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How to Make Wealth

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http://paulgraham.com/wealth.html

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How to Make Wealth
Want to start a startup? Get funded by Y Combinator.

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What Is A Startup

A startup is a small company that takes on a hard technical problem.

Economically, you can think of a startup as a way to compress your whole working life into a few years. Instea...

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The Difference Between Wealth And Money

  • Wealth is the collection of resources we can use. You can have wealth without having money. Money is a way of moving wealth, and in practice they are usually interchangeable.

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On The Creation Of Wealth

There is a limited amount of money in the world but wealth is unlimited. Wealth can be created through work and new ideas.

Companies aim to create wealth and so do you when you join on...

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Individual Power In The Creation Of Wealth

Joining a company is not the only way to create wealth. As long as you can create something that people want you can create wealth and for that you don’t need a company as an intermediary.

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To get rich...

...you need to get yourself in a situation with 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 mo...

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Technology As Leverage

Technology is technique, the way we do things. New technology has its value multiplied by all those who use it. Solving a technical problem that affects many gives you leverage.

Tec...

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The Role Of Big Companies In Technology Development

Big companies develop technology, but not quickly. Their size makes them slow and prevents them from rewarding employees appropriately.

They are better suited to develop technology ...

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How To Choose A Technology To Develop

Seek to solve the harder problems as they are more valuable and give your company an edge over the competition. It also increases the barrier to entry. That’s how hard it is for another comp...

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The Issues With Running Startups

  1. Your competitors decide how hard you work. And that’s often as hard as you possibly can.
  2. Payoff is only on average proportionate to your productivity. You might end up ea...

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Tips On Selling A Startup

  1. Minimize risks by selling your startup in the early stages, giving up upside for a smaller but guaranteed payoff. Unfortunately, big companies tend to be risk-averse, so it is easier to...

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Wealth and Power

Without the incentive of wealth, people would only work on projects that brought them personal satisfaction or social status, no one would want to develop mundane technologies like light bul...

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Observations On Startups

  • One advantage of startups is that they don't yet have any of the people who interrupt you. There is no personnel department, and thus no form nor anyone to call you about it.
  • Th...

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SIMILAR ARTICLES & IDEAS:

Hire Originals at Startups

  • To develop a resilient culture. An environment with people who think differently will put you into much better position to continuous innovation.
  • To anticipate market movemen...

Originals and Where to Find Them

  • Unsung Heroes. For each major innovation or movement, there are catalysts that fade into the background of what they create.
  • Insubordinates. It's important to triage troublemakers, but in doing so, don't miss an original in your midst.
  • Those who have been fired. The ones who do not worry about pleasing others or fitting in.
  • Inward-facing innovators. People that even though work privately, create extreme impact.

Adam Grant

Adam Grant

“Values over rules are key for encouraging originality.”

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Four Steps To Building Wealth

Four Steps To Building Wealth
  1. Don’t Be a Consumerist: keep your expenses as low as possible without sacrificing the quality of life. Spend money on things that yield lasting benefits.
  2. Have An Emergency Fu...

Benjamin Graham - Warren Buffett’s mentor

Benjamin Graham - Warren Buffett’s mentor

“Money isn’t making that much difference in how you and I live. We’re both going down to the cafeteria for lunch and working every day and having a good time. So don’t worry about money, because it won’t make much difference in how you live.”

Taking off

Startups take off because the founders make them take off.

Generally, startups take a push to get them going. Once they are on the track, they will usually keep going, but there is a s...

Recruiting users

Nearly all startups have to recruit their users manually. You can't wait for users to come to you. You have to go out and get them.

  • At least one founder will have to spend a lot of time on sales and marketing. Don't succumb to shyness and laziness.
  • Even if numbers may seem small at first, don't underestimate the power of compound growth. 
  • At some point, growth has to slow down. If the market exists, you can gradually switch to less manual methods.

Initial vulnerability

Almost all startups are vulnerable initially, like a newborn baby. It's harmless if know-it-alls dismiss your startup. Thinking "there's no way this tiny creature could even accomplish anything" is faulty thinking.

The danger is when you dismiss your startup yourself and fail to see the full potential of what you're building.

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