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How to earn a billion dollars

paulgraham.com

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Re: How to earn a billion dollars

#691

Post by LanceH »

irishcoffee wrote: post #8
smallmancontrov wrote: post #3

In creative destruction, you can do an accounting sleight of hand by attributing credit for creation while ignoring blame for destruction even though the two are linked. This is a technology + investing forum and all of us agree that in general creative destruction processes are enormously net positive, but they frequently do kick off a toxic byproduct in the form of said destruction (e.g. Uber and displaced taxi dri…

I will say before Uber was a thing, if I tried to call and schedule a taxi pickup in the city I lived in at the time, if they showed up at all they were at east a half hour late. Missed a flight because of it once. I don’t even like uber, but it is objectively a better service most of the time.

Up front pricing -- even if higher -- is welcome.

Re: How to earn a billion dollars

#692

Post by astonex »

pclowes wrote: post #641
PowerElectronix wrote: post #637

It's clear to me that in order to get a billion, you have to swidle a lot of people out of their fair share of the billion. As soon as the person that has "The Idea" keeps their 60% stake of the company while the army of minions are working their assess off to get that idea to a billion dollar valuations are given crumbs or no stake at all, you know who is swindling who.

False, you just make something very valuable. To get people to help you make it you offer to pay them and they willingly exchange their time for that money (or equity if they also think it will be very valuable someday or you have a record of making valuable things in the past) Who is the person swindled here? Who agreed to something and was deceived? Who was stolen from? This process is net wealth creation. The weal…

Ever experienced being the founding engineer and getting 0.5-2.5%? The amount of work done by the founding engineer for the amount of equity they usually get, there is definitely an unfair exchange here. I'd say the founding engineer is 99% of the time better off finding a non-technical co-founder and building something for 50% each.

Re: How to earn a billion dollars

#693

Post by chad_c »

pandoro wrote: post #592

> What she meant was that it's impossible to get that rich without doing something bad — without cheating in some way. > 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. There is no doubt that Graham is right in saying there is a formula to becoming a billionaire and that formula involves creating products that help you…

You can't.

For some subset of the population, they are okay with exploitation as long as they are able to exploit someone else that is lower on the capitalist hierarchy.

Re: How to earn a billion dollars

#694

Post by paulryanrogers »

WalterBright wrote: post #622
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…

> salaried workers can't use leverage to increase their earnings Of course they can. They can invest, say, 20% of their income into stocks. They can borrow money to invest into stocks, too.

Plenty of workers have to take loans just to pay rent or healthcare. And even if they did borrow to invest, they can't sell without paying CG. And what if they bet wrong?

Re: How to earn a billion dollars

#695

Post by pclowes »

astonex wrote: post #692
pclowes wrote: post #641

Earlier quoted context omitted.

False, you just make something very valuable. To get people to help you make it you offer to pay them and they willingly exchange their time for that money (or equity if they also think it will be very valuable someday or you have a record of making valuable things in the past) Who is the person swindled here? Who agreed to something and was deceived? Who was stolen from? This process is net wealth creation. The weal…

Ever experienced being the founding engineer and getting 0.5-2.5%? The amount of work done by the founding engineer for the amount of equity they usually get, there is definitely an unfair exchange here. I'd say the founding engineer is 99% of the time better off finding a non-technical co-founder and building something for 50% each.

Strongly agree from a purely economic perspective! However, founding engineer is a good way to watch the ups and downs of a startup before doing it yourself.

Additionally, since most startups fail, the founding engineer is typically better compensated than the founders. It’s only in the success case that it is a raw deal economically. However, in the rare case that it is a successful company, the founding engineer does alright and then also knows more about how to do it again.

The difference between founding engineer and founder is typically the difference between starting before any money came in or joining after (basically guts/conviction)

Re: How to earn a billion dollars

#696

Post by Daishiman »

hammock wrote: post #690
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)…

15 years ago things were quite different:

* There were far fewer tech billionaries.

* The tech billionaries were not publicly associating with far-right figures or cryptofascist belives, or at least were doing so quietly while promoting ideas of technology as social progress

* A lot of the tech startups were seen as fighting entrenched interests grounded in regulatory capture and people had the illusion that the next generation of companies supplanting these wouldn't succumb to the same factors.

* Donald Trump as a phenomenon of current politics did not quite exist yet, so we didn't have to witness these people sucking up to him

That's just for starters.

Re: How to earn a billion dollars

#697

Post by hammock »

pmxi wrote: post #639
galenptacek wrote: post #602

Someone told me it was impossible to become an avogadrillionaire (to have a net worth of one mole, or approximately 6.02 x 10^23 dollars.) Now there's this founder I know whose startup grew 93% last month. Let's be conservative and say she has 2 million dollars. Let's calculate how many months of 93% growth it takes for something to grow 301,100,000,000,000,000x. The log base 1.93 of 301,100,000,000,000,000 is 61.209…

PG acknowledged that growth is limited by market size. Markets to support "avogadrillionaire" level wealth may not current exist. However, there obviously exist markets to support billionaire level wealth, as evidenced by the at least 30 billionaires produced by YC, and the many others.

Markets have growth rates the same way that products do.

Re: How to earn a billion dollars

#698

Post by oatmeal1 »

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."

The market is not some independent external arbiter. The market is based on rules government creates. Those rules can be exploitative - It may be perfectly legal to make payday loans to financial illiterates, or treat animals cruelly in meat plants, or simply to use marketing in a way to manipulate people's behavior subconsciously (which almost every company does).

Everyone who makes a billion dollars must attribute that success to themselves, but also the people who built the roads their product is delivered with, the teachers that taught them in school, the doctors that keep them healthy, etc.

What fraction of the wealth earned by a billionaire society is entitled to for its contribution will always be a fair policy debate.

Re: How to earn a billion dollars

#699

Post by m0llusk »

Working under Steve Jobs at NeXT and then Apple it was always about excellence and could grandma use it. Money as the key to everything never came up. That kind of thinking led to iPhone and Apple as it is today. Seems like this money first thinking leads to relatively shallow achievements. Also notable that making a billion dollars appears to slam the brakes on innovation as billionaires focus on shell games like mergers and acquisitions.

Re: How to earn a billion dollars

#700

Post by paulryanrogers »

systemf_omega wrote: post #209
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…

You say "stuck at (1)" as if most people actually desire this kind of wealth and are trying to become entrepreneurs. The simple truth is that many people don't want to step into that kind of intensity and uncertainty, or lack the skills to succeed in a cutthroat industry. The idea that founders are somehow "cheating" is hilarious to me. Anyone in the developed world can easily become a founder, why don't you try it?

> Anyone in the developed world can easily become a founder, why don't you try it?

Because most of us have families and can barely afford rent and healthcare. Those of us with a bit more success are finding that extended family are falling into poverty and need help (thanks inflation and transition to lower wage jobs!). They cannot work more than 2 jobs and also found a company.

Most newly founded companies fail, so it's an expensive process unless you've a network of FFF or VCs to draw from.

Many founders get nothing out of the process but stress and bankruptcy.

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