Elon Musk is now a trillionaire, SpaceX has a valuation that can only be explained — wait, it can't be explained — and some people think it's immoral for people to be able to become billionaires and now trillionaires. I don't care for Elon, but I certainly don't have a problem with people creating lots of wealth for themselves. In fact, I think it's the outcome we want, provided we do the things necessary to maintain a healthy middle class.
Nevertheless, there are people who believe you cannot earn a billion dollars without bad behavior. I'd like to think that nobody really believes this and they have simply recognized it makes for good politics or some other self-serving purpose, but maybe I'm wrong.
Paul Graham recently responded to this argument with an essay called "How to Earn a Billion Dollars." With the experience of funding and investing in about 6,500 companies under his belt, he puts it very simply: The most common way to earn a billion dollars is to start a startup that many people like, and then have it grow very quickly for a period of time.
He provides some math:
If your revenues grow at 15% a month, how much more will you be making 5 years from now? To calculate that, we need to find 1.15 to the 60th power (since 5 years is 60 months). So go to Google again and this time type 1.15^60. The answer should be about 4384. Meaning in 5 years your startup will be making 4384 times as much. If you're currently making ten thousand a month, in five years you'll be making about 44 million a month, or 526 million a year. And at that point, if you own as much of the company as founders typically do, you will be a billionaire.
He then goes on to argue that a key founder trait is, in fact, the opposite of exploitation:
There are other ways to get rich than by starting startups. Some of those do require you to exploit people. But startups are the most common way to become really rich, and if you want to start a successful startup, the key is not exploitation but empathy. What do users really want? What could you do for them that would make their lives dramatically better? That kind of empathy is what we look for in founders, and what we cultivate in the ones we accept [at Y Combinator].
If you're interested, here's the full essay.
I saw Paul Graham write this week that "Cities inhale and exhale each generation. People move to cities in their 20s in search of colleagues and mates, move back out to raise their kids, and then when their kids are in their 20s, they return."
I don't like it being presented in such a single-minded way, but there is, of course, a lot of truth to this remark, particularly for North American cities. It's basically the "dumbbell" housing demand profile that we in the industry often talk about.
Whether you believe this is an innate housing preference, a deeply-rooted cultural bias, a fundamental truth about the optimal way to raise children, or the result of poor land-use decisions, it is a common housing outcome and, in some cities, the de facto housing outcome. But again, it is not universally the case.
This is a semi-regular topic on this blog, but I've been thinking about it more now that Bianca and I are about to graduate to being urban parents. In fact, now that it has become known, we've started getting some questions: "So, do you think you will move to a house?" (We live in an apartment condominium.) And sometimes it's not even a question; it's a flat-out assumption: "Once you move to a house..."
I wasn't aware that this was a prerequisite. Little do they know that I spend my free time fantasizing about apartment renovations in Paris, Tokyo, and Rio de Janeiro.
I'm sure that our thinking will evolve over time, but to a meaningful extent, I would classify us as being typologically agnostic, and instead resolute on a particular kind of urban context. What matters most to us is that we remain in a city where we can walk or bike to things, where a car is not an absolute necessity, and where exciting and cultured things take place from time to time.
I'm not sure what definition of "city" Paul had in mind when he was talking about people leaving it. Did he mean downtowns? Are the inner suburbs within a city an acceptable geography? I don't know, but I can confidently say that leaving the city is the last thing on our minds right now.
Maybe that will change. Or maybe it won't.
Back in 2016, I wrote a post called "Manager vs. maker," where I cited an essay by Paul Graham that talks about these two modes of working. To quickly summarize, the manager's schedule is for bosses. It's a calendar broken down into units of an hour that gets filled with lots of calls and meetings. Things are said, and then the manager moves on to the next appointment.
Makers, on the other hand, can't operate in units of an hour. If you write, program, design buildings, create financial models, or do anything that requires uninterrupted focus, sporadic meetings are the most effective way to neutralize any sort of productivity. You need solid blocks of time. I was reminded of this post today because, as I said back in 2016, I like making things.
But it's even more than that. Deep work, reading, and strategic thought are, in my opinion, how you win. And to do these things you also need solid blocks of time. You need mental space. And the 12 minutes you have before your next call, isn't it. So I'm reviving my old post, and Graham's old essay from 2009, as a reminder to myself to be more ruthless about saying no and guarding my calendar.
Don’t your spirits rise at the thought of having an entire day free to work, with no appointments at all? Well, that means your spirits are correspondingly depressed when you don’t. And ambitious projects are by definition close to the limits of your capacity. A small decrease in morale is enough to kill them off.
Don't kill off ambitious projects. Block time for them.