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How to earn a billion dollars

paulgraham.com

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Re: How to earn a billion dollars

#671

Post by paulryanrogers »

nfw2 wrote: post #625
chipotle_coyote wrote: post #525

Earlier quoted context omitted.

What if -- bear with me here -- it's possible for bright, motivated founders to create startups that your kids can work in, but those founders could be content with merely making a hundred million dollars? Because, and I don't know if you know this so you may have to take it on faith, that is still so much money that said founder and their family and very likely their descendants can live in extreme luxury for the re…

How exactly do you propose keeping a founder from becoming wealthier once their company scales past the point where they are worth a hundred million?

Taxes. If they want to externalize the costs then society should socialize excessive surpluses.

Re: How to earn a billion dollars

#672

Post by sutterd »

pipes wrote: post #509

The amount of negativity to this is depressing. No one seems to be contradicting anything he's saying here, instead it's just vacuous ideology "extraction" etc etc. Purposely narrow reading. I've got kids, I want people creating start ups they can work in, the alternative is too grim.

I think there are different views you can have here. I think PG is in the group that thinks if you get a billion dollars, you earned a billion dollars. His distinction is between getting the billion dollars honestly or dishonestly. The alternate view is that you can get 100 billion dollars, presumably honestly, but that doesn't mean you earned a billion dollars. The first group will say this is splitting hairs. The second group will say that is the whole point. It the company gets a billion dollars, did it earn a billion dollars? Even more to the point, if the company earns a billion dollars, does the founder/CEO, or whoever is refernced in this post, earn a billion dollars? I think the two groups will just see this differently.

Re: How to earn a billion dollars

#674

Post by paulryanrogers »

fn-mote wrote: post #645
chipotle_coyote wrote: post #525

Earlier quoted context omitted.

What if -- bear with me here -- it's possible for bright, motivated founders to create startups that your kids can work in, but those founders could be content with merely making a hundred million dollars? Because, and I don't know if you know this so you may have to take it on faith, that is still so much money that said founder and their family and very likely their descendants can live in extreme luxury for the re…

Surely this would just create an industry of ways to dodge the “$100m tax”. Just waiting for my company’s top 10 shareholders to be anonymous entities owned by other companies based in the Cayman Islands.

The rich being willing to cheat doesn't mean we should just give up and let them consume all surplus value in the system, until people are literally working 3 jobs for rent and food.

Re: How to earn a billion dollars

#675

Post by boelboel »

rayiner wrote: post #549
blfr wrote: post #23

But the accounting difference is real. It is virtually impossible to earn a billion dollars. What is possible but still difficult is to create something worth a billion dollars which you can then sell if you choose so. And to the people criticizing, this is cheating. To them, a billion dollars enterprise is not possible without the exploitation of employees, customers, or at least the environment. Also, the most impo…

> And to the people criticizing, this is cheating. To them, a billion dollars enterprise is not possible without the exploitation of employees, customers, or at least the environment. Well that’s wrong. Exploitive businesses do exist. Rent seeking and arbitrage does exist. But the ire today isn’t directed to Wall Street or private equity. It’s being directed to people who built real companies. It’s not inherently exp…

Amazon itself used the extremely advantageous rates of USPS for book delivery in the 90s/early 2000s to be able to grow. Combined with the lack of sales tax it could undercut basically any bookstore in sale-tax free states. Part of the reason why USPS couldn't improve itself was because of a law in 2006 which forced them to prefund retiree health benefits for decades into the future making them unable to spend those billions a year into modernisation right when it needed it the most (and private companies didn't face this pressure). Both the sale tax benefit and the USPS disadvantages are reversed now but the momentum amazon got and the slowdown USPS had can't be reversed.

The company also pushed for all sort of regulatory changes to punish competitors (e.g. minimum wage to harm Walmart) while it had labour violations which barely got fined. This isn't to say that I think Amazon didn't provide value at any point in time, with its recommendation algorithm and review system it actually abuses the added value the platform delivered in the past to benefit its own basic products, but I believe there would've always been an Amazon who would've used similar regulatory plays to get ahead. That's why it's kind of difficult for me to say how many of Bezos his billions were 'fairly' earned.

Furthermore I don't believe it's impossible for someone to truly earn a billion, the financial sector is one that has some of the best examples (e.g. Jim Simons) it's just difficult to find a 'close to purely fair' billionaire.

Re: How to earn a billion dollars

#676

Post by jonfromsf »

anbende wrote: post #627
chipotle_coyote wrote: post #525

Earlier quoted context omitted.

What if -- bear with me here -- it's possible for bright, motivated founders to create startups that your kids can work in, but those founders could be content with merely making a hundred million dollars? Because, and I don't know if you know this so you may have to take it on faith, that is still so much money that said founder and their family and very likely their descendants can live in extreme luxury for the re…

The primary issue with this is the way shares and equity work. Elon Musk is a trillionaire on paper. He pays himself famously little. That net worth is, under our current system, tightly linked with his interest and control in his various enterprises. He can borrow against it which gets around taxes and that should probably be addressed, but he like the hypothetical fresh billionaire startup founder don’t have that m…

Just don't step-up cost basis at death and you solve the problem. Elon's fine, we can wait until he dies and his heirs sell their shares.

Re: How to earn a billion dollars

#677

Post by sanswork »

csallen wrote: post #271
sanswork wrote: post #4

I don't personally subscribe to this belief but the people saying it's impossible to earn a billion dollars without doing something bad would say that your founders are doing something bad by exploiting the employees by not returning to the value creators a fair share of the value generated and instead hoarding it for themselves. pg is arguing a strawman to the actual argument when there are far better arguments arou…

Who decides what's "fair"? Shouldn't the market decide? Otherwise, of course people will always be incentivized to argue that their subjective opinion is what's fair, and that's almost always going to be, "I should have been given more."

I don't have an answer for that, again I don't subscribe to that belief and I think risk should be highly rewarded.

That said the market is a terrible judge of fairness since it's a feedback loop so luck early on can definitely allow you to extract an unfair amount of value later(this is what Wilkinsons employee was saying basically, Andrew pointed out that they offered them share packages instead of salaries and the employee replied that his employees couldn't afford to live without a salary like he could so it was never a real option so they didn't actually have a chance to capture a fair amount of the value from their work).

(It's been a while since I read the book I could be getting some of the details slightly wrong)

Re: How to earn a billion dollars

#678

Post by bwhiting2356 »

tim333 wrote: post #158

Technically if you look at AOC's statement he mentions >AOC: “There’s a certain level of wealth and accumulation that is unearned. You can’t earn a billion dollars. You just can’t earn that. You can get market power, you can break rules, you can abuse labor laws, you can pay people less than what they’re worth, but you can’t earn that” there's some truth there in that PG is talking about capital gains as the owner of…

they keep moving goal posts. Show me an entrepreneur making 10M AOC says fairly earned it.

Re: How to earn a billion dollars

#679

Post by a34729t »

This reeks of "Billionaires are persecuted" a la Silicon Valley (https://m.youtube.com/watch?v=JBZTHxZvOwg).

Billionaires are great when the tide is rising. However the challenge for the young generation now is the tide is going out: Housing is expensive, there fewer good jobs, AI is coming for these jobs if they arent outsourced (or we bring in guest workers), plus the specter of supporting all the seniors. This is a problem is every developed and developing country.

Maybe it's worth reflecting on how billionaires could inspire the next generation and help drive society in a better direction. If you are gonna argue capitalism is good (it is) you need to make a credible argument to individuals who arent doing well. Society (or the country) doing better doesnt make people feel better if they personally cannot find a job or afford housing.

The founder of Huawei is the right billionaire role model- not PG -and he at one point stated when you employ thousands of people, you start being responsible for their welfare!

Re: How to earn a billion dollars

#680

Post by CPLX »

pclowes wrote: post #634
chipotle_coyote wrote: post #525

Earlier quoted context omitted.

What if -- bear with me here -- it's possible for bright, motivated founders to create startups that your kids can work in, but those founders could be content with merely making a hundred million dollars? Because, and I don't know if you know this so you may have to take it on faith, that is still so much money that said founder and their family and very likely their descendants can live in extreme luxury for the re…

It is not like the money is in his bank account. And it’s not like he took the money from somebody else. He spent a ton of time to create something that he owned the majority of and to make that thing more valuable. He paid other people to help him and they were happy with that exchange. The government also helped them and they were happy with that exchange. Suddenly, people have assigned a concrete value to the thin…

Of course he took the money from someone else.

Is your theory that he dug it out of the ground with a shovel or something?

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