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what's not being said: unless you're rich, it's much better to aim for a small, profitable business within the first 3 months and a low 7 figure exit. If you ca

by pxue 3y ago

what's not being said: unless you're rich, it's much better to aim for a small, profitable business within the first 3 months and a low 7 figure exit. If you can't figure out how to do this, work for someone else until you do. I think the genz are very aware of this.

GordonS 3y ago
I think you're right. Hell, a lot of GenZ'ers find the very idea of billionaires to be abhorrent, let alone strive to become one. Can't say I disagree.
- valzam 3y ago
  I always find the anti-billionaire sentiment a bit weird in the sense that it's not like they have literally been given billions of dollars in cash. Most billionaires net worth is highly centralised in the stock of the companies they founded, which at some point were worth nothing. When people say they find the "very idea of billionaires" abhorrent, what exactly is the solution here? After the stock in your company becomes worth > billion you have to give it away for free? Because selling it means you are still a billionaire. I think there is something to be said about inheritance taxes and limiting the infinite perpetuation of wealth through generations but unless we are talking asset seizure I am not quite sure how you would do away with the Musks, Brins, Gates' etc. of today.
  - diogenes4 3y ago
    > When people say they find the "very idea of billionaires" abhorrent, what exactly is the solution here? After the stock in your company becomes worth > billion you have to give it away for free? Yes. Arguably it was never rightfully theirs to begin with—owning someone else's labor output without working yourself is a pretty antisocial act. Furthermore I'd argue that billionaires have repeatedly demonstrated they are unable to invest in public good. Philanthropy used to be a thing; even the Bill and Melinda Gates foundation is a pathetic shadow of that practice with obvious ideological blind spots.
    - kortilla 3y ago
      >owning someone else's labor output without working yourself is a pretty antisocial act. This is what happens when you buy literally anything. What is the distinction you are trying to make?
      - diogenes4 3y ago
        > This is what happens when you buy literally anything. Well presumably if you buy from the sole creator of a product, they're justly compensated as they could simply refuse the sale. Buying from a privately owned enterprise allows the owners of the enterprise to siphon off of the work of the people who actually build the phone without contributing anything themselves. That doesn't sit right with me, and it doesn't sit right with a lot of people. This creates hugely perverse incentives that magnify to global economic dysfunction and inefficiency and irrational resource distribution and social volatility. The world we live in!
  - wolfgang42 3y ago
    > When people say they find the "very idea of billionaires" abhorrent, what exactly is the solution here? There’s a quote[1] which makes the rounds occasionally and I think sums up the sentiment pretty well: > Ok how about this: > No more billionaires. None. > After you reach $999 million, every red cent goes to schools and health care. > You get a trophy that says, “I won capitalism” and we name a dog park after you. --- > Most billionaires net worth is highly centralised in the stock of the companies they founded[...] unless we are talking asset seizure I am not quite sure how you would do away with [billionaires] Marginal asset tax rate of 100%? (Really, the main difference between that and the inheritance tax you favor is the timing.) The Wikipedia article[2] has a bunch of arguments for why that might be a bad idea, but it’s reasonably straightforward in principle. [1] https://twitter.com/Mikel_Jollett/status/1241843944238923777 https://twitter.com/Mikel_Jollett/status/1241843944238923777 [2] https://en.wikipedia.org/wiki/Wealth_tax https://en.wikipedia.org/wiki/Wealth_tax
    - preommr 3y ago
      This already exists. It's called taxes, death, and children. Billionaires only have a single lifetime to spend their wealth, taxed at pretty high rates when they actually liquidate their assets, and it eventually evaporates over a few generations. There's ~3k billionaires and they're powerful enough that they'll be able to avoid those caps through loopholes, like through shell companies. There's no real practical way to prevent someone from accumulating wealth if they wanted to continue to do so. That quote about no more billionaires is from someone that cares more about making a point than actual policy.
      - nameequalsmain 3y ago
        > There's no real practical way to prevent someone from accumulating wealth if they wanted to continue to do so. Not within a capitalist system, no. There are other systems though.
        gadflyinyoureye 3y ago
        This worked surprisingly well in the communist countries. Look at China and Russia. There has never been a black market where distributors go rich. Never once.
  - Drakinte 3y ago
    That's easy. They shouldn't even come close to being billionaires. How? Stock should not be theirs in the first place. Investors are buying the company's stock, why would it be theirs? Especially after going public, it's not "your" company anymore.
    - WA 3y ago
      And the investors aren’t billionaires themselves? Do you think investors give away their money for nothing? What are you even talking about?
satvikpendem 3y ago
> what's not being said: unless you're rich, it's much better to aim for a small, profitable business within the first 3 months and a low 7 figure exit. If you can't figure out how to do this, work for someone else until you do. That is basically what the book Company of One says, yes. Zero to Sold is also another good book in the same vein.
- lamroger 3y ago
  thanks for the rec
lamroger 3y ago
low 7 figures after how long?
- pizzafeelsright 3y ago
  Had a boss sell after 3 years. The last two were ramping up and then two big clients boosted the books. Sold the contracts with clients for about 6x revenue.
HeyLaughingBoy 3y ago
Why do you need to exit?
- actionfromafar 3y ago
  You don't need to but you might not enjoy having all your eggs in your one basket.
- pxue 3y ago
  because the whole point of starting a business is to get it to run by itself. Eventually you (the founder) won't be needed anymore.
q7xvh97o2pDhNrh 3y ago
Three months? Can you share any data or case studies around such a number? Part of me finds it unbelievable (and part of me really wants to believe). From a look at the two books mentioned here, though, neither seem to clear that bar. Zero to Sold is about FeedbackPanda, which took 2 years. (Still impressive.) And Company of One, from a skim, appears to focus on services businesses — totally reasonable to get to six-figure revenue and therefore seven-figure valuation, but not terribly interesting as product companies and fairly difficult to exit via a sale. I'd love to see some case studies of the 3-month number. The more I think about it, the more possible it seems (with a fair bit of luck).
- ysavir 3y ago
  I think they mean join a company within 3 months of its founding, to max out shares/options.
  - foolswisdom 3y ago
    As I read it, the working for someone else (a company) is the alternative, for the case in which you can't get profitable in 3 months.
- HeyLaughingBoy 3y ago
  The rationale behind the 3-month number is that most people will need an income by that time since savings will have run out. It's entirely possible to start a service-based business and be profitable from day 1.
- solresol 3y ago
  Both the services companies I started were profitable within 8 weeks. (6 and 8 respectively.) One was sold 14 years later, the other is still going. Services companies are very fast to get started, and very easy to make profitable. Building a product company on the other hand...

by pxue 3y ago

GordonS 3y ago

I think you're right. Hell, a lot of GenZ'ers find the very idea of billionaires to be abhorrent, let alone strive to become one. Can't say I disagree.

valzam 3y ago
I always find the anti-billionaire sentiment a bit weird in the sense that it's not like they have literally been given billions of dollars in cash. Most billionaires net worth is highly centralised in the stock of the companies they founded, which at some point were worth nothing. When people say they find the "very idea of billionaires" abhorrent, what exactly is the solution here? After the stock in your company becomes worth > billion you have to give it away for free? Because selling it means you are still a billionaire. I think there is something to be said about inheritance taxes and limiting the infinite perpetuation of wealth through generations but unless we are talking asset seizure I am not quite sure how you would do away with the Musks, Brins, Gates' etc. of today.
- diogenes4 3y ago
  > When people say they find the "very idea of billionaires" abhorrent, what exactly is the solution here? After the stock in your company becomes worth > billion you have to give it away for free? Yes. Arguably it was never rightfully theirs to begin with—owning someone else's labor output without working yourself is a pretty antisocial act. Furthermore I'd argue that billionaires have repeatedly demonstrated they are unable to invest in public good. Philanthropy used to be a thing; even the Bill and Melinda Gates foundation is a pathetic shadow of that practice with obvious ideological blind spots.
  - kortilla 3y ago
    >owning someone else's labor output without working yourself is a pretty antisocial act. This is what happens when you buy literally anything. What is the distinction you are trying to make?
    - diogenes4 3y ago
      > This is what happens when you buy literally anything. Well presumably if you buy from the sole creator of a product, they're justly compensated as they could simply refuse the sale. Buying from a privately owned enterprise allows the owners of the enterprise to siphon off of the work of the people who actually build the phone without contributing anything themselves. That doesn't sit right with me, and it doesn't sit right with a lot of people. This creates hugely perverse incentives that magnify to global economic dysfunction and inefficiency and irrational resource distribution and social volatility. The world we live in!
- wolfgang42 3y ago
  > When people say they find the "very idea of billionaires" abhorrent, what exactly is the solution here? There’s a quote[1] which makes the rounds occasionally and I think sums up the sentiment pretty well: > Ok how about this: > No more billionaires. None. > After you reach $999 million, every red cent goes to schools and health care. > You get a trophy that says, “I won capitalism” and we name a dog park after you. --- > Most billionaires net worth is highly centralised in the stock of the companies they founded[...] unless we are talking asset seizure I am not quite sure how you would do away with [billionaires] Marginal asset tax rate of 100%? (Really, the main difference between that and the inheritance tax you favor is the timing.) The Wikipedia article[2] has a bunch of arguments for why that might be a bad idea, but it’s reasonably straightforward in principle. [1] https://twitter.com/Mikel_Jollett/status/1241843944238923777 https://twitter.com/Mikel_Jollett/status/1241843944238923777 [2] https://en.wikipedia.org/wiki/Wealth_tax https://en.wikipedia.org/wiki/Wealth_tax
  - preommr 3y ago
    This already exists. It's called taxes, death, and children. Billionaires only have a single lifetime to spend their wealth, taxed at pretty high rates when they actually liquidate their assets, and it eventually evaporates over a few generations. There's ~3k billionaires and they're powerful enough that they'll be able to avoid those caps through loopholes, like through shell companies. There's no real practical way to prevent someone from accumulating wealth if they wanted to continue to do so. That quote about no more billionaires is from someone that cares more about making a point than actual policy.
    - nameequalsmain 3y ago
      > There's no real practical way to prevent someone from accumulating wealth if they wanted to continue to do so. Not within a capitalist system, no. There are other systems though.
      - gadflyinyoureye 3y ago
        This worked surprisingly well in the communist countries. Look at China and Russia. There has never been a black market where distributors go rich. Never once.
- Drakinte 3y ago
  That's easy. They shouldn't even come close to being billionaires. How? Stock should not be theirs in the first place. Investors are buying the company's stock, why would it be theirs? Especially after going public, it's not "your" company anymore.
  - WA 3y ago
    And the investors aren’t billionaires themselves? Do you think investors give away their money for nothing? What are you even talking about?

satvikpendem 3y ago

> what's not being said: unless you're rich, it's much better to aim for a small, profitable business within the first 3 months and a low 7 figure exit. If you can't figure out how to do this, work for someone else until you do. That is basically what the book Company of One says, yes. Zero to Sold is also another good book in the same vein.

lamroger 3y ago
thanks for the rec

lamroger 3y ago

low 7 figures after how long?

pizzafeelsright 3y ago
Had a boss sell after 3 years. The last two were ramping up and then two big clients boosted the books. Sold the contracts with clients for about 6x revenue.

HeyLaughingBoy 3y ago

Why do you need to exit?

actionfromafar 3y ago
You don't need to but you might not enjoy having all your eggs in your one basket.
pxue 3y ago
because the whole point of starting a business is to get it to run by itself. Eventually you (the founder) won't be needed anymore.

q7xvh97o2pDhNrh 3y ago

Three months? Can you share any data or case studies around such a number? Part of me finds it unbelievable (and part of me really wants to believe). From a look at the two books mentioned here, though, neither seem to clear that bar. Zero to Sold is about FeedbackPanda, which took 2 years. (Still impressive.) And Company of One, from a skim, appears to focus on services businesses — totally reasonable to get to six-figure revenue and therefore seven-figure valuation, but not terribly interesting as product companies and fairly difficult to exit via a sale. I'd love to see some case studies of the 3-month number. The more I think about it, the more possible it seems (with a fair bit of luck).

ysavir 3y ago
I think they mean join a company within 3 months of its founding, to max out shares/options.
- foolswisdom 3y ago
  As I read it, the working for someone else (a company) is the alternative, for the case in which you can't get profitable in 3 months.
HeyLaughingBoy 3y ago
The rationale behind the 3-month number is that most people will need an income by that time since savings will have run out. It's entirely possible to start a service-based business and be profitable from day 1.
solresol 3y ago
Both the services companies I started were profitable within 8 weeks. (6 and 8 respectively.) One was sold 14 years later, the other is still going. Services companies are very fast to get started, and very easy to make profitable. Building a product company on the other hand...