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Billionaires Build

paulgraham.com

621–630 of 957 posts

Re: Billionaires Build

#621

Earlier quoted context omitted.

I don't know if you intentionally switched from billionaire to millionaire, but it seems entirely possible (and even somewhat common) to become a mere millionaire by actions and careers that most would consider virtuous combined with sound saving and investing strategies. I don't know if my parents are actually millionaires or not, but if not, they're not far off and they were both public school teachers whose parent…

if someone considers making a billion dollars to be some form of social theft, then making a million dollars by giving $100,000 to a fund manager .. may also constitute social theft for that critic.

Theft isn’t a word I used. I intentionally used the words advantage, leverage and exploitation the way I did for a reason.

Using your example, a billionaire doesn’t hand 1,000 more dollars to a hedge fund manager and get 1,000 times more wealth amplification. They hire a team of accountants and lawyers to do 1,000 times that base amplification each.

Making 100k and having a stock based retirement plan is an open drainage from the wealth factory, it definitely has access to the same levers, but it’s effectively the equivalent of a pension, just managed in the marketplace according to marketplace rules. That earning category is basically the automobile manufacturer lead/plant manager of our generation, the only difference is there’s more people who get that slice. People in this role largely don’t have the capacity to even think about increasing their leverage, they just get “benefits” and call it a night.

People who become billionaires have an entirely different approach. Their work is split between using whatever leverage they have access to, and whatever affords greater leverage. It’s mathematically the only way (given current dollar valuation) that you can get that many dollars.

Re: Billionaires Build

#622

No doubt most successful startups are built by selling useful things, not exploiting people, but as they grow and encounter new problems the exploitation happens. You don't _become_ a billionaire by exploitation, but it sure does help you _keep on_ being a billionaire. Facebook, Amazon, Apple and others didn't start out exploiting people, but they sure as hell do exploit at at least some group of people now. Content…

Being useful to one group (in the process of becoming a billionaire) can be exploitative to another group.

Re: Billionaires Build

#623
post #617

Earlier quoted context omitted.

> What happens if taxing the rich doesn't fix it and actually makes things worse? How is it going to be worse if Jeff Bezos is worth $50,000,000,000 instead of $180,000,000,000? I don't get it - America doesn't have a Communist party, what are you picturing happening here? > Disproportionate to what? Me. If he wants a policy to change, he has lobbyists and the Washington Post. If I want to change a policy I have to s…

> How is it going to be worse if Jeff Bezos is worth $50,000,000,000 instead of $180,000,000,000? Hmm, how would it be if Amazon stock dropped in price by 73%? Actually, I think that would be pretty bad. Ironically, least of all for Jeff Bezos. How good would it be for you if your 401k dropped by that much? Or maybe you're thinking we could just confiscate the stock, or force him to sell it. Sell it to whom? Other bi…

I'd be fine, I'm not that rich. I'm also not that heavily invested in Amazon, so I'd be even more fine.

Again, how will things be worse if Jeff Bezos was worth $50,000,000,000 instead of $180,000,000,000? That's what was supposed - that it would make things worse if we made him pay a fair rate to the American people for helping maintain his wealth.

Re: Billionaires Build

#624

Earlier quoted context omitted.

This is an amazing nugget which should be the context for any controversial discussion about "Billionaires". I have utmost respect for the former category, but I also believe that the later category should not exist (as in those people should exist but they should not have any unearned billions and all the unearned power and privileges that come with it).

You don’t believe that if someone makes billions they should be able to pass it on to their children?

I don’t. I don’t believe more than about 10 million should be able to be passed on to children. Maybe less than that. Just having been born to such rich parents is an opportunity that gives them incredible legs up in society, let alone them getting a ton of money due to the luck of their birth. If a parent that rich cares about their child they have many ways to help them achieve in life. If it is actually possible for a person to be so much better at creating things than another that they deserve billions of dollars, the parent can pass on that skill to their child. It’s hard enough to keep wealth from accumulating without also letting it accumulate across generations.

Re: Billionaires Build

#625
post #599
post #440

Earlier quoted context omitted.

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.

So do you really believe any single person is so "brilliant" (or whatever adjective you want to use) to have truly created or earned billions of dollars through their own brilliance alone? Do you think Jeff Bezos is 1,310,000x more deserving of his wealth than the average American household? IMO it's not reasonable at all past a certain point to continue to amass this kind of wealth that is a by-product of a broken s…

It's not about brilliance. Technology and organization allow your impact to scale to superhuman levels. I used the JK Rowling example because it's obvious that without her, we would not have the multi-billion dollar franchise that is Harry Potter. Without Harry Potter, there is no guarantee that another franchise would have taken it's place.

It's also not a stretch to suggest that Jeff Bezos or Bill Gates have created over 100 times more value than Rowling. Their roles are more nebulous, but they certainly did something better than their competitors. Microsoft Excel alone possibly has possibly saved trillions of hours productivity.

Re: Billionaires Build

#626
post #493

Earlier quoted context omitted.

It's a mistake to conflate the work of entire companies with one man, and I strongly disagree about the state of progress in America if billionaires did not exist. Someone else would have taken Musk's place. There is no inherent quality to billionaires that make them valuable outside of their wealth. > especially if you consider the potential scarcity of funding in this scenario. how is this an argument? I assume ban…

Someone else would have taken his place? You mean another billionaire? But the thought experiment is there would be no billionaires.

Why would a billionaire by necessary?

As mentioned, there are other vehicles to obtain financing. Secondly, when billionaires disappear, their wealth doesn't disappear with them. Not sure what you are asking.

Re: Billionaires Build

#627
post #422

Earlier quoted context omitted.

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…

> Ideally their kid should still have access to public school education, with all the tools needed to go on to become successful themselves. Ideally, but in reality public education is not an equalizer like that. Wealthy parents give their students advantages that school can't provide in our society: e.g. upper class culture and habits, resources for extra education, connections, etc. Even the institutional bits aren…

What are examples of upper class culture or habits?

Re: Billionaires Build

#628
post #389

Earlier quoted context omitted.

What would a younger founder find out of touch about it? The founders I see in recent YC batches don't seem so different in this respect—but perhaps I'm out of touch with out-of-touchness.

There's a selection bias there: people who think YC or YC's startup model is out-of-touch don't apply to YC, and certainly don't get selected. Personally, I've watched YC grow from something that I thought was an obviously good idea but nobody else agreed with me about (I applied to the first SFP in 2005, as a college student), to something mainstream that lots of people aspired to (~2010), to being something at best…

That's a point about the general population, not founders, who form a pretty different (and pretty small) subset.

The other thing I'd be cautious about here is that the curve you describe basically always happens. Shit was always cooler when it was newer and we were there before everyone else, etc.; people say this about everything. I'm not sure how to correct for this, but it's a strong skew.

Re: Billionaires Build

#629
post #512

Earlier quoted context omitted.

The general structure is that people are allowed to own the things they make. If you start a company, it belongs to you. Your company might become very valuable and mine might not, which might create some disparity. There are other systems, like where everybody owns everything, but historically when you allow it so one person can own something that someone else has to create it doesn't work out very well. People don'…

The general structure is that all businesses rely on the government to maintain the courts and enforce contracts, and they are all built upon public commons. Taxation is not theft, pay your share. Entrepreneurialism is at an all-time low in this low-tax, finance-happy environment, so I don't see how you can conclude that low taxes are good for creativity. It seems like it's been pretty good for concentration - low ta…

I never said taxation was theft or that taxes shouldn't exist. I said that private ownership of property was good for creativity, this is independent of taxation. You can pay taxes and still own things. Indeed, we do.

You seem to be proposing that taxation is an unalloyed good and that more taxation is always better - that all problems are the result of insufficient taxation. Do you have any actual plan for how to spend all this money you propose to collect in taxes, or do you just want to throw more money at the people who are currently doing a bad job with the money they already have?

Re: Billionaires Build

#630
post #312

About to write some possibly controversial stuff... My early life, I grew up and had middle to upper middle class all around me. In my late teens and early twenties, there were times I had to scrounge my cushions and rummage through my car to find enough change to eat a meal. We live in a society where everyone has access to a computer—personal or local library. We have all the information we need to bring (the major…

This seems like a sheltered view of poverty. When you live in poverty, there is no such thing as peace or thinking about the future. You are trying to cope minute-by-minute with hunger, abuse, fear, and limitless insecurity. You know someone who is in jail, someone who has been shot/stabbed/murdered, and plenty of people who did all the right things and still failed to make it out. In a nutshell, there's no such thin…

I hate to write the following sentence, but you don’t know me and the experiences I’ve had throughout my life.

The stabbed, jail, etc... you mentioned... yeah, I’ve seen that first hand a few times, know many people who have gone to jail and are still in it for a myriad of reasons. Seeing & having that stuff around you doesn’t mean you grow poor.

I did the 6 year community college plan; I failed out of college and by every metric on my academic record, I should be a complete failure, but hey, I’m not!

All the issues you of poverty and how crippling it is, I completely agree with, but what you don’t understand is that it’s all a decision. It’s a decision to live how you are or seek a return that will be realized down the road at some unknown point. I understand what I just said would be extremely difficult for someone who would be in that current situation, but it doesn’t deny them the ability to seek that reward at some point down the road.

As I’ve said, it’s all a choice on what to do with your time. The fight within is the most difficult thing anyone could ever face, but face it one must to change.

One of my favorite sayings is “you’re not going to change until the pain of change is less than the pain of staying the same.” Basically... one must hate oneself so much that it would be easier to change than to live another day as one currently does.

Wanna guess how I changed? I hated myself that much.

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