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How to earn a billion dollars

paulgraham.com

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Re: How to earn a billion dollars

#491

Post by choutos »

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.

15% monthly

Re: How to earn a billion dollars

#492

Post by aloe_falsa »

hjkl0 wrote: post #224
TheTaytay wrote: post #129

Earlier quoted context omitted.

Your phrase “extract” betrays a fundamental disagreement with what Paul is saying. (Externalities does so again) It assumes a zero-sum game where the job is to shift money from one person to another. Value, and thus money/wealth can be created. Literally. You are saying, in different words, that no one can do it “honestly”. He is saying one can.

Based on this article at least, he is not disagreeing with those claims, he is not even acknowledging they exist. The original claim, as I understand it, is basically this: you can’t be an honest actor in a dishonest system. And it’s not even necessary to claim that billionaires did something uniquely wrong to become billionaires. It’s just that their share of the exploitation is so, so, so much bigger.

> The original claim, as I understand it, is basically this: you can’t be an honest actor in a dishonest system.

Right, but, taken to its logical conclusion, you cannot earn any amount of money honestly at all, because you'll always create negative externalities to some extent, or supporting people who do/companies who exploit their workers, even as a rank-and-file employee.

Re: How to earn a billion dollars

#493

Post by ConorSheehan1 »

Very disappointing.

1. This is a strawman. Mention a startup but not what it does. Wave your hands at growth as much as you want, but it doesn't prove you didn't hurt anyone to make your billion. I think people would find it quite easy to pick apart the actual named companies like AirBnB, Facebook, Apple, Google. Lots of people got hurt by these companies in the name of growth and profit.

2. The distinction between having and earning a billion is irrelevant. You make a billion? Cool, now stop. Give someone else a slice of the supposedly infinite pie. We. Are. Starving.

Re: How to earn a billion dollars

#495

Post by ergocoder »

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…

> She meant impossible in that one doesn't earn a billion dollars through work alone

She meant it was unethical to do so. It wasn't about working alone or not.

I know we like AOC but the way people bend over backward for her is off-putting.

Re: How to earn a billion dollars

#497

Post by NoMoreNicksLeft »

Grombobulous wrote: post #420
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…

There are extremely good arguments for why the act of becoming and remaining a billionaire is immoral and bad alone, without any need for you to have directly wronged someone else. PG just completely misunderstands and hand-waves over this basic concept and makes the excuse that "hey we worked really hard and made an amazing product that people loved, we aren't harming anyone." For one thing, founders and employees d…

>So yeah, Jeff Bezos made $260 billion dollars, but an alternative that could have happened was "Jeff Bezos makes $50 million and every Amazon employee gets a much more fair share of the happy customers' money."

Jeff Bezos famously took an $80,000/yr salary. Bezos didn't make $260 billion, or anything within 1/1000th of that. He built a company, that through some inane estimations his share of which might be $260 billion.

For him to not have that imaginary $260 billion would be for the company to not be built at all. So, if that's what you want, you're at least consistent... but no one else would think that a particularly good idea. Quite a few people like being able to order things online and receive them quickly. They don't want to have to go back to stomping through Walmart, hoping that the store has what they need.

I think part of the problem is that if you can slap a label on someone of "Eleventy billion dollars", everyone's brain malfunctions and treats it as a literal fact, regardless of the truth of the label. When you don't want billionaires to have billions, what you're saying is that you don't want them in control of those billion dollar companies. But do you not want the companies to exist, or do you just want someone else in control of those companies? And who?

Re: How to earn a billion dollars

#498

Post by rybosworld »

I read this and see two possibilities.

1) PG honestly believes that his audience is unfamiliar with compound growth - i.e., an insult to the audience's intelligence.

Or

2) PG honestly believes that the founder of a successful startup is directly and wholly responsible for the level of magnificent growth a company achieves.

The 2nd one is some Ayn-Rand-like school of thought. That there are great people who have 1000x the work output of those around them. PG more or less alludes to this when he says stuff like

> The reason her startup was growing so fast was simply that users loved what she'd built.

Notice how the credit for the startup's growth is credited to the founder?

> The reason her startup was growing so fast was that she and her cofounder had been working their asses off to make their users happy, and as a result the users had been telling their friends

Again, crediting founders for the entirety of the company's growth. This is obviously flawed thinking in any company that has employees beyond the founder. Those employees are doing a significant amount of the work. And in any company with more than say, 5 people, they are doing the majority of the work.

PG and people who think like him believe ownership==credit. That's the whole problem.

Re: How to earn a billion dollars

#499

Post by dmurvihill »

blitzar wrote: post #137
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…

Having to pay a fat wedge of tax every year on what you "earn" sucks a lot of the life out of the compounding effect.

Luckily, billionaires don't have to worry about that.

Re: How to earn a billion dollars

#500

Post by pseudosavant »

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 clearly confusing "capturing" a billion dollars for "earning" a billion dollars. Becoming a billionare is working the system so that the wealth generated by something people love (Amazon) is mostly captured by a select group of people (Jeff Bezos) and not the workers who are actually earning the company the value (fulfilling and delivering the packages).
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