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Watching this video, I can see someone getting the impression that I think you /should/ start a business. That's not true, I think you should be able to if you want to, but there are lots of good reasons to not want to, and very much support people who are more interested in working for other people, especially if you work for me! PLEASE DON'T LEAVE ME!

But small business is extremely important, it helps even out inequality, ties communities together, and employs over half of working Americans. Small businesses hire faster than large ones, and employ more people per dollar they make.

Alas, there are lots of structural efficiencies to being big, and lots of ways big companies build their "moats." And just by virtue of the way capitalism works, it is sometimes easier to go from 400 to 800 employees than from 1 to 2.

Here's a selection of the articles I read and resources I used while making this video:

The Global Entrepreneurship Monitor is a great primary source for this stuff

What is driving the dramatic slowdown in IPOs

The Myth of the Millennial Entrepreneur

Millennials are obsessed with side hustles because they’re all we’ve got

American Entrepreneurship Is Actually Vanishing. Here's Why

The Psychological Price of Entrepreneurship

American Entrepreneurship: Dead or Alive?

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Good morning, John. I just sent a Twitter survey out to my followers asking them some of their thoughts on starting a business. 15% of those over eighteen said that they'd already started a business. 55% said they had considered starting one. Only 11% said that they weren't at all interested in starting their own business.

But while I think there's a strong entrepreneurial attitude among young people right now, the rate at which we in America are starting small businesses, and young people in particular, is dropping. Fast. And the easy thing to do is to put this on young people themselves. We aren't interested or we crave the stability of a normal job or we fear failure.
And indeed, social anxiety, uncertainty, and fear of failure all showed high up in my survey. And starting a business isn't for the faint of heart. You have to take risks, you have to jump into stuff you don't understand or know very well. You have to do stuff you don't want to do. You have to hire people, and you have to fire people.

A lot of the time, it sucks to own a business. I'd say this as a person who owns businesses. Like there's parts that are not super fun. I think people know that. But, this very clearly isn't just about people making different choices. As schools have thought to attract students, the cost of education has skyrocketed. And thus, so has the burden of student debt, and that debt pushes people toward making safer decisions, and maybe toward fearing failure more. 

In exactly the same way, the skyrocketing costs of health care in America have made people make safer decisions. When asked what their number one reason for not starting a business was, about half of people said that that was a personal choice, and about half of people said it was something structural. And the biggest structural one, of course, is just access to capital. And the money things have gotten kind of weird lately.

A lot more money is coming from venture capitalists, who are just, like, super rich people who basically want their money to come back ten times, so they mostly invest in tech, where there's a lot of opportunity for huge growth. Businesses that probably have a safer path to a smaller market get ignored. And banks are kind of focusing less and less on the things that are supposed to be doing, which is to help people create new value in the world. Community banks now make up just 13% of the banking sector, but that still make 43% of the small business loans. 

As starting a business gets more complicated, people who have money might see it as simpler and probably a better use of their time to just invest that money in the stock market, meaning, in big gigantic entrenched companies, rather than in their own small businesses. And that's especially true if you have a lot of money, and more and more of the money is in the hands of people who have a lot of it. 

If you have a ton of money, starting up a small business is like an inconsequential investment, in exchange for a whole lot of work. And then the massive amount of money pumped into the stock market pushes these gigantic businesses to grow or die. And that results in these massive behemoths taking over not just old markets but new markets, the way that Amazon and Netflix have done. 

Meanwhile, in the middle class, wealth has actually decreased. So the people who really want to work their butts up to make a new thing happen might not have access to the money to do that. 

The final reason I'm gonna talk about why young people might not be starting new businesses is 'cause I think they are... This is Generation 1099, side-hustling contractors. People making it work with a combination of their podcast, their Etsy store, their Postmates and their day job. Every one of those side hustles is basically a sole proprietorship.

If you count that way, this generation is starting up business like never before. But the path to hiring that second person, when all competitive supply chains are global and when employment regulations and business taxes are mountains of red tape. It's unclear if it's there at all, and if it is, it might just be uninteresting. 

This isn't a simple story. People much smarter than me are doing much better research than I have done to look at this. But I want more people, instead of fewer people to know the joy of starting your own thing: of giving someone else a job, of putting a team together to create value where there was no value before. If you got thought on this or advice on this or just want to tell us what you would do if you have to the access to the capital you need to do it. I'm really looking forward to the comments on this video. I'll be checking them out all weekend. 

John, I'll see you on Tuesday.