Automation enables founders to grow companies with fewer and fewer employees
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But this is ignoring the fact that automation never replaced workforce as such. It moved the focus of the workforce. At the end more automation even required more workforce.
The thing is, you cannot engineer the process to be automated. You need to keep maintaining the automation. This includes not only daily maintenance, but also to keep up with obsolescence. You need to keep-up with new upcoming technologies of automation to replace your old once. But all this distracts and takes-away focus on the development of you product. So you need workforce to basically run your business, while you can still stay focused. But even then you can't stay focused, because it is also your job to decide what newer automation processes to chose. As this will have an impact on your own product. That again takes away you focus for the development of you product. So again you need workforce to help you to stay focused. At some point you need workforce to manage your workforce namely HR.
So there is a cycle when you get more and more workforce so that you stay focused to develop your product.
All that of course assuming that you need to develop your product even further after launch.
If this is the case, a business should absolutely lay off 2/3 of their eng staff. If they don’t, their competitors will and then will eat their lunch!
No more lazy devs, they should be at their desks working all 8 required hours as they agreed to in their contract. If they’re not: you have too many staff.
Why do you have a bone to pick with Devs providing value disproportionate to time spent?
You sound pretty happy that devs will have it worse in your proposal.
Automation increased the productivity of employees, and drove down the price of goods. It never truly 'reduced' the size of the workforce. The industrial revolution actually led to an increase in the size of the workforce. New qualifications were required to handle technically-complex industrial equipment instead of the simple production methods of the pre-industrial world.
This is generally true, but also ignores a key difference. When processes first became mechanized and then industrialized, they we're fairly similar in their nature. Sure, they were different and did require some qualifications, but in the end the imaginary jump from a blacksmith to someone who works in an manufacturing plant building components out of metal is not too severe. With the increasing automation, the jump would be from a machine operator to a software engineer/automation engineer. While this are certainly all teachable skills, they require an extremely different skill profile than the ones they're replacing.
Overall, automation is nothing new. And although the capabilities continue to develop from a manufacturing standpoint, there is nothing disruptive about most new things in that area. With the tasks that are currently not automated, the cost is mostly the limiting factor, closely followed by technical complexity. And while there is certainly some change in terms of costs coming down thanks to technological advancements, it's still not completely disruptive. But that is all for blue collar work.
But what I think is overlooked way too often overlooked is white collar work. Working in a large company myself, I very frequently witnessed people whose job was essentially the human equivalent of a for loop with a bunch of if conditions. These jobs were hard to automate efficiently, mostly because of the lack of consistently digitally accessible process artifacts, but that is continuing to change. As (traditional) companies continue to shift towards completely digital business, it will become increasingly easy to automate "paper pusher" jobs like these.
Beyond that, I hate to be that person, AI will likely have an impact as well. Recent developments, namely GTP-3 or ChatGPT, have shown the current level of AI. And while there things to be criticized about those models and their abilities are still limited, they are significantly more advanced than what most people (outside of those closely following) deemed possible. And while they lack the creativity for original work, these models are already very good at transferring knowledge. And considering that many jobs don't necessarily need original problem solving skills, I can see how automation can have an impact there. It might not completely automate people away, but it certainly has to potential to boost productivity significantly.
But will it really put many people out of jobs? Who knows. Given the less than ideal demographic structure of many (european) countries, companies operating here do certainly need any productivity boost they can get. As for countries without those demographic issues? Who knows.
Generally my experience in automation projects: the people who many think will be the first ones to be automated away, the people doing the actually physical work, are significantly safer than the ones not expecting it. No matter how much AI or 3D printing houses you throw at the problem
Using your example of a blacksmith upgraded to machine shop worker, then later upgraded to robotic machine shop worker. In the first upgrade, the blacksmith no longer needs to hammer iron as this is done by a drop press. The skill lost (big arms for hammering) is replaced by a many fold increase in productivity and a removal of many people alternating hammering.
In the second upgrade, using robots for production, you do need to learn some programming, but the programming is centered on such industrial applications. In modern cobots you don't need 3D math or almost any programming knowledge. You just need to give it a set of steps to follow and you can lead it by hand https://www.youtube.com/watch?v=9iCLK__7ymY
As with most automation, the initial prototype is more cumbersome to use, but eventually it becomes a tool like any other.
A factory foreman/skilled labor -> burger flipping/unskilled labor.
Retraining into entirely new skill sets is hard - even if you don’t have debt/ bills/ dependents.
They're not though. You need higher intelligence to be a software engineer, compared to a machine operator in most manufacturing plants.
Certain jobs are simply out of reach for most people.
It's not controversial that in the 18-century logging wood was out of reach for some people for lack of strength. But somehow it's controversial to admit that certain modern jobs are out of reach because of lack of intelligence.
But it actually did. "Workforce participation", which might be the closest metric of what we actually mean here, keeps declining. In addition to that, we have the era of "bullshit jobs".
Workforce Participation (a per capita metric) decreased. Starting from 2002 with a participation of 66%, the US employed ~192 million. But in 2022 at a participation of 62%, the US employed ~203 million.
Absolute employment is up. Between that and productivity gains, more work is being done today than ever before.
Where? It's highest in the history in Poland, Germany, Italy and very close to the top in UK. US is the outlier, even there, it kept increasing after 2015 and just the pandemic dropped it. Even then it's higher than before 70s. Even in aging Japan it's very close to top.
It doesn't look as bad as I thought, but I suspect some national statistics are using evermore generous definitions of "participation". For example, people in higher education being included. That group is increasing as proportion of the population, especially in some European countries with laughably high official statistics.
The point about education does not make sense to me - the percent of higher education students in Poland is dropping in the last years, and the participation rate keeps climbing.
https://www.bls.gov/charts/employment-situation/civilian-lab...
Not really, it generally means older people will work.
Because governments attempt to maximize 'job creation' via a number of methods including tax benefits to businesses. Businesses don't really give a shit about unemployment unless it is too low, they benefit from low wages when it is high. When unemployment is too high the government risks getting burned to the ground by angry mobs with pitchforks and tends to optimize around preventing that.
Seems true but also doesn't automation diminish the diversity of work available?
It's an entirely subjective point. If a solo founder with some very powerful machinery (cloud, AI) produces a lot of economical value, it's quite questionable to attribute that value solely to the human being pushing the button.
Even more so when that human has exclusive access to the key input for the machine: capital. Somehow all investment capital has ended up in the hands of about 100 people, which is then gatekept and redistributed to founders "advancing society" with unfortunate side effect it producing even more money for the people that can't seem to get rid of it.
Surely that starting point, that capital concentration, is justified based on pure merit and brilliance, these people being a 100.000 times smarter than the average person? Or was it because they were insiders of the financial system, riding the bust and booms of our perverted stock market whilst producing zero tangible value?
As for the point of labor, you operate machinery largely based on open source. For which you will not pay a cent whilst said open source maintainers can barely make ends meet and instead of praise, gets lemons. As for your fancy AI model, you trained it on other people's labor, and again refuse to compensate. And yet still you dare to claim that all this value produced is yours to keep.
As for "advancing society", we can take a clue from China. They concluded that whilst SV for sure pumps around a lot of money, it's frankly a joke. Tech that produces addiction and ads, undermines employees (Uber, food delivery), externalizing all negatives to society as "people that add value" tend to do. So China killed most of the sector and refocuses on serious tech. Tech focusing on actual human needs. Supply chain, health, mobility, infrastructure. I know, weird concept.
Bottom line, if I were a filthy rich founder, I'd totally shut up about it and hope nobody notices.
He doesn’t seem to care very much about employees who have their own side projects or aspiring founders.
http://www.economicprincipals.com/issues/2019.09.01/2253.htm...
So, yeah, automation can take away a lot of pain, and how far you can get really depends on how well you automate specific aspects of your business. My takeaway after several SaaS products is that you have to optimize for minimal customer interaction from the start, otherwise you'll drown in support requests once you hit product-market fit. Stuff like billing, subscription management etc. should be solvable in self-service processes for customers, and if you see a speficic support issue more than 5 times in a given week you should ask yourself if you can automate it away or change the product so it won't happen again.
source?
What I actually hear people saying (including at least one person from YC) is that founders need to share the potential wealth more fairly with early hires. With various rationales, including that execution is everything: having an idea and raising money for it isn't execution -- and the founders need the early hires to execute successfully.
> But the falsity of this claim becomes increasingly obvious as automation enables founders to grow companies with fewer and fewer employees.
I'm not following the logic, but the initial assertion seems like it'd tend to be received sloppily, anyway. Whether founders deserve to be rich seems like a diversion from the usual question: why do founders with a successful exit get rich when employees get even less than they would've been guaranteed at a non-startup tech job.
> In the limit case, you're left with just the founders. And we're not far from it. Instagram had only 13 employees when it was sold for a billion dollars.
So share the wealth with those 13 employees. "I have an idea for site/app" and getting some funding isn't worth a billion dollars. Successful execution is.
> And a billion was if anything below market price. People mocked that deal at the time, but in retrospect it was a bargain.
Isn't part of the job of those founders to make sure the exit is at market value? Were the wealth spread around more evenly, so that everyone who made the success possible can get rich, the founders might have more motivation to get a good price. :)
(I suppose that an exception to this would be if a startup is actually closer to an investment scam, propped up by other startups in a portfolio as customers, and they expect all the workers involved to do only mechanical tasks in which individual creativity/ideas/brilliance/etc. doesn't significantly affect the success of the company.)
This is the question that if addressed would fix the whole startup scammyness and exploitation. But then it may as well kill startups.
He really said that? Plugging it into Google yields no results.
That's a really dumb thing to say, a very tech billionaire misunderstanding of Marx.
Probably why PG deleted his original tweet and rewrote it.
What would have taken an army of clerks in the past is now a (lot) of code. Whole departments are replaced by API’s that cost less than $100/month.
It’s really incredible.
I’m still in stealth mode. My startup is super simple in concept - I gather a particular type of data, clean it, process it, and serve it to subscribers. Some of my data sources are free, some are paid API’s.
All the processing is done in code. You would need an army of people to read all that text, a layer of bureaucracy to manage and check them.
Value is delivered on web and per email. There is no marketing over email, it just serves as a regular touchpoint (where I email them free value) to keep the relationship alive until my client is ready to upgrade.
Then there’s a couple of paid tiers which is the same but with more and different features. Starting at $10/month, up to $50 - $100 per month.
For perspective, the service can be worth many thousands of times this much in dollars gained for the client, so it may be the wrong model altogether.
I’ve test-driven different aspects of this to see if people would be interested. I might announce it here when I officially launch it, but probably not.
Asking because I might start selling hardware soon too and the prospect of turning my garage into a customer fulfillment center doesn't sound fun.
The first founded iteration was spent observing and learning what not to do and over time grew to around 100 employees at peak. The second founded iteration I re-architected and re-coded the entire platform in about four years automating out all possible employees before going live which peaked at 7 employees under my ownership. And as they say "Third time's a charm". ;)
From my own personal past experiences, and YMMV, people are the problem. Computers only make mistakes that the software allows which comes from the human writing the code of course until GPT3 starts coding:) Computers do not know of opinions, politics, emotions, illness, image, etc and if businesses were to track and quantify this as to the impact of said business then many eye opening considerations would occur. Just because "It has always been this way" does not make it correct or, from my direct experiences, efficient. Per Edison: "There is always a better way."
I am the exception however as I have been doing real hands-on work since about age seven and have always been the first person to jump into anything to get my hands dirty learning whether that involves ICE engines, electricity, plumbing, digging, and of course anything tech related. I love to learn and have a passion for solving the hard problems which is my downfall but I don't do it for the money since that cannot buy health nor happiness.
But PaulG seems excited about the days when the pie can be captured by fewer and fewer people, specifically those in the class to which he feels closest (founders). It's a very strange argument about perception too - people are consider billionaires undeserving of enormous wealth, but just wait until they share that wealth even less broadly! Then everyone will see how great they are and love them more, right?
Instagram in 2012 had 30 million active users and zero revenue. That's $0 value earned per employee; these days it's just under $2 million per employee. The scale is vastly different and they couldn't still be running with so few employees. And let's not forget that Instagram was bought as it was seen as a threat to facebook. That it was seen as worth a billion dollars is exactly the problem that many people are referring to about creating overnight billionaires but overvaluing digital companies, which would be worth much less if they were brick & mortar companies.
That said, there are a lot of great tools out that that allow people to run companies with off the shelf software and no code applications, which I think have the potential to make a bigger impact on software development than AI. Companies using new technology to become more efficient is nothing new, it's as old as work itself. The steam engine automated a lot of work but still required workers, just like automation tools require another company's employees to build. Growth creates more employment and automation moves those roles elsewhere. The problem is more that those employees that the enriched founder does need working for them are disrespected and paid badly as they are seen as just cogs in the machine who should be happy for the breadcrumbs tossed to them. Doesn't matter how many employees you have, if the founder is getting rich they can afford to pay their staff well.
This is a great business of course but there are not many of them given the scale of the whole economy.
Before the Internet, the closest to this was creators or inventors living off of patents, license or copyright fees.
This is a very good point to emphasize. Most readers here on HN work in IT and are thus inherently biased.
The reality is that the majority businesses rely on having a workforce of humans.
The CapEx spend of tens/hundreds of engineers that built the SaaS is offset by 1 company to remove the needed engineers from each company.
Companies used to: build their own authentication layers, databases, infrastructure, code repositories,etc, etc.
What starts in consumer always moves to Enterprise. So will AI and automations.
I should have also mentioned hedge funds who manage billions with relatively few head count and they use automation tools extensively starting with the spreadsheet in the 1980s.
There are more "psychological gotchas" among non-software people about what "real jobs" are and what it means to create value, but time catches up with everyone.
Let’s just think for a minute about a single potentially confounding factor - every company has competitors. Those competitors are looking for every opportunity to climb past you, and they’ll be willing to hire humans to do anything a machine can’t.
For example… a lot of people still prefer to talk to a human when they need help with something. (Not me and I’m guessing not many people on HN, but we’re the outliers here.) Yes, you can try to use automation to solve for that… but if your competitor offers a better experience through human intervention, you are essentially forced to match their move and hire a support team.
Yes, automation is getting better, and who knows, maybe in a few years GPT3 will be having support conversations with customers. But the pressure to find a competitive advantage is often going to lead to hiring large numbers of people. That’s how we got to where we are today.
Phone menus are not generally viewed as competitive advantages, I suppose, but we have them in plenty.
Would it be the standard chatbox case that competition for now is against hated menu trees, not against human beings?
We should recognize that he, by popularizing this world view, has done as much as anyone to empower the SBFs of the world.
Let's say a sole founder buys $100,000 worth of Amazon Cloud, Nvidia cards, smartphones etc. Yes, one person is at the company, but others made those goods. The founder may not have directly exploited the person who made the smartphone they're using, but someone did.
Also, let's say I sell my small company which is well positioned in a fast growing market. The buyers are not buying based on what happened before, but on the future work and revenues that will be acquired from people working on the product.
At the end of the day there are people who work and create wealth and get a wage or salary, and there are idle class heir LPs who do not work or create wealth. The heirs survive on the wealth created in expropriated, unpaid surplus labor time of workers who do work. VCs front for the LPs, and founders deal with the VCs.
I don't think Graham even knows what he is arguing with. I'm not trying to make a convincing argument for the other side, but a clarifying one.
Incidentally, pretty much every economist up until the mid 19th century agreed with my view in some form - Adam Smith, Benjamin Franklin, David Ricardo - all the people who made economic arguments which economists still use. They said they studied political economy. It wasn't until the 1870s that arguments against new value being created by labor were started in full swing, although some of the ideas go back to the 1830s.
I think this delusion is on par with Marie Antoinette and her "eat cakes if you don't have bread".
If you can build a factory that can build products more efficiently, it means you can sell them cheaper then your competitors, meaning you can move more volume and thus make more profit. So you are definitely not going to run that new shiny factory for only 3 days a week.
Eventually, competitors will notice your improved output and react with their own improved factory. If you sit still in your shiny new factory, you will eventually be outpaced by competitors as they catch up.
In the end though, the throughput per human is greatly increased as computers and machines do (most of) the work. This has increased prosperity greatly.
Unless you can accept living with less then the competition, you are not going to work less then your competitors.
3/8 is a thing in factories, so you could have just hired more employees part/lower time. It’s a cultural artefact that we work 40 hours a week.
Nobody is forcing you to work a 40h week, but because 40 hours is about the average of how many hours people work, you'll need to match that to stay 'competitive'. It's a very primitive instinct in natural selection.
For people earning average wage, they often cannot afford to work less hours, as prices of commodities (housing, food, energy) are naturally regulated by what people can afford. Because most of their peers work 40 hours, they need to do the same in order to be able to pay their bills.
Those that make more than average wage could afford to work less, yet most people chose not to do that. Because now that you make a lot of money, you could still work 40 hours and get a bigger house then your neighbor! And a faster car! You could impress a potential partner with that, which increases your chance of reproduction and creating (w/h)ealthy offspring.
No amount of automation, computers, machines or whatever technology will prevent people from staying competitive.
edit: replaced 'minimum wage' with 'average wage', because cost of living is highly location dependent.
Without discussing the vision, discussing the strategy becomes sort of meaningless.
(Edit: typo)
Also, the more automation we have, the more people will work in the automation industry. In other words, people will still be hired, just from the side of automation supplier, not automation consumer. If a single founder can run a billion-dollar company, it means that the automation industry that enabled this remarkable achievement has grown big and gave work to many people.
Why stop at the founders? Why not just have an algorithm churn out ideas for companies, an AI to build them, and another to launch them? What will Paul Graham do when even his job, as investor and producer of thoughtless observations on technology, labor and capital, has been automated away by an AI capable of writing similarly valid-sounding but uninformed takes?
Expenses eventually catch up with you, because business is adversarial. Any technology available cheaply to you to scale your business is also available cheaply to your competitors. Once other smart people start going after your market share, you will need to spend more to defend it and continue to grow.
Expensive things: invention, sales, marketing, customer service, compliance, content moderation, etc. These all have to be done by humans. A lot of companies who scaled their revenue rapidly with low head count, have then had to scale their headcount to maintain their business. (Google, Facebook, Netflix, etc)
The founder with no employees is for sure an attractive fantasy. It's basically the core of the superhero myth: a person who has a big effect on society without depending on anyone else. Superman doesn't need help because he is invulnerable and strong. Even superheroes who ostensibly depend on large teams, like Batman or Iron Man, are never shown that way. If you go back to the beginning of the MCU, Tony Stark is alway shown alone with his technology. It's the bad guys who bark at subordinates and run around in groups.
For sure, it's easier to launch a product with no employees. However, the challenge is to grow. That's when founders' run out of ability/patience to coax more out of automation tool. Edge cases appear more often; systems start breaking down; tools don't have meet their exact need anymore etc., That's when they start hiring these "tool experts". SAP consultants, AWS certified DevOps, Stripe Integration Engineers and so on. Also, at scale maintenance starts becoming a bigger challenge compared to new feature/product launch. So one needs to hire maintainers. As David Graeber astutely observed a glass cup needs to be produced just once but must be washed thousand times. Let's not forget one needs employees to maintain automation tools too.
I can cite plenty of real world examples but let's just look at Uber. For an outsider it seems like a tech company but internally it is run by a massive operations team. They are constantly in touch with drivers, address their problems, move drivers around to meet higher demand, map operations and so on.
What is happening however is these SAP consultants are paid significantly less compared to their Business Analyst (or equivalent domain expert) counterparts. So in some ways profit is being cornered.
All that said this is an extremely narrow view about IT sector. Look around; EV, solar energy, genetics, and so on. No automation happening there. If IT sector needs less employees, then it's only for good! Skilled labor is needed elsewhere too.
The argument they are making seems to be founded on the idea that founders are unique geniuses. Maybe they are, maybe they aren't. I guess we'll find out if there are no more such founders as IT automation advances.
But the most obvious example is electricity. People's output in certain roles immediately compounded and the long tail of this never really stopped (it was a precursor to the internet and AI ofc)
Where fields had to be toiled there was space for little else. But now people can scale their impact in interesting new ways
The people, via their government, invested in modernizing and automating the economy, and they deserve to now reap the rewards and redistribute them broadly to the people, who ultimately funded the government research.
Certainly the founders make some contribution as well, but since they are standing on the shoulders of giants, a progressively smaller cut, perhaps as little as 1-5% for incomes above say $10 million, would be very justifiable. Whether we actually enact marginal taxes of 95-99% above $10M would reduce to technocratic questions of incentives and who puts the money to the best use. Just desserts would be out of the question.
Right?
Anyone who sees it as desirable to give enormous amounts of money to Feynman or Gutenberg's descendants is free to advocate for that as being what they deserve.
Automation tools that provide APIs to allow founders to increase their leverage are produced by other developers who specialize in said tools.
Ideally, this allows the most efficient use of resources, everybody wins. Those who are great at building tools can do so and these tools can be used by many organizations. Pessimistically, there are some who get squeezed out of the production equation.
Should a startup develop their own accounting system? Unless they are in accounting, probably not. But there will hopefully become a point where a founder needs to bring in resources, internal or external, to manage the accounting system. This is a further extension of that.
" John Hammond: You're right. You're absolutely right. Hiring Nedry was a mistake, that's obvious. We're over-dependent on automation. I can see that now. Now, the next time, everything is correctible... "
Where are the new examples of that kind of startup? 13 employees selling for 1bn USD.
<< You still occasionally hear people saying that founders don't deserve to be rich, because their employees created all the value.
I don't hear that a lot. I see 'Eat the rich memes', guillotine pics popping up on various community sites. PG may be very limited in his view to VC-land only ( and if that is all he is talking about, he may well be right ), but if he is making a statement intended for general public, lets talk about not getting the current mood. The argument itself seems off, but I am having a harder time finding where it fails.
There seems to me to be a lot of moral panic in this thread, I don't think it's necessarily justified simply because people are annoyed at PG as a person or what he said specifically (about Marx or otherwise) or the way he phrased it, because the general idea he's writing about is completely true in my experience.
Y = A * L^β * K^α
Value of your work depends on how well you wield capital (K) and labor (L).
Code, Cloud and AI have massively improved α while β is at generational lows.
Nobody is saying this. As evidenced by several threads here, opinions are far more nuanced.
I really expected this thread to be more of #2 since historically Hacker News has been full of ambitious founders and founder-like engineers.
The great leaps in automation, especially with the recent AI developments is any founder's dream. To be able to go faster with less friction than ever to create something valuable for the world. Now this is within reach of even more people.
It's an amazing time - for those who choose to see the possibilities.
Nothing against automation itself, but the idea that it means all of the value of a business can and should accrue to a single person I take issue with. It doesn't matter how evenly spread the probability that a randomly chosen person can become a successful founder is, or what my personal probability is. The total number of such people is necessarily capped at a very small number, and there is nothing to celebrate about at the idea of a future where only a very small number of people can ever enjoy the wealth created by automation.
Humanity is built on societies and we must treat it so by ensuring we produce wealth and distribute, not extract wealth and horde it.
The past three years, the YC crowd has really tried hard to justify wealth disparities, gentrification and generally treating employees like garbage, as part of their Objectivist agenda.
Paul, employees do the automation, not the founders.
1920s robber baron bs.
Ignore the ethics that every single startup would be impossible without standing on the heads of those who have dedicated many hours of their lives building this free software.
It's not hard to read the licenses, and I have a fiduciary duty not to open up my company to unnecessary liability
I did have a discussion recently with some friends as to their ethical reasons against GPT and co-pilot generated code.
Although we have a type system so they are probably adjusting things to fit
But none of our supply chain has restrictive licenses attached, and good faith errors are usually easy to correct way before they go to trial
I know because I have had to sign off on using worse packages when our use case doesn't comply with the license on the best in class package
> those who have dedicated many hours of their lives digging their own grave
“I’ve already got the prize. The prize is the pleasure of finding things out, the kick in the discovery, the observation that other people use it - those are the real things, the honors are unreal to me.” -Richard Feynman
I think it's ridiculous that open source developers give out their hard work willingly and then seem to think big companies are 'taking advantage' by not hiring them or funding the project.
It has nothing to do with ethics. Startups didn't steal anything. The developers gave it out willingly.
This sort of attitude has soured me to the entire open source community. They want to be able to give their work out for free, but then have a say in who uses it and how it's used, which is exactly the opposite of free and open.
In the heads of somebody who believed The Fountain Head and Atlas Shrugged were bibles, there are 1 or 2 people doing 99% of all work in the companies.
Progress comes from all sorts of places. Scientific progress come from scientists. That doesn't result in things better in my life without a huge number of other people doing things well and efficiently. Both of which includes anything people will pay for, including b2b saas apps. Try having a pandemic lockdown without Amazon-level fulfillment in place. Thankfully we didn't have to.
Who would you like to appoint as an arbiter for what "valuable work is"? If certain people enjoy and pay women to fart in their faces - would you like to ban that? How about other "useless" activities that humans enjoy like video games or massages or fashion or fancy restaurants - would you like to ban those as well?
Depends entirely upon the quality of the fart.
I think Keynes said "The worst form of capitalism is in which the public holds all the risk, and the private sector realizes all the rewards".
Focusing on the latter is fair enough. Thinking that a corporation having lots of money is bad seems completely pointless. That money ends up as dividends or higher salaries or lower prices. Tax the first two and celebrate all three.
Not that anyone listens to him, but Noam Chomsky has been saying this for his whole career.
That's like saying anyone who thinks hammers are a good idea is really saying a hammer makes a builder successful, not the builder. It's just a tool, and he's saying tools mean one person can do more. You don't need to straw man a philosophy on to it to then have something to argue against.
> employees do the automation, not the founders
Founders normally are employees. For the phase or type of company pg is talking about, they may be the only employees.
I read this as pg being focused on justifying post-acquisition wealth. It seemed to be a justification for the founders receiving 100s if not 1,000s of times the level of compensation as the workers.
I would be curious to hear more justifications from him for this. Founders really take far less risk than employees. I say this as someone who missed out on about $75 million from a YC start-up when an unnamed higher-up told them to fire me two weeks before my first vesting, because I had the most amount of non-founder stock in the company (a compensation for which I took a 66% salary cut).
(edit, typos and turned 100s into 1,00s)
When founders start, unless they're hands-off directors, they'll be CEO/CTO/etc, which are employee positions. They'll get a salary, because they're employees.
> I read this as pg being focused on justifying post-acquisition wealth.
I don't see why. It makes more sense to focus on founders if he's talking early stage, where you can string a load of systems together to produce a business process. As you get bigger you'll probably regress to the mean of driving processes through admin and management staff, unless you stay laser-focused on keep automation around.
Not sure I understand you. Why do post-acquisition wealth need an justification at all?
> Founders really take far less risk than employees.
If it would be true, why aren't you a founder? You know, blaming other people for wealth/startup/marriage or government/party/boss/partner is easy. But when it comes to actual execution, most of these people come up blank.
You have worked for a startup. Well, you was aware of the risks. But I'm pretty sure the founder had more risks than you. I say this as someone who founded a company recently.
Did you read the tweets, or just the headline?
> You have worked for a startup. Well, you was aware of the risks. But I'm pretty sure the founder had more risks than you. I say this as someone who founded a company recently.
I have helped start 4 companies with 1 gracefully neutral exits, 1 sold, 1 gracefully neutral, and 2 nose dives. After every exit I walked into a job making more $$ than at the job I worked at before the previous startup. The only "risk" a startup founder takes is the potential for a below-market salary for a short period of time.
~20 years ago I failed at a music start-up, royally failed. We burned through $2.5m in about 11 months with nothing of value having been produced, then the dot bomb exploded while we were raising our A round. The same investors funded my next failed startup and offered to fund the one after that.
Once you get to say "I'm a founder and names you might know from vc insider have given me amounts of $$" you have a golden ticket.
The idea of automation is that we should advance as society. The very point of it is that we need to work less, but it never turns out that way because the benefits of automation are seized by the few.
Hence, we forcefully invent new labor regardless of purpose. Half of our economy is keeping each other busy with bullshit to keep this going.
And if that wasn't perverted enough, now the message is: actually, we don't need you. At all.
As for "treating employees like garbage", that's just a baseless smear.
Most of the "big tech" companies have surprising amount of employee, even pure players.
If these were far leftists talking about the need to reduce human capability because of the climate they would be rightly derided as being eco-terrorists, and that's precisely what we should see these people as. Ultra-libertarian terrorists whose primary, unabashed goal is to enrich themselves at the cost of human society.
The limit here is an edge case, it’s like dividing by zero. Sure if you can automate everything the founder gets all the profit. If you only have 1 employee, however, that single employee is immeasurably valuable and has some incredible leverage on you (you’re screwed if they walk). There’s a net benefit to the employer to having a certain amount of redundancy.
So this whole argument (to me) toes the line of sophistry. It just gets a big eyeroll and me thinking Paul is out of touch.
Wild-ass guess, but I can't imagine any other reason.
EDIT: Just astonishing that uses Instagram as an example. Quick question: After Facebook paid a billion dollars for it, did they a) continue to employ only 13 people or did they b) hire more fucking people in order to actually realize the potential of their investment?
EDIT2: Just saw that he also claims 'automation accumulating wealth in the hands of the ownership class at the expense of workers' contradicts Marx. Amazing. Paul, if you're reading this, please take an introductory class on Marxist thought at your local state college, or have your personal assistant take it and send you the notes.
Saying that they do not exist is just inviting being blind-sided by movements in that automation beyond your control.
Leaving aside the connective tissue between creating value, creating market cap, how these translate to reward/money... What's left?
The subsequent discussion about dividing loot is one discussion. The discussion about making more unicorns might be totally unrelated. The latter is theoretically empirical, but in practice pretty speculative.
My take on these is usually about bottlenecks. A screw holding together a $100bn f35 is still usually cheap. Its importance doesn't determine price, because without scarcity it cannot be a limiting factor. A patent protected screw could, in theory, be priced to reflects value to the buyer/aircraft. A custom designed screw might also be expensive... perhaps reflecting the time value or negotiating power of it's custom maker.
In all cases the plane does not work without the screw.
If we're reviewing costs and such, the above thoughts on "value" might have value. They may even hold clues to cost efficiency more broadly. They may not be too relevant to a discussion about aviation mechanics.
I (respectfully) think pg's pov is too abstract, as is the proverbial opposing pov that he's responding too.
Look... Investors tend to think the bottleneck is "great founders," the modern version of investment opportunity. A lot of founders tend to think that it's investors. Perhaps the bottleneck is corporate and government procurement. Military people and other tribes tend to think the bottleneck is leaders. Economists think bottlenecks are institutional. All convenient viewpoints for the people who hold them.
I don't really understand how automation relates. Unless we're talking about founder-only companies... Why is this points in favour of founder contribution, relative to the (now fewer) employees? Maybe it means that capital's value has risen. Automation is "capital" technically. You might even claim that the public is responsible for more of the value, considering the importance of public domains to technology.
That's not automation, it's an example for the fact that software can be copied for zero cost.
Compare that to a company with an intrinsic value, like Tesla. How far could Elon (I know he's not the founder) automate Tesla? Even if all tools for such an automation were available, how would a single person even know how to design and build a car, let alone the required automated factories?
If someone tried to sell you breathable air on the street, how much would you pay for it?
I can drive 10 times faster with good roads because a public sector maintain and build road infrastructure. If that enables me to earn 100 times more am I then entitles to the entire profits? Or should I pay some of it forward to the infrastructure.
I like the idea that innovation advantages should spill over to the rest of the society with the speed of inflation. Given an inflation of ~2% it should take me roughly 50 years to not gain any profits from my innovation (given no competition).
If you don't talk to people that know these facts, than you are almost guaranteed to repeat the same tantalizing yet bad choices.
Automation only tends to make things more feasible, but sometimes bankrupts the firm in the process.
Cheers =)
Ilari Kaila
@IlariKaila
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1h
Replying to
@paulg
Why did you delete this banger?
<Screenshot of a now deleted tweet by @paulg with the words: “Automation is an inductive proof that Marx was wrong”>
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Paul Graham
@paulg
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1h
Replying to
@IlariKaila
I forgot that mentioning Marx attracts angry fools. Since I could make my point without mentioning him, I just reposted it without.
I also think its incredulous to focus on one (admittedly, very) positive outcome of capitalism without acknowledging its externalities, like pollution, inequality, etc. I suppose pg believes the current system will lead to a post-scarcity society in which none of those exist. Perhaps that’s true, but I hope the planet survives long enough to get there.
/s
Can we NOT pretend that the people pg is talking are saying the former? It’s so disingenuous.
automation seems great for small companies & solo founders, but kind of an open question if that gets you to unicorn status
I refreshed my machine learning skills and using it to solve my problems or else i just deliver half baked product.no intention of hiring anyone period.
That was such a terrible take.
These days 9/10 founders only take on opportunity risk. In real terms, they take on a tiny amount of risk. Undocumented immigrants on the other hand, that's risk. Astronauts, yep, an incredible amount of risk. Founders, no, just hard work.
(In practice a lot of small businesses owners use debt and that is where the financial risk lies for them).
As a counter example, Microsoft's IPO made a few billionaires and tens of thousands (!) of millionaires, and that was in 1986 (so take inflation into account, it's been 36 years).
How many of these modern exits have made the lives of so many so good, with all the dilutions?
The idea that concentrated wealth is great for everyone and will trickle down has been pretty much debunked to the point where the wealthy are openly stating we don't need the masses anymore.
The crypto dystopian nightmare of generating money with zero utility backed by quantitative easing demonstrates that you don't actually need many employees to generate wealth. You don't even need commerce, financial engineering will suffice.
Employment is a social contract. Business owners and investors (who control capital) are supposed to provide a means for the masses to live in comfort, the employees give there labor and time in return. The wealthy get to live in their mansions, vacation on their yachts, etc. We get to buy our homes in the suburbs, raise our families, etc.
What happens when no one works and humans are removed from the value chain?
Can you point to an example of someone claiming that concentrated wealth is great for everyone and will trickle down?
There’s lots of people saying it and have said it. We just had tax cuts for the wealthy recently.
See also: Margaret Thatcher, Ronald Regan.
Where do you think all this stuff comes from exactly (or how is it paid for):
- the food in your pantry
- the stuff in your home
- the vehicles/PT you use to get around in
- the devices you use
- the content you watch/play
- the utilities you use to power it all/get water
- the services like banking you use
- the clothes you wear
- all the other forms of infrastructure like medical care/policing/fire brigades
https://www.theguardian.com/news/2022/sep/04/super-rich-prep...
That said, it is no by no means a certainty that increased automation will reduce the overall number of jobs or rate of employment. It has never done so in the past.
pitchforks?
If that's true, then what about a social experiment: If you are a solo founder, you get all your profits for yourself. But if you have employees, you have to share your profits with your employees. If employees don't produce any value, easy, fire them all, you get everything. But if they do, share your profits fairly.
I'm curious to see how many solo billionaires will appear. My estimated guess: zero.
Fixing the problem would mean that instead of the 'owner' hiring an 'employee,' they instead form an equal partnership as co-owners. Because the business serves the interest of the owners, it will seek to maximize their compensation as the ultimate goal, rather than to minimize their salary as a way of reducing expenses.
They could perhaps give the worker a minimum wage and the rest pay in dividends, but mind that dividends need to be distributed among all the shareholders equally, so you can't say you would pay $100,000 unless you allocate shares so that when dividend pay out is decided, worker's shares will yield that exact amount.
Which is to say that cost/value proposition is never simple. I've been at companies where people were paid simply not to jump to competitors.
The problem is that in most cases you can't do that. You might have been the person who made the last push to make the revenue possible, but you were building on the work of everyone else who was working for that company and you were leveraging someone else's resources to make it happen.
We have to have some way to agree what portion of that profit can reasonably be attributed to you. To avoid complicated math and guesswork every quarter, most of us agree to a fixed salary as a reasonable estimate for a fair share of the value we're creating.
I want it to be an equal equity corp basically every hour invested earns you shares based on your senior and tenure.... Sr dev multiplier x 2 years with company for example.
Then we'd earmark like 30 percent of revenue to go into profit sharing and each state gets a reward.
The shares also calculate your voting threshold.
Senior team will be given an edge so there's an ethical dictator but not an insurmountable thing.
It might take 10 people to out vote the execs but you can't buy shares it's all earned by actions and time investment etc...
I also want to build an ERP system that can actually run a co-op like this with multiple streams of income, multiple point pools to reward employees or even customers etc....
It'd also network with other co-ops to build symmetry like Amazon marketplace does for sellers, everyone would be invested in every other syndicated companies success.
Sales people often can get up to or more than 50% of the profits (after all expenses) as commission. I've seen up to 80 or 90 percent for companies with extreme growth focus.
Programmers don't generate value directly the same way, but often you can attribute value to products they create and compensate them fairly.
The bargain I've made instead is that I get a very good base salary and call it a day. When the company grows because of my contributions, I negotiate a higher salary, but I don't have to think about it from month to month.
I'm just saying, if I have an employee and he makes me $1m a year, I'm going to pay him well - I'll pay that employee what is fair in the context of what value we enable him to generate for us.
That usually means the employee is worth at least 50% of that in compensation, btw.
This is why if you bring a deal to a company as a sales person commissions are around that number (50% of profit).
1. Debt is built into your existence (student, medical, housing, etc);
2. The system is designed to extract (exploit) value from labor; and
3. There is no value without labor.
[1]: https://www.antislavery.org/what-we-do/past-projects/india-d...
My Assumption here is that the common usage of profit is, "Money after all expenses paid", which employee compensation is clearly outside of that definition.
Money is fungible and what we identify as "expenses" versus "profit shared" is arbitrary. Economic value is created by the enterprise, and that value is then split between the owner, the employees, the suppliers, and the customers.
We can argue about whether the distribution is fair, but complaining about the specific accounting method by which the value is distributed is myopic. Either you're getting a fair share of the economic value or you aren't—whether your share comes of the pre- or post-tax portion of the pie is the government's concern, not yours.
Workers: "We should see more of the profits the company makes and we are making the case that collectively we produce a larger portion of the value we're asking for"
Poster: "Your pay is part of the profit, the more money you make the less that goes to the owner"
You're right. I shouldn't assume a framing is misleading just because its unorthodox, I'm attempting to make a case for the framing being misleading with supporting statements.
At best the parent comment isn't saying anything of substance at all (in response to ITS parent comment), and in my view, at worst its an attempt to redirect the concept of 'profit' to make the argument seem less credible.
ceronman's thought experiment was "if you have employees, you have to share your profits ... If [they] don't produce any value, easy, fire them all, you get everything."
jerrre's response, which I think is fair, is that we're already running this experiment. If businesses did not think employees produce value, they would not pay them wages or salaries, because every dollar paid to an employee is a dollar less of profit for the company. Companies already acknowledge the value that employees create value by the very fact that they pay them anything.
In other words, what's actually at stake isn't whether employees create value but how much, and ceronman's comment doesn't contribute anything to that discussion.
I believe they were making the case that Employees need the company as much as the company needs the employees. The experiment is to split the profits evenly amongst those who created the value in the first place - The people that work inside the company. If they can't produce the value, get rid of them (And if that's the case there's more profit for everyone right?)
They could also mean that the profits are distributed amongst the employees based on individual contribution when they conclude that there wouldn't be any self-made billionaires because no single individual produces that much value.
I still disagree with the conflation of wages/cost of business and profits, even though more mages means less profit - Profit is still surplus after all has been paid. The distinction is important for more than just the scope of this conversation.
I think the allure of being a billionaire is it's "one and done". As in, once you achieve it, you can live the craziest life possible filled with lots of grandeur and not need to run any kind of business whatsoever after.
It's mainly a fantasy for people who are tired, overworked, underpaid, under-appreciated (which is like 85% of America I'm guessing).
"Wouldn't it be nice..."
I feel like this accelerates class segregation. like, going from talking about the new condo in a nice neighborhood changes from "must be nice" to "my friend lives there and says the Tesla charging stations are broken but I'll talk to the leasing office about it tomorrow", just immediately more depth that some groups of people can't contribute to and are dismissive about.
Hell, one can support the median household income at a reasonable SWR on ~ 2M.
Underlying all of this seems to be paulg's assertion that billionaire founders 'deserve' their wealth and therefore our inequality and their relatively small contribution to the public purse is justified.
I have no problem with founders being rich, but once you're earning 1%er income? You should be paying a hefty amount of taxes to support social spending. Think ~ 2/3rds, like it used to be before the regans and thatchers of the world gutted the social contract in the 80s.
$10M does get you a nice time, and you would never have to say no to any reasonable expense, but it's also definitely possible to overspend. There's some higher threshold where you really can be 'wild and crazy' and the only way to run out of money would be through bad investments.
There's a difference between always flying first class, always flying on a jetshare, and always having your plane fueled up and ready to go. Also, between driving yourself to the airport, taking a car service, having your driver take you, or having your helicopter pick you up.
I think maybe you're missing the perspectives of ...almost everyone outside of a very select few in VHCOL locations.
Tech workers in SF don’t.
While I wouldn't mind being very well off, I have a visceral gut reaction to any of the sort of flashy spending that draws attention to myself. I also find that it isolates you from the experience of the common man, and life is lonely enough as it is.
After I hit my 'retirement number', if I can find a job that will give me the flexibility I want in retirement, I plan on continuing to work 2-3 days a week and donating half my salary to charity.
God knows local charities can use my money far more than they can use me as a volunteer. I like coding, and if I get paid and do good in the world, so much the better.
for anybody not familiar
safe-withdrawl rate
typically 1% of portfolio value a quarter = 4% a year i am guessing?
theory is if your portfolio is invested in funds (mutual or ETF) tracking a broad-market index (S&P500) aka equities, and these equities go up 8-10% a year (return before inflation) on average over the long term
and if you have a $2m portfolio basically 100% in equities
sell off 4% = $80k/yr worth pre-tax (only taxes would be... long-term capital gains?)
because your portfolio is appreciating 8-10% a year, it'll stay at $2m despite you sell off $80k/year because it's tracking the US stock market/"economy" which is supposed to be growing 8-10% a year and they "offset each other"
with $10m this becomes $10m * 0.04 = $400k/yr pre-tax
i too would like to have $10m so that I could live off $400k/yr and not need to work :)
heck, i might even settle for $5m!
Of course you can always spend more money. However I have known rich people who decided their mansion was too large and so they downsized (their master bedroom after the downsize was the size of my whole house!) Eventually what you need is time to enjoy what you have not more luxury. Fly coach or have a private jet on call - end the end you get there, and the jet only saves you a bit of time at the airport.
-> https://www.ycombinator.com/
->
> Y Combinator created a new model for funding early stage startups.
> Twice a year we invest $500,000 per company in a large number of startups.
> We work intensively with the companies for three months, to get them into the best possible shape and refine their pitch to investors. Each cycle culminates in Demo Day, when the startups present their companies to a carefully selected, invite-only audience.
-> https://www.ycombinator.com/topcompanies/public
Sometimes I guess we just forget where we are :-)
So I guess yes, it's the wannabes.
I'm sure I'm years behind the curve on that idea, though.
Worth noting: Not all companies can or should target this trajectory -- which just means VC might not be the right funding source.
I don’t have a Twitter account but almost went to sign up to reply “billionaires whose wealth is based on mathematical inference not possession of tens of billions of real dollars.”
I say let’s automate away book smart, street stupid easily deluded normal humans who end up optimizing for themselves while roleplaying something more egalitarian is afoot with their games.
Letting a minority monopolize agency is not a greater good as there are no greater goods. It’s typical political corruption.
Automate away politicians, VCs, C*O level; organizing life in line with religious traditions is not sacrosanct. Why is organizing life under the prior 60-70 years so special? Ooh right; cause that cohort is where all the wealth is captured. Silly me.
Looks like it’s time to revisit Reagan’s policy of expropriating retirement for the youth to invest.
This seems to be the trend in "Western" societies, and the middle class enthusiastically votes for those who pursue that agenda.
I guess that could be the vision for the US to: a developing country style society, with utral-nice fenced areas for the rich, a supporting 10-20% class, and "skid-row lite" welfare land for the rest, with crumbling infrastructure...
And if things end up worse, the rich have already bought houses in New Zealand and elsewhere anyway...
How much of the profit do I share with the employees? What does the society deem fair in the case where founder comes up with the product, identifies the problem and works with the customer to configure the product? Do I get to take 5 salaries or 1 salary?
You wrote 80% of the code (who wrote the rest?) and you got it deployed. You're making a decent living on 15.000 users. "Scaling" guy comes in and "scales" you to 150.000 users. Do they get an order of magnitude more profit than you?
I'm not placing any value on "scaling", I'm asking what it should be valued at.
> Who wrote the rest
For argument's sake, let's say there's 10 devs who wrote the rest.
Let's say that in span of 12 months, after paying yearly gross salary of $150 000 to each person in equation (10 devs, 1 scaling/devops guy, 1 founder), $2 800 000 is left and we're dividing it.
How much goes to each of the 12 people in the equation?
Economy isn’t so hot anymore, folks with obligations will absolutely settle and take it on the chin. You have all the power here.
The "boss bad, worker good" is getting really boring and disgusting, just like not all bosses are evil - not all workers are good. I presented a scenario where there's no investors and where the founder did majority of the work.
> if you have employees, you have to share your profits with your employees
Needless to say, this already happens via equity and options. There's a reasonable debate to be had over what constitutes "fair" profit-sharing. But the market clears where it clears, and individual tech employees definitely have meaningful leverage even under current macro conditions.
This equivalence doesn't make much sense unless there's a widespread phenomenon of businesses "firing" owners in favor of other capital-providers who will accept lower returns.
Startups share equity with employees. The earlier you are there, the more you get, in part because of the inherent risk.
This is why founders get the most equity and the most upside if it succeeds. They took on the most risk and it wouldn't otherwise exist.
If the company ends up being valued at 100B dollars, guess what, the founder and maybe some early employees are billionaires or hundred millionaires.
It would be one thing for a founder to have 3x the equity of an early hire, but it is commonly more like 60x or 300x. Instead of a dozen people being able to cash out and support their families for the rest of their lives, one or maybe two people get to have many multiples of that and the rest barely make progress towards retirement.
Why would anyone ever be an early employee when they can be a founder instead?
Is this always true though? I've worked with a grand total of one company where, if the company went bust, it would mean the end of the founders' life savings. Every other startup/company I've seen, the founder was already very well off. Yes, they put a big chunk of capital and/or time into the start-up. Yes, they were highly motivated to make it succeed. But if it failed, they would... be sad, fall back to family money for a while, and then later do another start-up (or go back to their previous career in Investment Banking). I think this idea that the founder must be singularly taking a huge amount of "risk" is a romantic, stereotypical take, not always true.
Start-up employees, however are shouldering risk. They are by and large not already wealthy so if the start-up fails, there goes their livelihood until they line up another job. I think we should stop thinking that "risk" is exactly the same as "how much of the company's raw dollar equity did you contribute".
However, I don’t see the way out unless the social safety net is strengthened (not gonna happen) or we just ban rich people from starting companies (lol, lmao even)
Edit: maybe there shouldn’t be a way out. Maybe the solution is just to educate and make transparent that rich founders have better odds and less to lose and bust conceptions around successful at business == higher quality individual.
You need to create value continously or fall back to UBI.
Just something to play around with. :)
Basically we’ll end up in a totalitarian society governed by an AI.
That train of thought escalated quickly.
This risk exists with any employment arrangement. So arguably the risk is merely the greater likelihood of the startup failing vs big corp laying you off.
So someone with 10 million dollars who puts up 1 million has put more capital at risk than someone who puts up 100,000 even if that is everything they own.
And paying out on personal risk doesn't make sense. Imagine doing a seed round and the share of equity each investor gets is not related to how much they invest but what % of their networth they invest.
Also in every startup I've worked for(3) the founders were not rich before starting the company.
Unless the providers of said ability have to compete for business on price. One should not underestimate how hard it is to replace them.
While that's true, I think it also pushes the profile of the ideal founder much more to the technical side than where it is now.
Creating and maintaining automations is inherently difficult-to-impossible to fully automate, and will likely always require some level of engineering skill.
Conversely, many of the most important skills a "business founder" brings to the table are also the most ripe for automation. Marketing, sales, administrative tasks, investor pitches, support, accounting: all have the potential to be automated to a large degree by AI.
- Writing cold emails and responding to questions asked in replies
- Writing a script for sales calls
- Writing a pitch deck
- Writing marketing page copy
- Writing ad copy
- Responding to customer support requests
- Writing promotional social media posts
I have more confidence in its ability to do these tasks given its current level of sophistication than to meaningfully contribute to engineering tasks (though it can certainly help there too).
I wouldn't trust it with accounting or administrative tasks yet, but it doesn't seem far off.
Probably there will be AI tools to de-AI messages, like reverse semantic companders[1], coming soon.
It can already write better HR-friendly pap than I ever could, and it can churn it out by the thousands of words.
I'm very impressed by the power of "mere statistics" to construct dead-eyed language like the aliens in Blindsight. But, more than that, I'm grateful that I'm not employed to write such text in the first place. While there's an incoming boon for slackers who can just fire off a prompt email with a little bit of proofreading, there's a long run pinch on people who are employed just to talk nothings all day. Those who remain will have to watch over hundreds of thousands of words spraying out per day.
How do you determine how much profit an employed CTO makes versus a customer service rep? What's fair there? My estimated guess: you have no idea.
It seems like he definitely believes founders create a lot of value, but I don't think he is making the second claim that employees don't create value. Just making the argument that the outsized return to founders is fair because they are creating far more value as evidenced by automation.
I expect $1B solo founder startups to become normal pretty soon
https://twitter.com/amasad/status/1600143003607105537
(I honestly don't know -- not my area of expertise, just putting it up for discussion)
Very Musk-y of you
Satoshi Nakamoto is (most probably) a solo billionaire
And obviously, even if they were a billionare, their ultimate goal was not to develop a business where they become one, but they were probably supporting their idea by being an early miner.
Which is exactly why Marx makes his “vapid” argument: cleaners and other menial jobs contribute as much to society as any geniuses (evidently, as societies without those menial jobs got outcompeted). And the way society currently evaluate those values seems to be incorrect.
The issue with Marxist is that the solution he proposed is troublesome, not that the problem doesn’t exist. And until the next genius figures out a different solution, we should at least try to limit the problem as much as possible
Scarcity is clearly an important component of value. This is essentially the "why is gold more valuable than water when I need water to live." question. I don't see the point in rehashing this stuff as if it's new.
I agree that Paul is severely overstating his case here (as is his wont), but only the first half of your summary is true to his tweet. He's saying that founders create a lot of (even most of) the value in a company, but he is not saying that employees create no value.
His argument is essentially this: If employee jobs can in theory all be automated away while a company still produces value, that means the startup founder's role must produce a huge amount of the value in any company.
This is a pretty fragile argument that has a lot wrong with it (that a job can be automated today doesn't mean it wasn't extremely valuable yesterday), so there isn't really a need to erect a straw man.
They have some interesting properties and I wonder how they would stack up against a top-down structure like in a corporation or university. Specifically I wonder if they would be able to resist bureaucratic bloat and the growth of the managerial class that plagues mature companies and organizations.
As a small company, I have hired and fired few people over the years. When I made the wrong hire, it cost a lot not just in terms of money but the overhead, mental anguish and loss in productivity. Sometimes I got lucky and hired some exceptional people. They have made life 2x better and yes they do get rewarded accordingly at least in my company.
Not all employees produce equal (even if same job title and experience on paper) and it is a fact.
The claim he says is false is "their employees created all the value".
Replacing "all" with "also" produces almost the opposite statement. I don't mean to be pedantic but that's an extreme misinterpretation.