Running a small business instead of a startup is preferable for the majority

Dear politicians & bureaucrats, please don't advise every youngster to start their own startup right away. Startups are the Olympics of doing business. Super-majority of founders, especially those with mediocre skills, poor work experience and poor discipline, will fail. 

Most of these amateur founders and their misinformed families are ill-prepared for their failure in running startups, and hence will suffer. Running startups is not for everyone.

Instead, be realistic and suggest to people with average skills to start small businesses instead of startups. At the same time, make people aware of the benefits, challenges and risks of running startups so that those who want to run startups can make educated choices.

Why employers/investors prefer those who performed well in a competitive setting

If you have done well in a competitive race in the past, there is a higher chance that you will do well in a competitive race now, compared to someone who has never done well in a competitive race in the past.