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How People Get Rich Now

paulgraham.com

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Re: How People Get Rich Now

#551

Post by skjfdoslifjeifj »

Nacdor wrote: post #312
wanderer2323 wrote: post #180

Earlier quoted context omitted.

PG is apropos for this forum, but beyond that he is plainly a good writer. I don't know who you consider 'amazing writers across our civilization' -- but whether it is Gracian or Scott Alexander, PG shares one thing with them, namely that his works will be quoted beyond the lifespan of his contemporary readers.

> namely that his works will be quoted beyond the lifespan of his contemporary readers I have never seen PG quoted anywhere, not even on HN.

I see people quoting him occasionally. They're always mocking him and this site though.

Re: How People Get Rich Now

#552

Post by sushisource »

sillysaurusx wrote: post #516
adwn wrote: post #388

Earlier quoted context omitted.

> Every time I read one of PG's posts, it seems like he's working from a narrative that he's trying to conform facts to. Indeed. Compare this gem from [1]: You could probably work twice as many hours as a corporate employee, and if you focus you can probably get three times as much done in an hour. [1] You should get another multiple of two, at least, by eliminating the drag of the pointy-haired middle manager who wo…

Hm? That paragraph is accurate. When you're free to work flat-out – as hard as you can, as much as you want – you can make a lot more progress than if you were paid to do the same thing for someone else. 36x may not be the exact multiple, but it's correct within a power of two.

I think you're making the point. Correct according to... what... lol? The preconceived notion that it should be?

I don't even necessarily disagree, but, "No, it totally is right" isn't exactly an argument.

Re: How People Get Rich Now

#553

Post by bumby »

missedthecue wrote: post #433
greatgib wrote: post #411

Strangely, an explanation for the increased number of wealths coming from new, tech companies and investments that is ignored in his post is the disturbing fact it was taken from the average employee cut of the profits. See this: https://www.theguardian.com/business/2018/aug/16/ceo-versus-... I quote: "The 2017 CEO-to-worker compensation ratio of 312-to-1 was far greater than the 20-to-1 ratio in 1965, and more than…

I hate this comparison. Stock based compensation didn't exist in 1965. It's an oranges to apples comparison. CEO salaries today are still about 20-1, depending on the business. For instance: - Doug McMillon of Walmart makes $1.2 million in salary. - James Quincy of Coca-Cola makes $1.5 million in salary. - JPMorgan's CEO Jamie Dimon has a $1.5 million salary. - Sundar Pichai of Google makes $2 million in salary. You…

And in that context, the article does speak to this point.

>the companies themselves are more valuable, because newly founded companies grow faster than they used to.

The added reliance on stock-based compensation combined with higher valuations leads to higher CEO salaries.

This isn't making a case one way or the other about whether this is a fair or sustainable model, just meant to bolster your point about why greater context is needed when discussing executive salaries as a multiple of the individual employee.

Re: How People Get Rich Now

#554

Post by WalterBright »

gip wrote: post #437
greatgib wrote: post #411

Strangely, an explanation for the increased number of wealths coming from new, tech companies and investments that is ignored in his post is the disturbing fact it was taken from the average employee cut of the profits. See this: https://www.theguardian.com/business/2018/aug/16/ceo-versus-... I quote: "The 2017 CEO-to-worker compensation ratio of 312-to-1 was far greater than the 20-to-1 ratio in 1965, and more than…

Exactly. And I also think looking at money only may not go far enough. At the end of the day what matters is the amount of resources that the society allow a person to enjoy during her/his life, from food to home ownership to work opportunities, to access to vaccine. It's pretty clear that a new class of people (founders, VCs and people close to them) are capturing a larger part of the resources today while the major…

They're creating the value, not taking it from others.

Re: How People Get Rich Now

#555

Post by pradn »

domk wrote: post #155

This essay feels really dishonest. It tries to simplify the vastly complex problem of income inequality, on which there is a sea of existing, detailed research, into a simple "it's easier to start companies now" argument. And it doesn't even explore that argument in that much depth. What about bottom incomes? Why have those barely increased in real terms in the last 30 years, while the top 1% of incomes has been shoo…

His constant defense of high-risk startups also acts as a defense of his own wealth. If you can do it, and deserve wealth for succeeding, I must deserve my wealth for the companies I've founded. I'm not saying one shouldn't be rewarded for founding useful businesses. I'm saying there's a whole lot of mystification, self-mythmaking, and luck involved.

For the average person, being born to a somewhat comfortable family, being able to train yourself into a good career, and being able to save and invest in a mundane way are far safer and comfortable ways to live a good, secure life. The gulf in security between someone like him now, and anyone but the very top percentiles in wealth is literally unimaginable for him, because he doesn't live the reality of an average person. His constant push in this direction is not much more than "let them eat cake", or "let them found startups".

Re: How People Get Rich Now

#556

Post by boatsie »

domk wrote: post #155

This essay feels really dishonest. It tries to simplify the vastly complex problem of income inequality, on which there is a sea of existing, detailed research, into a simple "it's easier to start companies now" argument. And it doesn't even explore that argument in that much depth. What about bottom incomes? Why have those barely increased in real terms in the last 30 years, while the top 1% of incomes has been shoo…

The inequality is also being caused by the internet. Before, people would choose a product, restaurant, retailer, service, entertainment, etc based on what was near them. Or what they had a good experience with. Or what their neighbor recommended. But now the internet has pushed everything into what’s “best”. So if a company comes out with a great product or service, it can get huge and popular fast. Same with movies and music, the distribution and popularity travel basically at the speed of light. This is the meme economy and keeps pushing things to the head of the curve, while the tail gets longer and flatter. That then trickles down to the companies/founders/shareholders etc.

Re: How People Get Rich Now

#557

Post by WalterBright »

bo1024 wrote: post #547
jefftk wrote: post #503

Earlier quoted context omitted.

[3] When I say people are starting more companies, I mean the type of company meant to grow very big. There has actually been a decrease in the last couple decades in the overall number of new companies. But the vast majority of companies are small retail and service businesses. So what the statistics about the decreasing number of new businesses mean is that people are starting fewer shoe stores and barber shops. Pe…

This seems to contradict his analogy between 2020 to, say, 1890. Instead of a bunch of people starting small local businesses and gaining moderate wealth, we have winner-take-all dynamics.

> winner-take-all

You can buy stock in winning companies and get your share of the winnings.

Re: How People Get Rich Now

#558

Post by benjaminjosephw »

One implicit idea here is that companies are now also different kinds of things now - they are much smaller and leaner while also making a lot more money - that gives them a very different character to the large, dense and slow moving corporations of a few decades ago (and maybe a lot less accountability too).

Perhaps these big shifts warrant a renewed discussion about the role of new large and lean mega companies in society. Market success can't be the only metric we use to measure the societal value of a company. If it were, tech domination would be the name of the game and companies would devolve into creating software that manipulates users for more revenue in whatever way possible/necessary. On a resource constrained planet, that would be absolute madness.

Re: How People Get Rich Now

#559

Post by lupire »

areyousure wrote: post #514
jedberg wrote: post #213

Earlier quoted context omitted.

Unless it's changed recently, I believe there is exactly one person on the billionaires list that started life in the bottom quintile -- Oprah. So you have a good question is all I'm trying to say.

https://www.forbes.com/real-time-billionaires/ #1 was born to a teenage mom (and an alcoholic/deadbeat dad). Since she was still in high school, I assume she was probably in the bottom quintile of income. #7 was given up by his mother and adopted. #9 was born in the Soviet Union. It's likely his family's income (in rubles) was in the bottom quintile of the United States at the time. (Sources I've found suggest that t…

Why would you ignore Musk's father, who raised him? Alcoholic doesn't mean poor, and deadbeat is the wrong term for the father Elon lived with.

Elon's "teenage mother" was a famous model.

Re: How People Get Rich Now

#560

Post by [deleted] »

jedberg wrote: post #213
api wrote: post #22

Earlier quoted context omitted.

I'd be more interested in a study of how people move from lower classes to at least upper middle class.

Unless it's changed recently, I believe there is exactly one person on the billionaires list that started life in the bottom quintile -- Oprah. So you have a good question is all I'm trying to say.

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