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How People Get Rich Now

paulgraham.com

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Re: How People Get Rich Now

#781

Post by fairity »

benzor wrote: post #324

There's some nuggets of truth in here, but I am disappointed that this article sidesteps what I feel is the most important reason for startup success in 2020: easy and abundant access to cheap capital. - Interest rates are at all time lows, borrowing is cheap - The Fed's balance sheet is at an all-time high. The economy is flush with cash, particularly the investor / VC class - This excess cash creates an (arguably a…

Your comment leaves me wondering if we're reading the same essay.

PG specifically states that the "main reason it's easier to start a startup now is that it's cheaper". And, "cheaper" comes in the form of lower infrastructure costs, lower advertising costs, and lower cost of capital.

>> But the main reason it's easier to start a startup now is that it's cheaper. Technology has driven down the cost of both building products and acquiring customers...now investors need founders more than founders need investors, and that, combined with the increasing amount of venture capital available, has driven up valuations.

Re: How People Get Rich Now

#782

Post by monoideism »

taurath wrote: post #305
monoideism wrote: post #230

Earlier quoted context omitted.

> But this level of wealth concentration and inequality is detrimental to the fabric of a society. We’re not better off, we’re not more innovative, we’re not healthier or more cohesive or happier when this happens. I agree 100%, but you're ignoring the other factor that is detrimental to society: social factors. Notably, the divorce rate and single-parent rate among poor and working class Americans of all races has s…

Could also be the tail wagging the dog. People arrested for say being drunk in public are gonna be broke, because they don’t have mansions to drink in. Could be that the cultural problems you’re describing follow whole towns being hollowed out as all wealth is transferred to winner take all cities, as free trade knocks out industries with no help nor replacement.

Yes. It's also very possible that the two aspects are synergistic.

Re: How People Get Rich Now

#783

Post by dlp211 »

WalterBright wrote: post #646
dlp211 wrote: post #639

Earlier quoted context omitted.

Not to mention that you miss out on one of the bigger wealth building opportunities, the IPO. While not true for every company, tech IPOs have been gangbusters as of late. I would have loved to invest in AirBnb at their last evaluation before IPO. But that is only available to the truly wealthy.

Take a look at what you'd have today if you bought AMZN the day after it started trading (it doubled on the first day). Didn't buy it because you couldn't afford to buy enough to make a difference? You lost big time! Unhappy about Bezos' compensation? He was there on Day 1. He bet the farm on AMZN. You didn't.

Way to miss the point.

Re: How People Get Rich Now

#784

Post by hnick »

benzor wrote: post #324

There's some nuggets of truth in here, but I am disappointed that this article sidesteps what I feel is the most important reason for startup success in 2020: easy and abundant access to cheap capital. - Interest rates are at all time lows, borrowing is cheap - The Fed's balance sheet is at an all-time high. The economy is flush with cash, particularly the investor / VC class - This excess cash creates an (arguably a…

> These companies achieve growth and put pressure on the competition by offering their services below the real cost that would be needed to achieve profit, hence driving huge share price growth

Which I find weird, if I sell fruit at a loss to run a local competitor out of business as a major supermarket it's illegal predatory pricing (or at least was when I was growing up), yet do it to an entire industry and it's fine. Maybe this is just one of those US exception things.

Missing (or implied) by your list is that incumbents are not an all-or-nothing gamble based on other people's money, so are reluctant to engage in such tactics themselves and will suffer for it.

Re: How People Get Rich Now

#785

Post by closeparen »

whimsicalism wrote: post #250
closeparen wrote: post #197

Earlier quoted context omitted.

These takes freak people out because we want to think of anti-inequality as a virtuous, prosocial belief. But a commitment to hold down inequality is a commitment to prevent the creation of value. I don’t think it’s controversial to skim the top of the creation of value / rise in inequality to fund services that people need. But as long as a founder’s share of his value creation is greater than the share accruing to…

Is it? Does most inequality rise from value creation? Most wealth in America is held by the top 5% wealthiest households directly as a result of inheritance, not hard work or value creation. How is arguing that the inequality produced by inherited wealth needs to be restrained a "commitment to prevent the creation of value"?

No one is qualifying their discussion of inequality with “produced by inherited wealth.” If they did, it’d be a lot more palatable. About half the inequality discourse I see targets founders. The other half targets workers whose salaries are too high, whose children are too well prepared for college.

Re: How People Get Rich Now

#786

Post by niyikiza »

purple_ferret wrote: post #95

>So it's not 2020 that's the anomaly here, but 1982. The real question is why so few people had gotten rich from starting companies in 1982...a wave of consolidation was sweeping through the American economy Microsoft, Oracle, Apple, Bloomberg, etc were all started in the late 70's/ early 80's. Their founders are the richest people in the world. Seems like the question he's asking, though, is why weren't they obscene…

It's an essay. He's expressing an opinion, just like anyone can always produce an alternative narrative.

Re: How People Get Rich Now

#787

Post by arthur_sav »

benzor wrote: post #324

There's some nuggets of truth in here, but I am disappointed that this article sidesteps what I feel is the most important reason for startup success in 2020: easy and abundant access to cheap capital. - Interest rates are at all time lows, borrowing is cheap - The Fed's balance sheet is at an all-time high. The economy is flush with cash, particularly the investor / VC class - This excess cash creates an (arguably a…

I think everyone just wants to get a piece of the future. The companies of today, if successful, will become huge conglomerates given the accelerated globalisation.

Re: How People Get Rich Now

#788

Post by greggman3 »

fairity wrote: post #781
benzor wrote: post #324

There's some nuggets of truth in here, but I am disappointed that this article sidesteps what I feel is the most important reason for startup success in 2020: easy and abundant access to cheap capital. - Interest rates are at all time lows, borrowing is cheap - The Fed's balance sheet is at an all-time high. The economy is flush with cash, particularly the investor / VC class - This excess cash creates an (arguably a…

Your comment leaves me wondering if we're reading the same essay. PG specifically states that the "main reason it's easier to start a startup now is that it's cheaper". And, "cheaper" comes in the form of lower infrastructure costs, lower advertising costs, and lower cost of capital. >> But the main reason it's easier to start a startup now is that it's cheaper. Technology has driven down the cost of both building pr…

I'm not sure what your point is . The article says it "cheaper to do". The person you're responding to says "there's access to cheap capital".

Re: How People Get Rich Now

#789

Post by Florin_Andrei »

missedthecue wrote: post #747
Florin_Andrei wrote: post #724

Earlier quoted context omitted.

> Either you don't think modern CEO pay is a problem, or you think it's a problem because it makes shareholders poorer. The fact that you appear to be completely blind to the third option - the actual issue - is far more telling than any argument you've made so far.

My argument eliminated the third option. It doesn't hold water.

So, you're still missing the point. Or "missing" the point, not sure which. Interesting.

Re: How People Get Rich Now

#790

Post by russellendicott »

josefresco wrote: post #31
aqme28 wrote: post #11

I don't think that the top 100 richest people is a good dataset. You can be extremely rich without making it anywhere near that list. While a lot of those top 100 people made it to that list by starting companies, I'm curious how many of them did so by leveraging family or inherited wealth.

I agree. A rich individual can give their child $0 in inheritance but one introduction, referral or diner party later and they could be set for life. In between this scenario, and the other (handed money) there are countless scenarios that make conclusions very cloudy.

Shouldn't this be an incentive for parents everywhere to always be networking and upholding their social standing so they can pass those benefits down to their children?
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