How to Make Wealth - 0 views
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Startups usually involve technology, so much so that the phrase "high-tech startup" is almost redundant. A startup is a small company that takes on a hard technical problem.
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Here is a brief sketch of the economic proposition. If you're a good hacker in your mid twenties, you can get a job paying about $80,000 per year. So on average such a hacker must be able to do at least $80,000 worth of work per year for the company just to break even
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I'm claiming you could be 36 times more productive than you're expected to be in a random corporate job.
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then a smart hacker working very hard without any corporate bullshit to slow him down should be able to do work worth about $3 million a year
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Bill Gates is a smart, determined, and hardworking man, but you need more than that to make as much money as he has. You also need to be very lucky.
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If you want to create wealth, it will help to understand what it is. Wealth is not the same thing as money. [3] Wealth is as old as human history. Far older, in fact; ants have wealth. money is a comparatively recent invention.
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A programmer can sit down in front of a computer and create wealth. A good piece of software is, in itself, a valuable thing.
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And so it's clearer to programmers that wealth is something that's made, rather than being distributed, like slices of a pie, by some imaginary Daddy
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A great programmer, on a roll, could create a million dollars worth of wealth in a couple weeks. A mediocre programmer over the same period will generate zero or even negative wealth (e.g. by introducing bugs).
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Hackers often donate their work by writing open source software that anyone can use for free. I am much the richer for the operating system FreeBSD, which I'm running on the computer I'm using now, and so is Yahoo, which runs it on all their servers.
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All a company is is a group of people working together to do something people want. It's doing something people want that matters, not joining the group
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A programmer, for example, instead of chugging along maintaining and updating an existing piece of software, could write a whole new piece of software, and with it create a new source of revenue.
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You can't go to your boss and say, I'd like to start working ten times as hard, so will you please pay me ten times as much?
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To get rich you need to get yourself in a situation with two things, measurement and leverage. You need to be in a position where your performance can be measured, or there is no way to get paid more by doing more. And you have to have leverage, in the sense that the decisions you make have a big effect.
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If you're in a job that feels safe, you are not going to get rich, because if there is no danger there is almost certainly no leverage.
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Steve Jobs once said that the success or failure of a startup depends on the first ten employees. I agree
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What is technology? It's technique. It's the way we all do things. And when you discover a new way to do things, its value is multiplied by all the people who use it. It is the proverbial fishing rod, rather than the fish. That's the difference between a startup and a restaurant or a barber shop. You fry eggs or cut hair one customer at a time. Whereas if you solve a technical problem that a lot of people care about, you help everyone who uses your solution. That's leverage
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If there were two features we could add to our software, both equally valuable in proportion to their difficulty, we'd always take the harder one
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I can remember times when we were just exhausted after wrestling all day with some horrible technical problem. And I'd be delighted, because something that was hard for us would be impossible for our competitors
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You'd think that a company about to buy you would do a lot of research and decide for themselves how valuable your technology was.
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Wealth is what people want, and if people aren't using your software, maybe it's not just because you're bad at marketing. Maybe it's because you haven't made what they want.
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Now we can recognize this as something hackers already know to avoid: premature optimization. Get a version 1.0 out there as soon as you can. Until you have some users to measure, you're optimizing based on guesses.
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In that respect the Cold War teaches the same lesson as World War II and, for that matter, most wars in recent history. Don't let a ruling class of warriors and politicians squash the entrepreneurs