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Hi Eli & Community,
A philosophical question,
What are your thoughts on a wage system for entrepreneurs to earn an income while they are in the beginning stages of starting a business? Since you’ve mentioned before that right now the government is perfectly okay with anyone making a penny an hour.
Rather than think of government assistance, think more in terms of unemployment insurance where you elect benefits as an entrepreneur to receive an income while you are building your business and then once you become successful we mandate a requirement for you to pay back into the system the resources you’ve consumed.
I would also like to add that a system of such would definitely without a doubt need a vetting process by a body of verifiable successful entrepreneurs with a proven track record of success in order to keep things pure and prevent the hopelessly doomed from gaming the system.
I think the idea isn’t bad, the problem is the implementation. What happens when someone’s business doesn’t succeed ? And what does that do to the competitive environment of business ?
Part of the rewards of being a business owner come from the increased risk of operating / starting a business. If there’s (essentially) no risk to starting your own business, and everyone takes their stab at it, then the potential rewards might well be reduced.
You also risk flooding the market. Every market has a saturation point. You’ve seen this with Starbucks and MacDonalds when they closed large numbers of stores because each store wasn’t moving enough product on its own. Imagine a city of 30,000 people where they are 300 MSP / IT providers. You just wouldn’t have the work to go around for everyone to be successful. If you subsidize everyone on Employment Insurance to get them to start their own companies, you risk this type of flooding / oversaturation of the market. That drives down price because everyone has to compete with each other, but it gets to a point where price is driven down so much that no one can make any money or even get to a “break-even” point.
The other things is, being an enterpreneur / building a successful business requires business skills. These skills aren’t the same thing as being able to code, or being able to flip a burger or detailing a car. These are skills that relate to finances, human resources, etc. And, to be honest, these are skills that not every person has.
So yeah, it’s a great idea, but I would worry about the implementation.
Hi Amazing Tech,
I can only tell you something from the german perspective. We have something that would be translated as “Foundation Subsidy”.
The state institution that normally pays your unemployment benefits (in germany we only receive money, not food stamps for example), is allowed to pay a certain amount for your start up.
You apply for the “Foundation Subsidy” and then they invite you to a meet up. Then, like you would do at a bank for a loan, you present your idea/concept, why you think it will work, your business plan etc.
If they think it’s a good idea and worth the money, you get the money. The good thing: You won’t have to pay it back.
Only exception: If you lied about your plans/intend/project etc. Then you not only have to pay back the foundation subsidy, but – of course – they will sue you.
So you could calculate for example: I need 2k to live, I think my beginning phase will last for 20 months. On top of that I need 5k for purchases like hardware. So you would apply for a foundation subsidy worth 45k.