Comments for Start-ups and Job Creation at http://www.cepr.net , comment 1 to 9 out of 9 comments http://www.cepr.net Tue, 21 May 2013 20:58:10 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/start-ups-and-job-creation#comment-16952 Item - for the most part, r minty's list of items don't really address the point Dean made. Item - for the most part, r minty's list of items are not as much true as truthy. They seem to partake of the small business mythos, rather than to reflect reality. I grew up in the household of a guy who built several businesses over the years and most of the adult social set we saw growing up were, at one time or another, owners of small businesses. My observation is that generalizations about entrepreneurs are fatuous. Some succeed early. Some fail every time. There is no "5 tries => 100% odds of success" formula. Lots of folks start businesses because they want additional income, while working at a large corporation - often buying franchises. There are lots of hobby businesses. Businesses are started as pure cash funnels to avoid taxes - not always successfully. Others are structured to fail after a wad of cash goes from one partner to another. - kharris Tue, 19 Jun 2012 03:55:26 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/start-ups-and-job-creation#comment-16938 Item - Large & small businesses create roughly the same number of jobs. What counts on this front is the SPEED with with they do so. A single large business may decide to hire 5,000 new employees, and will do so over the next year. 5,000 small businesses will hire 1 additional employee - next week. Item - Large businesses provide little opportunity for new entrants to the job market and are willing to train people on the essentials of the work-world (be on time, dress appropriately, work hard, go get appropriate training, etc). It is small businesses do this type of grunt work Item - It's not that people need to be pushed into entrepeneurship. Entrepeneurs are entrepeneurs. But the regulatory environment actually discourages start-ups. 1/3 of all occupations now require some sort of professional licensing. To what end? To keep people OUT of the designated market. Why should NYC taxicabs require a $1 million medallion to take passengers? Why do nail technicians need a years training (and a license) to paint fingernails? City licenses; State licenses; health certificates; City, County, and State, tax licenses; occupancy certificates .... all with substantial fees before a business can even think about making the first sale. This is absurd! Item - Encouraging, or at least not DIScouraging, entreneurship, costs existing businesses nothing. Item - The entrepeneurial learning curve is steep and most businesses WILL fail within the first five years. But most entrepeneurs are serial entrepeneurs, so if 75% of new businesses fail, and the self-starter learns from each failure, and tries 5 times, his odds of eventual success are near 100%. Item - Business models/ideas like Youtube MAY eventually have been followed up on by Google, but WHEN? Mature businesses rarely branch out into unknown territory, except after years of determining that there is sufficient demand for an unknown product, with an unknown client base, etc. The entrepeneur will step out into an apparent void. Item - New businesses often offer benefit to established businesses by offering better and/or lower cost goods and/or services. Competition is the name of the game. Item - let us NEVER forget that every mature business began as a an entrepeneurial start-up. Today's American auto and airline companies began in barns. Microsoft and Apple began in garages. Wal-Marts was a single Five-and-Dime. McDonalds was a solo BBQ joint back in 1940. They all began somewhere, often as the vision of a single person - r minty Mon, 18 Jun 2012 16:14:23 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/start-ups-and-job-creation#comment-16935 Nailed it Dean. Yes it is all about job churn. I brought this point up to a buy local advocate (small business)- and I got that deer in the headlights look. They did not realize the hype surrounding small business employment never includes the jobs loss discussion! - scott moore Mon, 18 Jun 2012 08:01:03 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/start-ups-and-job-creation#comment-16924 "An example of this story is Google's acquisition of Youtube." And I guess the myriad of counter-examples are that nobody like NCR or IBM bought HP when it was starting out, or Google, or Apple, or Microsoft, or Amazon, or EBay, or the latest, Facebook...I guess the list is kind of infinite. Clearly large behemoths like IBM, SONY, ATT, etc. could not move fast enough. Why didn't they just buy the upstart startups which are now are tech backbone? And of course the other flip side is that plenty of mergers fail too, such as MYSPACE, or AOL. I.e, sometimes there is winners curse. This post is the least informed from Dr. Baker in quite a while. Fortunately, the conclusion is accurate, and quite libertarian for a change...no subsidies. Entrepreneurs are irrational, and will chase their dreams, with a few wild successes making up for the many failures. Some even have famous failures before their success. No need to encourage them with bribes. There is some good theory out their on these sorts of games, with irrational overconfidence being the key to survival. Data is unfortunately scarce. Finally, new businesses might be anybody that has to file Schedule C consulting income, such as many university professors who do consulting or grant work. No employees, no business so to speak, but filing the same form as a small preincorporated business. The IRS data base is not a good source for identifying entrepreneurs. - pete Sun, 17 Jun 2012 11:24:36 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/start-ups-and-job-creation#comment-16923 More of this. Your voice is sorely needed on this subject. - Kat Sun, 17 Jun 2012 09:54:57 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/start-ups-and-job-creation#comment-16920 This is a good post. There are a lot of people that promote entrepreneurship to avoid discussing the anemic rates of hiring and failure to mobilize idle workers by increasing demand. It it a risky proposition to start a business with weak demand unless you gamble on serving only rich people and sell products or sevices with extremely high margins while not creating a fad that will disappear quickly. - Jay Sun, 17 Jun 2012 06:48:07 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/start-ups-and-job-creation#comment-16918 I suspect this claim from Kauffman has a lot to do with trying to legitimize that steaming pile of cow dung known as the JOBS act, just another hallmark piece of legislation from this administration. - Jeff Sun, 17 Jun 2012 04:51:49 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/start-ups-and-job-creation#comment-16917 I agree. The start-up space is such a winner-take-all market. People often forget that for every successful Mark Zuckerberg, there are millions of aspiring entrepreneurs who failed and have lost their entire savings. Also, luck has more to do with being successful in that space than anything else, as Robert Frank has written about numerous times. The worst, in my opinion, is the whole Peter Thiel nonsense. Here's a guy who is a product of higher education -- undergrad and grad degrees from Stanford -- yet he's encouraging high school students to forgo college. If that's not hypocritical, then I don't know what is. And remember, Thiel takes an equity stake in every company that is formed through his foundation, so it's not like he cares about whether some companies fail -- i.e., whether some college dropouts ruin their lives by forgoing college to join his foundation -- because Thiel just needs a few to be successful in order to make money. - JSeydl Sun, 17 Jun 2012 04:37:59 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/start-ups-and-job-creation#comment-16916 I think there are some solid arguments in favor of encouraging entrepreneurship and innovation by startups. Before we even go there, however, we need to separate the signal from the noise. A significant percentage of small businesses and new businesses are not actually businesses. In many cases, they are simply new independent contractors, ofentimes working for the same large/old business doing the same thing they used to do as an employee of that busniess, sans benefits. Those examples need to be removed from the data before attempting to draw any meaningful conclusions. - RueTheDay Sun, 17 Jun 2012 04:32:30 +0100