9 ms·

How to Make Wealth

155 points by mofeeta 15y ago

solipsist 15y ago
Just out of curiosity, is pg a millionaire? A billionaire?
- JoachimSchipper 15y ago
  He's not on http://www.forbes.com/forbes-400/ http://www.forbes.com/forbes-400/; no billionaire. Did you expect otherwise?
- fraserharris 15y ago
  Using the data in Founder's at Work, and making some reasonable assumptions about the dilution of each round, his Viaweb exit was personally worth (before-tax) ~$10M in June, 1998. The exit was in Yahoo stock, which would gain ~17x, reaching a high of $118.75 a year and 1/2 later. So, anywhere from $10M - 170M from Viaweb.
- pathik 15y ago
  The way YC is growing, PG could very well become a billionaire in the coming years.
  - chalst 15y ago
    At 3% equity, he would need either a really, really big hit or a lot of big successes to become a billionaire. From YC's modus operandum, I think pg cares more about shaking up Silicon Valley than he does about maximising return on investment.
    - DilipJ 15y ago
      maybe if YC were acquired by another VC firm, he might be able to get a large multiple off of his ownership stake. either way, that would be cool to see pg become a billionaire. I wonder how he would shake up philanthropy? He might be able to find a better charity model than what currently exists today..
      - sp332 15y ago
        The most efficient way to help homeless people is to walk up to them on the street and give them money. Not much room there for innovation. On the other hand, the cheapest way for society to help "permanently" homeless people is to pay their rent on an apartment. That might be more interesting.
        chopsueyar 15y ago
        Give them anything but money.
        sp332 15y ago
        It's a small pilot project but it went really well: http://www.economist.com/node/17420321?story_id=17420321 http://www.economist.com/node/17420321?story_id=17420321 And, with the standard Malcolm Gladwell disclaimer, http://www.gladwell.com/2006/2006_02_13_a_murray.html http://www.gladwell.com/2006/2006_02_13_a_murray.html seems to indicate than most homeless people aren't homeless for very long.
wesleyzhao 15y ago
Was this really not submitted before? Or does HN have a time range in which afterwards, duplicate posts are OK
- chc 15y ago
  The dupe filter only checks posts that are in memory at the time — it doesn't examine the entire archives.
RandyHelzerman1 15y ago
He's slipping. Marx is wrong, there's no labor theory of value. If working 24/7 was the ticket to riches then every mother would be a billionaire. The Mexicans who now your lawn and harvest your food work way harder than a 20-something at a startup. What's more, you can do all that work, and 9 times out of 10 you end up with nothing.
- invalidOrTaken 15y ago
  The essay is about how to make wealth, not capture it. Know the difference. The importance of capture is skimmed over a bit too much in pg's essay, in my opinion. He writes "for much of human history... the only ways to acquire [wealth] rapidly [was] by inheritance, marriage, conquest, or confiscation. Naturally wealth had a bad reputation." Wealth-by-confiscation is far from dead, and is in fact alive and kicking. Excepting the government, no one can print money; hence, the only way to get it is from other people, who don't part with it willingly. The separation of others from their money is the real business, and those who specialize in it or aid others in it (salesmen, advertisers [Google, Facebook], lawyers, marketers, those who provide marketplaces [Amazon, eBay, Viaweb], payment facilitators [PayPal, banks]) will find themselves much better paid than those who "merely" create wealth. The same is true for those who guard wealth against those who would take it: tax accountants, lawyers, security system vendors (one of the more lucrative jobs in my town is sales for a security systems company---double whammy), and defense contractors (on a national level). Today I threw a kill switch on work I'd done for a client that was seemingly impervious to invoices. In two hours I had an email titled "Urgent Matter," and two hours later I had a check in hand (five minutes later the client's software was working just fine again, if you're curious). So while I would much prefer to think of myself as a developer, today I got paid for being an extortioner instead.
  - tbourdon 15y ago
    Here, here.
- _delirium 15y ago
  Marx's take on the labor theory of value doesn't argue that everyone is compensated according to the labor they put in. In fact his whole point is sort of the opposite, closer to yours, arguing that workers are not typically able to capture as income the value of the labor they produce, and in fact it's quite possible to produce a lot of value and get nothing out of it, depending on the way your labor is used within modern capital.
nwhitehead 15y ago
It's interesting that in this older essay pg suggests focusing on number of users as a good metric for adding value. Nowadays this is called a vanity metric and everyone is looking for actionable metrics based on cohort analysis etc. It shows how fast the best practices for startups are evolving.
asknemo 15y ago
"If you're a good hacker in your mid twenties, you can get a job paying about $80,000 per year." Wow, things change fast. Isn't there a thread talking about certain mid twenties in Google having $250k per year lately? It was written only 6 years ago.
- robryan 15y ago
  Wouldnt the equivalent non top of the range amount be around 120k now? And it seems the dev market is a fair bit tighter than 6 years ago?
  - achompas 15y ago
    What do you mean by "tighter"?
    - cwilbur 15y ago
      A good programmer who can find a job in an urban market can earn $120K a year. But there are a lot of programmers who can't find jobs, and that puts significant downward pressure on salaries; and there are a lot of programmers in more rural markets who are willing to telecommute, and that puts significant downward pressure on salaries as well.
kitsune_ 15y ago
I think the problem with such essays is that the authors extrapolate their own experience and think it can be used as a template for everyone. We are told how to get rich, become successful, date a beautiful women, write the best programs, influence people and so on.
nikcub 15y ago
I don't buy the argument that Gates became rich because of IBM's "blunder" with DOS. When Windows was released Microsoft almost had to start over again. They had both a good product and the right business model by horizontally integrating with ODM's and realizing that the value in software is in platform. Then he went and did it again with Microsoft Office. Bill Gates created some of the most profitable and efficient business units that the world has ever seen, and he did it more than once. It just happens that he took advantage of IBM's naivety the first time, but that was only a blunder with hindsight. To add, I think being rich is overrated, and that it isn't a coincidence that the biggest influencers and successes in our industry don't care about money.
- danssig 15y ago
  >To add, I think being rich is overrated, and that it isn't a coincidence that the biggest influencers and successes in our industry don't care about money. The biggest influences and successes in our industry don't care about money after they have their FU money. I wouldn't either! Ironically, this tells me that being rich is absolutely not overrated but really important if you ever want to be able to forget about money.
  - mgkimsal 15y ago
    Thank you. I find very few poor or middle class people who continuously hold the belief that "money isn't important" or they "don't care about money". Once you've got that FU money - you can say FU - that's why it's called FU money! The few that do may do so because of religious/spiritual beliefs, but almost everyone without enough money cares about it, because a) it's scarce and b) necessary to live.
- tpatke 15y ago
  I don't think PG is arguing that Gates is rich because of IBM's failure. I think he is arguing that Gates is fantastically rich because of IBM's failure. PG states in the essay that someone like Gates who is smart and hard working will be successful. ...but being successful and being a multi-billionaire are two different things. Being a multi-billionaire requires luck. And, yeah, it’s pretty clear that IBM dropped the ball on this one. There was a good 10 - 15 year period where IBM could have easilly crushed (or bought) Microsoft.
ashishgandhi 15y ago
Spooky coincidence: This is exactly the chapter I read yesterday in Hacker and Painters. Blunder or not, and as much as I love Apple; like Steve said, "They've earned their success, for the most part." On the other hand, because MS grew so big I feel people started taking software more seriously. It may have shaped how the industry looks at software now. This is only a hunch as I wasn't even around when it was the 80s.
nadam 15y ago
I liked these essays when I was young, because these were so encouraging. It treated us programmers as special snow flakes, and advertised us the romantic super exciting world of startups. Now as I got older and more experienced I find these essays trivial, boring or simply not true. I realized I no longer gain anything 'usable' for my life from such essays. (I find less and less interesting most essays from Joel and others also. I am more and more interested in actual business opportunities and connections, and less and less interested in general essays about enterpreneurship and programming.) Creating wealth is relatively easy, but I don't care about it anymore (except as a hobby), I care about creating money, which is much harder. All the stuff about programmer productivity in this essay is first not true but more importantly not really important anymore in my opinion. At most startups and big companies programming is a commodity. By 2011 we programers are good enough, programming became matrue enough that it is really a commodity now. Not a cheap commodity, but a commodity: a $100.000 per year commodity. I argue that in 2011 (maybe not in 2004) you can find really good people for $100.000 per year if you know how to find these people. You can find much cheaper in Eastern Europe (where I live) if you are not so snob that you think programmers in the West are so special. So unless you work on something very deeply technical or technicall revolutionary (so you are not John Carmack working on the fastest rendering engine on the planet or you are not the engineer behind Gogle's superfast javascript engine) your value as a programmer is someting like $100.000 or something. There is no '36x multiplier because of programmer productivity.' I think if the market is quasy efficient that means if your startup would be about programming then the expected value of your earnings would be sometinng like this value ($100.000) in your startup. What kind of multipliers there really are: - There can be a multiplier because of your idea, your product, your marketing, and your connections. But not programming (in case of not technically deep startups. Technically deep startups are quite rare.) - There is a factor which is related to how popular it is to create a startup. If it is super popular because of marketing essays like this, then it is possible that there are too much startups of constant sized markets, so that your expected value of earning could be even less than $100.000. At the time of this essay, when starting-up was not that popular we could not really speak of saturated markets, so that your expected value of earning was probably more than $100.000. The more people start-up the less attractive it will be to start-up. So the more successful PG's essays will be the less true they will be.
mgkimsal 15y ago
"If a fairly good hacker is worth $80,000 a year at a big company, then a smart hacker working very hard without any corporate bullshit to slow him down should be able to do work worth about $3 million a year." I'm not sure whether this was meant tongue-in-cheek or not, but ... If someone's worth $80k to company X, they're worth $80k in the context of the value the provide to company working as part of the whole. At least some of the "corporate bullshit" is at least partially necessary to make the company run. A developer "programming" outside the context of company X might be able to provide more value to a wider audience, but not without some level of "corporate bullshit" (legal, financial, etc). And they're not going to create $3m of directly accessible money without a decent amount of "corporate bullshit". The same skills that are worth $80k to company X might have nearly $0 value to anyone outside the context of company X.
- pmorici 15y ago
  I think you are under estimating the stench of corporate bullshit. Take how ever bad you think it is and multiply it by 10 then add a little bit and it's worse than that at the really bad places.
  - mgkimsal 15y ago
    Show me people that were $80k corp developers who left, did nothing else except the exact same things they did as corp devs (minus corp redtape) who made millions. No one does. To function, more stuff than just programming needs to happen.
    - pmorici 15y ago
      Yes more stuff besides programming needs to happen but in a large corp. doing all those ancillary things takes a lot longer than it needs to. For example if you needed to buy a larger hard drive for your dev machine as an individual you can just go to your favorite online retailer order it and have it in a day or two. At a large company you would have to deal with a litany of people forms and other nonsense that could stretch on for weeks if not months. If you've never experienced it you can't possibly imagine how bad it really is.
mr_luc 15y ago
It's been a while since I've read this essay -- and I'm surprised by some of the reactions I'm reading in these comments! The essay is just as good now as it was then. The underlying ideas are not only correct, they're being actively validated in the increase in salaries for good programmers. Someone in this thread says that programming is a commodity. Well, sure. Isn't everything? But the key point in the essay is about making value directly, by making something people want. Has that somehow become a dated notion? Isn't it, rather, being validated with every single startup that enriches its value-creating founders? There's no 'magic' in the essay, of course. No secret key to success, no fairy dust; I'm sorry for anyone who felt there was, but such is youth. The essay never said that all programmers will become millionaires. What it said was that if you wanted to become rich, and you're a programmer, probably your best shot is to make a product that people want. Google and Facebook and Twitter and more, they're all validating that argument by raising salaries for their best talent, to make creating value directly for the customer a less attractive option.
- achompas 15y ago
  The underlying ideas are not only correct, they're being actively validated in the increase in salaries for good programmers. Then why do people complain about low wages and poor equity offers? Not everyone is a Google employee making $250k in salary + benefits. But the key point in the essay is about making value directly, by making something people want. Has that somehow become a dated notion? Isn't it, rather, being validated with every single startup that enriches its value-creating founders? Where are all of these startups that magically print money for their founders? All I see on HN are people grinding away on their MVPs (or pushing a landing page as their MVP) while we discuss the same hot-shot startups (Square, Twitter, FB, etc.) over and over again.
drblast 15y ago
"If a fairly good hacker is worth $80,000 a year at a big company, then a smart hacker working very hard without any corporate bullshit to slow him down should be able to do work worth about $3 million a year." Wow, in hindsight this seems way too hacker-centric and elitist. The assumption is that all that other corporate stuff creates no value. I don't think that's true. I think that marketing, sales, etc., can be what enables the $80,000 salary and the combination of everything can be an overall multiplier. Otherwise, the proposition that a marketing firm can help you increase sales would not be true. Contrast with Joel Spolsky's article about how managers are there to abstract away everything but the hacking problem at hand. There is value created there, and a good manager can multiply the value of a good hacker.
outside1234 15y ago
two comments: * this only applies if you are the FOUNDER or early employee. joining later and making your 0.14% of the company is good for learning a small part of how startups work, but it is unlikely to get you rich, especially after the discount you take for not working at Googlesoft (where salaries are at least 40% higher than startups). This essay is part of the story that early employees spin to convince you to work like crazy so they take home the majority of the rewards. * the best way to make wealth consistently is to save money from your paycheck at a young age, invest it in low to moderate risk investments, and let it compound. this would actually argue for taking the higher paycheck from Googlesoft. * getting rich isn't everything and work isn't everything. you'll be a much more interesting guy (and probably more effective, including at work) and you'll have a better chance of seeing something that is broken and needs a startup.
achompas 15y ago
After spending over a year on HN, I really have to disagree with assertions about "corporate bullshit" for one reason: Advertising. Look at how HN is inundated with "Show HNs" for everyone's new web app. Many of these people bootstrap their own company and can't afford advertising. They're all fighting for attention in a market saturated with novel apps (Instapaper for videos! another iOS photo sharing app!). Many of these apps create wealth, and many won't survive into next June. Now compare these tiny startups with any larger startup or corporation. Facebook, Twitter, Foursquare have a lot of users, and they need to build out bizdev teams to continue growing (marginal cost and all that). They need HR departments to build out those teams--now we're halfway down the road to internal hierarchies and politics. Ugh, corporate bullshit! However, these startups can also advertise and market like crazy and watch as their growth charts show exponential behavior. Traction and user retention are economies of scale. As much as we hate corporate bullshit, that bullshit lets a company grow enough to trivialize all those marketing + bizdev concerns. Otherwise, how can you advertise your wealth creation when consumers are too busy looking at Tumblr or tweeting to pay attention to you?

How to Make Wealth

155 points by mofeeta 15y ago

solipsist 15y ago

Just out of curiosity, is pg a millionaire? A billionaire?

JoachimSchipper 15y ago
He's not on http://www.forbes.com/forbes-400/ http://www.forbes.com/forbes-400/; no billionaire. Did you expect otherwise?
fraserharris 15y ago
Using the data in Founder's at Work, and making some reasonable assumptions about the dilution of each round, his Viaweb exit was personally worth (before-tax) ~$10M in June, 1998. The exit was in Yahoo stock, which would gain ~17x, reaching a high of $118.75 a year and 1/2 later. So, anywhere from $10M - 170M from Viaweb.
pathik 15y ago
The way YC is growing, PG could very well become a billionaire in the coming years.
- chalst 15y ago
  At 3% equity, he would need either a really, really big hit or a lot of big successes to become a billionaire. From YC's modus operandum, I think pg cares more about shaking up Silicon Valley than he does about maximising return on investment.
  - DilipJ 15y ago
    maybe if YC were acquired by another VC firm, he might be able to get a large multiple off of his ownership stake. either way, that would be cool to see pg become a billionaire. I wonder how he would shake up philanthropy? He might be able to find a better charity model than what currently exists today..
    - sp332 15y ago
      The most efficient way to help homeless people is to walk up to them on the street and give them money. Not much room there for innovation. On the other hand, the cheapest way for society to help "permanently" homeless people is to pay their rent on an apartment. That might be more interesting.
      - chopsueyar 15y ago
        Give them anything but money.
        sp332 15y ago
        It's a small pilot project but it went really well: http://www.economist.com/node/17420321?story_id=17420321 http://www.economist.com/node/17420321?story_id=17420321 And, with the standard Malcolm Gladwell disclaimer, http://www.gladwell.com/2006/2006_02_13_a_murray.html http://www.gladwell.com/2006/2006_02_13_a_murray.html seems to indicate than most homeless people aren't homeless for very long.

wesleyzhao 15y ago

Was this really not submitted before? Or does HN have a time range in which afterwards, duplicate posts are OK

chc 15y ago
The dupe filter only checks posts that are in memory at the time — it doesn't examine the entire archives.

RandyHelzerman1 15y ago

He's slipping. Marx is wrong, there's no labor theory of value. If working 24/7 was the ticket to riches then every mother would be a billionaire. The Mexicans who now your lawn and harvest your food work way harder than a 20-something at a startup. What's more, you can do all that work, and 9 times out of 10 you end up with nothing.

invalidOrTaken 15y ago
The essay is about how to make wealth, not capture it. Know the difference. The importance of capture is skimmed over a bit too much in pg's essay, in my opinion. He writes "for much of human history... the only ways to acquire [wealth] rapidly [was] by inheritance, marriage, conquest, or confiscation. Naturally wealth had a bad reputation." Wealth-by-confiscation is far from dead, and is in fact alive and kicking. Excepting the government, no one can print money; hence, the only way to get it is from other people, who don't part with it willingly. The separation of others from their money is the real business, and those who specialize in it or aid others in it (salesmen, advertisers [Google, Facebook], lawyers, marketers, those who provide marketplaces [Amazon, eBay, Viaweb], payment facilitators [PayPal, banks]) will find themselves much better paid than those who "merely" create wealth. The same is true for those who guard wealth against those who would take it: tax accountants, lawyers, security system vendors (one of the more lucrative jobs in my town is sales for a security systems company---double whammy), and defense contractors (on a national level). Today I threw a kill switch on work I'd done for a client that was seemingly impervious to invoices. In two hours I had an email titled "Urgent Matter," and two hours later I had a check in hand (five minutes later the client's software was working just fine again, if you're curious). So while I would much prefer to think of myself as a developer, today I got paid for being an extortioner instead.
- tbourdon 15y ago
  Here, here.
_delirium 15y ago
Marx's take on the labor theory of value doesn't argue that everyone is compensated according to the labor they put in. In fact his whole point is sort of the opposite, closer to yours, arguing that workers are not typically able to capture as income the value of the labor they produce, and in fact it's quite possible to produce a lot of value and get nothing out of it, depending on the way your labor is used within modern capital.

nwhitehead 15y ago

It's interesting that in this older essay pg suggests focusing on number of users as a good metric for adding value. Nowadays this is called a vanity metric and everyone is looking for actionable metrics based on cohort analysis etc. It shows how fast the best practices for startups are evolving.

asknemo 15y ago

"If you're a good hacker in your mid twenties, you can get a job paying about $80,000 per year." Wow, things change fast. Isn't there a thread talking about certain mid twenties in Google having $250k per year lately? It was written only 6 years ago.

robryan 15y ago
Wouldnt the equivalent non top of the range amount be around 120k now? And it seems the dev market is a fair bit tighter than 6 years ago?
- achompas 15y ago
  What do you mean by "tighter"?
  - cwilbur 15y ago
    A good programmer who can find a job in an urban market can earn $120K a year. But there are a lot of programmers who can't find jobs, and that puts significant downward pressure on salaries; and there are a lot of programmers in more rural markets who are willing to telecommute, and that puts significant downward pressure on salaries as well.

kitsune_ 15y ago

I think the problem with such essays is that the authors extrapolate their own experience and think it can be used as a template for everyone. We are told how to get rich, become successful, date a beautiful women, write the best programs, influence people and so on.

nikcub 15y ago

I don't buy the argument that Gates became rich because of IBM's "blunder" with DOS. When Windows was released Microsoft almost had to start over again. They had both a good product and the right business model by horizontally integrating with ODM's and realizing that the value in software is in platform. Then he went and did it again with Microsoft Office. Bill Gates created some of the most profitable and efficient business units that the world has ever seen, and he did it more than once. It just happens that he took advantage of IBM's naivety the first time, but that was only a blunder with hindsight. To add, I think being rich is overrated, and that it isn't a coincidence that the biggest influencers and successes in our industry don't care about money.

danssig 15y ago
>To add, I think being rich is overrated, and that it isn't a coincidence that the biggest influencers and successes in our industry don't care about money. The biggest influences and successes in our industry don't care about money after they have their FU money. I wouldn't either! Ironically, this tells me that being rich is absolutely not overrated but really important if you ever want to be able to forget about money.
- mgkimsal 15y ago
  Thank you. I find very few poor or middle class people who continuously hold the belief that "money isn't important" or they "don't care about money". Once you've got that FU money - you can say FU - that's why it's called FU money! The few that do may do so because of religious/spiritual beliefs, but almost everyone without enough money cares about it, because a) it's scarce and b) necessary to live.
tpatke 15y ago
I don't think PG is arguing that Gates is rich because of IBM's failure. I think he is arguing that Gates is fantastically rich because of IBM's failure. PG states in the essay that someone like Gates who is smart and hard working will be successful. ...but being successful and being a multi-billionaire are two different things. Being a multi-billionaire requires luck. And, yeah, it’s pretty clear that IBM dropped the ball on this one. There was a good 10 - 15 year period where IBM could have easilly crushed (or bought) Microsoft.

ashishgandhi 15y ago

Spooky coincidence: This is exactly the chapter I read yesterday in Hacker and Painters. Blunder or not, and as much as I love Apple; like Steve said, "They've earned their success, for the most part." On the other hand, because MS grew so big I feel people started taking software more seriously. It may have shaped how the industry looks at software now. This is only a hunch as I wasn't even around when it was the 80s.

nadam 15y ago

I liked these essays when I was young, because these were so encouraging. It treated us programmers as special snow flakes, and advertised us the romantic super exciting world of startups. Now as I got older and more experienced I find these essays trivial, boring or simply not true. I realized I no longer gain anything 'usable' for my life from such essays. (I find less and less interesting most essays from Joel and others also. I am more and more interested in actual business opportunities and connections, and less and less interested in general essays about enterpreneurship and programming.) Creating wealth is relatively easy, but I don't care about it anymore (except as a hobby), I care about creating money, which is much harder. All the stuff about programmer productivity in this essay is first not true but more importantly not really important anymore in my opinion. At most startups and big companies programming is a commodity. By 2011 we programers are good enough, programming became matrue enough that it is really a commodity now. Not a cheap commodity, but a commodity: a $100.000 per year commodity. I argue that in 2011 (maybe not in 2004) you can find really good people for $100.000 per year if you know how to find these people. You can find much cheaper in Eastern Europe (where I live) if you are not so snob that you think programmers in the West are so special. So unless you work on something very deeply technical or technicall revolutionary (so you are not John Carmack working on the fastest rendering engine on the planet or you are not the engineer behind Gogle's superfast javascript engine) your value as a programmer is someting like $100.000 or something. There is no '36x multiplier because of programmer productivity.' I think if the market is quasy efficient that means if your startup would be about programming then the expected value of your earnings would be sometinng like this value ($100.000) in your startup. What kind of multipliers there really are: - There can be a multiplier because of your idea, your product, your marketing, and your connections. But not programming (in case of not technically deep startups. Technically deep startups are quite rare.) - There is a factor which is related to how popular it is to create a startup. If it is super popular because of marketing essays like this, then it is possible that there are too much startups of constant sized markets, so that your expected value of earning could be even less than $100.000. At the time of this essay, when starting-up was not that popular we could not really speak of saturated markets, so that your expected value of earning was probably more than $100.000. The more people start-up the less attractive it will be to start-up. So the more successful PG's essays will be the less true they will be.

mgkimsal 15y ago

"If a fairly good hacker is worth $80,000 a year at a big company, then a smart hacker working very hard without any corporate bullshit to slow him down should be able to do work worth about $3 million a year." I'm not sure whether this was meant tongue-in-cheek or not, but ... If someone's worth $80k to company X, they're worth $80k in the context of the value the provide to company working as part of the whole. At least some of the "corporate bullshit" is at least partially necessary to make the company run. A developer "programming" outside the context of company X might be able to provide more value to a wider audience, but not without some level of "corporate bullshit" (legal, financial, etc). And they're not going to create $3m of directly accessible money without a decent amount of "corporate bullshit". The same skills that are worth $80k to company X might have nearly $0 value to anyone outside the context of company X.

pmorici 15y ago
I think you are under estimating the stench of corporate bullshit. Take how ever bad you think it is and multiply it by 10 then add a little bit and it's worse than that at the really bad places.
- mgkimsal 15y ago
  Show me people that were $80k corp developers who left, did nothing else except the exact same things they did as corp devs (minus corp redtape) who made millions. No one does. To function, more stuff than just programming needs to happen.
  - pmorici 15y ago
    Yes more stuff besides programming needs to happen but in a large corp. doing all those ancillary things takes a lot longer than it needs to. For example if you needed to buy a larger hard drive for your dev machine as an individual you can just go to your favorite online retailer order it and have it in a day or two. At a large company you would have to deal with a litany of people forms and other nonsense that could stretch on for weeks if not months. If you've never experienced it you can't possibly imagine how bad it really is.

mr_luc 15y ago

It's been a while since I've read this essay -- and I'm surprised by some of the reactions I'm reading in these comments! The essay is just as good now as it was then. The underlying ideas are not only correct, they're being actively validated in the increase in salaries for good programmers. Someone in this thread says that programming is a commodity. Well, sure. Isn't everything? But the key point in the essay is about making value directly, by making something people want. Has that somehow become a dated notion? Isn't it, rather, being validated with every single startup that enriches its value-creating founders? There's no 'magic' in the essay, of course. No secret key to success, no fairy dust; I'm sorry for anyone who felt there was, but such is youth. The essay never said that all programmers will become millionaires. What it said was that if you wanted to become rich, and you're a programmer, probably your best shot is to make a product that people want. Google and Facebook and Twitter and more, they're all validating that argument by raising salaries for their best talent, to make creating value directly for the customer a less attractive option.

achompas 15y ago
The underlying ideas are not only correct, they're being actively validated in the increase in salaries for good programmers. Then why do people complain about low wages and poor equity offers? Not everyone is a Google employee making $250k in salary + benefits. But the key point in the essay is about making value directly, by making something people want. Has that somehow become a dated notion? Isn't it, rather, being validated with every single startup that enriches its value-creating founders? Where are all of these startups that magically print money for their founders? All I see on HN are people grinding away on their MVPs (or pushing a landing page as their MVP) while we discuss the same hot-shot startups (Square, Twitter, FB, etc.) over and over again.

drblast 15y ago

"If a fairly good hacker is worth $80,000 a year at a big company, then a smart hacker working very hard without any corporate bullshit to slow him down should be able to do work worth about $3 million a year." Wow, in hindsight this seems way too hacker-centric and elitist. The assumption is that all that other corporate stuff creates no value. I don't think that's true. I think that marketing, sales, etc., can be what enables the $80,000 salary and the combination of everything can be an overall multiplier. Otherwise, the proposition that a marketing firm can help you increase sales would not be true. Contrast with Joel Spolsky's article about how managers are there to abstract away everything but the hacking problem at hand. There is value created there, and a good manager can multiply the value of a good hacker.

outside1234 15y ago

two comments: * this only applies if you are the FOUNDER or early employee. joining later and making your 0.14% of the company is good for learning a small part of how startups work, but it is unlikely to get you rich, especially after the discount you take for not working at Googlesoft (where salaries are at least 40% higher than startups). This essay is part of the story that early employees spin to convince you to work like crazy so they take home the majority of the rewards. * the best way to make wealth consistently is to save money from your paycheck at a young age, invest it in low to moderate risk investments, and let it compound. this would actually argue for taking the higher paycheck from Googlesoft. * getting rich isn't everything and work isn't everything. you'll be a much more interesting guy (and probably more effective, including at work) and you'll have a better chance of seeing something that is broken and needs a startup.

achompas 15y ago

After spending over a year on HN, I really have to disagree with assertions about "corporate bullshit" for one reason: Advertising. Look at how HN is inundated with "Show HNs" for everyone's new web app. Many of these people bootstrap their own company and can't afford advertising. They're all fighting for attention in a market saturated with novel apps (Instapaper for videos! another iOS photo sharing app!). Many of these apps create wealth, and many won't survive into next June. Now compare these tiny startups with any larger startup or corporation. Facebook, Twitter, Foursquare have a lot of users, and they need to build out bizdev teams to continue growing (marginal cost and all that). They need HR departments to build out those teams--now we're halfway down the road to internal hierarchies and politics. Ugh, corporate bullshit! However, these startups can also advertise and market like crazy and watch as their growth charts show exponential behavior. Traction and user retention are economies of scale. As much as we hate corporate bullshit, that bullshit lets a company grow enough to trivialize all those marketing + bizdev concerns. Otherwise, how can you advertise your wealth creation when consumers are too busy looking at Tumblr or tweeting to pay attention to you?