8 ms·

I don't want to derail this too much with personal anecdotes, but I suspect you are much more likely to build wealth with the more established tech companies -

I don't want to derail this too much with personal anecdotes, but I suspect you are much more likely to build wealth with the more established tech companies - and that wealth is "rich enough". Maybe I am just unlucky or unskilled, but I spent roughly 20 years working at startups or innovation labs. I was "close" to some big events where I could have made big $$ but made 0. Both at my own startup and being at early stage duds. Its kind of like I was the tech guy in 'life of Brian'. However, in the last three years I have built more wealth at a FAANG than I have in the previous 20 years. YMMV. Back to the thesis, I think pg is saying wealth is built by startups - I am just here to say that's it still really rare unless you get lucky. But maybe you create your own luck by living in SF - I am a Bostonian.

chrisBob 6y ago
He is saying you are more likely to become a Billionaire by starting a company than by joining a FAANG as an employee. Now that is a 1:1000000 event instead of a 1:5000000 event like it may have been in the past. I will forgive you if you still think it is unlikely. Most people's goal isn't (and shouldn't be) $1B. If your goal is a more reasonable $5M then joining an existing company is still your best bet. I am going to plan my own like around the MEDIAN result which makes startup stock $0, and the salary wins.
- throwawayboise 6y ago
  That's sort of my take. Super wealth comes from founding or having a large stake in a unicorn. That's of course true but also rare and sort of like a kid betting his future on playing in the NBA. Sure some people make it, but the vast majority do not. "Enough" wealth -- i.e. retiring with millions in assets, is much more attainable by anyone who simply invests sensibly over the course of a working career. You don't even need stock options or equity compensation or a SV salary.
- cblconfederate 6y ago
  What about those billion-dollar companies that never made money but got acquired by FB, MS etc? Their founders did build a company, but if it wasn't for FAANG's insane profitability, which makes the cost of their moat so high, they wouldn't be worth that much. They essentially joined facebook as employees to make their billions.
  - winkeltripel 6y ago
    Average exit event (going public or getting bought) won't out-pay working for FAANG. The chances that it does are like 10%, and that's if there is a real exit, instead of just a wind-down.
- karolsputo 6y ago
  Dustin Moskovitz presented that point in the invaluable How to start a startup series - https://youtu.be/CBYhVcO4WgI https://youtu.be/CBYhVcO4WgI A good resource when deciding on your future ambitions
- darkwizard42 6y ago
  I think this is a good lens to look through. If you want the BIG payout and "f u" money, then forming your own company is now the highest odds way to make that result. The chance of abject failure ($0 payout) is still high but even that isn't necessarily true these days with the experience and learnings leading you to FAANG jobs (should you choose) anyways. You do fall behind your colleagues who started at those jobs earlier, but they won't reach that $1B goal that you had and now neither will you; the difference being you gave it a shot (and the highest odds shot). PG's point might be simplified to say starting a company is the newest highest odds way to be super rich.
angrais 6y ago
Who's the tech guy in the life of Brian? As in, what part of the movie are you referring to?
- blacktriangle 6y ago
  Just the whole notion that Brian is the guy whose life paralleled Christ but unlike Christ he was just some random guy.
- justinlilly 6y ago
  I think he means he's the tech equivalent. As in, "he was near many historical events, but not the focus or beneficiary of them"
  - BurningFrog 6y ago
    That also sounds a lot like Forrest Gump :)
    - rapnie 6y ago
      Forrest didn't care about fame and fortune, went for life and love.
amelius 6y ago
> Maybe I am just unlucky or unskilled, but I spent roughly 20 years working at startups or innovation labs. I was "close" to some big events where I could have made big $$ but made 0. Probably holds for many people, but we mostly hear the success stories only.
alberth 6y ago
Rich != Wealth I think where PG and others are conflating two topics is being Rich vs being Wealthy. You can certainly become Rich working at FAANG (top 1% earner + appreciating stock ... and it's way less risky than other jobs). Where you can become Wealthy starting your own company (super high risk, most likely won't even become "rich" doing it, but you have the potential to create limitless wealth) EDIT: If you're going to downvote, can you at least comment why you disagree ... so that we can have a productive conversation to hear a differing opinion.
- claudiulodro 6y ago
  The definition of "rich" is "having a great deal of money or assets; wealthy." Seems like Rich == Wealth as far as I can tell. There is definitely a difference between well-off and wealthy, though.
  - alistairSH 6y ago
    While not a dictionary definition, I've seen "the wealthy" described as the subset of "the rich" where their money is self-sustaining (passive income that spans generations). By most definitions, many of us on HN are rich, but few of us are wealthy. Most of us still have a day job and rely on that salary to pay bills and save for retirement.
- nly 6y ago
  Chris Rock has a funny skit about being rich vs having wealth: https://www.youtube.com/watch?v=We8P8J25OKQ https://www.youtube.com/watch?v=We8P8J25OKQ
fossuser 6y ago
Yeah living in SF (or just the bay area) is pretty key. AirBnB, Uber, Tesla, FB, SnapChat (LA based, but a lot of friends moved there to join friends from the peninsula and knew about it because of being here/near Stanford), Lyft, Snowflake, Stripe, eventually Robinhood, Roblox, Palantir, etc. I'm not saying luck isn't a factor - but the equation changes dramatically when you're in the bay area. A lot of people I know have been through exit events of some sort, many clear $1-5M via that (which is about enough to buy a house if you're closer to the $3-5M side). Fewer clear $20M+. That said, you could also have just worked at a FAANG and probably have saved $1-2M if you just stayed there over the last ten years (and obviously if you were at FB pre IPO in 2012). There's also a lot of opportunity to grow in that environment which can lead to higher incomes (particularly at a place like Netflix that just pays a lot up front). Doing a non-bay area startup seems riskier to me than working at a FAANG. If you live in the bay area for a bit - it's easier to learn which startups are likely to succeed. There's a reason YC moved from Boston.
kevinqi 6y ago
yeah having lived in both cities, I think the likelihood of success in the bay area is going to be higher than in boston for sure.
sneak 6y ago
I think the consolidation thing he describes is happening again, and we are again entering a period like the 60s where access to the markets is limited by a few small, impenetrable companies, and the only meaningful path to wealth will be working at those companies. I really hope I'm wrong, but the death of the web and the rise of the censored, anticompetitive app stores seems to be the writing on the wall.
- sjg007 6y ago
  This is exactly why we antitrust enforcement. It's not an easy problem to solve though.
notacoward 6y ago
Likewise, even down to being in the Boston area. I did OK at a couple of the eleven startups I worked at, but still made even more over just a couple of years at a FAANG. Many of my former colleagues on both sides have had similar trajectories. The vast majority of the "merely rich" in tech got that way by working at companies that had already broken away from the pack. Speaking of breaking away from the pack, that brings us to the ultra-rich. AFAICT what pg has shown is not that building wealth alone is a path to riches (nor was that his intent AFAICT). The way to become ultra rich is to be one of the "lottery winners" among a cohort of relatively minor wealth creators. Playing the lottery is just as essential as building wealth, just as with literal lottery winners. The main difference is that this lottery isn't entirely random. Even among those who make it into the first round (founders), some players have certain innate advantages over others in the second. There's little demographic distance between Gates, Ellison, Bezos, and Musk - and Graham, for that matter. It's no accident. If you want to become seriously rich, it helps if you can afford to ride out risks - or even actual losses - that would force others out of the race.
- kdusneodnejdn 6y ago
  "demographic distance" You mean they're all white, and men, and you have decided that means they are all the same, regardless as to the details of their backgrounds. This is literally racism, bigoted prejudice based solely on the group membership of people you don't like. You can't just look at people in these positions and say "they're overrepresented therefore systemic racism" or you're going to get into a really awkward place when you start to notice that Jews are actually overrepresented in places of leadership. If you consider race and sex the most important attribute of a person, then your statement about demographic makes sense. Only then. Regarding your username, you are in fact a coward.
- fossuser 6y ago
  I think this is true in the common case, but I thought Bezos was raised by a single mom who had him at 17 and his step father was a cuban immigrant? https://www.aboutamazon.com/news/policy-news-views/statement-by-jeff-bezos-to-the-u-s-house-committee-on-the-judiciary https://www.aboutamazon.com/news/policy-news-views/statement... There's also the donut king: https://news.ycombinator.com/item?id=25241898 https://news.ycombinator.com/item?id=25241898 I'm not trying to just pick rare counter examples, but I'm skeptical of the claim that there's little demographic distance or the implication that it's a prerequisite. One of the reasons people like the US is an immigrant can come here and they themselves (or their children) can become the richest person in the world (or the vice president). I'd agree there's a randomness element, but it's less lottery and more placing bets with odds that are hard to determine. Some people have better initial odds, but that's only one part of it. If anything - I'd hypothesize that extreme outliers share something other personality trait more relevant than demographics, willingness to take huge risks. You could argue that someone who has more of a safety net is in a better position to do so, but someone who has nothing to lose may also find the tradeoff easier. It's possible that most people in a relatively comfortable position would be less likely to take the big kind of risks that outlier payoffs require (I'd guess this is one reason why we have few people like Elon Musk).
nicetryguy 6y ago
Safe to say PG has a healthy amount of Survivorship Bias.
cmrdporcupine 6y ago
Yep, I wouldn't say I've had as much startup experience as you but I did work as employee #4 at one and then after that at a startup that got acquired by Google and while I did get a windfall out of that it certainly didn't make me rich and I've made a lot more money in the years since just taking in my regular FAANG compensation. FAANG compensations can be quite high. Arguably they are that high precisely to siphon up headcount that would in the past alternatively go into other ventures to seek wealth there. But I would say that these high compensations seem to me to be set precisely high enough to hoover up talent but not high enough for employees to achieve "escape velocity" entirely from the market (without extreme financial discipline anyways)
- VRay 6y ago
  Regarding the "escape velocity", it really isn't that tough IMO to save enough to retire when you're making 5-10x the median household US income, even if you're wasting $3500/month on rent. Yeah, milk and gas cost about twice what they do in the rest of the USA, but since I moved to the Bay Area I've been saving over a third of my income without even trying despite having a kid, eating out every day, and buying every gadget and gizmo I hear about ~5 years of savings can buy you a house out in the outside world so you can take a stab at building a ramen-profitable startup ~15 years' worth can probably cover regular old retirement at a level that'd be comfortable for people from https://old.reddit.com/r/FinancialIndependence https://old.reddit.com/r/FinancialIndependence
  - mmmmmbop 6y ago
    I think this is exactly what the parent commenter meant. You'll be able to retire comfortably after your most productive years, but you most likely won't be financially independent within 5 years and have the means to focus on building a startup.
afpx 6y ago
Over 25 years, I worked for 4 startups, 2 pre series A, 2 series A. All were VC funded, high growth, successful. 3 were acquired; 1 stayed private. I worked for startups because I really wanted to “get rich”. And, I put way too many hours in trying. In the end, I did get moderately rich. But, honestly, it was mostly from saving and investing well, not from exit events. Unless you play the political game, I doubt you’re gonna get rich from options. And, they don’t write the options contracts like they used to. When I started working, I made $30k / year, and I loved my work. Now, I make $180k / year, and I hate it. I hate the people mostly, and the politics. Lol. I do have enough to retire early, and I probably will because generally I feel the golden years of software development seem over. I liked it better when it was a bunch of nerds playing with tech - people who loved it. Now, it’s more people who would have otherwise gone into banking. Ymmv.
- bob33212 6y ago
  I have a similar background, and also miss the 90s where the people playing with tech were not thinking about the money but actually enjoyed the coding. What I find hopeful about Paul's essay and the current state of the world is that I can start my own company for next to nothing. And I only have to find a couple customers to cover my living expenses. I'm not going to be the CEO of a billion dollar company and that is fine. I don't want to have those responsibilities.
  - danielscrubs 6y ago
    Not sure about that. Let’s say you have 10x cheaper tools, but 1000x more competition can you still make it?
    - bob33212 6y ago
      The world is becoming more fragmented and long tails are getting longer. I'm not going to build a competitor to Facebook or AWS, but there are thousands of small untapped market segments.
cupofcoffee 6y ago
You are not unlucky the vast majority of startups fail. You need to be extremely lucky, extremely talented, extremely ambitious basically extremely everything to create a company and get rich from it. It's pretty much a pipe-dream to create a company and get rich from it. The most likely result is ending completely burnt out and having wasted a couple of years.
- internetslave 6y ago
  False. I personally know multiple people that have done it. And I knew them before they got rich
  - cupofcoffee 6y ago
    Right. Even if you knew 100 people that all made startups and made 10M+ it would still prove nothing. What percentage of startups do you think succeed?
    - internetslave 6y ago
      I’m kinda busy to go all into this, but generally people who went to top schools and raise from top vcs gave very good outcomes. The problem is when you lump in people with bad or mediocre career outcomes who try to start a company. The data is very misleading, getting funding from Andreesen Horowitz leaves a huge chance of success.
jedberg 6y ago
I've worked two startups and two public companies (and a University) in my career. Other than the small salary, I made nothing from the startups. The first public company made me enough to buy a house in the Bay Area and the second made me enough to fund my own startup as well as invest in others. So yeah, my experience tracks with yours -- all my wealth was made working for public companies (that I happen to catch during their biggest periods of growth). To be fair though, that may change if my investments work out. Then most of my wealth will be from investing in startups.
anonu 6y ago
> but I suspect you are much more likely to build wealth with the more established tech companies FANG: low variance + moderate reward vs ENTREPRENEUR: high variance + high reward The Kelly Criterion can probably be applied here on how much to "invest" in each opportunity. Ultimately it matters how often these opportunities come up.
- baloney1 6y ago
  absolutely correct, and let's not forget there is the whole spectrum of startups and mid sized growth companies that one can join in between.
- whimsicalism 6y ago
  When you use the phrase "reward", are you talking expected value? Or top of the distribution? Because if it's expected value, I doubt "entrepreneur" is high reward compared to FANGs "moderate reward".
  - anonu 6y ago
    Yes, EV. I certainly think tech entrepreneurs go into a startup opportunity impassioned by their ideas, but knowing they could IPO or exit at some point in the future for a sizeable amount of cash is certainly a motivating factor. EV = Probability * Outcome Probability is very low of an IPO outcome - but EV is probably still higher than FANG work.
    - whimsicalism 6y ago
      Yeah, I don't think that is true.
      - medvezhenok 6y ago
        Around 1% of seed-funded companies go on to become unicorns (>1B valuation). Total market value of unicorns ~$2T (~600 unicorns). So average unicorn valuation ~3.3B USD. Let's say you're the founder and your [ultimately diluted] share of the company is 10%. You have a 10Y runway. Your EV in startup case is 330M (10% of 3.3B) * 1% chance of success = $3.3M or $330K USD per year. This is only counting the extreme (unicorn cases) and will obviously vary with equity percentages. https://news.crunchbase.com/news/private-unicorn-board-now-above-600-companies-valued-at-2t/ https://news.crunchbase.com/news/private-unicorn-board-now-a...
deleted 6y ago
[deleted]
bawolff 6y ago
I don't think that's a controversial opinion. Start-ups are high risk high reward. You probably won't truly make it, but if you do you have more money than you know what to do with.

chrisBob 6y ago

He is saying you are more likely to become a Billionaire by starting a company than by joining a FAANG as an employee. Now that is a 1:1000000 event instead of a 1:5000000 event like it may have been in the past. I will forgive you if you still think it is unlikely. Most people's goal isn't (and shouldn't be) $1B. If your goal is a more reasonable $5M then joining an existing company is still your best bet. I am going to plan my own like around the MEDIAN result which makes startup stock $0, and the salary wins.

throwawayboise 6y ago
That's sort of my take. Super wealth comes from founding or having a large stake in a unicorn. That's of course true but also rare and sort of like a kid betting his future on playing in the NBA. Sure some people make it, but the vast majority do not. "Enough" wealth -- i.e. retiring with millions in assets, is much more attainable by anyone who simply invests sensibly over the course of a working career. You don't even need stock options or equity compensation or a SV salary.
cblconfederate 6y ago
What about those billion-dollar companies that never made money but got acquired by FB, MS etc? Their founders did build a company, but if it wasn't for FAANG's insane profitability, which makes the cost of their moat so high, they wouldn't be worth that much. They essentially joined facebook as employees to make their billions.
- winkeltripel 6y ago
  Average exit event (going public or getting bought) won't out-pay working for FAANG. The chances that it does are like 10%, and that's if there is a real exit, instead of just a wind-down.
karolsputo 6y ago
Dustin Moskovitz presented that point in the invaluable How to start a startup series - https://youtu.be/CBYhVcO4WgI https://youtu.be/CBYhVcO4WgI A good resource when deciding on your future ambitions
darkwizard42 6y ago
I think this is a good lens to look through. If you want the BIG payout and "f u" money, then forming your own company is now the highest odds way to make that result. The chance of abject failure ($0 payout) is still high but even that isn't necessarily true these days with the experience and learnings leading you to FAANG jobs (should you choose) anyways. You do fall behind your colleagues who started at those jobs earlier, but they won't reach that $1B goal that you had and now neither will you; the difference being you gave it a shot (and the highest odds shot). PG's point might be simplified to say starting a company is the newest highest odds way to be super rich.

angrais 6y ago

Who's the tech guy in the life of Brian? As in, what part of the movie are you referring to?

blacktriangle 6y ago
Just the whole notion that Brian is the guy whose life paralleled Christ but unlike Christ he was just some random guy.
justinlilly 6y ago
I think he means he's the tech equivalent. As in, "he was near many historical events, but not the focus or beneficiary of them"
- BurningFrog 6y ago
  That also sounds a lot like Forrest Gump :)
  - rapnie 6y ago
    Forrest didn't care about fame and fortune, went for life and love.

amelius 6y ago

> Maybe I am just unlucky or unskilled, but I spent roughly 20 years working at startups or innovation labs. I was "close" to some big events where I could have made big $$ but made 0. Probably holds for many people, but we mostly hear the success stories only.

alberth 6y ago

Rich != Wealth I think where PG and others are conflating two topics is being Rich vs being Wealthy. You can certainly become Rich working at FAANG (top 1% earner + appreciating stock ... and it's way less risky than other jobs). Where you can become Wealthy starting your own company (super high risk, most likely won't even become "rich" doing it, but you have the potential to create limitless wealth) EDIT: If you're going to downvote, can you at least comment why you disagree ... so that we can have a productive conversation to hear a differing opinion.

claudiulodro 6y ago
The definition of "rich" is "having a great deal of money or assets; wealthy." Seems like Rich == Wealth as far as I can tell. There is definitely a difference between well-off and wealthy, though.
- alistairSH 6y ago
  While not a dictionary definition, I've seen "the wealthy" described as the subset of "the rich" where their money is self-sustaining (passive income that spans generations). By most definitions, many of us on HN are rich, but few of us are wealthy. Most of us still have a day job and rely on that salary to pay bills and save for retirement.
nly 6y ago
Chris Rock has a funny skit about being rich vs having wealth: https://www.youtube.com/watch?v=We8P8J25OKQ https://www.youtube.com/watch?v=We8P8J25OKQ

fossuser 6y ago

Yeah living in SF (or just the bay area) is pretty key. AirBnB, Uber, Tesla, FB, SnapChat (LA based, but a lot of friends moved there to join friends from the peninsula and knew about it because of being here/near Stanford), Lyft, Snowflake, Stripe, eventually Robinhood, Roblox, Palantir, etc. I'm not saying luck isn't a factor - but the equation changes dramatically when you're in the bay area. A lot of people I know have been through exit events of some sort, many clear $1-5M via that (which is about enough to buy a house if you're closer to the $3-5M side). Fewer clear $20M+. That said, you could also have just worked at a FAANG and probably have saved $1-2M if you just stayed there over the last ten years (and obviously if you were at FB pre IPO in 2012). There's also a lot of opportunity to grow in that environment which can lead to higher incomes (particularly at a place like Netflix that just pays a lot up front). Doing a non-bay area startup seems riskier to me than working at a FAANG. If you live in the bay area for a bit - it's easier to learn which startups are likely to succeed. There's a reason YC moved from Boston.

kevinqi 6y ago

yeah having lived in both cities, I think the likelihood of success in the bay area is going to be higher than in boston for sure.

sneak 6y ago

I think the consolidation thing he describes is happening again, and we are again entering a period like the 60s where access to the markets is limited by a few small, impenetrable companies, and the only meaningful path to wealth will be working at those companies. I really hope I'm wrong, but the death of the web and the rise of the censored, anticompetitive app stores seems to be the writing on the wall.

sjg007 6y ago
This is exactly why we antitrust enforcement. It's not an easy problem to solve though.

notacoward 6y ago

Likewise, even down to being in the Boston area. I did OK at a couple of the eleven startups I worked at, but still made even more over just a couple of years at a FAANG. Many of my former colleagues on both sides have had similar trajectories. The vast majority of the "merely rich" in tech got that way by working at companies that had already broken away from the pack. Speaking of breaking away from the pack, that brings us to the ultra-rich. AFAICT what pg has shown is not that building wealth alone is a path to riches (nor was that his intent AFAICT). The way to become ultra rich is to be one of the "lottery winners" among a cohort of relatively minor wealth creators. Playing the lottery is just as essential as building wealth, just as with literal lottery winners. The main difference is that this lottery isn't entirely random. Even among those who make it into the first round (founders), some players have certain innate advantages over others in the second. There's little demographic distance between Gates, Ellison, Bezos, and Musk - and Graham, for that matter. It's no accident. If you want to become seriously rich, it helps if you can afford to ride out risks - or even actual losses - that would force others out of the race.

kdusneodnejdn 6y ago
"demographic distance" You mean they're all white, and men, and you have decided that means they are all the same, regardless as to the details of their backgrounds. This is literally racism, bigoted prejudice based solely on the group membership of people you don't like. You can't just look at people in these positions and say "they're overrepresented therefore systemic racism" or you're going to get into a really awkward place when you start to notice that Jews are actually overrepresented in places of leadership. If you consider race and sex the most important attribute of a person, then your statement about demographic makes sense. Only then. Regarding your username, you are in fact a coward.
fossuser 6y ago
I think this is true in the common case, but I thought Bezos was raised by a single mom who had him at 17 and his step father was a cuban immigrant? https://www.aboutamazon.com/news/policy-news-views/statement-by-jeff-bezos-to-the-u-s-house-committee-on-the-judiciary https://www.aboutamazon.com/news/policy-news-views/statement... There's also the donut king: https://news.ycombinator.com/item?id=25241898 https://news.ycombinator.com/item?id=25241898 I'm not trying to just pick rare counter examples, but I'm skeptical of the claim that there's little demographic distance or the implication that it's a prerequisite. One of the reasons people like the US is an immigrant can come here and they themselves (or their children) can become the richest person in the world (or the vice president). I'd agree there's a randomness element, but it's less lottery and more placing bets with odds that are hard to determine. Some people have better initial odds, but that's only one part of it. If anything - I'd hypothesize that extreme outliers share something other personality trait more relevant than demographics, willingness to take huge risks. You could argue that someone who has more of a safety net is in a better position to do so, but someone who has nothing to lose may also find the tradeoff easier. It's possible that most people in a relatively comfortable position would be less likely to take the big kind of risks that outlier payoffs require (I'd guess this is one reason why we have few people like Elon Musk).

nicetryguy 6y ago

Safe to say PG has a healthy amount of Survivorship Bias.

cmrdporcupine 6y ago

Yep, I wouldn't say I've had as much startup experience as you but I did work as employee #4 at one and then after that at a startup that got acquired by Google and while I did get a windfall out of that it certainly didn't make me rich and I've made a lot more money in the years since just taking in my regular FAANG compensation. FAANG compensations can be quite high. Arguably they are that high precisely to siphon up headcount that would in the past alternatively go into other ventures to seek wealth there. But I would say that these high compensations seem to me to be set precisely high enough to hoover up talent but not high enough for employees to achieve "escape velocity" entirely from the market (without extreme financial discipline anyways)

VRay 6y ago
Regarding the "escape velocity", it really isn't that tough IMO to save enough to retire when you're making 5-10x the median household US income, even if you're wasting $3500/month on rent. Yeah, milk and gas cost about twice what they do in the rest of the USA, but since I moved to the Bay Area I've been saving over a third of my income without even trying despite having a kid, eating out every day, and buying every gadget and gizmo I hear about ~5 years of savings can buy you a house out in the outside world so you can take a stab at building a ramen-profitable startup ~15 years' worth can probably cover regular old retirement at a level that'd be comfortable for people from https://old.reddit.com/r/FinancialIndependence https://old.reddit.com/r/FinancialIndependence
- mmmmmbop 6y ago
  I think this is exactly what the parent commenter meant. You'll be able to retire comfortably after your most productive years, but you most likely won't be financially independent within 5 years and have the means to focus on building a startup.

afpx 6y ago

Over 25 years, I worked for 4 startups, 2 pre series A, 2 series A. All were VC funded, high growth, successful. 3 were acquired; 1 stayed private. I worked for startups because I really wanted to “get rich”. And, I put way too many hours in trying. In the end, I did get moderately rich. But, honestly, it was mostly from saving and investing well, not from exit events. Unless you play the political game, I doubt you’re gonna get rich from options. And, they don’t write the options contracts like they used to. When I started working, I made $30k / year, and I loved my work. Now, I make $180k / year, and I hate it. I hate the people mostly, and the politics. Lol. I do have enough to retire early, and I probably will because generally I feel the golden years of software development seem over. I liked it better when it was a bunch of nerds playing with tech - people who loved it. Now, it’s more people who would have otherwise gone into banking. Ymmv.

bob33212 6y ago
I have a similar background, and also miss the 90s where the people playing with tech were not thinking about the money but actually enjoyed the coding. What I find hopeful about Paul's essay and the current state of the world is that I can start my own company for next to nothing. And I only have to find a couple customers to cover my living expenses. I'm not going to be the CEO of a billion dollar company and that is fine. I don't want to have those responsibilities.
- danielscrubs 6y ago
  Not sure about that. Let’s say you have 10x cheaper tools, but 1000x more competition can you still make it?
  - bob33212 6y ago
    The world is becoming more fragmented and long tails are getting longer. I'm not going to build a competitor to Facebook or AWS, but there are thousands of small untapped market segments.

cupofcoffee 6y ago

You are not unlucky the vast majority of startups fail. You need to be extremely lucky, extremely talented, extremely ambitious basically extremely everything to create a company and get rich from it. It's pretty much a pipe-dream to create a company and get rich from it. The most likely result is ending completely burnt out and having wasted a couple of years.

internetslave 6y ago
False. I personally know multiple people that have done it. And I knew them before they got rich
- cupofcoffee 6y ago
  Right. Even if you knew 100 people that all made startups and made 10M+ it would still prove nothing. What percentage of startups do you think succeed?
  - internetslave 6y ago
    I’m kinda busy to go all into this, but generally people who went to top schools and raise from top vcs gave very good outcomes. The problem is when you lump in people with bad or mediocre career outcomes who try to start a company. The data is very misleading, getting funding from Andreesen Horowitz leaves a huge chance of success.

jedberg 6y ago

I've worked two startups and two public companies (and a University) in my career. Other than the small salary, I made nothing from the startups. The first public company made me enough to buy a house in the Bay Area and the second made me enough to fund my own startup as well as invest in others. So yeah, my experience tracks with yours -- all my wealth was made working for public companies (that I happen to catch during their biggest periods of growth). To be fair though, that may change if my investments work out. Then most of my wealth will be from investing in startups.

anonu 6y ago

> but I suspect you are much more likely to build wealth with the more established tech companies FANG: low variance + moderate reward vs ENTREPRENEUR: high variance + high reward The Kelly Criterion can probably be applied here on how much to "invest" in each opportunity. Ultimately it matters how often these opportunities come up.

baloney1 6y ago
absolutely correct, and let's not forget there is the whole spectrum of startups and mid sized growth companies that one can join in between.
whimsicalism 6y ago
When you use the phrase "reward", are you talking expected value? Or top of the distribution? Because if it's expected value, I doubt "entrepreneur" is high reward compared to FANGs "moderate reward".
- anonu 6y ago
  Yes, EV. I certainly think tech entrepreneurs go into a startup opportunity impassioned by their ideas, but knowing they could IPO or exit at some point in the future for a sizeable amount of cash is certainly a motivating factor. EV = Probability * Outcome Probability is very low of an IPO outcome - but EV is probably still higher than FANG work.
  - whimsicalism 6y ago
    Yeah, I don't think that is true.
    - medvezhenok 6y ago
      Around 1% of seed-funded companies go on to become unicorns (>1B valuation). Total market value of unicorns ~$2T (~600 unicorns). So average unicorn valuation ~3.3B USD. Let's say you're the founder and your [ultimately diluted] share of the company is 10%. You have a 10Y runway. Your EV in startup case is 330M (10% of 3.3B) * 1% chance of success = $3.3M or $330K USD per year. This is only counting the extreme (unicorn cases) and will obviously vary with equity percentages. https://news.crunchbase.com/news/private-unicorn-board-now-above-600-companies-valued-at-2t/ https://news.crunchbase.com/news/private-unicorn-board-now-a...

deleted 6y ago

[deleted]

bawolff 6y ago

I don't think that's a controversial opinion. Start-ups are high risk high reward. You probably won't truly make it, but if you do you have more money than you know what to do with.