
The Sobering Reality of Entrepreneurship in the U.S. - wherespaul
http://www.mint.com/blog/trends/entrepreneurship-06252010/
======
lawrence
Self employment in Mexico City is a bit different than the startups you find
in San Francisco.

No, it's not a bit different. It's completely different. It's another
universe.

The vast majority of self employment in DF is a fruit stand or selling
cigarettes at traffic lights (not that there's anything wrong with that).

I spent some time with an Italian entrepreneur a few weeks ago and he told me
"we have three VCs in our country. and two are out of money."

The Sobering Reality of Entrepreneurship in the US is that we have it better
than everybody else in the world, and even more so if you are an entrepreneur
in SF, NY, Boston, Austin, etc.

~~~
holdenc
Yes, the US economy is better than most places where entrepreneurship is a
necessity. But it's also a world of paperwork, high tax and stifling
administrative work -- and that's _if_ you happen to be making a profit.

The problem is that the US is hostile to small businesses. Are you a single
member LLC? Then _you_ are personally liable for claims against your business.
Want health insurance? Get ready to pay through the nose. How about at tax
time? You'll have self-employment tax, and most likely special state taxes on
businesses (NY has this) to look forward to. The list goes on.

If you have a successful software business and don't need to be in the US it's
actually better to leave and run it elsewhere.

~~~
yardie
Do you think it's better anywhere else in the world. Up until a year ago, the
country I am in made it inconceivable to be an entrepreneur. And they invented
the f __king word! You think paying taxes at tax time is bad. How about paying
taxes before you are allowed to start your company.

If people could do a startup elsewhere you don't think they would already.
Taxes, liability, and health care are the least of the problems for a startup.

You might as well be saying people should emigrate to country other than the
US. There are far easier entry ports, yet the US still manages to be #1 no
matter how many hoops they make you jump through.

While this infograph is inconclusive it gives an accurate picture overall
[http://grasshopper.com/img/blog/entrepreneurism-us-
europe.PN...](http://grasshopper.com/img/blog/entrepreneurism-us-europe.PNG)

~~~
ahoyhere
Yes, many countries are better than the US for entrepreneurship. I'm sorry
that France is not one of them, but that doesn't really speak for the rest of
the world -- your countrymen invented the word 'entrepreneur,' but they also
invented 'bureaucracy' and 'laissez-faire'.

In Austria, if you become unemployed, and want to use that as an opportunity
to start a company, the govt will extend your unemployment benefits by 6-18
mos, and give you a big break on your social taxes for years.

Also, you get unemployment insurance as a self-employed person, as of a few
years ago.

And, naturally, everyone - no matter what they do or how much they earn - is
covered by social health insurance, which is excellent. (Also pensions!)

Also, yes, you have to come up with 20-30K euros to start a true LLC -- but
you can do business for "free" as a selbständig, or self-employed person,
including employing another. However, if you do set up an LLC, you can never
be liable for more than that 20-30K euros - it is not a fee, it is an escrow.
If you were to close the business, without outstanding liabilities, you would
get your money back.

Taxes, liability and healthcare may SEEM like the least of worries for a
startup -- right up to the point where they suddenly become life-or-death,
mission-critical. Naturally.

~~~
yardie
You've only addressed the bureaucratic part of startup. Many countries are
only now seeing the benefits of encouraging entrepreneurship instead of taxing
them out of existence. But just because the government writes a decree doesn't
mean everyone stops what they are doing to change course.

There is a reason its called a startup culture. It takes a societal shift to
get one running not just a few tax incentives.

Also unemployment doesn't change it. There are certain people that have what
it takes to run a successful startup. These people are in demand and are never
unemployed.

------
jellicle
One large reason is the lack of universal health care in the United States.
Should you or your family be hit with a major illness while you're busy being
entrepreneurial, you are sunk. One of the best things the United States could
do to promote entrepreneurship would be to implement proper universal
healthcare. Sadly, it's unlikely to happen in the near future.

~~~
natrius
Easy access to insurance that isn't provided by an employer is important for
entrepreneurship, but if by "proper universal healthcare" you mean single-
payer insurance, I disagree. The individual insurance market sucks in America
because of preexisting conditions and the higher taxes on individual insurance
than on employer-provided insurance. The former is getting fixed. I'm not sure
if the latter actually made it into the final bill, but I don't think it did,
and that's a shame.

Beyond that, the only advantage single-payer systems have is the lower prices
that result from wielding monopsony power. I don't think it's possible to
maintain the quality and pace of improvement of health care when people are
funding it less than they would be willing to. Health care is expensive
because we value it so much that we throw tons of money at it. People try to
provide better care in order to get some of that money, and if you take some
of the money away, there will be less people advancing the industry, which
isn't what people want.

~~~
onoj
Having lived in two countries that have free public health care at a good
level, I can say that starting my own business is much more relaxing in that
environment. I would not dream of doing the same in the USA at my age or
family situation.

~~~
natrius
Of course it's more relaxing. You don't have to worry about researching your
insurance options because the choice has already made for you. I don't think
"more relaxing" is a very compelling reason to choose a policy on its own,
especially when the cost of that relaxation is a slowed pace of advancement in
medicine.

If the U.S. government stops incentivizing the connection between employment
and insurance, starting a company wouldn't need to have any effect on your
health care. No single-payer system required.

~~~
pierrefar
I'm starting in the UK and I'm more relaxed because I don't have to worry
about health care - I'm covered come rain or shine. I'm not relaxed because of
avoiding researching options.

Also, you assume a slow in advancement in medicine. This can't be further from
the truth. Small example: all of the patients registered in the UK (i.e.
residents) are getting digital patient records.

~~~
natrius
I don't assume a slower _localized_ advancement in medicine. There is a global
market for medical technology, and it will be sold wherever it is profitable
enough to do so. The fact remains: the further the price of health care is
forced down by insurers who comprise the bulk of their respective insurance
markets (usually governments), the less money will be available to incentivize
people to produce medical technology.

Americans will be covered rain or shine once the healthcare reform bill kicks
in. If you can afford it, you have to by insurance. If you can't, it will be
subsidized so you can afford it. That's the goal, anyway.

Markets require choice to function properly. I think the American approach is
less likely to result in unintended consequences.

------
_delirium
As defined in this article (% of people self-employed / owning small
businesses), I think there are some other factors involved. I only know about
Greece first-hand (about half my family lives there), but one reason there is
that regulations and incentives generally discourage large corporations from
entering a whole lot of markets, though they've been relaxed somewhat
recently.

For example, Greece's high self-employment rate includes a _lot_ of one-man
grocery store or fruit/vegetable stand operations, because large supermarkets
were more or less banned until recently. More generally, there were (again,
recently relaxed) regulations on how many hours you could have a retail
establishment open per week, and what hours they could be, intended to make it
easier for small businesses to compete with the large ones: a one-man store
can't reasonably be open more than maybe 60 hours/week, so the law generally
banned businesses from being open more than a certain number of hours a week,
and required them to close at least one or two days a week (depending on
market segment). That made it much easier for small operations to compete with
the large ones, because your mom-and-pop store open 6 days a week, 8 hours a
day, wasn't up against a 24/7 chain store.

Some though is perhaps just cultural. When a rich Greek builds a vacation
villa, for example, he'll typically get a independent architect to design it
and oversee its construction, rather than going with a big
design/architecture/construction corporation, which is seen as too cookie
cutter / less prestigious. I bet just architects alone account for several
thousand of the self-employed Greeks, whereas most American architects work
for corporations (exceptions only on the _very_ high end of world-famous
architects). It even extends to commercial real-estate: the typical 6-story
office or apartment building in Thessaloniki or Athens is designed and built
by a small independent firm.

------
crikli
Entrepreneurship ain't for everyone.

You will: \- work more hours. \- deal with so much more stress. \- flirt with
financial ruin at least once. \- struggle to balance work and family.

But some folks are just cut out to do it. It's like a genetic predisposition
that can't be denied. And if one can learn to cope with the issues I mentioned
(and more) being an entrepreneur is one of the most rewarding life experiences
out there.

------
petercooper
_Turkey, Greece and Mexico had the highest self-employment rates as a
percentage of total employment._

I bet Mali or Niger have an even higher rate, given most of the working
population are subsistence farmers. Further, many countries don't have the
laws that, say, the US and UK do to prevent abusing "self employed" workers by
treating them as employees without benefits.

------
sh1mmer
"Self-employment" doesn't mean what we think of entrepreneurship.

PG has the great metaphor two saplings, one of them is a redwood sapling, it's
expecting to grow. On that measure we don't create self-employment with
entrepreneurship we create jobs.

HNers want to create a lot of employed people when they are succeeding.

------
tptacek
And now, a word about entrepreneurship in Greece:

[http://network.nationalpost.com/NP/blogs/fullcomment/archive...](http://network.nationalpost.com/NP/blogs/fullcomment/archive/2010/04/28/greece-
is-one-giant-ponzi-scheme.aspx)

(and, less humorously:
[http://online.wsj.com/article/SB1000142405270230425270457515...](http://online.wsj.com/article/SB10001424052702304252704575156023250923324.html))

~~~
dennisgorelik
The first link doesn't look humorous at all. The article is pretty serious.

~~~
Locke1689
I don't know, the comment at the end of the article is pretty funny.

------
softbuilder
I read this book and while the statistics were interesting the author's
complete disregard for correlation!=causation was extremely disappointing. It
was mostly conjecture and hand waving. Also if you're a minority woman, don't
read this book. It will seriously bum you out.

------
known
I think America is saturated and suitable for people who will live on
<http://en.wikipedia.org/wiki/Passive_income>

------
usaar333
entrepreneurship is stressful? Other countries, especially developing ones,
have more small businesses?

This might be one of the least insightful articles ever on mint life.

