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How to earn a billion dollars

paulgraham.com

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Re: How to earn a billion dollars

#681

Post by fallonator »

chipotle_coyote wrote: post #525
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.

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 about we set a maximum wage instead of a minimum wage? But it's not a set number. It is a maximum multiple of the lowest paid employee at a company? 10x should do it. If the CEO wants a million each year then the lowest paid employee still gets 100k. I'm trying to think of why this wouldn't work.

Re: How to earn a billion dollars

#682

Post by CPLX »

WarmWash wrote: post #619
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…

I think the most chronic misunderstanding in the "billionaire" rhetoric is that billionaires are in it for money. People who work a job they don't like because they need money to live, view money as the objective in life, because the equivocate it to escaping and freedom. So wearing that lens, and looking at billionaires, these motherfuckers are greed driven psychopaths who blew past the "escape with freedom" bank ac…

I've known and spent time with quite a few billionaires personally.

I can assure you, with the utmost in direct observation, that they are extraordinarily obsessed with money. It is, in fact, the defining characteristic of their entire existence, literally by definition.

Any argument to the contrary is profoundly hilarious. Imagine if you came across someone that had over one billion model trains in his basement who was claiming that he wasn't super interested in model trains.

Re: How to earn a billion dollars

#683

Post by robotpepi »

Telemakhos wrote: post #227
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…

Let's say she has ten employees. They all voluntarily agree to work for her: slavery is illegal, so people work for others on a consensual basis. Both the employer and employee negotiated and consented to a salary or wage schedule for that employee. The employer pays the agreed-upon compensation, and the employee receives it. If the company makes an unexpectedly large profit, the employer is not obligated to redistri…

so many people missing the point...

try to get out of the box

Re: How to earn a billion dollars

#684

Post by nfw2 »

WarmWash wrote: post #619
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…

I think the most chronic misunderstanding in the "billionaire" rhetoric is that billionaires are in it for money. People who work a job they don't like because they need money to live, view money as the objective in life, because the equivocate it to escaping and freedom. So wearing that lens, and looking at billionaires, these motherfuckers are greed driven psychopaths who blew past the "escape with freedom" bank ac…

I think the deeper issue is a chronic misunderstanding of what wealth is. Most people engage with wealth in the form of usable goods and services. A banana is wealth. A house is wealth. A dollar in my bank account or a share I own is, at the margin, entirely fungible into things I can consume, so they aren't meaningfully different.

This is an illusion. A share has value because it represents the hypothetical future productivity of an abstract entity that may or may not even exist in the future.

At the margin, you can take an Amazon share and buy bananas with it. However you absolutely can't take the entirety of Amazon and exchange it for a trillion bananas. Those bananas don't exist.

More importantly, you can't take the entirety of Amazon and transform it into housing supply. I think people are often too careful about "missing the forest for the trees" and then conceive of problems as overly abstract. The affordability crisis is, first and foremost, a housing shortage.

Young people can't afford homes. Millennials are hitting 40 and realizing they may never afford one. Being secure in housing is pretty damn low on the Maslow hierarchy of needs. Sure maybe we need a more progressive tax policy, but this myopic focus on billionaires distracts from the real problem which is a housing shortage.

Re: How to earn a billion dollars

#685

Post by rwmj »

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.

UK companies are forced to list beneficial owners, in order to cut through these kinds of shenanigans. It did take decades to get this change implemented because capital was deeply opposed to it. For some reason, I'm sure it's not because they want to avoid paying taxes like the little people.

Re: How to earn a billion dollars

#686

Post by hammock »

jltsiren wrote: post #670
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.

The essay kind of misses the point, as the question was mostly about the meaning of word "earned". "Earned income", for tax purposes, matches pretty closely the kinds of income many people consider genuinely earned in the moral sense. From this perspective, if a startup grows organically and the founders become rich, they have earned it. But if the growth requires capital (an investment, a loan, or the wealth the fou…

Halfway through your second paragraph you started conflating income with wealth/capital.

The wealth controlled by a startup investor becomes earned income, in your words, when the founder receives pay for their work, in the form of cash or exercised options or whatever else.

To get that earned income, which is derived from wealth but is not the wealth, they have to earn it in the same way the wagies in your first paragraph earned it. The investor (on the board, presumably) has to vote him in as CEO and approve his pay package.

And just as retail customers don’t give their money away for no good reason, neither do investors.

Re: How to earn a billion dollars

#687

Post by rwmj »

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…

Who is it that implements the rights around ownership? Who is it that will (possibly literally) go to war to defend this right? Maybe he should pay a bit of tax on this right since he expects others to defend it.

Re: How to earn a billion dollars

#688

Post by ProjectArcturis »

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 would have liked the essay more if PG had actually engaged with AOC's claims. He just does some math and shows that exponential growth is fast.

What did the founder have to do to keep growing at 93%? Good solid business fundamentals and identifying a new solution can get you some growth. But eventually you've done all that and the only way to continue growing is extraction -- buy out your competition and raise margins, outsource your workers, enshittify your user experience. THAT is why no one "earns" a billion. The last $900M pretty much always requires using your resources in clever but unethical ways to extract money from customers and financial markets.

Re: How to earn a billion dollars

#689

Post by Unbeliever69 »

sethammons wrote: post #40

This post hand waves away the inflection point(s) of maintaining high growth rates as you grow. He hints at it saying year 4 growth is harder, but it is _vastly_ harder. Companies focus of the Rule of 40 and struggle to keep above it. And this struggle is where many in management lose their way. Enshitification begins. The margins get harder. More corners cut. Employees get treated less well, customers get treated le…

Honestly the most insightful comment in this conversation.

"The road to hell is paved with good intentions." I would substitute the word "paved" with "begins." It is the very rare business that inevitably doesn't succumb to enshitification.

Re: How to earn a billion dollars

#690

Post by hammock »

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.

Having been on HN for 15+ years I have found it fascinating to witness the fawning and adulation over pg blog posts completely reverse and everyone has turned on him now.

It used to be if you criticized anything in his blogs you’d get downvoted to oblivion. Now criticism is the norm.

As far as I can tell it’s less a change in pg’s viewpoints (though the topics have evolved, and he has gotten more transparent perhaps), but a change in the public reaction to them.

I’m not sure if it’s the same people though, might just be the new generation.

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