yes, sorry. I didn't mean to imply that VCs, on the whole, don't have a more nuanced decision process. I meant that I dislike when ethically questionable decisions are protected by the 'ends justify the means' argument. In this case, where maximizing profit is the only end that gets any weight.
It's similarly strange to me when I hear people like Jim Cramer advocate investing in tobacco companies even if you find their business practices abhorrent because the point of the investment 'game' is to maximize profit. In his case, his solution was to take those profits and donate to a cancer charity. It just seems like a strange set of psychological hoops to jump through to avoid cognitive dissonance. It comes across that excelling at the 'game' is ultimately what's valued more than the ethics of the business decision. Again, maybe naive or poorly placed, but it seems the most moral choice is to make sure all the decisions align with your values, not creating strange workarounds so you can have your cake and eat it too.
> They do it by spreading information and reducing barriers, not by giving money to higher risk people though, since that's easier to align with their place in the system.
And it is mostly misguided. The barrier to entry and availability of information is what have already changed. It is everything else that hasn't. Or it has, but in the wrong way. By charging a premium for housing, education and contacts instead of taking it out of the equation. Some day all this friction is going to have consequences.
Those financial encumbrances exist due to VCs taking a larger share of the pie than their efforts are worth, and we can't look at their bank balances now and ignore all context as to how that money got there in the first place.
Venture capitalists are only a thing because they siphon off the working class via the exfiltration of surplus. And then they have the gall to demand percentage ownership for that money they "invest". Because they worked hard (stealing from workers) for 'their' money.
My opinion is their money is tainted from the get-go. It amounts to theft from the very people whom made the things.
You don't need a VC for most types of businesses. Especially not at the beginning.
Furthermore, you can get VC meetings or a job at Google with no college. Many have done it. It's increasingly the case that employers care more about what you've done/built than what college you went to - or indeed if you went at all.
Yes, I actually have gotten VC meetings and work at Google without a compsci degree. I said one of the factors, like that it is a big difference in likelihood of getting past filters, not that it's impossible. It's a statistical effect.
A practical problem with community colleges are the plain fact that high ambition people tend not to be there. People with ambition tend not to be there, or are operating from a disadvantage and community college is the best they can get, at that time in their lives. This defines the initial network of a community college attendee, as well as their operating environment. There is quite a bit of invisible help that arises simply from one's environment being a can-do ambitious place. Not saying community colleges do not have positive environments, but at a university setting becoming a degree professional is the given.
If you need to use the bathroom, you're very often better off walking into a lawyer's office than walking into a restaurant, because the restaurant workers have the expectation that a certain percentage of customers are going to shit on the floor, and the lawyer's secretary doesn't, so you don't have to work as hard to combat that expectation.
The same thing happens with community colleges, which have all kind of policies designed to protect the college from the students. Everything down to when you can be there and whether you can talk with a friend in the library is subject to much more negative expectations than in a real university. You can get a lot out of community college in terms of learning, but it's generally more of a struggle.
I agree that this is a valid concern, but how do you feel about the statistical part of this sort of problem? Isn't the elite always the top n% (1%, 5%, 10%, etc) You can fatten up the statistics in the middle somewhat, and shrink the poles of the bell curve, but I don't see how you hope to equalize "access to the elite."
Quality of community colleges vary greatly and these days you're just as likely to find one that's almost as predatory as a for profit college. They promise kids a great future and sign them up for as many student loans as they can. Then they feed them a canned curriculum from one of the major textbook publishers (with expensive digital content). Everyone passes just for asking. It's quickly becoming a racket thanks to "performance" based funding, but hey, they make lots of graduates now.
While you're not wrong in the strictest sense, I feel like this sentiment is being myopic to the point malice. The network gained from going to a university full of likeminded and talented people as well as living in a city teeming with opportunity is huge. Not to mention generic quality of life improvements of living in a city, doubly so if you happen not to be a cis-het white man.
Starting money is not strictly necessary nor sufficient for success but it sure can smooth over life's pitfalls, which makes risk taking a hell of a lot easier.
Cost to live in a decent sized city are much less than that in most cities. Sure Silicon Valley is going to be more. Also every city has rich areas that are more. However in most cities there are poor neighborhoods where rent is under $1000, and you can share that with a few roommates. If you tastes are to a stove that you don't need to light with a match, sidewalks that are even, and other nice things: that will cost you.
I should have qualified that with US. You can rent a mud hut for few bucks in some remote backward village, but that is obviously not a lifestyle anyone reading this would wish.
Otherwise there is a very real chances of getting evicted, not being able to find a decent job, not being able to keep your friends or start a family. Plenty of people who are successful today have their parents pay for university, their first apartment and/or a safety net. And that is just to have a normal career.