As Sam Altman says, “The most important thing you can get to be a founder is to pick your parents well. That’s a really sad statement about the world.”
A lot of what makes a founder is set before they’re old enough to drop out of college. It starts with nutrition and security and, as much as possible, love. And then it’s just money. Were you sent to a good school? Were there books around the house, a computer you could take apart and break?
Then it gets down to brass tacks. Can you get grandfathered into an elite school, or pay for the extra-curriculars to get in? Can your parents loan you that first $30,000 to get started or, like Jeff Bezos, that first $250,000? Can you afford to fail, over and over again? It gets down to money.
If you’re looking at what makes an entrepreneur with a hard, data-driven eye what you’ll see is that three traits are correlated more than any other. Wealth, gender and race.
Perseverance, grit, and intelligence all matter, but statistically these are all marginal gains. They’re barely measurable. What is measurable is that 80% of businesses start with personal or family money. Only 18% of businesses ever access a bank loan, and those are often secured by personal or family assets.
Finally, only 0.6% of businesses are venture-funded, and this is the Mount Everest of privilege — white and remote. 98% of funds go to men, 99% to whites and Asians, and 78% to just three states — California, New York, and Massachusetts.
Thus, statistically, the best startup advice is to be a rich, white, coastal male. This is also completely useless advice, which makes you wonder. If the answer isn’t improving myself, what if it’s improving society? If I can’t self-help my way out of this, maybe I can help others?
And thus you get to the actual advice. If we change startups from a rich white man’s game (like polo) to a global game (like football) then we can unlock opportunities for billions of people, and value that will dwarf anything we’ve seen so far.
But first, we have to demolish the illusion that startups are merit-based, and look the current inequity right in the…