I have been reading through the latest Forbes 400 list. The 400 richest people in America. Impressive wealth. I can’t imagine being that rich – it takes $1.3 billion of net worth to make the list this year. Some of the people on the list inherited their money but a lot of them made it themselves. Some of them actually started out pretty poor. The ones who are self-made seem to combine being very smart with hard work and a little bit of luck. These are people who see potential and are willing to take chances to make something of an opportunity.
What I find interesting and actually a bit surprising is how many of them made their money in software. I expect people to make money in hardware (Dell and Jobs are on the list) because that is tangible. Likewise retail (the Walton family for example), real estate, energy (oil, gas, coal), manufacturing and other conventional businesses all seem reasonable. But I’m not sure I ever expected people to become billionaires from software. Somehow it makes me think I must have missed an opportunity or three myself.
I wonder what these people are like in real life though. I’ve meet a couple of them but mostly those have been business situations. That means a somewhat more formal setting, conversation that is work related and applicable to what is going on at the moment. You can get more of an idea about people in a small meeting than watching them make a formal presentation but still it’s all artificial. I’ve had what I would consider to be a real conversation – the sort of informal one you’d have with ordinary people – with one of them – John Abele. Some of you will know that name because he has been involved with FIRST for a while and has been Chairman of FIRST for the last four years or so. I have to say I liked him. He seemed as much a regular guy as anyone. Really smart to be sure but someone I could comfortably talk to.
F. Scott Fitzgerald once wrote, the rich "are different from you and me." A character created by Ernest Hemingway replied, "Yes, they have more money." I wonder though how many of them are really different and how many just have more money? Two of the Forbes 400 I meet seemed pretty different. I’m not sure if they are different because they have money or if they have money because they are different. But clearly I don’t have enough of a sample to make a determination. I wish I could meet more of them to find out what they are really like.
Being at a business school, it’s practically expected that I always think of, “If I were a billionaire…” That way, if (err, when) I become a billionaire, I can hit the ground running. No need to research how to spend it. š
The ‘neat’ thing with software is that there’s next to no marginal cost. If I write a software app and sell 1,000 applications, my costs would be the same if I sold 5,000. Besides physical media and shipping, each additional unit is pure profit. (There are things like marketing and support, but they’re not unit costs.)
Iām not sure if they are different because they have money or if they have money because they are different.
That’s an interesting question, actually. I think it’s at least partially that they’re rich because they’re different. A normal person doesn’t sit down and write a platform for sharing MP3s (Shawn Fanning), a social networking site (Mark Zuckerberg), or an operating system (Bill Gates). Normal people sit on the couch, watch football, and drink beer. While I confess to sitting on couches at times, you’re not going to make it big if you don’t do anything.
What struck me after a few bios is that very few have what you might expect for background: came from a rich family, attended excellent business school, and went on to become rich. Some of the best businesspeople are people who dropped out of college. For a while every rich CEO I was reading about mentioned playing football as their major accomplishment in college.
The thing I wonder about is what you’d do with all that money. With $10 million, I’d want $20 million. And with $20 million I’d want $200 million. But there exists some sort of threshold where more money just piles up. I suppose if I had $900 million I’d want to hit the billionaire mark, but once you hit it, you might as well start with the philanthropy. If you’ve got that kind of money, you can take ten million for toys, ten million for a house, and keep a massive portfolio / use it to fund more businesses. But beyond maybe $100 million, I think I’d start to work on giving huge portions of it away. Or really, “investing” it in society. I don’t like the idea of writing huge checks, as much as giving lots of little donations. Like lots of scholarships. Maybe a library where needed. You leave a 100% tip at restaurants. You buy the homeless guy on the street an apartment. You fund the soup kitchen.
I think your whole view of the world would change, too. For one, you don’t have to work. Although I would have to, I think. When I got sick of starting businesses, I’d take all the weird jobs I always thought could be fun in some strange way, but that pay poorly — bus driver, janitor… I think you’d view them as short-term learning experiences. And how awesome would it be to pull up to your shift at Burger King in a Porsche? And there’s no need to worry about getting fired — you’d just be bored.
What surprises me most of all is that more and more of the billionaires are not just overseas, but in places generally thought of as poverty-stricken: India and China, for example.