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Tuesday, May 07, 2013

The decline of entrepreneurialism

Glenn Reynolds observes the current lack of startups with appropriate concern:
[T]he latest data indicate that start-ups are becoming rarer, not more common. A new report from JPMorgan economist Mike Feroli indicates that employment in start-ups is plunging. New jobs in the economy tend to come from new businesses, but we're getting fewer new businesses. That doesn't bode well.

In fact, it is yet another sign of a United States that is looking more like Europe: A society in which big businesses have cozy relationships with big government, while unemployment remains comparatively high. If you're fortunate enough to have a job at one of those government-connected businesses, GE, for example, your situation is pretty good. If you're a recent college graduate looking for work, your situation is not so great. If you're a low-skilled worker, your situation is dreadful.

So what's to blame for this change? A lot of things, probably. One reason, I suspect, for a job market that looks more like Europe is a regulatory and legal environment that looks more like Europe's. High regulatory loads -- the product of ObamaCare and numerous other laws -- systematically harm small businesses, which can't afford the personnel needed for compliance, to the benefit of large corporations, which can.

Likewise, higher taxes reduce the rewards for success, making people less likely to invest their money (or time) into new businesses. And local regulatory bodies, too, make starting new businesses harder.

But I wonder if the biggest problem isn't cultural.
Reynolds is right to be concerned.  Entrepreneurialism is the engine of economic growth, technological advancement, and scientific progress. I suspect he is not only right, but that the cultural problem can be narrowed down considerably and connected to another recent phenomenon.  And, to be honest, I'm a little surprised that Reynolds didn't make the connection, because that phenomenon is one of his primary bugaboos: the education bubble.

I started my first company when I was 23. It did rather well. But I would probably have been much more successful if I had followed the lead of Bill Gates, Michael Dell, and others and dropped out of school midway through my sophomore year.  With the considerable help of one of my father's engineers, I'd designed an Ad Lib-compatible, stereo, CD-quality 16-bit, 16-channel sound board at a time when Ad Lib reigned supreme in the game's industry with its MIDI card and Creative Labs had just introduced its first 8-bit, mono, 22 KHz Soundblaster.

We got two of the cards working over Christmas break, then I went back to school like a good little upper middle class worker bee and the project languished in a corporate bureaucracy that had no interest in game-related hardware until it died completely when the engineer who had worked on it left for another company before the summer.  Four and a half years later, Media Vision introduced its hugely successful Pro Audio Spectrum, which was almost exactly the same card we had built in the lab.

I'm not blaming anyone else for my failure to follow through on my ideas. It was my fault, no one else's.  Let's face it, if there is a theme to my life, that is it: once I have something working to my satisfaction, I tend to lose at least an amount of interest in it. But far from being encouraged to take advantage of the window of opportunity, I was actively discouraged from even the thought of dropping out of college.  I'd tentatively mentioned the possibility once we got the card working and it was greeted with what can only be described as unmitigated horror.  The idea that an intelligent individual from a good family would not be "educated" was simply not to be countenanced, and besides, I could always pursue the opportunity after I finished my degree in another two and a half years.

That seemed to make sense to me.  And indeed, it would have even been possible considering the timeline.  But opportunity doesn't follow a nice orderly schedule, and as it happened, I never even looked at that sound card again.

The cult of the college degree is now even more widespread than it was back in the late 1980s, more people than ever are attending college, they are attending longer, and they are going into significant debt to do so.  This means that not only are more young men putting off their entrepreneurial activity for four to eight years during the most risk-friendly and most creative period of their lives, but they are far less able to afford to take risks once they graduate.

As a result, what we have now is young lawyers and MBAs in debt instead of young CEOs running their own startups.  Fortunately, the feminization of the university is beginning to cause young men to question the value of a college degree, so there may be a silver lining in the devolution of the academy.

The taxes and regulations aren't helping either, of course. My father, for example, started three companies that employed hundreds of people and paid tens of millions in taxes.  He has spent the last six years living off the public dime, and in addition to the huge opportunity cost of locking him up, (which amounts to millions of dollars and scores of jobs), the actual cost of keeping him locked up in a Federal minimum-security prison amounts to about one-third of the amount he was charged with failing to pay.  Even if one is convinced he is the worst, most evil criminal of all time, from the macrosocietal perspective this is observably a case of society shooting itself in the foot.

So why should potential entrepreneurs bother?  It's too much work combined with too much risk... and success only comes with even more risk. (My father's imprisonment was the culmination of a battle with the IRS over an Irish subsidiary that began in 1992.) The younger versions of the best and brightest who once started companies are the most likely to see that it is now a better-paying, lower-risk option to get a glamor degree, join the parasitical class, and work up the hierarchy until reaching a position where one is able to use someone else's organization to direct someone else's money to one's own pocket.  Why be an entrepreneur spending the next 10 years building a company when in the same amount of time you can expect to be an executive, or better yet, a consultant?

Why build when you can more easily and safely leech?

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98 Comments:

Anonymous Peter Garstig May 07, 2013 5:59 AM  

Incentives...intelligence and smartness are not extinct. They are simply redirected to easier to accomplish things. Now it's way easier to get a high-paid job with no real work attached to it than 50 years ago. You have to be smart to get there, for sure, but it's still quite easy.

The tragedy of the education bubble is not only that we have our young people at debts very early. We also have them with absolutely 0 practical experience in a competitive world....with debts attached. There's only a painful future ahead.

Anonymous Roundtine May 07, 2013 6:03 AM  

Demographics play a role. An aging society doesn't specialize in start-ups, and it's not going to import the start-up vibe by bringing in young lettuce pickers. People pessimistic about the future also do not start-up businesses. I think a solid number of adventurous start-up types are also leaving for foreign shores, particularly in Asia, where the economies are booming and the demographics skew very young in places such as Indonesia.

Anonymous TLM May 07, 2013 6:27 AM  

And these young mid 20s folks with their precious degrees just plain suck in career fields that require being thick skinned and tenacious. Take high dollar biotech sales as an example. I hate the over used Matrix analogy, but its accurate in unplugging these folks from their comfortable little pods. They expect to walk in an account for the first time and pull down a capital order for 2 million @ 20% commission. When it doesn't happen for them they don't analyze the situation and make the appropiate adjustment in tactics to make the sale, they whine, piss, and moan that the mean ole CFO or purchasing manager doesn't like them. And the kicker is these are young men acting like this!

Anonymous VD May 07, 2013 6:28 AM  

Demographics play a role.

I totally agree. I was intending to mention that as well, but the post was running a little long. Any aging society, particularly one with delayed marriage and child-bearing, is likely to be less entrepreneurial.

Anonymous Anonymous May 07, 2013 6:33 AM  

In an environment that punishes productivity and rewards parasitism, I fear it's not long before even the most industrious-inclined people decide to say "screw it". Our leaders don't seem to understand this at all.

Anonymous TheExpat May 07, 2013 6:37 AM  

Enjoy the Decline

Anonymous SWW May 07, 2013 6:37 AM  

...particularly one with delayed marriage and child-bearing, is likely to be less entrepreneurial...

How does delayed marriage and child-bearing come into play? I would have thought that those responsibilities would make one more risk averse and less entrepreneurial.

Anonymous SWW May 07, 2013 6:39 AM  

I fear it's not long before even the most industrious-inclined people decide to say "screw it"
A la "Who is John Galt?"

Anonymous TGR White May 07, 2013 6:40 AM  

"I would probably have been much more successful if I had followed the lead of Bill Gates, Michael Dell, and others and dropped out of school midway through my sophomore year. "

This is true for almost everyone, not just entreprenuers. Most people woulod have benefitted far more from dropping out HS and working for a few yeasr before they even considered higher ed. That would seperate those who are serious from those who are not. And, after a few years of real working and not living off your parents money you learn the value of a dollar much more.

Blogger Heuristics May 07, 2013 6:41 AM  

I live in one of these societies with low birthrates and no entrepreneurialism (Sweden). The general view on such matters with young people here appears to be that it is morally wrong to earn more money then other people (so what would the incentive be to go through the test of fire that is starting your own company?). The other side is that they just don't care about anything at all, they just go through the motions in life, no goal and no direction and no passion. From such a position it is off course not possible to start a new company, you will just stop after a few months and start spending your days watching tv instead.

"why be an entrepreneur spending the next 10 years building a company when in the same amount of time you can expect to be an executive, or better yet, a consultant?"

For me, I do it for I have a fire that drives me in that direction and I was never brought up in this socialist indoctrination in a way that it could totally win over me (I grew up in an area with 95% immigrants). This type of culture appears to be inprinted in children/teens by the other children, not by the parents or state directly. Children/teens only trust what other children say, not what the parents say after all.

Anonymous Peter Garstig May 07, 2013 6:41 AM  

SWW: there's no need to risk anything without wife and kids.

Anonymous VD May 07, 2013 6:42 AM  

How does delayed marriage and child-bearing come into play? I would have thought that those responsibilities would make one more risk averse and less entrepreneurial.

Two ways. First, men are playing rather than building. Second, fewer children means more parental interference in their lives. Parents almost never favor entrepreneurial activity because they are more anti-risk with their children than with themselves.

Blogger Carnivore May 07, 2013 6:50 AM  

Seems to be a change at the big corp level as well, per the handful of large tech companies to which I have connections through friends. Previously, management would start up a new division from scratch, seeded with an idea and their best engineers. Now, management's answer to growing the company is buying another company. The mergers often fail because of different corporate cultures, the inevitable layoffs because of 'overlap' and the brain drain when the top engineers of the newly acquired company leave for different pastures. They've gone from starting up new businesses with new jobs to jockeying board positions and exchanging shekels.

Anonymous robh May 07, 2013 7:19 AM  

I would agree that even in big businesses, organic growth just doesn't happen. Not when execs can do a merger and thereby muddy the water for a few years on whether they are succeeding.

The regulatory load has gone up immensely. 15 years ago, I would expect an annual audit of my department. Now I barely finish one before another auditor, internal or external, steps up to bat.

Blogger Joe A. May 07, 2013 7:31 AM  

We're taught nothing about entrepreneurialism in public school. At most, we're aware that they exist or have existed. We're given the impression that they're basically freaks of nature. It's like an unspoken truth taken for granted in that environment that such a path is not feasible by default.

Anonymous Sigyn May 07, 2013 7:47 AM  

...there's no need to risk anything without wife and kids.

Is this too OT, by the way? I'm sorry if it is. It explains a lot, though.

Anonymous damaged justice May 07, 2013 7:57 AM  

Even as a small child, before reading or learning anything about economics or politics, I always wondered why anyone would bother to make money when "the more you make, the more they take".

Blogger James Dixon May 07, 2013 8:08 AM  

And since guns are never off topic here, the progressive dream of disarming the populace has just been dealt a minor setback: http://www.thepowerbase.com/2013/05/the-era-of-the-open-source-gun/

Blogger IM2L844 May 07, 2013 8:09 AM  

We're taught nothing about entrepreneurialism in public school.

Yes. Failure is not an option entrepreneurialism begins at home. I would guess most successful entrepreneurs are descended from successful entrepreneurs. It was true in my case and several other's that I personally know as well as many others that I don't personally know, but am aware of.

Blogger njartist May 07, 2013 8:18 AM  

This article from American Thinker dovetails with your thesis.

Anonymous TJIC May 07, 2013 8:20 AM  

Great rant.

I started two companies in my 30s. It took me a decade after college to work up the balls to do it, and that's entirely on me, but I wish that the culture had been more encouraging. I should have started them in my early 20s instead.

The culture has gone exactly the other way than I would have hoped - it's now WORSE than it was before.

The good thing is that when the collapse of the Cathedral really gets under way, we're going to see a lot more entrepreneurship at all levels. Bring the pain!

Blogger James Dixon May 07, 2013 8:26 AM  

> Failure is not an option entrepreneurialism begins at home.

Well, yes and no. :) Failure is always an option. And in fact, it's inevitable. Most of the ideas you try are going to fail. It's how to handle failure and manage risks that are taught at home and never even mentioned in the public school system.

But then, since the public school system was designed to produce good little robots for the factories, why should we expect anything else?

Anonymous Sigyn May 07, 2013 8:29 AM  

Seems to me that C.S. Lewis wrote something about the "need" to destroy the middle class by the would-be slaveowners. I just can't remember right now.

Anonymous Sigyn May 07, 2013 8:31 AM  

Ugh, incomplete thought. Add in: The middle class have always been the innovators, independent businessmen, etc. The guys you can't always control. They're a threat to the plantation pecking order.

Blogger IM2L844 May 07, 2013 8:36 AM  

Failure is always an option.

I was referring to the failure is not an option attitude and approach that is almost always a necessary prerequisite to success. Of course there are always those outliers, who no matter how many times they fall in a pile of crap, come up smelling like a rose every time.

I would counsel against including failure as part of the business plan. That's different that expecting obstacles and setbacks.

Blogger IM2L844 May 07, 2013 8:43 AM  

And I meant to include there are always those outliers, who no matter how many times they fall in a bed of roses, come up smelling like crap every time.

Then there are also stupid people with stupid ideas that are doomed from the start.

Anonymous Steveo May 07, 2013 8:54 AM  

Because the government type mentality of progressives (defined: persons possessed of a convenient floating mix socialist/fascist/communist ideologies that refuse to own both the name AND the consequences (facts, results, history) of their ideas) VIOLENTLY FORCE others to live under that intolerable yoke of government slavery - albeit for the chirrun), they cannot determine the market outcomes. They always try. They always fail. Because they bring nothing to the table but lies - LIES are what they produce.

They are incapable of understanding that entrepreneurs will always be entrepreneurs and therefore real producers will simply not produce in the lock step work factories of government thuggery. The free market will thrive - elsewhere (and those nations hosting it will tower above the ones you see now) - or - existing nations will change, splinter off, etc., & return to those principled roots and prosper; and/or producers will migrate to the market black. And there you have it. Boo-yah.

Anonymous DrTorch May 07, 2013 8:58 AM  

Yes, yes and yes.

Peter Thule should get a medal for what he's doing. He's certainly more important and patriotic than Gabby Giffords.

Anonymous DrTorch May 07, 2013 8:59 AM  

Sorry Peter Thiel

Anonymous RedJack May 07, 2013 9:13 AM  

In an environment that punishes productivity and rewards parasitism, I fear it's not long before even the most industrious-inclined people decide to say "screw it". Our leaders don't seem to understand this at all.



There is one other thing. Those companies that have "made it" work very hard to insure that no other competition enters the field. Look at the anti ebook movement funded by the trad publishing industry.

Blogger James Dixon May 07, 2013 9:14 AM  

> I would counsel against including failure as part of the business plan. That's different that expecting obstacles and setbacks.

That's merely defining failure as a final outcome rather than a matter of degrees. Both definitions are valid.

But I would argue that you should in fact consider what you're going to do if your business fails before you even start. Most start up businesses do in fact fail.

Anonymous Ioweenie May 07, 2013 9:22 AM  

VD: Second, fewer children means more parental interference in their lives. Parents almost never favor entrepreneurial activity because they are more anti-risk with their children than with themselves.

So 1) delay of marriage = men aren't working for something (they're playing); 2) delay of children = men aren't working for something (they're playing); and 3) those fewer children who are born (once these men marry) will be more risk-avoidant as they will have more parental involvement and that involvement is protection-oriented/risk-avoidant.

Basically you're saying, this will only get worse . . .

Anonymous Ioweenie May 07, 2013 9:24 AM  

Sigyn: I think this means very good news for you? Congrats if I'm getting it. And yes, keep 'em coming.

Anonymous VD May 07, 2013 9:26 AM  

Basically you're saying, this will only get worse . . .

Well, we can always hope for immigrant vigor.

Anonymous Stilicho May 07, 2013 9:29 AM  

A college degree and, increasingly, a graduate degree are just union cards having little value beyond that. It IS possible to learn useful things in college, but you have to do it on your own for the most part.

Anonymous Stilicho May 07, 2013 9:30 AM  

Congrats, Sigyn

Blogger James Dixon May 07, 2013 9:38 AM  

> Sigyn: I think this means very good news for you?

For her and Loki, yes. For the rest of us????

Anonymous Josh May 07, 2013 9:46 AM  

Congrats, Sigyn. Good to see Loki finally figuring out he wasn't supposed to be the one getting knocked up.

Blogger James Dixon May 07, 2013 9:53 AM  

> Good to see Loki finally figuring out he wasn't supposed to be the one getting knocked up.

You know, this theme gives new meaning to the phrase "beating a dead horse". :)

Anonymous Daniel May 07, 2013 9:55 AM  

Congratulations, Loki and Sigyn! Even though little Fenrir may put you through Hel, in the end Jormungand will keep everything together.

Anonymous Poglavnik May 07, 2013 9:57 AM  

So USA is fast becoming like Europe. Well, that is like A-list movie star becoming old whore.

Anonymous Godfrey May 07, 2013 10:02 AM  

"Entrepreneurialism is the engine of economic growth, technological advancement, and scientific progress."



... And all of the above is a threat to the established business elites. Thus the reason they suppress capitalism.

Blogger tz May 07, 2013 10:05 AM  

I tried the college thing but I was fortunate to have fallen ill so I couldn't continue directly so went into computers just as things were hitting - the micros and embedded controllers when colleges were still split along transistor EEs and hollerith card CS. My father worried for a while - he was the top paid skilled trade so made a lot, but he stopped when my paycheck was bigger than his.

Every generation has its sweet lies. The boomers didn't come from nowhere - the WW2 generation was taught college was a good thing and with Vietnam - everyone thought it was the duty of someone elses son to go fight there while their children were on a deferment (or in Canada).

The lie eventually dies of its own contradiction, though not always quickly or without a lot of suffering. Remember when Mises' "Socialism" was written.

The errors of feminism were similarly clear from the beginning, as well as multiculturalism.

Or the capacity to ignore the big things over little things, e.g. back on April 15th there were lots of innocents who were murdered by having their limbs ripped off, but not very far from the abortion clinics something happened where they were running a Marathon...

Anonymous Daniel May 07, 2013 10:20 AM  

Crime is becoming less risky than legitimate business. 100 years from now, they'll look back on this era and mistake The Usual Suspects for a movie about successful entrepreneurs.

Blogger IM2L844 May 07, 2013 10:21 AM  

But I would argue that you should in fact consider what you're going to do if your business fails before you even start. Most start up businesses do in fact fail.

Well, yes. I think we are talking past one another to some degree. There are several factors to consider. Of course it is always the smart thing to have backup plans in life. That is undoubtedly important. That goes hand in hand with wise old sayings like never put all your eggs in one basket or never gamble what you can't afford to lose, but I'm not talking about abandoning judiciousness or measured deliberation with regard to an overall life plan.

I'm talking about a goal oriented mindset for a specific endeavor where the very thought of failure invokes a sense of dread and desperation. Desperation can be an incredibly focusing and motivating force if you can harness it. Even if it's somewhat artificial.

Blogger GF Dad May 07, 2013 10:24 AM  

The rabbits are winning through regulation and attitude control.

Anonymous Aeoli Pera May 07, 2013 10:41 AM  

There's a bonus Alpha Game post in there if readers look close and kinda squint...

Blogger James Higham May 07, 2013 10:43 AM  

The decline over here is because of active measures to prevent it. Council greed is one of them.

Blogger Astrosmith May 07, 2013 10:44 AM  

First, congrats, Sigyn!

Speaking of how public school doesn't teach you anything about entrepreneurialism: Just how the hell is someone supposed to start their own company doing anything if they don't have any money to begin with? Vox may have been able to start a company at 23, but he had a wealthy family to back him up in case he needed financial support. It seems to me that many young entrepreneurs enjoy that same advantage. (IIRC, Dell did not)

And yes, I know there are VCs and loans and so forth out there, but I know that NOW in my early 40s; I had no idea about how that would work 20 years ago when it could have made a difference.

Anonymous Porky May 07, 2013 10:47 AM  

Congrats Sigyn!

Who's the father?

Anonymous Noah B. May 07, 2013 10:47 AM  

"Just how the hell is someone supposed to start their own company doing anything if they don't have any money to begin with?"

Designing and prototyping new PCB hardware takes some know-how, but it really isn't that expensive.

Anonymous Josh May 07, 2013 10:50 AM  

And yes, I know there are VCs and loans and so forth out there

Not for your average entrepreneur, and even if they were, you want to run from the VCs.

And the only kind of loan you would want to take out would be something that's self-liquidating.

Anonymous Porky May 07, 2013 11:01 AM  

Astrosmith: "Just how the hell is someone supposed to start their own company doing anything if they don't have any money to begin with?"

Shark Tank?

Blogger Joshua_D May 07, 2013 11:08 AM  

Congrats Sigyn.

Anonymous Toby Temple May 07, 2013 11:22 AM  

Is this too OT, by the way? I'm sorry if it is. It explains a lot, though.

Good Asgard!!! Loki's breeding an army!

Joke's aside, congrats Sigyn and to the Alpuny god!

Blogger Brad Andrews May 07, 2013 11:26 AM  

VD, you may have made a mistake pursuing education instead of a new business, but I am not sure that sound cards were as potentially lucrative as the OS or computers as a whole. Your niche was rather narrow. You might have had a success, but I don't see it as being the next Microsoft or Dell by any means.

Though perhaps that is aiming too large for such opportunities. You can do quite well with much less income than Microsoft or Dell, for example.

Anonymous Noah B. May 07, 2013 11:29 AM  

Somewhat related: European Commission to criminalize nearly all seeds and plants not registered with government

To call this "evil" is totally insufficient. This is an attack on individuals' right to exist. The EC is declaring itself owner and master of all earthly things.

Anonymous RedJack May 07, 2013 11:34 AM  

Noah,
There are a lot of laws and regs about who can grow what, where, and what they can call it. This is part of that. And Monsanto wants to be the Apple of the food world.

Look into the treaties regulating names and types of alcohol. South Africa makes a mean tequila, but by international law, it can't be Tequila.

Anonymous RedJack May 07, 2013 11:35 AM  

Sigyn and Loki are having a kid?

Guess that means Thor will be jealous that his step brother is showing him up again.

Blogger stareatgoatsies May 07, 2013 11:40 AM  

So 1) delay of marriage = men aren't working for something (they're playing); 2) delay of children = men aren't working for something (they're playing);

How does this play with the idea that a married man with children is the most dependable worker bee an employer could ask for - because any risk he takes lands not only on himself but his family entire? If you can up sticks with only what you can fit in your backpack and scrounge food & shelter along the way you've a pretty big head start on the guy who has to put away a year's living expenses for a family & organsise suitable housing/schooling etc before he could even consider the idea. Especially for the quick moving markets startups typically target.

Anonymous BillB May 07, 2013 11:42 AM  

WRT some of those mentioned as "entrepreneurs", I too could have gotten rich as they did by LYING THROUGH THEIR TEETH and CHEATING. I chose honor.

Sometime people should go back and read the archives of PC World, etc from the mid80s to see what these so-called entrepreneurs did to build their businesses.

I've had successful businesses off and on since I was 14. Never had one NOT make good money. But I was told time and again that I was too honest to be in business.

IMO, the biggest problem facing the US is overregulation by the govt. And the criminalization of every action. It is a federal offense to take pills from a prescription bottle and put them in one of those daily pill box containers. In so doing, the person is "dispensing" drugs.

Worse is that the feds can Constitutionally have only about 6 criminal laws. All those that are not granted by the Constitution explicitly are claimed based on McCulloch v Maryland and that ruling was so full of crap, it has brown eyes. MvM violates the central premise that the reading of one clause cannot negate the need for other contemporary clauses. MvM makes most of the grants of power wholly unnecessary and says the Framers had no idea as to what they were doing writing the Constitution. For instance Congress was granted the power to punish counterfeiting but was not granted power to punish, even with a fine, nonpayment of taxes. How do they do it? They just do because the People are freaking stupid.

Anonymous Porky May 07, 2013 11:46 AM  

There are a lot of laws and regs about who can grow what, where, and what they can call it. This is part of that. And Monsanto wants to be the Apple of the food world.

Monsanto is an entrepreneurial success story. The EU is not.

OpenID Jeremy May 07, 2013 11:48 AM  

There are many competing impediments to the startup, much like a reverse beauty contest. I dislike the over-regulation we now have just as much as the next person. The banking situation doesn't help. Fortunately we still have enough educated and unemployed people in the U.S. to have sufficient startups. However, even with deregulation, willing-to-lend banks, and lots of labor, there's still one big gorilla in the room preventing the entrepreneur.

It's our broken-beyond-repair patent/copyright/trademark system. What we have allowed to happen in the past 2 decades is nothing short of being submarined by government-sanctioned monopolies. Rather than compete, these large corporations will buy you out. If you can't be bought, they'll try to copy your innovation as closely as possible, then sell it for zero (Microsoft) to protect their technology platform. If you refuse to be bought, and cannot be out-innovated, they find enough lawyers to convince a judge that you are infringing on their copyright, or their patents, or their trademark. The result is we now have companies like Apple, which is so over-capitalized they could likely finance a mission to Mars and still have a positive balance sheet, while startups wither and die on the vine because they cannot protect their innovation from the armies of lawyers that can be thrown at them.

Blogger James Dixon May 07, 2013 11:53 AM  

> I think we are talking past one another to some degree.

Yes. :) I think we largely agree.

> Just how the hell is someone supposed to start their own company doing anything if they don't have any money to begin with?

Right now I've considered buying refurbished off lease computers from companies like CedarPC, reselling , installing, and supporting them for folks. But there's not a large enough population in my area to really make a living doing so. And in another 20 years, that market will largely be gone, having been replaced by portable devices.

Blogger IM2L844 May 07, 2013 11:54 AM  

you've a pretty big head start on the guy who has to put away a year's living expenses for a family & organsise suitable housing/schooling etc before he could even consider the idea.

The guy who is smart enough to put away a year's living expenses for a family & organizes suitable housing/schooling etc., is usually smart enough to plan and implement several things concurrently, over time, rather than consecutively.

Anonymous Noah B. May 07, 2013 11:58 AM  

"Monsanto is an entrepreneurial success story."

It's more than ironic for a self-proclaimed anarchist to laud the commercial success of a company that owes its existence largely to intellectual property laws.

Anonymous E. PERLINE May 07, 2013 11:59 AM  

The answer to over-complex regulation is to allow city government a month's supevision before giving an OK. Then to allow state government a year's supervision before giving an OK. But never to allow the feds to interfere at all.

Anonymous Jack Amok May 07, 2013 12:02 PM  

Congrats, Sigyn. Good to see Loki finally figuring out he wasn't supposed to be the one getting knocked up.

What makes you think it isn't Loki's test stick?

Congrats to the two of you.

Anonymous Jack Amok May 07, 2013 12:10 PM  

How does delayed marriage and child-bearing come into play? I would have thought that those responsibilities would make one more risk averse and less entrepreneurial.

They focus one on the need to be more productive. Double Income, No Kids (whether married, shacked up, or just dating) means tons of spending money and limited responsibilities. Now, some people may say "but today it's different, unemployment is sky high for kids" and that's true. However, the most capable of being entrepreneurs are most likely to be employed and making better wages.

You have a family, you have more expenses and a bigger focus on the future. Entrepreneurs understand there is huge risk in standing still, in stagnating.

How does this play with the idea that a married man with children is the most dependable worker bee an employer could ask for?

Because he's motivated. Not just by dread, but by better emotions too. Getting ahead at work, getting raises, bonuses and promotions, is something he can take pride in at home and in his own conscience. He's being a provider.

OpenID Jeremy May 07, 2013 12:15 PM  

Monsanto is an entrepreneurial success story. The EU is not.

A partially federally subsidized, litigation-happy, top-down monopolized biotech company is a success story? Maybe in James Taggart's world.

Anonymous Porky May 07, 2013 12:23 PM  

Noah B. It's more than ironic for a self-proclaimed anarchist to laud the commercial success of a company that owes its existence largely to intellectual property laws.

Understandable. But the blame for that lays at the feet of the elitist rulers, not the entrepreneur.

If you are an American League team you use a DH, even if you disagree with the DH rule.

Anonymous Coq76 May 07, 2013 12:24 PM  

Because he's motivated. Not just by dread, but by better emotions too. Getting ahead at work, getting raises, bonuses and promotions, is something he can take pride in at home and in his own conscience. He's being a provider.

Sounds more like a good little corporate slave bitch...

Anonymous DonReynolds May 07, 2013 12:36 PM  

The ancient Greeks believed the worst punishment that could be inflicted was exile. To be banned from living in Greece, to have to live with barbarians with their strange ways and strange tongues, to be denied the beauty that is Greece, this was worse than death itself. We need to embrace this old tradition, instead of locking people up for decades at a time. If they cannot obey the rules in this society, exile them from our shores, let them find a new home elsewhere....never to return. Very likely, they will find another place where they fit in and live normal and productive lives. If they do not, who cares?...as long as they are gone from here and we can close all the prisons.

Anonymous Jack Amok May 07, 2013 12:41 PM  

Sounds more like a good little corporate slave bitch...

Depends on the corporation, but yes, it can be that. The worst places (and that may be the majority of them today) are run by asshats who treat their employees that way, who reward conformity and brown-nosing. I suspect that one of the big drivers of the common transformation of a guy who was an Alpha at his wedding into a Beta ten years later is exactly that sort of drive-sucking environment at his workplace.

It doesn't have to be that way of course. It's all a matter of what the bosses choose to reward.

Anonymous stats79 May 07, 2013 12:44 PM  

"If they cannot obey the rules in this society, exile them from our shores,"

I don't think you've really thought this through.

Anonymous Jack Amok May 07, 2013 12:49 PM  

The rabbits are winning through regulation and attitude control.

Yes. Rabbits aren't entrepreneurs. Entrepreneurs scare rabbits because they defy the warren, leave it and take valuable resources away from it. Entrepreneurs bad. Entrepreneurs steal from warren by not serving warren. Hiss entrepreneurs! Hiss!!!

Of course, eventually the rabbits are going to be lunch for someone. Speaking of which, on the subject of failure:

The key thing isn't failure but recovery. The ability to recover from things that don't go as planned, and the wisdom to create plans that don't need to go perfectly in order to succeed.

Also, knowing when to pull the ripcord on something and salvage what you can to help seed the next effort. I'm thinking this last is taking on more importance from a civilization-wide perspective these days.

Anonymous Sigyn May 07, 2013 12:49 PM  

Who's the father?

*death glare*

What makes you think it isn't Loki's test stick?

*death glare*

And thanks for the well-wishing, guys! We're very excited!

Anonymous Porky May 07, 2013 12:58 PM  

Sorry Sig, that was rude of me. Let me rephrase...

Are you absolutely sure that I am not the father?



Anonymous JartStar May 07, 2013 1:01 PM  

Sigyn Congrats!

Anonymous Porky May 07, 2013 1:04 PM  

In all seriousness, Sig, I'm extremely, extremely happy for you guys. That blog of yours is so full of the giddy bliss of a newlywed country wife one can't help but smile. :)

When tough times come, and they surely will, you will look back on those delectatious writings and find a spark of remembrance. Until then, enjoy these days of God-given bliss.

Blogger James Dixon May 07, 2013 1:06 PM  

> The key thing isn't failure but recovery. The ability to recover from things that don't go as planned, and the wisdom to create plans that don't need to go perfectly in order to succeed.

Agreed. That's why expecting failures and stressing how to deal with them is so important.

Not that I'm any good at that, which is one of the reasons I'm a lowly IT tech and not an entrepreneur.

Anonymous GreyS May 07, 2013 1:17 PM  

"men are playing rather than building"

Yep. Young American men are much much more interested in playing rather than building. Fear of missing college is not just career-suicide fear, but fear of missing out on partying and girls. College is looked at as a societal right to party before getting serious.

And the naturally entrepreneurial ones can always rationalize with "I'll graduate, get a job and do my startup after that"-- which most never follow up on.

Blogger RobertT May 07, 2013 1:27 PM  

Nassim Taleb addresses this issue in his book Antifragile. Essentially he says the more chaotic a young person's life is and the more he is forced to recognize and choose between options, the more likely he is to succeed. Schools prepare young people for a static life. Right now all it takes to get in the front door is a degree from the right university. After watching my granddaughter's friends from public school, it has become obvious that her friends living chaotic lives are certainly much more interesting and more capable of dealing with whatever. The ones who lead picture perfect lives with stable homes, picket fences and a parakeet don't ever seem to be fully in the picture. This wasn't planned. We had hoped our granddaughter would lead a one of those stable lives, but since that didn't work out, it's not all bad.

Blogger RobertT May 07, 2013 1:30 PM  

Oddly enough, I also notice that children that were home-schooled fare much better in relationships and are not nearly as peer conscious. And I have been noticing that for decades. Go to a program put on by a home school group and then go to a program put on by one of your local high schools and you will see what I mean. The home school kids are tons more confident, relaxed and in charge of themselves.

Anonymous Porky May 07, 2013 1:30 PM  

Taleb is awesome. Well worth reading.

Anonymous bobert May 07, 2013 1:47 PM  

Sounds Luke Loki's +5 Sword of Wife-laying roller a critical hit.

Congrats you two!

Anonymous bobert May 07, 2013 1:48 PM  

Arrrrrghh
....
'Like' not 'Luke'...

Anonymous Noah B. May 07, 2013 1:48 PM  

"Understandable. But the blame for that lays at the feet of the elitist rulers, not the entrepreneur."

That's true right up until the point that the entrepreneur lobbies his elitist rulers for protectionist, freedom-crushing legislation. I don't know for a fact that Monsanto is guilty of this, but I strongly suspect that they are.

Blogger RobertT May 07, 2013 1:56 PM  

"Basically you're saying, this will only get worse . . ."

Success is possible in any environment. Until they line us up and lop off our heads, it will always be possible to succeed more and live better than those around you. It's surprising how many people don't seem to recognize this.

Anonymous Porky May 07, 2013 2:03 PM  

That's true right up until the point that the entrepreneur lobbies his elitist rulers for protectionist, freedom-crushing legislation.

One of the benefits of anarchy - you wouldn't have this problem.

Anonymous RC May 07, 2013 3:12 PM  

The taxes and regulations aren't helping either, of course. My father, for example, started three companies that employed hundreds of people and paid tens of millions in taxes. He has spent the last six years living off the public dime, and in addition to the huge opportunity cost of locking him up, (which amounts to millions of dollars and scores of jobs), the actual cost of keeping him locked up in a Federal minimum-security prison amounts to about one-third of the amount he was charged with failing to pay. Even if one is convinced he is the worst, most evil criminal of all time, from the macrosocietal perspective this is observably a case of society shooting itself in the foot." - VD

This is too true. I don't know if my companies were as large as your fathers, but they paid over $15M to the leviathan over the 17 years after I started them. I could write a book on the disincentives the government puts in front of the entrepreneur. Here I am, three years out of my last business, and I have yet to find an opportunity worth capitalizing, all things considered. Capitalizing a business today is for those who're either very well-connected or who're ignorant to the risks.

Anonymous Jack Amok May 07, 2013 3:54 PM  

That's true right up until the point that the entrepreneur lobbies his elitist rulers for protectionist, freedom-crushing legislation.

Usually it's the follow-on managers who do this, not the original entrepreneurs (except of course for the despicable class of 'entrepreneur' who's "innovation" amounts to finding new ways to set up toll booths with government compliance - e.g. class action lawyers). Guy builds successful small-to-medium company, hands it over to "money guys" and moves on to the next thing, and the "money guys" bring in the lobbyists (See "Netscape" and "Barksdale, James").

That's another place the bureaucracy creates problems. Running a mid-size company is pretty frustrating these days for the typical entrepreneur personality, so increasingly they are driven to sell out once they get past a certain level of success.

OpenID Anonymous May 07, 2013 3:58 PM  

Success is possible in any environment. Until they line us up and lop off our heads, it will always be possible to succeed more and live better than those around you...

That's debatable, and very dependent on relative living standards. Was it a success to live to 45 as a serf of a lord in old Europe when all your friends died of the plague? Was it a success to plow and sow the fields year after year while being given only enough to live on and having your sons taken away from you by force of law to serve as grunt soldiers?

The question eventually boils down to, at what point are the dead the lucky ones?

I would suggest that humans are infinitely capable of setting up systems where no one is "successful", and that the systems wherein most people can be successful are fewer and further between.

Blogger mmaier2112 May 07, 2013 5:49 PM  

All of God's blessings upon you and yours, Sigyn.

Anonymous fish May 07, 2013 6:42 PM  

Looks like someone got the message!

http://www.atr.org/pacquiao-takes-fight-macau-u-s-a7603


Congrats Sigyn and Loki!

Anonymous Porky's Revenge May 07, 2013 9:25 PM  

"The taxes and regulations aren't helping either, of course. My father, for example, started three companies that employed hundreds of people and paid tens of millions in taxes. He has spent the last six years living off the public dime, and in addition to the huge opportunity cost of locking him up, (which amounts to millions of dollars and scores of jobs), the actual cost of keeping him locked up in a Federal minimum-security prison amounts to about one-third of the amount he was charged with failing to pay. Even if one is convinced he is the worst, most evil criminal of all time, from the macrosocietal perspective this is observably a case of society shooting itself in the foot."

Can't do the time, don't do the crime. Period!

Anonymous rycamor May 07, 2013 11:02 PM  

Daniel May 07, 2013 10:20 AM

Crime is becoming less risky than legitimate business. 100 years from now, they'll look back on this era and mistake The Usual Suspects for a movie about successful entrepreneurs.

At this point, you pretty much are a criminal whether you want to be or not.

Noah B. May 07, 2013 11:29 AM

Somewhat related: European Commission to criminalize nearly all seeds and plants not registered with government

To call this "evil" is totally insufficient. This is an attack on individuals' right to exist. The EC is declaring itself owner and master of all earthly things.


Anyone who wants to live a decent, independent life will be forced underground. For a time. The system is fast approaching the point of feeding on itself. The death spiral comes next.

Anonymous Luke May 09, 2013 2:15 PM  

Porky's Revenge May 07, 2013 9:25 PM

"The taxes and regulations aren't helping either, of course. My father, for example, started three companies that employed hundreds of people and paid tens of millions in taxes. He has spent the last six years living off the public dime, and in addition to the huge opportunity cost of locking him up, (which amounts to millions of dollars and scores of jobs), the actual cost of keeping him locked up in a Federal minimum-security prison amounts to about one-third of the amount he was charged with failing to pay. Even if one is convinced he is the worst, most evil criminal of all time, from the macrosocietal perspective this is observably a case of society shooting itself in the foot."

Can't do the time, don't do the crime. Period!"

The crime being "working for a living, not in .gov/uber-large corps?

This quote of Ayn Rand's once again comes to mind:

"When you see that trading is done, not by consent, but by compulsion - when you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed."

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