The US Startup Is Disappearing (qz.com)

Dan Kopf, writing for Quartz: Historically, startups have been the engine of US economy. By creating new jobs and surfacing new ideas, startups play an outsized role in making the economy grow. It's too bad they are a dying breed. While companies that were less than two years old made up about 13% of all companies in 1985, they only accounted for 8% in 2014. From around 1998 to 2010, the share of private sector workers in companies that were less than two years old plummeted from more than 9% to less than 5%. A new report from the Brookings Institution, finds that in nearly every industry, from agriculture to finance, the share of new companies is falling.

Comments

How does outsourcing account for it?

[known_coward_69]

In 1998 there was virtually no outsourcing and start-ups had people on staff that now work for companies like Wageworks and others. Maybe it's better to track the number of actuall start up companies?

Re:How does outsourcing account for it?

[tattood]

Wageworks is a company that provides benefit consulting to companies. They are not an outsourcing contractor, so neither of these examples are really correct unless you are talking about the people at the startup that manage benefits.

Historical precedence

[sinij]

There is a historical precedence where wild west era was followed by consolidated power of robber barons. Comparable is happening in modern technological world - we have Google, Facebook, Apple, Microsoft and so on filling all technological niches and monopolizing them. So until the next niche opens up, be it applied AI or something else, there is less to start up to.

Re: Historical precedence

[DalM]

You know there are other sectors of the global economy besides tech, right?

Re:Historical precedence

[alvinrod]

There's always a history of new comers becoming incumbent giants and eventually being supplanted in turn. Look at Sears which once revolutionized the way that people shopped and is now a tiny bit player this is closing down its stores. Perhaps there's some cycle in the rate of new startups within that greater cycle of corporate birth and death, but I'm willing to bet that the bigger culprit is an increasing amount of hoops that a new startup must jump through. Government is always eager to put new hoops in place, while seldom bothering to remove old ones that may not be relevant. The existing companies love this as even though it costs them additional money in order to comply with those rules, it's much harder on the little guys. Look at the recent GDPR laws in Europe as an example and ask yourself how much of a pain that would be to deal with if you're a small one or two person company. Or consider companies like Uber, Lyft, etc. that are successful precisely because they're doing their best to skirt the draconian regulations surrounding Taxi services in most cities.

Re: Historical precedence

[Anonymous Coward]

Same thing is/has been happening to sectors outside of tech too. Some of them may even pre-date tech, with memes like Walmart replacing many mom & pop stores, and old media (tv, newspaper) being owned by a handful of companies, with Rupert Murdoch being portrayed as some Bond villain

Re:Historical precedence

[angel'o'sphere]

Look at the recent GDPR laws in Europe as an example and ask yourself how much of a pain that would be to deal with if you're a small one or two person company.
Close to zero. While the GDPR is a big chunk of paper, it is for 99% of all companies irrelevant.
You simply only store as much information you need to perform the business with your customer, like billing address, and never share any information with anyone else. And that is the default for small companies. With whom for what purpose would I share any private data of any of my customers?

Re: Historical precedence

[erice]

You know there are other sectors of the global economy besides tech, right?

Yes, but where else is there a regular pattern of disruption that allows startups to thrive? Restaurants and fashion are the only ones that come to mind. Fashion is fairly weak as the money is mostly in the barely disrupted manufacturing and retail sides. Restaurants aren't very profitable and few of these "startups" get past the small business stage.

Re:Historical precedence

[Anonymous Coward]

lolwut? pretty much every startup is in the adtech space, because the alternative is collecting money from customers. Any information about a user (even a randomly generated cookie) is subject to GDPR.

Re:Historical precedence

[Darinbob]

We never called these things "startups" in the past. The mentality of the startup is a modern thing. We used to innovate, but today we copy. I won't miss it if todays startups start to vanish, we can get back to having real companies whose valuation isn't listed in the fantasy section.

And how long is a startup a startup? For one day? Two years? I know private companies that go along fine being profitable for a decade, but somoene calls them a "startup" just because they're not publically traded.

Re:Historical precedence

[Anonymous Coward]

lolwut? pretty much every startup is in the adtech space, because the alternative is collecting money from customers. Any information about a user (even a randomly generated cookie) is subject to GDPR.

Not outside the US. Even before the GDPR this was categorically illegal in Europe and most of the civilized world.

Re:Historical precedence

[_Sharp'r_]

Lot of consequences you may not be considering. For example, every Indie/small press writer is a small business. They all tend to have email lists for their readers to subscribe to. For the last few months there has been a huge uproar amongst them while everyone scrambles to figure out what GDPR compliance means they do or don't have to do, just because they send emails to people who want to hear about them and/or their new releases as they come out.

In any case, the real reason for the decrease in new businesses is likely technology combined with the gig economy. People who would have started a traditional small business are instead becoming contractors. Small businesses still, but structured as a 1099-style relationship rather than a corp/LLC one. Traditionally most new small businesses are still single-person startups, after all.

Re: Historical precedence

[vlad30]

Do you know what is takes to start up a business of any type these days

Construction of any type - Insurance Public liability , Workers comp, licences before you even start

Restaurant - Insurance Public liability , Workers comp, licences, Rent, fit-out

The same goes for many businesses the costs to start now are much higher not just in tech and add to that ongoing costs e.g. energy cost that are increasing I see a lot of younger people give up once they realise that business they want to start-up would require 50k just to contemplate its not just big companies that make it difficult government and legislative requirements crush lots of starry eyed would be business owners

Unless you are lucky enough to get an angel investor most people rarely get a start-up going

Re:Historical precedence

[Goldsmith]

The tilt that GDPR applies against startups has to do with sharing your company information with potential customers, not sharing customer information.

If you're an existing company with an existing customer base, you have more people intersecting with your "legitimate business interest," allowing you to ignore most of the effects of GDPR when it comes to lead generation (non-customer communications). Essentially, larger companies ignore much of GDPR for outbound communications.

When you're a new company, without an established business track record, it's much harder to prove the "legitimate business interest" that's required to actually go out and tell new people what your product is (or will be). Your outbound communications are much more limited.

Re: Historical precedence

[another_twilight]

One difficulty faced by restaurants is needing to offer service like Uber eats to compete, but finding that it's disrupting their pricing as those customers aren't having their food subsidy offset by drinks, say.

We've had articles, here, about restaurants withdrawing from these services, and others that are starting up out of the normal foot traffic areas with an aim to target delivered food as a portion of their business.

Technology is pervasive and disrupting most businesses.

Re:Historical precedence

[Okind]

If you're an existing company with an existing customer base, you have more people intersecting with your "legitimate business interest," allowing you to ignore most of the effects of GDPR when it comes to lead generation (non-customer communications).

This is not correct: generating leads, i.e. future profits, is not a 'legitimate interest' with respect to GDPR compliance. You'll need consent for that.

Customer data is needed to fulfill (existing) contracts. But having data for one purpose does not allow you to use the same data for another purpose: you'll need a separate justification for using customer data for that new purpose. In that sense, the GDPR levels the playing field by giving large established companies the same options as startups to gain new customers. Large companies only have the advantage of their brand being known.

Re: Historical precedence

[mixed_signal]

See: Regulatory Capture
Big companies and industries shape the playing field, not just for better regulations for themselves, but to create barriers to competition.
https://en.wikipedia.org/wiki/...

Over regulation

[Anonymous Coward]

Over regulation, cost of entry, corporate cronies in government, high taxation, have all conspired to hurt small businesses.

It's a Democrat/Republican problem though. You cannot pick just one. They are all to blame. If you want a healthy functioning economy with light regulation and sensible government spending & taxation, then you cannot vote for anyone in those two parties.

Re:Over regulation

[Anonymous Coward]

Add the cost of health insurance to the list. Thanks Obama!

Re:Over regulation

[cayenne8]

Over regulation, cost of entry, corporate cronies in government, high taxation, have all conspired to hurt small businesses.

It's a Democrat/Republican problem though. You cannot pick just one. They are all to blame. If you want a healthy functioning economy with light regulation and sensible government spending & taxation, then you cannot vote for anyone in those two parties.

Yep...and it is getting so bad, that ONLY the big guys can afford full time staff dedicated to the tax and paperwork....keeps the upstarts out.

Re:Over regulation

[Sperbels]

You think third parties are inherently less corrupt? They're just as likely to be bought off or bullied as any other politician.

Re:Over regulation

[Anonymous Coward]

Just as the big guys intended all along, since they are the ones writing the legislation nowadays, in many cases literally

The dream of America is dead and the patient cannot be brought back to life

Re:Over regulation

[alvinrod]

It's not really a problem for most companies dealing with low-skill labor that previously did not receive health care. There was a provision put into place that you only needed to pay for employee's healthcare if they worked some set number of hours (in this case 30) per week. Predictably employers cut hours for many positions and there a now a large number of jobs that offer no more than 29 hours of work per week.

Re:Over regulation

[jellomizer]

I have always though of starting my own consulting business. The biggest problem isn't what you have listed, it is finding a Customer base to get my company off the ground.

Customers want to deal with established companies, knowing they will not be out of business in a year. Offering a product/service they can value over a long time. Also a lot of small companies with limited marketing ability, usually fall under used car salesmen like advertisements which makes them seem like shady individuals to work with.

The small thing politically that caused this was when George W Bush changed bankruptcy laws, to be more strict on the person/company going bankrupt, raising the cost of failure. But most of what the problem is during the Great Recession time, companies to survive merged and and consolidated to become bigger companies. So increasing the barrier to compete a small startup will now need to go against a mega company. Without having a lot of middle sized companies to work your way up from. Competition is good when you are going against someone bigger then you are, however if there is too much of a gap you are left in the dust without being able to figure out what things to learn from.

Re:Over regulation

[terrycarlino]

Would that be the Republicans, not one of which voted for it or had any say in the contents of the bill?

You can't have it both ways. If the ACA sucks it's because the Democrats passed it. If it's great its because Democrats passed it.

Anyone with a brain knew that if you make a business take on a large cost for employees who work more than 30 hrs a week all of a sudden there's going to be a lot more employees working 29 hours a week. So now instead of working 32-40 hours a week and not having benefits you get to work 29 hours a week and don't have benefits. So less money and still no benefits.

Re:Over regulation

[Anonymous Coward]

If all competitors are too big - time to adjust antitrust laws. Don't let corporations grow so big before forcibly breaking them up. You could start by changing anything "too big to fail" into "too big to exist as a single unit".

Re:Over regulation

[Anonymous Coward]

Don't forget the IP minefields.

If you wind up hitting a submarine patent, the incumbents can simply come in and take over without a fight, or you wind up in a huge legal battle where they drag out discovery and bleed you dry.

If you actually do invent something new, chances are the incumbents will offer a low price and require full transfer of all rights to them to complete the deal. If you refuse, see above about the legal battle you'll be faced with. Also, if you do agree to the deal, whatever you've invented is no longer yours and chances are you can't work on it in the future. (At least in anyway that the new owners don't want.)

If it's a creative work, you better hope you've created a new cord, otherwise you'll have the MAFFIA's finest after you. If it's an interactive piece, you had better hope that King didn't trademark part of the name already, and that your game isn't in a genre that has an asshole publisher / dev team who thinks they've invented it.

Most people don't bother anymore simply because they don't want to pour their soul into something only to have it taken from them by greedy incumbents. Or wind up in legal debit well past their eyeballs over it.

Re:Over regulation

[AHuxley]

Find a state that has low cost power, fast internet and nice, safe, clean housing.
Take a person who has an idea in the USA and welcome them to your state.
Show them the nice housing. The fast internet. The educated locals.
What their investment in your state gets. A house, a workplace. Services that support a productive community, roads for transport. Not tent cities and people living in parked RV.
That they can grow their new idea in your state.

The startup problem is a problem for a few states that need more tax money to cover their spending.
Take the good ideas and move to a better state. A city gov that welcomes investment rather than welcomes new taxes.

Maybe

[ogar572]

All of the stupid ideas have been vetted out and new startups are trying stuff that has some potential to succeed which cause fewer companies to start?

Risk vs reward

[DalM]

Start up risk is huge. That's the problem. It's massive. Sure there are some people that are successful and the risk pays dividends, but success is actually pretty rare. Most rational people look at the risk of starting your own company and shrug it off because simply being an employee is typically not that bad of a deal. In fact, it's really a pretty good deal. Your risk is greatly limited. Most people are perfectly ok with that.

Re:Risk vs reward

[alvinrod]

That's generally established and I think everyone knows that. The question being put forward is why the rate of people who are taking these risks is decreasing. Have people suddenly become much more risk averse? Is there some kind of economic interference that's resulting in this reduction? Is it just a small dip that happens from time to time for no real discernible reason? Are the number of startups still about the same, but what we're really seeing is a much more rapid failure in startups?

That few people start their own business is not surprising. What's interesting is that fewer people than usual are doing it.

Re:Risk vs reward

[DalM]

Honestly I think it's mostly that being a middle-class employee is generally becoming a better trade for the employee. If you have a salaried position (guaranteed reliable and regular pay), have general health benefits, and an IRA or 401K, why would you throw that away just to work harder and be responsible for entire company?

Being a lower-class employee is getting worse, but those people are less likely to have the ability to raise the funds necessary to start their own companies.

Re:Risk vs reward

[terrycarlino]

I think a good part of it is regulation. Not just federal regulation either, though a lot of EPA and OSHA and other regulations don't help either.

Before anybody screams about libertarianism or small-goverment or even socialism lets take a dispassionate look at things.

In 1960 if you wanted to start a business washing cars you rented a place, hired some people and dumped your dirty water either in the street or the sewers. In other words you externalized your disposal cost.

The same thing if you had a company that constructed batteries. You dumped your used chemicals somewhere at no cost. You externalized your disposal costs.

Now the EPA came along and suddenly you have to pay fro proper disposal. Your company is less profitable. The small guys, the ones most likely to running on the edges with little profit now become unprofitable.

So prohibiting companies from externalizing their disposal cost is good for society, however it does reduce the number of new business that are started because it raises the bar necessary to enter the market. This might be a societal bad, but on balance is better than allow cost externalization that we all pay, in both cost and reduced quality of life.

Do this for a number of decades and of course you're going to see a decline in the number of new business.

Re:Risk vs reward

[DalM]

But this has limited predictability. For example, how many new advertising consulting businesses are there each year. Of course there are lots, but I bet you would find that the rate of ad agency start-up has similarly decreased significantly over the decades. Can't really blame OSHA or the EPA for that.

Re:Risk vs reward

[DalM]

All of that is true if you look at the country as a whole. But if you break the country out into classes a different story unfolds. Upper and upper-middle incomes have greatly improved. Healthcare is pretty in America great for those with upper-middle class jobs. Housing selection across the country is great for those with upper-middle incomes.

The story is very different for those on the lower end of the spectrum, but those people aren't the ones in positions to start-up new companies, which is the point of the original post.

Re:Risk vs reward

[layabout]

you have hit the nail on the head. I'm a volunteer in a local entrepreneur group and we have been trying to figure out why our membership is declining. My long-term suspicion has been that it tracks the availability of a social safety net. I did a quick Google while writing this and found this very interesting article from back in 2015 about how welfare availability makes people more willing to take a risk on starting a business.

so if we want more startups, more entrepreneurial activity, make sure everybody gets healthcare from the public sector, not from your employer. Make sure food stamps are relatively easy to get. And, try to do something about rent because it's too damn high!

Re:Risk vs reward

[Srin Tuar]

> Now the EPA came along and suddenly you have to pay fro proper disposal. Your company is less profitable. The small guys, the ones most likely to running on the edges with little profit now become unprofitable.

Slight adjustment there: The EPA has no problem shielding companies like BP from hundreds of billions in pollution lawsuits, such as wrecking the entire gulf of mexico.

The EPA working as designed to protect he big polluters from competition.

If you actually cared about pollution, it would not be solved via regulation but by liability.

Regulations increase pollution and reduce competition.

Re: Risk vs reward

[TuringTest]

Liability is a form of regulation.

Re: Risk vs reward

[DalM]

That and all of the above listed risks are correct.

But that was my point. The risks are too high to justify the work.

The startups I see

[rsilvergun]

seem less like an attempt to build a real business and more like an attempt to build something with enough patents and/or engineers for a buyout. I can't say I blame them. Thanks to our weakly enforced anti-trust law if you don't get bought out the big guys can just bury you.

Re:The startups I see

[dyfet]

indeed, vc's seem only interested in those offering new ways to cheat people (business model innovations), not in new or better ways to actually do real things.

Dodd-Frank

[bill_mcgonigle]

All those new IPO expenses really saved the economy!

High risk, high consequence of failure, low reward

[Anonymous Coward]

Large corporations (universally) set up economic and legal barriers-to-entry to protect their own interests. These barriers stifle startups before they can even start up. Inasmuch as this strategy is successful, we would expect to see fewer startups in an economy dominated by a handful of giants.

As it stands now, one must be kind of crazy, and kind of stupid, to attempt a start up. Getting your foot in the economic door requires you to work yourself to death while taking on considerable risk, including risking your personal finances and those of supportive friends and family. And the odds against success are overwhelming. And when you fail, you fail hard, all that money lost and you broke, in debt, and with nothing to show for it (and brain-damaged from all the stress and humiliation of failure).

It is simply not rational to attempt a startup in this environment. As an aside, this explains why the proprietors of so many small-to-medium sized businesses tend to be kind of crazy and a bit stupid....only such people even consider jumping into this game these days.

Seems self-contradicting

[mi]

I am having a hard time reconciling the following two parts of the write-up: "Historically, startups have been the engine of US economy" vs. "While companies that were less than two years old made up about 13% of all companies in 1985, they only accounted for 8% in 2014". Even at their highest number of 13% during the, supposedly, "good old days", how can they be considered "the engine"?..

Re:Seems self-contradicting

[Peter P Peters]

I am having a hard time reconciling the following two parts of the write-up: "Historically, startups have been the engine of US economy" vs. "While companies that were less than two years old made up about 13% of all companies in 1985, they only accounted for 8% in 2014". Even at their highest number of 13% during the, supposedly, "good old days", how can they be considered "the engine"?..

Engine is probably the wrong word, maybe fertiliser or seed is better. With less fertiliser or seed you eventually produce less food. This will have consequences sooner or later.

Re:Seems self-contradicting

[mi]

Is "fertilizer" really a better word for something — anything — you'd wish to praise?

Re:Seems self-contradicting

[Peter P Peters]

Is "fertilizer" really a better word for something — anything — you'd wish to praise?

Is Fertiliser not a good thing where you live? Strange comment....

total # of companies? flawed study

[ole_timer]

The study does not say how many total companies there were/are, and has that grown so that the # of startups is actually the same. or larger?

Risk/Reward

[lamer01]

The large tech giants pay so much that it skews the Risk/Reward of any startup-minded person. Usually start ups were created by people that did not see a payroll job as good enough and took the risk of starting their own. Now, even people on the bottom tier of a tech giant make a very good living. Very hard to give that up.

Predictable result....

[JoeDuncan]

...of gutting education and immigration.

Being a dying breed ...

[Qbertino]

... is the whole point about "StartUps".
Fail fast is the motto and the most fail.
Something like 98%.
So this is news how?

Top-of-bubble consolidation maybe?

[ErichTheRed]

"While companies that were less than two years old made up about 13% of all companies in 1985, they only accounted for 8% in 2014. From around 1998 to 2010, the share of private sector workers in companies that were less than two years old plummeted from more than 9% to less than 5%. "

This makes sense given the timeline. In the mid-80s everyone was experimenting and you had tons of small companies chipping away at the monolithic UNIX/mainframe computing culture...as well as a few manufacturers actually making physical goods. From 1998 to 2010, you had the top of Dotcom Bubble 1.0, followed by the financial crisis in 2010, so you go from 8% at the height to 5% at the start of the recovery cycle. Then in 2014, you have the inflation of the Second Dotcom Bubble which (IMO) we're nearing the top of. plus smartphones and social media really go nuts from 2010 to 2014, hence the increase to 8%.

My opinion is that startups aren't sticking around very long, simply because they're easier to cobble together from outsourced parts. SaaS providers offer HR, finance, payment acceptance, logistics, and IT in a box. Cloud providers will host your workloads for a monthly fee which the VCs probably like a lot, because they slowly burn money rather than give millions at a time to build data centers and such. So, some guy building Yet Another Provisioning Tool or Yet Another Abstraction Layer on JavaScript can follow the First Dotcom Bubble playbook on an accelerated timeline...either they get big enough to IPO, or get bought by Microsoft/Facebook/Google/Netflix.

The other thing that might be driving this is just the sheer risk involved. Despite what the media portrays about SV startups, they are not stable places to work. It's great when you're fresh out of college and can continue the lifestyle...getting paid in free food and doing 100 hour weeks in the office with your buddies. But when you grow up, steady paychecks have a huge appeal, especially when you have a family.

Chances to be sued

[Parker Lewis]

The way the patent system is in US, any company trying to invent/improve anything without the giants (Facebook, Google, Microsoft) blessing, probably will be sued by them about about any stupid licensed stuff.

Re: so fine it's ok pay some one $2/hr to drive

[ArmoredDragon]

Bleh, edited that poorly, meant I don't understand why some say they rely on Uber, and yet...

Re:So what?

[Anonymous Coward]

Is it? Last time I checked unemployment was down, but wages are still stagnant.

The "economy" is booming if you have millions of dollars, if you are middle class or under, "the economy" being in a "boom" or a "bust" doesn't really matter since you are still treading water with far less buying power than your parent's generation.

https://hbr.org/2017/10/why-wages-arent-growing-in-america

You'll also note a line in that article that links the two ideas you flippantly disregarded: one factor that encourages large wage growth is young companies. High numbers of start-ups and younger companies tend to drive wages up. Without this competition, larger / older companies don't pay as well.

The "economy" isn't really booming-- the people at the top have simply found new ways to siphon more money off the lower and middle classes. Welcome to the end game of capitalism, we've managed to stay here a lot longer this time without the lower classed players breaking out the guillotine. I'm not really keen on seeing the end of this round, but I feel like we aren't as far away as I thought we were.

"Pig in the Python" effect?

[Steve1952]

An additional contributing factor might demographics. Consider the baby boomer population. This is often called the "Pig in the Python". During the 1990's, there were a large number of educated baby boomers in their 30's, in an environment where there were fewer open slots of any type above them. So there may have been a greater incentive to "create your own slot" by doing a startup.

Re:Corporate Mergers

[iMadeGhostzilla]

I actually didn't hate Hillary so much as I hated the environment that propped her up and the tens of thousands of leeches who expected to profit from her reign or to keep being smug and tell others what to think. I loathed the idea of her being President but at some level I respected her as a person, she was fighting for what she thought was right (her becoming the center of the Universe), and she fought a good fight.

That she lost is, in my view, not just lucky for us, but for her too -- I believe the power she so craved would have made her mad before the end of the first term.

Re:You hate Clinton?

[terrycarlino]

Clinton was the better choice.

Actually she wasn't. She was and is a horribly flawed candidate, who only got the nomination because the DNC subverted their own primary process. You want to know the real reason she lost? She T'ed off enough Bernie Sanders voters by stealing the primary from him that they stayed home.

With Trump, we don't have a leader. He's making a fool out of us on the World stage.

He's doing that how? Let me tell you something about the world stage. Nobody is your friend. Each and every world leader is more interested in their own people than in anyone else's people. As they should be. I didn't elect Angela Merkel and I don't expect her to take into account whether her policies are good for me or not. Likewise it's not Trump's job to make Germans or Brits or Canadians happy. Likewise Putin doesn't have my best interest at heart, and I don't expect him too. That doesn't make him evil (or not evil for that matter.) That just makes him not someone I would expect to do good things for me.

Illegal immigration was never that big a deal. It was blown out of proportion by right-wing media because their audience of old white male conservatives like it that way.

There are only seven states in the United States that have populations higher than the total number of illegal immigrants in the US. To me that sounds like a pretty big problem.

I suspect the parents of children killed by illegal immigrants might think it's a pretty big problem too. If you think they're mostly old white people let me fix that for you. Most of them are Hispanic. And they're being killed by gang members who are making their neighborhoods unsafe places to be. Maybe your nice upper middle class neighborhood doesn't have this problem.

And the Evangelical Christians losers who continually support him have shown themselves to be stupid, hypocritical, disgusting human beings.

So we've established that you're into identity politics. Would you care to make a comment about Jews or African Americans now?

Others voted for him for change and he's doing everything but.

I suggest you take a look at what he's done. Basically he's actually keeping his campaign promised, which is terrifying both mainstream Democrats and Republicans. A politician actually keeping his campaign promises is certainly a change.

And then the Republicans who are a bunch of pussies won't stand up to him because the Republican base is a bunch of ignorant Bible thumping morons who still think the orange orangutan in the Whitehouse is going to save them - they are just too ignorant to understand that Trump is a member of the very small group of people who are shafting them but they want to continue to believe the nonsense that it's immigrants and leftists and progressives who are keeping them down.

It's nice to see you are so tolerant of people who disagree with you. The "keeping me down" mantra is the mantra of the left, not the right. No one thinks illegals are keeping them down. No one thinks illegals are taking their jobs. No one thinks progressives are keeping them down.

What people who disagree with you see is vast numbers of people advocating ignoring laws they either cannot or will not change, creating what is likely to become a lawless society. I don't need Trump or any one else to save me, except from the policies that people like you would impose on me at the point of a government goon's gun, after you take mine away.

The Republicans have shown that they cannot govern or lead. They just have vapid talking points for the ignorant masses to gobble down.

Looks to me like you're the one ignorantly parroting talking points. I don't agree with everything Trump has done, but at least I fully believe he's the one calling the shots in the White House, not some unelected political adviser, like the last empty suit-in-chief or the husband-in-chief that we ducked in the last election, could you sure don't think Hillary was going to be running things do you? She couldn't even keep track of Bill.

Re:Venture capital vs. small business loan

[terrycarlino]

It got regulated out of existence. You need the VC money just to be able to hire the lawyers and tax accountants so you can start a business without other lawyers and the IRS putting out of business before you even come to market.

Lim n-infty

[lucasnate1]

Given enough time, unrestrained capitalism ends with oligopoly

Because of the lack of TAXES

[stooo]

The problem is in fact that the big companies do not pay any taxes.
That makes them much more competitive than small ones, and the small ones disappear.
Tax the big ones, as it once was, it will be much more balanced.

Re:Because of the lack of TAXES

[mixed_signal]

Companies used to be taxed much more, esp. in the "good old days" of the 1950's and 1960's.

Interesting statistic

[jon3k]

So we went from 13% of the population in 1985, when there were 237.9MM people in the US to 8% of the population in 2014 when there are approximately 318.6MM people. So from 31MM people in 1985 to 25.5MM in 2014.

But with that said, we were coming out of a recession. There's probably a considerable lag time. Anecdotally, the economy would need to be pretty healthy for quite a while before I'd risk working for a startup. So I'd be interested to see statistics in the 2020-2025 time frame. I'm not panicing yet.

Re:Regulatory Capture

[ErichTheRed]

"Regulatory burdens of all kinds are absolutely killing small businesses, which makes the buyouts from large players all that more lucrative."

I deal with lots of "entrepreneurs" who constantly repeat this refrain over and over. What regulation is killing a business? Paperwork is handled by accounting software. Collecting sales tax is done via your POS software or online merchant processor, and you can even pay them online as well. Minimum wage is just something business owners have to live with...if you can't make ends meet paying someone minimum wage then you shouldn't be in business or just do the work yourself.

There's no burden. Business owners already get a huge free pass that salaried employees don't...the ability to make up their own income numbers and overstate expenses. Literally every small business owner I've ever seen is passing all of his/her personal expenses through their business entity. The company owns their houses, cars, etc. and they pay themselves a tiny salary.

Insurance Cost

[laughingskeptic]

I was just looking into starting a company because I have an opportunity to pursue a $1M/year contract. I found myself inundated with ridiculously bad insurance "offers". Initial quotes for insurance came to $35k/employee for three people ... more than 10% of my projected annual revenue for the first year. I know there are other options, like co-employment companies but have not finished working through these details yet. CPA and legal fees are a drop in the bucket compared to insurance for a small business that has actual employees. There is a forcing function here that is not accounted for in the statistics presented in the article and I believe that the growing number of people working for startups as "independent contractors" offsets some of the perceived differences.

Re:How does companies succeeding account for it?

[ranton]

I wonder if it is just caused by less companies failing. If you look at the number of companies being started each year (source), it has been failure steady over the past 20 years. Maybe the share of companies which are younger than 2 years is a symptom of less companies failing. If company failure rates were higher in the decades preceding 1985, then of course young companies would be larger percentage of all companies.

Could this just be a case of playing with statistics to create a good headline for a story?

Re:So what?

[Seven Spirals]

Maybe we should break out the guillotines. Why? It sure as hell seemed to work for the French. Wages for laborers, artisans, and tradespeople went up dramatically after they scared the living shit out of the rich folks. Start with the billionaires and see if the millionaires feel like un-assing a bit more wages. I bet it wouldn't take many heads in a basket to convince them wages need to rise and the H1B assholes need to go home.

the world according to 1998

[epine]

Excellent choice of end-point. Fucking morons.

Nortel market cap rivals IBM — 29 June 2000

With about 2.9 billion common shares outstanding, Brampton, Ont.-based Nortel is now being valued at $200.6-billion. That fell just short of IBM's total valuation of $201.7-billion at the end of the day yesterday.

Re:So what?

[ceoyoyo]

Have you noticed how many of the most vocal proponents of minimum basic income are tech billionaires?

They're the ones who know where tech is going, are smart enough to realize the societal implications, and are aware that it's good to be rich, but not good to be TOO rich when a bunch of poor people are getting desperate.

Re:So what?

[Seven Spirals]

Agreed. Too bad the old-school industrialists don't seem to have the same fear. The tech billionaires have their foibles, too. They lobby to let in tens of thousands H1Bs then give their arrange-married-spouses a backdoor work permit, too (and lefty-trolls don't tell me this doesn't happen. I'm a hiring manager - fucking WATCH it happen personally), and won't stop until job growth in tech is less than or equal to the H1B immigration level. I feel sorry for American kids who hear "Go into STEM" only to find out that their job is already taken by some asshole from India. However, they can't get out of the student loans even if they die (they'll come after your "estate" such as it may be and take it from your inheritors). Sounds a lot like pre-revolutionary French aristocracy to me:

• Debt Bondage: Check
• Fat cats bringing in foreign labor: Check.
• Wages stagnating and falling: Check
• Fat cats in control of the government and using power to fund idiotic wars: Check
• Guilds taking over trades and locking out newcomers: Check
• Bankrupt zombie finances at the government level: Check
• Fake news and rumors spreading on all political sides: Check

About the only non-parallel was the fact that bad crop yields had caused a lot of hunger in France at the time. As a student of history, I believe that's one of the most potent triggers. If people can't feed their kids they will do just about anything, including killing anyone who might be to blame.

Lovely invention, the guillotine.

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[account_deleted]

Comment removed based on user account deletion

Re:GDPR is not that much of a pain

[Okind]

If you respected its predecessor law chance is that you are fully golden.

Although many companies are loath to admin it, this is spot on!

Blame big biz...

[martinfb]

This is a no-brainer: Big Biz is, by far, the leading culprit.

Think about it. Do the easy research. Big biz either swallows-up those startups early (usually hostile takeover),
or squashes them (via product/patent theft, direct interference/manipulation, etc...) before they can get established.

Not to mention the difficulty in getting startup capital.

This is why big biz needs tighter regulation.
History has shown that big biz gets less and less individual-friendly as it gets bigger.

Re:You hate Clinton?

[HornWumpus]

Really? Bullshit!

Trump was collecting millions/year in bribes in a charity fund? That fund's cash flow was affected by the election?

You could have believed the 'Clinton Global Fund' was legit, until after she lost the election and all the bribes dried up. Now you're just lying to yourself and acting a fool.

Re: How does companies succeeding account for it?

[lsatenstein]

What if the reason for fewer startups is the fact that large oligopolies will buy up his ideas and compete with him or her. Have a good idea about some feature in your field of expertise a very rich competitor will likely buy you up or copy your idea and keep you from growing or even remaining in business.