The research isn't absolutely conclusive, but Matt Clancy -- who is an assistant teaching professor of economics at Iowa State -- makes an interesting case (over here) about entrepreneurship being mostly contagious.

The article cites a long list of studies that have more or less found that being around entrepreneurs can have a measurable positive effect on whether you yourself might also become one.

There is evidence to suggest that this is true whether you're a scientist working with someone who has previously commercialized a piece of research, a community with entrepreneurial neighbors, a student with an entrepreneurial mentor, or a child with parents who have started their own business(es).

According to one Swedish study, the children of entrepreneurs are about 12 percentage points more likely to start a business at some point in their life compared to people with non-entrepreneur parents.

But as I said at the beginning of this post, the research isn't entirely conclusive. Could a proclivity for risk and independence be instead genetic? Could it be that entrepreneur types simply seek out other entrepreneurs to hang out with? Perhaps these associations aren't causal. Maybe.

But my gut tells me that there has got to be some contagiousness. Here's an excerpt from Matt's article:

...being around someone who has done it plants the seed in your mind that it’s a possibility, something you really could do. For most of the studies, the population exposed to entrepreneurship is a population that wouldn’t normally consider it. For them, exposure has a measurable positive effect.

What this once again tells me is that there's immeasurable value in people clustering in cities, local communities, offices, coffee shops, and many other spaces. It's a hard (probably impossible) thing to replace. And it could be the difference between taking initiative and starting a business, and not doing that.

Back in the old days, and by the old days I mean the 1980s, there were a handful of ways in which you were likely to get rich. You either inherited it, or you made it in oil or real estate. The Forbes list of the 100 richest Americans was first published in 1982 and, at that time, 60 of the people on this list had inherited their wealth. Of the 40 new fortunes on the list, about 60% were primarily related to oil or real estate. If you couldn't inherit your money, these two industries were a good place to start.

But as Paul Graham explains in this recent essay about "how people get rich now," this is no longer the case. On the 2020 list, there were 73 new fortunes, but only 4 stemmed from real estate and only 2 stemmed from oil. As you might imagine, today's biggest driver is what we call tech and, more specifically, it is people founding tech companies (there are also a couple of examples of early employees doing very well). Of the 73 new fortunes last year, approximately 30 came from tech, including 8 of the top 10 fortunes on the list.

Given how many people are starting new companies today (it has become easier and cheaper) and given how many of these companies are quickly growing to big valuations (things are scaling faster), it is perhaps tempting to think about this period of time as being entirely unprecedented. Never before have we seen so many young people getting rich by starting their own company. And never before have we seen such inequality.

However, Graham argues in his essay that this period of time is the default. What we saw in the second half of the 20th century was actually an anomaly. Indeed, if you go back to the end of the 19th century, the richest people in the US were mostly people who were starting their own companies and taking advantage of new technologies, such as that of mass production.

His claim is that for the most part it wasn't really viable to start your own company in, say, the 1960s. Instead, most people simply went to work for a big company that had some sort of oligopolistic positioning in the market. And it turns out that was pretty good for maintaining a strong middle class. Less people were getting fabulously rich. I'd like to see some more data points around entrepreneurship and wealth during this era. But regardless, I think it's pretty clear that the dominant sources of wealth have changed.

Howard Lindzon has a podcast called Panic with Friends. It was started last March (hence the name) and he uses it to interview entrepreneurs, investors, venture capitalists, and other business people about what they're up to. In today's episode he speaks with Harley Finkelstein, President of Shopify, about the future of ecommerce and about how they're positioning the company. What was interesting but not surprising to hear was that in the early years people didn't believe that Shopify had a large enough total addressable market. Supposedly, there weren't enough people out there who might be interested in starting their own online store. That, of course, has proven to be false and there are new and successful ideas emerging all the time. We're also now talking about how ecommerce is reshaping the landscape of our cities. Given all of this, the company has grown to think of itself as an entrepreneurship company. If you're at all ambitious, then you're an entrepreneur in their eyes and Shopify wants to be the platform for you. As a Canadian, it's great to see them doing so well. If you can't see the embedded Spotify player above, click here.