Hiring Should be Obsolete

Paul Graham has a new essay, Hiring is Obsolete. As usual it is quite insightful, though perhaps just a little self serving in light of his latest venture.

I feel just a bit disappointed when I read about other people’s experiences related to founding startups. Now that I have a family the risk founding a startup is too high. I wonder how much wealth would be generated if I did not have to risk my family’s health and well-being to be involved in a startup. Until then founding startups will remain — primarily, at least — domain of the young (or rich).

Regardless of what your emotional reaction is to universal health care and a social safety net, there is no denying that they would reduce the risk of founding a startup. I think that risk reduction would be a massive boost to the economy. It would allow anyone with a good idea to pursue it without having to worry about what would happen if your child gets sick, etc. Unfortunately, it would be at the short-term expense of entrenched interests (read: owners of congress people) so things are not likely to change anytime soon.

Comments 5

  1. Mike Brown wrote:

    This is why starters of startups get investors, so the risk isn’t all on them. I think the current system is good. It doesn’t make society subsidize mediocore ventures.

    Posted 03 Jun 2005 at 2:03 pm
  2. Peter Williams wrote:

    I disagree. The reason startups get investors is because they cannot fund the development of the idea. You might argue that health care is part of the development costs but I think you would find very few angle/seed investors that would agree.

    I am not suggesting that startups get propped-up by goverment subsidies. I think that a business should succeed or fail on it’s on merits. Rather, I am suggesting that entrepreneurs should have to risk their money, time and reputation, but not their families lives, went starting a business.

    You may think the current system works well but remember that people in countries that have universal health care live longer and pay less for health care.

    Posted 04 Jun 2005 at 3:23 pm
  3. Cliff Vick wrote:

    Yes, people in countries that have universal health care do live longer and pay less for health care, but, do those contries innovate at the rate of the U.S.?

    Posted 07 Jun 2005 at 9:07 am
  4. Peter Williams wrote:

    The rate of innovation in countries with and without universal health care is a interesting question. I am not aware of any evidence one way or the other. However, it seems reasonable to think that if innovation is good you should try to motivate it. The only ways I see to motivate innovation are to increase the rewards or to lower the risk. The only way I see to increase the rewards is to regulate the economy more (say by forcing people to pay more for innovation) but I think that is a bad idea. So that leaves you with just one choice, to attempt to lower the risk.

    On the other hand, having a situation where if you do not make a lot of money (hopefully by innovating) you die might provide sufficient motivation. :) But it is not really the sort of society in which I want to live.

    Posted 07 Jun 2005 at 2:33 pm
  5. Mike Brown wrote:

    > You might argue that health care is part of the
    > development costs but I think you would find
    > very few angle/seed investors that would agree.

    Well, resources (what used to be called workers, employees or personel) come at a cost. And the investors are going to have to pay the market rate for engineers. I’ve worked for startups, and we had medical benefits. I don’t see why you view your personal medical expenses any differently than you do any other expense your family has. Investors pay for your family’s expenses or you don’t agree to work for them.

    What I really think has messed up medicine in the US, besides outrageous malpractice lawsuits, is the fact that we buy medical insurance through our employers. Talk about supressing market forces! If I can’t change to a better insurance company without changing employers, I don’t call that a free market. The customer (me) isn’t the one paying the bill (my employer). The same is true with 401(k)s. Imagine if coming on board with a company meant I had to buy groceries at only one store, had to buy my auto insurance from one company, and had to buy a particular brand of automobile. It would be completely repressive. And yet, I would argue that medical coverage and retirements savings are even more important products/services to my family’s well being than those things.

    Posted 12 Mar 2006 at 1:27 am