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How to earn a billion dollars

paulgraham.com

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Re: How to earn a billion dollars

#311

Post by CPLX »

Levitz wrote: post #296
CPLX wrote: post #165

Earlier quoted context omitted.

His entire essay is just based on a purposeful misreading of the opposing point. It's a straw man. And if you look at his history it's obviously intentional and part of his usual style of argument. The actual opposing argument is that it's impossible to create a billion dollar enterprise without a group effort, and for one person to end up with a billion dollars necessarily means that they made decisions within that…

>Period. That's it, and it's inarguable. No it's not, it's actually extremely easy to prove wrong: J.K. Rowling.

She ran the printing press and picked the camera lenses and stacked the books by the cash register and booked her own press interviews? Also who taught all the kids to read?

Re: How to earn a billion dollars

#312

Post by altcognito »

jrm4 wrote: post #243
TheTaytay wrote: post #129

Earlier quoted context omitted.

Your phrase “extract” betrays a fundamental disagreement with what Paul is saying. (Externalities does so again) It assumes a zero-sum game where the job is to shift money from one person to another. Value, and thus money/wealth can be created. Literally. You are saying, in different words, that no one can do it “honestly”. He is saying one can.

But he seems wildly oblivious to the fact that there even is an argument to be had here, which there emphatically is. Reasonable people can disagree as to the nature/extent -- or even the existence of -- exploitation, but this guy absolutely has impermissibly strong blinders on, rendering most of this article a waste.

Seriously, the paragraph is bad enough to warrant an accusation of bad faith.

Like, does PG really not understand that nobody is arguing that a company can build a billion dollars worth of value? Has he not read Adam Smith? Is his definition or understanding of rent seeking so limited that he can't see the grey areas between "extraction" and "earning" money?

Anybody who earns significant income from investment, including VC money, should recognize that they are at some level extractive, not the hard won dollars that the folks at the ground level are generally putting in.

For guys like PG, Musk, Bezos, Zuck, Ellison, Thiel their very identity is tied to winning this as a game, and thus, any actions they take must defended at all costs, and the score must be seen as righteous and deserved and free from interference.

Re: How to earn a billion dollars

#313

Post by PaulDavisThe1st »

changoplatanero wrote: post #263
AdamN wrote: post #124

She meant impossible in that one doesn't earn a billion dollars through work alone. The only way to get there is to set up a structure that extracts a billion dollars from a market (usually by building a structure that's more efficient but also generates externalities that are not borne by the person getting the billion dollars). pg's reading of it is so blunt and misrepresentative that I'm nervous about what kind of…

I wonder what she would say about professional athletes. Some of the top stars have made near a billion dollars in lifetime wages, as unionized employees. Hard for me to see who the sports stars are exploiting to get their wealth.

Nozick has a very interesting thought experiment about this. It poses a completely egalitarian world in which everyone has the same wealth and earns the same income. But there's a kid who's really good at dunking basketballs, and starts charging 5c to watch him dunk. Nobody is required to pay the kid, everybody does so entirely of their own free will. Things progress, and the kid now has 100x the wealth of anybody else. Nozick asks the question: is this something that a good society would try to stop?

Re: How to earn a billion dollars

#314

Post by 3997531578 »

teddyh wrote: post #81
jameskilton wrote: post #66

There is nothing more evil in this world than the pursuit of power and wealth.

“ For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows. ” — 1 Timothy 6:10 KJV (The King James Bible) https://en.wikisource.org/wiki/Bible_(King_James)/1_Timothy#... >

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Re: How to earn a billion dollars

#315

Post by automatic6131 »

geysersam wrote: post #292
TheTaytay wrote: post #129

Earlier quoted context omitted.

Your phrase “extract” betrays a fundamental disagreement with what Paul is saying. (Externalities does so again) It assumes a zero-sum game where the job is to shift money from one person to another. Value, and thus money/wealth can be created. Literally. You are saying, in different words, that no one can do it “honestly”. He is saying one can.

The word "extracted" does not betray a belief that value cannot be created. You can "extract" value that is created just as you can extract value that was there already. The question is not whether or not value was created, the question is who deserves to control the value that was created. The fact is the billionaire managed to extract value from the market. The ethical question is: who deserves to get the value tha…

You're asserting a dichotomy that doesn't exist. One can both create and extract at the same time.

That's why we're here debating, because one can create value, and one can extract value. Both statements are true and easy to argue for. The synthesis is that creating value also grants licence to extract since it's impossible (possibly even theoretically impossible) to define exactly where the line between the two is.

Re: How to earn a billion dollars

#316

Post by DonsDiscountGas »

TrackerFF wrote: post #116

I think the distinction the politician tried to make, was that you don't "earn" a billion dollars the same way the vast majority of people make their money. You become a billionaire by company ownership, not getting cold hard cash. The hierarchy of wage looks something like: 1. hourly pay (how many hours you can work sets the maximum possible salary) 2. base pay + cash bonus (the cash bonus starts to increase your ea…

Even if you're "stuck" at 1, a person with a reasonably high salary can buy equity in the public stock market and start capturing exponential growth. And if they can outperform the market by even ~5% that can really add up[0]. Not to billionaire status but maybe it's okay to not be a billionaire.

[0] Big "if" obviously but so is a 15% monthly growth rate in revenue.

Re: How to earn a billion dollars

#317

Post by nradov »

atq2119 wrote: post #218
inigyou wrote: post #134

Earlier quoted context omitted.

pg is or was the owner of a very influential venture capital fund, that created projects such as Uber and AirBNB. He knows all about setting up structures to extract value, and he also knows which framing makes people more sympathetic instead of angry.

The sad part about it, and one that has become a bit of a theme with his postings, is that pg stopped being intellectually honest in his online writings at some point over the last two decades. His post here in particular violates the fundamental principles of HN in that he does not engage with the argument at all. The argument isn't that it's impossible to become a billionaire legally , the argument is that it's imp…

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Re: How to earn a billion dollars

#318

Post by csallen »

sofard wrote: post #181
AdamN wrote: post #124

She meant impossible in that one doesn't earn a billion dollars through work alone. The only way to get there is to set up a structure that extracts a billion dollars from a market (usually by building a structure that's more efficient but also generates externalities that are not borne by the person getting the billion dollars). pg's reading of it is so blunt and misrepresentative that I'm nervous about what kind of…

I think there are many arguments against AOC's comments, but I agree that PG here is misrepresenting her point. I don't think anyone reading PG's blog is clueless about the power of compounding or the difference between salary and wealth through asset growth. Her point is essentially whether the entire capital system is "fair." And to be fair to PG I don't think AOC articulated a particularly strong point either.

He very explicitly engaged with her claim that the system is unfair/unethical, and whether you agree with him or not, he argued against it:

> What [AOC] meant was that it's impossible to get that rich without doing something bad — without cheating in some way... The reason [my founder's] startup was growing so fast was simply that users loved what she'd built. So she could feel from her own experience how wrong [AOC] was. She wasn't exploiting anyone. Exactly the opposite in fact. The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy, and as a result the users had been telling their friends. And that gets you exponential growth.

In other words, he's saying that rapid wealth creation can (and often does) come from creating and selling things of value to willing buyers, at scale, and that that's not unethical to do.

I do agree with you that AOC's point is not particularly strong, though :)

Re: How to earn a billion dollars

#319

Post by barnabee »

Money, property, limited companies, intellectual property laws, patents, contract law, etc. etc. are things on which all successful businesses depend. These are social constructs - societal "technologies" if you like. They work because as a society we agree that they should and enforce them through the rule of law.

The assertion that it should be "impossible" to be a billionaire (or trillionaire, gazillionaire, whatever) is really an assertion that a just and moral society would design all of these things to prevent that outcome.

And I think it's pretty reasonable to say that we ought to set society up such that as someone gets wealthier we take money away from them at faster rates, so that beyond some level of wealth it is very difficult to continue to get richer.

Unfortunately, a lot of people are captured by rather libertarian ideas about government, money, property, etc. that seem to prevent many people (at least in the US, UK, et al.) from behaving in anything but the most selfish, individualistic, and antisocial of ways.

Re: How to earn a billion dollars

#320

Post by anon84873628 »

testing22321 wrote: post #284
twoodfin wrote: post #237

Earlier quoted context omitted.

Putting the scale of dollars and the startup world aside, AOC’s comments read that way would suggest a farmer who gets a series of loans from the bank to help him expand his family farm from a $200K sole proprietorship to a $10M sole proprietorship didn’t “earn” it either. I don’t think a definition of “earn” that excludes cases like that captures the generally understood meaning.

The farmer doesn’t own that mega farm until he pays off the loans. How does he get the money to do that?

By paying farm worker less than they deserve, farm equipment manufacturers more than they deserve, and using farming practices that destroy the ecology and depend on continued fossil fuel extraction.

(And in California where the most profitable crops are perennial fruits and nuts, probably outright stealing water from the aquifer or state irrigation system.)

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