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How to earn a billion dollars

paulgraham.com

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Re: How to earn a billion dollars

#471

Post by encoderer »

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…

That’s a charitable read. Remember she also thought that New York would “lose millions” if Amazon put their hq2 there. Just because she’s in congress you can’t assume she understands how building a business works.

Taking your interpretation at face value I would add that yes we call it “capitalism” not “laborism”.

Re: How to earn a billion dollars

#473

Post by coffeemug »

“Billionaires v. the underclass” is such an unsophisticated discussion. Markets have all kinds of externalities, equilibrium traps, information asymmetry flywheels, and hundreds of other phenomena that interplay to trip people’s sense of fairness in all kinds of ways.

To pick just one example, infinite scrolling can be seen as a modern equivalent of cigarettes— a product that made people billionaires, and that consumers obviously want but are not free to stop using because of hyper-sophisticated dark patterns.

Is Elon a trillionaire because he created a trillion dollars of value from thin air, or is it because he created an information asymmetry flywheel that lets him allocate capital more efficiently than other actors?

It’s genuinely unclear to me whether the universe in which we incentivize this kind of scale is better than the universe in which we do not (because the counterfactual universe has massive externalities too). But this is obviously not just a matter of compounding value creation and becoming a billionaire fair and square in ten years.

Re: How to earn a billion dollars

#474

Post by smallmancontrov »

zeroonetwothree wrote: post #406
theptip wrote: post #360

Earlier quoted context omitted.

Right, regardless of whether you agree or disagree with the point, PG doesn’t actually engage with it. He just says “compound growth + build something that people love”. But the meat of the point is: if the economy is growing at 2.5%, how do you sustain 15% over 5 years? Look, I’m a startup guy, I buy into the premise that it’s an intensely value-creating activity. But I think it’s self-defeating to pretend like the…

Perhaps you realize this, but the way the economy grows 2.5% is through lots of entities growing faster than that. Growth comes from innovation, and innovators get rewarded with faster growth as non-innovators decline.

No mention of Piketty or r>g?

Look, I know this is a tech forum and we don't claim to be good at the social sciences, but this is a central debate and r>g, the idea that the rate of return to capital tends to exceed economic growth over the course of history, is a major result from Piketty's Capital In The 21st Century that people interested in "grow the pie" vs "trickle down" really ought to be familiar with. Even if you disagree, you ought to be able to articulate why, and "the average includes winners and losers" ain't it.

"But life has improved, r>g couldn't have been true forever" -- last time the inequality bubble popped because of a great depression and two world wars. The capital was incinerated, metaphorically and literally. It's a cautionary tale and we should aspire to do better.

Re: How to earn a billion dollars

#476

Post by runarberg »

rayiner wrote: post #386
theptip wrote: post #360

Earlier quoted context omitted.

Right, regardless of whether you agree or disagree with the point, PG doesn’t actually engage with it. He just says “compound growth + build something that people love”. But the meat of the point is: if the economy is growing at 2.5%, how do you sustain 15% over 5 years? Look, I’m a startup guy, I buy into the premise that it’s an intensely value-creating activity. But I think it’s self-defeating to pretend like the…

[flagged]

Your analogy does not apply. Billionaires are growing faster than anybody else in the global economy. The impoverished are growing slowest. If you want to apply this to your family then the adults would be growing by 15% every year, while your kids growing the least (and your teenagers would be shrinking).

If we take this analogy further, your kids would be the ones working the hardest to bring the food on the table required for this growth, and the adults would consume like 90% of it.

Re: How to earn a billion dollars

#477

Post by lkjdsklf »

rayiner wrote: post #384
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…

Your phraseology of “extract” suffers from the same problem as AOC’s. You’re conflating value creation with value extraction. The problem with AOC’s argument is she’s recycling a 2008 talking point into a context where it doesn’t make sense. Financial entities making trillions moving money around raises questions about whether value is really being created. When I get three Amazon packages delivered to my house every…

You’ve entirely misunderstood her point.

Her point isn’t that Amazon is bad because it’s a trillion dollar company

Her point is that Bezos is bad because he and Amazon could have paid that driver 10x what they make and still had more money than they could spend in 100 lifetimes

The distribution of the gains is absurdly weighted towards the top

Re: How to earn a billion dollars

#478

Post by Robin_Message »

stouset wrote: post #470
theptip wrote: post #360

Earlier quoted context omitted.

Right, regardless of whether you agree or disagree with the point, PG doesn’t actually engage with it. He just says “compound growth + build something that people love”. But the meat of the point is: if the economy is growing at 2.5%, how do you sustain 15% over 5 years? Look, I’m a startup guy, I buy into the premise that it’s an intensely value-creating activity. But I think it’s self-defeating to pretend like the…

Even 15% for five years only doubles your original investment. To get a billion from a million you need to do 15% for fifty years, and that ignores inflation. Or 25% for thirty-one years. These numbers are ludicrous.

I think he's doing 15% every month, not every year. It's not an implausible growth rate for a unicorn startup; it is implausible to expect it.

Re: How to earn a billion dollars

#479

Post by blini-kot »

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…

what kind of content he's consuming?

like other "entrepreneurs" its most likely self-affirming bullshit, cranked up to religious levels (cue any modern ayn rand equivalent)

Re: How to earn a billion dollars

#480

Post by virgilp »

stouset wrote: post #470
theptip wrote: post #360

Earlier quoted context omitted.

Right, regardless of whether you agree or disagree with the point, PG doesn’t actually engage with it. He just says “compound growth + build something that people love”. But the meat of the point is: if the economy is growing at 2.5%, how do you sustain 15% over 5 years? Look, I’m a startup guy, I buy into the premise that it’s an intensely value-creating activity. But I think it’s self-defeating to pretend like the…

Even 15% for five years only doubles your original investment. To get a billion from a million you need to do 15% for fifty years, and that ignores inflation. Or 25% for thirty-one years. These numbers are ludicrous.

He talks about 15% _per month_
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