p.s. Possibly a feedback mechanism where each contributor votes a fraction back to the person/team in charge and valuation (compensation) emerges that way.
He very easily could have given equity away to the employees and spread it around. Or had exceedingly generous profit sharing.
But he didn't. He ended up with all the equity at the end, and thus the billionaire.
And they could leave at any point, they are paid for their work within 30 days. They take 0 risk.
As an entrepreneur for 20 years, I used to believe employees believe in companies and missions, but they don't, 99% of the time. They get paid for 30 days work, on time, and if they get a better offer they leave.
I'm sorry but that is 0 risk compared to what an entrepreneur does. People like yourself clearly have no idea how much responsibility and risk, and emotional strain an entrepreneur takes on, while employing people and paying them monthly. There is no comparison.
Don't expect people who take 0 risk to become millionaires. It's a ridiculous proposition. If that were the case "everyone" would be a millionaire, or a professional sports person, or an influencers, or whatever.
Taking risk, and building things yourself is much much harder. People who have never done it don't understand.
> They take 0 risk.
For wealthy worker problably, but for labor worker is not risky free.
> building things yourself is much much harder
Unless you work alone you don't build things yourself.
> People like yourself clearly have no idea how much responsibility and risk, and emotional strain an entrepreneur takes on
It seems like you don't have idea how hard it is to be in the bottom layer of the wealth distribution.
> Don't expect people who take 0 risk to become millionaires.
I don't think no one in this thread meant that. They are just advocating for better wealth distribution.
Did you offer those employees a chance to have a stake, to take a risk and share in the bigger reward than just their salary? I mean, in a meaningful way that had the potential to change their quality of life if it paid off? Were you willing to share the reward?
If you didn't offer such an opportunity, you can't complain that the staff didn't contribute to the level you hoped.
Just ask any freelancer how different it is to being an entrepreneur, even that change is a massive difference, you have to actually invoice and chase clients for payments, you have to take risk in whether you will actually be paid for work, etc.
Now just take it a step further for someone who is risking their capital, reputation, and time on creating something new, that might only make any revenue in 12-16 months, or never. And it might bankrupt them, lose their reputation etc. At a minimum that's 12-16x more risk than even a freelancer.
Oh and if insane people like myself didn't take this risk, the world would probably still be a foraging bunch of tribes. And you get hated for it for getting rich by exploiting people...
You have no idea about life, to be honest.
And you do? Everyone only has a small slice of what life is like. That is the life that you yourself lead. FYI I was a freelancer, chasing clients and invoices sucked, and was a waste of my time and skills.
You obviously have very strong opinions on how great entrepreneurs are, it is also coming across as "employees are lesser" as well which is not right.
There is nothing wrong (and a hell of a lot good) with not wanting to be a person that doesn't chase up invoices and worry about payroll, it lets you focus on doing a good job. Specialisation is a great thing, and would not be possible if everyone was busy marketing their own business/self.
> At a minimum that's 12-16x more risk than even a freelancer.
So they should get 12x the reward as the average? The average US wage is about $55k, so that would be, for a successful entrepreneur, 660k (and $0 for an unsuccessful one). I don't think anyone has a problem with this I certainly don't. I do have an issue with the ultra rich, like Bezos who have made 7.5 Billion a year since Amazon was founded, or 278,406 times the average wage from 1994 (26,939). Did he take 278,406 times the risk that an employee did. No. No he did not.
> Oh and if insane people like myself didn't take this risk, the world would probably still be a foraging bunch of tribes. And you get hated for it for getting rich by exploiting people...
And if everyone wanted to be an entrepreneur we would also still be like this. People need to actually do the day in day out grind work that is building things. 99% of this is done by employeed people. If everyone tried to do their own thing that would severely limit what can be done. You really need to stop looking down on your (and all) employees.
edit: fixed maths - Bezos has too much money for my math skills.
It has everything to do with this. Not wanting to be that person is fine. But then don't complain about people willing to take a lot more shit earning more than you. Generally, the stuff less people want to do (but is valuable to society), is better paid.
> like Bezos who have made 7.5 Billion a year since Amazon was founded, or 278,406 times the average wage from 1994
The guy created 400,000 jobs during the covid crisis, when most other businesses were either shut or going bankrupt. That's 1% of the US population. Going by your $7.5bn a year, that's $18 per new employee that year. You think he doesn't deserve that?
400,000 * 18 = 7.2 million, not 7.2 billion.
Amazon's deliveries avoided literally billions of in-person interactions during the peak uncertainties of C19. Bezos didn't start Amazon with that in mind, but it sure did help when called upon.
Then, people had the unmitigated gall to complain that Amazon made a lot of money during that time period. Well no shit; they provided a ton of value to hundreds of millions of people...
No he didn't. The business he founded did, the investors that invested in this business did, the customers that paid for services did. The people that made all of that happen were employees. He is not solely responsible for anything. For a long while he was responsible than many others in the organisation, but ever since he hired another person he was never responsible for anything on his own.
The idea that one person solely, directly lead to 400,000 people being employed is farcical. Did he really create a job spec, position, interview and do the paper work for 500 people each calendar day for two years?
No he does not deserve the money he has.
That's not how averages work. If 1 in 10 of entrepreneurs succeed at all and 1 in a million succeed notably, all of those millions of $0 outcomes flow to the 1 in a million (or 1 in 50 million?) success cases to make the average come out to whatever it is.
If it worked like you suggest and 10% succeed, you'd have 10 @ $660K and 90 at $0K for an average of $66K.
I don't think it takes away from my point, that some people have far outsized rewards for the risks they take.
People really don't have the sort of freedom to make choices that you're assigning to them. There's a thousand mitigating circumstances that limit peoples' options and can preclude the sort of risk taking that you're valorizing and shaming employees for not taking.
Fuck you buddy. You have no idea what I've done, what I've staked, what I won or lost, who I protect or what any of this means to me.
You're trying to justify keeping people out of your successes whilst complaining that they don't support you (and your business). How could they possibly deliver at the level you're expecting without the reward? Why bother?
So no, you have no idea of life or history.
So's yours. You're arguing that only might is right and that only greed works. You're simultaneously complaining that the people you're explicitly locking out of your chosen success path don't support you. Show me how you support them and I'll accept some of the rest of your argument.
> and it’s always the same.
Let me correct that for you: previous attempts to systematise broader opportunity have been corrupted by power. The bigger the attempt to make things fair, the further it's been corrupted. Those who don't care about fairness have abused the system for their own ends.
I still live in hope we can develop a system that decouples power from leadership, enables more people to have greater power over their own development, and better rewards collaboration and co-ownership. I acknowledge the failures from the past but I refuse to accept this is the only way life can be.
> So no, you have no idea of life or history.
I'm fairly interested in history and I have _a lot_ of ideas about life.
To that I would add that the only risk we're rewarding in this way is the risk to capital. While we do pay more for jobs that are more risky in terms of safety, it's close to impossible to become a multi-millionaire by risking your life in your job. I would say that kind of risk is higher than the one taken by entrepreneurs, but entrepreneurs and investor have an easier (though not easy) path to getting outsized rewards for their risk.
It's OK to reward risk, and it's OK to reward effort, and it might even be OK to reward risk more than effort. But by how much more?
No one is arguing that there shouldn't be any millionaires.
Also - yes, there are rent seeking evil billionaires. The 2008 banking crises showed that. There are also rent seeking evil slum lords who own $50k worth of real estate.
The problem isn't wealth. It's rent seeking with no value add, with government lobbying sprinkled in.
Surprisingly, this is an answerable question. It's not that we directly take away money from current existing billionaires — rather, we create policies that make SMB owners and working class the beneficiaries of the policies we implement.
For example:
1) Be more labor favored rather than rent favored in terms of tax policy. Like you rightly said, rent seeking is currently too strong compared to wages, tax policy should penalize rent seeking. This is only contentious because rent seekers are already too large of a population and would not support this.
2) Business environments that favor small business over large business. Large business is a choice, not an inevitability. I would much prefer a dynamic city with many small businesses (maybe higher prices overall) than the current cookie cutter walmart landscape. This is doable by policy, specifically creating policy that subsidizes small businesses and make them easier to start and run and penalizing large corporations.
3) Labor protection instead of risk and asset protection. For example, the wallstreet bailout is a policy environment that favors risk and asset protection over labor protection.
It's not that I'm pro-labor - trust me, when labor laws become too strong to the point that business suffer, I'm pro-business. But right now the working class is powerless to the point of suffering, while large businesses are at a historic level of return, even through multiple recessions.
Speaking of large businesses vs small businesses, I want to state again that there's a huge difference between billionaires and millionaires. Repeating again - large businesses are a byproduct of economic policy and not an inevitability.
Economic policy is not about optimizing for GDP or growth, it's about the preference of how you want your economy to run. Do you want cities where walmarts eat all the local businesses? That's a economic policy choice. Do you want billionaires? That's also an economic policy choice.
And the policy decisions are not "oh, you have a billion dollars, now we tax you." It's instead "oh, you have 6 buildings? maybe your 7th building will impose additional taxes." Oh, you are a giant multi-national shopping chain? Maybe we'll force minimum wage and benefits on your workers so that you can't expand everywhere recklessly. Oh, that rises the price of bread by .50$? Sure, we can live with that tradeoff.
This is what is meant by billionaires are a policy issue. It's not limiting your ability to be an entrepreneur - actually, a environment that is good for large businesses is usually bad for small businesses and entrepreneurship (because it favors the incumbents).
And that opens a massive can of worms. How does a paper billionaire pay taxes on paper wealth? Do you force them to take out loans? What if there’s a stock market crash. And they lose net worth? Do you refund their taxes?
It’s a really bad policy.
Most employees loan the company 45 days of labour. This is an "at risk" investment. If the company goes under, they may lose all of it. When multiplied by a large staff, this can be a very significant investment which would, if borrowed from a venture capitalist, be quite expensive equity. Yet, no equity is given.
Moreover, unlike founders and other investors, the employees are typically left in the dark about finances. When a company is in dire straits, venture asks for a large multiplier as return. Employees, that grant a "free" 45 day rolling line of credit do not enjoy this risk premium.
First, many employers pay bi-weekly, but deposit is delayed one cycle. You work, then at 2 week mark timesheets are submitted & approved, and then following week the auto payment happens.
Second, there is vacation time, which can be as much as 4-6 weeks accrued but not paid out. The average employee probably carries at least a week or three.
I hope this explains. Even though paychecks may be first in line, there is significant amount of the company's risk borne by employees.