4 ms·

No, he's rich because (1) he had first mover advantage (credit to him) (2) he has a good sense of how to run a business (3) he exploits a large number of people

No, he's rich because (1) he had first mover advantage (credit to him) (2) he has a good sense of how to run a business (3) he exploits a large number of people to his own benefit.

dangus 9mo ago
Don’t forget the giant investment from his parents. Lots of people with great ideas, skills, and work ethic don’t have $250,000 lying around to invest.
- jacquesm 9mo ago
  Yes, that's a good point.
- rayiner 9mo ago
  His parents invested about $500,000 in today's money in their 50s. At that age, 10% of Americans have a financial net worth (excluding home equity) of over $2 million. People in America invest that kind of money in small businesses all the time. That’s on the low end of what it costs to open a Dunkin Donuts, and half of what it costs to open a McDonalds. The kids of the Indian guy who owns the Dunkin’ Donuts down the street aren’t exactly scions of wealth. And Bezos's biological dad was a unicyclist, his mom got pregnant with him at 16 and later dropped out of college, and his stepdad was a Cuban refugee who got an education and became an engineer for Exxon. Going from zero to billionaire in two generations actually says something remarkable about our system. Think about it another way. If the government doled out $500k to fund business ideas, do you think that investment would be available to kids of refugees? Of course not. There would be gatekeeping behind credentials and connections, and it would be open to a lot less than 10% of the population. [1] In terms of birth lottery, having top 10% parents is like being born smart enough to get a 1290 on the SAT or having a 120 IQ. Not exactly rarified aid! https://research.collegeboard.org/reports/sat-suite/understanding-scores/sat https://research.collegeboard.org/reports/sat-suite/understa...
  - pinnochio 9mo ago
    > Going from zero to billionaire in two generations actually says something remarkable about our system. It does? I mean, sure, it's better than having only the already rich stay rich, but let's not kid ourselves that this is a life outcome that everybody, or even 10% or 1% of the US can shoot for. The vast majority of people stay closer to zero. Who gives a shit that a few people get to win the right-time-right-place lottery?
    - SturgeonsLaw 9mo ago
      One guy went from zero to billionaire. Neat! How many thousands went from middle class to homeless over the same timeframe?
    - rayiner 9mo ago
      Every society has elites. If you invoke the government to keep people from being financial elites, then those government positions will become highly coveted and those will be the elites. And in countries where there aren’t many financial elites because the whole country is poor (like India until recently) those government jobs are highly coveted and insanely difficult to break onto. So it matters a lot where a society’s elites come from. In most societies, entering the elite requires family pedigree, credentials, and connections. If your society is such that simply becoming upper middle class gives your kids a sufficient platform to become a billionaire, that has a huge effect on who makes up the elites. Having elites whose parents were refugees or restaurant owners is hugely different from most countries.
  - cbolton 9mo ago
    > Going from zero to billionaire in two generations actually says something remarkable about our system. This data point doesn't distinguish between a system that fairly rewards abilities, and one that works like a lottery. My guess is that the US is in between: it unfairly rewards abilities, and chance plays a large role. Taking Jeff Bezos as example: 1) he certainly has remarkable abilities but maybe not 1,000,000 times more than the median American, yet he has about 1,000,000 times the wealth; 2) it's plausible that the US population of 350M includes several people with abilities similar to Bezos yet no notable wealth due to various circumstances. Both points suggest an unfair system.
cbolton 9mo ago
Isn't there also an effect like the second billion dollar being easier to get than the first? I mean all your points are good but the fact that the system allows you to leverage your wealth to increase it is probably the most important factor to get to $250B.
- jacquesm 9mo ago
  Absolutely, the more money you have the more risk you can take. That's fractions-of-a-martingale level money so you can probably chalk up a win before you lose it all. Musk uses the same playbook. Losing is for small fry. Proverb from my granny to contemplate: the devil always craps on the larger heap.
  - cbolton 9mo ago
    Right, and the risk aspect is only a second order effect. The main effect applies even when you restrict yourself to low-risk investments: it's simply that the more you have, the more you can invest so the more you make on average. But yeah, higher risk tolerance means you can also aim for higher returns.
graemep 9mo ago
He also had a lot of startup capital.

No, he's rich because (1) he had first mover advantage (credit to him) (2) he has a good sense of how to run a business (3) he exploits a large number of people to his own benefit.

dangus 9mo ago

Don’t forget the giant investment from his parents. Lots of people with great ideas, skills, and work ethic don’t have $250,000 lying around to invest.

jacquesm 9mo ago
Yes, that's a good point.
rayiner 9mo ago
His parents invested about $500,000 in today's money in their 50s. At that age, 10% of Americans have a financial net worth (excluding home equity) of over $2 million. People in America invest that kind of money in small businesses all the time. That’s on the low end of what it costs to open a Dunkin Donuts, and half of what it costs to open a McDonalds. The kids of the Indian guy who owns the Dunkin’ Donuts down the street aren’t exactly scions of wealth. And Bezos's biological dad was a unicyclist, his mom got pregnant with him at 16 and later dropped out of college, and his stepdad was a Cuban refugee who got an education and became an engineer for Exxon. Going from zero to billionaire in two generations actually says something remarkable about our system. Think about it another way. If the government doled out $500k to fund business ideas, do you think that investment would be available to kids of refugees? Of course not. There would be gatekeeping behind credentials and connections, and it would be open to a lot less than 10% of the population. [1] In terms of birth lottery, having top 10% parents is like being born smart enough to get a 1290 on the SAT or having a 120 IQ. Not exactly rarified aid! https://research.collegeboard.org/reports/sat-suite/understanding-scores/sat https://research.collegeboard.org/reports/sat-suite/understa...
- pinnochio 9mo ago
  > Going from zero to billionaire in two generations actually says something remarkable about our system. It does? I mean, sure, it's better than having only the already rich stay rich, but let's not kid ourselves that this is a life outcome that everybody, or even 10% or 1% of the US can shoot for. The vast majority of people stay closer to zero. Who gives a shit that a few people get to win the right-time-right-place lottery?
  - SturgeonsLaw 9mo ago
    One guy went from zero to billionaire. Neat! How many thousands went from middle class to homeless over the same timeframe?
  - rayiner 9mo ago
    Every society has elites. If you invoke the government to keep people from being financial elites, then those government positions will become highly coveted and those will be the elites. And in countries where there aren’t many financial elites because the whole country is poor (like India until recently) those government jobs are highly coveted and insanely difficult to break onto. So it matters a lot where a society’s elites come from. In most societies, entering the elite requires family pedigree, credentials, and connections. If your society is such that simply becoming upper middle class gives your kids a sufficient platform to become a billionaire, that has a huge effect on who makes up the elites. Having elites whose parents were refugees or restaurant owners is hugely different from most countries.
- cbolton 9mo ago
  > Going from zero to billionaire in two generations actually says something remarkable about our system. This data point doesn't distinguish between a system that fairly rewards abilities, and one that works like a lottery. My guess is that the US is in between: it unfairly rewards abilities, and chance plays a large role. Taking Jeff Bezos as example: 1) he certainly has remarkable abilities but maybe not 1,000,000 times more than the median American, yet he has about 1,000,000 times the wealth; 2) it's plausible that the US population of 350M includes several people with abilities similar to Bezos yet no notable wealth due to various circumstances. Both points suggest an unfair system.

cbolton 9mo ago

Isn't there also an effect like the second billion dollar being easier to get than the first? I mean all your points are good but the fact that the system allows you to leverage your wealth to increase it is probably the most important factor to get to $250B.

jacquesm 9mo ago
Absolutely, the more money you have the more risk you can take. That's fractions-of-a-martingale level money so you can probably chalk up a win before you lose it all. Musk uses the same playbook. Losing is for small fry. Proverb from my granny to contemplate: the devil always craps on the larger heap.
- cbolton 9mo ago
  Right, and the risk aspect is only a second order effect. The main effect applies even when you restrict yourself to low-risk investments: it's simply that the more you have, the more you can invest so the more you make on average. But yeah, higher risk tolerance means you can also aim for higher returns.

graemep 9mo ago

He also had a lot of startup capital.