This is why I think in the long run, the Chinese models will probably end up winning where it matters. You can get a cluster of relatively affordable 30 or 4090s, load up DeepSeek v4 and let it rip. Your only ongoing cost is power. We're already seeing companies recoil at the sight of their API bills from the frontier labs, for the price of 1 years worth of tokens you can host your own decent model that's 75% of the way there.
The "guardrails" are just Anthropic's attempt at building a moat. Guarantee they'll be seeking regulation around AI as well to ensure a form of regulatory capture. Guardrails, in this context, are useless. Anyone who's sufficiently motivated will either get around them, or will just run their own model on their home hardware. There's already tools that one can use to remove the guardrails present in open weight models.
Unironically the most simple (note; not easy) way to become a multi-millionaire. Do a trade in your 20s, leverage that into running your own trades business in your 30s, and have a >10m valuation business by your 40s.
I know enough of trade business owners to know that a business worth $10 million is rare.
Just using some back of the envelope math from numbers I found. On the high end a plumbing company is valued at 5x EBITA. A very very good plumbing company has a 20% net profit margin (and no debt, no corporate taxes or anything so that net income and EBITA are essentially the same), and a good plumbing company makes $350k in revenue per truck.
So a $10 million plumbing company would need to have 30 trucks, all with high performing employees. They’d need to bring in $10 million in revenue at best in class profit margins.
That’s a huge operation. Very few plumbing businesses owners will ever get to that level. There are 3 times as many doctors in the US as there are business owners with business that do the kind of revenue in the above example. If you’re capable of running an operation like that you can probably succeed at plenty of other things.
I am not in the business of valuing small businesses, but one thing that seems off to me is that an EBITDA multiple is usually also dependent on the overall size of the business. That is, a business with only $1 million in EBITDA may only be worth 3-4x that, while a business with $10 million in EBITDA might be worth 8-10x EBITDA, on the theory that larger businesses will be more stable and less likely to have key person or large customer risk (some examples, https://raincatcher.com/ebitda-valuation-multiples-by-indust...)
That said, I agree with your overall assessment that $10 million single-owner plumbing businesses are rare, for the simple reason that $10 million single owner anything is rare. If it were not rare, by definition you'd have a lot more folks worth $10 million (and, in this case, a lot more people lining up to be plumbers), and then $10 million would probably not be worth very much.
I’m not a plumber but from spending 20 minutes looking into it, it looks like the primary thing that changes the value multiple is how involved the owner is in the business (your key person risk). 5x was also on the high side of the multiples I saw.
The thing to keep in mind though is we’re talking small business, once you get to $10 million EBITA, you’re probably talking $50-$200 million in revenue and 200-500 employees. Thats firmly into mid sized business territory and I think revenue growth would be the or primary driver of the multiple.
From your source a 10x multiple would require very high revenue growth. That makes sense because you can get 10% average return with index funds, so you need to significantly beat that ROI.
I personally know 2 people that did this route and while I don't know about a $10m valuation, one is claims 900k income annually (roofing) and the other one must make 300k+. But both are in their 50's or 60's. This is midwest usa.
Look, I'm not from the US, I'm guessing maybe the pay for tradesmen isn't as high as in Australia. But what you're suggesting as a comparison involves a pretty high degree of variance and odds are stacked against you. You need to get into a good PhD program, get funding, compete against everyone else doing those things and so on.
The path I outlined in my OP is a _very_ common path that people take in Australia and not at all unrealistic. The barrier to entry is drastically lower, and the access to funding/capital is far easier.
They’re trained professionals. And we’ve sent demand through the roof by convincing everyone and their dog that they need therapy. Despite it seemingly doing way more harm than good for a lot of people who probably don’t need therapy.
I think they're more referring to the scalable service economy. Haircuts, which are a service, don't scale (unless we're talking about robotics or something).
This has been a meme in Chinese tech/startup world lately, as it's now the main problem they are trying to solve. They largely consider 1 to 100 solved, and have set their sights on the new goal.
Is that not the commonly cited example for commodity trading, whereas meaningful comparison of fundamentals to market capitalization only started much later?
In Australia one of the most common paths to wealth outside of owning property is literally taking up a trade as an apprentice, then after a couple of years beginning your own plumbing/electrician/brick laying/etc business.
That's still very highly celebrated. Interestingly enough, people with Mediterranean backgrounds also feel this way (there's lots of crossover here btw).
Owning your own business is one of the best things one can do in that culture. There's a story in a Taleb book about a Lebanese (I think?) man who went on to become one of the execs at Mobil or some other oil company, and his mother was still disappointed that he didn't own his own company.
Europe is obviously full of sole proprietor tradesmen, shop and restaurant owners etc. It's completely orthogonal to the apparent shortage of VC-funded startup unicorn hustle culture.
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