Having said that, I'm going through a stage in my life where I am getting to see the real character of people in terms of their risk appetite. Everybody wants to be an entrepreneur but when it really comes to doing it people chicken out. May be it's my circle but again that's my experience.

The point isn't so much about "risk" per se, it's about whether or not there's a viable Plan B.

If I'm working two jobs to barely keep a roof over my head and play the lotto and lose, I'm still keeping a roof over my head (by working two jobs). The odds are long, but the cost of failure is low.

If, on the other hand, I have the Best Startup Idea Ever (and all the necessary skills to make it a reality) then I will still be unable to pursue it. Sure, I'm like 80% certain it's going to be a huge success, but in the 20% case I'm fuuuuuuuuucked so taking a swing at it is a nonstarter.

These aren't the particularly wealthy ones, most of whom have followed quite conservative paths, but the ones who were confident they wouldn't get a "well it's your problem, you should have got a real job" response.

Bringing down risk taking to a simple “risk it all” is a trivia that is maybe inspiring but naive.

What’s worse, those kinds of strategies are appealing to people mostly because of survivorship bias: one hears inspiring stories from those who risked it all and made it to the top but rarely from those who loosed it all (those don’t sell too well).

here's something nobody seems to mention.

most people don't risk everything once, then exit with a set-for-life payday a few short years later. that's the rare minority of entrepreneurs. most are moderately successful for many years on end, and may finally do a $multi-million exit after a decade or more of hard work and risk.

after that initial success, you have to risk it all, multiple times, to either keep succeeding, or reach the next level of success. at any point, if you stop risking the status quo you are likely to fail.

in other words it's a self-selecting process. if you are having doubts about risking your meager savings which you can likely earn back within a few years of frugal living while working a high paying programming job, there's your answer.

To the author's credit, $500k in comp as an engineer is not easy. Kudos to anyone who pulls that off.

The reason for my reaction is this: the title can be interpreted two ways:

"I had a great setup but I'm giving it up to take a risk."

"I want to feel motivated again and I'm willing to give up a lot of money to do so."

But I increasingly dislike these posts because (1) we know there's a strong correlation between having a lot of money and success in entrepreneurship. Starting out with a safety net is the best way to derisk! In that sense, this post is just saying "I'm taking a risk after I've derisked it!" And (2) talking about how much money you'd give up to feel motivated is pretty explicitly signalling success to other people in the "I earn enough to be able to talk about it like this" group. That's just upper-middle class signalling.

The author's other posts also don't really address the elephant in the room. He was pulling in $500k. If he fails, and even if he wipes out his savings, he's going back to pulling in more than enough money to live very comfortably while still saving enough for kids and retirement. That may feel like more risk than he's comfortable with, but that means he's about as derisked as it gets at a personal level. His explanation in the post titled "How I set myself up financially before I took the plunge." has to do with allocating his savings to make sure he and his family are taken care of, but it doesn't really talk about the point that he at any point can choose to go back to earning more than enough money. That's a privilege that very few people have. He certainly earned that privilege, but how many entrepreneurs can say "I'm setting aside $1m of my liquid money to bootstrap a startup"?

If the author had left the money out, it would have been a great post about searching for motivation, which we all struggle with, but I think the money aspect undermines the point.

> And this is a key advantage: When basic needs are met, it’s easier to be creative; when you know you have a safety net, you are more willing to take risks.

Your (and my) basic needs were met. In the USA, 40% of families could not meet a $500 surprise expense. That's not paycheck to paycheck, that's pretty close to the edge and such a family would generally be averse to rocking the boat.

The ability to take risks is very important for success, but what that really translates to for entrepreneurs is an inability to believe failure is a thing.

So again, you did not have an upbringing that would make you afraid to take risks, therefore you took them.

I had an upbringing that made me afraid to take risks because even though my father was well off, his upbringing was during wartime. I took risks anyway, and my kids are basically rich kids in that they are unafraid to go after everything they want. It's very strange to see.

I do think that there's a bit of overlap in that part of the mentality of people who gamble and people who start businesses. You have to accept that there's a good chunk of luck with starting a business, and also acknowledge that if you don't have that luck that the business will likely go belly-up.

What I was getting at is I am personally a coward. I don't say this with pride, and this isn't some attempt at humble-bragging or anything, it's a dig at myself, not entrepreneurs.

Sometimes being a coward isn't a bad thing, if nothing else I don't waste my money at casinos, so that's good. But because I'm so terrified of losing money, and so terrified of anything involving "risk", I feel like I took the cowards way out by working for BigCos at a desk job instead of trying to build my own thing. Sometimes I'm a little jealous of the people who can throw caution to the wind.

The risk of the same action (e.g. spending a year on getting a startup to work out) differs based on your background, too.

Let's say you make minimum wage. That reduces the amount of money you can invest in your startup, lowering the chances of success while also shortening the runway. The risk here is might even be homelessness.

If you are backed by a reasonably wealthy family, you can invest more and your runway is longer, making it more likely to succeed (or at least fail not that hard). The risk here is having "wasted" one year of your life.

This doesn't even take into account other factors like family/friend connections.

Of course there are always counter examples to this, I'm just talking about probabilities.

I think something like this happens to a lot of people who do startups:

"Why on earth are you leaving a 50-100k job per year, with benefits, to do a startup?"

  Some things to think about:
  1) Are you really sure your job is secure and recession-proof?
  2) Are you really sure your company is secure and recession-proof?
  3) Starting your own company is one of the surest ways to get rich.

I'm risk-averse/security-seeking but I hope to make it as an entrepreneur because I basically agree with sentiments (mis)attributed to Benjamin Franklin to the effect that the only real security is rooted in freedom.

HTH and good luck with your decision.

All I'm saying is people who work their whole lives to get their kids a decent education and those kids themselves are most likely to take a safer path in life. Because they want all their sacrifice to result in a better life. I am not saying start ups don't offer that. But start ups are often risky and ridden by failures. Who would like to be in a situation where they see their parents slog their whole lives to put them a decent place, and now as kids they waste all that by failing in things whose risks they understood pretty well. In such cases, will the parent lives, their work have any meaning?

Now imagine a situation if your basic education, food, clothing and shelter are more or less taken care of. You have good medical care. You don't have to take any risks to just survive. You know if you fail, you always have some basic things taken care of. The infrastructure is there, there is lesser corruption and bureaucracy to worry about.

When you ask why people are afraid to take risks its the former reason.

In the latter situation risk only has a time value, and nothing much.

But here was the point that I think got lost in such a binary stated view of risk: right now it's easy to jump back on the totem pole. If I really wanted to buy property that bad, I could get a job making well over my previous salary within weeks. There are not a lot of entrepreneurial endeavors where that is true.

Consider something like opening a restaurant. There is not just opportunity cost but real investment cost before you even get started. And if you bomb, and statistically it's very likely you will, there is not nearly the the likelihood you can at least go back to where you started. As another anecdotal example, my friend is a second year lawyer at a firm, one of the few people in his graduating class that got a nice corporate law job so that he actually has a chance to pay off his massive loans. And he pretty much hates his life, but there's a huge chance that if he left to pursue one of his dreams, there would be no "reset" button. There is no easy chance that if he doesn't succeed, he can just go back to being a highly compensated corporate lawyer within a few weeks.

So yes, there's obviously risk in starting your own startup. There's always a cost to pursuing a dream, and not everyone wants to pay that cost. The distinction is as a technology startup founder in this current environment, your cost is dramatically lower than anyone else's, and I think that's ultimately what I think the OP is trying to say.

A person with $10 million who puts $3 million into a business isn't taking that much of a risk. There's some risk there and, yes, it should be rewarded. But a person with no net worth is taking a huge risk every time he takes a new job: career risk.

This dynamic exists in startups as well. The people who are taking the real risks are the founders, not the venture capitalists.

For example, suppose I want to take a year off and go hiking. I could have worked that year instead, made 100K, invested that in the stock market, and be a multimillionaire by the time I retire. So from a financial point of view, going hiking is a really terrible idea.

Or, suppose, I feel like taking that year and doing a startup. And suppose I have a 90% chance of failure. OK, you can run the numbers, and probably show that, on average, I'll do worse than if I took a job for a year. So, yes, looking at it that way, you can say that my starting a business is an "exceptionally high risk".

Except... what if I'm working on a project that I feel like working on?

A part of the interview with Steve Wozniak that I found quite fascinating was that he said he didn't feel like he was taking a risk with Apple. Sure, he could have worked all those extra nights and weekends and had it come out to nothing. Yikes! Invest all those hours, that he could have been working to make money, and end up with zero. But so what? He was doing something he wanted to do, that he found really exciting, building one of the first computers that people could own themselves.

Is there a danger that one will become overly caught up in a startup, and do foolish things? Sure. I been there. I've done that. If I had found the right mentor they could have advised me to bail on my startup a year and half before I did, and saved me a lot of grief. Does that mean that you "have to" or that it is "realistic" that you're going to wildly over commit? No. Just because most Americans are overweight and unhealthy doesn't mean that it is "realistic" for me not to have a moderate exercise program and eat healthy food.

it makes sense to double-down with money

hmm, I've already responded to this point, as far as I can tell. I'd be happy to expound more if someone wants a more detailed explanation, but otherwise I think I'd just be repeating myself.

...

But your parents have $1M house, and you have a six figure job. Are you not the definition of a rich trust-fund kid? (To be fair, I don't know your age) I don't understand? To me it seems that you perfectly personify this section of the article:

>The research that concludes that entrepreneurs don’t have a propensity for risk, they just have wealthy parents backs this up. It is less of a risk to start a company if you can be supported while doing so, and have fall back options.

And this one:

>A senior manager once told me they loved risk, and I remember thinking, ‘but you aren’t affected by it’. They’d go on to a well paid job elsewhere, and not only would they be untouched by any failure of their risk but it would likely boost their status. They become a person willing to take risk, which has increased currency. This is not the case for someone who may be made unemployed in their late 50s with little chance of re-employment as a result of the change they sought to introduce.