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How to earn a billion dollars

paulgraham.com

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Re: How to earn a billion dollars

#901

Post by ben_w »

jokethrowaway wrote: post #894
tsimionescu wrote: post #861

Earlier quoted context omitted.

Why do you think no one is contradicting him? The exponential growth model that pg presents is an obvious lie - you could use his exact explanation to claim that good founders will soon become trillionaires, all it takes is 9 months of 93% growth after your first few billions; quadrillionaires will soon follow. The obvious reality is that exponential growth is just a small phase in any company's history, and it is an…

You didn't prove him wrong. You and Paul are both claiming it's extremely hard. A restaurant won't scale - most ideas won't scale - because they're not useful enough. These companies are not criminal enterprise and they don't steal money or threaten them with violence: they just offer them products and ecosystem and most people are dumb enough to ruin their life with it. Don't get me wrong: I hate them and I ban soci…

> A restaurant won't scale - most ideas won't scale - because they're not useful enough

Counterexample, a restaurant worth $202 billion: https://stockanalysis.com/stocks/mcd/market-cap/

One of the arguments against billionaires really deserving that much money is that while they own the shares, the scaling up is done by a labour force that doesn't capture this growth, "only" (so goes the argument, I do know about share options) "their wages".

How many burger flippers get compensation in the form of shares in the parent company? I genuinely don't know, but I do expect it to mostly be in the form of pension funds rather than stuff they can see in their working lives. Pension funds are a lot of money, they need to be so those with them can retire, same logic as FIRE because being a pensioner is the first three initials of FIRE.

This is probably for the best, owing to something not explicitly mentioned in the article: startups are risky. This is as much a lottery question as it is an effort question, because "cool idea" absolutely does not mean "make it and they will come", no matter how hard working the founders (and first hires) are.

Re: How to earn a billion dollars

#902

Post by aakresearch »

How do you know that someone is about to lose their computing chops? They waste a paragraph explaining a convoluted roundabout way to answer question "how many months of 93% growth it takes for something to grow 500x" with useless precision. A kid just started with BASIC learns by heart in a week that 512=2^9 :)

Re: How to earn a billion dollars

#903

Post by [deleted] »

hilariously wrote: post #94
RickJWagner wrote: post #64

It’s like fertilizer, for jealousy.

Yeah man its just all the people who are jealous that are mad and no other reason. The billionares hands are clean, the climate is fine, the elections are great, there's nothing wrong, close your eyes, stuff your ears with wax, and keep on trucking :)

[deleted]

Re: How to earn a billion dollars

#904

Post by ben_w »

dotancohen wrote: post #870
_carbyau_ wrote: post #763

Earlier quoted context omitted.

I can't speak for his other essays but this article was not great. He basically does some maths to show exponential growth. The definition of "earn" is not on the chopping block. Nor is what it means to "cheat" - which he introduces pretty early on. And times change. With the announcement: "[Insert name] is a billionaire!" It used to be: "Congrats to them for making the world better in some way and reaping the reward…

> It used to be: "Congrats to them for making the world better in some way and reaping the rewards." > Now it is: "What did they leverage to force another subscription on us?" Are you seriously asking how Elon Musk made the world better in some way? How about catalysing the move away from fossil fuels? How about inexpensive spaceflight?

> How about catalysing the move away from fossil fuels? How about inexpensive spaceflight?

Much as I appreciate the former, the latter is if questionable benefit to most people, as the cost of launching e.g. GPS constellations and weather satelites was not the limiting factor for them, and direct-to-satelite phones and broadband at whatever the subscription price is, while neat, are not life changing for 99% of the population.

(Space is cool, I like space, he's free to spend his own money how he likes, but the IPO happened because he ran out of his own and private investors' money).

Also Tesla has problems going with that benefit, between court cases over marketing of FSD & if he committed fraud by saying he had secured funding to take it private, and also the P/E ratio is unjustifiable as a mere car company so they're pushing an AI narrative that's also unjustifiable for reasons long enough I can't be bothered to type them in again.

That and him selling Tesla shares worth more than the lifetime revenue of the business, which is sus.

Re: How to earn a billion dollars

#906

Post by jrflowers »

InterviewFrog wrote: post #771
oatmeal1 wrote: post #716

PG makes little effort to identify what it means to earn something. Some people consider effort the measure of whether something is earned. Some believe luck should be subtracted from result to get what is earned. Some say you cannot earn the benefits you receive from your genetics. No idea of what it means to earn something is given except for making users happy while "not cheating" (who decides what counts as cheat…

You saved $500k to buy a beautiful home. You don't know how to build a home. I do. I take the $500k from you and then pay $450k to a bunch of employees who put in 40 hours a week. I take home $50k. I earn $50k. Now, you like the home so much you tell all your friends about it. I hire more employees and I take $50k profit per house but I build 20k houses and make $1B. I earn $1B. Market forces decide how much you "ear…

> You don't know how to build a home. I do.

Sweet, how do you build a house?

> I take the $500k from you and then pay $450k to a bunch of employees

Oh. You don’t know how to build a house. You know people that know how to build a house.

Picking a thing that you literally don’t know how to do as your example of a thing that you know how to do is amazing. You could’ve picked a blanket fort or a spreadsheet that tracks other people’s work or a LinkedIn post but those aren’t really things people pay for

I know doctors but I don’t go around posting that I know how to treat eczema lmao

Re: How to earn a billion dollars

#907

Post by OrangeMusic »

srpablo wrote: post #851

Disco Stu meme Paul is my favorite example of "brain gout." I learned what gout was as "a disease kings used to get by eating foods that were too rich." Paul's writing when he was closer to reality, in the early 2000's, was a lot more insightful, because he was closer to reality. But if you've spent 21 years never having a material concern, and increasingly interacting with other rich people (or young people who idol…

> Buy your own groceries. Cook your own meals

What's the point of being rich if you're living like a chump!

Re: How to earn a billion dollars

#908

Post by gpt5 »

tsimionescu wrote: post #861
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.

Why do you think no one is contradicting him? The exponential growth model that pg presents is an obvious lie - you could use his exact explanation to claim that good founders will soon become trillionaires, all it takes is 9 months of 93% growth after your first few billions; quadrillionaires will soon follow. The obvious reality is that exponential growth is just a small phase in any company's history, and it is an…

Both you and PG are missing the mark here.

PG made the error thinking that this is just people misunderstanding math and exponential growth, which created a convoluted math section that could have simply been explained as - if you start with a million dollar and double every month, you'll be a Billionaire in less than a year. He also didn't really touch well on why many people hate large companies / billionaires.

You are making the mistake of using a moralization framework that equivocate being accused of something to being bad for society + not looking at the alternative (i.e. even if it's true that every Billion dollar company is "bad/exploitative/etc.", that doesn't mean that the (realistic) alternative is better for society or people.

The reality is that companies like Google, Amazon, NVidia, etc. have create an immense amount of wealth for their founders and investors, but also created an immense amount of value in society. There is a real problem of incentives when you prioritize growth endlessly, as it leads to perverse incentives such as that ones these companies are accused of - leading you to progressively take more and more less positive actions in order to achieve this growth. So I don't disagree with the general premise that growth leads to moral problems, but I do disagree with saying that building big companies is bad for society.

Re: How to earn a billion dollars

#909

Post by levanten »

a13n wrote: post #885
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.

Nobody is forcing people to be employees of startups. They choose to do it of their own free will. If they think they can generate immense value from their own ideas they are free to go try to do that. Hiring people to do a job for a wage they agree to isn’t swindling.

What a fine story you tell!

Let’s ignore all the political and socio economic dynamics driving the current trends. Squeeze people’s livelihood by rent seeking; pillage public resources while externalizing as much of the risks and cost of doing business back to public; limit access to capital to few networks. Then pretend it’s in people’s power to choose to earn more if they would only work harder.

No one is arguing that founders shouldn’t earn the rewards for their work and risk. But to act like it’s all fair business and freedom of choice is rather glib to the point of being callous.

Re: How to earn a billion dollars

#910

Post by caaqil »

srpablo wrote: post #851

Disco Stu meme Paul is my favorite example of "brain gout." I learned what gout was as "a disease kings used to get by eating foods that were too rich." Paul's writing when he was closer to reality, in the early 2000's, was a lot more insightful, because he was closer to reality. But if you've spent 21 years never having a material concern, and increasingly interacting with other rich people (or young people who idol…

So... what's the critique here exactly? "Oh hey everybody, Paul is out touch!" - Okay, now what? Rich people are rich, that's truism. Some comments made good counter arguments but this lazy polished ad-hominem attacks are more offensive than the piece itself.
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