Ask HN: If I am so smart, why I am not rich? | Hacker News Reader

Ask HN: If I am so smart, why I am not rich?

19 pointsLeoDTO49 comments

I grew up very modestly, borderline poverty. None of my extended family/friend went to college, I was the first one to graduate from college later in life.

I was always a good student A- since it didn't come easy but I was eager and motivated to put the time and work to achieve.

When I was 18 with a few buddies we started a "fun" business and it was mildly successful. When I tried to start another business everyone told me that I needed an education (college).

Fast forward a couple of decades I have my BS and MBA,with a decent career in high tech (operations). Through the years I have started a few projects and they all failed (my bad), at the same time I have been working for entrepreneurs who are able to make a pretty good living with mediocre ideas and bad management.

I am now at a point in my career where I have the time and some funds to start something, but I am stuck by "analysis paralysis". I know AI is a great opportunity, but I can't find a pain point to use as an entry point.

I am well versed with Paul Graham essays, with the Innovator's Dilemma strategy, and Lean Startup methodology; still not much going on.

I have also done Startup School.

Am I just an employee-type and not cut for entrepreneurship?

Looking for honest feedback, resources, pointers anything.

Thank you in advance.

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"" America is the wealthiest nation on Earth, but its people are mainly poor, and poor Americans are urged to hate themselves. To quote the American humorist Kin Hubbard, “It ain’t no disgrace to be poor, but it might as well be.” It is in fact a crime for an American to be poor, even though America is a nation of poor. Every other nation has folk traditions of men who were poor but extremely wise and virtuous, and therefore more estimable than anyone with power and gold. No such tales are told by the American poor. They mock themselves and glorify their betters. The meanest eating or drinking establishment, owned by a man who is himself poor, is very likely to have a sign on its wall asking this cruel question: “if you’re so smart, why ain’t you rich?” There will also be an American flag no larger than a child’s hand—glued to a lollipop stick and flying from the cash register.

Americans, like human beings everywhere, believe many things that are obviously untrue. Their most destructive untruth is that it is very easy for any American to make money. They will not acknowledge how in fact hard money is to come by, and, therefore, those who have no money blame and blame and blame themselves. This inward blame has been a treasure for the rich and powerful, who have had to do less for their poor, publicly and privately, than any other ruling class since, say Napoleonic times. Many novelties have come from America. The most startling of these, a thing without precedent, is a mass of undignified poor. They do not love one another because they do not love themselves. ""

It's been my experience that business success is less about intelligence, and more about the right combination of intelligence and motivation. Succeeding as an entrepreneur takes an extreme amount of work and fortitude that has to come along with your intelligence.

And motivation counts for more than intelligence. A genius who doesn't want to do anything but read and collect a secure pay-cheque isn't cut out to be an entrepreneur. Where someone who has the pure motivation to build a business, but less brute force intelligence, is much more likely to actually do so.

Basically the upper limit of our earning potential is limited by how much work and stress we're willing to take on, not how smart we are. And this explanation also doesn't dive into the equally important requisite of social skill.

This is honestly a bad answer. You can have all of the motivation in the world. But if you don’t know how to create products that people want, market it, have funding for it and not get crushed by a larger company that can throw a team at it, you won’t be successful.

The world is filled with the corpses of dead companies founded by people with “motivation” and “passion”.

The whole idea of if you work really hard you are guaranteed success gives too many people unrealistic hope

> But if you don’t know how to create products that people want, market it, have funding for it and not get crushed by a larger company that can throw a team at it, you won’t be successful.

Yes, but you can keep trying. In entrepreneurship, you only need to be right once. Most successful entrepreneurs have had failed startups and projects before they got it right.

>The whole idea of if you work really hard you are guaranteed success gives too many people unrealistic hope

It's not guaranteed, but it's the best system to get what you want, that we have.

> Yes, but you can keep trying. In entrepreneurship, you only need to be right once

And how many entrepreneurs are “right” enough to make up for the years of lost wages they could make even as ordinary CRUD enterprise devs let alone working for BigTech or adjacent? Not to mention the compounding returns if they had invested the money early?

HN especially suffers from survivorship bias. You don’t hear about all of the failed founders who are in their 30s and 40s with nothing to show for it and unemployable.

The “best” system is to “grind leetCode and work for a FAANG” (tm r/cscareerqyestions). Even the second best system of working your way up through enterprise dev is much more likely to succeed.

You're making fair points although I'll just add that I didn't claim that success was easy, I just described the minimum requirements for success. It's always going to be a gamble.

Fair, but you seemed to miss the part where I described intelligence as nearly important as motivation. It's just that I'd give motivation a greater importance. You need to be smart enough to run a business, but more importantly you need the drive.

Intelligence doesn’t help either, there are thousand of smart people who tried to start a business and failed.

Each part is necessary, but in itself not sufficient.

Successful business takes hard work, the right work, done well, reaching a market that needs it and can afford it.

Motivation by itself is worthless. Working on the wrong thing is worthless. Working hard on the wrong thing is worthless.

Being smart isn't about doing Integral Calculus. It's about deciding to work on the right thing.

Most of all a business needs to reach customers who want what you are selling, and can afford what you need to charge.

To the OP I say "I don't know you, but i expect you looked for product first, then first customers. Switch to finding customers first, then worry about the product."

Once you have that then you'll need motivation, hard work and indeed some luck.

So if that’s all it takes? Then why are so many businesses failures? I bet if you got in a room with 30 people and they all told you their story without mentioning the outcome and you could judge the characteristics you mentioned and they were all equal, you couldn’t predict which ones are successful business people and which ones are failures.

On the other hand, if you gave 10 people a job at BigTech, 10 a job at a well known non tech company and told 10 to go start a business, which one of those groups do you think would have the highest median and mean compensation history over 5 years? 10 years?

I posit that it would be BigTech, Enterprise Dev and the startup founders would come in dead last.

Heck I got close to a million dollars in “revenue” just working as a mid level (L5) remote employee at BigTech for 3.5 years and I was paid 10-15% less in my position (cloud consulting) than the equivalent SDE.

If that were my major concern at this point in life (I’m 50), there are much easier ways to have a million dollars in “revenue” over 3-4 years for anyone in tech than starting a business with much less work and risks.

> So if that’s all it takes? Then why are so many businesses failures? I bet if you got in a room with 30 people and they all told you their story without mentioning the outcome and you could judge the characteristics you mentioned and they were all equal, you couldn’t predict which ones are successful business people and which ones are failures.

Luck. Or, IOW, random variation. In physics, you could probably predict the position[1] of every atom in a confined volume of a gas, if you knew all their initial positions and velocities with sufficient precision... But that required precision is so high, and the effects of any infinitesimal deviation from the true state has such far-reaching chaotic effects, that it's in practice pretty much impossible.

Same with the social sciences, economy, and "the market" (whichever market it is you're entering): Random impossible-to-measure tiny variations add up to a chaotic sum of effects that manifests as what is usually called "good" -- or "bad" -- "luck", which probably accounts for almost as much of your success as anything you do (or don't do).

> On the other hand, if you gave 10 people a job at BigTech, 10 a job at a well known non tech company and told 10 to go start a business, which one of those groups do you think would have the highest median and mean compensation history over 5 years? 10 years?

> I posit that it would be BigTech, Enterprise Dev and the startup founders would come in dead last.

Yup, I'd guess so too... For N = 10 or so. Add an order of magnitude, and the mean might rise enormously -- though not the median.

[1]: Heisenberg's uncertainty principle notwithstanding.

> Successful business takes hard work, the right work, done well, reaching a market that needs it and can afford it.

And luck. Or, to put it another way -- which kind of is luck: What "the right work" is, and whether you reach your market or not, is influenced by so many other hard-to-predict things besides your own input, that getting it right among all these confounding factors is pretty much the definition of "luck".

Every dead body on Mt. Everest was a motivated, hard working person.

Well, I’m certainly not rich, so take this with a grain of salt, but:

I think a lot of very smart people have a definition of intelligence that is orthogonal to money-making. This is probably because, for all intents and purposes, it is. Some of the smartest people I’ve known were basically incompetent at “street” skills, and vice versa. This is especially common in fields like philosophy (which my background is in.) The level of raw intellect is often off the charts, and yet translating that into pragmatic dollars and cents seems almost impossible to them.

And so a lesson I’ve gradually learned is that entrepreneurship is not really about being smart, and being good at entrepreneurship does not indicate that someone has a high level of intelligence. It means they have certain skills that the market values, full stop. That can be technical skills, sales skills, the ability to notice and capitalize on opportunities, and so on. It doesn’t mean they are dumb, of course, but American culture has a way of lionizing business leaders and ascribing wisdom to them that they usually don’t have.

This is all long-winded way of saying that you have to decouple intelligence and success in your mind, because in the real world they are only sometimes related, unfortunately.

I will add my two cent because just like you we seem to have similar background. I am average intelligence. I do have a MBA and most importantly I am rich. I actually grew up poor and was middle class most of my life. The biggest misconception is that as an entrepreneur you have to start or create something new. The truth of the matter is that you may not have it in you to work as hard and make the sacrifice needed. I felt the same way, starting something from scratch is not my cup of tea. I became rich because I started buying businesses. Think about the advantages. You already have customers, cash flow and staff all you have to do is come in and make it better or keep it the same if everything is already good. Yes, you need capital but if you do get the capital starting a business recommended instead of starting from scratch and most of the time you may not even need to quit your day job. Good luck!!!

I've been your position before and although I can't say I'm a successful entrepreneur, I can share lessons that helped me escape "analysis paralysis":

1. Fear. This is was a huge inhibitor of action. I was afraid of picking the wrong problem and then spending months-years having nothing to show for it.

2. To overcome the fear, I decided that instead of anchoring on the painpoint, I'll anchor on something else: The user. I chose ML engineers as the market I want to serve (its a terrible market, I advise you pick something else). It's hard to fathom a niche of users out there that don't have some pain they're willing to relieve by paying somebody else. You don't have to anchor on a user. You can anchor on something else, like a mission (eg. democratizing access to startup investing), or an industry (eg. semiconductor manufacturing). When you commit to a center point, now you have the freedom to iterate on ideas freely, knowing that even if an idea doesn't work out, you'll learn useful information you can use in the next iteration.

Does this guarantee that you'll company eventually grow into a unicorn? No, not really. You can end up picking a tiny niche, but in practice, most founders are able to expand the niche or find ways of expanding their market by combining niches.

This is more relevant to software businesses but hopefully some of it is still useful for other types of businesses.

> *but in practice, most founders are able to expand the niche or find ways of expanding their market by combining niches.+

“Most” founders fail miserably or toil in obscurity making peanuts until they give up.

True true. I should qualify my statement: Most founders who are able to find micro-PMF in a niche generally can expand that niche or grow threw composition. But this is based on my own anecdotal evidence, with a slant towards optimism.

Forbes says there are about 2800 billionaires in the world, and there are like 8 billion people, so your odds are about 1-in-3 million of making it into that class. And it doesn't just take smarts, it takes being in the right place at the right time.

[1] https://www.forbes.com/billionaires/?form=MG0AV3

I have no clue why your comment would be down-voted. Luck or chance is definitely important once one is in a position to benefit from it.

Weird. I never ran the math.

Becoming a billionaire is actually more achievable than I would have predicted, by a lot.

The probability in GP's comment assumes that everyone has an equal chance of attaining billionaire status, and that the percentage of billionaires in the world remains constant. Given heritability of wealth and access to better education and healthcare, wealthy children have much lower barriers to success. The second assumption may not hold either, as the current overall economic trends seem to favor increasing concentration of wealth.

It'd be interesting to see just how steeply those advantages decrease the odds for the rest of us. I'd be willing to bet that—even in a comparatively wealthy developed country—the true chances for an average person achieving >$1B are orders of magnitude lower than the figure quoted.

I agree, it's not at all perfectly random. For some the chances are better than 1 in 3 million, for others they are miniscule and improbable.

I feel like the odds are so long that a few orders of magnitude either way don't really change the argument that luck is a bigger factory than anything else.

Developing vs developing world is an interesting question. There are a lot of people in the developing world who outright stole $1B or more, and the process of development frequently makes billionaires. Chinese people I know who came to the US and had average results often regret coming because they know people back home who got really lucky and hit it big.

Alternate reading: being a billionaire is less impressive than it's hyped to be, if it's a pure numbers game.

It's not just a numbers game. Bill Gates was stupendously smart, driven and competitive. He and Paul Allen also got the idea that the microcomputer industry was going to need systems software before he could get a microcomputer to develop it on, so he developed it with an emulator on a PDP-10. It was "flip switches on the front panel" or "ship with Microsoft BASIC" which let Microsoft claim to be "the first microcomputer software"; they got a few lucky breaks such as getting a contract with IBM for the systems software for the PC which could have easily gone to a competitors like Digital Research.

Bernard Arnault is another interesting case study, his talents were quite different, started with a wealthy family, had luck to multiply his family wealth with real estate and get out [2] had a lot of luck rolling luxury brands together, and also benefited from the growth of China, as "keeping up with the Chens" more than made up for the decline of materialism in the west.

[1] https://en.wikipedia.org/wiki/Bernard_Arnault

[2] it is easy to turn a small fortune into a huge one in real estate using leverage and then lose it all

> Bill Gates was stupendously smart

[citation needed]

Gates had family and connections. Brain didn't come into play.

Rich doesn't have to mean billionaire. Now look at the number of millionaires in the US, ~22 million or 8.5% of the population.

https://en.wikipedia.org/wiki/List_of_countries_by_number_of...

“there were 56 million people worldwide whose assets exceeded one million US dollars”

That doesn’t take starting your own business or even working for one of the top paying companies. If you bought a house ten years ago in an area with rapid price appreciation - congratulations you are now close to a million easily.

Now if you work for any of the tech companies that pay top of market for a few years and live below your means, reaching 1 million is even easier.

Indeed, that's my point. It is statistically unlikely to do well enough in business to get to 1 MM compared to working for a living.

Some people are going to argue that a millionaire isn't really "rich". It's not that hard to become a millionaire if you make a decent income, sock a lot away, and invest in stocks in the 1930-2024 time frame. [1] You'd be pretty old when you make that milestone though.

I think the OP wants to be rich when he's young.

[1] https://www.amazon.com/Millionaire-Next-Door-Surprising-Amer...

Statistically, which do you think is a better way to get to $1 million? Working for BigTech or equivalent or starting your own business?

I think some entrepreneurs actually have kind of obsessive traits. They seem to get obsessed with an idea and see it through major hurdles that most other people would give up on. It’s like a combination of obsession and aggressively putting forward their ideas with confidence, whereas people who are “intelligent” - like have a lot of education, a lot of experience might actually sometimes see the bigger picture in a way that’s detrimental to the success of the overall idea. I actually had an idea the other day that I thought, fuck that would be a great idea - one that could really be something… will I see it through to fruition as an actual sustainable business? Most likely no, because I lose my passion for things quicker than entrepreneurs. That’s ok, not everyone is supposed to be an entrepreneur. I’m looking for other ways to find my success, and basically build a life that is full of joyful experiences and a happy retirement. I don’t need or want a billion dollar idea or company

Obsession is not a bad trait, until you're obsessed by the wrong thing.

Be careful of survivor bias here, there are lots of very obsessed entrepreneurs who have failed.

i once saw someone post on x: the only real measure of intelligence is "do you have what you want". i think that's a tremendous metric for anyone. if you are as smart as you think you are, you probably don't want those things you're describing. if you did, you would probably have it.

Humans have a tendency to downplay what we have and focus on what's missing (missing tile syndrome and whatnot). I have had my share of these feelings over the years. 2 weeks ago, I decided to quit my job and start my entrepreneurship journey. I have no clue on what I am going to build, but excited (call it stupid naivety). I am glad, I decided to do something about the feelings I've had. Be biased towards action.

Listen. I'm going to give you some on-the-ground perspective here. Mostly because I'm drunk. ;)

I've started businesses (and by most measures, successful ones), and despite what all the gurus will tell you, I would not wish it on anyone.

I tell people often, don't do it. Unless you're a certain type of person, do something else, and even if you're that sort of person, it's probably going to suck. A lot. We're not honest enough about this in our society, because people have a certain respect for entrepreneurs and aspire to be one themselves. And there's an entire cottage industry that preys on these aspirations (yes, that includes some of these startup incubators, etc).

Really, you know if you're the sort of person who will keep going or not. You know if you'll love the challenge of pulling together a million different pieces (half of which you know nothing about sometimes) and when to check yourself... or not. You know what to listen to others... or not.

Most people are not built like this. I'm close friends with a number of very successful entrepreneurs, and they're... weird. Good folks, but always weirdos.

That said, since it's in your title, I have a high IQ (145) but I think it's important to add, I grew up in the ghetto, where such an IQ is not considered an asset... instead, force and street savvy often are.

The reason I bring this up is because I've done okay for myself. Not insane, but decent. I thrive in organizing chaos. Not to be too dramatic, but that's what starting a business is like, especially when it's your own money on the line. Most of the successful people I know in starting businesses are also smart, process-oriented, and curious as all Hell.

For perspective, I'm comfortable reading scientific papers outside my expertise and seeing the potential business applications that the MBAs likely aren't looking at, because, well, they're thinking about other things. I'm comfortable shooting the shit with my plumber... or my siblings in very niche tech or science. I love breaking things and asking both these types of people for help, so they can laugh at me. I've done some incredibly stupid things in the name of curiosity.

My advice? Stop reading, stop talking. Flip a coin and take a risk on something you want to see to its end. Then burn yourself out to see where it goes. But be prepared for a lot of heartache and pain.

If you do this, hit me up after. Would love to hear how it went.

Well there’s a couple of things at play here

- extreme survivorship bias in the tech and startup world distorts your expectations

- most startups fail, most businesses do not see exceptional returns

- intelligence is necessary (in most cases) but not sufficient for getting wealthy

- If you work in big tech with an MBA you’re probably much wealthier than the median USian.

- I suspect that lifestyle creep/peer comparison is distorting your view of your own personal wealth.

So yeah, there’s a number of cognitive biases that are distorting your ability to assess yourself here. What level of wealth are you aiming for? It would be easier to work backward from that number and try to model what you’d need to do to hit it.

There must be a thousand ways to be smart.

Some "stupid" persons are able to make money effortlesy, maybe you could learn this kind of "smartiness".

If you speak spanish there is a Mensa's member named Javier Recuenco that talk a lot about this topic.

Funnily enough there are several articles with your exact question: https://news.ycombinator.com/item?id=35447827

Because intelligence != success, nor is it enough to obtain it. You can be in the top 0.01% of the population IQ wise with all As in every subject and a ton of degrees and experience, and not get anywhere close to being a millionaire or billionaire.

What matters a lot more is the combination of a bunch of factors:

1. Your network/background. Someone with a rich and influential family has way better odds than someone from a poorer one.

2. Whether your interests happen to align with a field or industry that's got a lot of potential for success. Being interested in technology/bitcoin/AI/whatever at the right time would get you a lot more money than being interested in journalism or travel.

3. Your mindset and how determined you are to push yourselves to do one thing despite overwhelmingly bad odds. Obviously you're gonna have issues if you get really attached to a bad idea with no chance of it becoming a viable business venture, but I also see a lot of people fail simply because their interests are very temporary/short term.

4. Plain old luck when it comes to your skillset, the timing for launching your idea, etc.

Point being though, there's a huge luck/timing element to it all, with connections and your network being another big factor on top of that. If you don't get those, you can be as skilled and hard working as you like and not get anywhere.

> everyone told me that

If you know you're smart enough to start a decent business - don't listen to anyone. Key secret here is that nobody knows what is the right way to business success (not your friends, not warren buffet, not elon musk, nobody).

And also "everyone" is more often than not are dumb and wrong. (few examples: support for hitler, popularity of gaming chairs etc.)

Next thing is that getting make million from 0 is magnitudes harder than make same million from another million (for example your ancestors left you any capital) - it is not a fair game. Being smart is just one of many variables.

Good news is that in the long run, smart usually wins. If you live in free and advanced enough, democratic enough economy - your chances of success grow with time if you're persistent. It's more about endurance, marathon, not how sharp you are at the moment or what cool skills you have.

So were all the people who failed (and most do), not “smart”?

It doesn’t matter how much persistence or how far you are willing to run if you are running in the wrong direction. It’s an important skill to know when to quit

This is why I mentioned smart being just one of many variables.

Also not changing direction when it is clearly wrong - is a good sign of not being smart. It is not persistence, it’s stubbornness.

Being rich and being smart are not well correlated attributes.

This sort of inhibition is not uncommon. We are creatures of habit.

The leap you describe is a reinvention. And you have taken the opiate of modernity, delegating self mastery for sublime mediocrity.

You must find within yourself to work your ass off. You must find within yourself the “get it done.” Don’t wait for crisis and loss like every other ordinary human. Preempt your inevitable failure and fix those problems before they come upon you.

Money and asset management is no joke.

Play OpenTTD or some 4x games to drill your mind that resource management is the eternal costrategy for success.

No matter how smart you are you fail when you cannot pay rent.

Good luck!

Give Taleb a read

Second this. Getting rich is orthogonal to general intelligence, and much more aligned to how you estimate and handle risk.

> I grew up very modestly, borderline poverty. None of my extended family/friend went to college, I was the first one to graduate from college later in life.

That's your answer right there.

Wealthy people aren't smarter or better than you or anyone else. They are lucky by birth, get lucky in life, or just straight up grift their way to wealth. The Gilded Age figures are rife with men who lied, cheated, and bribed their way to amassing fortune.

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