Automation enables founders to grow companies with fewer and fewer employees(twitter.com)
twitter.com
Automation enables founders to grow companies with fewer and fewer employees
https://twitter.com/paulg/status/1600119268858744832
393 comments
I have to agree here.
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.
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.
> 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
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
> …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.
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.
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.
I can't speak to the second half of what you said, but for the first half: The jump is not as big as you think for any competent piece of automation.
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.
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.
The economic term which is relevant here is under employment.
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.
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.
We could eventually replace (parts of) the workforce if we were happy with the current standards of living (and prevented a small group from hoarding all the wealth). If we were satisfied with a 1850s standard of living, only a small portion of the modern workforce would need to work. What automation enables is greater productivity with the same amount of human effort/time. But because we seek to improve out living standards, we need to keep the same portion of people employed and productive. So I say, once we bring everyone to a decent standard of life, we can just stop and gradually liberate people from the shackles of work until society runs on a bunch of robots and a small core of maintainers.
How many people here have simpler jobs than 10-20 years ago due to automation? I work in marketing and I all I see is more apps and more complexity no matter how "automated" things get.
I'm a developer and honestly ChatGPT and GitHub copilot handle 90 percent of the frontend/templates and 40 percent of my code is now somehow enriched by ai. It's remarkable and has helped cut way back on burnout.
Exactly! These tools are force multipliers. 1 dev can do the work of 3.
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.
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.
I'm assuming you sit at your desk and work 8 hours under supervision? Many great devs I know work more hours than 8 per day.
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.
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.
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This would only be true if the demand were capped. Other scenarios are also conceivable: For example, if the same workers in this sector can produce for a third of the price, demand may perhaps increase by more than three times and the number of workers would have to increase accordingly, not decrease.
another way of looking at it: writing software becomes cheaper, so software becomes more accessible in more parts of the world - leading to more demand for more kinds of software, and more developers needed.
Yes, automation is nothing new and we're all still working. It changes the jobs and then typically the company can use the gain to expand and so needs to hire more.
>and we're all still working
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.
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.
> But this is ignoring the fact that automation never replaced workforce as such.
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".
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".
Source: https://www.bls.gov/charts/employment-situation/civilian-lab...
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.
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.
>keeps declining
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.
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.
https://data.oecd.org/chart/6UQi
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.
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.
Some of this data is straight up bad in the earlier days, like drastic around 2000 in several countries or Italy in 1992. Another examples are Estonia or Russia around soviet union disintegration. The labor statistics of socialist countries were extremely bloated.
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.
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.
US labor force participation rate has been dropping for at least 20 years. Lower birth rates means this is inevitable basically everywhere.
https://www.bls.gov/charts/employment-situation/civilian-lab...
https://www.bls.gov/charts/employment-situation/civilian-lab...
> Lower birth rates means this is inevitable basically everywhere.
Not really, it generally means older people will work.
Not really, it generally means older people will work.
Graham will always defend founders "deserving" their wealth, as if it is some technical argument rather than a political one.
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.
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.
Graham falls into the same trap said to have been experienced by Milton Friedman, who "celebrated drivers and took roads [and cars and gasoline and ...] for granted," according to NY Times economics correspondent Binyamin Appelbaum in his book, The Economists' Hour.
http://www.economicprincipals.com/issues/2019.09.01/2253.htm...
http://www.economicprincipals.com/issues/2019.09.01/2253.htm...
Graham only seems to defend the successful founders.
He doesn’t seem to care very much about employees who have their own side projects or aspiring founders.
He doesn’t seem to care very much about employees who have their own side projects or aspiring founders.
Of course he doesn't, he's a billionaire venture capitalist. No billionaire cares about fair value contributed because that idea is incompatible with the idea of being a billionaire.
Given the current market I'd say you have to achieve some basic success before hiring anyone, at least if you're bootstrapping. From my experience it's quite difficult to find early-stage employees that are both affordable and good enough to handle the breadth of technical tasks needed in the early phase of a business.
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.
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.
I automated my e-commerce business and turned that into a SaaS. Found customers organically and have become my own “customer” multiple times. Solo founders like me are on the rise and you’d be surprised how far a little automation can take a business.
> Solo founders like me are on the rise
source?
source?
> You still occasionally hear people saying that founders don't deserve to be rich, because their employees created all the value.
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.)
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.)
> 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
This is the question that if addressed would fix the whole startup scammyness and exploitation. But then it may as well kill startups.
This is the question that if addressed would fix the whole startup scammyness and exploitation. But then it may as well kill startups.
If we're going to devalue and degrade the labour of anybody who isn't "founder" because of its ability to be automated, then let's follow the thread to its logical conclusion and say that it's the only VCs who really "create value". Just as AI will be able to take the legwork out of turning a concept into code, coming up with these concepts might well be an even easier task to automate. Of course though, it takes a wise human to know which AI generated concept to fund, and in that spirit, let's all put our hands together for the billionaires who will define this future for is. Really give it up!
Why not go all the way and replace the fallible, gullible, arrogant human VCs with much smarter AI VCs who can determine which AI generated companies are likely to succeed with higher fidelity?
I think the more social/political/financial power possessed by the individual threatened by AI, the more resistance there will be to them being disrupted by it. Like look at tech's smug responses to truckers concerned about self driving, and contrast that to the perspective this tweet has toward everybody in tech except for founders. He's literally just insulating a ruling class. This class dynamic is so deeply ironic coming from someone who literally said that "automation is inductive proof that Marx was wrong". It's the opposite!
> "automation is inductive proof that Marx was wrong"
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.
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.
He did, in a now deleted tweet. He verifies the screenshots veracity in the replies.
https://twitter.com/IlariKaila/status/1600120645211201536
Yeh I just saw it screenshotted on Twitter. Damn, so dumb. Graham once again getting too high on his own thought-leadership.
"You either die a hero, or live long enough to see yourself become the villain."
When was he the hero?
Which is hilarious, because one of Marxism's core tenets is that new technologies and industrialization lead to the deskilling of workers, resulting in the need for fewer of them.
Probably why PG deleted his original tweet and rewrote it.
Probably why PG deleted his original tweet and rewrote it.
He said he deleted it because mentioning Marx “attracts angry fools”, so if you’re right, his attempt to save face is hilarious.
I’m creating a startup. I’m the first and only employee, and likely to remain that way for the foreseeable future.
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.
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.
Could you give some examples? Congratulations on your success implementing this stuff
https://loodio.com - Hardware company - Solo founder - No employees and same here; I don't see the need for any in the forseeable future. Don't even need capital as my burn rate is ~$50/month except when I order new stock. Weird times.
How do you get the devices made and shipped to customers? Do you ship them yourself or are you paying someone for that too?
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.
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.
Assembling and sending from home currently. 3PL too early in current volumes.
Manually assembling it yourself?
Yes every unit takes me around 20 minutes to assemble and pack, but it prepares me for when I can outsource it later. "Do things that don't scale"
Love the idea. Ballpark revenue/profit?
Thank you! Just launched last week so no numbers yet. :)
Let's circle back in 1 year :)
The book The Million-Dollar One-Person Business goes into a lot more examples. It's usually people who build software that can scale.
Congratulate me when it finally works out!
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.
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.
Can I ask what your pricing model is?
This is the end state I envision: I offer a bunch of value for free in exchange for an email.
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.
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.
As a serial entrepreneur and founder in the technology realm my past matches his claim exactly.
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.
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.
He's right about automation being good but misses the dichotomy between capturing value and creating value. Instagram was worth billions because they won in a market that is lucrative and tends towards winner take all. To use a somewhat bad analogy, you don't create a billion dollars of value by winning the powerball lottery.
This attitude makes me so sad. When I started in tech, people were proud that this was one of the few industries that shared equity with a broad base of employees. Seeing a parking lot full of Porsches was celebrated, and people loved stories of the secretary (or mural painter in the Facebook case) who got rich off their options.
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?
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?
It's not a zero-sum game here. Being able to do more with less is a huge win — this enables individuals and small teams to tackle niche problems that would've otherwise been ignored. But there will always be an endless stream of universe-scale problems that require massive hordes of people to solve.
Someone seeing automation tools and saying “cool! This will centralize wealth even more, and that’s a good thing” is quite revealing
It is sad indeed and many of us feel used and discarded. But maybe this will have a different outcome than we envision. Maybe the capitalist class can be automated away too
If his example is Instagram then the lesson is that you didn't use to need many employees to get rich via venture capital and buy out, which are the main goals of many tech founders. Instagram and tech in the early 2010s is not a company or sector that represents the wider economy.
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.
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.
It is important to point out that this is only possible for the consumer app economy or a self-service type of software app or digital marketplace (like craigslist). Everything else requires more headcount (could be outsourced to 3rd parties or consultants). And in the whole economy this is a sliver of companies.
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 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.
I wholly disagree. SaaS are similar to automations for end customers.
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.
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.
Maybe it wasn't clear but I was referring to low-touch SaaS as well with "self-service type of software app". There are low-touch SaaS apps and offerings serving the developer and some "enterprise" market segments. The problem with certain enterprise SaaS is that they are high-touch by the very nature of the sales process involving big-ticket items. Once you are in the territory of high ACV there are many sales "gatekeepers" ranging from pay-to-play analyst coverage, Vegas conferences and outings, tickets to NFL games, to compliance and regulatory hurdles.
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.
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.
And chasing down purchase orders and higher expectations for customer support and, once you have direct sales, you need training for sales, and you have to generate qualified leads for them, and you have to respond to RFPs...
Thanks for the response. I upvoted because your comment added value.
Just so you know, you don't have to mention that you upvoted, it's actually recommended that people don't do that here, so that we don't get tons of comments like "thanks" which can make it frustrating for others to wade through such comments for the value added ones, as you mention.
Thanks for the response. I upvoted because your comment added value.
Not really. Any business can now use tools that make jobs redundant. It is having its effect everywhere. Anyone whose job is to copy information between mails, spreadsheets, and some webapp will eventually be replaced.
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.
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.
> This is a great business of course but there are not many of them given the scale of the whole economy.
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.
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.
This whole notion seems to be based on a bunch of seemingly logical conclusions, but it’s also a very narrow view of the reality.
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.
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.
> But the pressure to find a competitive advantage is often going to lead to hiring large numbers of people.
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?
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?
Agree with your point but if the alternative is a vendor that leaves me with no way to get my questions answered, I think most people would gladly step through a phone tree to talk to a human being.
Great point. People don't appear to think about competition enough.
PG is one of the most important bishops of the Cult of the Founder. This is more of the same.
We should recognize that he, by popularizing this world view, has done as much as anyone to empower the SBFs of the world.
We should recognize that he, by popularizing this world view, has done as much as anyone to empower the SBFs of the world.
That’s a very short term vision. The founders and VCs are not any less automatable than their employees. I guess we’ll se how dearly they hold those beliefs when the AIs will own all the wealth
In the limit case, you're left with just the automated founders.
It's a strawman argument for founders, but I am fairly sure it is made out of ignorance.
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.
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.
It's frightening that people "at the top" write those things without even realizing how it sounds for ordinary people.
I think this delusion is on par with Marie Antoinette and her "eat cakes if you don't have bread".
I think this delusion is on par with Marie Antoinette and her "eat cakes if you don't have bread".
What happened to the future, a 3 day week for all as computers/machines did the work.
Because of the competitive nature of business (and humans).
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.
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.
> So you are definitely not going to run that new shiny factory for only 3 days a week.
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.
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.
Again, it is due to competitive nature.
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.
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.
People making minimum wage typically have to work well above 40 hours, and even then often find their earnings difficult to live off of. See also: all the calls for paying low-level employees a "living wage".
How would that stoke the egos of all godless psycopaths?
This is the question I see way too few people asking: how do we want end-game capitalism to look. Should it be Banks' "The Culture", or should it be neo-feudal with the populace at large acting as serf to capital.
Without discussing the vision, discussing the strategy becomes sort of meaningless.
(Edit: typo)
Without discussing the vision, discussing the strategy becomes sort of meaningless.
(Edit: typo)
As awesome as The Culture sounds I find it unsettling that Humans basically become the exceptionally pampered pets of the Minds and at least right now it's unlikely we will create AIs as benign and benevolent as they are.
I have a feeling that PG doesn't understand automation. Automation is just a tool to increase work productivity (and, consequentially, profits and salaries). Automation doesn't change the nature of relationship between an employer and employees. The fact that a founder might need fewer employees due to automation only means that the moment when the founder will need to hire more people is shifted later in time (when the company grows) and the salaries of the employees will be higher because they will be required to work with automation tools and their work productivity will be higher.
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.
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.
Founderless companies are the real future. Having to divide profits
with founders, shareholders and other meat beings only weakens a
company. Surely nobody supposes business knowledge is somehow immune
to encoding in AI? And mistakes won't really matter when you can spawn
a swarm of 300,000 "subsidiaries" from a single shellscript and have
them coordinate via a darknet protocol to underwrite each other's
losses.
I can't do anything but reject his claims when he presents Instagram as proof. It's crazy to think seriously that the value was created by the 13 employees + founder of an electronic glossy billboard. Influencers and advertisers indirectly treated as cattle. Goddammit Paul.
In a follow-up tweet: “ 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.”
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?
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?
Whoever has the algorithm is the founder
This is specific to startups. If you can define a business model that is somewhat unique and successful, you can scale really quickly and hopefully exit before your expenses catch up to you, like Instagram and WhatsApp did.
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.
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.
> automation enables founders to grow companies with fewer and fewer employees.
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.
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.
If it becomes possible for a solo founder to automate a $1B start-up, then it's not worth $1B dollars, because the barrier to entry for others to do the same is much lower. The whole startup thing would seem to implode because of this.
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.
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.
More fever dreams from the pus filled mind of PG. Imagine thinking employees create no value for a startup. The guy has been drinking his own piss for far too long.
This isn't new. There's been 4 industrial revolutions.
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
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
And automation is enabled by a massive web of technologies made possible by government-funded research. So it seems that, by Paul's argument, it is justified to have very high taxes on the incomes created by these founders with these technologies.
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?
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?
Did the government sell these technologies? If not then how do the people make money from it? Sounds like the government gave it away for free: how can they now charge for it? Especially since tbe government mainly researches ideas rather than products. Should we pay Gutenburg's estate every time we print something? Perhaps Feynman gets a cut from nuclear power plants? Last I checked patents expire after 20 years. If the government has patented any technologies that are active, sure, let them charge for it.
I am talking about how an equality-promoting system can be justified because I see that as desirable. In doing so I am showing that Paul Graham's view is not the only valid view about what people "deserve".
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.
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.
It's easy to make any argument sound valid when you tout the extreme outliers (Instagram & WhatsApp in this case). What about the average case? What percentage of founders have grown their company to $100M+ revenue or $1B+ valuation on the backs of "automation" (whatever that is)?
This reflects increased maturity and thus the transition to more specialized labor. It is akin to early craftsmen assembling cars and transitioning to assembly lines.
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.
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.
Automation always reminds of this quote from Jurassic Park:
" 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... "
" 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... "
Hmm, so his example is Instagram. But Instagram was sold to FB, sorry Meta!, in 2012.
Where are the new examples of that kind of startup? 13 employees selling for 1bn USD.
Where are the new examples of that kind of startup? 13 employees selling for 1bn USD.
Musical.ly to Bytedance? And Qualcomm buying Nuvia?
Good examples. Didn't know that Qualcomm was so small
I will admit that I assumed a lot before I read the whole thing ( I was kinda hoping it will be more about automation ), but I guess it goes back to the opening statement:
<< 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.
<< 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.
As a founder, it's true, if I can run a solo operation, I want to do that for as long as possible. New automatons like Stable Diffusion and ChatGPT enable that so they're great for me. Just the other day I asked ChatGPT to solve a particular programming problem for me and it did, all the while explaining what and why each line of code existed.
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.
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.
This is clear to anyone with freshman macroeconomics - The Cobb-Douglas function for factor productivity:
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.
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.
Thank you for mentioning something new to me: https://en.wikipedia.org/wiki/Cobb–Douglas_production_functi... .
Why do you think the output elasticity for labor is low? Is it a case of having to work a certain number of hours to get medical care? Is it the price of medical care? It seems like modern tools and automation would help it be higher?
> You still occasionally hear people saying that founders don't deserve to be rich, because their employees created all the value.
Nobody is saying this. As evidenced by several threads here, opinions are far more nuanced.
Nobody is saying this. As evidenced by several threads here, opinions are far more nuanced.
Wow. There seems to be 2 main responses to this. 1) Sadness and depression or 2) Excitement and possibility
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.
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.
We can't and will never have a world with 8 billion distinct businesses that all have zero employees each. So it's nice that you think you might have a shot at a tiny lottery, but personally, I like to see trends that can benefit all of humanity, not just those who choose to start businesses.
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.
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.
Or maybe stop worrying about theoretical macro trends and go build something valuable right now?
HN suffers from a higher than average amounts of narcissism when it comes to being "Temporarily depressed millionaires" when thinking they will be the ones at the top of the pyramid. The few here that are near the top of the pyramid seem to forget that their high position tend to forget that position is supported by the base below them and if they don't perform maintenance on the base the entire thing collapses.
Humanity is built on societies and we must treat it so by ensuring we produce wealth and distribute, not extract wealth and horde it.
Humanity is built on societies and we must treat it so by ensuring we produce wealth and distribute, not extract wealth and horde it.
friedman23(2)
Based on his argument: Fewer people are doing a lot more thanks to being good at automation. It's the automation that's making it possible to be successful, not the engineers doing the automation.
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.
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.
> It's the automation that's making it possible to be successful, not the engineers doing the automation.
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.
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.
Can you explain how Founders are employees in this context?
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)
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)
> Can you explain how Founders are employees in this context?
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.
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.
Yeah no one has anything to say about this, probably they read it and run to check their agreements sweating buckets. That's messed up, sorry to hear it.
Many of my friends and colleagues became wealthy thanks to winning the YC lottery, some as founders some as employees. The way they changed afterwards drove me away from the pursuit of money entirely. I'm sure the me in this timeline would not like the me in an alternate timeline where I lasted there two more weeks and achieved wealth status.
[deleted]
> I would be curious to hear more justifications from him for this.
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.
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.
> Not sure I understand you. Why do post-acquisition wealth need an justification at all?
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.
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.
Is that legal? Were you able to file a lawsuit or just ate all of the loss?
In most US states employees can be fired at any point without cause. What happened to OP is horrible, but not illegal.
It's just business in the USA, that's all.
Pretty clear that these are people who want to fuck you over. Silicon Valley elites have accumulated enough power to come mask off. Entitled dirtbags who profited off government funded science and technology who've never created an ounce of value in their lives.
It does seem a bit tone-deaf for pg to be making this argument at the precise moment tens of thousands of people are being laid off in the tech industry. Definitely a "mask off" moment. Either that, or he has a large equity stake in a manufacturer of pitchforks.
Thank you. Nobody ever seems to mention how much founders get to stand on the heads of engineers and scientists who were paid with tax dollars. Kind of how the libertarian musk fans ignore how much aid his companies have gotten from the t taxpayers.
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.
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.
> Nobody ever seems to mention how much founders get to stand on the heads of engineers and scientists who were paid with tax dollars.
Not that anyone listens to him, but Noam Chomsky has been saying this for his whole career.
https://youtu.be/a4ZIhW5ZpaE
Not that anyone listens to him, but Noam Chomsky has been saying this for his whole career.
https://youtu.be/a4ZIhW5ZpaE
Most progress has come from universities, defense and government funding. These losers build an app and proclaim themselves gurus on the future. It's insane that people fall for it.
Progress comes from individuals. MIT did not endow Claude Shannon with divine knowledge of Boolean algebra and information theory. He discovered it himself.
Claude Shannon was able to do what he was able to do because of the ample research funding and the academic environment. I have great respect for people like Claude Shannon but they require an ecosystem to be able to do their work.
There were plenty of electrical engineers at MIT working on differential analyzers when Shannon worked on his paper. Why Shannon and not them? Funding and ecosystems don't make technological revolutions anymore than they make cures for diseases. After all, the four papers that revolutionized physics in the early 20th century were composed by a 24-year old patent clerk. Someone has to do the job of thinking and putting those ideas to paper. This is a requirement of any great idea irrespective of funding or people. Thinking is an individual pursuit for an individual reward.
There is both an individual contribution and a societal contribution. No one is denying the individual contribution. But none of YC types had anything to do with inventing the internet but feel like they are the only ones who deserve it's rewards. They haven't created anything like information theory. It's mostly been about fleecing retail investors. More SBF and less Shannon
Progress doesn't come from funding, and funding doesn't come from the government. People make progress. People pay taxes.
Sure progress comes from scientists , not from idiots building b2b saas apps.
> Sure progress comes from scientists , not from idiots building b2b saas apps.
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.
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.
No not all work is equal. Progress is a rare thing. Do not equate all forms of work to progress. People will pay good money for women to fart on their faces. That's not valuable work. Neither is building shitty apps.
Scientist's work is not necessarily valuable either: https://en.wikipedia.org/wiki/Ig_Nobel_Prize
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?
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?
Who's saying anything needs to be banned. We're talking about who can reasonably claim to be contributing to the progress of society. Go ahead and smell the farts my friend
I'm not equating all forms of work to progress. That'd be a category error. It's the inverse: you saying only progress comes from scientists is a category error.
> Do not equate all forms of work to progress. People will pay good money for women to fart on their faces.
Depends entirely upon the quality of the fart.
Depends entirely upon the quality of the fart.
But what about the yet another distributed key store we built?
I feel like you're making fun of Riak :)
Corporations seem to do a good job of avoiding taxes in a way that people cannot replicate. The ultra-rich founders also do a great job of making sure they pay a lower tax rate than the rest of us.
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".
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".
> Corporations seem to do a good job of avoiding taxes in a way that people cannot replicate. The ultra-rich founders also do a great job of making sure they pay a lower tax rate than the rest of us.
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.
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.
The idea that the fruits of automation should be awarded to the single guy on top is ridiculous, and that's not communist thinking.
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.
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.
I don't follow? Lots of technical founders create their own automations.
His whole point is: There is a lot of great free open source software being exploited by small technical teams to run faster. This means the people doing the integration deserve less $$ because they can do the same amount with less. Founders deserve all the money, everybody else should be happy to be employed.
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.
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.
I made this exact argument in the early 2000s when open source starting getting popular and many in the tech community thought I was ridiculous.
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.
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.
Open source software is often funded by big corporations once it hits critical mass because it's a nice way to stamp out competing small businesses who might be have been able to charge $ for a small chunk of software functionality.
> those who have dedicated many hours of their lives digging their own grave
Yep. Absolute suckers for giving out their work for free I guess.
You misunderstand their intentions.
“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’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
This assumes that there is no financial intent in the work. My favorite example of this is that many thousands of Google's engineers used an app (Homebrew I think), but Google wouldn't hire him, thus letting him share in wealth partially created by his life's work.
Did Richard Feynman struggle to pay rent?
Wasn't his work funded by the government?
OSS creators can choose their license. If I make something MIT licensed, I can't then complain that people are "stealing" my work. Just make proprietary software at that point.
Where does he mention open source? And using open source software is not standing on anyone's head.
Where do you think all of that automation comes from? I promise you, every single start-up you know of is violating somebody's copyrights on their open source. I've seen this in every company I've worked with for the past 30 years. There is always code inside of private applications which was copied and pasted from GPL'd code.
Unless that code is under the AGPL specifically and the software isn't cloud-based (and the vast majority of start-ups these days are doing SaaS) then there's no license violation there.
What are you talking about? There is not always code copy and pasted from GPL'd code. Giant amounts of open source software is not released under GPL, and automation is moving fast enough that there's a huge amount that's not released under GPL precisely because if it is then people don't use it.
Not every single startup.
It's not hard to read the licenses, and I have a fiduciary duty not to open up my company to unnecessary liability
It's not hard to read the licenses, and I have a fiduciary duty not to open up my company to unnecessary liability
Have you ever copied and pasted anything from StackOverflow? Did you ask them if they copied it, if they had permission to copy it, or where it was copied from so you could attribute properly? If so, my hat is off to you Sir.
I did have a discussion recently with some friends as to their ethical reasons against GPT and co-pilot generated code.
I did have a discussion recently with some friends as to their ethical reasons against GPT and co-pilot generated code.
I'm not an engineer, so it's possible there are engineers in my company copying and pasting from stack overflow
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
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
Stop stealing the internet bits from Claude Shannon. He did the work and deserves his cut.
I've been around YC for 80% of its existence and have never observed anything that could remotely be described as an "Objectivist agenda". I'd remember it too, if I had.
As for "treating employees like garbage", that's just a baseless smear.
As for "treating employees like garbage", that's just a baseless smear.
I think PG is extrapolating/speculating a lot here.
Most of the "big tech" companies have surprising amount of employee, even pure players.
Most of the "big tech" companies have surprising amount of employee, even pure players.
These blue check VCs on twitter are on such a gnarly anti-human bent these days. They are targeting a capitalist maximalism where a few people are very wealthy and everyone else does nothing (except...consume SaaS products? where do they think customers come from?). They are so absolutely caught up in AI development speed that they have traveled all the way to techno-eugenics, totally eliding the problem that there are a bunch of humans in the world that can't just be "disrupted" without their nightmarish little automation empires being seized by force.
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.
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.
I think it's also worth considering that automation will enable founders to grow companies with less and less funding.
Well, it requires fewer more skilled employees. Employees some of whom could be founders themselves and compete with you. So despite the number of employees being lower, their opportunity cost is likely similar or higher, just more concentrated. Therefore what you’d have to pay them if they were negotiating rationally is similar to what you’d pay multiple people.
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.
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.
Well that's fun -- I'm apparently recently blocked by PaulG, having never interacted with him directly, or anywhere near him in any recent memory. Is he running something to proactively block anyone that's been talking about Mastodon?
Wild-ass guess, but I can't imagine any other reason.
Wild-ass guess, but I can't imagine any other reason.
Every time some VC asshole makes some pompous self-gratifying pronouncement like this, their personal capital gains tax rate should go up 10%.
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.
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.
I would state fewer named employees, not fewer employees as the people creating the infrastructure automation was still employees of you in both focus and impact, etc.
Saying that they do not exist is just inviting being blind-sided by movements in that automation beyond your control.
Saying that they do not exist is just inviting being blind-sided by movements in that automation beyond your control.
I feel like the implied question isn't of much value on its own. It's all about "where are you going with this?"
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.
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.
Instagram the software has no intrinsic value. The whole thing could be reproduced in no time. It's the network effect that matters and getting that effect is essentially a hack. Yes, the author's prime example is a hack of society.
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?
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?
Totally, you still hear that feudals didn't deserve to be rich, because serfs created all the value. But the falsity of this claim become obvious as enclosures enabled feudals to use fewer and fewer serfs on their land.
Weird space to wade into, as wealth inequality is no joke worthy of tweets.
Who pays for the infrastructure?
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).
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).
"Well you see after I become a billionaire I'm going to pull up the ladder behind me and move to a private island. Good luck everybody else."
I have a company with my own product. I wrote software, rented servers, designed hardware and placed orders to a couple of small factories. I have partner but he mostly handles business matters. No employees. We do hire contractors every once in a while for particular sporadic jobs (like design pics for website, create campaign page, assemble hardware from parts etc. etc). So yes no employees thanks to technological advancements.
22/23 founders ride their company into the ground, or hit the $100k/year marginal profit glass-ceiling. This remains true regardless of the amount of investment in time, labor, and or infrastructure.
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 =)
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 =)
The employees are still there, just because they are in an AWS facility instead of two doors down from you doesn't mean they don't exist.
What about competition? What prevents multiple copycat companies from propping up if a one-person startup grows to a billion dollar valuation?
A capitalist fever dream to justify how valuable he is to society. Of course, he completely ignores the labour going into the entire supply chain that enables this level of automation. It's full of underpaid workers likely including some living under slavery-like conditions or in authoritarian dictatorships that don't even live up to his free-market ideals.
The barrier to entry for becoming a founder has been lowered, meaning more people can become founders. Sounds good to me. I hope this point isn't being overlooked here, although, I understand that with recent waves of layoffs across tech, taking away people's jobs is a sensitive topic.
If founding work is so simple then founders should be interchangeable? Where is the moat that ensures what two handful of people cobbled together is not replicated? Isn't it that the real moat and the real propelling force becomes more and more the capital leveraged?
Most Founders are interchangeable. The entire business of YC is paying for a ton of people to found a ton of companies and hoping one hits. Luck is a huge factor. The issue is the 1 guy that does hit has an outsize impact on society. Sometimes it's positive but often it's not.
https://twitter.com/IlariKaila/status/1600120645211201536
Ilari Kaila
@IlariKaila
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1h
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@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.
Ilari Kaila
@IlariKaila
·
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.
Actually Marx talked a lot about automation. Marx's prediction was this would lead to a lower rate of profit for invested capital which - mainstream establishment sources say is what has been happening.
Yes I have no idea why Paul would say this. I guess he realised he was wrong and thus he deleted it, but he won’t admit that. So many people online who make fun of Marx haven’t read any of Capital
I always find this take that innovation wouldn’t happen in a non-capitalist society very strange, as if humanity hadn’t produced countless innovations before modern constructs like the corporation existed.
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.
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.
It's not like a socialist country could invent things like a satellite, and be the society that figures out how to send a man into space, probes to the moon and other planets - oh yaa, a socialist country is the first country to figure out those things.
His apparently original post, "automation is an inductive proof that Marx was wrong," along with that recent pseudophilosophical essay about "wanting what you want (to want)^n," concerns me as to whether he's jumped the shark.
You still occasionally hear people saying that VCs don't deserve to be rich, because founders created all the value. But the falsity of this claim becomes increasingly obvious as automation enables VCs to grow funds with fewer and fewer founders.
/s
/s
Hasn't this been the case since the first machine or even tool was invented?
I feel like he’s missing the second order effect. If everyone can automate everything, then there would have been (or will be) 900 Instagrams and 1 (or 20) that would have had a $1000 exit.
Early automators will obviously leave roadblocks behind them, new regulations regarding automation, etc.
Well, there’s “deserve-to-rich” and there’s “deserve-to-be-so-rich-that-you-can-afford -bend-reality” rich.
Can we NOT pretend that the people pg is talking are saying the former? It’s so disingenuous.
Can we NOT pretend that the people pg is talking are saying the former? It’s so disingenuous.
Users are effectively the employees often in these companies, they just get zero pay or huge fees on something they are forced to sell through the locked in platform.
One important thing to know, is knowledge sharing actually creates value. But yes, a company will increase its value internally if it has culture of sharing.
Has he always been like this? It seems he is posting more and more polarized content over time or at least its being shared more. Maybe that is the point?
Paul Graham saying the quiet part loud as usual.
And yet automation has led to an ongoing explosion in the number of jobs since the dawn of the Industrial Revolution!
Doesn't the "automation" usually mean hordes of low-paid people in India and elsewhere doing it?
I can attest that we’ve grown a SaaS a lot bigger with 3 people than I ever would have thought possible.
automation only scales to a certain point though? after a certain point of scale it makes sense to do something in house & save money at the margin right?
automation seems great for small companies & solo founders, but kind of an open question if that gets you to unicorn status
automation seems great for small companies & solo founders, but kind of an open question if that gets you to unicorn status
I tried to hire a few freelancers to do nothing but collect information from stores. Easiest job and offered good pay but no takers. I dumped the idea and since then i work on ideas that require no outsiders hand.
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.
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.
And who was it that created the automation? The automation just creates itself?!
That was such a terrible take.
That was such a terrible take.
As Peter Thiel has pointed out, the reality is that founders take on incredible amounts of risk and put in long hours to build and grow their companies. American exceptionalism is founded on the principle of rewarding hard work and entrepreneurship, and founders who succeed in building successful companies should be celebrated, not demonized.
While employees at startups don't take on the exact same risks as the founder, they do take on personal risks when joining one and I think the reason founders are demonized is because they regulary ignore this fact, especially when it comes time to divvy up the cash.
> on incredible amounts of risk
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.
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.
We’re talking about financials here so it’s referring to financial risk. A highly-qualified and skilled founder is forgoing the guaranteed opportunity to make $1m+ in the time they choose instead to work on their startup. They also risk harming their future earning potential and career prospects if they don’t already have a track record of success. A low-paid worker in this imaginary situation isn’t risking much of anything financially as they’ll (hopefully) get minimum wage either way.
(In practice a lot of small businesses owners use debt and that is where the financial risk lies for them).
(In practice a lot of small businesses owners use debt and that is where the financial risk lies for them).
[deleted]
Paul Graham founded this site. How did it end up being so hostile to founders?
As p0pcult said, people realized that VC is about concentrating wealth.
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?
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?
It's become a more general site for tech employees rather than founders. Notice how most of the comments are employees talking about how this kind of opinion affects them. To be honest, I don't know where founders reside these days, Indie Hackers was a good site but it has a lot of spam and people posting links with little discussion nowadays.
If you can get into YC, then BookFace.
Because people woke up from the fiction that venture capital is about making the world a better place.
But do we need human founders? For how long will we still need them?
Then why have a co-founder as YC preaches ?
ChatGPT would enable founders to Solo soon.
Feudalism without the serfs. What is in it for the plebs?
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?
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?
It can be helpful to think of the USA as a giant factory that produces billionaires. Dollars and workers go into the factory as inputs, billionaires (and defects, millionaires) come out on the assembly line, and the system's waste product that gets discarded is the lives and livelihoods of working and middle-class people. So the system is working and producing what it is supposed to produce.
There is also the small matter of the goods and services produced that improve standards of living for everyone in the US and the world.
This is one of the dumber takes I've ever seen on hacker news. Completely blinded by envy.
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
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
What happens when the mass is struggling and has a lot of free time because everything has been automated? The billionaires seem to not have planned more than one step ahead.
Oh they are planning...
https://www.theguardian.com/news/2022/sep/04/super-rich-prep...
https://www.theguardian.com/news/2022/sep/04/super-rich-prep...
That's where basic income comes in, hopefully.
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.
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.
Massive social upheaval that the super wealthy think they are immune from, even when they are directly responsible for its creation.
> The idea that concentrated wealth is great for everyone and will trickle down has been pretty much debunked
Can you point to an example of someone claiming that concentrated wealth is great for everyone and will trickle down?
Can you point to an example of someone claiming that concentrated wealth is great for everyone and will trickle down?
[deleted]
https://en.wikipedia.org/wiki/Trickle-down_economics
There’s lots of people saying it and have said it. We just had tax cuts for the wealthy recently.
There’s lots of people saying it and have said it. We just had tax cuts for the wealthy recently.
Liz Truss, who brought in tax cuts for the highest earners based on this idea, and as a result lasted only 45 days as prime minister of the U.K.
See also: Margaret Thatcher, Ronald Regan.
See also: Margaret Thatcher, Ronald Regan.
> What happens when no one works and humans are removed from the value chain?
pitchforks?
pitchforks?
i don't think anyone is claiming it's going to trickle down
Marx thought of that too, which is why he said there'd be a revolution.
He is implying that founders can create a lot of value without employees, and that the claim that employees also create value is false.
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.
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.
His assertion is made worse by automation. Every skill the founder can automate they should. That’s efficiency. Every skill they can’t, that’s a crucial skill the founder depends on. The more crucial the skill, the more leverage the employee should have over the founder and the more incentive the founder has in sharing equity. This becomes magnified if the founder doesn’t have the skill to produce and operate the automation their business depends on, but even if they did have the skill - I think this is a population that understand the sheer amount of time and energy automation requires to simply oversee, operate, and maintain. The founder can’t be on call 24/7 for every function of every part of any but the most trivial of operations. Finally, typical ownership rules makes the founder highly enriched in equity unless they trade equity for capital or talent to the point they lose control. That controlling equity is the founders reward for the founding. Their share of growing profits is their reward whether they personally grow the profits or their employees do. A smart founder doesn’t try to do it all just so they can squeeze out some other people. They delegate responsibility to employees who in turn find ways to outsize the growth of profits and the value of the equity. Nothing says the founder needs to treat them well or provide them incentive to succeed - but everyone who has ever grown a company knows the best talent is attracted to where they are a “part” of the success, which includes sharing in the reward of their labor not just the labor.
> The more crucial the skill, the more leverage the employee should have over the founder and the more incentive the founder has in sharing equity
Unless the providers of said ability have to compete for business on price. One should not underestimate how hard it is to replace them.
Unless the providers of said ability have to compete for business on price. One should not underestimate how hard it is to replace them.
"This becomes magnified if the founder doesn’t have the skill to produce and operate the automation their business depends on"
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.
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.
I'm curious why the downvotes? I'm a technical founder running a devtools/security startup. After experimenting with ChatGPT for a few hours, it's clear to me that given the right prompts and model tuning, it's already capable of doing the following tasks at an above average skill level:
- 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.
- 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.
It really appears to have a default style or bland, corporate nothing-speak to it. It can write perfect emails crammed with every platitude and all in completely sterility, unless prompted otherwise.
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.
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.
Adding to that ChatGPT can also generate working function code for many different programming languages given the right description in your prompt
That's true, but while it is definitely helpful and can accelerate development, I don't generally see writing working functions to do simple, discreet tasks as a bottleneck to engineering in the context of a nontrivial system. But writing quality cold emails tailored to each prospect is definitely a bottleneck to sales--they are time consuming/tedious to write, and you usually need to write tons of them to get results. Same story with marketing copy, ads, social media posts, etc. having the time and energy to produce this content on an ongoing basis is a major bottleneck to marketing.
On the receiving end, being able to rip though thousands of words of AI drivel and pick out the actual content (if any) is going to become a major skill in itself. Not that skim reading and summarisation isn't a skill now, but the noise floor is about to rise by many decibels.
Probably there will be AI tools to de-AI messages, like reverse semantic companders[1], coming soon.
[1]: https://en.wikipedia.org/wiki/Companding
Probably there will be AI tools to de-AI messages, like reverse semantic companders[1], coming soon.
[1]: https://en.wikipedia.org/wiki/Companding
What's with that obsession about "billionaires"? If somebody can make a nice living with their business, isn't that good enough? Personally I think we are perfectly fine without billionaires.
a "nice living" is actually quite hard for small businesses. competition is brutal, all sorts of risks can be fatal etc. the "billionaire adoration" phenomenon is actually putting lipstick on oligopolistic market arrangements and pretending they are still entrepreneurial
> What's with that obsession about "billionaires"? If somebody can make a nice living with their business, isn't that good enough? Personally I think we are perfectly fine without billionaires.
https://news.ycombinator.com/
-> 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 :-)
https://news.ycombinator.com/
-> 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 is the premise that Y Combinator is only for billionaire-wannabes?
YC is creating venture-backed startups, where the nature of power-law returns necessitates aiming for "grand slams" (i.e. 100x outcomes following SeriesA funding). If successful, this creates billionaires. So in a sense (though I wouldn't conflate cause & effect): Yes, YCombinator is looking for people who want to create companies that could reasonably result in the founders becoming billionaires.
Worth noting: Not all companies can or should target this trajectory -- which just means VC might not be the right funding source.
Worth noting: Not all companies can or should target this trajectory -- which just means VC might not be the right funding source.
The irony is the only person I personally know who founded a startup (he's the CTO) which is valued at more than $1b never looks at HN.
So I guess yes, it's the wannabes.
So I guess yes, it's the wannabes.
YC isn't just HN though. Was he funded by YC at all?
It might be useful to have a billionaire-wannabe honey pot . . .
I'm sure I'm years behind the curve on that idea, though.
I'm sure I'm years behind the curve on that idea, though.
> If somebody can make a nice living with their business, isn't that good enough?
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 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..."
The thing is, this is achievable even at 10M.
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.
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.
> The thing is, this is achievable even at 10M.
$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.
$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 have to remind myself that there are people comfortable with such a 'wild and crazy' lifestyle.
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.
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.
it's interesting that it's very common to have a disdain / discomfort with showing that you have that money, but no such corresponding problem with just having it. if you're not going to give the money away, i don't see how there's any benefit to not spending. you're still way richer.
Eh, any money you have invested generates income. That income can be used for your expenses or given to charity, depending on what your needs are for a given year.
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.
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.
Because it changes your experience in such a way that you will not fit in as well with your fellow humans, something many of us conscipusly enjoy and most of us somewhat need.
10M would give you a safe withdrawal rate somewhere between 300-400k a year. A fairly common household income for people on HN. It affords a very nice quality of life but you're certainly not living the lifestyle that most people think of as "rich."
>It affords a very nice quality of life but you're certainly not living the lifestyle that most people think of as "rich."
I think maybe you're missing the perspectives of ...almost everyone outside of a very select few in VHCOL locations.
I think maybe you're missing the perspectives of ...almost everyone outside of a very select few in VHCOL locations.
That's the average? There's no way to measure it, but that's around five times the US median household income, at a percentile of 97%. It could not be close to the median for HN just by probability, and it's a rich man's income.
I never said average. I said it's a fairly common household income on HN– which is true.
It’s the other way around. Most people think of it as rich.
Tech workers in SF don’t.
Tech workers in SF don’t.
> SWR
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!
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!
I am very far from being a billionaire, but as soon as I made it to upper-middle-class, I realized that the hedonistic treadmill would never end, even if I was a billionaire.
It's a never ending fantasy world where everyone looks up and wants to be as rich as the next tier, even though that's rarely possible, and just like the scene in WarGames, "the only winning move is not to play".
While there is some of that, eventually you reach a point where you don't really know what to do with more money. That is you fly first class, and you see no reason to upgrade to the next level (shared jet, owned jet). Maybe you try a cruise and decide an inside cabin is just as good as the largest balcony room (or something inbetween) and are not interested in owning your own ship at all - perhaps a cruise isn't for you and you still prefer primitive camping in the backwoods with the minimum you can take with you.
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.
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.
You can do that with $10m or less. 4% safe withdrawal rate, $400k a year is a hell of a lifestyle in the vast majority of locations.
or if you have something, the response is "must 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.
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.
Check paulg’s tweet history. A few weeks ago he lamented how fake things are in the US, pointing at things like Kraft singles.
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.
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.
[deleted]
Unfortunately they still crop up, with increasing frequency.
He's not implying that employees don't create value.
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.
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.
> 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.
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".
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".
When they talk about risk they mean capital risk, not personal risk.
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.
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.
> there goes their livelihood until they line up another job.
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.
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.
For employees, there is employment risk, reduced compensation, potential increased difficulty of finding next job. For founders there is the first two but generally finding next job is easier (because you get lots of managing/etc experience potentially faster than you would normally).
I agree with you 100% and am not afraid of vocalizing similar things to a hyper capitalist audience.
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.
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.
I’ve been toying with an idea where blockchain actually is interesting: imagine all currency is on the ledger - all of it. And every coin had an (rather short) expiry!
You need to create value continously or fall back to UBI.
Just something to play around with. :)
You need to create value continously or fall back to UBI.
Just something to play around with. :)
So... the role (controlled) inflation plays in an economy?
Good point. I guess this need to be expanded with limits on other types assets as well.
Basically we’ll end up in a totalitarian society governed by an AI.
That train of thought escalated quickly.
Basically we’ll end up in a totalitarian society governed by an AI.
That train of thought escalated quickly.
The straw man here is the family money you've assumed. I've done 6 startups as founder or early employee. I assure you I had no "family money" to fall back on. It's only my most recent company that had an exit that really put a cushion under me, and that's after more than 20yrs of startups.
People who assume there's family money to fall back on are generally themselves in a privileged position. They are projecting that onto everyone else and it's an excuse to not build anything and discouraging anyone to do anything.
Maybe there is an imbalance of risk taken or value added among founders and early employees. I think that's debatable, but assume it's true. It's never reasonably accounted for in the equity distribution.
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.
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.
I agree 100%. Also, I don't see a substantial difference in risk between a founder and an early employee at all. Founders typically have little invested in the startup other than their own time but they compensate for that by paying themselves a salary with investor money.
It sounds like you're saying that early employees and founders have a similar level of rush, but vastly different levels of reward.
Why would anyone ever be an early employee when they can be a founder instead?
Why would anyone ever be an early employee when they can be a founder instead?
Paying a wage = sharing your profits, just not on a % base, but a fixed amount. But in the end it's still: less profits for the founder, and more profit for the employee.
Also this is not about a dystopian village with one single employer that exploits workers that cannot move. Startup employees agree with free choice to work somewhere for the agreed upon profit share, be that % based or fixed, or mixed.
VictorPath(3)
This is a fun semantic game but Profits are not the cost of doing business. When you have an employee sign a contract for $X dollars per year, that's a cost. Conflating Revenue and Profit for the sake of an argument is bad faith.
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.
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.
Don't assume bad faith: that their framing is unorthodox doesn't make it misleading.
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.
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.
I think people are largely arguing over whether or not the share of economic value is proportional to contributions and when they talk about that share they typically refer to profits. I think redefining/reframing what profit means in this conversation is intentionally misunderstanding/redirecting the argument.
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.
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.
I don't agree that jerrre isn't saying anything of substance. It could have been fleshed out better, but what they say is a reasonable counter to their parent's argument.
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.
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 disagree with your interpretation of ceronman's experiment and the premise that we're already conducting it.
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 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.
Are you familiar with "debt bondage"? Technically, the brick kiln workers of India and Pakistan are paid a wage [1]. Closer to home, Amazin warehouse workers probably wouldn't consider themselves as sharing in Amazon's profits. Let me summarize:
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...
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...
What is your point? OP's comment was about how revenue - (other employees wages) = profit, not the actual details surrounding working for a wage.
And that revenue wouldn’t exist without labor. That’s the point. So offering to “share” that in the form of mostly fixed wages both betrays a presumption of ownership and gives a false appearance of charity or benevolence.
Wage is a cost and profit comes after costs. If owner want's to share profit, they need to give company shares to the employees and pay dividends.
A cost that cuts into what would otherwise be profits. It's all fungible so you're quibbling about an accounting issue here. If an owner made a contract with an employee that they will pay them a $0 salary but will pay them a fixed annual dividend of $100,000 (broken up into convenient bi-weekly payments) would that fix your concern? I'm getting the impression that it wouldn't.
You're right, that wouldn't fix it.
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.
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.
This is disingenuous. Money is fungible but the flow of money is not. My buying weekly groceries is not the same as my putting a down payment on a new car: they're two different activities that use the same fungible source as a medium of exchange. Likewise, if I run a business, paying a fixed wage to an employee is not the same as distributing profit in the form of dividends to shareholders: the fungible medium of exchange is weighted differently, comes from different sources, and is used for different purposes.
That would be illegal in my country. Dividend is considered an unearned income and is taxed differently as well.
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.
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.
The argument he is arguing against is that the workers create the wealth, and profit is that unpaid surplus labor time that the LPs/VCs/founders expropriate from the workers creating wealth. You can't "share" profits with workers when workers are creating all the wealth, the LPs/VCs etc. expropriate profits from workers.
So if the people providing the funding weren't there, where would the salary for the workers who are currently getting their surplus labor expropriated come from? If these workers are getting unjustly exploited, then what's to keep them from starting a co-op together where they share all profits? Plenty of co-ops exist in modern day capitalist societies, including several successful ones like WinCo in the US and Mondragon Corporation in Spain. No one is forcing these employees to give up their "surplus labor" to investors.
No not really. If I generate $1m of value for a company and they pay me $90k a year that isn't really sharing profit.
If you can convincingly demonstrate that you singlehandedly generate $1m revenue for a company, then I'm confident that you have the negotiating power to demand a share.
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.
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 to start an agency that does everything digital, but also some mrr micro SaaS projects.
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.
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.
Well, sure. But people are not programmed like that.
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.
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.
Personally, I don't envy the salespeople their commission-based compensation. Having my compensation directly tied to demonstrable value created would be overly stressful for me.
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.
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.
Not disagreeing; but for clarity you'd want to refer to generating surplus value rather than value, i.e. net of costs. i.e. if my work can be construed as having created $1M of revenue, but $990,000 of cost (say some low-commission dropship affiliate sales structure, or online payments with a small transaction fee), I've only created $10,000 of surplus value, out of which I can make a case for a different distribution scheme based on an update (read: agitation) of normative values.
Sure, yeah. Agreed.
in that case you should bet on yourself and start your own company. It comes down to risk and reward
I'm not implying that companies don't bring value by their nature. They absolutely do. I'm also not implying that I could generate this value on my own, though I have before.
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).
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).
But if you cost the company $1m you still get your $90k.
Hopefully you do not have many employees that are costing you $1m a year...
Look at the cost of Zuckerberg's metaverse push to Meta, and Musk's work to Twitter: sure, that's currently sitting at a lot more than that, but they are hoping to turn that around in a number of years.
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.
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.
It isn't even limited to high profile cases like those. Same goes for a lot of hiring (in junior positions especially), it often takes some time for the employee to learn the ropes, during which time their cost (both in terms of direct costs like salary, benefits and equipment and indirect costs like the time of the people bringing them up to speed) is almost definitely higher than the value they're bringing to the business.
Definitely: I was just putting out obvious extreme cases to illustrate the point.
More likely you get fired.
No, negating “employees created all the value” does not mean, “founders create all the value”. It means employees didn’t.
So who is the magical missing third party that created value?
re-read the comment you're replying to:
employees didn't create ALL the value. In other words, founders created some as well. :)
[deleted]
Who said anything about a third party?
The exploited consumers that give up all their sweet sweet data to the surveillance capitalism complex?
While it's true he's saying that founders can create a lot of value without employees, he's certainly not suggesting employees don't also create value. Obviously they do, or founders wouldn't hire anyone.
> 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.
> 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.
> He is implying that founders can create a lot of value without employees, and that the claim that employees also create value is false.
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.
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.
What if I'm a founder who's also a developer, I have the idea, customer base and I've done ~80% of the code of the product but I need help with deploying and scaling the product.
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?
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?
How much value do you place on "scaling"?
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?
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?
That's what I'm asking. What does the "scaling" guy get? What's the fair distribution of wealth?
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?
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?
They get what they negotiate for, no? I worked for startups before and I would press for more equity, but I wasn't under any delusion that if there were 4 employees and I was just joining that I'd get 20% equity. They were there first, had to take on the risk, etc.
The only sensible move is to payback investors and yourself first. So, as little as they will accept. If you can afford to (maybe) loose them, give them $0 extra.
Economy isn’t so hot anymore, folks with obligations will absolutely settle and take it on the chin. You have all the power here.
Economy isn’t so hot anymore, folks with obligations will absolutely settle and take it on the chin. You have all the power here.
What I'm trying to get for an answer is straight percentages, because there's always this latent hate towards founders or bosses so I'm trying to see what would be fair in the scenario I presented.
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.
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.
Isn't Notch [1] a solo billionaire? Not sure if he had help running Minecraft (I guess so), but you could say he created a billion-dollar company single-handedly.
1: https://en.wikipedia.org/wiki/Markus_Persson
1: https://en.wikipedia.org/wiki/Markus_Persson
Mojang had employees.
He wasn't even working on Minecraft when Mojang sold to Microsoft. Jens Bergensten was the lead developer for years before the sale went through.
Even better: let's see how many billioaire entrepreneurs will appear in a society where few or no people are there to buy their products and services, because they've made redundant and are out of jobs or in new lower-paying forced careers...
Eliminating the middle class (except for those who directly serve the billionaires) and having a huge industrial reserve army (Marx) that does jobs that cannot be automated could work. It works for the super rich in Brazil.
This seems to be the trend in "Western" societies, and the middle class enthusiastically votes for those who pursue that agenda.
This seems to be the trend in "Western" societies, and the middle class enthusiastically votes for those who pursue that agenda.
>It works for the super rich in Brazil
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...
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...
FWIW the reply by the founder of repl.it explicitly takes the other side of the bet
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)
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)
I think it could happen. AI and automation have the tendency of amplifying ability. The ideal company has zero employees. Similarity, the ideal world has zero employees and everyone does want they want. If that scares you, give your head a shake.
Yeah if work was so great you wouldn't have to pay people to do it
My experience is that employees just for the sake of employees are of no use and a lot of companies have too much fat just because they could hire. Great employees though are worth every penny and a whole lot more.
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.
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.
> He is implying that founders can create a lot of value without employees, and that the claim that employees also create value is false.
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.
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 believe what you’re describing is a worker-owned co-op. Workers get a vote in business decisions.
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.
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.
Seems like he took the red pill right after elno.
> and that the claim that employees also create value is false
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.
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.
For value creation, you need both workers and capital (provided by founders and investors). The value is created by both together, not each independently. The compensation for created value is based on market rate for both work and capital.
> The compensation for created value is based on market rate for both work and capital.
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.
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.
> If employees don't produce any value, easy, fire them all
Very Musk-y of you
Very Musk-y of you
>I'm curious to see how many solo billionaires will appear. My estimated guess: zero.
Satoshi Nakamoto is (most probably) a solo billionaire
Satoshi Nakamoto is (most probably) a solo billionaire
Not unless they start converting their bitcoins into actual money, when lots of it might go down in value. If they even have access to secret keys that control these funds.
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.
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.
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Aren't we just back to rehashing vapid Marxist arguments? In your experiment a brilliant computer scientist working on a breakthrough invention will be forced to do menial tasks like data entry and accounting him/herself rather than split the profits evenly with a laborer. This is not going to work, a society where geniuses spend most of their days using Quickbooks, cleaning the bathroom etc, will be outcompeted by ones where they can specialize.
> This is not going to work, a society where geniuses spend most of their days using Quickbooks, cleaning the bathroom etc, will be outcompeted by ones where they can specialize.
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
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
> cleaners and other menial jobs contribute as much to society as any geniuses (evidently, as societies without those menial jobs got outcompeted)
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.
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.
> But if they do, share your profits fairly.
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.
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.
Here's another experiment: All employees share the losses as well. Company makes a huge loss, employees are liable.
And I'm curious to know, in your model, if the employees are willing to work without salary and bear the cost of running the company?
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.