When people talk about how government can promote startups, there seems to be a fairly standard consensus: we need more economic inequality. Lower income and capital gains taxes provide more incentive to work, looser labor laws make it easier to fire non-performers, and large private wealth funds provide investment capital.
But having been through a startup myself, I think there’s much more you can do in the other direction: decreasing economic inequality. People love starting companies. You get to be your own boss, work on something you love, do something new and exciting, and get lots of attention. As Daniel Brook points out in The Trap, 28% of Americans have considered starting their own business. And yet only 7% actually do.
What holds them back? The lack of a social safety net.
Thanks to Daniel Brook’s book The Trap: Selling Out to Stay Afloat in Winner-Take-All America for suggesting this line of argument and providing the statistics.