If the United States had universal healthcare and education wasn't brutally expensive then more people could justify being entrepreneurial. You can't have society in which almost all wealth flows upwards and normal people are comfortable taking business risk.
Want start-ups? Raise taxes on the wealthiest of us, increase social services and safety nets and access to education. If people feel safe, they'll take more risks. Make it so people don't have to risk their kids' futures on their idea.
Also maybe put some protections in place so massive incumbents can't just stomp potential competitors and squash innovation...
All of that sounds good in theory and I support these policies, but empirically these policies don't lead to the results you believe that they do. The US is massively more entrepreneurial than any other country, and it has none of these things. The countries that do, are not only significantly less entrepreneurial, but when people are entrepreneurial there are often confounded by those systems.
What seems to empirically be true is that easy access to capital is the primary driver for entrepreneurship, and easy access to capital is mostly enabled by a combination of fiscal policy and wealthy individuals and institutions without better investment opportunities. Easy access to capital is the primary driving force behind entrepreneurship in the West, and particularly in the US, and it seems being the wealthiest country in the world is a huge driver on its own for this.
The US is really a unique case even now - so many factors to consider. If I had to guess I would say that the US leads the entrepreneurial space for many reasons other than healthcare but that does not mean universal healthcare would make it even more entrepreneurial. More than anything, however, I think those social safety nets would encourage people to consider career changes more (like if they are very dissatisfied with their current one) and job movement between existing businesses.
I agree with the take on capital access as the foundation of entrepreneurship, especially its modern, VC-backed incarnation (poor bootstrapped startups, with cards stacked against them - and even if they win - no serious media coverage) ... yet to play a bit of devil's advocate, are wealthy individuals as important in providing the capital?
Surely, by the sheer monetary volume, the fiscal policy component you mention will overshadow any private initiative, and it is this component which makes the US an outstanding location?
If this is true, progressive tax system wouldn't interfere with the entrepreneurship much, while the QE-driven investment continues to work as intended.
> What do they thing is the number one reason most people won't start their own business?
That's obvious: the number one reason most people won't start their own business is that most new businesses fail. So most people won't try it, since they expect they will fail and don't want to go through trying and failing. Only people who are outliers, often extreme outliers, in their tolerance for failure or their belief that they are exceptional and won't fail (or most likely both) will try it.
I'm in my late 40s and in the process of starting another company - this is not my first.
My NUMBER ONE CONCERN, and the NUMBER ONE CONCERN for most of the prospective hires I have talked to is healthcare. This has been the experience and NUMBER ONE CONCERN for every other person I know who has started a company, and I know a lot of those people since the experience drives you to know other founders.
You are completely out of touch if you think the the primary issue is that startups fail. Founders as a group are kind of delusional since believing you can beat incumbents, a mostly irrational proposition, selects for that.
Yeah if you made a pie-chart of headaches for small business owners I'm pretty sure like 25-30% of the chart would just be "healthcare" and that'd be the largest single slice. It's kind of a miracle that small businesses do as well as the do in the US, considering how incredibly bad our healthcare system is for them.
A friend recently interviewed at a pretty well funded company started by some ex-bigco executives. It has raised a lot of money and has a pretty substantial team. They are, as far as I can tell, not far from product (trials now) and yet friend, who they really actively recruited, as part of his offer, was told he'd have to buy his own insurance using ACA.
(a) this was very surprising in legal terms, and I still don't quite get it, but (b) the friend absolutely rejected the offer even though he was otherwise very interested. His issue was that he can compromise on comp, he can compromise on location, and so on, but no way in hell was he going to compromise on health insurance. That take is regardless of whether he would, in fact, be compromising.
ACA plan quality varies a ton based on where you are, which can make it either an OK option, or something you only use as a last resort and try to get off of ASAP.
In my state, there are zero individual plans offered outside the exchange—you call insurers, you call brokers, they'll all tell you the same thing, that every company is completely out of the individual market here unless they're on the exchange—and most years only two providers offer ACA plans, and 100% of those plans have terrible "networks" (which hospitals/doctors/pharmacies/urgent-cares/testing-facilities accept the insurance, for non-US readers).
It's literally impossible to buy an actually-good individual plan in my state. Even middling employer-offered insurance is usually overall-better than the "platinum" ACA plans. I mean, I assume the very-rich have some concierge-type options that are good, but for normal people, having to buy individual insurance here means definitely having bad insurance, even if you pay a ton.
I am in CA and I find the plans offered quite OK. They're better than what I've gotten from some employers though much, much worse than what I had most recently. The friend above was in Massachusetts where, I assume, things would be OK, but I didn't check.
Red state in the Midwest that uses the federal exchange. I understand things are much better for ACA plans—both prices and plan quality—in states that have taken healthcare and the ACA seriously (so, mostly blue states) but that's only... like, half of all states, at best. Granted, that's our own stupid state's fault, but still.
> I'm in my late 40s and in the process of starting another company - this is not my first.
Which means you are not even in the demographic I was referring to. The relevant demographic is people who have not started a business. If those people's primary concern was health care, then, as others have pointed out elsewhere in the comments on this article, in countries that don't have health care coupled to employment, more people would start businesses; but that isn't the case.
Have you talked to anyone over the age of say 25 about why they’re not starting a company?
It’s not “it’s hard and I might fail.” I only ever hear: I have loved ones whose health, education, and financial security I can’t put at risk.
This problem exists even if you have complete certainty you’ll succeed, because en route to that certain success, your loved ones are still at immense risk.
If it takes you 5 years to hit your guaranteed $100MM payout, and en route your spouse got hit by a car while you had no insurance and your child had to skip vital years of college because you had no paycheck, then it doesn't actually matter that the $100MM payout came exactly when it was guaranteed to come.
The stakes of failing at a startup when having no dependands are not "pretty much zero". It sucks to kill yourself for a couple of years and have nothing to show for it, especially if you know that, for all that time, you could've coasted in some job and accumulated a nice sum.
if all you care about is money, sure. but if i hire you i care about your experience, not the money you already accumulated. and if your partner only cares about your money, find a better partner. spending a few years gaining experience instead of earning money is not nothing to show for. on the contrary. it's the more valuable experience for your future. money is not everything.
Most people work for money... And you might be getting more valuable experience in a job than being a generalist who runs the startup (the market doesn't need many people like this).
It's really not, I'm not sure why you'd think that.
Even then, I imagine there's a lot of countries in the world where running out of money would mean landing in a safety net that still involves relocating to the the most basic accommodation available that may be neither safe nor close to any friends and/or family.
i can only speak about the countries that i know, but no, generally people are not forced out of their homes into the most basic accommodation available. at worst, they may be asked to move into a smaller apartment in the same area, or rent out some of the rooms to supplement the cost of the rent. they are also not uprooted, because family support and social ties are considered important (and better off relatives can be asked to help). especially when there are children, the social environment must be preserved. uprooting people would be considered inhumane.
also most european cities generally do not have unsafe neighborhoods. that's really an american thing. (and in third world countries who don't have such a safety net anyways)
this needs verification, but i speculate that those countries that actually have a safety net are doing this right, and other countries don't do much at all.
The US is the most "pro-entrepreneurship" country and it doesn't have universal healthcare. European countries have "low levels of entrepreneurship"[1] despite universal healthcare.
> If the United States had universal healthcare and education wasn't brutally expensive then more people could justify being entrepreneurial
Doesn't it strike you as odd then, that US is unique among first-world countries at (1) not having a safety net like universal healthcare and (2) being by far, almost the most entrepreneurial country in the world? (May be behind Israel and/or Singapore, but it's a whole other topic anyway).
I mean, if your assumption was right, then European countries like France or Germany would be homes of Silicon Valley, but it's the other way around.
That is what you think but in the real world it doesn't seem to work. Europe (and other developed countries) have the big social safety net and they're less entrepreneurial.
I'm not sure why, perhaps its the egalitarian nature means no one wants to be richer than anyone else? Or maybe its lack of desperate workers.
I'm not sure this holds up under close examination; SV is kind of unique in how entrepreneurial it is. But there's also the "angel investor" effects; in Europe far too many wealthy people are content to simply be landlords rather than invest in riskier things like actual businesses.
It's also very hard to generalise across Europe, which has a more diverse set of rules and business cultures than the US does.
But given a magic wand to make changes I would definitely introduce "de minimis" clauses in a whole load of business regulations. The rules for megacorps can afford to be complicated, the rules for small businesses cannot.
My totally off-the-cuff guess is that there is no causal link between social safety nets (like government provided health care) and a lower rate of entrepreneurship.
If there is a correlation, I'm guessing it is that governments that take active responsibility for the wellbeing of their citizens also institute regulations which may make starting businesses more difficult. In other words, active governments are more active in general, not just limited to the safety net.
As a european my answer is that throughout my entire upbringing, I've been taught to aspire to "just landing a job". Only in the second half of my twenties did I discover the "coolness" of being an entrepreneur. I am planning to start my own business soon, but I had to invent the dream myself. My observation is that in American culture, entrepreneurs are much more celebrated as heroes, in contrast to capitalist profiteurs.
Yep, that. In the US, risk-taking, being "the greatest", achieving success etc. are widely held as things to aspire to. I don't think it's great for people's mental health, but it produces a killer economy. Whereas in Europe, when someone thinks or talks like that, it's perceived as a bit off-putting. We're content here with relatively modest lifes and shooting for the stars is seen as foolish.
> Want start-ups? Raise taxes on the wealthiest of us, increase social services and safety nets and access to education. If people feel safe, they'll take more risks. Make it so people don't have to risk their kids' futures on their idea.
Many countries have done this — do you have any examples of one of them becoming more entrepreneurial? Because I don’t think we can just assume it to be true.
Just because people said that was their biggest barrier to starting a business doesn’t make it true. And I say that as someone who generally supports universal healthcare/insurance. People make up tons of reasons for not making a huge change in their life (like founding a company): “if only X then I’d finally do Y”. But if you fix X, they’ll find some new reason that they can’t do it.
>Many countries have done this — do you have any examples of one of them becoming more entrepreneurial? Because I don’t think we can just assume it to be true.
Also needed is a consistent explanation that explains all the other countries doing this which have nonetheless failed to become more entrepreneurial.
In theory, but you'd need a competent government to make sure they don't create new problems or exacerbate the problem.
Over the last decade, an incredible sum of money has been poured into the homelessness problem. We now have the homeless industrial complex, which feeds the very problem it was supposed to solve. It requires perpetual homelessness in the same way that the military industrial complex requires perpetual war. As a result, we have more homelessness, not less!
Or examine the student loan crisis. Because the government guarantees the loans, loans are made without consideration for whether students will ever be able to repay them. There is no cost benefit analysis or return on investment. It's just take the loan and maybe get a degree, any degree. In addition, the government made it impossible to discharge these loans in bankruptcy. In effect it's a wealth transfer program to college administrators and a big fuck you to taxpayers and vulnerable students. All under the guise of helping people.
Are you really proposing that we should take even more money out of the productive economy to continue worsening the homeless problem? The money has created an administrative industry that is incentivized toward self preservation and growth. It doesn't decrease the number of homeless or genuinely improve their station. It literally exacerbates the problem.
Which has been the case for at least the last decade when you examine the data and the on ground reality of the situation. All I'm pointing out is that you must repair the government first so it's actually solving problems and not making them worse.
Want start-ups? Raise taxes on the wealthiest of us, increase social services and safety nets and access to education. If people feel safe, they'll take more risks. Make it so people don't have to risk their kids' futures on their idea.
Also maybe put some protections in place so massive incumbents can't just stomp potential competitors and squash innovation...