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How People Get Rich Now

paulgraham.com

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Re: How People Get Rich Now

#901

Post by bumby »

shuckles wrote: post #819
WalterBright wrote: post #651

Earlier quoted context omitted.

SpaceX, etc. That's what you do with billions to spend.

I think there’s an interesting and fair argument to make that one negative consequence of billionaires is entire otherwise unproductive economic sectors that exist for no reason other than their vanity (mega yachts, Swiss boarding schools, high fashion, doomsday bunkers). That is a different argument than one about resource hoarding though — a Louis bag doesn’t take much in the way of resources, just a single python…

>one negative consequence of billionaires is entire otherwise unproductive economic sectors that exist for no reason other than their vanity

This isn't just relegated to billionaires. Depending on how you define "consumption", up to 70% of the U.S. economy is consumer driven. Now I wouldn't call all this "unproductive" but it's probably selectively unfair to claim only the uber-rich are spending money on items they don't need.

Re: How People Get Rich Now

#902

Post by danielmarkbruce »

mike_hearn wrote: post #866
danielmarkbruce wrote: post #824

Earlier quoted context omitted.

Would you have put Google and Facebook in this group when they weren't profitable? You are missing something - many companies have great long term economics even if they are losing money right now . Slack (if still independent) could easily be profitable - they just have to spend less growth (ie, largely they could cut their sales and marketing dramatically, along with other items). Snapchat the same, Pinterest the s…

This is a common argument but would seem wrong to a lot of people. It's just unintuitive. Most people of our parents generation would find this argument slightly absurd, and our grandparents would find it entirely absurd. It sounds weird because it assumes that every tech business has either insurmountable lock-in or insurmountable first mover advantage, without explicitly stating that. To fill in that assumption req…

1. Good unit economics can come from various sources. The idea that Slack has little lock in and hence can't have good economics is misguided. Coke has little lock in, yet amazing economics. Google has little lock in, yet amazing economics. Sources of competitive advantage aren't restricted to lock in. Scale is a source of competitive advantage, for example.

2. Your point is hard to refute and may be correct - it isn't obvious they will do well or poorly over time.

3. This is almost certainly wrong. If Uber had no moat there would be more than Uber and Lyft in the US. It's going to be impossible to enter this market for a new player short of having self driving all worked out.

4. Yep, it wasn't/isn't clear on Amazon's retail biz, I'll agree with that.

You have some examples which are correct - there are specific situations where you are right. But the statement cannot be generalized.

Re: How People Get Rich Now

#903

Post by davidgerard »

Matticus_Rex wrote: post #300
blaser-waffle wrote: post #271

Earlier quoted context omitted.

Indeed. How many people know who HL Mencken is? Alexander is a good writer, and I appreciate how he is able to tackle assumptions and challenge mainstream opinions, and does so systematically. But he's writing 10 pages of what could be summed up in 10 bullet points. The intellectual collateral is nice, but he's not really breaking new ground, and I'm not sure what he's going to share with the next generation of reade…

Mencken gets quoted pretty regularly in my circles :shrug:

Alexander is extremely difficult to get clear quotes out of - pithy sentences that would fit in a tweet, for example.

Re: How People Get Rich Now

#904

Post by brg »

maerF0x0 wrote: post #728
dcolkitt wrote: post #73

> It's easier now to start and grow a company than it has ever been. That means more people start them, that those who do get better terms from investors, and that the resulting companies become more valuable. This may be a quibble, because I think Paul Graham really means a certain type of high-growth startup in mind when he says "start a company". But the rate of new business formation in the US has fallen off a cl…

> Nobody becomes a billionaire from starting a landscaping service or an auto body shop. few, but actually it's quite reasonable to expect to become a millionaire as show in [1], given the age of the book I'd extrapolate to multimillionaire https://www.goodreads.com/book/show/998.The_Millionaire_Next...

The statistic that PG didn't write about but seems to pertinent is that the number of millions has increased more than 10 fold from 1980 to 2020.

1992 story: https://www.washingtonpost.com/archive/politics/1992/07/11/n...

Recent statistic: 18.6 million families, https://spendmenot.com/blog/what-percentage-of-americans-are...

Re: How People Get Rich Now

#905

Post by TapWaterBandit »

jason0597 wrote: post #872
TapWaterBandit wrote: post #859

Earlier quoted context omitted.

> Putting aside that the circumstances of your birth are already a huge matter of luck This is another one of those points that sounds superficially plausible on the surface but makes little sense once you think it through. The circumstances of my birth weren't a matter of luck. My (married) parents decided to have 4 children of which I was one. Before doing this they both finished high school, and stayed away from d…

Before you are conceived, before you even become a zygote, who rolls the dice for which womb you'll end up in? Who decides whether you'll be in the womb of a Japanese mother, an American mother, or a Greek mother? Do we as individuals have any control over which country we are born in? To pretend as if this is not pure chance (luck) is bonkers.

The Japanese/American/Greek mother who had sex?

Or are you saying it was just luck my mom got pregnant then? She just fell asleep one night, the stork visited, and then she woke up pregnant?

I think you don't understand how sex or genetics work, I am 50% my mother's dna and 50% my father's. It's not like they were going to have sex and then I would be born with the genetic code of two entirely different people.

Re: How People Get Rich Now

#906

Post by d110af5ccf »

ashtonbaker wrote: post #879
d110af5ccf wrote: post #814

Earlier quoted context omitted.

> even in the face of evidence to the contrary This is the problem though. There really isn't any clear evidence one way or the other in your example. Predicting how someone will perform in a particular context is incredibly difficult (see the frequent disagreements on HN surrounding the hiring process). More technical proficiency might or might not translate to better overall performance in your particular case. Mea…

The first part of your comment is arguing for the second justification. Which I agreed was logically fine to do, and I think you laid out the case well. The second part seems to reveal a difference in opinion unlikely to be resolved easily in this forum. Food for thought, though - thank you!

Whoops, I didn't mean it to read like that. I actually happen to agree with you (that social status is a likely factor in certain cases for VC, and that people often seem uncomfortable about acknowledging such things). I was just trying to illustrate that it's at least possible for someone's behavior to appear dogmatic when in reality their mental model is carefully reasoned but differs from yours.

Re: How People Get Rich Now

#907

Post by TapWaterBandit »

arvinsim wrote: post #862
TapWaterBandit wrote: post #727

Earlier quoted context omitted.

> It makes people uncomfortable to think that success is mostly a matter of luck. I constantly hear this sentiment and don't think it makes people uncomfortable at all. If anything it is the opposite, people cling to this idea to absolve themselves of responsibility for their own situation. What makes people far more uncomfortable is the nagging feeling that success isn't mostly a matter of luck. Success is a choice…

> But if you follow some basic rules (finish high school, don't have kids before marriage, don't do drugs or smoke, minimise alcohol, eat healthy and exercise, don't buy things to impress others), you have a very good chance of being successful in life. The discontent in millenials nowadays is exactly because they are peddled that fairy-tale myth. "Get a degree and get a job, you can will be able to afford a house an…

> "Get a degree and get a job, you can will be able to afford a house and a family with children."

This is still true, you just might have to move to a different place from where you grew up to get it. You know, like enormous amounts of our parents/grandparents/ancestors did (why did people come to the USA in the first place? Lack of access to housing where they were from ;p )

Re: How People Get Rich Now

#908

Post by int_19h »

CameronNemo wrote: post #898
int_19h wrote: post #796

Earlier quoted context omitted.

To become the richest people on Earth, they have to collect economic rent from the actual producers of wealth, which is all the rest of us. Wouldn't you want to know who is being unfairly enriched by your labor?

Perhaps. But I tend to look at the actual interactions I have as a laborer and consumer, and try to determine the effects of those actions. So I care about Jeff Bezos because I occasionally order goods from Amazon, not because he is the richest person on earth.

Even in the example you describe, there is an interesting question: how much of that money that you pay to Amazon for those goods ends up in the pockets of those people who fulfilled your order, and how much ends up in the pockets of Jeff Bezos? And how does it affect the quality of the service that you get?

Re: How People Get Rich Now

#909

Post by anitil »

mmmmmbop wrote: post #611
qzw wrote: post #464

I'm rather disappointed PG would think that the Forbes wealth list could support any kind of conclusion whatsoever. One of the biggest reasons that the top of the list is filled with tech billionaires is that their wealth is relatively transparent, being mostly in the form of stock holdings in publicly traded companies and often directly disclosed. This makes it much easier for Forbes to estimate their net worth with…

Genuinely curious: Do you have any more background on this? Who are these rich people that are not listed in Forbes?

An example is the House of Saud. They are incredibly wealthy, but I believe Forbes doesn't look at _families_ only _individuals_, even if, say, the head of the family would technically make the list.

Also, they're unlikely to put out public accounting statements

Re: How People Get Rich Now

#910

Post by SamvitJ »

mmmmmbop wrote: post #611
qzw wrote: post #464

I'm rather disappointed PG would think that the Forbes wealth list could support any kind of conclusion whatsoever. One of the biggest reasons that the top of the list is filled with tech billionaires is that their wealth is relatively transparent, being mostly in the form of stock holdings in publicly traded companies and often directly disclosed. This makes it much easier for Forbes to estimate their net worth with…

Genuinely curious: Do you have any more background on this? Who are these rich people that are not listed in Forbes?

PG himself is a good example. His equity stake in VC is very likely worth in the $1-10B range (YC didn't take outside capital, see footnotes: http://www.paulgraham.com/worked.html). But his ownership stake isn't transparent to Forbes.

I think a lot of VCs and real estate investors would fall in this category.

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