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Billionaires Build

paulgraham.com

431–440 of 957 posts

Re: Billionaires Build

#431
post #28

For a clearly smart guy it's so frustrating to see PG bring in a topic like the Billionaires being exploitative, and then taking such a thoroughly blinkered view. It's a massive blind spot that PG fails to address is that it's the exact same sense of mission that he sees in start ups that creates the permission structure to exploit people. It's not that people set out to exploit people and as a result they become bil…

He's just saying "an early sign of someone unlikely to become a billionaire is their tendency to exploit others"

Whether existing billionaires exploit is a separate point.

Re: Billionaires Build

#432
This seems in fairly bad faith. As best I can tell, it suggests that the argument that billionaires exploit people is unfounded, because they delight _users_? I mean, sure, but that says _nothing_ about exploitation.

A company that exploits its users won't generally do well, but that doesn't mean that it doesn't exploit its workers, which is generally what politicians mean here (see Amazon, for instance. Or, since Facebook was brought up in the article, their content moderation team)

Re: Billionaires Build

#433

Earlier quoted context omitted.

Do you believe in meritocracy? Because ownership of that amount of wealth is surely going to skew the entire system. How long before we just have a permanent ruling class, and how does that move humanity forward?

Familial wealth disperses and collapses pretty quickly, eventually being split up between 2 to the n heirs thereabouts. Irrespective, the wealth is the property of an individual who earned that wealth through voluntary exchange. If they want to give it all to their kids, to a charitable cause, or just destroy it, that should be their right as owners of that property, it is not just for the state to steal that propert…

Good faith line of questioning. Promise.

1. Who do you think decides what rights an individual has in a society, and on what grounds do they hold that right? 2. Why grant property rights

Re: Billionaires Build

#434
> But aptitude for exploiting people is not what Y Combinator looks for at all. In fact, it's the opposite of what they look for. I'll tell you what they do look for, by explaining how to convince Y Combinator to fund you, and you can see for yourself. > > What YC looks for, above all, is founders who understand some group of users and can make what they want. This is so important that it's YC's motto: "Make something people want."

These things aren't necessarily as contradictory as they may seem on the surface. The full life cycle of many successful tech startups is to make something people want, attract a large user base, have an IPO and become billionaires, and then (when it comes time to generate the revenue that the investors were expecting when they invested in the first place) throw the users under the bus in favor of the real customers, whoever they are. Often marketers.

The early phase, where the company is simply providing users with the best product they can make and seems to be making the world a better place is often a mirage that disappears as soon as they switch to a revenue-maximization mode of existence.

I don't think it has to be this way; probably plenty of people have become billionaires and treated their customers well at the same time. It's just a common thread with many of the very high-profile tech company "successes".

Paul Graham deals with founders at the very beginning of their endeavors when idealism is high and strongly correlated with success. At that time it isn't exactly clear where their companies will be in twenty or thirty years.

Re: Billionaires Build

#435

Earlier quoted context omitted.

How about the value destroyed? Im thinking of online retailers and the killing of the brick and mortar stores with lots of local economy and jobs murdered. Who decries those? The destitute become voiceless while the voice of the ones who got to the top becomes a strong unison and myths to riches are created so more people could be exploited.

How do you measure the value lost by the jobs of stablehands, cobblers, milkmen, and movie projectionists?

I see what you’re trying to do there but that’s not what i was talking about. Some jobs become obsolete but we still need phisical stores. My neighborhood has very few stores open and that’s because of Amazon and friends. The value and the vitality of my neighborhood was largely destroyed

Re: Billionaires Build

#436

Not sure what to make of this. Billionaire companies != seed funded startups. The exploitation really kicks into gear after you have 5000 employees and there are many inflection points of power differentials until then. Each not as a big deal, but slowly eroding some rights the farther and lower you go.

The evidence is indisputable that workers at large firms have substantially higher productivity than small firms.[1] Big business also pays its workers substantially higher wages. If your model of big business is that it's a tool for exploiting workers, you'd expect the opposite of this dynamic. Instead the economics is pretty clear that most large firms create synergies that empower individual workers to produce muc…

At what point do you think a firm becomes 'too heavy' and open itself to disruption?(IBM, Intel, Sears) (Genuinely curious)

Does rent seeking count as productivity?

Re: Billionaires Build

#437
I think the point that billionaires build is a reasonable one. There are basically two ways to make money: Create something of value and somehow keep some portion of that value or extract value.

Extracting value sort of works to some degree in some situations, such as mining (at least until you have ruined the environment and your unsustainable practices are coming back to bite you). But whether you are a "self made billionaire" or inherited it, you have to fundamentally be a good steward of value to at least some degree or things soon look like the dystopian outcome in the movie The Lion King after the hyenas ally with the bad guy lion.

Billionaires can only exist as long as billionaires create more pie than they keep -- though certainly it is reasonable to be concerned about exactly where that dividing line should be such that their customers/users/whatever phrase you desire to use here get sufficient value that they don't feel taken advantage of and screwed over. It gets easy for wealthy people to demand more without really intending to be assholes and get it because they haven't really figured out that the aggressive tactics that worked to make them rich are no longer appropriate now that they are rich because of the power differential that was created in the course of getting wealthy (money being rooted in power, not the other way around).

If you want "evidence" that billionaires fundamentally must provide some degree of real value, I am happy to point you to Theranos and Elizabeth Holmes. Theranos was valued at $10 Billion and went to zero valuation overnight after it was discovered the entire thing was a con job.

Re: Billionaires Build

#438

Earlier quoted context omitted.

You are right about the feedback loops that make it hard to escape poverty. The most uncomfortable one to talk about is basic social network effects. Two people meet at some prestigious college and get married - are we shocked they have children who are predisposed for success? Besides from having god-given IQ, they are likely some combination of ambitious, punctual, respectful of authority, long-term oriented, hard-…

In your explanation I see the feedback loop that makes it easier for you and your children to stay out of poverty if you're already successful. I don't see a feedback loop that makes it hard to escape poverty. Why did the high school dropouts drop out in the first place, and why does that make their kid more likely to drop out? Ideally their kid should still have access to public school education, with all the tools…

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Re: Billionaires Build

#439
post #191

56% of billionaires build. 44% of billionaires inherit.

Also if we look at the so-called "self-made" billionaires, Bill Gates went to a fancy prep school where grammar school students had access to a computer in the late 1960s . His great grandfather was a bank president, and he was born with a million dollar trust fund. His mother was on an executive committee with the CEO of IBM. Zuckerberg went to a high school, current tuition cost of which is over $57000 a year. Warr…

Criticizing the level of "self-made"-ness of billionaires seems like a waste of time. These are extreme outliers. Of course they had to start with every advantage and have everything go just right and also work their asses off. You're talking about a 1 in a billion chance to get to that level.

It's like looking at an Olympic gold medal winner and saying "Oh yeah, well of course they broke the world record in the 100-meter dash. They were born with genetic predisposition for the sport and they had the best coaches and their parents got up at 4am to drive them to practice and..." Well, yeah. But a lot of people might have those advantages and not achieve anything with them.

Sure, Zuckerberg went to some fancy prep school. So did all of his classmates. None of them started Facebook. There's lots of other Congressmen who have kids. None of them are Warren Buffet.

But claiming that being "self-made" is something that doesn't exist because the extremest outliers had unusual circumstances (this is surprising for some reason?) ignores all the people who make more modest success largely by their hard work and ingenuity.

Re: Billionaires Build

#440
post #427
post #401

Earlier quoted context omitted.

The government is made up of people who make mistakes even if they have the best of intentions. It doesn't make sense for a bureaucrat to have more control of the wealth than the person who created that wealth purely from her imagination.

A government that makes some "mistakes" is far better than the alternative. Just ask the town a bunch of libertarians took over. [0] 0: https://newrepublic.com/article/159662/libertarian-walks-int...

I'm saying that it's reasonable to expect a significant fraction of the wealth that you created, which is true in every developed country. I'm not advocating for libertarianism.
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