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16 lessons from Paul Graham on starting a startup

Paul Graham runs Ycombinator, a Silicon Valley based startup incubator. He previously started and sold Viaweb to Yahoo.

Paul’s essays have had a tremendous impact on how I think about projects, business, and life.

Below are just a few of my own reflections as I’ve read through a few of the posts on his website.

Perhaps these lessons might help someone on their own startup journey.

Lessons from Paul Graham’s Essays

• Create an easy way for people to pay you for it.
• Create something that “a small number of people want a large amount”.
• The initial customer should initially be a single human, not an enterprise. While it may be an enterprise in the future, the first delivery channel should be via solving a unique and specific problem for someone.
• In order to do this, keep a list of stuff that annoys you, stuff that irritates you… Use it as fuel for the company.
• As the founder, you should use the product all the time.
• The problem should be easy for the founder to solve.
• Consistency is the greatest predictor of success.
• Execution wins 99% of the time, and persistence wins all of the time. 
• You will be able to make headway and really push the ball forward because the project is fresh in mind. 
• An unscalable process can become a service-based business, which can later be productized. Service co’s are easier to brute-force into existence.
• The activation energy of a service co. is much much lower than a product co. 
• Remember, users have other important stuff to think about besides your co.
• This can be done via a niche community that you are in some way a part of. If you’re not part of any special-interest groups, find one on reddit, twitter, or facebook groups from which to create a spark of interest. 
• Get the MVP in front of users ASAP. Leverage ChatGPT. Today is a unique and rare time with this new technology.
• Think of your initial version not as a product, but as a trick for getting users to start talking to you after they initial icebreaker. The MVP is just a way to have those 2nd level conversations with users.
• Use a medium that lets you work fast and doesn’t require much commitment up front… such as spreadsheets, notion, performing a service, typeform, stripe, email, airtable, google sheets, convert kit, etc. Lookup “email first startups” for more ideas
• Be careful if you charge for the core component… you may charge for add ons.
• Use the scientific method to formulate hypotheses about the “killer feature” in the product.
• Conversations with users are your way of testing the hypothesis.
• Even if the project itself is a failure, you’ll still be better from it.
• You need at least one reference-able customer and sale. This will help with future projects and customer acquisition.
• Could even write about “following the PG Approach”… basically just following Paul Graham’s advice that he shared on building a startup.
• Refer to the “micro-saas” movement on making modest but adequate stream of money. 
• Pick a name that you buy the .com of.

Anti-advice: follies to avoid

• Avoid risk & ruin.
• Avoid anything that feels scammy or incurs undue financial, regulatory, or compliance risk.
• Avoid creating a company that relies on yourself or another’s “personal brand”.
• Don’t build something that is bad for people.
• Don’t try to build a marketplace, and definitely don’t try to build a 2-sided marketplace.
• Don’t worry about competition.

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How to Start a Startup: A Summary of Paul Graham’s Essential Advice

Starting a successful startup is no easy feat. It requires dedication, perseverance, adaptability, and a bit of luck. For over two decades, Paul Graham has been providing invaluable advice to founders through his essays on startups. He co-founded Y Combinator, one of the most prestigious startup accelerators globally.

Graham’s wisdom comes from his experience as a successful founder, advisor, and investor. His advice provides practical tips and key mindsets essential for startup success. Here is a summary of his most critical points for aspiring startup founders.

Developing a Startup Idea

Every startup begins with an idea. But how do you come up with an idea worth pursuing? Graham emphasizes starting with problems you face yourself:

“The very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing.”

Trying to solve problems faced by real people you understand is much better than chasing hypothetical customer needs or copycat ideas. Build things you wish someone would make for you.

Graham also advocates starting small:

“If you can make something a small number of users love, you’re doing exceptionally well.”

Don’t be discouraged if your initial product is basic. Release it quickly and improve iteratively based on user feedback. Small early successes with real users can grow into something big.

Assembling a Founding Team

For Graham, having co-founders is non-negotiable:

“You need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.”

Choose co-founders carefully based on complementary skills and shared vision. disputes between founders often kill startups. Vesting schedules can provide an orderly exit if needed.

Moving Fast in Early Days

Speed is critical in the early days. As Graham puts it:

“A startup is a company designed to grow fast.”

He advises focusing on quick growth over profitability initially:

“You make what you measure. If you focus on growing quickly each week, growth is what you’ll get.”

Release a basic v1 fast, recruit users manually, get feedback, and rapidly build v2. Don’t get bogged down trying to launch something perfect.

Relentless Improvement & Learning

“Keep pumping out features. Improve something in some way daily.”

Startups must build momentum through continuous small improvements and learning. Doggedly listen to user feedback and respond. Never stand still.

Budgeting Lean

In the early days, conserve cash zealously. As Graham puts it:

“Spend little. Get ramen profitable as fast as you can.”

Minimize salaries and expenses. Be scrappy and do things manually before you scale. Every dollar should go toward learning and growth.

Focus Intently on Customers

“Understand your users. Make a few users love you rather than lots ambivalent.”

Know your early adopters intimately. Obsess over delighting them. Give them incredible service. Make them raving fans before trying to expand.

Persevering Through Challenges

Startups face many hurdles. Things will go wrong. Grahams’ advice is:

“Don’t get demoralized. Don’t give up. Deals fall through.”

Persistence through difficulties is an entrepreneurial must-have. Stay determined but flexible. Keep your optimism in check to avoid disappointment.

Securing Funding Strategically

Graham cautions against both raising too much and too little funding:

“Take enough to get to the next step, but not so much you get locked into the wrong direction.”

Understand exactly how much runway you need to hit key milestones. When pitching investors, focus on conveying your expertise and traction.

Maintaining Focus & Priorities

Distractions are lethal for early stage startups with limited resources. As Graham warns:

“Avoid distractions, especially those that pay money like consulting.”

Stay obsessively focused on learning and growth. Don’t get enamored with quick revenue opportunities that detract from the core mission.

Key Mindsets for Founders

Some of Graham’s advice goes beyond tactical steps. He emphasizes cultivating an entrepreneurial mindset:

• Iterate rapidly:   “Most successful startups end up doing something different than they originally intended.”  Remain adaptive and willing to pivot.
• Create value:   “If you fix things that seem broken, you’ll build something of value.”  Focus on real user problems, not big ideas.
• Start small:   “Better to dominate a small niche than be marginal in a big one.”  Grow deliberately from a strong initial beachhead.
• Expect challenges:   “Assume the worst about machines and people.”  Mentally prepare for inevitable hurdles.
• Move fast:   “Economically, a startup is a way to work faster.”  Value speed, learning and flexibility over short-term gains.

How to Develop Startup Ideas People Want

Coming up with ideas for startups is challenging. You want to find an idea that is novel yet solves a real problem for people. Graham provides a framework for developing promising startup ideas systematically:

Look to your own experiences

Pay attention to problems and frustrations you face regularly in your daily life. The best ideas often arise from scratching your own itch.

Observe small inefficiencies

Don’t overlook problems that only mildly annoy you. Small frustrations that people have learned to tolerate present opportunities.

Notice gaps in products

Look for missing features, holes in user experiences, or needs not adequately addressed by current solutions.

Leverage your unique knowledge

Your specialized expertise in a domain exposes problems others may not see. Domain knowledge fuels creative ideas.

Talk to people with different experiences

Other people you interact with likely face frustrations you don’t. Discover unmet needs through conversations.

Pay attention to workarounds

When people devise clumsy workarounds, it often signals an underlying problem with current solutions.

Follow up on complaints

Don’t dismiss complaints as mere whining. Frustrations that make people complain out loud are promising starting points.

Zoom in on “hair on fire” problems

The best opportunities involve big pain points that people desperately want solved. Identify the most pressing frustrations.

Fall in love with the problem, not the solution

Ideas morph. Success comes from understanding user problems deeply, not having the perfect solution upfront.

By diligently following this approach, you can discover startup ideas that fulfill Graham’s criteria: addressing problems people care about that you can uniquely solve.

8 Keys to Building Habit-Forming Products

Incredible product design is crucial for startups to delight users. Graham emphasizes making your product compellingly habit-forming. Here are 8 techniques he advises:

Solve a frequent frustration

Choose a problem people encounter routinely. The more regularly the need arises the faster habits form.

Provide immediate value

The first interaction must provide tangible value upfront. Don’t make users wait for “aha” moments.

Keep it simple

Complexity is the enemy of habit formation. Distill your solution down to the absolute essentials.

Build for quick interactions

Habits require repeated small actions, not lengthy engagements. Target micro-moments.

Utilize reminders and prompts

Triggers bring users back frequently. Employ notifications, emails, texts, etc. appropriately.

Create variable rewards

Varying payoffs sustain interest. Provide surprises via personalized content, Easter eggs, etc.

Leverage natural drives

Tap into innately satisfying human drives: achievement, connection, competition, self-expression.

Continuously improve

Small ongoing enhancements delight users and fixes keep them loyal. Never stop iterating.

Building habit-forming products is challenging, but incredibly valuable. Utilize these techniques to hook users and create obsessive fans.

Choosing the Right Startup Funding Strategy

Raising startup funding is nuanced. Graham suggests being strategic about how much money to take and when:

Factor in your risk profile

Conservative founders should minimize early fundraising to maintain control. Aggressive ones can raise more upfront.

Only take what you need to hit milestones

Don’t raise too far ahead of your needs. Investors want to see progress between rounds.

Have a plan to be ramen-profitable fast

Target basic profitability quickly to extend runway. Then raise more once you’ve proven traction.

Build momentum before raising bigger rounds

The better your metrics, the better terms you can negotiate. Wait until you have strong traction.

Keep early rounds small

Raise small amounts initially while you find product-market fit. Startups need flexibility early on.

Only expand after nailing the model

Premature scaling wastes money. Prove repeatability before ramping up aggressive growth.

Maintain control of decision-making

Taking money from investors doesn’t mean letting them run the company. Protect autonomy.

Raising too much too fast can be as dangerous as raising too little. Match your fundraising pace to your progress and milestones.

How to Convince Investors to Back Your Startup

Fundraising is a skill. Graham explains how to craft a compelling pitch:

Demonstrate market opportunity

Show a big problem exists that consumers urgently want solved, that is better than current solutions.

Convey why you can win

Explain why your team and strategy will beat competitors. Lean on domain expertise.

Provide evidence of product appeal

Nothing persuades like traction. Showcase metrics, testimonials, usage data.

Talk specifically about users

Share specific stories of real users describing transformative experiences.

Emphasize exponential growth

Investors love hockey stick growth curves. Outline plans to scale aggressively.

Highlight your purpose

Communicate the “why” behind your startup. Mission and meaning matter.

Skip business model details

Models change. Focus pitches on problem, solution and traction, not monetization.

Demonstrate self-belief

Conviction is contagious. Investors back founders who believe in their startup.

Success ultimately depends on having a startup worth investing in. Refine your model until you can pitch with authentic conviction.

Choosing the Right Startup Metrics to Track

Tracking metrics helps startups learn and improve. Graham advises being thoughtful about what to measure:

User growth rate

This reveals how fast you’re acquiring users and if efforts are working. Compare week-over-week.

Customer lifetime value

Knowing value per customer helps determine sustainable pricing and profitability.

Monitoring churn shows if you’re delighting customers or need improvement.

Virality rate

For growth, analyze how users invite others. Tweak until you find viral fuel.

Engagement by feature

Spot which features drive stickiness and where users lose interest.

Funnel conversion rates

Pinpoint where users drop off in sign up, trials, purchases, etc. Optimize weak points.

Net Promoter Score

This measures user satisfaction and loyalty. High is 40+; low is below zero.

Customer acquisition cost

Calculate cost of acquiring each customer to guide marketing spend.

Carefully tracking metrics gives startups crucial feedback on what’s working, what’s broken, and where to focus energy. But don’t get analysis paralysis. Spend more time improving the product than analyzing.

Key Mindsets All Startup Founders Need

While doing valuable work is essential, mindset also plays a big role in startup success. Here are 5 founder mentalities Graham highlights:

Starting a business is a rollercoaster. Grit enables founders to power through the inevitable brutal periods.

Flexibility

Successful founders stay nimble and adaptable. They allow their ideas and plans to evolve.

Persistence through setbacks, rejections, and short-term disappointments is non-negotiable.

Sisu – This Finnish concept of stoic determination and courage drives founders through dark times.

Delayed gratification

Startups involve sacrifice. Founders must delay rewards for future gain.

Cultivating these attitudes provides stamina when efforts seem fruitless and resilience to rebound from failures. Build these mindset muscles intentionally.

Key Decisions When Structuring Your Startup

Startup legal structure has long-term implications. Graham highlights critical choices:

Corporation vs LLC

Weigh investor preferences, risks, taxes, and paperwork requirements. Many startups pick C-Corp.

State of incorporation

Delaware has startup-friendly laws but can be costlier. Consider home state too.

Vesting schedule

This governs how founder equity vests over time. Typically 4 years with 1 year cliff.

Stock option pool

You’ll need equity for employees. Set aside 10-20%.

Board composition

Decide arrangement of voting vs non-voting directors. Keep founders in control initially.

Share classes

Allows different rights for common shareholders, investors, employees.

Protective provisions

Give investors veto rights on key decisions to ease concerns.

Founder control

Maintain majority voting power when possible, especially early on.

Don’t just default to typical startup legal structures. Make deliberate choices tailored to your situation and goals.

When Does It Make Sense to Pivot or Persevere?

Pivoting requires effectively abandoning your idea to start fresh. Graham offers advice on when to stick it out versus changing direction:

Preserve core vision

Stay committed to the core problem you’re solving, even if solutions shift.

Question assumptions

Continuously test your hypotheses. Be ready to toss wrong assumptions.

Keep evolving based on feedback

Let customer input guide iterations. Don’t pivot impulsively based just on opinions.

Watch for exponential growth

If you see hockey stick adoption, persist. Slow linear growth demands change.

Consider opportunity costs

At some point, further optimization produces diminishing returns. Pivot before excessive sunk costs.

Be unsentimental

Judge ideas dispassionately. Don’t cling to solutions out of attachment.

Focus on trajectory

Isolate week-over-week trends. Pivot if metrics consistently worsen over time.

Change one variable at a time

Small iterative pivots are best. Don’t pivot product, market and business model simultaneously.

There are no fixed rules on when to pivot. Carefully weigh quantitative trends and qualitative learning to decide.

Key Startup Failures Modes to Avoid

Startups face many hazards. Here are 6 common failure modes Graham warns founders about:

Premature scaling

Expanding aggressively before nailing product-market fit will kill startups fast through waste.

Getting distracted

Lack of focus plagues startups. Shiny objects derail progress. Maintain ruthless prioritization.

Not listening to users

Failure to obsessively gather user feedback causes startups to build unwanted products.

Founder disputes

Infighting and lack of alignment corrodes startups from the inside. Ensure you have shared vision.

Running out of runway

Mismanaging cash burn forces startups to shut down or accept bad terms too soon.

Losing momentum

The graveyard spiral of stagnation must be avoided. Always make progress week-to-week.

Avoiding these pitfalls requires discipline, open communication between co-founders, and constantly learning from users. Be vigilant in order to dodge these startup killers.

Key Lessons from Paul Graham on Startups

• Ideas emerge from understanding people’s frequent frustrations
• Build for habit-forming daily use cases
• Match fundraising to reaching key milestones
• Obsess over delighting a small group of users first
• Continuously improve through rapid iteration
• Persist through the turbulent rollercoaster ride
• Maintain intense focus on learning & growth
• Cultivate grit, flexibility, tenacity and determination
• Pivot when necessary but preserve the core vision
• Avoid scaling prematurely or getting distracted

Paul Graham has mentored generations of founders, sharing hard-earned wisdom forged through experience. His advice provides invaluable perspectives for increasing the odds of startup success.

At the core, he emphasizes deeply understanding customer problems, assembling the right team, maintaining focus on learning and growth, and persisting through challenges. By internalizing his perspectives, founders give themselves the best chance at building companies that improve people’s lives.

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Partha Chakraborty

Partha Chakraborty is a venture capitalist turned entrepreneur with 17 years of experience. He has worked across India, China & Singapore. He is the founder of Tactyqal.com, a startup that guides other startup founders to find success. He loves to brainstorm new business ideas, and talk about growth hacking, and venture capital. In his spare time, he mentors young entrepreneurs to build successful startups.

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Paul Graham 101

There’s probably no one who knows more about startups than Paul Graham. Having helped thousands of startups through Y Combinator, the startup accelerator he co-founded, there’s a thing or two to learn from his essays. And Graham’s wisdom isn’t limited to startups either; his essays, read by millions, touch on education, intelligence, writing, society, the human mind, and much more.

I’ve read all of Paul Graham’s published essays (200+), ending up with enough notes to fill a book. This post tries to summarize the parts I’ve found most insightful and provide an accessible starting point for someone new to Graham.

Whenever possible, I’ve included links to his essays so you can easily go to the source when something interesting catches your eye. (Indeed, I recommend it - use this post as a gateway to the good stuff rather than a complete account in itself).

If my description of Graham’s idea sounds interesting, expect his essay to be 100x better. Always go back to the essays, where the ideas are fleshed out in full. This post is a very shallow overview.

Nevertheless, I hope this post inspires you to read Graham’s essays. They’re worth your time.

Boring disclaimer stuff:

• I made a Google Docs version of this post, in case that's easier to navigate.
• I’ve included all essays that were published before November 2021 ( Beyond Smart is the latest essay included). You can find a list of all essays on Graham’s site .
• The info included is based on my interests at the time of reading the posts. Had I read an essay a year earlier or later, I’d likely have included something else. Plus, with over 200 essays, I’ve just downright overlooked and forgot important stuff. Again, I recommend you explore the essays yourself.
• This post does NOT cover Paul Graham’s thoughts or essays on programming / coding. I’m simply not interested in or knowledgeable about that stuff, so I didn't think it fair to talk about it. He’s written a lot about coding, so if that’s your interest, explore his essays yourself.
• Finally, if something seem off or missing, let me hear about it and I’ll fix it: [email protected] / Twitter

Okay, let’s jump in.

Paul Graham on Startups

Unsurprisingly, many of Graham’s essays are startup-related. Given his experience on the topic, there’s a lot to unwrap, including some classics like “Ramen Profitable”, “Do Things that Don’t Scale” and “Maker’s Schedule, Manager’s Schedule”. Let’s start with an overview.

Startups in 13 sentences :

• Pick good co-founders.
• Launch fast.
• Let your idea evolve.
• Understand your users.
• Better to make a few users love you than a lot ambivalent.
• Offer surprisingly good customer service.
• You make what you measure.
• Spend little.
• Get ramen profitable.
• Avoid distractions.
• Don't get demoralized.
• Don't give up.
• Deals fall through.

For a detailed account, try How to Start a Startup . 

This section presents some of Graham’s core ideas around startups, including the principles above.

Essays mentioned in this section:

Startups in 13 sentences

How to Start a Startup

Startup = Growth  

How to Make Wealth

After Credentials

The Lesson to Unlearn

The Power of the Marginal

News from the Front

A Student's Guide to Startups

What Startups Are Really Like

Before the Startup

Hiring is Obsolete

Why to Not Not Start a Startup

The Hardest Lessons for Startups to Learn

Organic Startup Ideas

Six Principles for Making New Things

Frighteningly Ambitious Startup Ideas

Black Swan Farming

Crazy New Ideas

Why There Aren't More Googles

Ideas for Startups

Jessica Livingston

Startup FAQ

Earnestness

Relentlessly Resourceful

A Word to the Resourceful

The Anatomy of Determination

Mean People Fail

Why It's Safe for Founders to Be Nice

Design and Research

A Version 1.0

What Microsoft Is this the Altair Basic of?

Beating the Averages

Do Things that Don't Scale

Ramen Profitable

Default Alive or Default Dead?

Maker's Schedule, Manager's Schedule

Holding a Program in One's Head

How Not to Die

Disconnecting Distraction

Good and Bad Procrastination

Don’t talk to Corp Dev

The Top Idea in Your Mind

The Fatal Pinch

Startups are fundamentally different

Startups aren’t ordinary businesses. “ A startup is a company designed to grow fast ”, it is fundamentally different from your standard restaurant or hair salon. All decisions reflect this need to grow. Indeed, Graham says : “If you want to understand startups, understand growth”.

“Economically, you can think of a startup as a way to compress your whole working life into a few years. Instead of working at a low intensity for forty years, you work as hard as you possibly can for four. This pays especially well in technology, where you earn a premium for working fast.” (From How to Make Wealth )

Startups are also vastly different from your school experience. Your tests at school can be hacked, but success at startups is unhackable. At school, you learned that the way to get ahead is to perform well in a test, so you learned how to hack the tests . But in startups, you cannot really trick investors to give you money; the real hack is to be a good investment. You cannot really trick people to use your product; the real hack is to build something great. Valuable work is something you cannot hack.

So you don’t need to be a good student to be a good startup founder. In fact, if your opinions differ from those of your business teacher, that may even be a good thing (if your business teacher was excellent in business, they’d probably be a startup founder). In a startup, credentials don’t really matter - your users won’t care if you went to Stanford or got straight A’s. (Related: A Student's Guide to Startups ) . 

Starting a startup is fundamentally different from a normal job , too. In a startup, experience is overrated . The one thing that matters is to be an expert on your users and the problem; everything else can be figured out along the way. “The most productive young people will always be undervalued by large organizations, because the young have no performance to measure yet, and any error in guessing their ability will tend toward the mean.” (From Hiring is Obsolete ). By starting a startup, you can figure out your real market value.

So, startups are fundamentally different from other companies, school and “normal work”. But why don’t more people start them? Graham has listed common excuses (and rebuttals) in Why to Not Not Start a Startup .

Startups are wealth-creation machines

So, startups are fundamentally different. You cannot really understand them by looking at other things. But what are they then?

Startups are one of the most powerful legal ways to get rich. If you’re successful, you can, in a few years, get so rich you don’t know what to do with all the money. But perhaps even better than the money is all the time a successful founder saves:

“Economically, a startup is best seen not as a way to get rich, but as a way to work faster. You have to make a living, and a startup is a way to get that done quickly, instead of letting it drag on through your whole life.” (From The Hardest Lessons for Startups to Learn ) 

In How to Make Wealth , Graham shows why startups are optimized for wealth-creation. (And for clarity, wealth is different from money: wealth is what people want, while money is merely the medium of exchange to get it. So a startup doesn’t actually create money, it creates wealth; in other words, it creates something people want, and people give money for that. This distinction may seem small but it’s important: “making money” seems really complicated while “making something people want” is far easier.)

Why are startups optimized for wealth-creation?

Leverage: If a startup solves a complex problem, it only needs to solve it once, then scale it infinitely with technology. So a startup, once it cracks the code, can create a lot of wealth rapidly. 

Measurement: The performance of every employee in a startup is easier to measure than the performance of every employee in a big organization. So if you perform well and create wealth, you’re in a better position to get paid according to your value in a startup.

More detail in How to Make Wealth . 

Good startup ideas come from personal need and they don’t sound convincing

While there are many ways you could get startup ideas, Graham has observed that most successful startups were founded because of a personal need. Fix something for yourself, and don’t even think that you’re starting a company. Just keep on fixing the problem until you find that you’ve started a company. (From Organic Startup Ideas )

He’s also observed that good ideas tend to come from the margins - places you’d not expect. The idea is often very focused - like a book store online or a networking site for university students - so it isn’t obvious how it would change the world; we dismiss the idea until it becomes obvious.

So, good ideas don’t initially sound like billion-dollar ideas - what even is a billion-dollar idea? Certainly not something we could recognize in advance. Indeed, the initial idea is usually so crude and basic that you’ll ignore it if you’re looking for a billion-dollar idea. The really big ideas may even repel you - they are too ambitious. 

A good idea doesn’t sound convincing because, for no one to have already taken it, it must be a bit crazy or unconventional. “The most successful founders tend to work on ideas that few beside them realize are good. Which is not that far from a description of insanity, till you reach the point where you see results.” (From Black Swan Farming )

Indeed, when someone presents a crazy new idea to you, and if they are “both a domain expert and a reasonable person”, chances are that it’s a good idea (even if it sounds like a bad one). “If the person proposing the idea is reasonable, then they know how implausible it sounds. And yet they're proposing it anyway. That suggests they know something you don't. And if they have deep domain expertise, that's probably the source of it.”

Graham also emphasizes that it is not the idea that matters, but the people who have them. 

Oh, and "Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats." ( Graham quoting Howard Aiken )

Nevertheless, if you’re in need of inspiration, Graham has some good starting points for coming up with startup ideas.

Founders make the startup

“ The earlier you pick startups, the more you’re picking the founders. ” Throughout his essays, Graham emphasizes the importance of the founders. More than anything - target audience, trends, TAM… - a startup’s success is influenced by the founders. (Obviously, the other employees matter, too. But founders are special, they are the heart and soul of the startup.)

“Cofounders are for a startup what location is for real estate. You can change anything about a house except where it is. In a startup you can change your idea easily, but changing your cofounders is hard.” (from Startups in 13 Sentences ). 

Indeed, Graham notes that most successful startups tend to have multiple founders .

Earnestness and resourcefulness make a good founder

If the founders are the most important factor for a startup’s success, it is critical to understand what makes a good founder. Indeed, this is the topic of numerous essays.

According to Graham, a good founder is:

“The highest compliment we can pay to founders is to describe them as ‘earnest.’”

An earnest person does something for the right reasons and tries as hard as they can. The right reason usually isn’t to make a lot of money, but to solve a problem or satisfy an intellectual curiosity. This is why it’s important to figure out your intrinsic motivation or embrace your nerdiness (both of which we’ll discuss later).

“A couple days ago I finally got being a good startup founder down to two words: relentlessly resourceful.”

Relentless = make things go your way

Resourceful = adapt and try new things to make things go your way

Relentlessly resourceful people know what they want, and they will aggressively try things out and “hustle” until they get what they want. Consider the Airbnb founders and selling cereal .

Graham noticed a pattern around resourcefulness: when he talks to resourceful founders, he doesn’t need to say much. He can point them in the right direction, and they’ll take it from there. The un-resourceful founders felt harder to talk to. 

It is not the most intelligent who succeed, but the most determined . Smart people fail all the time while dumb people succeed just because they decide they must. 

"Make something people want" is the destination, but "Be relentlessly resourceful" is how you get there.

Oh, also: good founders aren’t mean. Mean People Fail and can’t get good people to work with them while startup founders who are nice tend to attract people to them .

Make something people want

If there’s one piece of startup advice to take from Graham, it’s this: “Make something people want”. (As you may know, this is also Y Combinator’s motto)

Yes, it is obvious. But it’s also pretty much the only thing that matters in a startup: if you just make something people want, you’ll attract users, employees, investors, money. “ You can envision the wealth created by a startup as a rectangle, where one side is the number of users and the other is how much you improve their lives .”

Indeed, many early-stage startups are “ indistinguishable from a nonprofit ”, because they focus so much on helping the users and less so on making money. Funnily, this approach makes them money in the long term.

“In nearly every failed startup, the real problem was that customers didn't want the product. For most, the cause of death is listed as ‘ran out of funding,’ but that's only the immediate cause. Why couldn't they get more funding? Probably because the product was a dog, or never seemed likely to be done, or both.” (From How to Start a Startup ) 

So how do you make something people want? Get close to users, launch fast, then iterate.

Get close to users

“The essential task in a startup is to create wealth; the dimension of wealth you have most control over is how much you improve users' lives; and the hardest part of that is knowing what to make for them. Once you know what to make, it's mere effort to make it, and most decent hackers are capable of that.” (From Startups in 13 Sentences ) 

“You have to design for the user, but you have to design what the user needs, not simply what he says he wants. It's much like being a doctor. You can't just treat a patient's symptoms. When a patient tells you his symptoms, you have to figure out what's actually wrong with him, and treat that.” (From Design and Research )

Since you may not precisely know who your users are and what exactly are their needs before you launch, it’s useful to yourself be a user of your product. If you use and like the product, other people like you may, too. This is why successful startups tend to arise from personal need.

Launch fast, then iterate

“The thing I probably repeat most is this recipe for a startup: get a version 1 out fast, then improve it based on users' reactions.”

The importance of iterations is highlighted in “ A Version 1.0 ”, “ What Microsoft Is this the Altair Basic of? ” and “ Early Work ”, among others. (If you understand the importance of iterations, then you understand that you must release a version 1 as soon as possible, so you can start iterating sooner.)

Some ideas from these essays:

• Don’t be discouraged by people’s ridicules of your early work. Just keep on iterating. (There will always be Trolls and Haters . Don’t mind them.)
• Don’t compare your early work with someone’s finished work. (If you wanted to compare your work to something, it’d optimally be a successful person’s early work. But people tend to hide their first drafts, precisely because they don’t want to be ridiculed.)
• When in doubt, ask: Could this really lame version 1 turn into an impressive masterpiece, given enough iterations?

Iterating and getting through the lame early work never gets easy. But Graham has listed some useful tips to trick your brain in “ Early Work ”.

Execution is a pathless land, but there is advice to be given

Mostly, a startup shouldn’t try to replicate what other startups do:

“If you do everything the way the average startup does it, you should expect average performance. The problem here is, average performance means that you'll go out of business. The survival rate for startups is way less than fifty percent. So if you're running a startup, you had better be doing something odd. If not, you're in trouble.”

Startup execution is a pathless land; there’s no formula to follow, even though many blog posts and thought leaders want you to believe otherwise. This is why it’s so important for the founders to be earnest and relentlessly resourceful: they need to figure it out themselves.

Even though there isn’t a connect-the-dots type of way to succeed in the startup world, Graham has observed hundreds (if not thousands) of startups from a very close distance, so he has identified general principles that help:

Do Things that Don’t Scale

“Think of startups not only as something you build and you scale, but something you build and force to scale.” 

“Startups take off because the founders make them take off. If you don’t take off, it’s not necessarily because the market doesn’t exist but because you haven’t exerted enough effort.”

At some point, your startup may grow on autopilot. But before you’re there, you need to do seemingly insignificant things, like cold emailing potential clients, speaking to people at conferences or offering “ surprisingly good customer service ”.

The “Do Things that Don’t Scale” advice helps us remember that building something great is only one part of the equation; we must also do laborious, unscalable work to get initial growth, no matter how great the product is.

Get Ramen Profitable

Ramen profitability = a startup makes just enough to pay the founders’ living expenses.

“Ramen profitability means the startup does not need to raise money to survive. The only major expenses are the founders’ living expenses, which are now covered (if they eat ramen).”

Significance: Ramen profitability means that the startup turns from default dead into default alive . The game changes from “don’t run out of money” into “don’t run out of energy”. While running a startup is never not stressful, reaching ramen profitability does take a weight off your shoulders.

To increase your startup’s chances of succeeding, increase your chances of survival; to increase your chances of survival, reach ramen profitability.

Maintain a Maker’s Schedule

To get into the making/building mindset, you need big chunks of time with no interruptions. You can’t build a great product in 1-hour units in-between meetings; “that’s barely enough time to get started”. If you think of the stereotypical coder, they prefer to work throughout the night, probably because no one can distract them at 3am.

“When you're operating on the maker's schedule, meetings are a disaster. A single meeting can blow a whole afternoon, by breaking it into two pieces each too small to do anything hard in.”

If you want to create great stuff, you need to be mindful that a manager and a maker operate on very different schedules. If you’re the manager, try to give big blocks of time for the maker; if you’re the maker, try to schedule all meetings on two days of the week so the rest is free for creating.

Holding a Program in One's Head expands on some of these ideas.

What not to do

Graham has also figured out something about the inverse: what not to do. Or, as he puts it, “ How Not to Die ”. 

• Keep morale up (don’t run out of energy)
• Don’t run out of money (for example, hire too fast)
• Don’t do other things. The startup needs your full attention. ( Procrastination is mostly distraction . Avoid distractions and you’ll avoid procrastination. Note, though, that you can procrastinate well .)
• Make failing unbelievably humiliating (to force you to give your everything)
• Simply don’t give up, especially when things get tough

To summarize this part on execution, here are Paul Graham’s Six Principles for Making New Things : 

• Simple solutions
• To overlooked problems
• That actually need to be solved
• Deliver these solutions as informally as possible
• Starting with a very crude version 1
• Then iterating rapidly

The more you focus on money, the less you focus on the product

Graham doesn’t often talk about money, and when he does, I get this weird feeling. It’s like “sure, we’re talking about money... but I’d rather we talk about the product instead.” Let me explain:

In Don’t talk to Corp Dev , Graham says all a startup needs to know about M&A is that you should never talk to corp dev unless you intend to sell right now. So it’s better to focus on the product until you absolutely must think about M&A.

In The Top Idea in Your Mind : “once you start raising money, raising money becomes the top idea in your mind”, instead of users and the product. So your product suffers.

When you get money, don’t spend it . “ The most common form of failure is running out of money ”, and you can avoid that by not spending money, not hiring too fast.

One instance when you should think about money is if your startup is default dead . “Assuming their expenses remain constant and their revenue growth is what it has been over the last several months, do they make it to profitability on the money they have left?” If you know you’re default dead, your focus quickly shifts to turning the ship around and reaching profitability; avoiding The Fatal Pinch .

In the long term, it’s obvious that the company that focuses more on the users and product beats the company that obsesses over investors and raising money.

Paul Graham on What to work on

What to work on is one of the most important questions in your life, along with where you live and who you’re with. While Graham’s treatment of this question definitely leans on the side of startups, you can also view his ideas from the perspective of side hustles, hobbies, projects (in or outside of a career) and so on.

What Doesn't Seem Like Work?

Why Nerds are Unpopular

Fashionable Problems

How to Do What You Love

You Weren't Meant to Have a Boss

A Project of One's Own

Great Hackers

Follow intrinsic motivation

If it’s something you’re intrinsically motivated about, that’s something where you have infinite curiosity, and that’s something you’ll eventually do well in. (Later, we’ll discuss how curiosity leads to genius.)

“ If something that seems like work to other people doesn't seem like work to you, that's something you're well suited for. ” Put another way: the stranger your tastes seem to other people, the more you should embrace those tastes. 

Because of the internet, you can make money by following your curiosity. This is a revolutionary shift : in the past, money was gained from a boring job, and you satisfied your curiosity during the weekends. But now, you can make real money just by following your curiosity, whether it’s from a startup or a YouTube or Gumroad account.

The two greatest powers in the world - money and curiosity - are getting more aligned each day. There has never been a greater time to follow your intrinsic motivation. Now, the important question is what to work on, not how to make money, because if you figure out an answer to the former, the latter question will answer itself. 

Turns out, nerds are far closer to figuring out the answer than non-nerds. (Nerds - or earnest people - do something for the sake of it, not to become popular or rich). Nerds in high school tend to be unpopular , not because they couldn’t figure out how popularity works and game the system, but perhaps because they don’t really want to be popular. That makes high school a tough time for them, but real life becomes much more fulfilling: while others are stuck in the popularity/status rat race and compete to work on Fashionable Problems , the nerds can follow their own curiosities, thus work on stuff no one else is working on, thus discover new things, thus succeed. Plus, they have a much nicer time doing so.

A question to figure out your intrinsic motivation and what to work on: “What are you a big nerd on?”

Let’s end this part with a sharp and practical observation from “ How to Do What You Love ”: 

“To be happy I think you have to be doing something you not only enjoy, but admire. You have to be able to say, at the end, wow, that's pretty cool. This doesn't mean you have to make something. If you learn how to hang glide, or to speak a foreign language fluently, that will be enough to make you say, for a while at least, wow, that's pretty cool.”

You should be working on your own projects

The logical conclusion of following your intrinsic motivation is that you should be working on your own projects (or other people’s projects where you have significant ownership). 

You may have noticed that projects you start on your own feel fundamentally different from tasks handed to you by a manager or teacher. And there’s a reason for that: “ You Weren't Meant to Have a Boss ”.

In that essay, Graham makes the argument that even though working in a large organization is the default now, it’s not how we evolved to work. A large organization is similar to the modern diet - consisting of pizza, candies and other processed foods - while a small group (like a startup) is the hunter-gatherer diet. One is easy and safe and appealing in the short term (but terrible over time) while the other is hard and unappealing, but more natural and better in the long term.

While working in smaller groups makes you happier and gives you more freedom, it’s also the way to do great work, as Graham argues in “ A Project of One’s Own ”. If a project feels like it’s your own, you have motivation and skin in the game that you don’t otherwise have. You’re much more willing to obsess over the details and make something great.

Work on things that you want to take over your life

“It's a mistake to insist dogmatically on ‘work/life balance.’ Indeed, the mere expression ‘work/life’ embodies a mistake: it assumes work and life are distinct. [...] I wouldn't want to work on anything I didn't want to take over my life.” (From “ A Project of One’s Own ”)

For startup founders, the startup is their life - there is time for little else, even sleep. Why would they willingly work 80+ hours a week and eat nothing but ramen , with no guaranteed financial reward, when they could work 40 hours a week and eat lobster at a big company? Because the startup is a project of their own, and they have - hopefully consciously - decided it’s something they want to take over their lives. “People will do any amount of drudgery for companies of which they're the founders.”

How do you know if something has taken over your life? Here’s a simple test: Do you think about it in the shower? 

In “ The Top Idea in Your Mind ”, Graham argues that if something is really important to you, then your mind will think about it subconsciously and ideas will appear in your head whilst walking or showering. Indeed, if this does not happen, you’ll have trouble doing great work - that’s your sign to reconsider what you work on.

Paul Graham on Thinking & Decision-making

Startup founders are an interesting group of people: they seek to change something about the status quo, which means they see something non-obvious that could be improved and they believe in that improvement so much that they’re willing to work 80+ hours a week and eat ramen until their vision becomes a reality.

What drives them? It can’t be just money - there are so many founders who’ve already gotten rich, and they still work in their companies and start new startups. And why aren’t there more founders? What qualities are there in a founder that you don’t find in non-founders?

By trying to understand this group of people, Graham has discovered a lot about thinking, decision-making, and the human mind in general.

The Four Quadrants of Conformism

The Two Kinds of Moderate

Orthodox Privilege

Novelty and Heresy

How to Disagree

How to Think for Yourself

The Bus Ticket Theory of Genius

Is It Worth Being Wise?

Beyond Smart

How to Work Hard

Mind the Gap

Being a Noob

How to Be an Expert in a Changing World

How Art Can Be Good

Taste for Makers

The Island Test

Independent-mindedness vs conventional-mindedness

Independent-minded people prefer to think through things for themselves, and because of this, they may seem weird to conventional-minded people (who follow the average and agreeable). Hence, it is almost a tautology to say that new ideas and new startups are the work of independent-minded people.

In The Four Quadrants of Conformism , Graham goes a bit deeper and differentiates between aggressive and passive forms of independent-mindedness and conventional-mindedness. Notably, aggressively independent-minded people tend to question existing norms and rules, working against them, while aggressively conventional-minded people work to maintain the norms and rules. There’s a clash between the groups, so it’s important for independent-minded people to “be protected”, be given space to innovate, break norms and come up with new ideas and things. (These “protected areas” are important for innovation. You could think of Silicon Valley as one.)

If you know someone is conventional-minded, you know a lot about them. Their beliefs and actions match the average, and you know what the average is. Whereas, if someone is independent-minded, you don’t really know them; they think things through for themselves, and thus they may arrive at conclusions you can’t imagine. In fact, on one issue, independent-minded people can be in the political left, and on another issue, in the political right; they are politically moderate by accident . A conventional-minded person is more likely either in the left or right for every issue.

Conventional-minded people have what Graham calls Orthodox Privilege : it seems to them that everyone is safe to express their opinions because everything they think about is conventional and uncontroversial. “They literally can't imagine a true statement that would get them in trouble.”

So if you do express your controversial, new ideas to them, they may regard them as untrue heresy. Novelty and Heresy go hand-in-hand. “It doesn't seem to conventional-minded people that they're conventional-minded. It just seems to them that they're right.” To them, anything that is unconventional is likely to be false; to the independent-minded, anything too conventional seems suspicious. So if you express your independent-minded thoughts publicly, you may want to learn How to Disagree .

In How to Think for Yourself , Graham shows there are some types of work that you can only do well in if you think differently from others: Scientists aim to discover something new, so being conventional-minded won’t get you very far; an investor who thinks exactly like everyone else will not get rich; a startup founder who shares the same ideas as everyone else won’t build great new stuff. You need to be right and most other people need to be wrong.

Of course, not every type of work is like this. You can be a good administrative worker without thinking differently from others; it’s not essential that everyone else is wrong. Generally, independent-minded people want to work in areas where newness is rewarded.

In How to Think for Yourself , Graham shares some exercises for training your independent-mindedness muscles.

Genius comes from infinite curiosity, intelligence, hard work and courage

We tend to think some people are just blessed with genius, that it’s an innate thing. But Graham has taken this black box apart and argues genius is something you can influence.

“ Those who do really great work have an unexplainable obsession about something ”. Infinite curiosity leads to surprising discoveries, simply because you think about and play with the topic more than any rational person would expect. And all that thinking and tinkering feels like play to you (but looks like work to others) because an obsessive interest “is a proxy for ability and a substitute for determination”. 

Intelligence

There’s a difference between wisdom and intelligence . If wisdom means a high average outcome across all outcomes, intelligence is a spectacularly high outcome in a few situations. If we think of “genius”, it tends to fit the latter description: you can be a terrible fool about everything else, but if you discover relativity, you’re a genius. 

High curiosity in something + high intelligence in that domain are a great beginning. But not necessarily enough to discover important new ideas. As Graham elaborates in Beyond Smart , there are smart people, and then there are those who have important new ideas; “There are a lot of genuinely smart people who don’t achieve very much.”

Intelligence and curiosity are perhaps necessary to become a genius, but not sufficient; you also need hard work to uncover new ideas and courage to pursue them, as developing something new challenges your ego (and irritates the conventional-minded people).

Hard work and courage

Even when you’re undeniably brilliant, you cannot avoid hard work. (Indeed, just knowing How to Work Hard can get you closer to sheer brilliance.) Hard work in itself isn’t the goal, though. Output matters (output being, in this context, important new ideas): “ If I paint someone's house, the owner shouldn't pay me extra for doing it with a toothbrush .”

When you start to do or learn anything new, you’ll Be a Noob at it first. But “the more of a noob you are locally, the less of a noob you are globally.” In How to Be an Expert in a Changing World , Graham notes that if your opinion was right once, it may not be right anymore because the world has changed. So it takes intellectual humility and courage to update your opinions to the new world, instead of clinging to the opinions you formed in the old world.

Putting together Graham’s thoughts, it seems like genius is not an innate quality that you can’t influence, but a combination of multiple qualities like curiosity, intelligence, hard work and courage.

Good taste is necessary for good work

Good taste is a quality related to genius. Some people seem to have an “eye” for design or an “ear” for music, but Graham shows, again, that taste is something you can develop.

”Taste is subjective” isn’t true, and you see it as soon as you start designing or writing or building things. There’s good art and there’s bad art , good writing and bad writing, nice design and less nice design. Saying “taste is subjective” is lazy and won’t help you improve your work.

So if you want to create better stuff, you need to realize that you may have poor taste and you need to develop good taste, normally by getting better at your craft or studying those who have good taste. “Good work happens when you see something is ugly, understand why, and have the ability to fix it into something beautiful.” (From Taste for Makers )

So what is good art or design? Graham gives a list (I redacted a few points):

• Solves the right problem
• Often slightly funny
• Uses symmetry
• Resembles nature
• Often strange
• Often daring 

Good work isn’t necessarily the most popular work; “There are sources of error so powerful that if you take a vote, all you're measuring is the error.” But if you do good work, eventually, people will appreciate it.

Is your argument testable?

If you read Graham closely, you notice that often when he makes an argument, he immediately considers what kind of test is needed to validate the argument. He’s thinking like a scientist: only accepting an argument if it’s testable.

Watch him do it in How to Do What You Love :

 “To be happy I think you have to be doing something you not only enjoy, but admire. You have to be able to say, at the end, wow, that's pretty cool. This doesn't mean you have to make something. If you learn how to hang glide, or to speak a foreign language fluently, that will be enough to make you say, for a while at least, wow, that's pretty cool. What there has to be is a test.”

And in The Island Test , he presents a test to figure out what you’re addicted to: 

“Imagine you were going to spend the weekend at a friend's house on a little island off the coast of Maine. There are no shops on the island and you won't be able to leave while you're there. Also, you've never been to this house before, so you can't assume it will have more than any house might.

What, besides clothes and toiletries, do you make a point of packing? That's what you're addicted to.”

In some cases, the way to make a point (and make it practical) is to devise a test. In How to Start a Startup , Graham explores what makes a good startup employee. He could just say “they are determined and will do whatever it takes”, but that’s not a testable argument, and not very practical for someone who’s hiring. 

Instead, Graham devised a test: “Could you describe the person as an animal?” If you could say “Jaakko is an animal” and don’t laugh but rather take the description seriously, that’s the person you want in your startup. An animal of a salesperson simply won’t take no for an answer; an animal of a programmer will stay up all night to finish the code; an animal of a PR person will pitch every newspaper in the city until your startup gets featured. 

Fun evening activity: Go through an essay you’ve written and see if each of the arguments you make is testable.

Paul Graham on Writing

Paul Graham is known for incredibly clear and simple writing. Each of his essays is easy to understand, no matter how complicated the topic. 

You can learn a lot about writing just by reading Graham, and doubly so if it’s an essay on the topic of writing. Fortunately for us, there are many such essays.

For starters, Graham has summarized his writing philosophy in Writing, Briefly . It’s an entire writing course, condensed into one (long) sentence. I recommend you read it now before continuing below.

Writing, Briefly

Writing and Speaking

The List of N Things

Persuade xor Discover

General and Surprising

The Age of the Essay

How to Write Usefully

Write Simply

Write Like You Talk

Economic Inequality

Writing is how you get ideas, develop ideas and improve your thinking

If you read Writing, Briefly , as you should, you noticed this:

“I think it's far more important to write well than most people realize. Writing doesn't just communicate ideas; it generates them. If you're bad at writing and don't like to do it, you'll miss out on most of the ideas writing would have generated.”

From an idea perspective, being a good writer is better than being a good speaker. You need good ideas to have good essays, but you can do a good speech without saying much at all. Though speeches can be better for motivation and personal touch, writing is better for ideas.

Don’t write to persuade, write to discover something new and useful

There are roughly two types of essays: those where you know exactly where it’s going before you start, and those where you have no clue where it’s going. 

We’re taught to write the first type of essay in school: we write the thesis statement in the introduction and ensure that the rest of the essay supports that thesis. We’re writing to persuade the reader, so that they’ll accept our thesis. A listicle is equivalent to that type of essay, and writing one doesn’t help you discover new ideas or knowledge. “ I worry that if I wrote to persuade, I'd start to shy away unconsciously from ideas I knew would be hard to sell .”

Paul Graham is a supporter (and practitioner) of the second type, writing to discover. In his mind, an essay is supposed to be two things: new and useful.

An essay should be new

If an essay doesn’t share something new or surprising, what good is it? When we write to discover, we want to surprise ourselves and the reader. Most surprising = furthest from what people currently believe . 

But just anything new doesn’t cut it. There’s constantly new info and news, and that doesn’t make a difference in our lives. What we should aim for is something General and Surprising . “Ordinarily, the best that people can do is one without the other: either surprising without being general (e.g. gossip), or general without being surprising (e.g. platitudes).” If you can do some combination of general and surprising (at least to some people), you’ve got a winning essay.

“ Essays should aim for maximum surprise. ”

An essay should be useful

What does it mean for an essay to be useful? Graham offers some ideas in How to Write Usefully : 

• When something is useful, it’s correct. If it’s merely persuasive, it could be false. “Good writing should be convincing, certainly, but it should be convincing because you got the right answers, not because you did a good job of arguing.” (From The Age of the Essay ) 
• “Useful writing makes claims that are as strong as they can be made without becoming false.”
• “Useful writing tells something important that people didn’t already know” (again, going back to the “surprise” idea)

Good writing is rewriting (in particular, rewriting to make the text simpler)

Just like in anything involving skill, the way to get better is through iterations. Good writing is rewriting . Because we can’t see someone’s drafts and rewrites, we compare their end product to our Early Work , then get discouraged looking at the gap. Instead, we must appreciate that something bad now could become great, if we iterate enough. 

“My strategy is loose, then tight. I write the first draft of an essay fast, trying out all kinds of ideas. Then I spend days rewriting it very carefully.” (From How to Write Usefully ) 

And when you rewrite, your main goal is to make your writing simple . Most of the time, the simplest words and simplest sentences are better than decorative, complicated words. Your purpose is to convey an idea, not to use fancy words and make the reader “do extra work just so you can seem cool.”

In Write Like You Talk , Graham shares a trick for writing simply: explain your ideas to a friend by talking; then, use that transcript as a draft for your essay. The spoken and written version of your idea should be as close to each other as possible. “If you simply manage to write in spoken language, you'll be ahead of 95% of writers.” 

When possible, find a metaphor for your idea

This is not direct advice from Graham (though he does recommend you write simply, and what’s simpler than a great metaphor?) 

Instead, this is a theme you notice if you read a lot of Graham. Metaphors are a weapon he wields often.

Some of my favorite metaphors from Paul Graham:

“There's an Italian dish called saltimbocca, which means ‘leap into the mouth.’ My goal when writing might be called saltintesta: the ideas leap into your head and you barely notice the words that got them there.” (From Write Simply )

“People don’t realize that scrapping things together is how big things get started. They unconsciously judge larval startups by the standards of established ones. They're like someone looking at a newborn baby and concluding ‘there's no way this tiny creature could ever accomplish anything.’” (From Do Things that Don’t Scale )

“The list of n things [listicle] is in that respect the cheeseburger of essay forms. If you're eating at a restaurant you suspect is bad, your best bet is to order the cheeseburger. Even a bad cook can make a decent cheeseburger. And there are pretty strict conventions about what a cheeseburger should look like. You can assume the cook isn't going to try something weird and artistic. The list of n things similarly limits the damage that can be done by a bad writer.” (From The List of N Things )

“Sometimes it's because the writer only has very high-level data and so draws conclusions from that, like the proverbial drunk who looks for his keys under the lamppost, instead of where he dropped them, because the light is better there.” (From Economic Inequality ) 

“If I paint someone's house, the owner shouldn't pay me extra for doing it with a toothbrush.” (From Mind the Gap ) 

“I'm not sure why. It may just be my own stupidity. A can-opener must seem miraculous to a dog.” (From Taste for Makers )

“A startup is like a mosquito. A bear can absorb a hit and a crab is armored against one, but a mosquito is designed for one thing: to score. No energy is wasted on defense. The defense of mosquitos, as a species, is that there are a lot of them, but this is little consolation to the individual mosquito.” (From How to Make Wealth ) 

“The independent-minded thus have a horror of ideologies, which require one to accept a whole collection of beliefs at once, and to treat them as articles of faith. To an independent-minded person that would seem revolting, just as it would seem to someone fastidious about food to take a bite of a submarine sandwich filled with a large variety of ingredients of indeterminate age and provenance.” (From How to Think for Yourself )

Paul Graham on Society

Startups turn into big companies, startup founders turn into billionaires , products used by hundreds turn into products used by millions... If you’re working to help startups, you’re working to change society in a big way. 

The Refragmentation

Inequality and Risk

What You Can't Say

“Reducing wealth inequality” isn’t as great as it sounds

As we established earlier, a startup is a wealth-creation machine. As such, it shouldn’t surprise us to see Graham discussing wealth inequality and why it isn’t the demonic thing many believe.

Wealth inequality is a divisive topic, and one I’m no expert in, so I’ll try to provide a general overview without twisting Graham’s ideas into something they aren’t. You might want to read the essays in full if you’re interested in the topic.

By default, we think wealth inequality is inherently bad. 

In Mind the Gap , Graham presents three reasons why we think wealth inequality is inherently bad:

• The Daddy Model of Wealth: We confuse wealth with money and think there is a fixed amount of it. And if there’s a fixed amount, we believe it should be distributed equally. (By now, you should realize that wealth is different from money, and that you can create wealth; there is no “fixed amount” or “fixed pie”; you can increase the pie)
• We think people get rich today like they got rich earlier: In the past, the rich people tended to get rich by stealing (through war or taxes). So some people still believe rich people have gotten rich by stealing, even though today the much better, more reliable, faster and legal way to get rich is by creating wealth, not stealing it.
• We don’t understand leverage: Technology increases the gap between the productive and the unproductive, thus increasing wealth inequality. If a CEO is 100x richer than an employee in the same company, we think it unjust because there’s no way the CEO works 100x more than they do. But because of leverage, the CEO can easily be 100x more productive than an employee, or make decisions that are 100x more valuable. “I have no trouble imagining that one person could be 100 times as productive as another.”  

Wealth inequality can be a sign of good things.

“Variation in wealth can be a sign of variation in productivity. (In a society of one, they're identical.) And that is almost certainly a good thing: if your society has no variation in productivity, it's probably not because everyone is Thomas Edison. It's probably because you have no Thomas Edisons.

In a low-tech society you don't see much variation in productivity. If you have a tribe of nomads collecting sticks for a fire, how much more productive is the best stick gatherer going to be than the worst? A factor of two? Whereas when you hand people a complex tool like a computer, the variation in what they can do with it is enormous.” (From Great Hackers )

“By helping startup founders, you’re helping to increase economic inequality. If economic inequality should be decreased, no one should be helping founders. But that doesn’t sound right.” (From Economic Inequality )

There are many causes of economic inequality. Some of them are bad, like corruption and stealing. But some causes are generally good, like variation in productivity. Some people are vastly better at creating things people want, so it’s unsurprising they are able to make more money than other people.

Remember that startups grow the pie: they get rich by making other people richer. Because they are rich doesn’t mean you must have been screwed over. It’s more like the opposite: the Google founders are rich because they have made life easier and richer for billions of people.

Of course, wealth inequality isn't only due to startups (although startups create the most extreme results). Some people’s salaries are higher than others’, again, because some produce more wealth than others. Salaries are closer to market price than ever before , and get constantly closer, as people are more free to start their own companies, switch companies and work internationally.

Taxing the rich reduces economic inequality, but may not lead to the results you’d hope for. 

If you want to make the poor richer - as is probably the intention when you want to reduce economic inequality - you can either take the money from the rich, or make the poor more productive so they’ll get richer (through education and infrastructure, for example). But if you make people more productive, some people will create 1,000x the results as another, so economic inequality remains. 

So if you want to reduce economic inequality, the only way is to push from the top - to take money from the rich (see Inequality and Risk ). Thus, you reduce the rewards for creating or funding startups and business activity, thus you hinder technological innovation. This doesn’t sound as positive as “reducing economic inequality”. Especially when you consider the many different kinds of inequalities beyond income equality.

The gap between rich and poor is increasing in monetary terms, but probably closing in wealth terms. Today, the average person lives a relatively similar life, materially, to a rich person: both have a fridge, a car, a phone, Netflix… 100 years ago, the rich had a car while the poor didn’t, they had things we now regard as “essentials” while the poor didn’t. Through businesses, essential products are getting cheaper and more accessible to everyone. In many cases, the rich can pay to have a flashier version of something, like a sports car or brand watch, but the basic, affordable version is still good enough.

Today, the difference is appearance and what brand your stuff is; in the past, the difference was either having it or not having it. So yes, the income gap is increasing, but with it, the gap in quality of life is decreasing.

“You need rich people in your society not so much because in spending their money they create jobs, but because of what they have to do to get rich. I'm not talking about the trickle-down effect here. I'm not saying that if you let Henry Ford get rich, he'll hire you as a waiter at his next party. I'm saying that he'll make you a tractor to replace your horse.” (From Mind the Gap ) Trickle-down economics is a bad argument because it misses the point. We need to look at how wealth is created, not how it’s used

Graham’s proposition:

Allow those who create wealth to keep it.

When you’re allowed to keep the wealth you create, people can get rich by creating wealth instead of stealing it. People take bigger risks if they can keep more of the upside when those risks pay off. A startup founder never captures all of the wealth created; most of the wealth is transferred to other people, so we should encourage those who want to get rich, not discourage them.

Based on these ideas, you can probably guess Graham’s opinions on capitalism vs communism (something he discusses in the essays linked in this section, particularly in How to Make Wealth and Mind the Gap ).

Not everything we think is true is true, and not everything we think is false is false

“At every period of history, people have believed things that were just ridiculous, and believed them so strongly that you risked ostracism or even violence by saying otherwise. If our own time were any different, that would be remarkable.” (From Taste for Makers ) 

“And yet at every point in history, there were true things that would get you in terrible trouble to say. Is ours the first where this isn't so? What an amazing coincidence that would be.” (From Orthodox Privilege ) 

Not everything we think is true is true, and not everything we think is false is false.

Graham comes back to this idea repeatedly, particularly in the essays discussing independent-mindedness and conformism (see above). But you can see tones of this idea in his startup essays too; after all, a successful startup has a vision of a future that most other people do not believe in at the time. 

Graham deep-dives into this idea in What You Can't Say , an essay I consider one of his finest - one you must read for yourself. In fact, the whole essay is so intellectually important that I’d do it a disservice by summarizing. Instead, here’s the main takeaway I was left with:

There are things you believe that are incorrect, horribly so. To you, they seem correct without question. Stay open-minded.

Paul Graham on Life

If we accept that writing is thinking (as we addressed earlier), Graham, with over 200 essays and decades of writing, has done a lot of thinking. When he shares life wisdom, you’d be smart to listen.

What You'll Wish You'd Known is sort of Paul Graham’s compilation of life wisdom, targeted at high school students. It’s also one of his most popular essays. While you should read it yourself, here are a few major points that stood out for me:

• It’s okay to not have a plan. In fact, it may be better not to fixate on one plan when you’re young. Optimize for optionality. If you’re unsure, go with the option that gives you more options later down the line. 
• Build something. Work on something hard on your own, doesn’t really matter what it is. You’ll learn so much about yourself in that process. This is a shortcut to finding what you want to work on, which is one of the major questions in life. “If I could go back and redo my twenties, that would be one thing I'd do more of: just try hacking things together. [...] I should have spent less time worrying and more time building. If you're not sure what to do, make something.” (From The Power of the Marginal ) 
• How you succeed in school is in no way representative of how you succeed in life. “One of the most dangerous illusions you get from school is the idea that doing great things requires a lot of discipline. Most subjects are taught in such a boring way that it's only by discipline that you can flog yourself through them.” At school, stuff is forced on you; in real life, it is the stuff you initiate that matters and defines your trajectory.
• “There's no switch inside you that magically flips when you turn a certain age or graduate from some institution. That’s not how you become an adult. You start being an adult when you decide to take responsibility for your life. You can do that at any age. [...] The important thing is to get out there and do stuff. Instead of waiting to be taught, go out and learn.”

Beyond that essay, there are a few bigger themes I want to highlight below.

What You'll Wish You'd Known

Life is Short

The Acceleration of Addictiveness

• How to Lose Time and Money

Lies We Tell Kids

Keep Your Identity Small

Cities and Ambition

The Top of My Todo List

Life is short

“Life is short” is one of those statements everyone kind of agrees with, without giving it too much thought. But Graham has explored the idea a bit deeper.

For starters, a startup itself is a way to appreciate the shortness of life or adapt to it ; instead of a 40-year career, you compress your income-making to a few startup years and thus free up time for activities beyond making a living. The average human lifespan is increasing while the minimum possible time it takes to be set for life is decreasing; startups are one way to maximize the gap.

Whether you agree with the premise that Life is Short , it’s easy to agree that one way to make life seem less short is to minimize anything unimportant. If you do nothing for 5 hours, that 5 hours will feel excruciatingly long. The more we have going on, the shorter life feels. So we should cut all the things we don’t like doing, the stuff that we think life is too short for (Graham calls this, bluntly, “bullshit”).

And if we invert the argument, we realize that we should dedicate more time for the important stuff. If people and relationships are important to you, your calendar should reflect that. When life is short, we must ruthlessly cut the unimportant while making time for the important. Sounds simple and easy to dismiss, but somehow, Graham applies weight to it in Life is Short .

It’s surprisingly easy to waste your life if you’re not careful

Since life is short, it’s easy to let it slip away in a blur if you’re not careful.

One thing you get easily sucked into is “ anti-tests ”. These are tests you can try to excel in, but the way to come on top is to not care about the test at all, to ignore the test. So you could try to be popular in school, but you probably shouldn’t care about popularity; you can try to become important and high-status in life, but you probably shouldn’t care about that. Just because there’s a test doesn’t mean you should try to perform well in it. 

Ignoring tests is especially hard for intelligent, ambitious people, because their ambition provides the motivation and intelligence the means to do well in the test. But try not to get sucked into the anti-tests in life; they are the kind of “bullshit” life is too short for.

Another thing that can corrode your life, if you’re not careful, is addiction. We know to be careful with the standard stuff like alcohol and gambling, but it’s harder to avoid addictions that everyone has because those seem normal to us. In The Acceleration of Addictiveness , Graham makes a division between two normals: statistically normal (that which everyone does) and operationally normal (that which works best). Being addicted to social media and your phone is statistically normal, but not operationally normal. “ Technology tends to separate normal from natural. ”

“ You can probably take it as a rule of thumb from now on that if people don't think you're weird, you're living badly. ” For example, if your approach to consumerism doesn’t seem a bit weird, you probably own too much Stuff .

But being careful about pleasures and self-indulgence and “the bullshit” isn’t enough. We must also be careful about the things we do that feel important and productive. In How to Lose Time and Money , Graham writes: 

“It's hard to spend a fortune without noticing. Someone with ordinary tastes would find it hard to blow through more than a few tens of thousands of dollars without thinking ‘wow, I'm spending a lot of money.’ Whereas if you start trading derivatives, you can lose a million dollars (as much as you want, really) in the blink of an eye.”

Similarly, for a fairly ambitious person, it’s hard to waste your time by watching TV or laying on the sofa - your brain will start thinking “this is a waste of time” sooner or later. But you can easily work 12h a day for 2 years on something that, in retrospect, was a complete waste of your time. 

If you’re not careful about where you invest your time and money, life passes by surprisingly easily. 

You have a lot of unconditioning to do

What’s a lie you were told as a child? Stuff like “if you swallow an apple seed, a tree will grow in your stomach” is easy to identify as a lie. But stuff like “be careful with strangers, they are dangerous”? Less so.

In Lies We Tell Kids , Graham shows that we’ve been lied to as kids, for a variety of reasons (some better than others). Some falsities have flowed into our heads at home, some at school, but the main idea is that we’ve woven lies into our understanding of the world at a young age. And if it’s something we learned as a child, it feels undeniably true as an adult; it takes serious effort to take apart these deep-held beliefs.

As a rule, if you think it’s true because you learned it in school or in your childhood, assume it is not true. It’s better to verify it for yourself, even if it turns out to have been true all along.

If childhood beliefs are a good place to start unconditioning, a good place to continue is whatever you identify as (democrat, minimalist, crypto bull…). This is because we have a terribly hard time thinking clearly about something that’s part of our identity , so you may have taken in opinions one-sidedly. If you identify as x, criticism against x feels like a personal attack because x is a part of your identity, part of you. The bigger your identity, the more you have to process and rethink. 

Another thing to uncondition comes from Cities and Ambition . When most people talk about the essay, they consider the obvious implication: you should go to the city that matches your ambition. So if you want to be in the show biz, go to Hollywood, or if you’re into startups, go to Silicon Valley (or, increasingly, the right corner of the internet). But there’s an inverse consideration, too, and it’s an important one: the places you’ve already lived in have subconsciously influenced your ambition. So, yes, we could match the city we live in to our ambition, but before we do that, we should figure out whether our ambition really is our own or if it’s simply a product of where we have lived in so far.

This idea of unconditioning links back to the earlier point: because you’ve been conditioned a certain way, you’re set on a path that you may not wish to be on, had you consciously made the choice. So unless you do uncondition yourself, it’s easy to waste your life.

You have a lot of unconditioning to do. So better get started.

Paul Graham’s 5 commandments for life

Bronnie Ware, a palliative care nurse, made a list of the biggest regrets of the dying:

• Forgetting your dreams
• Ignoring family
• Suppressing emotions
• Neglecting friends
• Forgetting to be happy with what you have

In The Top of My Todo List , Graham inverted the regrets into his 5 commandments to live by:

• Don’t ignore your dreams
• Don’t work too much
• Say what you think
• Cultivate friendships

Paul Graham’s Best Essays

Paul Graham’s favorites ‍

This is in addition to the three that get the most traffic: https://t.co/zsxRpKm4ew https://t.co/nROmN4eyhO https://t.co/O8hIcjcMd2 I should also have included: https://t.co/CUBGEQ9N7H https://t.co/bAcAN5wROL https://t.co/MVTTJDzyQ2 https://t.co/OKZOGIhi4i — Paul Graham (@paulg) December 20, 2019

My favorites

• What You Can't Say  
• How to Think for Yourself  
• You Weren't Meant to Have a Boss  
• How to Make Wealth  

Final words

This has been nothing but a short introduction to Paul Graham’s ideas. There are so many essays and ideas and topics that weren’t included here, so, who knows, maybe at some point there will be a PG 201. 

Anyhow, I hope this has inspired you to explore the essays yourself and gives you a convenient way to find the essays that interest you. 

If you found this summary useful, please feel free to share around. It took me nearly a year to read all the essays and turn my notes into something useful, so it’d be awesome if many people knew about this.

And if there’s something you’d like to add / edit, reach out: [email protected] / Twitter

Thanks for reading.

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Investor Paul Graham explains why it's better to take a job at a startup over a big company — even if it ends up failing

• Y Combinator cofounder Paul Graham said you should work for startups, not big companies.
• Even when they fail, you'll be surrounded by future founders, he said.
• The two career routes are often debated in terms of money, mental health, and upward mobility.

Famed entrepreneur and Y Combinator cofounder Paul Graham says it's wise to work for startups over big companies — even if they're more likely to fail.

Working for big companies might be "safer," the investor shared on X , but the connections forged with startup colleagues can cue up future success.

"In ten years they'll be running everything," Graham wrote of startup employees, "even if the startup tanks."

Related stories

While Graham's position isn't exactly surprising from a cofounder of a famed startup incubator, the two career routes are hotly debated. In terms of salary , there are tradeoffs between generous Big Tech salaries and potentially lucrative startup stock options.

Others have noted the unique pressures of working for startups can lead to mental health issues , with corporate jobs often furnishing a better work-life balance. Long hours are the norm at startups, although they can also be a part of corporate life too, depending on the industry and role.

Still, Graham's advice resonated with users on X. "You need people willing to jump in and build the future, and startups inherently self-select for this," one wrote.

Another argued that working with big companies helped inform their eventual startup journey: "I learned professionalism, humility, and was surrounded by incredible mentors."

Graham often sounds off on career advice on X — including his personal indicator for when an email pitch might have been composed by ChatGPT and evolving attitudes toward remote work .

He did not immediately respond to a request for comment from Business Insider ahead of publication.

Watch: Microsoft CEO unravels ChatGPT, ethical AI, and going bust

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Paul Graham’s Startup Advice for the Lazy

Paul graham is a renowned programmer and wildly successful venture capitalist. he also happens to be a talented writer. if you’re short on time, i’ve cropped the most important pieces from my favorite essays of his below..

Paul Graham is a renowned programmer and wildly successful venture capitalist. He also happens to be a talented writer.

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I highly recommend you stop reading this and just go read his actual essays , but if you’re short on time, I’ve cropped the most important pieces from my favorite essays below.

Startups in 13 Sentences

1. Pick good cofounders

2. Launch fast

3. Let your idea evolve (most ideas appear in implementation)

4. Understand your users (many successful startups make something the founders needed)

5. Better to make a few users love you than a lot ambivalent

6. Offer surprisingly good customer service

7. You make what you measure (measuring something has an uncanny tendency to improve it)

8. Spend little

9. Get ramen profitable (just enough to pay the founders’ living expenses)

10. Avoid distractions (the worst type are those that pay money like day jobs and consulting)

11. Don’t get demoralized

12. Don’t give up

13. Deals fall through

Organic Startup Ideas

– The best way to come up with startup ideas is to ask yourself the question: what do you wish someone would make for you?

– If you want to come up with organic startup ideas, I’d encourage you to focus more on the idea part and less on the startup part. Just fix things that seem broken, regardless of whether it seems like the problem is important enough to build a company on. If you keep pursuing such threads it would be hard not to end up making something of value to a lot of people, and when you do, surprise, you’ve got a company.

– Don’t be discouraged if what you produce initially is something other people dismiss as a toy. In fact, that’s a good sign. That’s probably why everyone else has been over- looking the idea.

– There’s nothing more valuable than an unmet need that is just becoming fixable.

How to Get Startup Ideas

– The very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing.

– It sounds obvious to say you should only work on problems that exist. And yet by far the most common mistake startups make is to solve problems no one has.

– You can either build something a large number of people want a small amount, or something a small number of people want a large amount. Choose the latter.

– If Mark Zuckerberg had built something that could only ever have appealed to Harvard students, it would not have been a good startup idea. Facebook was a good idea because it started with a small market there was a fast path out of. Colleges are similar enough that if you build a Facebook that works at Harvard, it will work at any college.

– It’s even better when you’re both a programmer and the target user, because then the cycle of generating new versions and testing them on users can happen inside one head.

– You’re doubly likely to find good problems in another domain: (a) the inhabitants of that domain are not as likely as software people to have already solved their problems with software, and (b) since you come into the new domain totally ignorant, you don’t even know what the status quo is to take it for granted.

– It’s exceptionally rare for startups to be killed by competitors — so rare that you can almost discount the possibility. If you have something that no competitor does and that some subset of users urgently need, you have a beachhead.

– A crowded market is actually a good sign, because it means both that there’s demand and that none of the existing solutions are good enough.

Do Things that Don’t Scale

– The most common unscalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them.

– We encourage every startup to measure their progress by weekly growth rate. If you have 100 users, you need to get 10 more next week to grow 10% a week. And while 110 may not seem much better than 100, if you keep growing at 10% a week you’ll be surprised how big the numbers get. After a year you’ll have 14,000 users, and after 2 years you’ll have 2 million.

– You’ll be doing different things when you’re acquiring users a thousand at a time, and growth has to slow down eventually. But if the market exists you can usually start by recruiting users manually and then gradually switch to less manual methods.

– How do you find users to recruit manually? If you build something to solve your own problems, then you only have to find your peers, which is usually straightforward. Otherwise you’ll have to make a more deliberate effort to locate the most promising vein of users. The usual way to do that is to get some initial set of users by doing a comparatively untargeted launch, and then to observe which kind seem most enthusiastic, and seek out more like them.

– Tim Cook doesn’t send you a hand-written note after you buy a laptop. He can’t. But you can. That’s one advantage of being small: you can provide a level of service no big company can.

– A consulting-like technique for recruiting initially lukewarm users is to use your software yourselves on their behalf. We did that at Viaweb. When we approached merchants asking if they wanted to use our software to make online stores, some said no, but they’d let us make one for them. Since we would do anything to get users, we did. We felt pretty lame at the time. Instead of organizing big strategic e-commerce partnerships, we were trying to sell luggage and pens and men’s shirts. But in retrospect it was exactly the right thing to do, because it taught us how it would feel to merchants to use our software. Sometimes the feedback loop was near instantaneous: in the middle of building some merchant’s site I’d find I needed a feature we didn’t have, so I’d spend a couple hours implementing it and then resume building the site.

Startup = Growth

– A startup is a company designed to grow fast. A good growth rate during YC is 5–7% a week. If you can hit 10% a week you’re doing exceptionally well. If you can only manage 1%, it’s a sign you haven’t yet figured out what you’re doing.

– The best thing to measure the growth rate of is revenue. The next best, for startups that aren’t charging initially, is active users.

– We usually advise startups to pick a growth rate they think they can hit, and then just try to hit it every week. The key word here is “just.” If they decide to grow at 7% a week and they hit that number, they’re successful for that week. There’s nothing more they need to do. But if they don’t hit it, they’ve failed in the only thing that mattered, and should be correspondingly alarmed.

The 18 Mistakes that Kill Startups

1. Single Founder You need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.

2. Bad Location The kind of people you want to hire want to live there, supporting industries are there, and the people you run into in chance meetings are in the same business.

3. Marginal Niche You can only avoid competition by avoiding good ideas.

4. Derivative Idea Instead of copying Facebook, with some variation that the Facebook rightly ignored, look for ideas from the other direction. Instead of starting from companies and working back to the problems they solved, look for problems and imagine the company that might solve them.

5. Obstinacy Most successful startups end up doing something different than they originally intended. You have to be prepared to see the better idea when it arrives. Switching to a new idea every week will be equally fatal. Ask whether the ideas represent some kind of progression. If in each new idea you’re able to re-use most of what you built for the previous ones, then you’re probably in a process that converges. If you’re thinking about turning in some new direction and your users seem excited about it, it’s probably a good bet.

6. Hiring Bad Programmers Business guys can’t tell which are the good programmers.

7. Choosing the Wrong Platform How do you pick the right platforms? The usual way is to hire good programmers and let them choose. But there is a trick you could use if you’re not a programmer: visit a top computer science department and see what they use in research projects.

8. Slowness in Launching It’s only by bouncing your idea off users that you fully understand it.

9. Launching Too Early Think about the overall goal, then start by writing the smallest subset of it that does anything useful. If it’s a subset, you’ll have to write it anyway, so in the worst case you won’t be wasting your time. The early adopters you need to impress are fairly tolerant. They don’t expect a newly launched product to do everything; it just has to do something.

10. Having No Specific User in Mind You can’t build things users like without understanding them.

11. Raising Too Little Money If you take money from investors, you have to take enough to get to the next step. Usually you have to advance to a visibly higher level: if all you have is an idea, a working prototype; if you have a prototype, launching; if you’re launched, significant growth.

12. Spending Too Much The classic way to burn through cash is by hiring a lot of people. Don’t do it if you can avoid it, pay people with equity rather than salary, not just to save money, but because you want the kind of people who are committed enough to prefer that, and only hire people who are either going to write code or go out and get users, because those are the only things you need at first.

13. Raising Too Much Money Once you take a lot of money it gets harder to change direction. The more people you have, the more you stay pointed in the same direction.

14. Poor Investor Management You shouldn’t ignore them, because they may have useful insights. But neither should you let them run the company.

15. Sacrificing Users to (Supposed) Profit Because making something people want is so much harder than making money from it, you should leave business models for later.

16. Not Wanting to Get Your Hands Dirty If you’re going to attract users, you’ll probably have to get up from your computer and go find some.

17. Fights Between Founders We advise founders to vest so there will be an orderly way for people to quit. Most disputes are not due to the situation but the people. The people are the most important ingredient in a startup, so don’t compromise there.

18. A Half-Hearted Effort Most founders of failed startups don’t quit their day jobs, and most founders of successful ones do.

The Hardest Lessons for Startups to Learn

1. Release Early Get a version 1 out fast, then improve it based on users’ reactions. I don’t mean you should release something full of bugs, but that you should release something minimal. Users hate bugs, but they don’t seem to mind a minimal version 1, if there’s more coming soon.

2. Keep Pumping Out Features You should make your system better at least in some small way every day or two. Users love a site that’s constantly improving. They’ll like you even better when you improve in response to their comments, because customers are used to companies ignoring them.

3. Make Users Happy The most important is to explain, as concisely as possible, what the hell your site is about. The other thing I repeat is to give people everything you’ve got, right away. If you have something impressive, try to put it on the front page, because that’s the only one most visitors will see.

4. Fear the Right Things Way more startups hose themselves than get crushed by competitors. There are a lot of ways to do it, but the three main ones are internal disputes, inertia, and ignoring users.

5. Commitment Is a Self-Fulfilling Prophecy The most important quality in a startup founder is determination. You have to be the right kind of determined, though. You have to be determined, but flexible.

6. There Is Always Room The reason we don’t see the opportunities all around us is that we adjust to however things are, and assume that’s how things have to be.

7. Don’t Get Your Hopes Up It’s ok to be optimistic about what you can do, but assume the worst about machines and other people. When you hear someone say the words “we want to invest in you” or “we want to acquire you,” I want the following phrase to appear automatically in your head: don’t get your hopes up.

8. Speed, not Money Economically, a startup is best seen not as a way to get rich, but as a way to work faster. You have to make a living, and a startup is a way to get that done quickly, instead of letting it drag on through your whole life.

How to Convince Investors

– Convince yourself that your startup is worth investing in, and then when you explain this to investors they’ll believe you. And by convince yourself, I don’t mean play mind games with yourself to boost your confidence. I mean truly evaluate whether your startup is worth investing in.

– If it isn’t, don’t try to raise money. But if it is, you’ll be telling the truth when you tell investors it’s worth investing in, and they’ll sense that. You don’t have to be a smooth presenter if you understand something well and tell the truth about it.

– To evaluate whether your startup is worth investing in, you have to be a domain ex- pert. If you’re not a domain expert, you can be as convinced as you like about your idea, and it will seem to investors no more than an instance of the Dunning-Kruger effect. Which in fact it will usually be.

– And investors can tell fairly quickly whether you’re a domain expert by how well you answer their questions. Know everything about your market.

– Founders think of startups as ideas, but investors think of them as markets. If there are X number of customers who’d pay an average of $Y per year for what you’re making, then the total addressable market, or TAM, of your company is $XY. Investors don’t expect you to collect all that money, but it’s an upper bound on how big you can get.

– Your target market has to be big, and it also has to be capturable by you. But the market doesn’t have to be big yet, nor do you necessarily have to be in it yet. Indeed, it’s often better to start in a small market that will either turn into a big one or from which you can move into a big one.

How to Present to Investors

1. Explain what you’re doing Say what you’re doing as soon as possible, preferably in the first sentence.

2. Get rapidly to demo A demo explains what you’ve made more effectively than any verbal description.

3. Better a narrow description than a vague one Your primary goal is not to describe everything your system might one day become, but simply to convince investors you’re worth talking to further.

4. Don’t talk and drive Have one person talk while another uses the computer. As long as you’re standing near the audience and looking at them, politeness (and habit) compel them to pay attention to you.

5. Don’t talk about secondary matters at length If you only have a few minutes, spend them explaining what your product does and why it’s great.

6. Don’t get too deeply in to business models That’s not what smart investors care about in a brief presentation and any business model you have at this point is probably wrong anyway.

7. Talk slowly and clearly at the audience If you feel you’re speaking too slowly, you’re speaking at about the right speed.

8. Have one person talk Startups often want to show that all the founders are equal partners. This is a good instinct; investors dislike unbalanced teams. But trying to show it by partitioning the presentation is going too far. It’s distracting.

9. Seem confident I mean show, not tell. Never say “we’re passionate” or “our product is great.” If you’ve truly made something good, you’re doing investors a favor by telling them about it.

10. Don’t try to seem more than you are All you need to convince them of is that you’re smart and that you’re onto something good. If you try too hard to conceal your rawness — by trying to seem corporate, or pretending to know about stuff you don’t — you may just conceal your talent. They’re probably better at detecting bullshit than you are at producing it.

11. Don’t put too many words on slides When there are a lot of words on a slide, people just skip reading it. Don’t read your slides.

12. Specific numbers are good If you have any kind of data, however preliminary, tell the audience. Numbers stick in people’s heads. If you can claim that the median visitor generates 12 page views, that’s great. But don’t give them more than four or five numbers, and only give them numbers specific to you. You don’t need to tell them the size of the market you’re in.

13. Tell stories about users It’s good if you can talk about problems specific users have and how you solve them. The best stories about user needs are about your own. The next best thing is to talk about the needs of people you know personally, like your friends or siblings.

14. Make a soundbite stick in their heads In the startup world, they’re usually “the x of y.”

Stelios Constantinides is a UX Designer/Engineer at Truth Labs. You can follow him on Twitter @stothelios .

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Startup Jobs Today Mean Networking With Tomorrow's Industry Leaders, Says Paul Graham: 'In Ten Years They'll Be Running Everything, Even If The Startup Tanks'

Paul Graham , the renowned entrepreneur and co-founder of Y Combinator , has voiced his opinion on why it’s more beneficial to work for a startup than a large corporation, even if the startup doesn’t succeed.

What Happened : Graham recently shared his thoughts on the matter on X. He believes that the connections made while working at a startup can lead to future success, even if the startup fails. “In ten years they’ll be running everything,” Graham wrote, referring to startup employees.

He acknowledged that working for big companies might be perceived as “safer,” but the potential for future success through startup connections is worth the risk. Graham’s advice has sparked a debate, particularly regarding the tradeoffs between high salaries at big tech companies and potentially lucrative stock options at startups.

Despite the potential for mental health issues and a lack of work-life balance at startups, Graham’s advice has resonated with many. Users on X, where Graham often shares career advice, have expressed their support for his views, according to a Business Insider report.

See Also: Steve Jobs Turned Around Apple’s Fortunes 27 Years Ago, Not By Making Mac Better Than Windows, But By Using This Technique Nike Is Known For

Why It Matters : Graham’s advice comes at a time when the tech industry is experiencing significant changes. His stance on the benefits of working for a startup aligns with the shifting attitudes toward work and career paths. This advice also complements recent industry insights, such as Amazon CEO Andy Jassy ‘s identification of the most crucial skill for success, indicating a growing emphasis on entrepreneurial thinking and adaptability in the workplace.

Additionally, Graham’s advice may resonate with recent graduates, as Steve Jobs ‘ ex-intern shared an investment tip with new graduates, emphasizing the value of taking risks and pursuing unconventional paths.

This advice also aligns with Elon Musk ‘s recent reflections on the craftsmanship and dedication required for success, highlighting the importance of perseverance and adaptability in the tech industry.

Read Next: More Classified Documents Reportedly Recovered From Trump’s Mar-A-Lago Bedroom — Judge Expresses Disbelief: ‘No Excuse Is Provided’

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

This article Startup Jobs Today Mean Networking With Tomorrow's Industry Leaders, Says Paul Graham: 'In Ten Years They'll Be Running Everything, Even If The Startup Tanks' originally appeared on Benzinga.com .

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Paul Graham Slams AI Regulation After Person Assisting UK Government Said He 'Wasn't Sure Yet' What They Were Going To Regulate: 'Most Intelligent Thing...So Far'

Venture capitalist and Y Combinator cofounder Paul Graham expressed skepticism over the U.K. government’s unclear plans for AI regulation , sparking a discussion on the challenges of AI governance.

What Happened : On Wednesday, Graham, a prominent figure in the tech industry, took to X , formerly Twitter , to share his recent interaction with a person assisting the British government with AI regulation.

"I met someone helping the British government with AI regulation. When I asked what they were going to regulate, he said he wasn’t sure yet," Graham posted.

He mocked the attempts at AI regulation so far, saying, "This seemed the most intelligent thing I’ve heard anyone say about AI regulation so far."

See Also: Elon Musk Reacts As MIT Engineer Says We’re At ‘Fraction Of 1% In AI Investment. Imagine What’s About To Come In Next Decade

This comment comes amid a global push for AI regulation.

Recently, the U.S. and the United Kingdom signed an agreement to address the safety concerns surrounding artificial intelligence (AI).

The agreement aims to evaluate and regulate the potential risks emerging AI technology poses. However, the specifics of what will be regulated remain unclear.

Subscribe to the  Benzinga Tech Trends newsletter  to get all the latest tech developments delivered to your inbox.

Why It Matters : The call for AI regulation has been growing, with the European Union leading the way by endorsing the world's first comprehensive regulatory framework for AI.

However, the process of crafting regulatory frameworks for AI is complex and challenging, as highlighted by OpenAI CEO Sam Altman , who suggested the need for a "regulatory sandbox" for experimenting with AI technologies.

Moreover, the absence of tech leaders like Meta Platforms Inc. CEO Mark Zuckerberg and xAI founder Elon Musk from the U.S. AI Safety Institute has raised questions about the inclusivity and effectiveness of these regulatory efforts.

Check out more of Benzinga's Consumer Tech coverage by  following this link .

Read Next: Elon Musk Takes A Dig At Sundar Pichai After Google’s Alleged Censorship On Hunter Biden

Disclaimer : This content was partially produced with the help of  Benzinga Neuro  and was reviewed and published by Benzinga editors.

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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Meet PayHOA, a profitable and once-bootstrapped SaaS startup that just landed a $27.5M Series A

PayHOA, a previously bootstrapped Kentucky-based startup that offers software for self-managed homeowner associations (HOAs), is an example of how real-world problems can translate into opportunity.

It just raised a $27.5 million Series A round in an environment where nearly $30 million Series A rounds are no longer common.

PayHOA founder and CEO Mike Bollinger has been putting his finance degree to good use. The entrepreneur started PayHOA in 2018 after selling two other companies — LegFi.com, a startup focused on fraternity and sorority financial management and File990.org, which catered to nonprofit tax compliance needs — to Togetherwork in 2018.

Bollinger says experience working with volunteer-based organizations fueled his desire to create PayHOA .

“While larger companies catered to professional property managers, self-managed HOAs struggled,” he told TechCrunch. “They were forced to cobble together solutions with unconnected tools or generic software not designed for their specific needs — some even came to us with shoe boxes of paper receipts.”

PayHOA’s SaaS offering acts as a “central hub” for association board members, handling finances, maintenance requests and communication with their communities, Bolinger says.

Notably, PayHOA says it is profitable (with positive EBITDA), which helps explain how it managed to land such a decent-sized Series A round in what remains a challenging fundraising environment, especially for non-AI startups. The 15-person startup notched year-over-over revenue growth of over 70%. It has more than 652,000 users, and makes money by charging a monthly subscription fee based on the number of units in the community. Prices start at $49 per month for HOAs with 25 units or less. Self-managed HOAs account for 30% to 40% of community associations , made up of 2.5 million volunteer board members.

The decision to raise outside capital for the first time stemmed from PayHOA reaching a critical inflection point, according to Bollinger. 

“We’d found product market fit and were growing at a rapid rate,” he told TechCrunch. “The additional capital and investor guidance will guide the business to the next level.”

The new funds will mostly go toward product development and hiring. PayHOA has plans to grow its team by 40% across engineering, sales and support. Today, the company also announced a Payables module, which Bollinger said uses Optical Character Recognition (OCR) technology to automatically scan and extract data from invoices. PayHOA has processed more than $1.6 billion in invoices since 2018.

Looking ahead, PayHOA doesn’t have plans to expand outside of community management, but Bollinger has noticed an increased number of property management companies signing up for the platform — opening up the company’s total addressable market. 

“Many HOAs manage their communities themselves, and for too long, their needs haven’t been fully addressed,” Peter Fallon, a general partner at Elephant Ventures, the firm that led the round, said in a written statement. “PayHOA recognizes this gap and provides a comprehensive platform designed specifically for self-managed HOAs. This empowers them to access powerful tools typically reserved for larger communities.”

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Sam Altman’s Scarlett Johansson Whoopsie Is The True Future Of AI

3:11 PM EDT on May 26, 2024

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Give OpenAI CEO Sam Altman this much credit: I did not think he had the capacity to surprise. Among the uppermost tier of Silicon Valley types, the ones that get referred to as " legends " in the press, Altman is remarkable chiefly for his vacuousness. He is a tech leader without any tech skills or original ideas, someone who internalized the correct lessons first at Stanford and then Y Combinator, which are: what matters most is who you know, the industry is primarily about marketing, and there is a percentage in being willing to break the rules.

I was thinking about that last bit a fair amount over the past week as Altman has posted his way into a stupid and entirely avoidable legal battle with Scarlett Johansson. One of the foundational principles of YC is "naughtiness," which is a cutesy way to describe repeatedly breaking the law; in a 2010 blog post outlining the virtue , YC founder Paul Graham singles out Altman as the alumnus who most embodies the principle. That assessment tracks across Altman's career as a huckster and operator, from dropping out of Stanford as a marketing ploy to getting fired from YC for being too selfish even for them , to nearly getting fired twice from his deeply stupid first startup Loopt to actually getting fired by the OpenAI board, only to weaponize his network of powerful rich guys to crush his own board and remake the company in and around his own image at last.

Failure is lionized when you fail upwards; Altman has done this enough to learn that there's nothing he can't get away with. And so when his company's engineers tricked out ChatGPT's new fake voice thingy to give it the illusion of personhood and make Kevin Roose , whose job it is to write about stuff like this, turn into this guy , Altman probably thought it was a good idea to hint that this new technology was just like the 2013 movie Her , in which Joaquin Phoenix turns into that guy over an AI voice lady. The new fake voice thingy offers five options, one of which is named Sky and sounds very much like Johansson. While "Sky's" "voice" is faintly distinguishable from Johansson's, to the point that OpenAI could make some claim of plausible deniability, they gave the game away a number of times. They did this first by repeatedly asking Johansson to do the voice herself.

Per a statement the actress gave to NPR, Altman asked her in September, and she declined. At that point, tech reporters were already noting the similarities between the two voices. Two days before the launch earlier this month, Altman contacted Johansson again, and before she responded, OpenAI released Sky and convinced Roose that it would pay him Thursday for a hamburger today. OpenAI paused the use of Sky and claimed they had a different actress lined up before ever reaching out to Johansson.

Let us consider the two positions as they stood then, given the evidence laid out in the paragraphs above: Johansson knows what OpenAI is going for, OpenAI knows they have to avoid the ire of the litigious actress but would also like to do so without having to change anything about Sky. You can see a narrow path to OpenAI getting what they want, by artfully hinting at what they're going for without actually saying it. All they'd have to do is keep from explicitly invoking the movie. Altman decided to go in a different direction.

her — Sam Altman (@sama) May 13, 2024

Altman's post was fairly naughty, but it was also a stellar example of how to elicit a lawsuit using the fewest characters possible. Johansson referenced the tweet days later when she released a statement threatening legal action and connecting OpenAI's brazen attempted theft of her voice to the larger-order legal battle over large language models. "In a time when we are all grappling with deepfakes and the protection of our own likeness, our own work, our own identities, I believe these are questions that deserve absolute clarity," Johansson wrote. "I look forward to resolution in the form of transparency and the passage of appropriate legislation."

The rollout of this mildly spruced-up ChatGPT product is the first big public move since the briefly successful, eventually futile OpenAI revolt against Altman last November. At that point, the company was still notionally a "capped for-profit" business—a marketing scheme designed to assure the public that, while they surely could , they would not Build SkyNet in the name of maximizing profit. The people who wanted to keep those guardrails on saw the increasing greed at the highest levels of the company and sought to boot Altman before his leadership took a dark turn. They lost.

Very quickly, Altman was back on top of the company, having consolidated power. Chief Scientist Ilya Sutskever, who had a hand in the coup, left on May 15 , as did fellow executive Jan Leike, who wrote "safety culture and processes have taken a backseat to shiny products." In that quote, he was referring to OpenAI's decision to dissolve OpenAI's team focused on reigning in the potential long-term risks of "AI" less than one year after announcing the initiative. Vox reported that employees who leave OpenAI are subject to ironclad NDAs that forbid them "for the rest of their lives, from criticizing their former employer. Even acknowledging that the NDA exists is a violation of it." OpenAI, embarrassed, has since released former employees from the provision.

There is something remarkable about the arrogance and hubris at work here. Altman runs a company built on stealing and aggregating other people's work and presenting it tied up in a neat bow—they have not really figured out how to do this yet, but they're stealing and aggregating as fast as they can—and which has internalized the value of theft for theft's sake and views illegality as something approximating a market inefficiency. And why would they not? The point of the faux-human turn in ChatGPT's marketing is to obfuscate that the product is, still, just an aggregation machine. And as Kyle Chayka noted in the New Yorker , OpenAI's totalizing aims have at the very least an uneasy relationship with the creation of new stuff on the internet, which is the raw material the company's technology mines and adorns as if it's novel. OpenAI has reportedly been aggressively pursuing deals with media outlets and Hollywood studios, which I read as them essentially running a protection racket on the sum total of human endeavor on the internet.

As with the company's chief, there is also something equally dull and sinister about all this. Here as with its signature technology, OpenAI is more eager than capable about the stuff it swipes. It is, among other things, very tacky to pay such uncanny, sloppy homage to this particular movie, which is after all not about how cool and fun it is to fall in love with a robot that has Scarlett Johansson's voice but about someone who tricks himself into falling in love with a robot, only to eventually be forced to grapple with the artifice and self-delusion in his own life. There is a sadness that can't be magicked away with the panacea of a sexy robot. In the movie, anyway.

"Magic" comes up a lot in the AI business, and not just from critics or sycophants. Altman used the word to refer to the quality of the recent demo. As John Herrman wrote for New York , that "could be read as a warning or an admission: ChatGPT is now better than ever at pretending it’s something that it’s not." Between Altman's own marketeering and the way he explicitly aligned his elaborately dressed-up search engine in a costume made in tribute to a sci-fi story he did not understand, he is aligning himself with a storied, ignoble huckster's tradition of pretending that you are crafting a reality out of the movies.

People in Altman's economic and cultural super-class—fabulously wealthy, megalomaniacally ambitious tech executives, imbued with an unearned and flimsy aura of brilliance because of their wealth and megalomania—have expressed a very particular and wildly dishonest reverence for other people's fictional imaginings for decades. They become enamored of some piece of sci-fi technology or fantasy magic-ware and either pay homage to them by giving their own products names inspired by or taken from those works (TASER, the names of SpaceX drone ships, the relentless copping of basically everything J.R.R. Tolkien ever wrote, et cetera). The concept of the "metaverse," a word now most associated with Facebook's largely abandoned digital fiefdom, was coined by Neal Stephenson. Elon Musk cannot stop smirking about how the Cybertruck is like something " Blade Runner would have driven ."

Doing this is usually corny and unoriginal, and while there's plenty of that here I also detect a certain blissful malice in things like Musk or Zuckerberg adopting essentially dystopian nomenclature, or Peter Thiel naming his company Palantir, or the Thiel acolyte and weird little guy Palmer Luckey doing double-time cover-band shit and naming his Anduril. Those two companies exist to grease the wheels of the ugliest and most cynical cogs in the American empire. They take their names from a pair of on-the-nose items in the Tolkien mythos: respectively, those are a group of seeing stones that give the wielders power and deceive them and a sword whose name translates to "Flame of the West." Taken together, it is a stunning riposte to the most basic notion of subtlety.

These people are not quite stupid enough to miss the overtones in the works they're aping, nor do I think the mimesis ends at the point of founders seeing themselves as the protagonists of stories about broken worlds. The appeal of the worlds of Bladerunner or the Tolkien legendarium is that each represents a brilliant leap of imagination. Yoinking a name from one of them then associates the yoinker with that leap, but also places them within neatly circumscribed bounds. There's a goofy, cartoon quality to a name like Anduril. How evil, really, could you be if you're playful enough to pay homage to Aragorn? If you get the reference, you see the name and think of Viggo Mortensen's fantastic hair, not autonomous drones coldly vaporizing climate refugees.

This is, in essence, the joke Altman is telling by ripping off Spike Jonze. You are not supposed to fall in love with ChatGPT, or really believe anyone could. You are supposed to think OpenAI has a sense of humor; not so much to laugh at the joke as recognize the shape of something joke-like. The trust that a sufficiently desperate/motivated audience would do the work upon being presented the barest facsimile of something human is, amusingly, the only bit that suggests Altman has perhaps seen the movie. It's a good thing these bozos are also so full of themselves that they couldn't keep from doing something so hubristic that it actually became funny.

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• Project Team:  Ivan Okhapkin. Maria Repkina, Anna Anisimova, Anna Geraimovich, Konstantin Pastukhov, Tatyana Kozlova, Angelina Vasnetsova, Valeria Shevtsova
Monica Galstyan, Zakhar Smirnov, Nikita Tchikin, Alexandra Terentyeva
• City:  Odintsovo
• Country:  Russia

Text description provided by the architects. Aim: To develop a concept of a contemporary landscape park next to the Barvikha and Nemchinovka areas taking into account improvement standards for protected natural areas.

Solution: We started working on the park concept by studying the context and searching for the area's identity. We found out that this territory is closely related to the name of the famous Russian avant-garde artist Kazimir Malevich who after 1917 often visited the neighbouring village of Nemchinovka and was inspired by the local landscapes. There is even a legend about a “Malevich oak tree”, well-known to the researchers of his creative work. We offered to preserve the memory of this place, hence the idea to call the park after Malevich. This predetermined the image of the area referring to the tradition of Russian suprematism. 

The concept of the Basis bureau is based on recreating the close link between nature and art. It provides for using basic shapes, close to the main geometrical figures: a square, a circle, and a triangular as well as a reflecting surface of the objects (stainless steel accompanied by black colour). The composed austerity of the architecture favorably highlights the vitality and natural beauty of the area. 

The functional zones of the park were designed following the requests from the local population. For instance, there is a quite strong community of volleyball players in the area playing almost in any weather. We have saved their playing fields making them even more comfortable and update. The park will also have a new sports cluster with its football fields, tennis and badminton courts, pavilions, and stands. The park pavilions inspired by suprematism compositions will be equipped with cafes and art spaces. 

The park zones are arranged so as to preserve the maximum amount of woodland and the already existing landscape.

Project gallery

Project location

Address: odintsovo, moscow oblast, russia.

• Sustainability

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