What Would You Do with $830 Million (or So)?

Here’s a piece in the New York Times today (mostly) about Max Levchin who was one of the co-founders of PayPal and became wealthy after it sold to eBay. It’s not only about him but about the larger phenomenon of young Internet entrepreneurs making lots of money and then heading back into the startup fray.

The piece in and of itself is mostly unremarkable: a fairly straightforward story about a man who’s already made “his money” but continues to work on similar projects without slowing down or changing direction. (One thing the article neglects to mention about Levchin is that he provided the original $1 million to start Yelp.) But there are many things that are interesting to me about the article and the larger culture that it now seems to arise out of.

The Times has written lots of stories over the past year or so about extreme wealth in America, with many of them coming out of Silicon Valley where lots of money is being made and changing hands. But the paper’s coverage is largely (and strangely) uncritical and basically makes a fetish out of wealth creation and accumulation. The wide-eyed tone of these pieces is generally: “gee, look at all the money these people seem to have.”

There’s a kind of throw away reference to philanthropy in the article: “He thought he would spend the time after the sale ‘exploring my inner self.’ Instead, he spent the better part of 12 months ‘feeling worthless and stupid’ and baffled by what he might do with the remainder of his life. He felt too young to retire or downshift a gear or two — and too restless to become a philanthropist.”

What’s interesting about this sentence and its “throw away” quality is that it’s a kind of metaphor for something more pervasive and disturbing to me.

America has historically been a place that immigrants have come for two primary reasons: 1) to escape persecution and/or 2) to make money. It’s interesting to note that Levchin and Google’s Sergey Brin are both Russian immigrants. (Levchin was born in Ukraine according to the article.)

It’s also true that many tycoons/titans/extremely wealthy individuals in America have historically donated money very generously to causes and public projects. Bill Gates and Warren Buffet are the latest examples of this.

Now I don’t know Levchin and don’t know what he does with his money. So I’m not being critical of him when I say that the culture today seems to instill virtually no sense of obligation or public duty in terms of “what to do with all that money.” There’s a disappearing culture of public “responsibility.” All sense of such obligations seems to be going away.

In some larger moral sense, “the public,” reduced to “the users” in Silicon Valley speak, has enabled the wealth by adopting the site/service/whatever. There should be some consciousness of this among entrepreneurs and a corresponding desire to “give back” or “help people.”

Google’s Brin and Page have set up a foundation and are tied to a bunch of valuable causes. Pierre Omidyar, of eBay, has essentially become a philanthropist. These are just top of mind. So there are examples of young entrepreneurs “doing good” with their money. But not enough unfortunately.

It could be that people in their 20s and early 30s who’ve made so much money – Facebook’s 23 year old founder Mark Zuckerberg is the next one set to become part of this new techristocracy – are just not yet mature enough to be fully aware of their connection and corresponding duty to others. It’s really a spiritual issue at bottom.

If I were in the position of one of these guys and never had to work again, which I’m not of course, I can tell you very clearly that I’d pay off my house and other expenses, put some money away for my kids’ college and then devote part of my life to some sort of effort to solve a public problem.

That of course doesn’t preclude working on private business ideas or starting companies and may well be compatible with it. But once your immediate needs are taken care of and you’ve had some time to indulge your fantasies about the vacation, the big car, the big house or writing the novel, it’s time to get back to work. And at least some of that work should be about helping other people.

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13 Responses to “What Would You Do with $830 Million (or So)?”

  1. Joe Zekas Says:

    If Bill Gates and Warren Buffet had followed the path you suggest they would have far less wealth to give back to helping people, and far less experience in how to give it wisely.

    The great American example of deeming wealth a public trust is, of course, Andrew Carnegie. Carnegie consciously devoted his immense skills for a period of his life to accumulating greater wealth to deploy at a later date to greater good.

    Who’s to say that Levchin and others aren’t following a similar path?

  2. Greg Sterling Says:

    You’re misunderstanding what I’m saying.

    I’m saying AFTER the wealth has been accumulated then it’s time to focus on the public good. Note what I said re Levchin in particular: “Now I don’t know Levchin and don’t know what he does with his money. So I’m not being critical of him . . .”

    Note that I don’t begrudge these guys their subsequent startups either: “That of course doesn’t preclude working on private business ideas or starting companies and may well be compatible with it.”

    I’m talking in part about the culture and attitudes that I observe. Carnegie is an archetypal example of what I’m describing should happen: Once he accumulated his wealth he turned toward philanthropy. I’m suggesting that the move is both a function of larger cultural values and individual “growth,” including recognition of the importance of helping others.

    We once had a culture that seemed to balance (at least somewhat) public good with individual wealth creation. I’m saying that the former has almost totally fallen away in favor of the latter.

  3. Will Scott Says:

    Greg,

    I think I’m closer to your age than Levchin’s (and closer to your wealth-level too).

    That said, my ultimate goal is to teach science or math, part-time, in an inner-city school. My goal for when I’ll be able to do this is a bit aggressive: by my 45th birthday (I’m about to turn 39).

    And I wonder, what does it take to be in tune with that philanthropic bent?

    I live in the New Orleans area where the lines of demarcation between rich / poor are much less clear than in the areas I’ve visited / lived in California. I’ve traveled in the developing world and seen the slums (albeit out the car window) of some of the world’s largest cities.

    All that said, as much as I want my own family taken care of, I want our family (humanity) taken care of – in the Bono / Sachs / Gore sense.

    I think I can best do that with 40-80 kids / year. Kids who don’t even know the next Parish (County to the rest of you), let alone the other side of the planet.

    $830 Million would allow that and then some.

    Let’s not forget that the 25-34 demo is still very much about “Me”. Where as the 35 + has a higher likelihood of being about “Us”.

    Thought-provoking piece – thank you,
    Will

  4. Greg Sterling Says:

    You’re welcome.

  5. frontporchforum Says:

    Thank you Greg. Makes me wonder if the quote attributed to Balzac is as applicable to the internet age as it was to the industrial age…

    “Behind every great fortune lies a great crime.”

    Another angle to consider… players in the dot.com world fall into three rough types… (1) tech, (2) money/business, and (3) service/community. As a guy with two engineering degrees and an MBA, I’d suggest that the first two types don’t spend a lot of time thinking the way you suggest… it’s more the third. But they’re in the minority in Silicon Valley.

    -Michael Wood-Lewis

  6. Jeremy Wright Says:

    Greg, I’ve always felt that once I’d made “my money” (which, depending on my mood) I’d put at 2-10M$ in the bank) that I’d spend most of my life solving “problems” that mattered. In the last 4-5 years I’ve been toying (with SME friends) on airframe redesign, atmospheric scrubbing (removing pollutants from the atmosphere), microlending and local/national politics.

    I’d like to think that once I’d made “my money” (if I ever do, I really don’t mind either way) that I’d take a year or so off and then dive into one or more of these projects part-time, while also spending more time with my family and helping out in the local community.

    I’d also love to advise startups (free of charge, ideally), go back and help out some of the communities that helped me grow as an entrepreneur and give much more aggressively than I do right now.

    Dunno, maybe I’m just an idealist, but the idea of simply diving into another startup and being totally consumed by it doesn’t appeal to me. I’d much rather leave a lasting impact on my family, my city and the world than to beat “those smug YouTube guys” (as they’re being called).

    ps: you don’t have comment notification on, so not sure I’ll get your follow up response… feel free to email me if the conversation here continues! 🙂

  7. AhmedF Says:

    “and too restless to become a philanthropist.” – what?! I guess it depends on your view of philanthropy – to some it is just about giving money, but to me, it is more about using your money to make a permanent improvement in people’s lives. And that requires serious thought (at least when it comes to scaling).

    I think the real question is – what happened? Even Buffet’s giving has been a relatively recent change of heart (due to his wife’s death).

    If anyone, we need more stories on that Duty Free guy 🙂

  8. Simon Says:

    Great post Greg. I completely agree with your observation. I had a long conversation with a VC last week about what VCs look for. I explained to him that my company is expected to give employment back to hundreds if not thousands of Americans next year. It was distressing to hear him tell me that he though our level of income had great potential but my company was a ‘cash’ business and not worth investing in. His justification was that the more it grows, the more humans I would need to employ, thus making it unscalable. The VC investment model looks for massive multipliers of profit and fails to support what is important for the American economy. Now, I’m an English guy that came to America 12 years ago. This is my home now and I feel a deep sense of community spirit and loyalty to this country. I love the fact that I’m creating jobs here and loath the current greed of the VC world and their seeming lack of economic balance to our communities. In my opinion the current investment system in Silicon Valley is detrimental to our long term progress as a nation. It’s creating youthful billionaires that lack spiritual/ karmic (dare i say it) community responsibilities. They are trained by their investors to replace people with server. If the lions share of our nations investors are channeling ridiculous all their into these companies, that can’t be good for America, can it?

  9. Joe Zekas Says:

    Greg,

    I think you’re the one who misunderstood my point rather than the other way around.

    You seemed to assume these guys had made their money and should stop focusing on accumulation. Carnegie felt he had a talent for acquiring wealth, and an obligation to deploy that talent for the accumulation of great wealth before turning to giving it away.

    Should Gates or Buffet have switched to charity much earlier? Or is society the better for their having pursued wealth accumulation much longer and more intensely that you might deem wise?

  10. Jeff Tadie Says:

    Hey Simon, an irony in what you say about VCs wanting the great multiplier effect of automation (rather than human talent) is the recent VC round of $55M for ReachLocal…which was, from the press clippings, substantially due to the fact they are scaling their sales force of hundreds of reps across the country to thousands.

    We’re launching a chain of walk-in retail SEM/marketing stores across the country, http://www.YourMarketingCorner.com

    We hope to avoid VCs altogether as we feel our business is all about live interaction with customers and want the flexibility to educate, explain and deliver packages that drive customer loyalty. Hard to automate that.

  11. Joe Zekass Says:

    Greg,

    Just accept it. You’re wrong, I’m right. I’m always right! I’m Joe ZEKASS!

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