DISQUS

Ben Casnocha · 2 years ago

The best way to maximize your chances of getting rich is to go to NYC and work in finance or law. Your expected return will be much higher than doing a Silicon Valley start-up.

Of course, maximizing chances at being rich isn't the only consideration!!

Ben Casnocha · 2 years ago

The best way to maximize your chances of getting rich is to go to NYC and work in finance or law. Your expected return will be much higher than doing a Silicon Valley start-up. Of course, maximizing chances at being rich isn't the only consideration!!

charles · 2 years ago

Ben, I couldn't agree with you more. There are a million reasons to join a small company and getting rich is not a viable one in the web 2.0 world. I just found it odd that someone would choose "getting rich" as a reason.

Jon Lunetta · 2 years ago

I passed up working in banking last year post-grad to start my own Web 2.0 company in Silicon Valley- it's the best decision I've ever made, win or lose.

For me, it wasn't about getting rich quick. It was about returning to the Valley (where I grew up), and starting something that I was passionate about- all while surrounding myself with like-minded people.

Like you said, Ben, the expected return of those careers may be greater, but nothing beats the energy, creativity, and resources of Silicon Valley.

It is odd that people are looking to Web 2.0 land as the next frontier for striking it rich- when only a very small percentage of companies thus far have hit.

I'm reminded of the private equity craze in the late nineties, and the hedge fund craze up until last year. Hopefully 2.0 isn't the latest "fad"...

any thoughts???

Jon Lunetta · 2 years ago

I passed up working in banking last year post-grad to start my own Web 2.0 company in Silicon Valley- it's the best decision I've ever made, win or lose. For me, it wasn't about getting rich quick. It was about returning to the Valley (where I grew up), and starting something that I was passionate about- all while surrounding myself with like-minded people. Like you said, Ben, the expected return of those careers may be greater, but nothing beats the energy, creativity, and resources of Silicon Valley. It is odd that people are looking to Web 2.0 land as the next frontier for striking it rich- when only a very small percentage of companies thus far have hit. I'm reminded of the private equity craze in the late nineties, and the hedge fund craze up until last year. Hopefully 2.0 isn't the latest "fad"... any thoughts???

charles · 2 years ago

Jon,

I totally agree with what you said. I wrote the post because I was perplexed that someone would see the current crop of web 2.0 companies as a way to get rich quick.

charles · 2 years ago

Jon, I totally agree with what you said. I wrote the post because I was perplexed that someone would see the current crop of web 2.0 companies as a way to get rich quick.

David Sachs · 2 years ago

Charles, I agree. But I would argue that this isn't just a web 2.0 phenomenon. In nearly every economic circumstance, only those who own meaningful equity in an enterprise are likely to become wealthy.

In web 1.0, it felt like everyone at all levels of startups was getting rich. In reality, it was mostly only founders, investors and senior officers that became wealthy as a result of most startup exits, even at the crazy web 1.0 valuations. Lower-level employees only got "retire now" rich at startups that became major companies with market caps or acquisition values >$5B (and whose founders/senior officers became near or actual billionaires).

VCs and founders do well when companies go public; I'd argue that employees only get rich when companies continue to grow at a torrid pace for *years* after they are public. Big tech companies that grew to tens of billions in market cap over time are the best examples: Microsoft, Cisco, Amazon, Google, eBay, Microsoft, Intel, Oracle, etc. Save for the internet bubble and Google, most of these companies took >10 years to scale those heights.

If you really want to get rich quick, found a hedge fund and outrun mean reversion for as long as you can. Also, as Warren Buffet has said, if you build up a business over a period of years and sell it, you're not any richer than you were before--you now just have assets in the form of bonds and stocks of companies you don't know as well as the one you just sold.

David Sachs · 2 years ago

Charles, I agree. But I would argue that this isn't just a web 2.0 phenomenon. In nearly every economic circumstance, only those who own meaningful equity in an enterprise are likely to become wealthy. In web 1.0, it felt like everyone at all levels of startups was getting rich. In reality, it was mostly only founders, investors and senior officers that became wealthy as a result of most startup exits, even at the crazy web 1.0 valuations. Lower-level employees only got "retire now" rich at startups that became major companies with market caps or acquisition values >$5B (and whose founders/senior officers became near or actual billionaires). VCs and founders do well when companies go public; I'd argue that employees only get rich when companies continue to grow at a torrid pace for *years* after they are public. Big tech companies that grew to tens of billions in market cap over time are the best examples: Microsoft, Cisco, Amazon, Google, eBay, Microsoft, Intel, Oracle, etc. Save for the internet bubble and Google, most of these companies took >10 years to scale those heights. If you really want to get rich quick, found a hedge fund and outrun mean reversion for as long as you can. Also, as Warren Buffet has said, if you build up a business over a period of years and sell it, you're not any richer than you were before--you now just have assets in the form of bonds and stocks of companies you don't know as well as the one you just sold.

charles · 2 years ago

David,

That's a very good and detailed explanation. I had a bunch of friends from Excite who went to eBay in 2000 and all did really well when eBay got its "second wind" as a public company.

charles · 2 years ago

David, That's a very good and detailed explanation. I had a bunch of friends from Excite who went to eBay in 2000 and all did really well when eBay got its "second wind" as a public company.

Charlie Kemper · 2 years ago

I couldn't agree with this post more. Working for a startup is more about experience than potential wealth. Billion dollar outcomes are far & few between and, generally, only a handful of folks really walk away with gobs of money.

However, by working at a startup at a young age, if you're ambitious and a self-starter, you can assume responsibilites that might take years to reach in a large organization. There is an opportunity of current income by working for a startup, not to mention generally increased stress levels - so it's not for the faint of heart.

The real gem is the risk/rush of starting your own business and the joy of making it worth -- now that's where wealth comes from -- independence.

Charlie Kemper · 2 years ago

I couldn't agree with this post more. Working for a startup is more about experience than potential wealth. Billion dollar outcomes are far & few between and, generally, only a handful of folks really walk away with gobs of money. However, by working at a startup at a young age, if you're ambitious and a self-starter, you can assume responsibilites that might take years to reach in a large organization. There is an opportunity of current income by working for a startup, not to mention generally increased stress levels - so it's not for the faint of heart. The real gem is the risk/rush of starting your own business and the joy of making it worth -- now that's where wealth comes from -- independence.

Chris Yeh · 2 years ago

Hey Ben, aren't I the one who always tells would-be entrepreneurs that there are many easier ways to get rich? Credit where credit is due, old friend!

I didn't choose entrepreneurship to get rich--if I wanted to do that, I could simply have stayed at my first employer D. E. Shaw & Co. (David Shaw recently sold a 20% stake in the company to Lehman Brothers for $3 billion, and most of my former colleagues are multi-millionaires by now). I'm an entrepreneur because I enjoy it. Although it is my contention that without at least the slim chance of getting rich, I couldn't justify it. Entrepreneurial wages and payoffs may be worse than Wall Street, but we're not talking NGO-level compensation here.

Chris Yeh · 2 years ago

Hey Ben, aren't I the one who always tells would-be entrepreneurs that there are many easier ways to get rich? Credit where credit is due, old friend! I didn't choose entrepreneurship to get rich--if I wanted to do that, I could simply have stayed at my first employer D. E. Shaw & Co. (David Shaw recently sold a 20% stake in the company to Lehman Brothers for $3 billion, and most of my former colleagues are multi-millionaires by now). I'm an entrepreneur because I enjoy it. Although it is my contention that without at least the slim chance of getting rich, I couldn't justify it. Entrepreneurial wages and payoffs may be worse than Wall Street, but we're not talking NGO-level compensation here.