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How to earn a billion dollars

paulgraham.com

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Re: How to earn a billion dollars

#211

Post by Loughla »

jadenPete wrote: post #155
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…

Why does building a successful business necessitate generating economic externalities? Many do, and that should be prevented, but many also don’t. And to say that those externalities are responsible for a majority of the business’s growth in all cases is just false.

I'm genuinely struggling to think of a sector of billion dollar business that doesn't rely heavily on externalized costs. I'm not trying to be difficult, but I can't come up with any.

Re: How to earn a billion dollars

#212

Post by tome »

thedevilslawyer wrote: post #90

Mr. Graham is making 2 mistakes: a) thinking that others don't understand exponential. Any reasonably college educated grad understands it well. b) thinking that growing 93 percent every month means the founder has put in 93% more effort than the prior month. Their argument relies upon the ideology that just because you thought and executed an idea profitably means you should continue to "earn" from it. In the LLM ag…

Sadly, I don't believe that many college grads reasonably well educated in anything other than a scientific field understand exponentials.

Re: How to earn a billion dollars

#213

Post by GlibMonkeyDeath »

readingnews wrote: post #44

The real problem is his example, "you start off with 2 million dollars and 95% growth rate". Fine, show me the average person who can come up with 2 million dollars. I sure as hell can not. I even went to banks and founders with my ideas, cash flow sheets and customer list looking for a loan. No, I am convinced, the rich already have 2 million dollars, and make themselves a billionaire. The system is rigged against "…

He was talking about an equity stake in a start-up. Although on paper it is worth $2M, it is (probably) not liquid (i.e, the shares can't be traded easily, maybe at all.) The vast majority of founders don't literally spend $2M from their checking account to purchase their position in a start-up - they get some ownership as part of taking the start-up risk.

Re: How to earn a billion dollars

#214

Post by mlhpdx »

What occurred to me reading this was the wage. Initially, and famously, the hours put into building a startup result in sub-par wages. But the amount of work by an individual never increases as it is limited by human capacity. In a successful startup with continuous growth the wage is ever increasing, to the point of absurdity.

That’s weird. I grew up around farming and farmers. A group also very proud of the work they do, in a profession where the wage is also indirect — sometimes negative, sometimes a fortune, always based directly on the work they’ve done. Year after year, the work.

That’s different.

I’ve always identified two sets in the realm of entrepreneurs: those that want to “be rich”, and; those that want to “become rich”. The latter group is perhaps more admirable as they acknowledge the process and the value creation whereas the former seek only the status. But neither are often interested in the work of it.

Re: How to earn a billion dollars

#215

Post by tome »

zarzavat wrote: post #97

I don't disagree with the essay, but is there any benefit to being a billionaire? Almost anything I could possibly want could be satisfied by being a humble multi-millionaire.

Do you have a want to please millions of people whose lives are improved by exactly the product that your company sells? I could certainly do without that, but it does sound nice.

Re: How to earn a billion dollars

#216

Post by tome »

theopsimist wrote: post #161

- So I would like you all to do me a favor please. I would like you to take out your phones and calculate a number. I know this may seem contrived, but I promise it will be useful for you. I’m thinking of vibe coding a calculator app How Many Babies Died For This where you input your startup idea, life(style) goals and AI token usage and the machine spits out the Net Babies Dead for you to achieve your dreams

How many would it be?

Re: How to earn a billion dollars

#217

Post by oreally »

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…

Agreed, what a disappointment of an essay, encouraging a growth at all costs mindset and pretending that this growth doesn't involve/encourage bad side effects.

And a lot of these structures either involves a percentage cut or a security of some kind. And it's not new, it's copied.

Re: How to earn a billion dollars

#218

Post by atq2119 »

inigyou wrote: post #134
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…

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 impossible to become a billionaire in a moral way, though that's more of a problem of the system than it is necessarily one at the individual level. A just and moral system would assign the value being created in such a way that becoming a billionaire would be essentially impossible.

Yet pg never even acknowledged the possibility that that might have been the argument.

Re: How to earn a billion dollars

#219

Post by tsimionescu »

Findeton wrote: post #29
tsimionescu wrote: post #5

So nice of pg to mention AirBnB as one of his examples of what a successful startup who "doesn't cheat" means. They just were great people with a great idea who found a market for something people wanted that no one had thought about before, and poof, exponential math billionaires who earned it! Of course, we'll ignore the huge issues that Airbnb created for cities, customers, and providers. We'll ignore the way they…

No, that problem was not generated by Airbnb. There’s growing demand and, because of regulation, not enough is built every year. For example, according to INE, 250k new families are formed in Spain (more than 500k people) and only 100k new houses/flats are built and the yearly deficit has been accumulating for 12 years. That is the real issue and blaming corporations is just the politicians’ easy path to deflect blam…

Even if it were true that the problem of housing affordability was not affected by Airbnb (it's not, at best it only exacerbated an existing problem), that would not mean it didn't create other problems for cities. Having tourists concentrated in places that are not designed for it, where a hotel license would never have been issued; the problem of too many tourist accommodations, causing an overflow of tourism; problems for neighbors with parties and similar nuissances; problems with untaxed income from the smaller owners; and probably others I'm forgetting.

Re: How to earn a billion dollars

#220

Post by Demiurge »

This is slightly disappointing, but it's probably necessary cope. If you want to build startups which move fast and break things, you have to ignore many problems and many people of this state, country, and world.

You start by ignoring what a "billion dollars" means, and most people don't think it's stock. Then you have to ignore what "earn" means, which most people don't think is getting stock on the assumption that the company you own a portion in will turn a profit one day, possibly many years ahead.

Getting investment without having profitability, getting to keep a portion of this investment, even if the banks that are insured with taxpayer money lose that money, is not what the constituency of AOC think is earning money.

There is a huge amount of technological advancement and personal fortune that I enjoy from this system, but I'm not trying to bullshit anyone that the system is fair.

In conclusion, I do think this attitude is cope that allows a high performing individual to focus on this game and be successful, and Paul Graham seems to be successful, so it's natural.

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