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How to earn a billion dollars

paulgraham.com

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Re: How to earn a billion dollars

#361

Post by skybrian »

mlsu wrote: post #346

You can tell that he doesn’t really think too deeply about any of this, because the way he wants to illustrate the point is by typing the numbers into a calculator. It’s as if the money comes right up out of thin air, isn’t it? He inadvertently gets close when he talks about Facebook being about people doing stalking. PG, is stalking a good thing or a bad thing, hmmm?

There’s no conservation rule for an asset’s value. Market cap comes mostly out of thin air because people believe a company is valuable. If they change their minds, it disappears.

(Market cap is estimated based on transactions that are a small percentage of market cap.)

Re: How to earn a billion dollars

#362

Post by grim_io »

csallen wrote: post #333
grim_io wrote: post #304

To me, earning something means deserving something. I don't think that the current system rewards those deserving the largest cuts of the pie. If you want to argue how to get a billion dollars, sure. But to me that is different than earning it.

Why would you say that people don't deserve money that others willing gave to them in return for something they wanted and found to be worth it?

First, I'm assuming that you are not a free market maximalist, and that you believe that a market without any regulation will result in mega monopolies where it no longer matters if you find the price of the product to be fair.

The distribution of the wealth created by the massive increase in productivity has been trending towards the organisational top for many decades now.

I don't think that the management has gotten exponentially more efficient and better at their job to justify their increasingly bigger share of the profits.

Re: How to earn a billion dollars

#363

Post by Alpha3031 »

twoodfin wrote: post #270
DanHulton wrote: post #169

Why would you even WANT to become a billionaire? Wealthy, sure, but becoming a billionaire effectively destroys your place in any of your social circles. It obliterates any dynamics of trust and interdependence you may have and replaces them with a gnawing unease about if they’re still hanging out with you, or if they’re hanging out with the money. Not to mention, Graham entirely fails to differentiate between EARNIN…

There’s a fundamental misunderstanding of the mechanics & incentive structure here: Take Mr. World’s First Trillionaire, Elon Musk. He doesn’t have a dragon’s horde, his money is almost entirely invested in SpaceX and Tesla, building things he wants to build. SpaceX didn’t IPO so he could have bragging rights with his Forbes list peers, it IPO’d because it was the most efficient way to get more capital to grow and ac…

It's possible to have more than one reason for getting $75 billion from public markets. Paying off $20 billion of loans from people you don't want to owe money to (who, as far as I could tell, SpaceX borrowed money from to pay off people you really don't want to owe money to) and getting a really big number associated with your name are not mutually exclusive, and from Musk's previous actions (getting large compensation packages approved by conflicted boards) he obviously does want that number.

Re: How to earn a billion dollars

#364

Post by zpeti »

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…

If I vibe code an app, and make $1m, and people willingly paid me for it, who am I exploiting? How did I "extract" $1m from a market. Who did I take that away from?

I didn't even exploit my workers and make a margin on their labor. Please can someone who believes billionaires are evil explain this to me.

Re: How to earn a billion dollars

#365

Post by cm2012 »

filup wrote: post #10

I exclusively build stuff that I think is cool for me and my friends but I have little drive to market these things and plus they are designed to be completely free forever so I don't think I'll ever be a billionaire.

That is wonderful. What makes billionaires valuable to society is that the act of trying to make a business worth a billion dollars that people want is really, really hard. It essentially punches you in the face constantly. You have to power through a bunch of really tough situations. There has to be a really strong reward at the end to make it worth it. Otherwise everyone would just toy around with free projects.

Re: How to earn a billion dollars

#366

Post by pseudalopex »

ModernMech wrote: post #179
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…

> so blunt and misrepresentative You should read that as a self-preservation technique. The eager use of a strawman tells us PG heard AOC's words as an attack against him personally, his business, and his friends. So the essay is not a reasoned retort but more an emotional self-defense to soothe a bruised ego. It's to assure himself that no -- in fact he did earn his wealth fair and square, and to imply otherwise sho…

> So the essay is not a reasoned retort but more an emotional self-defense to soothe a bruised ego.

No. It was to persuade future politicians not to redistribute his and his friends wealth.

Re: How to earn a billion dollars

#367

Post by theptip »

csallen wrote: post #318
sofard wrote: post #181

Earlier quoted context omitted.

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]…

But his N=1 anecdote doesn’t prove anything. He shares a feel-good story about an early stage company with very high growth on a small base. This person is not a billionaire yet.

The actual comparison would be to look at all the startups with billionaire founders (so likely $10B companies) and then analyze the market dynamics that enable them to keep growing so fast.

Re: How to earn a billion dollars

#368

Post by chanakya »

Even AOC doesn't believe what she said. She's saying it because she has a startup of her own which sells ideas, and gets paid in votes. It may not be 93%, but she's had a pretty good growth rate, and when you get to about 50 million, you have a great shot at being President. Ideas which bash rich people have had a growing market for a while, and she's good at it, and people are telling their friends about her.

Re: How to earn a billion dollars

#369

Post by AnimalMuppet »

hilariously wrote: post #96
AnimalMuppet wrote: post #77

I think maybe the fundamental issue is something that he said really late in the essay: > There are other ways to get rich than by starting startups. Some of those do require you to exploit people. But startups are the most common way to become really rich, and if you want to start a successful startup, the key is not exploitation but empathy. > How people become rich in your society is one of the most important thin…

You're right, higher taxes on the billionares would create all sorts of second order effects, like the ability to pay for the social safety net for the common folk, maybe educating the populace properly, all sorts of truly scary stuff!

I didn't say "higher taxes". I said "take it" - meaning take all of it. Confiscation. That's what I think many of these people are trying to say, without quite saying it.

Re: How to earn a billion dollars

#370

Post by zarathustreal »

owaiswiz wrote: post #163

> She was getting richer at a stupendously rapid rate. And yet she hadn't been doing anything bad. The reason her startup was growing so fast was simply that users loved what she'd built. So she could feel from her own experience how wrong that politician was. She wasn't exploiting anyone. I presume it's a company that just has co-founders then? Or everyone is getting an equal % of the share? In which case SHE's not…

Not giving everyone equal % is exploitation?

Interesting, by that logic every participant in the economy should also be required to bail out any startup that fails otherwise we’re exploiting the founders! They’re taking all the risk and we’re getting all the benefit of the services and goods they create!

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