One of the exciting things about Paul Graham handing over the reins of Y Combinator to Sam Altman is the fact that it gives Paul more time to write.
Paul has long been one of my writing inspirations, and his concise yet conversational style has always struck me a near-perfect fit for his topics.
I’m delighted to report that Paul’s latest essay is one of his best. For the most part, I’ll simply quote some key passages, but I will add a few additional thoughts here and there.
“Gaming the system may continue to work if you go to work for a big company. Depending on how broken the company is, you can succeed by sucking up to the right people, giving the impression of productivity, and so on. But that doesn’t work with startups. There is no boss to trick, only users, and all users care about is whether your product does what they want. Startups are as impersonal as physics. You have to make something people want, and you prosper only to the extent you do.
The dangerous thing is, faking does work to some degree on investors. If you’re super good at sounding like you know what you’re talking about, you can fool investors for at least one and perhaps even two rounds of funding. But it’s not in your interest to. The company is ultimately doomed. All you’re doing is wasting your own time riding it down.
So stop looking for the trick. There are tricks in startups, as there are in any domain, but they are an order of magnitude less important than solving the real problem. A founder who knows nothing about fundraising but has made something users love will have an easier time raising money than one who knows every trick in the book but has a flat usage graph. And more importantly, the founder who has made something users love is the one who will go on to succeed after raising the money.”
Growing up, I was always a game the system kind of guy. Offer me a game, and I’ll try to figure out the best way to exploit the rules. There’s a reason why I’m the king of board game night.
When I started my first company, I did the same thing. I quickly assembled all the markers of success, from my own academic credentials to my successful co-founder, and used my verbal agility and emotional intelligence to raise millions of dollars (in two rounds of funding, just like Paul wrote!) while I was still a b-school student.
The only problem was, nobody really wanted my product. The sinking realization hit me when our receptionist, a young, recent graduate, asked me to show her the product. She tried it out, then simply said, “That’s *so* not worth it.” And she was right. Everything after that was simply finding a way to get as much money back to investors as we could.
By the end, I felt trapped, but I also felt an obligation to get as much money as I could for the investors who had placed their faith in me. I’ve had a lot more success since then as both entrepreneur and investor, and a lot of it comes from having learned a painful, expensive lesson my first time out.
P.S. Gaming the system is still a lot of fun…when you know that you’re playing a game. Feel free to challenge me!
“Larry Page may seem to have an enviable life, but there are aspects of it that are unenviable. Basically at 25 he started running as fast as he could and it must seem to him that he hasn’t stopped to catch his breath since. Every day new shit happens in the Google empire that only the CEO can deal with, and he, as CEO, has to deal with it. If he goes on vacation for even a week, a whole week’s backlog of shit accumulates. And he has to bear this uncomplainingly, partly because as the company’s daddy he can never show fear or weakness, and partly because billionaires get less than zero sympathy if they talk about having difficult lives. Which has the strange side effect that the difficulty of being a successful startup founder is concealed from almost everyone except those who’ve done it.
Y Combinator has now funded several companies that can be called big successes, and in every single case the founders say the same thing. It never gets any easier. The nature of the problems change. You’re worrying about construction delays at your London office instead of the broken air conditioner in your studio apartment. But the total volume of worry never decreases; if anything it increases.”
There have been times in my life when I had enough so that I never worried about money. There have been other times when I had so little that I constantly worried about money. But the one constant is that I always had plenty of worries, regardless of the state of my bank account. (The other fact is that it’s not a constant linear progression from poor to rich–entrepreneurship is far more of a rollercoaster, with multiple steps forward and back, at least for most of us)
I have friends who have vastly more money than I do, and I have friends who have vastly less money than I do. We all have worries. And as Paul notes, one of the interesting things is that those who have a lot of money get very little sympathy, probably because most people would trade lives with them in an instant (something of which those very successful folks are well aware).
In fact, I’ve joked that I should set up show as a “First World Problems Counselor,” and charge money to lend a sympathetic and understanding ear to Silicon Valley’s 1-percenters. Everyone has problems, and everyone deserves sympathy, no matter how enviable their overall situation.
So if you keep thinking to yourself that you’ll finally stop worrying when you become “successful,” I’ve got bad news for you. No matter how “successful” you become, you’ll never stop worrying. The only way to stop worrying is to learn to stop worrying, regardless of your life circumstances.