Technically that constraint only applies to rational actors. There are plenty of reckless actors who risk it all on a longshot without anything to fall back on and enough survivor bias to make others think it is a good idea in general.

Uh, most parents would take their kids back in the event of financial disaster. That's not even rare. Many folks live with their parents until late 20s / early 30s these days.

This does make the assumption that the parents are doing well enough to be able to support their adult children. There are some situations where the parents need the support of adult children, instead of the other way around.

My personal stance towards high-risk startups changed dramatically a few years ago when I took on a big chunk of responsibility for my parents' retirement. My "nest egg" that could be absorbed in a pre-revenue startup has more or less been transformed into the house they've retired into. Having my first kid a couple of years later only compounded the effect. (They're also mutually-dependent, since my parents provide essential childcare while schools and daycare are shut down due to COVID. My parents not having to work right now is literally a matter of life and death given their age and medical histories.)

Regardless, "smart, sustainable work that will support my family" doesn't really map to the intentionally-accelerated make-or-break pace of most incubators and funds. Nor do those programs naturally align with founders who want to create a solid long-term business working from sound operating fundamentals (positive cashflow, measured and even conservative hiring, working to the team's strengths) instead of chasing the next exploding market and "faking it until you make it".

Coincidentally those safer, longer-term plays are also the ones most likely to actually build generational wealth and financial independence for people starting without either. The lack of a safety net (or the presence of one that you're thoroughly entangled in for others' sake) makes all-or-nothing, giant bets far less tenable when you aren't effectively free from having to worry about mundane details like housing or medical costs. That in turn discourages if not de facto shuts out both the least privileged and those with meaningful resources but too much to lose if it all goes wrong.

That assumption holds for most of the population in European countries, even the poorest ones. In fact it's common for young people to live with their parents a long time.

One has to be either dirt poor or very unlucky not to he able to move back with relatives. This sound like an excuse.

The median wealth of African American households in the U.S. is $35k, vs. $150k for white households.

Yes - most people might be able to move back in with relatives, but among those people who can't, minorities are almost certainly going to be overrepresented, which was OP's point.

The world's quite bigger than the US and its particularities don't apply in most other countries.

Sleep in the couch or basement, food costs very little. That's still a lot of support, means that no matter what you have a place to stay and regroup. Not all parents can do that but most could

can't really do that if your parents share an 800 square foot public housing apartment with your sister and her kids. or if they're in prison, or dead, or abusive, or they threw you out for not conforming to their religious choices, or disowned you for not being cisgender and heterosexual, or or or

Of course not, and that might be the case for 10-20% of the population. But you don't have to be some privileged trust fund kid for your parents to give you a place to stay in the event of financial hardship. That's not rare and let's hope that never becomes rare because I'd shudder a world where parents by and large would not do this for their kids.

> But you don't have to be some privileged trust fund kid for your parents to give you a place to stay in the event of financial hardship. That's not rare

I think the point is that it is rare for people who don't have this fallback option to put all their time and resources behind entrepreneurship (the same applies to post-secondary education), because to do so is actually risky for them. It's not that they're worse at business or have less ambition, which is an extremely common sentiment expressed widely in the US.

Here's the reason I think it would be a problem for an imaginary, abstract incubator (because I don't think YCombinator actually does have this) to have a rule "To apply here you need to have alive parents, who like you, with a spare bedroom".

I think that the 10-20% group you are talking about is likely to have more than its share of not-white people. Maybe it's a small divergence, if we imagine the population of the US to be 50% white and 50% not white, maybe the group of people who can't go back and crash with their parents is 49% white and 51% not white.

OK, so imagine there's a different imaginary incubator with a rule that every applicant has to roll a 100 sided die. If they're white they have to roll a 50 or higher to get in, and if they're not white they have to roll a 51 or higher.

I wouldn't like the "roll a die" rule, I think a lot of people probably wouldn't, but it's ultimately not a heck of a lot different than the "crash with your parents" rule. You are still more likely to fall afoul of both rules if you are not white- or (if you change the dice game) gay, or poor, or marginalized in other ways.

(yes the probabilities are different, not the point)

How is 10%-20% not a problem? Not to mention tens of percentages above that where staying with one's parents is incredibly difficult and/or uncomfortable.

This is the right time to shudder, much as I'm happy that you're in a situation where it seems hard to imagine (or empathize with).

No, but then again in those situations of extreme poverty one probably has bigger problems than not being able to get a start-up off the ground.

And of their parents threw them out or don't otherwise like them that's just bad luck. Some people will not have an easy life, I don't see why we have to make those with loving families feel bad about it.

No one's trying to make anyone feel bad about their loving family. We just don't want it to be a selection criterion for entrepreneurship.

That's exactly what's happening: diminishing others' achievements because they can move back with their parent.

It's not their fault that there's so much misery in the world, nor do they have an obligation to fix it.

In fact three million have done so in the last six months. Including ~2.5 million in Gen Z.

https://www.theatlantic.com/family/archive/2020/07/pandemic-...

https://www.newsobserver.com/news/coronavirus/article2434685...

I suspect that people living with family until 20s/30s is likely to be much more common than people here expect, and that not doing so is an anomaly of the current age in only certain cultures, with a possible return to norm in the future.

Where are you seeing this kind of a stats? Are you just talking about the US? Remember that were on an online multinational discussion board.

Do you think your perspective is coloured by your own experiences?

Whose isn't?

There are parents with ample incomes and large comfortable homes that will welcome their child with open arms, proud of them for risking everything on a start up and encouraging them to try again.

There are parents with little extra cash and homes without space for permanent guests who are going to accept their children back with some disappointment and disapproval for taking large risks and failing.

Children of the first set of parents are just going to be more comfortable going out and taking chances.

You really need to implement some 2nd level thinking.

It seems to me that you're just taking the logical argument of better safety net --> lower overall risk --> better performance.

In reality the flow I've seen throughout the years is more like:

Big risk of failure --> additional motivation to succeed --> world changing technology.

If you have a safety net and your life is stable, why even take such a big risk like entrepreneurship?

Because the risk is to become homeless and that sounds even scarier than it is in reality. Ive met people who had a stretch of being homeless and they eventually got back on their feet. They were also young.

There are parents with ample incomes and large comfortable homes that will accept their children back with some disappointment and disapproval for taking large risks and failing.

There are parents with little extra cash and homes without space for permanent guests who will welcome their child with open arms, proud of them for risking everything on a start up and encouraging them to try again.

Point being - there are a lot of factors outside of one's control that affects one risk adversity

* having a place to live if you go broke

* a place within some manageable travel distance ( i.e. same state/country/continent )

* a place where you will feel a warm sense of welcome

* a place where you will have creature comforts: a comfortable bed, a private room, an bathroom with minimal wait times

* a place where you don't need to contribute to living expenses, at least not right away and not until you can get back on your feet

* a place which is a good launching point for your next career

* (US) health care

Successful founders I know have all of these - every last one.

I think it's perfectly ok that if I save and work that my kids will have a leg up on my peers' kids who don't do the same.

Don't we want, as a society, to encourage parents to do these things for their kids? Isn't that a net win for society as a whole?

The alternative would require a near 100% estate/death tax, wouldn't it?

Don't misunderstand me, the parents did nothing wrong.

Their problem was their mental model where their child's success was entirely due to their child's talents and drive, and that since they ( the parents ) had not provided any seed money, they had nothing to do with their child's success.

In a way that's true though, because the majority of kids who have that soft-landing available don't go on to achieve any kind of success like that.

the point is that the vast majority of people able to have that sort of success do have the soft landing and it is that advantage that enables them to create the successes they do.

Exactly what i wanted to post. Also excludes everyone who is married or has to feed their family.

What sort of joke is this? Having parents with an extra bedroom, once used by kids, is perfectly ordinary.

A. All upper class and some (most?) middle class people can afford to support their children indefinitely. Less wealthy individuals, the millions and millions of people who live paycheque to paycheque just to get by and whose retirement plan is to work until their last days, cannot.

For so many families, the only way they can afford to support their children even in their childhood is government aid, which gets cut off when the child reaches 18.

B. For immigrants, moving back to one's parents is a much more difficult process. You may have to move to another continent. You have to give up on trying to find a job or settle down in the US. Moving back to the US afterwards would not be exactly easy either, because being away from the US for extended periods of time may mean losing your green card.

No parent wants to support their adult child indefinitely. The whole point of raising a child is to raise them to be self sufficient as adults. There's quite a difference between a parent offering their child a place to stay while they get back on their feet and supporting them "indefinitely".

33 percent of 25-29 year olds live with their parents today: https://qz.com/1248081/the-share-of-americans-age-25-29-livi... It's not rare at all.

For children of immigrants, B is absolutely not a problem, in general (of course there are exceptions). In my experience there is far less stigma attached with living with your parents well into adulthood for children of immigrants than natives. It's even culturally common to remain with your parents until you're married. Of course first generation immigrants have it more difficult. That is part of the inherent risk of moving to a different country.

First generation immigrants were my point in B. Please note that this includes many of your university classmates and current colleagues. They may even come from well-off families who can support them, but they would have to move back to their country of origin and because of the way US immigration works, that would most probably be a one-way trip.

First gen immigrants have it more difficult. No doubt, but at the same time, they start businesses more often than their own children and multi-generation natives do in the US: https://www.forbes.com/sites/elainepofeldt/2013/06/26/first-... . But yes, many first gen immigrants are from relatively well off families in their respective countries. Chances are the immigration policies in the US are more favorable than whatever country they emigrated from. It's perfectly fine that we expect people who come here to work and support themselves otherwise our social programs would get burdened with taking care of anyone who could hop a flight.

Multigenerational living is pretty common in many parts of the world - many places children dont (or cant) move out of their parents house until they are married, and later in life their parents move in with them. There's a difference between supporting a child or parent with a roof and a meal and supporting a child with a NYC apartment and a trust fund.

It is of course a spectrum between no support and supporting a lavish lifestyle. Some parents may be able to let their child sleep on their couch, but cannot afford to rent a bigger home with an extra bedroom. Some parents may be able to afford the groceries, but (after the age of 21) not the health insurance for their child. Some parents may be able to support their child, but with significant financial difficulties that would put a strain on family finances, make their retirement plans nonviable, or pushes back their retirement date significantly; so the child would not dare take financial risks because while they would not go homeless, they will be putting an unreasonable burden on their parents, ...

So yes, if the family is reasonably well-off (owns their home, has savings and good income, have a margin of safety in their finances) you can depend on them as your safety net. If they are not, you cannot or cannot in good conscience.

Perfectly ordinary for you and people in your peer group who share largely similar upbringings.

I think this comment is (no offense intended towards you specifically) very indicative of how insulated and lacking in diversity tech is.

What’s your estimate of the percent of the population that could move in with their parents? And then additionally what’s your estimate of the percent of the population that can program that this is true for?

40% of young adults in the USA do live with family, and it’s a good bet that a large fraction of the rest could. It’s certainly not universal by any means, but it’s also far from some great rarity.

https://www.cbsnews.com/news/percentage-of-young-americans-l...

I’ll grant that the original comment talked of having “his own bathroom” and that is reasonably rare, but it’s the least important part of the package compared to a room and shared meals.

"Very few people" could get a room and a meal? Really?

A room and a meal, possibly not.

A room and a meal indefinitely with absolutely no pressure to leave or contribute? With the freedom to find the next job or opportunity that fits, not just desperately throw out their resume and accept the first offer? Not so much.

I think the comment they're responding to and others are grasping at straws and trying to find excuses.

Like I said in another comment even in the poorer European countries it's possible to move back with one's parents. And in fact people do live with their parents into their twenties.

The parent said "very few people have that kind of soft landing."

The fact is, having parents with a place you can crash at is perfectly normal. If your parents weren't complete degenerates or very unlucky, they have a couch you can sleep on. Anybody who's startup founder material can at that point find themselves a job.

<shrug> I have a supportive, middle class family and if I went broke I'd be sleeping on an air mattress in front of the TV and trying to figure out how soon I could start contributing to the monthly expenses. It enough to keep me from wanting to take any large risks.

I also didn't mention location, but my relative's parents are withing spitting distance of the valley. Someone who has to move from Mountain View to Omaha is going to find it really hard to get back into the thick of things.

The most underrated type of privilege is location privilege. If you grow up far away from a major city, you have to invest heavily to break-in. One false move and everything you worked to establish gets wiped away.

People growing up in Omaha are at a severe disadvantage vs people who grow up in Mountainview.

Right.

And if your parents are in Mountain View or nearby, you can stay with them a few extra years after you get your first job to save money for a downpayment on your own house.

A person without that option may spend a decade paying rent and trying desperately to save up enough for a down payment.

I distinctly remember moving to Silicon Valley as a developer from out of country. Realizing that the standard of living bump due to my 2x Salary, was actually a standard of living drop. Then looking around at the company, seeing the IT support guy with the brand new Porsche. Wondering if he 'struck it rich' with a previous .com and finding out it's just because he lives at home still.

People growing up in Alliance, Nebraska, are at a severe disadvantage vs Omaha. Almost everyone in Nebraska lives within 50 miles of Omaha (1.3M of 1.9M people).

I moved around a lot as a child, and in my admittedly anecdotal experience... this is not the case for most people in urban / suburban areas.

In most places in the United States, extra space is a premium that requires consistent stable work at or above the median household income in a single field of work over extended periods of time.

From this alone we can rule out those who work minimum wage jobs, most of those who do not have an established field other than "Service Industry" and many of those who specialize in an "unskilled" trade, e.g. forklift operators.

Those who do manage to purchase a home with the requisite space often don't live in posh neighbourhoods with comfortable amenities, and generally are not swimming in excess income.

Additionally modern society, with its' inundation of appealing marketing campaigns and easy credit, has rendered even your "middle class" families cash-poor, stretching their budgets thinner and thinner with each additional monthly payment.

When you culminate all of these things together with a fundamental breakdown in nuclear families and rising divorce rates, "going home after a rough patch" is not an outcome most are able to, much less willing to, consider.

Within your (and my) peer group it is, sure. But even you surely know a bunch of folks who don't have an easy fallback like that. For anyone from a poorer background, and especially those who have to move (or, yikes, immigrate) somewhere else to found a startup, it's very much not.

It's the privilege argument that I'm sure you're sick of arguing about. The world is set up well for perfectly ordinary middle class educated kids with working (or wealthy) parents. That's not everyone.

I would refine this by saying "upper middle class" rather than "middle class", depending on how we define the middle class.

If you're somewhere in the lower or middle "middle class", the world still isn't set up very well for you.

Being of the "cultural upper middle class" (born into a professor, scientist, engineer, etc. family) is also an advantage.

If the family you'd fall back on lives in Section 8 housing and you don't meet several criteria and become an approved occupant, you can't go back to live with them. If you stay with them, they will lose their housing. This applies to about 1.2 million Americans. The VA and HUD also have rental assistance programs, each of which also has rules about who can live in the rental. Altogether, programs like this serve about 5.2 million Americans. Given that we're predominantly talking about adult children, a larger group is touched by these rules.

> Having parents with an extra bedroom, once used by kids, is perfectly ordinary.

Do you mean an extra bedroom with two or more beds for your kids or an extra bedroom per kid? That makes the difference and it is more uncommon.

That is a naive perspective, and that is all that needs to be said.

I'm guessing your parents are still alive and live in the same country?

I'm not perfectly ordinary I guess

No it's not.

I don't know think this is as clear. Can you link me to some researcher where a stronger social net leads to better entrepreneur outcomes?

Because looking at country level data, USA, with it's terribly scary and risky path of entrepreneurship completely outperforms welfare state countries like the Nordics.

You could say the difference is from capital markets, but still even the difference in startups that are not successes is humongous.

Do you have statistics demonstrating that, per capita, the USA outperforms Nordic countries on entrepreneurship?

I don't either way. But I have run across the counterintuitive fact that Nordic countries outperform the USA on how many people per capita are worth at least $30 million. And at least some of them got there through entrepreneurship.

Can't ignore old money. Nordics (most obviously Sweden and Denmark), Baltics (Lithuania) and many CEE countries (Poland) have hundreds of old aristocratic families with family trees two to four times as old as the US.

This article is a good summary and links to several studies. https://qz.com/455109/entrepreneurs-dont-have-a-special-gene...

Here are a couple of the most relevant: http://www.andrewoswald.com/docs/entrepre.pdf and https://www.nber.org/papers/w19276.pdf

I don't know of any research, but personally know people who looked for ways to start their company while hedging various risks[1], couldn't find a way, and never tried.

I started a company after the first dot.com bust, because I had almost nothing to lose. But I also had no dependents to hurt. So it can cut both ways, but I don't think many folks take the path I did by choice.

[1] One had a spouse with a chronic medical condition, losing insurance was not an option; one had a large student loan debt and didn't want to risk defaulting. I've heard other stories.

There are cultural factors as well that make entrepreneurs valued and respected in the USA in ways they aren't in other places, so the right comparison doesn't seem to be across countries (where non-financial cultural factors may overshadow all else) but within a country in which the government-supplied safety net is severely lacking. In the USA, those best-suited to pursue entrepreneurship are those for whom the personal safety net is strong, despite the overall national safety net being weak.

> with it's terribly scary and risky path of entrepreneurship completely outperforms welfare state countries like the Nordics

or maybe it's worse than you suggest: taking a risk on a startup is the only opportunity to earn any income, where "welfare state countries" take basic income out of the picture. And, according to which mesurement are these welfare states being outperformed? and is it relevant to the humans involved?

It isn't the only opportunity in the US at least (Artisinal miners, tree poachers, dump pickers, and street vendors certainly certainly are an example and can be found), but that it tends to pay the most. In addition to some social baggage that the individual may have had. Drop out (small) business owner who has issues with authority other than their own is a niche stereotype.

Apparently according to some traveler's accounts Ukraine has a lot of "side hustles" due to lower wages of day jobs and lack of consolidation.

I suspect it may be both and a result of culture shaping actions shaping culture. Essentially a more risk adverse culture is more likely to support a strong safety net and a culture with a strong safety net is in itself incentivised to not encourage have people take stupid risks even if the nominal purpose is to allow those risks. (That sort of left hand vs right hand thing crops up every organization large enough with distinct duties.)

Then there is the whole Maslow hierarchy of needs aspect where they would ironically need to be better off before considering anything collective. Revolutions have been lead by disgruntled college students far more often than the desperately poor.

I don’t think the issue being brought up here is the outcome of the entrepreneur (and their companies) but moreso the Well being of the entrepreneur

It's easy to find many countries with much worse social nets than the USA, but with worse entrepreneurial outcomes. The social net versus entrepreneurial outcome function might not be a monotonically increasing one.

> Can you link me to some researcher where a stronger social net leads to better entrepreneur outcomes?

is Harvard good enough?

https://news.harvard.edu/gazette/story/2016/07/public-progra...

https://www.nber.org/papers/w18441.pdf

> looking at country level data, USA, with it's terribly scary and risky path of entrepreneurship completely outperforms welfare state countries like the Nordics.

False.

>> The U.S. likes to think of itself as the world capital of start-ups. But America doesn't lead the world in actually starting new businesses. By various measures, it's behind Canada, Denmark, and Norway.

https://www.inc.com/magazine/20110201/in-norway-start-ups-sa...

They clearly means successful businesses.