Did she live in a house made of yellow paper, and eat yellow paper as well? Who paid for the yellow pads? And how did her scribblings on the yellow pad become a best-selling novel? Did she just leave the pad in a bookstore and charge people to read it there?
Maybe starting a business doesn't require much capital, but running it until it becomes self-sustaining (or fails) sure does.
JK Rowling was basically on social security payments from the government which paid for accommodation, food and the like. I'm not sure that would normally be considered capital.
It's income without the need to work for it, which is basically the same thing as having an investor or being able to live off savings, in the sense that it allowed her the time and opportunity to write. If she didn't have those social security payments, she would have had to get a job, and she probably wouldn't have had the time and energy to create the vast amount of wealth she was able to create.
This is a great argument in support of Basic Income. How much wealth is currently not being created because the people who would create it are trapped scraping a living from useless low-pay work?
Or alternatively (more accurately?) praying for the good fortune that someone will invest in your idea. Who knows how many almost-Harry Potters there are in the world?
Rowling was an unemployed divorced single mother who had to rely on welfare to support her whilst she wrote Harry Potter.
She is quite socially conscious and has always supported the welfare state that gave her a leg up.
> Inversely proportional to your odds is success, though.
I seriously doubt that is true.
> For many people the stakes are a bit too high:
Starting a business with little capital has little downside risk, especially if you are already unemployed.
BTW, I started my business with nothing more than an ordinary computer. A friend of mine started his own businesses tuning up peoples' cars in their driveways so they didn't have to go to a shop. His investment and risk was essentially zero, he already had the hand tools needed.
Etsy.com and Ebay.com are packed full of people who started their own businesses with nothing.
Heck, the other day I was at the local public library when they had a book sale. There were people in there scarfing up boxes of books, and checking the value of them with an iphone app. They were clearly intending to resell those books online and make money.
> Starting a business with little capital has little downside risk, especially if you are already unemployed.
You're confusing (A) labor-focused self-employment with (B) get-rich-eventually entrepreneurship.
Not everyone has significant savings, family nearby who they can crash with if they got evicted, or the confidence that grandma won't have to start skipping her medication to keep the power on, etc.
BTW, I started my business with nothing more than an ordinary computer.
Really? Nothing more? You were out in the middle of an empty field, with a computer that you somehow acquired for free, and with that you were able to start a business? What kind of business was that?
I'm rude? WalterBright is being rude and dismissive to everyone who must work at a job that consumes all of their time and energy just to survive, saying that they should just go ahead and quit and start their own business, because it's so easy and you can do it with nothing. His statements are ridiculous, completely ignoring the need for income or pre-existing savings to eat and live while trying to create a business that can be self-supporting.
WalterBright was being quite blind (maybe even a bit passive-aggressive) about what's actually required to start a company: one's gotta eat. DougWebb eventually lashed out, and now he's being perceived as the rude one.
He was not. He was just frustrated.
---
By the way, the situation would be very different if we had sufficient basic income. If you can count on the state (or the community, or whatever) to give you enough to eat, then starting a company suddenly becomes much less risky, if at all. Then speaking about needing "nothing more" than an affordable device stops being ridiculous.
Of course, but you assume starting a company as immediate comprehensive self-employment. If you start a company out of your spare time, then you really do need almost nothing for the company.
I only see two of WalterBright's comments but they don't seem passive-aggressive at all. DougWebb is right only to the extent that he ignores WalterBright's actual meaning, so lashing out is not appropriate. But even if it was appropriate, it's still rudeness. You can be right and rude.
I'd wager that starting a company in your spare time is very hard. Even harder if you have a family: you must make time for your day job, your family, and your new company. This can easily turn into a recipe for burnout. This approach is risky too. (I'm not mentioning family out of the blue. Most people wait to have some experience in their field before they start a company. That means sailing past 30, and often having children.)
Now you can try and balance things out: instead of working full time or not at all, you can work part time. You make less money, but you have more time. That's probably the most sustainable approach. Still, you're split between two jobs, which may or may not drag you down. Now the problem is finding that part time job.
There's also consulting, but that's its own kind of risky.
WalterBright made it sound like sustaining yourself while you build the company isn't difficult nor risky. Like the only difficulty is building the company itself. It's not.
Now if we had Basic Income, that would be a different story.
The problem with Walters' comments, and yours, and the reason I made the statements I made is the assumption that people have spare time.
The discussion started with a statement that you don't have to work at a crappy job for someone you hate; you can just start a business and work for yourself. That was followed with a comment that most people can't do that because they don't have any capital (savings specifically) with which to start a business. Then Walter made a couple of comments saying that you can start a business with 'essentially nothing', and that there is little downside risk to doing so.
What I was trying to point out is that this is not true for the majority of people "working a crappy job for someone they hate", because those people need to work that job to feed and house themselves. They're often working multiple jobs, in fact. Spare time is a type of capital when it comes to starting a business; if you don't have it (and most lower-income people don't) than you're trapped.
One job at minimum wage is significantly over the poverty line as long as you're not a single parent receiving no child support. I would assert that under normal circumstances, with no massive hospital bills, with either one child max or someone helping to raise your children, that you can manage 10 hours a week starting a business.
The median US income of a household, was about 50K in 2012. It's not poor, possibly even comfortable, but if we assume this is 2 parents with one or 2 children, quitting a job means cutting that budget by two. Unless of course you can rely on unemployment insurance —I don't know the US system.
But most interesting is the mode of the distribution: meaning the most common income. Income distribution is not a bell curve, and the mode happen to be much lower than the median: about 20K per year. The bottom 25% is already kinda struggling. They're not going to quit their day jobs, nor take a pay cut to work part time. They're also probably too worried about making ends meet to try and build a company on the little spare time they have left.
Also, even if you don't have a massive hospital bill, you may have one later, especially if you have a crappy insurance (thank goodness I live in France). That's not very reassuring, and is one of the many things that just rouse fear. When you're afraid you don't take risks. Building a company looks risky. There's an emotional risk at the very least.
Then there's peer pressure. HN is a very unusual place, talking about building companies all over the place, Paul Graham speaking about entrepreneurship replacing employment, how we look up to the failures even (that last one is a good thing, by the way). Most of the rest of the world just tells you to get a "real" job instead. Over and over. Moms, friends, media… Many politicians even try to solve unemployment with incentives to the unemployed! (Pro tip: if they are 95 jobs and 100 unemployed, searching harder won't work.)
Finally, there's a general sense of depression and helplessness. People expect their children to be worse off than they are, and they generally feel there is nothing they can do about it. Collective action is possible, but our culture tend to emphasise great individuals —see for example the Steve Jobs semi-cult. Unless they think of themselves exceptional as well, they are not likely to figuratively leave the pack, and build their company.
And there's school, who rewards being on time, obedient, and ignores creativity, when it doesn't actively stifle it. It's meant to produce the workers the elite need to stay rich. It's not meant to produce entrepreneurs and other such free thinkers. They don't even teach us the most important stuff! (I know it sounds conspiratorial, but it's really just powerful people and institutions protecting themselves, as they always did. For instance: the most important aspect of our economy is monetary policy, and the most important aspect of monetary policy is Fractional Reserve Banking, which is best translated by "private banks print most of the money". If schools taught that, we'd risk a revolution.)
Really, in such a hostile environment, it takes an unusual kind of person to even dare start a business.
I wasn't suggesting anyone quit their main job. If they have a second job then yeah quit that to the point of being merely full-time. Now that you're an employee for no more than 40 hours a week, how would you not have spare time in which you could start a business, perhaps spending one hour a day or half of the weekend? Again I'm temporarily excluding single parents with sole custody and more than one child.
I'm not saying it's fun to be poor, I'm saying it's possible to avoid burnout.
And for every 'Harry Potter' there are a hundred more books that barely break even or lose money for publisher. For eaxh of those there are a hundred more manuscripts sitting in slush piles or desk drawers that will never see the light of day.
Not really. A large number of businesses can be started with essentially nothing. Rowling wrote "Harry Potter" on a yellow pad, for one example.