Comments on: Job creation: Where are the startups? http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/ A slice of lime in the soda Sat, 18 May 2013 23:43:55 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: onmyway http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43430 onmyway Tue, 25 Sep 2012 10:34:09 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43430 In my experience the only businesses getting investments are internet startups - as long as they have a potential for high user volume. Technology and how they're going to make money is second hand. In my experience the only businesses getting investments are internet startups – as long as they have a potential for high user volume. Technology and how they’re going to make money is second hand.

]]> By: chazbike http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43209 chazbike Mon, 17 Sep 2012 23:09:52 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43209 There is a complete lack of funds available. Banks won't lend and investors seem to be only interested in extremely rapid ramp-ups with immediate returns. Until capital loosens up, the number of entrepreneurs will continue to decline. There is a complete lack of funds available. Banks won’t lend and investors seem to be only interested in extremely rapid ramp-ups with immediate returns. Until capital loosens up, the number of entrepreneurs will continue to decline.

]]> By: unherd http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43206 unherd Mon, 17 Sep 2012 19:19:31 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43206 Some of the surprise may be just in how the terms are framed. How many start-ups hire a lot of employees in the first year? I would ask how many jobs were created by companies formed since the recession started (2008)? My experience also has been that the construction, housing, and investment banking inudstries did badly during what is typically called the recession, but many executives didn't lose their jobs until later, and then received unemployment benefits for a year or more, meaning they lacked the incentive you're looking for until 2010 or 2011, which isn't included in the data yet. I think it is still difficult to create a true start-up company without home equity to borrow against, but the framing of the data may explain the apparent conflict between the small business job creation connection and what startups there are. Some of the surprise may be just in how the terms are framed. How many start-ups hire a lot of employees in the first year? I would ask how many jobs were created by companies formed since the recession started (2008)? My experience also has been that the construction, housing, and investment banking inudstries did badly during what is typically called the recession, but many executives didn’t lose their jobs until later, and then received unemployment benefits for a year or more, meaning they lacked the incentive you’re looking for until 2010 or 2011, which isn’t included in the data yet. I think it is still difficult to create a true start-up company without home equity to borrow against, but the framing of the data may explain the apparent conflict between the small business job creation connection and what startups there are.

]]> By: KristinZhivago http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43201 KristinZhivago Mon, 17 Sep 2012 15:08:18 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43201 I combed over the 2004 US census some time ago and saw that there were 27 million companies in the US. Further analysis convinced me that more than more than 90% of them had 0 - 9 employees. It would be interesting to know how much these companies contribute to the overall economy in terms of job opportunities. Based on my interviews of company leaders, and the work I do with CEOs, those who run small and medium-sized companies are currently very hesitant to make any major "bets" on the future. They are very concerned with increased regulatory activity. Taxes aside, companies of all sizes must comply (and build systems to comply with) confusing, ever-changing regulations. It is not even the passage of regulations that causes the problem; it is the possibility that the regulations will be passed, and that company leaders will have to learn about and then successfully comply with new regulations. It is difficult to understand the negative effect that increased regulations have on businesses, unless you run one. I should note that all of the CEOs I work with (admittedly, I purposefully do not work with jerks), are solid, upstanding, honest citizens who live their lives within the law. When simply doing that becomes a major distraction, the economy is sure to suffer. Kristin Zhivago I combed over the 2004 US census some time ago and saw that there were 27 million companies in the US. Further analysis convinced me that more than more than 90% of them had 0 – 9 employees. It would be interesting to know how much these companies contribute to the overall economy in terms of job opportunities.

Based on my interviews of company leaders, and the work I do with CEOs, those who run small and medium-sized companies are currently very hesitant to make any major “bets” on the future. They are very concerned with increased regulatory activity. Taxes aside, companies of all sizes must comply (and build systems to comply with) confusing, ever-changing regulations. It is not even the passage of regulations that causes the problem; it is the possibility that the regulations will be passed, and that company leaders will have to learn about and then successfully comply with new regulations.

It is difficult to understand the negative effect that increased regulations have on businesses, unless you run one. I should note that all of the CEOs I work with (admittedly, I purposefully do not work with jerks), are solid, upstanding, honest citizens who live their lives within the law. When simply doing that becomes a major distraction, the economy is sure to suffer.

Kristin Zhivago

]]> By: Mikeirv http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43147 Mikeirv Fri, 14 Sep 2012 16:17:40 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43147 The biggest problem with lack of start up capital has been the SEC and SarBox. Prior to SB, there were 20 real solid Tier 3 Broker Dealers that every year did 10-20 IPO's in the $5-20mm range. These deals are the exact types this article is speaking about. It is so bad that Paulson Investments, a boutique Investment Bank of high repute, basically shut down this year. This lack of small capital formation has been, in my opinion, one of the main reasons this recession has dragged along. Small companies CANNOT get access to risk capital. That simple and that sad. And, when you hear about VC money, if your company doesn't have a billion dollar potential forget it. The biggest problem with lack of start up capital has been the SEC and SarBox. Prior to SB, there were 20 real solid Tier 3 Broker Dealers that every year did 10-20 IPO’s in the $5-20mm range. These deals are the exact types this article is speaking about. It is so bad that Paulson Investments, a boutique Investment Bank of high repute, basically shut down this year. This lack of small capital formation has been, in my opinion, one of the main reasons this recession has dragged along. Small companies CANNOT get access to risk capital. That simple and that sad. And, when you hear about VC money, if your company doesn’t have a billion dollar potential forget it.

]]> By: mfw13 http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43134 mfw13 Fri, 14 Sep 2012 05:22:19 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43134 One issue may be access to capital....the banks are being very stingy right now, and it's pretty damn hard to start a new business without at least some capital. One issue may be access to capital….the banks are being very stingy right now, and it’s pretty damn hard to start a new business without at least some capital.

]]> By: KenG_CA http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43128 KenG_CA Fri, 14 Sep 2012 00:33:28 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43128 Reuters, you need to fix your commenting system. It's ridiculously broke. Reuters, you need to fix your commenting system. It’s ridiculously broke.

]]> By: nyet http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43126 nyet Thu, 13 Sep 2012 23:24:37 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43126 I wonder if Obamacare will have an impact. I know people who have had health catastrophes while trying to start businesses (and were uninsured). It's been a trend among silicon valley startups to offshore from the beginning. Overall, so much comes from abroad and it is cheap which makes certain kinds of businesses a bad bet. Construction is down, yes. What about Wal-mart and big retail? These must have taken market share from small retail. Finally, consumer confidence may play a role. I wonder if Obamacare will have an impact. I know people who have had health catastrophes while trying to start businesses (and were uninsured).

It’s been a trend among silicon valley startups to offshore from the beginning.

Overall, so much comes from abroad and it is cheap which makes certain kinds of businesses a bad bet.

Construction is down, yes.

What about Wal-mart and big retail? These must have taken market share from small retail.

Finally, consumer confidence may play a role.

]]> By: nyet http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43125 nyet Thu, 13 Sep 2012 23:24:16 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43125 I wonder if Obamacare will have an impact. I know people who have had health catastrophes while trying to start businesses (and were uninsured). It's been a trend among silicon valley startups to offshore from the beginning. Overall, so much comes from abroad and it is cheap which makes certain kinds of businesses a bad bet. Construction is down, yes. What about Wal-mart and big retail? These must have taken market share from small retail. Finally, consumer confidence may play a role. I wonder if Obamacare will have an impact. I know people who have had health catastrophes while trying to start businesses (and were uninsured).

It’s been a trend among silicon valley startups to offshore from the beginning.

Overall, so much comes from abroad and it is cheap which makes certain kinds of businesses a bad bet.

Construction is down, yes.

What about Wal-mart and big retail? These must have taken market share from small retail.

Finally, consumer confidence may play a role.

]]> By: nyet http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43124 nyet Thu, 13 Sep 2012 23:08:49 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43124 I wonder if Obamacare will have an impact. I know people who have had health catastrophes while trying to start businesses (and were uninsured). It's been a trend among silicon valley startups to offshore from the beginning. Overall, so much comes from abroad and it is cheap which makes certain kinds of businesses a bad bet. Construction is down, yes. What about Wal-mart and big retail? These must have taken market share from small retail. Finally, consumer confidence may play a role. I wonder if Obamacare will have an impact. I know people who have had health catastrophes while trying to start businesses (and were uninsured).

It’s been a trend among silicon valley startups to offshore from the beginning.

Overall, so much comes from abroad and it is cheap which makes certain kinds of businesses a bad bet.

Construction is down, yes.

What about Wal-mart and big retail? These must have taken market share from small retail.

Finally, consumer confidence may play a role.

]]> By: dmcdougall http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43123 dmcdougall Thu, 13 Sep 2012 22:56:07 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43123 Obviously this is only one possible factor, but what percentage of startups have traditionally been led by young people, who have yet to buy houses or build families and thus can be more tolerant of risk? It wouldn't surprise me if this risk profile has shifted, because of the massive increase in student loan debt over the last 5-10 years (511% increase from 1999 - 2011, the vast majority since 2005: http://www.theatlantic.com/business/archive/2011/08/chart-of-the-day-student-loans-have-grown-511-since-1999/243821/. Obviously this is only one possible factor, but what percentage of startups have traditionally been led by young people, who have yet to buy houses or build families and thus can be more tolerant of risk? It wouldn’t surprise me if this risk profile has shifted, because of the massive increase in student loan debt over the last 5-10 years (511% increase from 1999 – 2011, the vast majority since 2005: http://www.theatlantic.com/business/arch ive/2011/08/chart-of-the-day-student-loa ns-have-grown-511-since-1999/243821/.

]]> By: dmcdougall http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43121 dmcdougall Thu, 13 Sep 2012 22:45:07 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43121 Obviously this is only one possible factor, but what percentage of startups have traditionally been led by young people, who have yet to buy houses or build families and thus can be more tolerant of risk? It wouldn't surprise me if this risk profile has shifted, because of the massive increase in student loan debt over the last 5-10 years (511% increase from 1999 - 2011, the vast majority since 2005: http://www.theatlantic.com/business/archive/2011/08/chart-of-the-day-student-loans-have-grown-511-since-1999/243821/. Obviously this is only one possible factor, but what percentage of startups have traditionally been led by young people, who have yet to buy houses or build families and thus can be more tolerant of risk? It wouldn’t surprise me if this risk profile has shifted, because of the massive increase in student loan debt over the last 5-10 years (511% increase from 1999 – 2011, the vast majority since 2005: http://www.theatlantic.com/business/arch ive/2011/08/chart-of-the-day-student-loa ns-have-grown-511-since-1999/243821/.

]]> By: nyet http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43120 nyet Thu, 13 Sep 2012 22:40:07 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43120 I wonder if Obamacare will have an impact. I know people who have had health catastrophes while trying to start businesses. It's been a trend among silicon valley startups to offshore from the beginning. Overall, so much comes from abroad and it is cheap which makes certain kinds of businesses a bad bet. Construction is down, yes. What about Wal-mart and big retail? These must have taken market share from small retail. Finally, consumer confidence may play a role. I wonder if Obamacare will have an impact. I know people who have had health catastrophes while trying to start businesses.

It’s been a trend among silicon valley startups to offshore from the beginning.

Overall, so much comes from abroad and it is cheap which makes certain kinds of businesses a bad bet.

Construction is down, yes.

What about Wal-mart and big retail? These must have taken market share from small retail.

Finally, consumer confidence may play a role.

]]> By: nyet http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43119 nyet Thu, 13 Sep 2012 22:37:14 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43119 I wonder if Obamacare will have an impact. I know people who have had health catastrophes while trying to start businesses. It's been a trend among silicon valley startups to offshore from the beginning. Overall, so much comes from abroad and it is cheap which makes certain kinds of businesses a bad bet. Construction is down, yes. What about Wal-mart and big retail? These must have taken market share from small retail. Finally, consumer confidence may play a role. I wonder if Obamacare will have an impact. I know people who have had health catastrophes while trying to start businesses.

It’s been a trend among silicon valley startups to offshore from the beginning.

Overall, so much comes from abroad and it is cheap which makes certain kinds of businesses a bad bet.

Construction is down, yes.

What about Wal-mart and big retail? These must have taken market share from small retail.

Finally, consumer confidence may play a role.

]]> By: dmcdougall http://blogs.reuters.com/felix-salmon/2012/09/13/job-creation-where-are-the-startups/comment-page-1/#comment-43117 dmcdougall Thu, 13 Sep 2012 22:34:44 +0000 https://blogs.reuters.com/felix-salmon/?p=17622#comment-43117 Obviously this is only one possible factor, but what percentage of startups have traditionally been led by young people, who have yet to buy houses or build families and thus can be more tolerant of risk? It wouldn't surprise me if this risk profile has shifted, because of the massive increase in student loan debt over the last 5-10 years (511% increase from 1999 - 2011, the vast majority since 2005: http://www.theatlantic.com/business/archive/2011/08/chart-of-the-day-student-loans-have-grown-511-since-1999/243821/. Obviously this is only one possible factor, but what percentage of startups have traditionally been led by young people, who have yet to buy houses or build families and thus can be more tolerant of risk? It wouldn’t surprise me if this risk profile has shifted, because of the massive increase in student loan debt over the last 5-10 years (511% increase from 1999 – 2011, the vast majority since 2005: http://www.theatlantic.com/business/arch ive/2011/08/chart-of-the-day-student-loa ns-have-grown-511-since-1999/243821/.

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