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Why You Haven't Started a Business

2017-07-28 · explainer · Hank · 3:43 · watch on YouTube

Topic: Economics · mode: Explainer

Starting from a Twitter survey showing strong entrepreneurial interest, Hank argues that the falling rate at which young Americans start businesses is not just personal choice: student debt and health-care costs push safer decisions, capital flows to venture-backed tech and the stock market, middle-class wealth has fallen, and many already run side-hustle sole proprietorships. He wants more people to know the joy of starting something and asks for comments.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — Hank's Twitter survey on starting a business; the rate of new small businesses is dropping

  • ★★ Hank's Twitter survey of his followers found 15% of those over 18 had already started a business, 55% had considered it, and only 11% were not at all interested. — 00:00:00 · Twitter
  • ★★ Hank thinks there is a strong entrepreneurial attitude among young people right now. (hedged) — 00:00:14
  • ★★★ Hank says the rate at which Americans, and young people in particular, start small businesses is dropping fast. — 00:00:18 · United States

00:00:22 — Why young people aren't starting businesses: fear, student debt, health-care costs, capital, the stock market, side hustles

  • ★★ Hank says it is easy to blame young people themselves (disinterest, craving stability, fear of failure), and social anxiety, uncertainty and fear of failure did rank high in his survey. — 00:00:23
  • ★★ Speaking as a business owner, Hank says starting a business is not for the faint of heart (risks, hiring and firing) and a lot of the time owning one sucks. — 00:00:36
  • ★★★ Hank says it is not just choices: schools competing for students sent education costs and student debt soaring, and debt pushes people toward safer decisions and maybe more fear of failure. (hedged) — 00:00:51
  • ★★ Hank says skyrocketing US health-care costs have likewise made people make safer decisions. — 00:01:09 · United States
  • ★★ Asked for their number one reason for not starting a business, about half said personal choice and about half something structural, the biggest being access to capital. — 00:01:14
  • ★★★ Hank says more money now comes from venture capitalists, super rich people wanting tenfold returns, so they invest mostly in tech and ignore businesses with a safer path to a smaller market. (hedged) — 00:01:26
  • ★★ Hank says banks are focusing less and less on what they are supposed to do: help people create new value in the world. (hedged) — 00:01:39
  • ★★ Hank says community banks are just 13% of the banking sector but still make 43% of small business loans. — 00:01:49
  • ★★ Hank says that as starting a business gets more complicated, people with money may find it simpler and better to invest in the stock market, in big entrenched companies, than in their own small businesses. (hedged) — 00:01:55
  • ★★★ Hank says this is especially true for the very rich, and more and more money is in their hands; for them a small business is an inconsequential investment for a lot of work. — 00:02:09 · economic inequality
  • ★★ Hank says money pumped into the stock market pushes gigantic businesses to grow or die, so behemoths take over old and new markets, as Amazon and Netflix have. — 00:02:22 · Amazon
  • ★★ Hank says wealth in the middle class has actually decreased, so people willing to work hard on a new thing may lack the money. — 00:02:36
  • ★★★ Hank thinks young people are starting businesses: 'generation 1099' of side-hustling contractors with podcasts, Etsy stores, Postmates and day jobs, each side hustle a sole proprietorship, so counted that way more than ever. (hedged) — 00:02:45
  • ★★ Hank says that with global supply chains and red tape of employment regulations and business taxes, the path to hiring a second person may not exist, or may be uninteresting. (hedged) — 00:03:01

00:03:15 — The joy of starting your own thing; asks for thoughts in the comments; sign-off

  • ★★★ Saying it is not a simple story and others research it better, Hank wants more people to know the joy of starting their own thing, giving someone a job and building a team that creates value. — 00:03:15
  • ★★ Hank asks viewers to comment their thoughts or advice, or what they would do with the capital they need; he will read the comments all weekend. — 00:03:31

In the description and comments

  • ★★ The description says Hank does not think viewers should start a business, only that they should be able to; there are good reasons not to, and he supports people who work for others, especially for him. (hedged) — video description
  • ★★ The description says small business is extremely important: it helps even out inequality, ties communities together and employs over half of working Americans. — video description · economic inequality
  • ★★ Hank says small businesses hire faster than large ones and employ more people per dollar they make. — video description
  • ★★ Hank says being big brings many structural efficiencies and ways for big companies to build their 'moats', and the way capitalism works can make going from 400 to 800 employees easier than from 1 to 2. — video description
  • ★★ Hank recommends the Global Entrepreneurship Monitor as a great primary source and lists the articles he read for the video: on the slowdown in IPOs (Financial Times), the myth of the millennial entrepreneur (The Atlantic), millennials' side hustles (Quartz), vanishing American startups and the psychological price of entrepreneurship (Inc.), and Gallup on whether American entrepreneurship is dead or alive. — video description · United States

Threads in this video

Mentioned

Central: entrepreneurship · small business

Also: Organizations: Amazon · Etsy · Netflix · Postmates · Twitter

Concepts: community bank · economic inequality · fear of failure · gig economy · health care prices in the United States · higher education · middle class · sole proprietorship · stock market · venture capital

Places: United States

Only in the description or credits: Financial Times · Gallup · Global Entrepreneurship Monitor · Inc. (magazine) · Quartz · The Atlantic

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