Most Entrepreneurs Start Rich. I Did.
Young people ask me how to become an entrepreneur. It’s a simple answer. Be born rich.
They laugh every time, but it’s not a joke.
The first hump in entrepreneurship is about $20,000, and almost no one who’s not related to you will give you that money. If you don’t have savings or rich family or friends, you’re probably stuck at the gate. Zuckerberg, Bezos, et cetera. They all started with family investment.
And it goes deeper than that.
By the time someone is old enough to drop out of college their parents have already invested thousands if not hundreds of thousands of dollars in them. In books, schools, or even just nutrition and security. Steve Jobs's parents weren’t rich, but they used all their savings to move to a better school district and send him to Reed College. Larry Page and Sergey Brin came from highly educated families and went to Stanford.
This is the iceberg of privilege under entrepreneurship, but we don’t talk about it. And we should.
The most common shared trait among entrepreneurs is access to financial capital — family money, an inheritance, or a pedigree and connections that allow for access to financial stability. While it seems that entrepreneurs tend to have an admirable penchant for risk, it’s usually that access to money which allows them to take risks. (Quartz, citing a bunch of studies)
Capitalism rewards people with access to capital. Labor (ie, hard work) does not get you into the capitalist class, yet this is the lie that entrepreneurs and startups sell. I wasn’t able to become an entrepreneur because I was smarter or worked harder than anyone else. I just had more privilege.
What I did with that privilege was my own I guess, but as I get older I find that more of a meaningless distinction. My privilege was invisible to me until I aged (and had kids) but now I can see how deep that it goes. How much of my life is luck and good fortune and how little is me.
In my small pond, I often get asked to talk about entrepreneurship and I try to tell the truth. I’m not a very good entrepreneur, and I got there mostly by being lucky and rich.
I was born on second base. My parents were grad students in Canada and I was pushed out in Canada, whereupon they handed me an excellent passport. I had done nothing at this point and was already ahead of almost everyone in my native country. My dad’s Sri Lankan passport is an international kick-me sign, it only gives him visa-free access to 22% of the world. I have access to 95%, and much more opportunities and protections besides.
For nothing, I was just born.
As a child, I was still not in control of anything, and still getting lucky. My family moved to America, itself an advantage, and my parents did everything in their power to move us to the edge of a rich school district. We were among the lowest income people there, so I never grew up feeling rich, but now I can see that we were.
I had amazing teachers that inspired me to write from age five. Our little suburb had one of the best public libraries I ever encountered. I read a lot, subsidized by my parents and the good taxpayers of Upper Arlington. I also had access to computers at school and at home from a very young age.
Everybody at my school went to university, and so did I. I took advantage of that Canadian citizenship to get local rates for university at McGill. My parents paid the tuition, and enough living expenses to live comfortably, and have a lot of fun. Essentially an adult vacation in a wonderful city, with books and fascinating, vetted people. Like my birth and education, almost entirely undeserved.
I wasn’t worried about getting a job immediately after school, so I made up my own major, taking Psychology, Computer Science, Philosophy, Linguistics and cobbling together a Cognitive Science degree. I even took Educational Psychology where I learned about blogging. These would all have been dumb things to do if I was worried about employability, but I wasn’t.
After school, I moved back to Sri Lanka because I thought there’d be more growth there. Also, for whatever reason, I was depressed. I spent a year being depressed and mostly lying around my parent's house until my mom dragged me to therapy. I got some medication and CBT, which really helped. If you’re like that, please ask for help, it helps. I had the luxury of being depressed in a safe and helpful environment. I could take a break. I could pay for healthcare. That’s also privilege.
During this time I would occasionally stay up all night coding shitty HTML/CSS and execrable PHP. I learned WordPress in and out and designed my own blog, and started writing and publishing frequently. Through a family connection, I got an introduction to a newspaper publisher and was able to start an IT magazine. I think I was like 23, and my inner white man hubris was strong. Privilege does that to you. You generally get what you want, so you feel confident asking for what you want as well.
I had the chutzpah and contacts to get a meeting with the CEO of the country’s leading telco to try and sell him an ad. Later he recruited me to do publishing and content for them. That company had to downsize and so they offered anyone a year's salary to quit. So I took it. It was more money than I’d seen in my life, because I’d never seen the invisible money that was my life.
For a while, I did mostly what I enjoyed. I traveled around India, I wrote, I took photographs, I started a blog aggregator. I worked at The Sunday Leader, a newspaper, which didn’t pay, but I modernized their website, which did make a bit of money. When I needed actual money again I got a job at an international strategy consultancy. I thought because I was smart, but I see now that my foreign exposure and education made this easy for me.
The main reason I started something was that I just wasn’t very good at holding down a normal job. I would inevitably get huffy about some point of principle and leave. I took ownership to an extreme, so it made sense to own what I was working on.
So I decided to leave my well-paying job and just take a shot at something. I didn’t even know what, but my parents loaned me some money to try. So I started a classified site that never launched, looked at monetizing blogging, and finally built a crappy but working cab app. In short, I missed every opportunity that would ever make money in Sri Lanka.
I then pitched this cab app and won one round of a startup accelerator. So yeah, I thought I’d get some proper VC money and be on my way. This is how the system is supposed to work. But it doesn’t.
In the last round, those investors passed. So no capital. There aren’t many sources of startup capital in the world, and getting them takes a huge amount of time (years) that you’re not building anything. But I could afford to fail. My parents and in-laws invested and we started anyways.
And So On
And from there it goes on.
We never did launch the cab app, it pivoted to a restaurant review company which also failed at food delivery until we got bought by a successful cab company and helped launch food delivery for them. It was hard and I did contribute a lot of value, but I would have never gotten in the door without all that privilege.
Without my international exposure, my education, knowing English, and — above all — having security, time and the ability to fail. Then, of course, there’s just the money. It takes money to make money. Most businesses start with the owner's savings or money from friends and family. Obviously. Nobody starts from zero, and nobody gives you money for nothing — besides your family.
That opportunity is a privilege. It’s a privilege that I had and it’s what made me an entrepreneur.
Whenever I tell this to young people they seem disappointed. It is of course deeply unhelpful advice. What are they going to do? Go back in time, teleport their parents to Canada and leave them the names of some winning horses? People want a more actionable answer, like wake up earlier, or change your mindset, or read this book. But that’s all ice cubes on an iceberg.
The fact is that the best entrepreneurship policy is socialism. Taxation and redistribution. Estate taxes. Investments in health and education. Public libraries. And then direct access to capital, that first $20,000 you need to even get in the game.
What we pitch for entrepreneurship is the idea of self-help, but this is a lie. Little tweaks to your personality are not going to overcome structural inequality. The solution is social change. The solution is to help each other. It is to turn privileges into rights, to give chances to children even if their parents aren’t rich or educated. That’s how we unleash the true and diverse potential of humanity, and create true entrepreneurship and innovation.
This is still such a crazy idea that people just laugh. They’re laughing because it’s true.