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Naval Podcast Apple Email <LOCATION> YouTube Aug 6 2025 We talked about in the past how "Become the best in the world at what you do. Keep redefining what you do until this is true." And <PERSON> made a song out of it. <PERSON> , God bless him. And I think that's absolutely true. More Aug 3 2025 We're hiring an editor for the Naval Podcast, and Naval is also hiring a personal chief of staff. If you're not interested in either of these, you can move on to the next episode. Let me give you some details on both of them. First, the editor for the Naval Podcast, which as you already know, is the most timeless and overproduced podcast in human history. More Jul 31 2025 Marketing is an open problem. People try to solve marketing in different ways. Some people will create videos, some people will write and/or tweet. Some people will literally stand outside with a sandwich board. Some people will go make a whole bunch of friends and just throw parties and spread by word of mouth. More Jul 29 2025 I ultimately think that everyone should be figuring out what it is that they uniquely do best-that aligns with who they are fundamentally, and that gives them authenticity, that brings them specific knowledge, that gives them competitive advantage, that makes them irreplaceable. And they should just lean into that. And sometimes you don't know what that is until you do it. More Jul 26 <DATE_TIME> From <DATE_TIME> : "When you truly work for yourself, you won't have hobbies, you won't have weekends, and you won't have vacations, but you won't have work either." This is the paradox of working for yourself, which every entrepreneur or every self-employed person is familiar with, which is that when you start working for yourself, you basically sacrifice this work-life balance thing. More Jul 25 2025 Like in most interesting, difficult things in life, the solution is indirect. That was part of the How to Get Rich tweetstorm , which is, if you want to get rich, you don't directly just go for the money. I suppose you could like a bankster, but if you're building something of value and you're using leverage and you're taking accountability and you're applying your specific knowledge, you're going to make money as a byproduct. More Jul 21 2025 I recently started another company. It's a very difficult project. In fact, the name of the company is The Impossible Company. It's called Impossible, Inc. What's interesting is that it's driven me into a frenzy of learning. And not necessarily even motivated in a negative way, but I'm more inspired to learn than I have been in a long time. More Jul 17 2025 Life is lived in the arena. You only learn by doing. And if you're not doing, then all the learning you're picking up is too general and too abstract. Then it truly is <PERSON> aphorisms. You don't know what applies where and when. And a lot of this kind of general principles and advice is not mathematics. More Jul 15 2025 Welcome back to the Naval Podcast where we post intermittently since <DATE_TIME>, I believe. We are going to talk about some How to Get Rich content. I've pulled out some tweets from Naval's Twitter from <DATE_TIME>. I got a little help from <PERSON> as well and we're just going to go through them. More <DATE_TIME> <PERSON> and I interview <PERSON> , physicist and author of The Beginning of Infinity . Also see The Deutsch Files I , II , and III . I can only start with what understanding I want. And I know I've asked you this before, but I want to be pedantically exhaustive about connecting the four theories of The Fabric of Reality . More Read More Modal body text goes here. <PERSON>... Write a Comment... Email Name Website
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<PERSON> New: Good Writing | Founder <PERSON> to start a startup? Get funded by Y Combinator . © mmxxv pg
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Arc Arc is a new dialect of Lisp we're working on. You can find an early release and ask questions at <URL> . The Arc community is very newbie-friendly, because all the users are newbies to some extent. To get an idea of where we eventually hope to take <PERSON>, see Being Popular and The Hundred-Year Language . Forum Tutorial Get Arc Arc's Out Take the Arc Challenge First Priority: Core Language Arc FAQ Help Us Design Philosophy Why Arc Isn't Especially Object-Oriented LFM and LFSP Ideas People Have Sent Us Old Arc Stuff
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<LOCATION> <DATE_TIME> <LOCATION> is a spec for a new dialect of Lisp, written in itself. This should sound familiar to people who know about Lisp's origins, because it's the way Lisp began . It consists of two text files meant to be read in parallel: a guide to the Bel language , and the <PERSON> source . For those who just want to see some code examples, there's a file of those . But of course the <PERSON> source is also a code example, since it's written in itself. Considering the rate at which I was discovering bugs before publishing <PERSON>, there are bound to be more remaining. So this first version is version C, after Cunningham's Law.
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Lisp The Roots of Lisp What Made Lisp Different A Lisp Startup Arc: A New Lisp Lisp Code Lisp Links Lisp History Lisp Quotes Lisp FAQ
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Spam A Plan for Spam Plan for Spam FAQ Better Bayesian Filtering So Far, So Good Filters that Fight Back Will Filters Kill Spam? Stopping Spam Spam is Different Filters vs. Blacklists The Destiny of Blacklists Getting Past Filters Spam Conference Filtering Research Spam Resources Spam Archives Spam Links
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Responses "The amount of energy necessary to refute bullshit is an order of magnitude bigger than to produce it." <PERSON> Founders' Accents What I Didn't Say Female Founders "I can be tricked by anyone who looks like <PERSON>."
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FAQs General FAQ Programming FAQ Startup FAQ Arc FAQ Lisp FAQ Viaweb FAQ Plan for Spam FAQ FFB FAQ
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RAQs These are questions that I've only been asked once or twice, but which seem especially interesting. Why don't more painters have hacking jobs? Probably for the same reason that few hackers take up painting. They both seem from the outside like great abstruse mysteries. You can learn great abstruse mysteries as a teenager, because everything is a mystery at that point anyway. And you have the boundless self confidence that comes from ignorance. But unless you learn both as a teenager, which is rare, you'll be afraid of the other later. What should I read to learn more about history? The way to do it is piecemeal. You could just sit down and try reading <PERSON>'s History of the World cover to cover, but you'd probably lose interest. I think it's a better plan to read books about specific topics, even if you don't understand everything the first time through. Here are the most exciting ones I can think of: <PERSON>, Civilisation White, Medieval Technology and Social Change McEvedy, Penguin Atlases of Ancient and Medieval History Laslett, The World We <PERSON>, The Extension of Man Franklin, Autobiography Girouard, Life in the English Country House Pirenne, <PERSON> and <PERSON>, The Fall of Constantinople Cipolla, Guns, <PERSON> and Empires Hadas, A History of Rome <LOCATION>, The Art of War in the Middle Ages Vasari, Lives of the Artists Bovill, The Golden Trade of the Moors Caesar, Gallic Wars Kuhn, The Copernican Revolution Couldn't you add something equivalent to Lisp macros to languages like Perl or Python? Not without turning them into dialects of Lisp. Real macros need to operate on the parse tree of the program. To allow that in a language with syntax, you have to (a) make public the translation from source code to parse trees, and (b) give the programmer the opportunity to run programs on parse trees before they go on to the compiler. But it would be hard to do that without creating a notation for parse trees; and once you do, your language has become a skin on Lisp, in much the same way that in OS X , the Mac OS became a skin on Unix. How can I avoid turning into a pointy-haired boss? The pointy-haired boss is a manager who doesn't program. So the surest way to avoid becoming him is to stay a programmer. What tempts programmers to become managers are companies with old-fashioned corporate structure, where the only way to advance in salary and prestige is to go into management. So if you want to avoid becoming a PHB, avoid such companies, and work for (or start ) startups. I never had to manage anyone in our startup, even though I was the president. The other hackers were my peers, and would have given me the raspberry if I'd tried to "manage" them. We operated by consensus. And the rest of the company reported to our experienced COO, who was also more of a peer. Why be a manager when you could be a founder or early employee at a startup? I'm about to become a teacher. How can I be a good one? The best teachers I remember from school had three things in common: (1) They had high standards. Like <DATE_TIME> testing their parents, students will test teachers to see if they can get away with low-quality work or bad behavior. They won't respect the teachers who don't call them on it. (2) They liked us. Like dogs, kids can tell very accurately whether or not someone wishes them well. I think a lot of our teachers either never liked kids much, or got burned out and started not to like them. It's hard to be a good teacher once that happens. I can't think of one teacher in all the schools I went to who managed to be good despite disliking students. (3) They were interested in the subject. Most of the public school teachers I had weren't really interested in what they taught. Enthusiasm is contagious, and so is boredom. Two startups want to hire me. Which should I choose? The one with the most determined and smartest founders (in that order) is the more likely to succeed. Pretend you're an investor-which you are, of your time-and ask yourself which of the two you'd buy stock in. How can I become really good at Lisp programming? Write an application big enough that you can make the lower levels into a language layer. Embedded languages (or as they now seem to be called, DSLs) are the essence of Lisp hacking. What philosophy books would you recommend? I can't think of any I'd recommend. What I learned from trying to study philosophy is that the place to look is in other fields. If you understand math or history or aeronautical engineering very well, the most abstract of the things you know are what philosophy is supposed to be teaching. Books on philosophy per se are either highly technical stuff that doesn't matter much, or vague concatenations of abstractions their own authors didn't fully understand (e.g. <PERSON>). It can be interesting to study ancient philosophy, but more as a kind of accident report than to teach you anything useful. I want to start a startup, but I don't know how to program. How long will it take to learn? I would guess a smart person can learn to hack sufficiently well in <DATE_TIME>. The best way to do it would be to find some startup to hire you in an initially menial capacity, and start learning to program on the side. Then gradually work your way up from answering phones through system administration to actual software design. There is always so much to do in a startup that people won't be too picky about your paper qualifications, if you can solve problems for them without screwing up.
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<PERSON> is a programmer, writer, and investor. In <DATE_TIME>, he and <PERSON> started <PERSON>, the first software as a service company. <PERSON> was acquired by Yahoo in <DATE_TIME>, where it became Yahoo Store. In <DATE_TIME> he started publishing essays on <URL> , which now gets around 25 million page views per year. In <DATE_TIME> he and <PERSON>, <PERSON>, and <PERSON> started Y Combinator , the first of a new type of startup incubator. Since <DATE_TIME> Y Combinator has funded over 3000 startups, including Airbnb, Dropbox, Stripe, and <LOCATION>. In <DATE_TIME> he published a new Lisp dialect written in itself called <PERSON> . <PERSON> is the author of On Lisp (Prentice Hall, <DATE_TIME>), ANSI Common Lisp (Prentice Hall, <DATE_TIME>), and Hackers & Painters (<PERSON>, <DATE_TIME>). He has an AB from Cornell and a PhD in Computer Science from Harvard, and studied painting at RISD and the Accademia di Belle Arti in <LOCATION>. Photo by <PERSON>, released under the Attribution Creative Commons license. Click for full-size version.
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Having Kids <DATE_TIME> Before I had kids, I was afraid of having kids. Up to that point I felt about kids the way the young <PERSON> felt about living virtuously. I'd have been sad to think I'd never have children. But did I want them now? No. If I had kids, I'd become a parent, and parents, as I'd known since I was a kid, were uncool. They were dull and responsible and had no fun. And while it's not surprising that kids would believe that, to be honest I hadn't seen much as an adult to change my mind. Whenever I'd noticed parents with kids, the kids seemed to be terrors, and the parents pathetic harried creatures, even when they prevailed. When people had babies, I congratulated them enthusiastically, because that seemed to be what one did. But I didn't feel it at all. "Better you than me," I was thinking. Now when people have babies I congratulate them enthusiastically and I mean it. Especially the first one. I feel like they just got the best gift in the world. What changed, of course, is that I had kids. Something I dreaded turned out to be wonderful. Partly, and I won't deny it, this is because of serious chemical changes that happened almost instantly when our first child was born. It was like someone flipped a switch. I suddenly felt protective not just toward our child, but toward all children. As I was driving my wife and new son home from the hospital, I approached a crosswalk full of pedestrians, and I found myself thinking "I have to be really careful of all these people. Every one of them is someone's child!" So to some extent you can't trust me when I say having kids is great. To some extent I'm like a religious cultist telling you that you'll be happy if you join the cult too but only because joining the cult will alter your mind in a way that will make you happy to be a cult member. But not entirely. There were some things about having kids that I clearly got wrong before I had them. For example, there was a huge amount of selection bias in my observations of parents and children. Some parents may have noticed that I wrote "Whenever I'd noticed parents with kids." Of course the times I noticed kids were when things were going wrong. I only noticed them when they made noise. And where was I when I noticed them? Ordinarily I never went to places with kids, so the only times I encountered them were in shared bottlenecks like airplanes. Which is not exactly a representative sample. Flying with a toddler is something very few parents enjoy. What I didn't notice, because they tend to be much quieter, were all the great moments parents had with kids. People don't talk about these much the magic is hard to put into words, and all other parents know about them anyway but one of the great things about having kids is that there are so many times when you feel there is nowhere else you'd rather be, and nothing else you'd rather be doing. You don't have to be doing anything special. You could just be going somewhere together, or putting them to bed, or pushing them on the swings at the park. But you wouldn't trade these moments for anything. One doesn't tend to associate kids with peace, but that's what you feel. You don't need to look any further than where you are right now. Before I had kids, I had moments of this kind of peace, but they were rarer. With kids it can happen several times a day. My other source of data about kids was my own childhood, and that was similarly misleading. I was pretty bad, and was always in trouble for something or other. So it seemed to me that parenthood was essentially law enforcement. I didn't realize there were good times too. I remember my mother telling me once when I was about 30 that she'd really enjoyed having me and my sister. My god, I thought, this woman is a saint. She not only endured all the pain we subjected her to, but actually enjoyed it? Now I realize she was simply telling the truth. She said that one reason she liked having us was that we'd been interesting to talk to. That took me by surprise when I had kids. You don't just love them. They become your friends too. They're really interesting. And while I admit small children are disastrously fond of repetition (anything worth doing once is worth doing fifty times) it's often genuinely fun to play with them. That surprised me too. Playing with a <DATE_TIME> was fun when I was 2 and definitely not fun when I was <DATE_TIME>. Why would it become fun again later? But it does. There are of course times that are pure drudgery. Or worse still, terror. Having kids is one of those intense types of experience that are hard to imagine unless you've had them. But it is not, as I implicitly believed before having kids, simply your DNA heading for the lifeboats. Some of my worries about having kids were right, though. They definitely make you less productive. I know having kids makes some people get their act together, but if your act was already together, you're going to have less time to do it in. In particular, you're going to have to work to a schedule. Kids have schedules. I'm not sure if it's because that's how kids are, or because it's the only way to integrate their lives with adults', but once you have kids, you tend to have to work on their schedule. You will have chunks of time to work. But you can't let work spill promiscuously through your whole life, like I used to before I had kids. You're going to have to work at the same time every day, whether inspiration is flowing or not, and there are going to be times when you have to stop, even if it is. I've been able to adapt to working this way. Work, like love, finds a way. If there are only certain times it can happen, it happens at those times. So while I don't get as much done as before I had kids, I get enough done. I hate to say this, because being ambitious has always been a part of my identity, but having kids may make one less ambitious. It hurts to see that sentence written down. I squirm to avoid it. But if there weren't something real there, why would I squirm? The fact is, once you have kids, you're probably going to care more about them than you do about yourself. And attention is a zero-sum game. Only one idea at a time can be the top idea in your mind . Once you have kids, it will often be your kids, and that means it will less often be some project you're working on. I have some hacks for sailing close to this wind. For example, when I write essays, I think about what I'd want my kids to know. That drives me to get things right. And when I was writing <PERSON> , I told my kids that once I finished it I'd take them to <LOCATION>. When you say that sort of thing to a little kid, they treat it as a promise. Which meant I had to finish or I'd be taking away their trip to <LOCATION>. Maybe if I'm really lucky such tricks could put me net ahead. But the wind is there, no question. On the other hand, what kind of wimpy ambition do you have if it won't survive having kids? Do you have so little to spare? And while having kids may be warping my present judgement, it hasn't overwritten my memory. I remember perfectly well what life was like before. Well enough to miss some things a lot, like the ability to take off for some other country at a moment's notice. That was so great. Why did I never do that? See what I did there? The fact is, most of the freedom I had before kids, I never used. I paid for it in loneliness, but I never used it. I had plenty of happy times before I had kids. But if I count up happy moments, not just potential happiness but actual happy moments, there are more after kids than before. Now I practically have it on tap, almost any bedtime. People's experiences as parents vary a lot, and I know I've been lucky. But I think the worries I had before having kids must be pretty common, and judging by other parents' faces when they see their kids, so must the happiness that kids bring. Note [1] Adults are sophisticated enough to see <DATE_TIME> for the fascinatingly complex characters they are, whereas to most <DATE_TIME> are just defective <DATE_TIME>. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. <NRP> Translation Slovak Translation
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How to <PERSON> and Money <DATE_TIME> When we sold our startup in <DATE_TIME> I suddenly got a lot of money. I now had to think about something I hadn't had to think about before: how not to lose it. I knew it was possible to go from rich to poor, just as it was possible to go from poor to rich. But while I'd spent a lot of <DATE_TIME> studying the paths from poor to rich , I knew practically nothing about the paths from rich to poor. Now, in order to avoid them, I had to learn where they were. So I started to pay attention to how fortunes are lost. If you'd asked me as a kid how rich people became poor, I'd have said by spending all their money. That's how it happens in books and movies, because that's the colorful way to do it. But in fact the way most fortunes are lost is not through excessive expenditure, but through bad investments. 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. In most people's minds, spending money on luxuries sets off alarms that making investments doesn't. Luxuries seem self-indulgent. And unless you got the money by inheriting it or winning a lottery, you've already been thoroughly trained that self-indulgence leads to trouble. Investing bypasses those alarms. You're not spending the money; you're just moving it from one asset to another. Which is why people trying to sell you expensive things say "it's an investment." The solution is to develop new alarms. This can be a tricky business, because while the alarms that prevent you from overspending are so basic that they may even be in our DNA, the ones that prevent you from making bad investments have to be learned, and are sometimes fairly counterintuitive. <DATE_TIME> I realized something surprising: the situation with time is much the same as with money. The most dangerous way to lose time is not to spend it having fun, but to spend it doing fake work. When you spend time having fun, you know you're being self-indulgent. Alarms start to go off fairly quickly. If I woke up <DATE_TIME> and sat down on the sofa and watched TV all day, I'd feel like something was terribly wrong. Just thinking about it makes me wince. I'd start to feel uncomfortable after sitting on a sofa watching TV for <DATE_TIME>, let alone a whole day. And yet I've definitely had days when I might as well have sat in front of a TV all <DATE_TIME> at the end of which, if I asked myself what I got done <DATE_TIME>, the answer would have been: basically, nothing. I feel bad after <DATE_TIME> too, but nothing like as bad as I'd feel if I spent the whole day on the sofa watching TV. If I spent a whole day watching TV I'd feel like I was descending into perdition. But the same alarms don't go off on <DATE_TIME> when I get nothing done, because I'm doing stuff that seems, superficially, like real work. Dealing with email, for example. You do it sitting at a desk. It's not fun. So it must be work. With time, as with money, avoiding pleasure is no longer enough to protect you. It probably was enough to protect hunter-gatherers, and perhaps all pre-industrial societies. So nature and nurture combine to make us avoid self-indulgence. But the world has gotten more complicated: the most dangerous traps now are new behaviors that bypass our alarms about self-indulgence by mimicking more virtuous types. And the worst thing is, they're not even fun. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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The Shape of the Essay Field <DATE_TIME> An essay has to tell people something they don't already know. But there are three different reasons people might not know something, and they yield three very different kinds of essays. One reason people won't know something is if it's not important to know. That doesn't mean it will make a bad essay. For example, you might write a good essay about a particular model of car. Readers would learn something from it. It would add to their picture of the world. For a handful of readers it might even spur some kind of epiphany. But unless this is a very unusual car it's not critical for everyone to know about it. [ 1 ] If something isn't important to know, there's no answer to the question of why people don't know it. Not knowing random facts is the default. But if you're going to write about things that are important to know, you have to ask why your readers don't already know them. Is it because they're smart but inexperienced, or because they're obtuse? So the three reasons readers might not already know what you tell them are (a) that it's not important, (b) that they're obtuse, or (c) that they're inexperienced. The reason I did this breakdown was to get at the following fact, which might have seemed controversial if I'd led with it, but should be obvious now. If you're writing for smart people about important things, you're writing for the young. Or more precisely, that's where you'll have the most effect. Whatever you say should also be at least somewhat novel to you, however old you are. It's not an essay otherwise, because an essay is something you write to figure something out. But whatever you figure out will presumably be more of a surprise to younger readers than it is to you. There's a continuum of surprise. At one extreme, something you read can change your whole way of thinking. The Selfish Gene did this to me. It was like suddenly seeing the other interpretation of an ambiguous image: you can treat genes rather than organisms as the protagonists, and evolution becomes easier to understand when you do. At the other extreme, writing merely puts into words something readers were already thinking - or thought they were. The impact of an essay is how much it changes readers' thinking multiplied by the importance of the topic. But it's hard to do well at both. It's hard to have big new ideas about important topics. So in practice there's a tradeoff: you can change readers' thinking a lot about moderately important things, or change it a little about very important ones. But with younger readers the tradeoff shifts. There's more room to change their thinking, so there's a bigger payoff for writing about important things. The tradeoff isn't a conscious one, at least not for me. It's more like a kind of gravitational field that writers work in. But every essayist works in it, whether they realize it or not. This seems obvious once you state it, but it took me a long time to understand. I knew I wanted to write for smart people about important topics. I noticed empirically that I seemed to be writing for the young. But it took me <DATE_TIME> to understand that the latter was an automatic consequence of the former. In fact I only really figured it out as I was writing this essay. Now that I know it, should I change anything? I don't think so. In fact seeing the shape of the field that writers work in has reminded me that I'm not optimizing for returns in it. I'm not trying to surprise readers of any particular age; I'm trying to surprise myself. The way I usually decide what to write about is by following curiosity. I notice something new and dig into it. It would probably be a mistake to change that. But seeing the shape of the essay field has set me thinking. What would surprise young readers? Which important things do people tend to learn late? Interesting question. I should think about that. Note [ 1 ] It's hard to write a really good essay about an unimportant topic, though, because a really good essayist will inevitably draw the topic into deeper waters. <PERSON> could write an essay about how to boil potatoes that ended up being full of timeless wisdom. In which case, of course, it wouldn't really be about how to boil potatoes; that would just have been the starting point. Thanks to <PERSON> and <PERSON> for reading drafts of this.
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Good Writing <DATE_TIME> There are two senses in which writing can be good: it can sound good, and the ideas can be right. It can have nice, flowing sentences, and it can draw correct conclusions about important things. It might seem as if these two kinds of good would be unrelated, like the speed of a car and the color it's painted. And yet I don't think they are. I think writing that sounds good is more likely to be right. So here we have the most exciting kind of idea: one that seems both preposterous and true. Let's examine it. How can this possibly be true? I know it's true from writing. You can't simultaneously optimize two unrelated things; when you push one far enough, you always end up sacrificing the other. And yet no matter how hard I push, I never find myself having to choose between the sentence that sounds best and the one that expresses an idea best. If I did, it would be frivolous to care how sentences sound. But in practice it feels the opposite of frivolous. Fixing sentences that sound bad seems to help get the ideas right. [ 1 ] By right I mean more than just true. Getting the ideas right means developing them well - drawing the conclusions that matter most, and exploring each one to the right level of detail. So getting the ideas right is not just a matter of saying true things, but saying the right true things. How could trying to make sentences sound good help you do that? The clue to the answer is something I noticed <DATE_TIME> when I was doing the layout for my first book. Sometimes when you're laying out text you have bad luck. For example, you get a section that runs one line longer than the page. I don't know what ordinary typesetters do in this situation, but what I did was rewrite the section to make it a line shorter. You'd expect such an arbitrary constraint to make the writing worse. But I found, to my surprise, that it never did. I always ended up with something I liked better. I don't think this was because my writing was especially careless. I think if you pointed to a random paragraph in anything written by anyone and told them to make it slightly shorter (or longer), they'd probably be able to come up with something better. The best analogy for this phenomenon is when you shake a bin full of different objects. The shakes are arbitrary motions. Or more precisely, they're not calculated to make any two specific objects fit more closely together. And yet repeated shaking inevitably makes the objects discover brilliantly clever ways of packing themselves. Gravity won't let them become less tightly packed, so any change has to be a change for the better. [ 2 ] So it is with writing. If you have to rewrite an awkward passage, you'll never do it in a way that makes it less true. You couldn't bear it, any more than gravity could bear things floating upward. So any change in the ideas has to be a change for the better. It's obvious once you think about it. Writing that sounds good is more likely to be right for the same reason that a well-shaken bin is more likely to be tightly packed. But there's something else going on as well. Sounding good isn't just a random external force that leaves the ideas in an essay better off. It actually helps you to get them right. The reason is that it makes the essay easier to read. It's less work to read writing that flows well. How does that help the writer? Because the writer is the first reader. When I'm working on an essay, I spend far more time reading than writing. I'll reread some parts 50 or 100 times, replaying the thoughts in them and asking myself, like someone sanding a piece of wood, does anything catch? Does anything feel wrong? And the easier the essay is to read, the easier it is to notice if something catches. So yes, the two senses of good writing are connected in at least two ways. Trying to make writing sound good makes you fix mistakes unconsciously, and also helps you fix them consciously; it shakes the bin of ideas, and also makes mistakes easier to see. But now that we've dissolved one layer of preposterousness, I can't resist adding another. Does sounding good do more than just help you get the ideas right? Is writing that sounds good inherently more likely to be right? Crazy as it may seem, I think that's true too. Obviously there's a connection at the level of individual words. There are lots of words in English that sound like what they mean, often in wonderfully subtle ways. Glitter. Round. Scrape. Prim. Cavalcade. But the sound of good writing depends even more on the way you put words together, and there's a connection at that level too. When writing sounds good, it's mostly because it has good rhythm. But the rhythm of good writing is not the rhythm of music, or the meter of verse. It's not so regular. If it were, it wouldn't be good, because the rhythm of good writing has to match the ideas in it, and ideas have all kinds of different shapes. Sometimes they're simple and you just state them. But other times they're more subtle, and you need longer, more complicated sentences to tease out all the implications. An essay is a cleaned up train of thought, in the same way dialogue is cleaned up conversation, and a train of thought has a natural rhythm. So when an essay sounds good, it's not merely because it has a pleasing rhythm, but because it has its natural one. Which means you can use getting the rhythm right as a heuristic for getting the ideas right. And not just in principle: good writers do both simultaneously as a matter of course. Often I don't even distinguish between the two problems. I just think Ugh, this doesn't sound right; what do I mean to say here? [ 3 ] The sound of writing turns out to be more like the shape of a plane than the color of a car. If it looks good, as <PERSON> used to say, it will fly well. This is only true of writing that's used to develop ideas, though. It doesn't apply when you have ideas in some other way and then write about them afterward - for example, if you build something, or conduct an experiment, and then write a paper about it. In such cases the ideas often live more in the work than the writing, so the writing can be bad even though the ideas are good. The writing in textbooks and popular surveys can be bad for the same reason: the author isn't developing the ideas, merely describing other people's. It's only when you're writing to develop ideas that there's such a close connection between the two senses of doing it well. Ok, many people will be thinking, this seems plausible so far, but what about liars? Is it not notoriously possible for a smooth-tongued liar to write something beautiful that's completely false? It is, of course. But not without method acting. The way to write something beautiful and false is to begin by making yourself almost believe it. So just like someone writing something beautiful and true, you're presenting a perfectly-formed train of thought. The difference is the point where it attaches to the world. You're saying something that would be true if certain false premises were. If for some bizarre reason the number of jobs in a country were fixed, then immigrants really would be taking our jobs. So it's not quite right to say that better sounding writing is more likely to be true. Better sounding writing is more likely to be internally consistent. If the writer is honest, internal consistency and truth converge. But while we can't safely conclude that beautiful writing is true, it's usually safe to conclude the converse: something that seems clumsily written will usually have gotten the ideas wrong too. Indeed, the two senses of good writing are more like two ends of the same thing. The connection between them is not a rigid one; the goodness of good writing is not a rod but a rope, with multiple overlapping connections running through it. But it's hard to move one end without moving the other. It's hard to be right without sounding right. Notes [ 1 ] The closest thing to an exception is when you have to go back and insert a new point into the middle of something you've written. This often messes up the flow, sometimes in ways you can never quite repair. But I think the ultimate source of this problem is that ideas are tree-shaped and essays are linear. You inevitably run into difficulties when you try to cram the former into the latter. Frankly it's surprising how much you can get away with. But even so you sometimes have to resort to an endnote. [ 2 ] Obviously if you shake the bin hard enough the objects in it can become less tightly packed. And similarly, if you imposed some huge external constraint on your writing, like using alternating one and two syllable words, the ideas would start to suffer. [ 3 ] Bizarrely enough, this happened in the writing of this very paragraph. An earlier version shared several phrases in common with the preceding paragraph, and the repetition bugged me each time I reread it. When I got annoyed enough to fix it, I discovered that the repetition reflected a problem in the underlying ideas, and I fixed both simultaneously. Thanks to <PERSON> and <PERSON> for reading drafts of this.
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What to Do <DATE_TIME> What should one do? That may seem a strange question, but it's not meaningless or unanswerable. It's the sort of question kids ask before they learn not to ask big questions. I only came across it myself in the process of investigating something else. But once I did, I thought I should at least try to answer it. So what should one do? One should help people, and take care of the world. Those two are obvious. But is there anything else? When I ask that, the answer that pops up is Make good new things . I can't prove that one should do this, any more than I can prove that one should help people or take care of the world. We're talking about first principles here. But I can explain why this principle makes sense. The most impressive thing humans can do is to think. It may be the most impressive thing that can be done. And the best kind of thinking, or more precisely the best proof that one has thought well, is to make good new things. I mean new things in a very general sense. Newton's physics was a good new thing. Indeed, the first version of this principle was to have good new ideas. But that didn't seem general enough: it didn't include making art or music, for example, except insofar as they embody new ideas. And while they may embody new ideas, that's not all they embody, unless you stretch the word "idea" so uselessly thin that it includes everything that goes through your nervous system. Even for ideas that one has consciously, though, I prefer the phrasing "make good new things." There are other ways to describe the best kind of thinking. To make discoveries, for example, or to understand something more deeply than others have. But how well do you understand something if you can't make a model of it, or write about it? Indeed, trying to express what you understand is not just a way to prove that you understand it, but a way to understand it better. Another reason I like this phrasing is that it biases us toward creation. It causes us to prefer the kind of ideas that are naturally seen as making things rather than, say, making critical observations about things other people have made. Those are ideas too, and sometimes valuable ones, but it's easy to trick oneself into believing they're more valuable than they are. Criticism seems sophisticated, and making new things often seems awkward, especially at first; and yet it's precisely those first steps that are most rare and valuable. Is newness essential? I think so. Obviously it's essential in science. If you copied a paper of someone else's and published it as your own, it would seem not merely unimpressive but dishonest. And it's similar in the arts. A copy of a good painting can be a pleasing thing, but it's not impressive in the way the original was. Which in turn implies it's not impressive to make the same thing over and over, however well; you're just copying yourself. Note though that we're talking about a different kind of should with this principle. Taking care of people and the world are shoulds in the sense that they're one's duty, but making good new things is a should in the sense that this is how to live to one's full potential. Historically most rules about how to live have been a mix of both kinds of should, though usually with more of the former than the latter. [ 1 ] For most of history the question "What should one do?" got much the same answer everywhere, whether you asked Cicero or <PERSON>. You should be wise, brave, honest, temperate, and just, uphold tradition, and serve the public interest. There was a long stretch where in some parts of the world the answer became "Serve God," but in practice it was still considered good to be wise, brave, honest, temperate, and just, uphold tradition, and serve the public interest. And indeed this recipe would have seemed right to most <NRP>. But there's nothing in it about taking care of the world or making new things, and that's a bit worrying, because it seems like this question should be a timeless one. The answer shouldn't change much. I'm not too worried that the traditional answers don't mention taking care of the world. Obviously people only started to care about that once it became clear we could ruin it. But how can making good new things be important if the traditional answers don't mention it? The traditional answers were answers to a slightly different question. They were answers to the question of how to be, rather than what to do. The audience didn't have a lot of choice about what to do. The audience up till <DATE_TIME> was the landowning class, which was also the political class. They weren't choosing between doing physics and writing novels. Their work was foreordained: manage their estates, participate in politics, fight when necessary. It was ok to do certain other kinds of work in one's spare time, but ideally one didn't have any. Cicero's De Officiis is one of the great classical answers to the question of how to live, and in it he explicitly says that he wouldn't even be writing it if he hadn't been excluded from public life by recent political upheavals. [ 2 ] There were of course people doing what we would now call "original work," and they were often admired for it, but they weren't seen as models. Archimedes knew that he was the first to prove that a sphere has 2/3 the volume of the smallest enclosing cylinder and was very pleased about it. But you don't find ancient writers urging their readers to emulate him. They regarded him more as a prodigy than a model. Now many more of us can follow <PERSON>'s example and devote most of our attention to one kind of work. He turned out to be a model after all, along with a collection of other people that his contemporaries would have found it strange to treat as a distinct group, because the vein of people making new things ran at right angles to the social hierarchy. What kinds of new things count? I'd rather leave that question to the makers of them. It would be a risky business to try to define any kind of threshold, because new kinds of work are often despised at first. <PERSON> was writing literal pulp fiction, and he's now recognized as one of the best writers of <DATE_TIME>. Indeed this pattern is so common that you can use it as a recipe: if you're excited about some kind of work that's not considered prestigious and you can explain what everyone else is overlooking about it, then this is not merely a kind of work that's ok to do, but one to seek out. The other reason I wouldn't want to define any thresholds is that we don't need them. The kind of people who make good new things don't need rules to keep them honest. So there's my guess at a set of principles to live by: take care of people and the world, and make good new things. Different people will do these to varying degrees. There will presumably be lots who focus entirely on taking care of people. There will be a few who focus mostly on making new things. But even if you're one of those, you should at least make sure that the new things you make don't net harm people or the world. And if you go a step further and try to make things that help them, you may find you're ahead on the trade. You'll be more constrained in what you can make, but you'll make it with more energy. On the other hand, if you make something amazing, you'll often be helping people or the world even if you didn't mean to. <PERSON> was driven by curiosity and ambition, not by any practical effect his work might have, and yet the practical effect of his work has been enormous. And this seems the rule rather than the exception. So if you think you can make something amazing, you should probably just go ahead and do it. Notes [ 1 ] We could treat all three as the same kind of should by saying that it's one's duty to live well - for example by saying, as some <NRP> have, that it's one's duty to make the most of one's God-given gifts. But this seems one of those casuistries people invented to evade the stern requirements of religion: it was permissible to spend time studying math instead of praying or performing acts of charity because otherwise you were rejecting a gift God had given you. A useful casuistry no doubt, but we don't need it. We could also combine the first two principles, since people are part of the world. Why should our species get special treatment? I won't try to justify this choice, but I'm skeptical that anyone who claims to think differently actually lives according to their principles. [ 2 ] Confucius was also excluded from public life after ending up on the losing end of a power struggle, and presumably he too would not be so famous now if it hadn't been for this long stretch of enforced leisure. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Writes and Write-Nots October 2024 I'm usually reluctant to make predictions about technology, but I feel fairly confident about this one: in <DATE_TIME> there won't be many people who can write. One of the strangest things you learn if you're a writer is how many people have trouble writing. Doctors know how many people have a mole they're worried about; people who are good at setting up computers know how many people aren't; writers know how many people need help writing. The reason so many people have trouble writing is that it's fundamentally difficult. To write well you have to think clearly, and thinking clearly is hard. And yet writing pervades many jobs, and the more prestigious the job, the more writing it tends to require. These two powerful opposing forces, the pervasive expectation of writing and the irreducible difficulty of doing it, create enormous pressure. This is why eminent professors often turn out to have resorted to plagiarism. The most striking thing to me about these cases is the pettiness of the thefts. The stuff they steal is usually the most mundane boilerplate - the sort of thing that anyone who was even halfway decent at writing could turn out with no effort at all. Which means they're not even halfway decent at writing. Till recently there was no convenient escape valve for the pressure created by these opposing forces. You could pay someone to write for you, like <PERSON>, or plagiarize, like <PERSON>, but if you couldn't buy or steal words, you had to write them yourself. And as a result nearly everyone who was expected to write had to learn how. Not anymore. AI has blown this world open. Almost all pressure to write has dissipated. You can have AI do it for you, both in school and at work. The result will be a world divided into writes and write-nots. There will still be some people who can write. Some of us like it. But the middle ground between those who are good at writing and those who can't write at all will disappear. Instead of good writers, ok writers, and people who can't write, there will just be good writers and people who can't write. Is that so bad? Isn't it common for skills to disappear when technology makes them obsolete? There aren't many blacksmiths left, and it doesn't seem to be a problem. Yes, it's bad. The reason is something I mentioned earlier: writing is thinking. In fact there's a kind of thinking that can only be done by writing. You can't make this point better than <PERSON> did: If you're thinking without writing, you only think you're thinking. So a world divided into writes and write-nots is more dangerous than it sounds. It will be a world of thinks and think-nots. I know which half I want to be in, and I bet you do too. This situation is not unprecedented. In preindustrial times most people's jobs made them strong. Now if you want to be strong, you work out. So there are still strong people, but only those who choose to be. It will be the same with writing. There will still be smart people, but only those who choose to be. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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When To Do What You Love <DATE_TIME> There's some debate about whether it's a good idea to "follow your passion." In fact the question is impossible to answer with a simple yes or no. Sometimes you should and sometimes you shouldn't, but the border between should and shouldn't is very complicated. The only way to give a general answer is to trace it. When people talk about this question, there's always an implicit "instead of." All other things being equal, why wouldn't you work on what interests you the most? So even raising the question implies that all other things aren't equal, and that you have to choose between working on what interests you the most and something else, like what pays the best. And indeed if your main goal is to make money, you can't usually afford to work on what interests you the most. People pay you for doing what they want, not what you want. But there's an obvious exception: when you both want the same thing. For example, if you love football, and you're good enough at it, you can get paid a lot to play it. Of course the odds are against you in a case like football, because so many other people like playing it too. This is not to say you shouldn't try though. It depends how much ability you have and how hard you're willing to work. The odds are better when you have strange tastes: when you like something that pays well and that few other people like. For example, it's clear that <PERSON> truly loved running a software company. He didn't just love programming, which a lot of people do. He loved writing software for customers. That is a very strange taste indeed, but if you have it, you can make a lot by indulging it. There are even some people who have a genuine intellectual interest in making money. This is distinct from mere greed. They just can't help noticing when something is mispriced, and can't help doing something about it. It's like a puzzle for them. [ 1 ] In fact there's an edge case here so spectacular that it turns all the preceding advice on its head. If you want to make a really huge amount of money - hundreds of millions or even billions of dollars - it turns out to be very useful to work on what interests you the most. The reason is not the extra motivation you get from doing this, but that the way to make a really large amount of money is to start a startup, and working on what interests you is an excellent way to discover startup ideas . Many if not most of the biggest startups began as projects the founders were doing for fun. Apple, Google, and Facebook all began that way. Why is this pattern so common? Because the best ideas tend to be such outliers that you'd overlook them if you were consciously looking for ways to make money. Whereas if you're young and good at technology, your unconscious instincts about what would be interesting to work on are very well aligned with what needs to be built. So there's something like a midwit peak for making money. If you don't need to make much, you can work on whatever you're most interested in; if you want to become moderately rich, you can't usually afford to; but if you want to become super rich, and you're young and good at technology, working on what you're most interested in becomes a good idea again. What if you're not sure what you want? What if you're attracted to the idea of making money and more attracted to some kinds of work than others, but neither attraction predominates? How do you break ties? The key here is to understand that such ties are only apparent. When you have trouble choosing between following your interests and making money, it's never because you have complete knowledge of yourself and of the types of work you're choosing between, and the options are perfectly balanced. When you can't decide which path to take, it's almost always due to ignorance. In fact you're usually suffering from three kinds of ignorance simultaneously: you don't know what makes you happy, what the various kinds of work are really like, or how well you could do them. [ 2 ] In a way this ignorance is excusable. It's often hard to predict these things, and no one even tells you that you need to. If you're ambitious you're told you should go to college, and this is good advice so far as it goes, but that's where it usually ends. No one tells you how to figure out what to work on, or how hard this can be. What do you do in the face of uncertainty? Get more certainty. And probably the best way to do that is to try working on things you're interested in. That will get you more information about how interested you are in them, how good you are at them, and how much scope they offer for ambition. Don't wait. Don't wait till the end of college to figure out what to work on. Don't even wait for internships during college. You don't necessarily need a job doing x in order to work on x; often you can just start doing it in some form yourself. And since figuring out what to work on is a problem that could take <DATE_TIME> to solve, the sooner you start, the better. One useful trick for judging different kinds of work is to look at who your colleagues will be. You'll become like whoever you work with. Do you want to become like these people? Indeed, the difference in character between different kinds of work is magnified by the fact that everyone else is facing the same decisions as you. If you choose a kind of work mainly for how well it pays, you'll be surrounded by other people who chose it for the same reason, and that will make it even more soul-sucking than it seems from the outside. Whereas if you choose work you're genuinely interested in, you'll be surrounded mostly by other people who are genuinely interested in it, and that will make it extra inspiring. [ 3 ] The other thing you do in the face of uncertainty is to make choices that are uncertainty-proof. The less sure you are about what to do, the more important it is to choose options that give you more options in the future. I call this "staying upwind." If you're unsure whether to major in math or economics, for example, choose math; math is upwind of economics in the sense that it will be easier to switch later from math to economics than from economics to math. There's one case, though, where it's easy to say whether you should work on what interests you the most: if you want to do great work . This is not a sufficient condition for doing great work, but it is a necessary one. There's a lot of selection bias in advice about whether to "follow your passion," and this is the reason. Most such advice comes from people who are famously successful, and if you ask someone who's famously successful how to do what they did, most will tell you that you have to work on what you're most interested in. And this is in fact true. That doesn't mean it's the right advice for everyone. Not everyone can do great work, or wants to. But if you do want to, the complicated question of whether or not to work on what interests you the most becomes simple. The answer is yes. The root of great work is a sort of ambitious curiosity, and you can't manufacture that. Notes [ 1 ] These examples show why it's a mistake to assume that economic inequality must be evidence of some kind of brokenness or unfairness. It's obvious that different people have different interests, and that some interests yield far more money than others, so how can it not be obvious that some people will end up much richer than others? In a world where some people like to write enterprise software and others like to make studio pottery, economic inequality is the natural outcome. [ 2 ] Difficulty choosing between interests is a different matter. That's not always due to ignorance. It's often intrinsically difficult. I still have trouble doing it. [ 3 ] You can't always take people at their word on this. Since it's more prestigious to work on things you're interested in than to be driven by money, people who are driven mainly by money will often claim to be more interested in their work than they actually are. One way to test such claims is by doing the following thought experiment: if their work didn't pay well, would they take <DATE_TIME> jobs doing something else in order to do it in their spare time? Lots of mathematicians and scientists and engineers would. Historically lots have . But I don't think as many investment bankers would. This thought experiment is also useful for distinguishing between university departments. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, Harj Taggar, and <PERSON> for reading drafts of this.
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The Reddits <DATE_TIME> I met the <NRP> before we even started Y Combinator. In fact they were one of the reasons we started it. YC grew out of a talk I gave to the Harvard Computer Society (the undergrad computer club) about how to start a startup. Everyone else in the audience was probably local, but <PERSON> and <PERSON> came up on the train from the University of Virginia, where they were seniors. Since they'd come so far I agreed to meet them for coffee. They told me about the startup idea we'd later fund them to drop: a way to order fast food on your cellphone. This was before smartphones. They'd have had to make deals with cell carriers and fast food chains just to get it launched. So it was not going to happen. It still doesn't exist, <DATE_TIME>. But I was impressed with their brains and their energy. In fact I was so impressed with them and some of the other people I met at that talk that I decided to start something to fund them. <DATE_TIME> I told <PERSON> and <PERSON> that we were starting Y Combinator, and encouraged them to apply. That first batch we didn't have any way to identify applicants, so we made up nicknames for them. The <NRP> were the "Cell food muffins." "Muffin" is a term of endearment <PERSON> uses for things like small dogs and <DATE_TIME>. So that gives you some idea what kind of impression <PERSON> and <PERSON> made in <DATE_TIME>. They had the look of slightly ruffled surprise that baby birds have. Their idea was bad though. And since we thought then that we were funding ideas rather than founders, we rejected them. But we felt bad about it. <PERSON> was sad that we'd rejected the muffins. And it seemed wrong to me to turn down the people we'd been inspired to start YC to fund. I don't think the startup sense of the word "pivot" had been invented yet, but we wanted to fund <PERSON> and <PERSON>, so if their idea was bad, they'd have to work on something else. And I knew what else. In <DATE_TIME> there was a site called Delicious where you could save links. It had a page called <URL> that listed the most-saved links, and people were using this page as a de facto Reddit. I knew because a lot of the traffic to my site was coming from it. There needed to be something like <URL> but designed for sharing links instead of being a byproduct of saving them. So I called <PERSON> and <PERSON> and said that we liked them, just not their idea, so we'd fund them if they'd work on something else. They were on the train home to <LOCATION> at that point. They got off at the next station and got on the next train north, and by <DATE_TIME> were committed to working on what's now called <LOCATION>. They would have liked to call it Snoo, as in "What snoo?" But <URL> was too expensive, so they settled for calling the mascot <PERSON> and picked a name for the site that wasn't registered. Early on <LOCATION> was just a provisional name, or so they told me at least, but it's probably too late to change it now. As with all the really great startups, there's an uncannily close match between the company and the founders. <PERSON> in particular. Reddit has a certain personality - curious, skeptical, ready to be amused - and that personality is <PERSON>'s. <PERSON> will roll his eyes at this, but he's an intellectual; he's interested in ideas for their own sake. That was how he came to be in that audience in <LOCATION> in the first place. He knew me because he was interested in a programming language I've written about called Lisp, and Lisp is one of those languages few people learn except out of intellectual curiosity. <PERSON>'s kind of vacuum-cleaner curiosity is exactly what you want when you're starting a site that's a list of links to literally anything interesting. <PERSON> was not a big fan of authority, so he also liked the idea of a site without editors. In <DATE_TIME> the top forum for programmers was a site called Slashdot. It was a lot like <LOCATION>, except the stories on the frontpage were chosen by human moderators. And though they did a good job, that one small difference turned out to be a big difference. Being driven by user submissions meant <LOCATION> was fresher than Slashdot. News there was newer, and users will always go where the newest news is. I pushed the Reddits to launch fast. A version one didn't need to be more than a couple hundred lines of code. How could that take <DATE_TIME> or two to build? And they did launch comparatively fast, <DATE_TIME> into the first YC batch. The first users were <PERSON>, <PERSON>, me, and some of their YC batchmates and college friends. It turns out you don't need that many users to collect a decent list of interesting links, especially if you have multiple accounts per user. Reddit got two more people from their YC batch: <PERSON> and <PERSON>, and they too were unusually smart. <PERSON> was just finishing his PhD in physics at Harvard. <PERSON> was younger, a college freshman, and even more anti-authority than <PERSON>. It's not exaggerating to describe him as a martyr for what authority later did to him. Slowly but inexorably Reddit's traffic grew. At first the numbers were so small they were hard to distinguish from background noise. But within <DATE_TIME> it was clear that there was a core of real users returning regularly to the site. And although all kinds of things have happened to <NRP> the company in <DATE_TIME> since, <LOCATION> the site never looked back. Reddit the site (and now app) is such a fundamentally useful thing that it's almost unkillable. Which is why, despite a long stretch after <PERSON> left when the management strategy ranged from benign neglect to spectacular blunders, traffic just kept growing. You can't do that with most companies. Most companies you take your eye off the ball for <DATE_TIME> and you're in deep trouble. But <LOCATION> was special, and when <PERSON> came back in <DATE_TIME>, I knew the world was in for a surprise. People thought they had Reddit's number: one of the players in <LOCATION>, but not one of the big ones. But those who knew what had been going on behind the scenes knew there was more to the story than this. If Reddit could grow to the size it had with management that was harmless at best, what could it do if <PERSON> came back? We now know the answer to that question. Or at least a lower bound on the answer. <PERSON> is not out of ideas yet.
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The Best Essay March 2024 Despite its title this isn't meant to be the best essay. My goal here is to figure out what the best essay would be like. It would be well-written, but you can write well about any topic. What made it special would be what it was about. Obviously some topics would be better than others. It probably wouldn't be about this <DATE_TIME>'s lipstick colors. But it wouldn't be vaporous talk about elevated themes either. A good essay has to be surprising. It has to tell people something they don't already know. The best essay would be on the most important topic you could tell people something surprising about. That may sound obvious, but it has some unexpected consequences. One is that science enters the picture like an elephant stepping into a rowboat. For example, <PERSON> first described the idea of natural selection in an essay written in <DATE_TIME>. Talk about an important topic you could tell people something surprising about. If that's the test of a great essay, this was surely the best one written in <DATE_TIME>. And indeed, the best possible essay at any given time would usually be one describing the most important scientific or technological discovery it was possible to make. [ 1 ] Another unexpected consequence: I imagined when I started writing this that the best essay would be fairly timeless - that the best essay you could write in <DATE_TIME> would be much the same as the best one you could write now. But in fact the opposite seems to be true. It might be true that the best painting would be timeless in this sense. But it wouldn't be impressive to write an essay introducing natural selection now. The best essay now would be one describing a great discovery we didn't yet know about. If the question of how to write the best possible essay reduces to the question of how to make great discoveries, then I started with the wrong question. Perhaps what this exercise shows is that we shouldn't waste our time writing essays but instead focus on making discoveries in some specific domain. But I'm interested in essays and what can be done with them, so I want to see if there's some other question I could have asked. There is, and on the face of it, it seems almost identical to the one I started with. Instead of asking what would the best essay be? I should have asked how do you write essays well? Though these seem only phrasing apart, their answers diverge. The answer to the first question, as we've seen, isn't really about essay writing. The second question forces it to be. Writing essays, at its best, is a way of discovering ideas. How do you do that well? How do you discover by writing? An essay should ordinarily start with what I'm going to call a question, though I mean this in a very general sense: it doesn't have to be a question grammatically, just something that acts like one in the sense that it spurs some response. How do you get this initial question? It probably won't work to choose some important-sounding topic at random and go at it. Professional traders won't even trade unless they have what they call an edge - a convincing story about why in some class of trades they'll win more than they lose. Similarly, you shouldn't attack a topic unless you have a way in - some new insight about it or way of approaching it. You don't need to have a complete thesis; you just need some kind of gap you can explore. In fact, merely having questions about something other people take for granted can be edge enough. If you come across a question that's sufficiently puzzling, it could be worth exploring even if it doesn't seem very momentous. Many an important discovery has been made by pulling on a thread that seemed insignificant at first. How can they all be finches? [ 2 ] Once you've got a question, then what? You start thinking out loud about it. Not literally out loud, but you commit to a specific string of words in response, as you would if you were talking. This initial response is usually mistaken or incomplete. Writing converts your ideas from vague to bad. But that's a step forward, because once you can see the brokenness, you can fix it. Perhaps beginning writers are alarmed at the thought of starting with something mistaken or incomplete, but you shouldn't be, because this is why essay writing works. Forcing yourself to commit to some specific string of words gives you a starting point, and if it's wrong, you'll see that when you reread it. At least half of essay writing is rereading what you've written and asking is this correct and complete? You have to be very strict when rereading, not just because you want to keep yourself honest, but because a gap between your response and the truth is often a sign of new ideas to be discovered. The prize for being strict with what you've written is not just refinement. When you take a roughly correct answer and try to make it exactly right, sometimes you find that you can't, and that the reason is that you were depending on a false assumption. And when you discard it, the answer turns out to be completely different. [ 3 ] Ideally the response to a question is two things: the first step in a process that converges on the truth, and a source of additional questions (in my very general sense of the word). So the process continues recursively, as response spurs response. [ 4 ] Usually there are several possible responses to a question, which means you're traversing a tree. But essays are linear, not tree-shaped, which means you have to choose one branch to follow at each point. How do you choose? Usually you should follow whichever offers the greatest combination of generality and novelty. I don't consciously rank branches this way; I just follow whichever seems most exciting; but generality and novelty are what make a branch exciting. [ 5 ] If you're willing to do a lot of rewriting, you don't have to guess right. You can follow a branch and see how it turns out, and if it isn't good enough, cut it and backtrack. I do this all the time. In this essay I've already cut a 17-paragraph subtree, in addition to countless shorter ones. Maybe I'll reattach it at the end, or boil it down to a footnote, or spin it off as its own essay; we'll see. [ 6 ] In general you want to be quick to cut. One of the most dangerous temptations in writing (and in software and painting) is to keep something that isn't right, just because it contains a few good bits or cost you a lot of effort. The most surprising new question being thrown off at this point is does it really matter what the initial question is? If the space of ideas is highly connected, it shouldn't, because you should be able to get from any question to the most valuable ones in a few hops. And we see evidence that it's highly connected in the way, for example, that people who are obsessed with some topic can turn any conversation toward it. But that only works if you know where you want to go, and you don't in an essay. That's the whole point. You don't want to be the obsessive conversationalist, or all your essays will be about the same thing. [ 7 ] The other reason the initial question matters is that you usually feel somewhat obliged to stick to it. I don't think about this when I decide which branch to follow. I just follow novelty and generality. Sticking to the question is enforced later, when I notice I've wandered too far and have to backtrack. But I think this is the optimal solution. You don't want the hunt for novelty and generality to be constrained in the moment. Go with it and see what you get. [ 8 ] Since the initial question does constrain you, in the best case it sets an upper bound on the quality of essay you'll write. If you do as well as you possibly can on the chain of thoughts that follow from the initial question, the initial question itself is the only place where there's room for variation. It would be a mistake to let this make you too conservative though, because you can't predict where a question will lead. Not if you're doing things right, because doing things right means making discoveries, and by definition you can't predict those. So the way to respond to this situation is not to be cautious about which initial question you choose, but to write a lot of essays. Essays are for taking risks. Almost any question can get you a good essay. Indeed, it took some effort to think of a sufficiently unpromising topic in the third paragraph, because any essayist's first impulse on hearing that the best essay couldn't be about x would be to try to write it. But if most questions yield good essays, only some yield great ones. Can we predict which questions will yield great essays? Considering how long I've been writing essays, it's alarming how novel that question feels. One thing I like in an initial question is outrageousness. I love questions that seem naughty in some way - for example, by seeming counterintuitive or overambitious or heterodox. Ideally all three. This essay is an example. Writing about the best essay implies there is such a thing, which pseudo-intellectuals will dismiss as reductive, though it follows necessarily from the possibility of one essay being better than another. And thinking about how to do something so ambitious is close enough to doing it that it holds your attention. I like to start an essay with a gleam in my eye. This could be just a taste of mine, but there's one aspect of it that probably isn't: to write a really good essay on some topic, you have to be interested in it. A good writer can write well about anything, but to stretch for the novel insights that are the raison d'etre of the essay, you have to care. If caring about it is one of the criteria for a good initial question, then the optimal question varies from person to person. It also means you're more likely to write great essays if you care about a lot of different things. The more curious you are, the greater the probable overlap between the set of things you're curious about and the set of topics that yield great essays. What other qualities would a great initial question have? It's probably good if it has implications in a lot of different areas. And I find it's a good sign if it's one that people think has already been thoroughly explored. But the truth is that I've barely thought about how to choose initial questions, because I rarely do it. I rarely choose what to write about; I just start thinking about something, and sometimes it turns into an essay. Am I going to stop writing essays about whatever I happen to be thinking about and instead start working my way through some systematically generated list of topics? That doesn't sound like much fun. And yet I want to write good essays, and if the initial question matters, I should care about it. Perhaps the answer is to go one step earlier: to write about whatever pops into your head, but try to ensure that what pops into your head is good. Indeed, now that I think about it, this has to be the answer, because a mere list of topics wouldn't be any use if you didn't have edge with any of them. To start writing an essay, you need a topic plus some initial insight about it, and you can't generate those systematically. If only. [ 9 ] You can probably cause yourself to have more of them, though. The quality of the ideas that come out of your head depends on what goes in, and you can improve that in two dimensions, breadth and depth. You can't learn everything, so getting breadth implies learning about topics that are very different from one another. When I tell people about my book-buying trips to Hay and they ask what I buy books about, I usually feel a bit sheepish answering, because the topics seem like a laundry list of unrelated subjects. But perhaps that's actually optimal in this business. You can also get ideas by talking to people, by doing and building things, and by going places and seeing things. I don't think it's important to talk to new people so much as the sort of people who make you have new ideas. I get more new ideas after talking for <DATE_TIME> with <PERSON> than from talking to 20 new smart people. I know because that's what a block of office <DATE_TIME> at Y Combinator consists of. While breadth comes from reading and talking and seeing, depth comes from doing. The way to really learn about some domain is to have to solve problems in it. Though this could take the form of writing, I suspect that to be a good essayist you also have to do, or have done, some other kind of work. That may not be true for most other fields, but essay writing is different. You could spend half your time working on something else and be net ahead, so long as it was hard. I'm not proposing that as a recipe so much as an encouragement to those already doing it. If you've spent all your life so far working on other things, you're already halfway there. Though of course to be good at writing you have to like it, and if you like writing you'd probably have spent at least some time doing it. Everything I've said about initial questions applies also to the questions you encounter in writing the essay. They're the same thing; every subtree of an essay is usually a shorter essay, just as every subtree of a Calder mobile is a smaller mobile. So any technique that gets you good initial questions also gets you good whole essays. At some point the cycle of question and response reaches what feels like a natural end. Which is a little suspicious; shouldn't every answer suggest more questions? I think what happens is that you start to feel sated. Once you've covered enough interesting ground, you start to lose your appetite for new questions. Which is just as well, because the reader is probably feeling sated too. And it's not lazy to stop asking questions, because you could instead be asking the initial question of a new essay. That's the ultimate source of drag on the connectedness of ideas: the discoveries you make along the way. If you discover enough starting from question A, you'll never make it to question <PERSON> Though if you keep writing essays you'll gradually fix this problem by burning off such discoveries. So bizarrely enough, writing lots of essays makes it as if the space of ideas were more highly connected. When a subtree comes to an end, you can do one of two things. You can either stop, or pull the Cubist trick of laying separate subtrees end to end by returning to a question you skipped earlier. Usually it requires some sleight of hand to make the essay flow continuously at this point, but not this time. This time I actually need an example of the phenomenon. For example, we discovered earlier that the best possible essay wouldn't usually be timeless in the way the best painting would. This seems surprising enough to be worth investigating further. There are two senses in which an essay can be timeless: to be about a matter of permanent importance, and always to have the same effect on readers. With art these two senses blend together. Art that looked beautiful to the ancient <NRP> still looks beautiful to us. But with essays the two senses diverge, because essays teach, and you can't teach people something they already know. Natural selection is certainly a matter of permanent importance, but an essay explaining it couldn't have the same effect on us that it would have had on <PERSON>'s contemporaries, precisely because his ideas were so successful that everyone already knows about them. [ 10 ] I imagined when I started writing this that the best possible essay would be timeless in the stricter, evergreen sense: that it would contain some deep, timeless wisdom that would appeal equally to <PERSON> and <PERSON>. That doesn't seem to be true. But if the best possible essay wouldn't usually be timeless in this stricter sense, what would it take to write essays that were? The answer to that turns out to be very strange: to be the evergreen kind of timeless, an essay has to be ineffective, in the sense that its discoveries aren't assimilated into our shared culture. Otherwise there will be nothing new in it for the second generation of readers. If you want to surprise readers not just now but in the future as well, you have to write essays that won't stick - essays that, no matter how good they are, won't become part of what people in the future learn before they read them. [ 11 ] I can imagine several ways to do that. One would be to write about things people never learn. For example, it's a long-established pattern for ambitious people to chase after various types of prizes, and only later, perhaps too late, to realize that some of them weren't worth as much as they thought. If you write about that, you can be confident of a conveyor belt of future readers to be surprised by it. Ditto if you write about the tendency of the inexperienced to overdo things - of young engineers to produce overcomplicated solutions, for example. There are some kinds of mistakes people never learn to avoid except by making them. Any of those should be a timeless topic. Sometimes when we're slow to grasp things it's not just because we're obtuse or in denial but because we've been deliberately lied to. There are a lot of things adults lie to kids about, and when you reach adulthood, they don't take you aside and hand you a list of them. They don't remember which lies they told you, and most were implicit anyway. So contradicting such lies will be a source of surprises for as long as adults keep telling them. Sometimes it's systems that lie to you. For example, the educational systems in most countries train you to win by hacking the test . But that's not how you win at the most important real-world tests, and after <DATE_TIME> of training, this is hard for new arrivals in the real world to grasp. Helping them overcome such institutional lies will work as long as the institutions remain broken. [ 12 ] Another recipe for timelessness is to write about things readers already know, but in much more detail than can be transmitted culturally. "Everyone knows," for example, that it can be rewarding to have kids . But till you have them you don't know precisely what forms that takes, and even then much of what you know you may never have put into words. I've written about all these kinds of topics. But I didn't do it in a deliberate attempt to write essays that were timeless in the stricter sense. And indeed, the fact that this depends on one's ideas not sticking suggests that it's not worth making a deliberate attempt to. You should write about topics of timeless importance, yes, but if you do such a good job that your conclusions stick and future generations find your essay obvious instead of novel, so much the better. You've crossed into <PERSON> territory. Writing about topics of timeless importance is an instance of something even more general, though: breadth of applicability. And there are more kinds of breadth than chronological - applying to lots of different fields, for example. So breadth is the ultimate aim. I already aim for it. Breadth and novelty are the two things I'm always chasing. But I'm glad I understand where timelessness fits. I understand better where a lot of things fit now. This essay has been a kind of tour of essay writing. I started out hoping to get advice about topics; if you assume good writing, the only thing left to differentiate the best essay is its topic. And I did get advice about topics: discover natural selection. Yeah, that would be nice. But when you step back and ask what's the best you can do short of making some great discovery like that, the answer turns out to be about procedure. Ultimately the quality of an essay is a function of the ideas discovered in it, and the way you get them is by casting a wide net for questions and then being very exacting with the answers. The most striking feature of this map of essay writing are the alternating stripes of inspiration and effort required. The questions depend on inspiration, but the answers can be got by sheer persistence. You don't have to get an answer right the first time, but there's no excuse for not getting it right eventually, because you can keep rewriting till you do. And this is not just a theoretical possibility. It's a pretty accurate description of the way I work. I'm rewriting as we speak. But although I wish I could say that writing great essays depends mostly on effort, in the limit case it's inspiration that makes the difference. In the limit case, the questions are the harder thing to get. That pool has no bottom. How to get more questions? That is the most important question of all. Notes [ 1 ] There might be some resistance to this conclusion on the grounds that some of these discoveries could only be understood by a small number of readers. But you get into all sorts of difficulties if you want to disqualify essays on this account. How do you decide where the cutoff should be? If a virus kills off everyone except a handful of people sequestered at <LOCATION>, could an essay that had been disqualified now be eligible? Etc. <PERSON>'s <DATE_TIME> essay was derived from an earlier version written in <DATE_TIME>. Extracts from it were published in <DATE_TIME>. [ 2 ] When you find yourself very curious about an apparently minor question, that's an exciting sign. Evolution has designed you to pay attention to things that matter. So when you're very curious about something random, that could mean you've unconsciously noticed it's less random than it seems. [ 3 ] Corollary: If you're not intellectually honest, your writing won't just be biased, but also boring, because you'll miss all the ideas you'd have discovered if you pushed for the truth. [ 4 ] Sometimes this process begins before you start writing. Sometimes you've already figured out the first few things you want to say. Schoolchildren are often taught they should decide everything they want to say, and write this down as an outline before they start writing the essay itself. Maybe that's a good way to get them started - or not, I don't know - but it's antithetical to the spirit of essay writing. The more detailed your outline, the less your ideas can benefit from the sort of discovery that essays are for. [ 5 ] The problem with this type of "greedy" algorithm is that you can end up on a local maximum. If the most valuable question is preceded by a boring one, you'll overlook it. But I can't imagine a better strategy. There's no lookahead except by writing. So use a greedy algorithm and a lot of time. [ 6 ] I ended up reattaching the first 5 of the 17 paragraphs, and discarding the rest. [ 7 ] <PERSON> confessed to making use of this phenomenon when taking exams at <LOCATION>. He had in his head a standard essay about some general literary topic, and he would find a way to turn the exam question toward it and then just reproduce it again. Strictly speaking it's the graph of ideas that would be highly connected, not the space, but that usage would confuse people who don't know graph theory, whereas people who do know it will get what I mean if I say "space". [ 8 ] Too far doesn't depend just on the distance from the original topic. It's more like that distance divided by the value of whatever I've discovered in the subtree. [ 9 ] Or can you? I should try writing about this. Even if the chance of succeeding is small, the expected value is huge. [ 10 ] There was a vogue in <DATE_TIME> for saying that the purpose of art was also to teach. Some artists tried to justify their work by explaining that their goal was not to produce something good, but to challenge our preconceptions about art. And to be fair, art can teach somewhat. The ancient <NRP>' naturalistic sculptures represented a new idea, and must have been extra exciting to contemporaries on that account. But they still look good to us. [ 11 ] <PERSON> caused huge controversy in <DATE_TIME> with his ideas about "trial marriage." But they make boring reading now, because they prevailed. "Trial marriage" is what we call "dating." [ 12 ] If you'd asked me <DATE_TIME>, I'd have predicted that schools would continue to teach hacking the test for <DATE_TIME>. But now it seems plausible that students will soon be taught individually by AIs, and that exams will be replaced by ongoing, invisible micro-assessments. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and Harj Taggar for reading drafts of this.
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How to Get New Ideas January 2023 ( Someone fed my essays into GPT to make something that could answer questions based on them, then asked it where good ideas come from. The answer was ok, but not what I would have said. This is what I would have said.) The way to get new ideas is to notice anomalies: what seems strange, or missing, or broken? You can see anomalies in everyday life (much of standup comedy is based on this), but the best place to look for them is at the frontiers of knowledge. Knowledge grows fractally. From a distance its edges look smooth, but when you learn enough to get close to one, you'll notice it's full of gaps. These gaps will seem obvious; it will seem inexplicable that no one has tried x or wondered about y. In the best case, exploring such gaps yields whole new fractal buds.
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The Need to Read November 2022 In the science fiction books I read as a kid, reading had often been replaced by some more efficient way of acquiring knowledge. Mysterious "tapes" would load it into one's brain like a program being loaded into a computer. That sort of thing is unlikely to happen anytime soon. Not just because it would be hard to build a replacement for reading, but because even if one existed, it would be insufficient. Reading about x doesn't just teach you about x; it also teaches you how to write. [ 1 ] Would that matter? If we replaced reading, would anyone need to be good at writing? The reason it would matter is that writing is not just a way to convey ideas, but also a way to have them. A good writer doesn't just think, and then write down what he thought, as a sort of transcript. A good writer will almost always discover new things in the process of writing. And there is, as far as I know, no substitute for this kind of discovery. Talking about your ideas with other people is a good way to develop them. But even after doing this, you'll find you still discover new things when you sit down to write. There is a kind of thinking that can only be done by writing . There are of course kinds of thinking that can be done without writing. If you don't need to go too deeply into a problem, you can solve it without writing. If you're thinking about how two pieces of machinery should fit together, writing about it probably won't help much. And when a problem can be described formally, you can sometimes solve it in your head. But if you need to solve a complicated, ill-defined problem, it will almost always help to write about it. Which in turn means that someone who's not good at writing will almost always be at a disadvantage in solving such problems. You can't think well without writing well, and you can't write well without reading well. And I mean that last "well" in both senses. You have to be good at reading, and read good things. [ 2 ] People who just want information may find other ways to get it. But people who want to have ideas can't afford to. Notes [ 1 ] Audiobooks can give you examples of good writing, but having them read to you doesn't teach you as much about writing as reading them yourself. [ 2 ] By "good at reading" I don't mean good at the mechanics of reading. You don't have to be good at extracting words from the page so much as extracting meaning from the words. <NRP> Translation Chinese Translation Italian Translation French Translation
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What You (Want to)* Want <DATE_TIME> Since I was about 9 I've been puzzled by the apparent contradiction between being made of matter that behaves in a predictable way, and the feeling that I could choose to do whatever I wanted. At the time I had a self-interested motive for exploring the question. At that age (like most succeeding ages) I was always in trouble with the authorities, and it seemed to me that there might possibly be some way to get out of trouble by arguing that I wasn't responsible for my actions. I gradually lost hope of that, but the puzzle remained: How do you reconcile being a machine made of matter with the feeling that you're free to choose what you do? [ 1 ] The best way to explain the answer may be to start with a slightly wrong version, and then fix it. The wrong version is: You can do what you want, but you can't want what you want. Yes, you can control what you do, but you'll do what you want, and you can't control that. The reason this is mistaken is that people do sometimes change what they want. People who don't want to want something - drug addicts, for example - can sometimes make themselves stop wanting it. And people who want to want something - who want to like classical music, or broccoli - sometimes succeed. So we modify our initial statement: You can do what you want, but you can't want to want what you want. That's still not quite true. It's possible to change what you want to want. I can imagine someone saying "I decided to stop wanting to like classical music." But we're getting closer to the truth. It's rare for people to change what they want to want, and the more "want to"s we add, the rarer it gets. We can get arbitrarily close to a true statement by adding more "want to"s in much the same way we can get arbitrarily close to 1 by adding more 9s to a string of 9s following a decimal point. In practice three or four "want to"s must surely be enough. It's hard even to envision what it would mean to change what you want to want to want to want, let alone actually do it. So one way to express the correct answer is to use a regular expression. You can do what you want, but there's some statement of the form "you can't (want to)* want what you want" that's true. Ultimately you get back to a want that you don't control. [ 2 ] Notes [ 1 ] I didn't know when I was <DATE_TIME> that matter might behave randomly, but I don't think it affects the problem much. Randomness destroys the ghost in the machine as effectively as determinism. [ 2 ] If you don't like using an expression, you can make the same point using higher-order desires: There is some n such that you don't control your nth-order desires. Thanks to <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. <NRP> Translation
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Alien Truth <DATE_TIME> If there were intelligent beings elsewhere in the universe, they'd share certain truths in common with us. The truths of mathematics would be the same, because they're true by definition. Ditto for the truths of physics; the mass of a carbon atom would be the same on their planet. But I think we'd share other truths with aliens besides the truths of math and physics, and that it would be worthwhile to think about what these might be. For example, I think we'd share the principle that a controlled experiment testing some hypothesis entitles us to have proportionally increased belief in it. It seems fairly likely, too, that it would be true for aliens that one can get better at something by practicing. We'd probably share Occam's razor. There doesn't seem anything specifically human about any of these ideas. We can only guess, of course. We can't say for sure what forms intelligent life might take. Nor is it my goal here to explore that question, interesting though it is. The point of the idea of alien truth is not that it gives us a way to speculate about what forms intelligent life might take, but that it gives us a threshold, or more precisely a target, for truth. If you're trying to find the most general truths short of those of math or physics, then presumably they'll be those we'd share in common with other forms of intelligent life. Alien truth will work best as a heuristic if we err on the side of generosity. If an idea might plausibly be relevant to aliens, that's enough. Justice, for example. I wouldn't want to bet that all intelligent beings would understand the concept of justice, but I wouldn't want to bet against it either. The idea of alien truth is related to Erdos's idea of God's book. He used to describe a particularly good proof as being in God's book, the implication being (a) that a sufficiently good proof was more discovered than invented, and (b) that its goodness would be universally recognized. If there's such a thing as alien truth, then there's more in God's book than math. What should we call the search for alien truth? The obvious choice is "philosophy." Whatever else philosophy includes, it should probably include this. I'm fairly sure <PERSON> would have thought so. One could even make the case that the search for alien truth is, if not an accurate description of philosophy, a good definition for it. I.e. that it's what people who call themselves philosophers should be doing, whether or not they currently are. But I'm not wedded to that; doing it is what matters, not what we call it. We may one day have something like alien life among us in the form of AIs. And that may in turn allow us to be precise about what truths an intelligent being would have to share with us. We might find, for example, that it's impossible to create something we'd consider intelligent that doesn't use Occam's razor. We might one day even be able to prove that. But though this sort of research would be very interesting, it's not necessary for our purposes, or even the same field; the goal of philosophy, if we're going to call it that, would be to see what ideas we come up with using alien truth as a target, not to say precisely where the threshold of it is. Those two questions might <DATE_TIME> converge, but they'll converge from quite different directions, and till they do, it would be too constraining to restrict ourselves to thinking only about things we're certain would be alien truths. Especially since this will probably be one of those areas where the best guesses turn out to be surprisingly close to optimal. (Let's see if that one does.) Whatever we call it, the attempt to discover alien truths would be a worthwhile undertaking. And curiously enough, that is itself probably an alien truth. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Putting Ideas into Words <DATE_TIME> Writing about something, even something you know well, usually shows you that you didn't know it as well as you thought. Putting ideas into words is a severe test. The first words you choose are usually wrong; you have to rewrite sentences over and over to get them exactly right. And your ideas won't just be imprecise, but incomplete too. Half the ideas that end up in an essay will be ones you thought of while you were writing it. Indeed, that's why I write them. Once you publish something, the convention is that whatever you wrote was what you thought before you wrote it. These were your ideas, and now you've expressed them. But you know this isn't true. You know that putting your ideas into words changed them. And not just the ideas you published. Presumably there were others that turned out to be too broken to fix, and those you discarded instead. It's not just having to commit your ideas to specific words that makes writing so exacting. The real test is reading what you've written. You have to pretend to be a neutral reader who knows nothing of what's in your head, only what you wrote. When he reads what you wrote, does it seem correct? Does it seem complete? If you make an effort, you can read your writing as if you were a complete stranger, and when you do the news is usually bad. It takes me many cycles before I can get an essay past the stranger. But the stranger is rational, so you always can, if you ask him what he needs. If he's not satisfied because you failed to mention x or didn't qualify some sentence sufficiently, then you mention x or add more qualifications. Happy now? It may cost you some nice sentences, but you have to resign yourself to that. You just have to make them as good as you can and still satisfy the stranger. This much, I assume, won't be that controversial. I think it will accord with the experience of anyone who has tried to write about anything nontrivial. There may exist people whose thoughts are so perfectly formed that they just flow straight into words. But I've never known anyone who could do this, and if I met someone who said they could, it would seem evidence of their limitations rather than their ability. Indeed, this is a trope in movies: the guy who claims to have a plan for doing some difficult thing, and who when questioned further, taps his head and says "It's all up here." Everyone watching the movie knows what that means. At best the plan is vague and incomplete. Very likely there's some undiscovered flaw that invalidates it completely. At best it's a plan for a plan. In precisely defined domains it's possible to form complete ideas in your head. People can play chess in their heads, for example. And mathematicians can do some amount of math in their heads, though they don't seem to feel sure of a proof over a certain length till they write it down. But this only seems possible with ideas you can express in a formal language. [ 1 ] Arguably what such people are doing is putting ideas into words in their heads. I can to some extent write essays in my head. I'll sometimes think of a paragraph while walking or lying in bed that survives nearly unchanged in the final version. But really I'm writing when I do this. I'm doing the mental part of writing; my fingers just aren't moving as I do it. [ 2 ] You can know a great deal about something without writing about it. Can you ever know so much that you wouldn't learn more from trying to explain what you know? I don't think so. I've written about at least two subjects I know well - Lisp hacking and startups - and in both cases I learned a lot from writing about them. In both cases there were things I didn't consciously realize till I had to explain them. And I don't think my experience was anomalous. A great deal of knowledge is unconscious, and experts have if anything a higher proportion of unconscious knowledge than beginners. I'm not saying that writing is the best way to explore all ideas. If you have ideas about architecture, presumably the best way to explore them is to build actual buildings. What I'm saying is that however much you learn from exploring ideas in other ways, you'll still learn new things from writing about them. Putting ideas into words doesn't have to mean writing, of course. You can also do it the old way, by talking. But in my experience, writing is the stricter test. You have to commit to a single, optimal sequence of words. Less can go unsaid when you don't have tone of voice to carry meaning. And you can focus in a way that would seem excessive in conversation. I'll often spend <DATE_TIME> on an essay and reread drafts 50 times. If you did that in conversation it would seem evidence of some kind of mental disorder. If you're lazy, of course, writing and talking are equally useless. But if you want to push yourself to get things right, writing is the steeper hill. [ 3 ] The reason I've spent so long establishing this rather obvious point is that it leads to another that many people will find shocking. If writing down your ideas always makes them more precise and more complete, then no one who hasn't written about a topic has fully formed ideas about it. And someone who never writes has no fully formed ideas about anything nontrivial. It feels to them as if they do, especially if they're not in the habit of critically examining their own thinking. Ideas can feel complete. It's only when you try to put them into words that you discover they're not. So if you never subject your ideas to that test, you'll not only never have fully formed ideas, but also never realize it. Putting ideas into words is certainly no guarantee that they'll be right. Far from it. But though it's not a sufficient condition, it is a necessary one. Notes [ 1 ] Machinery and circuits are formal languages. [ 2 ] I thought of this sentence as I was walking down the street in <LOCATION>. [ 3 ] There are two senses of talking to someone: a strict sense in which the conversation is verbal, and a more general sense in which it can take any form, including writing. In the limit case (e.g. Seneca's letters), conversation in the latter sense becomes essay writing. It can be very useful to talk (in either sense) with other people as you're writing something. But a verbal conversation will never be more exacting than when you're talking about something you're writing. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. <NRP> Translation
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Is There Such a Thing as Good Taste? <DATE_TIME> (This essay is derived from a talk at the Cambridge Union.) When I was a kid, I'd have said there wasn't. My father told me so. Some people like some things, and other people like other things, and who's to say who's right? It seemed so obvious that there was no such thing as good taste that it was only through indirect evidence that I realized my father was wrong. And that's what I'm going to give you here: a proof by reductio ad absurdum. If we start from the premise that there's no such thing as good taste, we end up with conclusions that are obviously false, and therefore the premise must be wrong. We'd better start by saying what good taste is. There's a narrow sense in which it refers to aesthetic judgements and a broader one in which it refers to preferences of any kind. The strongest proof would be to show that taste exists in the narrowest sense, so I'm going to talk about taste in art. You have better taste than me if the art you like is better than the art I like. If there's no such thing as good taste, then there's no such thing as good art . Because if there is such a thing as good art, it's easy to tell which of two people has better taste. Show them a lot of works by artists they've never seen before and ask them to choose the best, and whoever chooses the better art has better taste. So if you want to discard the concept of good taste, you also have to discard the concept of good art. And that means you have to discard the possibility of people being good at making it. Which means there's no way for artists to be good at their jobs. And not just visual artists, but anyone who is in any sense an artist. You can't have good actors, or novelists, or composers, or dancers either. You can have popular novelists, but not good ones. We don't realize how far we'd have to go if we discarded the concept of good taste, because we don't even debate the most obvious cases. But it doesn't just mean we can't say which of two famous painters is better. It means we can't say that any painter is better than a randomly chosen <DATE_TIME>. That was how I realized my father was wrong. I started studying painting. And it was just like other kinds of work I'd done: you could do it well, or badly, and if you tried hard, you could get better at it. And it was obvious that <PERSON> and <PERSON> were much better at it than me. That gap between us was not imaginary. They were so good. And if they could be good, then art could be good, and there was such a thing as good taste after all. Now that I've explained how to show there is such a thing as good taste, I should also explain why people think there isn't. There are two reasons. One is that there's always so much disagreement about taste. Most people's response to art is a tangle of unexamined impulses. Is the artist famous? Is the subject attractive? Is this the sort of art they're supposed to like? Is it hanging in a famous museum, or reproduced in a big, expensive book? In practice most people's response to art is dominated by such extraneous factors. And the people who do claim to have good taste are so often mistaken. The paintings admired by the so-called experts in one generation are often so different from those admired a few generations later. It's easy to conclude there's nothing real there at all. It's only when you isolate this force, for example by trying to paint and comparing your work to Bellini's, that you can see that it does in fact exist. The other reason people doubt that art can be good is that there doesn't seem to be any room in the art for this goodness. The argument goes like this. Imagine several people looking at a work of art and judging how good it is. If being good art really is a property of objects, it should be in the object somehow. But it doesn't seem to be; it seems to be something happening in the heads of each of the observers. And if they disagree, how do you choose between them? The solution to this puzzle is to realize that the purpose of art is to work on its human audience, and humans have a lot in common. And to the extent the things an object acts upon respond in the same way, that's arguably what it means for the object to have the corresponding property. If everything a particle interacts with behaves as if the particle had a mass of m , then it has a mass of m . So the distinction between "objective" and "subjective" is not binary, but a matter of degree, depending on how much the subjects have in common. Particles interacting with one another are at one pole, but people interacting with art are not all the way at the other; their reactions aren't random . Because people's responses to art aren't random, art can be designed to operate on people, and be good or bad depending on how effectively it does so. Much as a vaccine can be. If someone were talking about the ability of a vaccine to confer immunity, it would seem very frivolous to object that conferring immunity wasn't really a property of vaccines, because acquiring immunity is something that happens in the immune system of each individual person. Sure, people's immune systems vary, and a vaccine that worked on one might not work on another, but that doesn't make it meaningless to talk about the effectiveness of a vaccine. The situation with art is messier, of course. You can't measure effectiveness by simply taking a vote, as you do with vaccines. You have to imagine the responses of subjects with a deep knowledge of art, and enough clarity of mind to be able to ignore extraneous influences like the fame of the artist. And even then you'd still see some disagreement. People do vary, and judging art is hard, especially recent art. There is definitely not a total order either of works or of people's ability to judge them. But there is equally definitely a partial order of both. So while it's not possible to have perfect taste, it is possible to have good taste. Thanks to the Cambridge Union for inviting me, and to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Weird Languages <DATE_TIME> When people say that in their experience all programming languages are basically equivalent, they're making a statement not about languages but about the kind of programming they've done. 99.5% of programming consists of gluing together calls to library functions. All popular languages are equally good at this. So one can easily spend one's whole career operating in the intersection of popular programming languages. But the other .5% of programming is disproportionately interesting. If you want to learn what it consists of, the weirdness of weird languages is a good clue to follow. Weird languages aren't weird by accident. Not the good ones, at least. The weirdness of the good ones usually implies the existence of some form of programming that's not just the usual gluing together of library calls. A concrete example: Lisp macros. Lisp macros seem weird even to many Lisp programmers. They're not only not in the intersection of popular languages, but by their nature would be hard to implement properly in a language without turning it into a dialect of Lisp. And macros are definitely evidence of techniques that go beyond glue programming. For example, solving problems by first writing a language for problems of that type, and then writing your specific application in it. Nor is this all you can do with macros; it's just one region in a space of program-manipulating techniques that even now is far from fully explored. So if you want to expand your concept of what programming can be, one way to do it is by learning weird languages. Pick a language that most programmers consider weird but whose median user is smart, and then focus on the differences between this language and the intersection of popular languages. What can you say in this language that would be impossibly inconvenient to say in others? In the process of learning how to say things you couldn't previously say, you'll probably be learning how to think things you couldn't previously think. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. <NRP> Translation
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A Project of One's Own June 2021 <DATE_TIME>, on the way home from school, my <DATE_TIME> son told me he couldn't wait to get home to write more of the story he was working on. This made me as happy as anything I've heard him say - not just because he was excited about his story, but because he'd discovered this way of working. Working on a project of your own is as different from ordinary work as skating is from walking. It's more fun, but also much more productive. What proportion of great work has been done by people who were skating in this sense? If not all of it, certainly a lot. There is something special about working on a project of your own. I wouldn't say exactly that you're happier. A better word would be excited, or engaged. You're happy when things are going well, but often they aren't. When I'm writing an essay, most of the time I'm worried and puzzled: worried that the essay will turn out badly, and puzzled because I'm groping for some idea that I can't see clearly enough. Will I be able to pin it down with words? In the end I usually can, if I take long enough, but I'm never sure; the first few attempts often fail. You have moments of happiness when things work out, but they don't last long, because then you're on to the next problem. So why do it at all? Because to the kind of people who like working this way, nothing else feels as right. You feel as if you're an animal in its natural habitat, doing what you were meant to do - not always happy, maybe, but awake and alive. Many kids experience the excitement of working on projects of their own. The hard part is making this converge with the work you do as an adult. And our customs make it harder. We treat "playing" and "hobbies" as qualitatively different from "work". It's not clear to a kid building a treehouse that there's a direct (though long) route from that to architecture or engineering. And instead of pointing out the route, we conceal it, by implicitly treating the stuff kids do as different from real work. [ 1 ] Instead of telling kids that their treehouses could be on the path to the work they do as adults, we tell them the path goes through school. And unfortunately schoolwork tends to be very different from working on projects of one's own. It's usually neither a project, nor one's own. So as school gets more serious, working on projects of one's own is something that survives, if at all, as a thin thread off to the side. It's a bit sad to think of all the high school kids turning their backs on building treehouses and sitting in class dutifully learning about <PERSON> or Newton to pass some exam, when the work that made <PERSON> and <PERSON> famous was actually closer in spirit to building treehouses than studying for exams. If I had to choose between my kids getting good grades and working on ambitious projects of their own, I'd pick the projects. And not because I'm an indulgent parent, but because I've been on the other end and I know which has more predictive value. When I was picking startups for Y Combinator, I didn't care about applicants' grades. But if they'd worked on projects of their own, I wanted to hear all about those. [ 2 ] It may be inevitable that school is the way it is. I'm not saying we have to redesign it (though I'm not saying we don't), just that we should understand what it does to our attitudes to work - that it steers us toward the dutiful plodding kind of work, often using competition as bait, and away from skating. There are occasionally times when schoolwork becomes a project of one's own. Whenever I had to write a paper, that would become a project of my own - except in English classes, ironically, because the things one has to write in English classes are so bogus . And when I got to college and started taking CS classes, the programs I had to write became projects of my own. Whenever I was writing or programming, I was usually skating, and that has been true ever since. So where exactly is the edge of projects of one's own? That's an interesting question, partly because the answer is so complicated, and partly because there's so much at stake. There turn out to be two senses in which work can be one's own: 1) that you're doing it voluntarily, rather than merely because someone told you to, and 2) that you're doing it by yourself. The edge of the former is quite sharp. People who care a lot about their work are usually very sensitive to the difference between pulling, and being pushed, and work tends to fall into one category or the other. But the test isn't simply whether you're told to do something. You can choose to do something you're told to do. Indeed, you can own it far more thoroughly than the person who told you to do it. For example, math homework is for most people something they're told to do. But for my father, who was a mathematician, it wasn't. Most of us think of the problems in a math book as a way to test or develop our knowledge of the material explained in each section. But to my father the problems were the part that mattered, and the text was merely a sort of annotation. Whenever he got a new math book it was to him like being given a puzzle: here was a new set of problems to solve, and he'd immediately set about solving all of them. The other sense of a project being one's own - working on it by oneself - has a much softer edge. It shades gradually into collaboration. And interestingly, it shades into collaboration in two different ways. One way to collaborate is to share a single project. For example, when two mathematicians collaborate on a proof that takes shape in the course of a conversation between them. The other way is when multiple people work on separate projects of their own that fit together like a jigsaw puzzle. For example, when one person writes the text of a book and another does the graphic design. [ 3 ] These two paths into collaboration can of course be combined. But under the right conditions, the excitement of working on a project of one's own can be preserved for quite a while before disintegrating into the turbulent flow of work in a large organization. Indeed, the history of successful organizations is partly the history of techniques for preserving that excitement. [ 4 ] The team that made the original Macintosh were a great example of this phenomenon. People like <PERSON> and <PERSON> and <PERSON> and <PERSON> were not just following orders. They were not tennis balls hit by <PERSON>, but rockets let loose by <PERSON>. There was a lot of collaboration between them, but they all seem to have individually felt the excitement of working on a project of one's own. In <PERSON> book on the Macintosh, he describes how they'd come back into the office after dinner and work late into the night. People who've never experienced the thrill of working on a project they're excited about can't distinguish this kind of <DATE_TIME> from the kind that happens in sweatshops and boiler rooms, but they're at opposite ends of the spectrum. That's why 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. For those to whom the word "work" automatically implies the dutiful plodding kind, they are. But for the skaters, the relationship between work and life would be better represented by a dash than a slash. I wouldn't want to work on anything that I didn't want to take over my life. Of course, it's easier to achieve this level of motivation when you're making something like the Macintosh. It's easy for something new to feel like a project of your own. That's one of the reasons for the tendency programmers have to rewrite things that don't need rewriting, and to write their own versions of things that already exist. This sometimes alarms managers, and measured by total number of characters typed, it's rarely the optimal solution. But it's not always driven simply by arrogance or cluelessness. Writing code from scratch is also much more rewarding - so much more rewarding that a good programmer can end up net ahead, despite the shocking waste of characters. Indeed, it may be one of the advantages of capitalism that it encourages such rewriting. A company that needs software to do something can't use the software already written to do it at another company, and thus has to write their own, which often turns out better. [ 5 ] The natural alignment between skating and solving new problems is one of the reasons the payoffs from startups are so high. Not only is the market price of unsolved problems higher, you also get a discount on productivity when you work on them. In fact, you get a double increase in productivity: when you're doing a clean-sheet design, it's easier to recruit skaters, and they get to spend all their time skating. <PERSON> knew a thing or two about skaters from having watched <PERSON>. If you can find the right people, you only have to tell them what to do at the highest level. They'll handle the details. Indeed, they insist on it. For a project to feel like your own, you must have sufficient autonomy. You can't be working to order, or slowed down by bureaucracy. One way to ensure autonomy is not to have a boss at all. There are two ways to do that: to be the boss yourself, and to work on projects outside of work. Though they're at opposite ends of the scale financially, startups and open source projects have a lot in common, including the fact that they're often run by skaters. And indeed, there's a wormhole from one end of the scale to the other: one of the best ways to discover startup ideas is to work on a project just for fun. If your projects are the kind that make money, it's easy to work on them. It's harder when they're not. And the hardest part, usually, is morale. That's where adults have it harder than kids. Kids just plunge in and build their treehouse without worrying about whether they're wasting their time, or how it compares to other treehouses. And frankly we could learn a lot from kids here. The high standards most grownups have for "real" work do not always serve us well. The most important phase in a project of one's own is at the beginning: when you go from thinking it might be cool to do x to actually doing x. And at that point high standards are not merely useless but positively harmful. There are a few people who start too many new projects, but far more, I suspect, who are deterred by fear of failure from starting projects that would have succeeded if they had. But if we couldn't benefit as kids from the knowledge that our treehouses were on the path to grownup projects, we can at least benefit as grownups from knowing that our projects are on a path that stretches back to treehouses. Remember that careless confidence you had as a kid when starting something new? That would be a powerful thing to recapture. If it's harder as adults to retain that kind of confidence, we at least tend to be more aware of what we're doing. Kids bounce, or are herded, from one kind of work to the next, barely realizing what's happening to them. Whereas we know more about different types of work and have more control over which we do. Ideally we can have the best of both worlds: to be deliberate in choosing to work on projects of our own, and carelessly confident in starting new ones. Notes [ 1 ] "Hobby" is a curious word. Now it means work that isn't real work - work that one is not to be judged by - but originally it just meant an obsession in a fairly general sense (even a political opinion, for example) that one metaphorically rode as a child rides a hobby-horse. It's hard to say if its recent, narrower meaning is a change for the better or the worse. For sure there are lots of false positives - lots of projects that end up being important but are dismissed initially as mere hobbies. But on the other hand, the concept provides valuable cover for projects in the early, ugly duckling phase. [ 2 ] Tiger parents, as parents so often do, are fighting the last war. Grades mattered more in <DATE_TIME> when the route to success was to acquire credentials while ascending some predefined ladder. But it's just as well that their tactics are focused on grades. How awful it would be if they invaded the territory of projects, and thereby gave their kids a distaste for this kind of work by forcing them to do it. Grades are already a grim, fake world, and aren't harmed much by parental interference, but working on one's own projects is a more delicate, private thing that could be damaged very easily. [ 3 ] The complicated, gradual edge between working on one's own projects and collaborating with others is one reason there is so much disagreement about the idea of the "lone genius." In practice people collaborate (or not) in all kinds of different ways, but the idea of the lone genius is definitely not a myth. There's a core of truth to it that goes with a certain way of working. [ 4 ] Collaboration is powerful too. The optimal organization would combine collaboration and ownership in such a way as to do the least damage to each. Interestingly, companies and university departments approach this ideal from opposite directions: companies insist on collaboration, and occasionally also manage both to recruit skaters and allow them to skate, and university departments insist on the ability to do independent research (which is by custom treated as skating, whether it is or not), and the people they hire collaborate as much as they choose. [ 5 ] If a company could design its software in such a way that the best newly arrived programmers always got a clean sheet, it could have a kind of eternal youth. That might not be impossible. If you had a software backbone defining a game with sufficiently clear rules, individual programmers could write their own players. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Fierce Nerds <DATE_TIME> Most people think of nerds as quiet, diffident people. In ordinary social situations they are - as quiet and diffident as the star quarterback would be if he found himself in the middle of a physics symposium. And for the same reason: they are fish out of water. But the apparent diffidence of nerds is an illusion due to the fact that when non-nerds observe them, it's usually in ordinary social situations. In fact some nerds are quite fierce. The fierce nerds are a small but interesting group. They are as a rule extremely competitive - more competitive, I'd say, than highly competitive non-nerds. Competition is more personal for them. Partly perhaps because they're not emotionally mature enough to distance themselves from it, but also because there's less randomness in the kinds of competition they engage in, and they are thus more justified in taking the results personally. Fierce nerds also tend to be somewhat overconfident, especially when young. It might seem like it would be a disadvantage to be mistaken about one's abilities, but empirically it isn't. Up to a point, confidence is a self-fullfilling prophecy. Another quality you find in most fierce nerds is intelligence. Not all nerds are smart, but the fierce ones are always at least moderately so. If they weren't, they wouldn't have the confidence to be fierce. [ 1 ] There's also a natural connection between nerdiness and independent-mindedness . It's hard to be independent-minded without being somewhat socially awkward, because conventional beliefs are so often mistaken, or at least arbitrary. No one who was both independent-minded and ambitious would want to waste the effort it takes to fit in. And the independent-mindedness of the fierce nerds will obviously be of the aggressive rather than the passive type: they'll be annoyed by rules, rather than dreamily unaware of them. I'm less sure why fierce nerds are impatient, but most seem to be. You notice it first in conversation, where they tend to interrupt you. This is merely annoying, but in the more promising fierce nerds it's connected to a deeper impatience about solving problems. Perhaps the competitiveness and impatience of fierce nerds are not separate qualities, but two manifestations of a single underlying drivenness. When you combine all these qualities in sufficient quantities, the result is quite formidable. The most vivid example of fierce nerds in action may be <PERSON> The Double Helix . The first sentence of the book is "I have never seen <PERSON> in a modest mood," and the portrait he goes on to paint of <PERSON> is the quintessential fierce nerd: brilliant, socially awkward, competitive, independent-minded, overconfident. But so is the implicit portrait he paints of himself. Indeed, his lack of social awareness makes both portraits that much more realistic, because he baldly states all sorts of opinions and motivations that a smoother person would conceal. And moreover it's clear from the story that <PERSON> and <PERSON>'s fierce nerdiness was integral to their success. Their independent-mindedness caused them to consider approaches that most others ignored, their overconfidence allowed them to work on problems they only half understood (they were literally described as "clowns" by one eminent insider), and their impatience and competitiveness got them to the answer ahead of two other groups that would otherwise have found it within <DATE_TIME>, if not <DATE_TIME>. [ 2 ] The idea that there could be fierce nerds is an unfamiliar one not just to many normal people but even to some young nerds. Especially early on, nerds spend so much of their time in ordinary social situations and so little doing real work that they get a lot more evidence of their awkwardness than their power. So there will be some who read this description of the fierce nerd and realize "Hmm, that's me." And it is to you, young fierce nerd, that I now turn. I have some good news, and some bad news. The good news is that your fierceness will be a great help in solving difficult problems. And not just the kind of scientific and technical problems that nerds have traditionally solved. As the world progresses, the number of things you can win at by getting the right answer increases. Recently getting rich became one of them: 7 of the 8 richest people in <LOCATION> are now fierce nerds. Indeed, being a fierce nerd is probably even more helpful in business than in nerds' original territory of scholarship. Fierceness seems optional there. <PERSON> for example doesn't seem to have been especially fierce. Whereas it's impossible to be the CEO of a company over a certain size without being fierce, so now that nerds can win at business, fierce nerds will increasingly monopolize the really big successes. The bad news is that if it's not exercised, your fierceness will turn to bitterness, and you will become an intellectual playground bully: the grumpy sysadmin, the forum troll, the hater , the shooter down of new ideas . How do you avoid this fate? Work on ambitious projects. If you succeed, it will bring you a kind of satisfaction that neutralizes bitterness. But you don't need to have succeeded to feel this; merely working on hard projects gives most fierce nerds some feeling of satisfaction. And those it doesn't, it at least keeps busy. [ 3 ] Another solution may be to somehow turn off your fierceness, by devoting yourself to meditation or psychotherapy or something like that. Maybe that's the right answer for some people. I have no idea. But it doesn't seem the optimal solution to me. If you're given a sharp knife, it seems to me better to use it than to blunt its edge to avoid cutting yourself. If you do choose the ambitious route, you'll have a tailwind behind you. There has never been a better time to be a nerd. In <DATE_TIME> we've seen a continuous transfer of power from dealmakers to technicians - from the charismatic to the competent - and I don't see anything on the horizon that will end it. At least not till the nerds end it themselves by bringing about the singularity. Notes [ 1 ] To be a nerd is to be socially awkward, and there are two distinct ways to do that: to be playing the same game as everyone else, but badly, and to be playing a different game. The smart nerds are the latter type. [ 2 ] The same qualities that make fierce nerds so effective can also make them very annoying. Fierce nerds would do well to remember this, and (a) try to keep a lid on it, and (b) seek out organizations and types of work where getting the right answer matters more than preserving social harmony. In practice that means small groups working on hard problems. Which fortunately is the most fun kind of environment anyway. [ 3 ] If success neutralizes bitterness, why are there some people who are at least moderately successful and yet still quite bitter? Because people's potential bitterness varies depending on how naturally bitter their personality is, and how ambitious they are: someone who's naturally very bitter will still have a lot left after success neutralizes some of it, and someone who's very ambitious will need proportionally more success to satisfy that ambition. So the worst-case scenario is someone who's both naturally bitter and extremely ambitious, and yet only moderately successful. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. <NRP> Translation
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An NFT That Saves Lives <DATE_TIME> Noora Health , a nonprofit I've supported for <DATE_TIME>, just launched a new NFT. It has a dramatic name, Save Thousands of Lives , because that's what the proceeds will do. <PERSON> has been saving lives for <DATE_TIME>. They run programs in hospitals in <LOCATION> to teach new mothers how to take care of their babies once they get home. They're in 165 hospitals now. And because they know the numbers before and after they start at a new hospital, they can measure the impact they have. It is massive. For every 1000 live births, they save 9 babies. This number comes from a study of 133,733 families at 28 different hospitals that <PERSON> conducted in collaboration with the Better Birth team at Ariadne Labs, a joint center for health systems innovation at Brigham and Womens Hospital and Harvard T.H. Chan School of Public Health. <PERSON> is so effective that even if you measure their costs in the most conservative way, by dividing their entire budget by the number of lives saved, the cost of saving a life is the lowest I've seen. $1,235. For this NFT, they're going to issue a public report tracking how this specific tranche of money is spent, and estimating the number of lives saved as a result. NFTs are a new territory, and this way of using them is especially new, but I'm excited about its potential. And I'm excited to see what happens with this particular auction, because unlike an NFT representing something that has already happened, this NFT gets better as the price gets higher. The reserve price was about $2.5 million, because that's what it takes for the name to be accurate: that's what it costs to save 2000 lives. But the higher the price of this NFT goes, the more lives will be saved. What a sentence to be able to write.
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The Real Reason to End the Death Penalty <DATE_TIME> When intellectuals talk about the death penalty, they talk about things like whether it's permissible for the state to take someone's life, whether the death penalty acts as a deterrent, and whether more death sentences are given to some groups than others. But in practice the debate about the death penalty is not about whether it's ok to kill murderers. It's about whether it's ok to kill innocent people, because at least 4% of people on death row are innocent . When I was a kid I imagined that it was unusual for people to be convicted of crimes they hadn't committed, and that in murder cases especially this must be very rare. Far from it. Now, thanks to organizations like the Innocence Project , we see a constant stream of stories about murder convictions being overturned after new evidence emerges. Sometimes the police and prosecutors were just very sloppy. Sometimes they were crooked, and knew full well they were convicting an innocent person. <PERSON> and three other men spent <DATE_TIME> in prison on a murder conviction. They were exonerated after DNA testing implicated three different men, two of whom later confessed. The police had been told about the other men early in the investigation, but never followed up the lead. <PERSON> spent <DATE_TIME> in prison on a murder conviction. He was convicted because "experts" said his teeth matched photos of bite marks on one victim. He was exonerated after DNA testing showed the murder had been committed by another man, <PERSON>. <PERSON> and two other men spent <DATE_TIME> in prison after being convicted of murder on the testimony of a <DATE_TIME> boy, who later recanted and said he'd been coerced by police. Multiple people have confirmed the boy was elsewhere at the time. The three men were exonerated after the county prosecutor dropped the charges, saying "The state is conceding the obvious." <PERSON> spent <DATE_TIME> in prison on a murder conviction, including <DATE_TIME> on death row. He was exonerated after it was discovered that the assistant district attorney had concealed phone records proving he could not have committed the crimes. <PERSON> spent <DATE_TIME> on death row after having been convicted of murder. He was exonerated after new evidence proved he was not even at the scene when the murder occurred. The attorneys assigned to represent him had never tried a jury case before. <PERSON> was actually executed in <DATE_TIME> by lethal injection. The "expert" who testified that he deliberately set fire to his house has since been discredited. A re-examination of the case ordered by the state of <LOCATION> in <DATE_TIME> concluded that "a finding of arson could not be sustained." Rich Glossip has spent <DATE_TIME> on death row after being convicted of murder on the testimony of the actual killer, who escaped with a life sentence in return for implicating him. In <DATE_TIME> he came within <DATE_TIME> of execution before it emerged that <LOCATION> had been planning to kill him with an illegal combination of drugs. They still plan to go ahead with the execution, perhaps as soon as <DATE_TIME>, despite new evidence exonerating him. I could go on. There are hundreds of similar cases. In <LOCATION> alone, 29 death row prisoners have been exonerated so far. Far from being rare, wrongful murder convictions are very common . Police are under pressure to solve a crime that has gotten a lot of attention. When they find a suspect, they want to believe he's guilty, and ignore or even destroy evidence suggesting otherwise. District attorneys want to be seen as effective and tough on crime, and in order to win convictions are willing to manipulate witnesses and withhold evidence. Court-appointed defense attorneys are overworked and often incompetent. There's a ready supply of criminals willing to give false testimony in return for a lighter sentence, suggestible witnesses who can be made to say whatever police want, and bogus "experts" eager to claim that science proves the defendant is guilty. And juries want to believe them, since otherwise some terrible crime remains unsolved. This circus of incompetence and dishonesty is the real issue with the death penalty. We don't even reach the point where theoretical questions about the moral justification or effectiveness of capital punishment start to matter, because so many of the people sentenced to death are actually innocent. Whatever it means in theory, in practice capital punishment means killing innocent people. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. Related: Will <LOCATION> Kill an Innocent Man? Was <PERSON> for Murder? Did <LOCATION> execute an innocent man?
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How People Get Rich Now <DATE_TIME> since <DATE_TIME>, Forbes magazine has published a list of the richest <NRP>. If we compare the 100 richest people in <DATE_TIME> to the 100 richest in <DATE_TIME>, we notice some big differences. In <DATE_TIME> the most common source of wealth was inheritance. Of the 100 richest people, 60 inherited from an ancestor. There were 10 du Pont heirs alone. By <DATE_TIME> the number of heirs had been cut in half, accounting for only 27 of the biggest 100 fortunes. Why would the percentage of heirs decrease? Not because inheritance taxes increased. In fact, they decreased significantly during this period. The reason the percentage of heirs has decreased is not that fewer people are inheriting great fortunes, but that more people are making them. How are people making these new fortunes? Roughly 3/4 by starting companies and 1/4 by investing. Of the 73 new fortunes in <DATE_TIME>, 56 derive from founders' or early employees' equity (52 founders, 2 early employees, and 2 wives of founders), and 17 from managing investment funds. There were no fund managers among the 100 richest <NRP> in <DATE_TIME>. Hedge funds and private equity firms existed in <DATE_TIME>, but none of their founders were rich enough yet to make it into the top 100. Two things changed: fund managers discovered new ways to generate high returns, and more investors were willing to trust them with their money. [ 1 ] But the main source of new fortunes now is starting companies, and when you look at the data, you see big changes there too. People get richer from starting companies now than they did in <DATE_TIME>, because the companies do different things. In <DATE_TIME>, there were two dominant sources of new wealth: oil and real estate. Of the 40 new fortunes in <DATE_TIME>, at least 24 were due primarily to oil or real estate. Now only a small number are: of the 73 new fortunes in <DATE_TIME>, 4 were due to real estate and only 2 to oil. By <DATE_TIME> the biggest source of new wealth was what are sometimes called "tech" companies. Of the 73 new fortunes, about 30 derive from such companies. These are particularly common among the richest of the rich: 8 of the top 10 fortunes in <DATE_TIME> were new fortunes of this type. Arguably it's slightly misleading to treat tech as a category. Isn't Amazon really a retailer, and Tesla a car maker? Yes and no. Maybe in <DATE_TIME>, when what we call tech is taken for granted, it won't seem right to put these two businesses in the same category. But at the moment at least, there is definitely something they share in common that distinguishes them. What retailer starts AWS? What car maker is run by someone who also has a rocket company? The tech companies behind the top 100 fortunes also form a well-differentiated group in the sense that they're all companies that venture capitalists would readily invest in, and the others mostly not. And there's a reason why: these are mostly companies that win by having better technology, rather than just a CEO who's really driven and good at making deals. To that extent, the rise of the tech companies represents a qualitative change. The oil and real estate magnates of the <DATE_TIME> Forbes 400 didn't win by making better technology. They won by being really driven and good at making deals. [ 2 ] And indeed, that way of getting rich is so old that it predates the Industrial Revolution. The courtiers who got rich in the (nominal) service of <NRP> royal houses in <DATE_TIME> were also, as a rule, really driven and good at making deals. People who don't look any deeper than the <PERSON> coefficient look back on the world of <DATE_TIME> as <DATE_TIME>, because those who got rich then didn't get as rich. But if you dig into how they got rich, the old days don't look so good. In <DATE_TIME>, 84% of the richest 100 people got rich by inheritance, extracting natural resources, or doing real estate deals. Is that really better than a world in which the richest people get rich by starting tech companies? Why are people starting so many more new companies than they used to, and why are they getting so rich from it? The answer to the first question, curiously enough, is that it's misphrased. We shouldn't be asking why people are starting companies, but why they're starting companies again . [ 3 ] In <DATE_TIME>, the New York Herald Tribune compiled a list of all the millionaires in <LOCATION>. They found <DATE_TIME> of them. How many had inherited their wealth then? Only about 20%, which is less than the proportion of heirs <DATE_TIME>. And when you investigate the sources of the new fortunes, <DATE_TIME> looks even more like <DATE_TIME>. <PERSON> found that "many of the richest ... gained their initial edge from the new technology of mass production." [ 4 ] So it's not <DATE_TIME> that's the anomaly here, but <DATE_TIME>. The real question is why so few people had gotten rich from starting companies in <DATE_TIME>. And the answer is that even as the Herald Tribune 's list was being compiled, a wave of consolidation was sweeping through the <NRP> economy. In <DATE_TIME>, financiers like <PERSON> combined thousands of smaller companies into a few hundred giant ones with commanding economies of scale. By <DATE_TIME> World War II, as <PERSON> writes, "the major sectors of the economy were either organized as government-backed cartels or dominated by a few oligopolistic corporations." [ 5 ] In <DATE_TIME>, most of the people who start startups <DATE_TIME> would have gone to work for one of them. You could get rich from starting your own company in <DATE_TIME> and in <DATE_TIME>, but in <DATE_TIME> it was not really a viable option. You couldn't break through the oligopolies to get at the markets. So the prestigious route in <DATE_TIME> was not to start your own company, but to work your way up the corporate ladder at an existing one. [ 6 ] Making everyone a corporate employee decreased economic inequality (and every other kind of variation), but if your model of normal is <DATE_TIME>, you have a very misleading model in that respect. <PERSON> economy turned out to be just a phase, and starting in <DATE_TIME>, it began to break up. Why did it break up? Partly senescence. The big companies that seemed models of scale and efficiency in <DATE_TIME> had by <DATE_TIME> become slack and bloated. By <DATE_TIME> the rigid structure of the economy was full of cosy nests that various groups had built to insulate themselves from market forces. During the <PERSON> administration the federal government realized something was amiss and began, in a process they called "deregulation," to roll back the policies that propped up the oligopolies. But it wasn't just decay from within that broke up J. P. Morgan's economy. There was also pressure from without, in the form of new technology, and particularly microelectronics. The best way to envision what happened is to imagine a pond with a crust of ice on top. Initially the only way from the bottom to the surface is around the edges. But as the ice crust weakens, you start to be able to punch right through the middle. The edges of the pond were pure tech: companies that actually described themselves as being in the electronics or software business. When you used the word "startup" in <DATE_TIME>, that was what you meant. But now startups are punching right through the middle of the ice crust and displacing incumbents like retailers and TV networks and car companies. [ 7 ] But though the breakup of J. P. Morgan's economy created a new world in the technological sense, it was a reversion to the norm in the social sense. If you only look back as far as <DATE_TIME>, it seems like people getting rich by starting their own companies is a recent phenomenon. But if you look back further, you realize it's actually the default. So what we should expect in the future is more of the same. Indeed, we should expect both the number and wealth of founders to grow, because every decade it gets easier to start a startup. Part of the reason it's getting easier to start a startup is social. Society is (re)assimilating the concept. If you start one now, your parents won't freak out the way they would have <DATE_TIME>, and knowledge about how to do it is much more widespread. But the main reason it's easier to start a startup now is that it's cheaper. Technology has driven down the cost of both building products and acquiring customers. The decreasing cost of starting a startup has in turn changed the balance of power between founders and investors. Back when starting a startup meant building a factory, you needed investors' permission to do it at all. But now investors need founders more than founders need investors, and that, combined with the increasing amount of venture capital available, has driven up valuations. [ 8 ] So the decreasing cost of starting a startup increases the number of rich people in two ways: it means that more people start them, and that those who do can raise money on better terms. But there's also a third factor at work: the companies themselves are more valuable, because newly founded companies grow faster than they used to. Technology hasn't just made it cheaper to build and distribute things, but faster too. This trend has been running for a long time. IBM, founded in <DATE_TIME>, took <DATE_TIME> to reach a billion 2020 dollars in revenue. Hewlett-Packard, founded in <DATE_TIME>, took <DATE_TIME>. Microsoft, founded in <DATE_TIME>, took <DATE_TIME>. Now the norm for fast-growing companies is <DATE_TIME>. [ 9 ] Fast growth has a double effect on the value of founders' stock. The value of a company is a function of its revenue and its growth rate. So if a company grows faster, you not only get to a billion dollars in revenue sooner, but the company is more valuable when it reaches that point than it would be if it were growing slower. That's why founders sometimes get so rich so young now. The low initial cost of starting a startup means founders can start young, and the fast growth of companies <DATE_TIME> means that if they succeed they could be surprisingly rich <DATE_TIME>. It's easier now to start and grow a company than it has ever been. That means more people start them, that those who do get better terms from investors, and that the resulting companies become more valuable. Once you understand how these mechanisms work, and that startups were suppressed for most of <DATE_TIME>, you don't have to resort to some vague right turn the country took under <PERSON> to explain why <LOCATION>'s <PERSON> coefficient is increasing. Of course the <PERSON> coefficient is increasing. With more people starting more valuable companies, how could it not be? Notes [ 1 ] Investment firms grew rapidly after a regulatory change by the Labor Department in <DATE_TIME> allowed pension funds to invest in them, but the effects of this growth were not yet visible in the top 100 fortunes in <DATE_TIME>. [ 2 ] <PERSON> deserves mention as an exception. Though really driven and good at making deals, he was also the first to figure out how to use fracking to get natural gas out of shale. [ 3 ] When I say people are starting more companies, I mean the type of company meant to grow very big. There has actually been a decrease in <DATE_TIME> in the overall number of new companies. But the vast majority of companies are small retail and service businesses. So what the statistics about the decreasing number of new businesses mean is that people are starting fewer shoe stores and barber shops. People sometimes get confused when they see a graph labelled "startups" that's going down, because there are two senses of the word "startup": (1) the founding of a company, and (2) a particular type of company designed to grow big fast. The statistics mean startup in sense (1), not sense (2). [ 4 ] <PERSON>, <PERSON>. "Great Fortunes of the Gilded Age." NBER Working Paper 14555, <DATE_TIME>. [ 5 ] <PERSON>, <PERSON>. Land of Promise. HarperCollins, <DATE_TIME>. It's also likely that the high tax rates in <DATE_TIME> deterred people from starting their own companies. Starting one's own company is risky, and when risk isn't rewarded, people opt for safety instead. But it wasn't simply cause and effect. The oligopolies and high tax rates of <DATE_TIME> were all of a piece. Lower taxes are not just a cause of entrepreneurship, but an effect as well: the people getting rich in <DATE_TIME> from real estate and oil exploration lobbied for and got huge tax loopholes that made their effective tax rate much lower, and presumably if it had been more common to grow big companies by building new technology, the people doing that would have lobbied for their own loopholes as well. [ 6 ] That's why the people who did get rich in <DATE_TIME> so often got rich from oil exploration or real estate. Those were the two big areas of the economy that weren't susceptible to consolidation. [ 7 ] The pure tech companies used to be called "high technology" startups. But now that startups can punch through the middle of the ice crust, we don't need a separate name for the edges, and the term "high-tech" has a decidedly retro sound. [ 8 ] Higher valuations mean you either sell less stock to get a given amount of money, or get more money for a given amount of stock. The typical startup does some of each. Obviously you end up richer if you keep more stock, but you should also end up richer if you raise more money, because (a) it should make the company more successful, and (b) you should be able to last longer before the next round, or not even need one. Notice all those shoulds though. In practice a lot of money slips through them. It might seem that the huge rounds raised by startups nowadays contradict the claim that it has become cheaper to start one. But there's no contradiction here; the startups that raise the most are the ones doing it by choice, in order to grow faster, not the ones doing it because they need the money to survive. There's nothing like not needing money to make people offer it to you. You would think, after having been on the side of labor in its fight with capital for <DATE_TIME>, that the far left would be happy that labor has finally prevailed. But none of them seem to be. You can almost hear them saying "No, no, not that way." [ 9 ] IBM was created in <DATE_TIME> by merging three companies, the most important of which was <PERSON> Tabulating Machine Company, founded in <DATE_TIME>. In <DATE_TIME> its revenues were $60 million. Hewlett-Packard's revenues in <DATE_TIME> were $125 million. Microsoft's revenues in <DATE_TIME> were $590 million. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this, and to <PERSON> for growth data.
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Write Simply <DATE_TIME> I try to write using ordinary words and simple sentences. That kind of writing is easier to read, and the easier something is to read, the more deeply readers will engage with it. The less energy they expend on your prose, the more they'll have left for your ideas. And the further they'll read. Most readers' energy tends to flag part way through an article or essay. If the friction of reading is low enough, more keep going till the end. There's an <NRP> 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. It's too much to hope that writing could ever be pure ideas. You might not even want it to be. But for most writers, most of the time, that's the goal to aim for. The gap between most writing and pure ideas is not filled with poetry. Plus it's more considerate to write simply. When you write in a fancy way to impress people, you're making them do extra work just so you can seem cool. It's like trailing a long train behind you that readers have to carry. And remember, if you're writing in English, that a lot of your readers won't be native <NRP> speakers. Their understanding of ideas may be way ahead of their understanding of English. So you can't assume that writing about a difficult topic means you can use difficult words. Of course, fancy writing doesn't just conceal ideas. It can also conceal the lack of them. That's why some people write that way, to conceal the fact that they have nothing to say. Whereas writing simply keeps you honest. If you say nothing simply, it will be obvious to everyone, including you. Simple writing also lasts better. People reading your stuff in the future will be in much the same position as people from other countries reading it <DATE_TIME>. The culture and the language will have changed. It's not vain to care about that, any more than it's vain for a woodworker to build a chair to last. Indeed, lasting is not merely an accidental quality of chairs, or writing. It's a sign you did a good job. But although these are all real advantages of writing simply, none of them are why I do it. The main reason I write simply is that it offends me not to. When I write a sentence that seems too complicated, or that uses unnecessarily intellectual words, it doesn't seem fancy to me. It seems clumsy. There are of course times when you want to use a complicated sentence or fancy word for effect. But you should never do it by accident. The other reason my writing ends up being simple is the way I do it. I write the first draft fast, then spend days editing it, trying to get everything just right. Much of this editing is cutting, and that makes simple writing even simpler.
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Donate Unrestricted <DATE_TIME> The secret curse of the nonprofit world is restricted donations. If you haven't been involved with nonprofits, you may never have heard this phrase before. But if you have been, it probably made you wince. Restricted donations mean donations where the donor limits what can be done with the money. This is common with big donations, perhaps the default. And yet it's usually a bad idea. Usually the way the donor wants the money spent is not the way the nonprofit would have chosen. Otherwise there would have been no need to restrict the donation. But who has a better understanding of where money needs to be spent, the nonprofit or the donor? If a nonprofit doesn't understand better than its donors where money needs to be spent, then it's incompetent and you shouldn't be donating to it at all. Which means a restricted donation is inherently suboptimal. It's either a donation to a bad nonprofit, or a donation for the wrong things. There are a couple exceptions to this principle. One is when the nonprofit is an umbrella organization. It's reasonable to make a restricted donation to a university, for example, because a university is only nominally a single nonprofit. Another exception is when the donor actually does know as much as the nonprofit about where money needs to be spent. The Gates Foundation, for example, has specific goals and often makes restricted donations to individual nonprofits to accomplish them. But unless you're a domain expert yourself or donating to an umbrella organization, your donation would do more good if it were unrestricted. If restricted donations do less good than unrestricted ones, why do donors so often make them? Partly because doing good isn't donors' only motive. They often have other motives as well - to make a mark, or to generate good publicity [ 1 ] , or to comply with regulations or corporate policies. Many donors may simply never have considered the distinction between restricted and unrestricted donations. They may believe that donating money for some specific purpose is just how donation works. And to be fair, nonprofits don't try very hard to discourage such illusions. They can't afford to. People running nonprofits are almost always anxious about money. They can't afford to talk back to big donors. You can't expect candor in a relationship so asymmetric. So I'll tell you what nonprofits wish they could tell you. If you want to donate to a nonprofit, donate unrestricted. If you trust them to spend your money, trust them to decide how. Note [ 1 ] Unfortunately restricted donations tend to generate more publicity than unrestricted ones. "X donates money to build a school in <LOCATION>" is not only more interesting than "X donates money to Y nonprofit to spend as Y chooses," but also focuses more attention on X. Thanks to <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Billionaires Build <DATE_TIME> As I was deciding what to write about next, I was surprised to find that two separate essays I'd been planning to write were actually the same. The first is about how to ace your Y Combinator interview. There has been so much nonsense written about this topic that I've been meaning for <DATE_TIME> to write something telling founders the truth. The second is about something politicians sometimes say that the only way to become a billionaire is by exploiting people and why this is mistaken. Keep reading, and you'll learn both simultaneously. I know the politicians are mistaken because it was my job to predict which people will become billionaires. I think I can truthfully say that I know as much about how to do this as anyone. If the key to becoming a billionaire the defining feature of billionaires was to exploit people, then I, as a professional billionaire scout, would surely realize this and look for people who would be good at it, just as an NFL scout looks for speed in wide receivers. But aptitude for exploiting people is not what Y Combinator looks for at all. In fact, it's the opposite of what they look for. I'll tell you what they do look for, by explaining how to convince Y Combinator to fund you, and you can see for yourself. What YC looks for, above all, is founders who understand some group of users and can make what they want. This is so important that it's YC's motto: "Make something people want." A big company can to some extent force unsuitable products on unwilling customers, but a startup doesn't have the power to do that. A startup must sing for its supper, by making things that genuinely delight its customers. Otherwise it will never get off the ground. Here's where things get difficult, both for you as a founder and for the YC partners trying to decide whether to fund you. In a market economy, it's hard to make something people want that they don't already have. That's the great thing about market economies. If other people both knew about this need and were able to satisfy it, they already would be, and there would be no room for your startup. Which means the conversation during your YC interview will have to be about something new: either a new need, or a new way to satisfy one. And not just new, but uncertain. If it were certain that the need existed and that you could satisfy it, that certainty would be reflected in large and rapidly growing revenues, and you wouldn't be seeking seed funding. So the YC partners have to guess both whether you've discovered a real need, and whether you'll be able to satisfy it. That's what they are, at least in this part of their job: professional guessers. They have 1001 heuristics for doing this, and I'm not going to tell you all of them, but I'm happy to tell you the most important ones, because these can't be faked; the only way to "hack" them would be to do what you should be doing anyway as a founder. The first thing the partners will try to figure out, usually, is whether what you're making will ever be something a lot of people want. It doesn't have to be something a lot of people want now. The product and the market will both evolve, and will influence each other's evolution. But in the end there has to be something with a huge market. That's what the partners will be trying to figure out: is there a path to a huge market? [ 1 ] Sometimes it's obvious there will be a huge market. If Boom manages to ship an airliner at all, international airlines will have to buy it. But usually it's not obvious. Usually the path to a huge market is by growing a small market. This idea is important enough that it's worth coining a phrase for, so let's call one of these small but growable markets a "larval market." The perfect example of a larval market might be Apple's market when they were founded in <DATE_TIME>. In <DATE_TIME>, not many people wanted their own computer. But more and more started to want one, till now every <DATE_TIME> on the planet wants a computer (but calls it a "phone"). The ideal combination is the group of founders who are "living in the future" in the sense of being at the leading edge of some kind of change, and who are building something they themselves want. Most super-successful startups are of this type. <PERSON> wanted a computer. <PERSON> wanted to engage online with his college friends. <PERSON> and <PERSON> wanted to find things on the web. All these founders were building things they and their peers wanted, and the fact that they were at the leading edge of change meant that more people would want these things in the future. But although the ideal larval market is oneself and one's peers, that's not the only kind. A larval market might also be regional, for example. You build something to serve one location, and then expand to others. The crucial feature of the initial market is that it exist. That may seem like an obvious point, but the lack of it is the biggest flaw in most startup ideas. There have to be some people who want what you're building right now, and want it so urgently that they're willing to use it, bugs and all, even though you're a small company they've never heard of. There don't have to be many, but there have to be some. As long as you have some users, there are straightforward ways to get more: build new features they want, seek out more people like them, get them to refer you to their friends, and so on. But these techniques all require some initial seed group of users. So this is one thing the YC partners will almost certainly dig into during your interview. Who are your first users going to be, and how do you know they want this? If I had to decide whether to fund startups based on a single question, it would be "How do you know people want this?" The most convincing answer is "Because we and our friends want it." It's even better when this is followed by the news that you've already built a prototype, and even though it's very crude, your friends are using it, and it's spreading by word of mouth. If you can say that and you're not lying, the partners will switch from default no to default yes. Meaning you're in unless there's some other disqualifying flaw. That is a hard standard to meet, though. Airbnb didn't meet it. They had the first part. They had made something they themselves wanted. But it wasn't spreading. So don't feel bad if you don't hit this gold standard of convincingness. If Airbnb didn't hit it, it must be too high. In practice, the YC partners will be satisfied if they feel that you have a deep understanding of your users' needs. And the Airbnbs did have that. They were able to tell us all about what motivated hosts and guests. They knew from first-hand experience, because they'd been the first hosts. We couldn't ask them a question they didn't know the answer to. We ourselves were not very excited about the idea as users, but we knew this didn't prove anything, because there were lots of successful startups we hadn't been excited about as users. We were able to say to ourselves "They seem to know what they're talking about. Maybe they're onto something. It's not growing yet, but maybe they can figure out how to make it grow during YC." Which they did, <DATE_TIME> into the batch. The best thing you can do in a YC interview is to teach the partners about your users. So if you want to prepare for your interview, one of the best ways to do it is to go talk to your users and find out exactly what they're thinking. Which is what you should be doing anyway. This may sound strangely credulous, but the YC partners want to rely on the founders to tell them about the market. Think about how VCs typically judge the potential market for an idea. They're not ordinarily domain experts themselves, so they forward the idea to someone who is, and ask for their opinion. YC doesn't have time to do this, but if the YC partners can convince themselves that the founders both (a) know what they're talking about and (b) aren't lying, they don't need outside domain experts. They can use the founders themselves as domain experts when evaluating their own idea. This is why YC interviews aren't pitches. To give as many founders as possible a chance to get funded, we made interviews as short as we could: <DATE_TIME>. That is not enough time for the partners to figure out, through the indirect evidence in a pitch, whether you know what you're talking about and aren't lying. They need to dig in and ask you questions. There's not enough time for sequential access. They need random access. [ 2 ] The worst advice I ever heard about how to succeed in a YC interview is that you should take control of the interview and make sure to deliver the message you want to. In other words, turn the interview into a pitch. ⟨elaborate expletive⟩. It is so annoying when people try to do that. You ask them a question, and instead of answering it, they deliver some obviously prefabricated blob of pitch. It eats up <DATE_TIME> really fast. There is no one who can give you accurate advice about what to do in a YC interview except a current or former YC partner. People who've merely been interviewed, even successfully, have no idea of this, but interviews take all sorts of different forms depending on what the partners want to know about most. Sometimes they're all about the founders, other times they're all about the idea. Sometimes some very narrow aspect of the idea. Founders sometimes walk away from interviews complaining that they didn't get to explain their idea completely. True, but they explained enough. Since a YC interview consists of questions, the way to do it well is to answer them well. Part of that is answering them candidly. The partners don't expect you to know everything. But if you don't know the answer to a question, don't try to bullshit your way out of it. The partners, like most experienced investors, are professional bullshit detectors, and you are (hopefully) an amateur bullshitter. And if you try to bullshit them and fail, they may not even tell you that you failed. So it's better to be honest than to try to sell them. If you don't know the answer to a question, say you don't, and tell them how you'd go about finding it, or tell them the answer to some related question. If you're asked, for example, what could go wrong, the worst possible answer is "nothing." Instead of convincing them that your idea is bullet-proof, this will convince them that you're a fool or a liar. Far better to go into gruesome detail. That's what experts do when you ask what could go wrong. The partners know that your idea is risky. That's what a good bet looks like at this stage: a tiny probability of a huge outcome. Ditto if they ask about competitors. Competitors are rarely what kills startups. Poor execution does. But you should know who your competitors are, and tell the YC partners candidly what your relative strengths and weaknesses are. Because the YC partners know that competitors don't kill startups, they won't hold competitors against you too much. They will, however, hold it against you if you seem either to be unaware of competitors, or to be minimizing the threat they pose. They may not be sure whether you're clueless or lying, but they don't need to be. The partners don't expect your idea to be perfect. This is seed investing. At this stage, all they can expect are promising hypotheses. But they do expect you to be thoughtful and honest. So if trying to make your idea seem perfect causes you to come off as glib or clueless, you've sacrificed something you needed for something you didn't. If the partners are sufficiently convinced that there's a path to a big market, the next question is whether you'll be able to find it. That in turn depends on three things: the general qualities of the founders, their specific expertise in this domain, and the relationship between them. How determined are the founders? Are they good at building things? Are they resilient enough to keep going when things go wrong? How strong is their friendship? Though the Airbnbs only did ok in the idea department, they did spectacularly well in this department. The story of how they'd funded themselves by making Obama- and <PERSON>-themed breakfast cereal was the single most important factor in our decision to fund them. They didn't realize it at the time, but what seemed to them an irrelevant story was in fact fabulously good evidence of their qualities as founders. It showed they were resourceful and determined, and could work together. It wasn't just the cereal story that showed that, though. The whole interview showed that they cared. They weren't doing this just for the money, or because startups were cool. The reason they were working so hard on this company was because it was their project. They had discovered an interesting new idea, and they just couldn't let it go. Mundane as it sounds, that's the most powerful motivator of all, not just in startups, but in most ambitious undertakings: to be genuinely interested in what you're building. This is what really drives billionaires, or at least the ones who become billionaires from starting companies. The company is their project. One thing few people realize about billionaires is that all of them could have stopped sooner. They could have gotten acquired, or found someone else to run the company. Many founders do. The ones who become really rich are the ones who keep working. And what makes them keep working is not just money. What keeps them working is the same thing that keeps anyone else working when they could stop if they wanted to: that there's nothing else they'd rather do. That, not exploiting people, is the defining quality of people who become billionaires from starting companies. So that's what YC looks for in founders: authenticity. People's motives for starting startups are usually mixed. They're usually doing it from some combination of the desire to make money, the desire to seem cool, genuine interest in the problem, and unwillingness to work for someone else. The last two are more powerful motivators than the first two. It's ok for founders to want to make money or to seem cool. Most do. But if the founders seem like they're doing it just to make money or just to seem cool, they're not likely to succeed on a big scale. The founders who are doing it for the money will take the first sufficiently large acquisition offer, and the ones who are doing it to seem cool will rapidly discover that there are much less painful ways of seeming cool. [ 3 ] Y Combinator certainly sees founders whose <LOCATION> is to exploit people. YC is a magnet for them, because they want the YC brand. But when the YC partners detect someone like that, they reject them. If bad people made good founders, the YC partners would face a moral dilemma. Fortunately they don't, because bad people make bad founders. This exploitative type of founder is not going to succeed on a large scale, and in fact probably won't even succeed on a small one, because they're always going to be taking shortcuts. They see YC itself as a shortcut. Their exploitation usually begins with their own cofounders, which is disastrous, since the cofounders' relationship is the foundation of the company. Then it moves on to the users, which is also disastrous, because the sort of early adopters a successful startup wants as its initial users are the hardest to fool. The best this kind of founder can hope for is to keep the edifice of deception tottering along until some acquirer can be tricked into buying it. But that kind of acquisition is never very big. [ 4 ] If professional billionaire scouts know that exploiting people is not the skill to look for, why do some politicians think this is the defining quality of billionaires? I think they start from the feeling that it's wrong that one person could have so much more money than another. It's understandable where that feeling comes from. It's in our DNA, and even in the DNA of other species. If they limited themselves to saying that it made them feel bad when one person had so much more money than other people, who would disagree? It makes me feel bad too, and I think people who make a lot of money have a moral obligation to use it for the common good. The mistake they make is to jump from feeling bad that some people are much richer than others to the conclusion that there's no legitimate way to make a very large amount of money. Now we're getting into statements that are not only falsifiable, but false. There are certainly some people who become rich by doing bad things. But there are also plenty of people who behave badly and don't make that much from it. There is no correlation in fact, probably an inverse correlation between how badly you behave and how much money you make. The greatest danger of this nonsense may not even be that it sends policy astray, but that it misleads ambitious people. Can you imagine a better way to destroy social mobility than by telling poor kids that the way to get rich is by exploiting people, while the rich kids know, from having watched the preceding generation do it, how it's really done? I'll tell you how it's really done, so you can at least tell your own kids the truth. It's all about users. The most reliable way to become a billionaire is to start a company that grows fast , and the way to grow fast is to make what users want. Newly started startups have no choice but to delight users, or they'll never even get rolling. But this never stops being the lodestar, and bigger companies take their eye off it at their peril. Stop delighting users, and eventually someone else will. Users are what the partners want to know about in YC interviews, and what I want to know about when I talk to founders that we funded <DATE_TIME> and who are billionaires now. What do users want? What new things could you build for them? Founders who've become billionaires are always eager to talk about that topic. That's how they became billionaires. Notes [ 1 ] The YC partners have so much practice doing this that they sometimes see paths that the founders themselves haven't seen yet. The partners don't try to seem skeptical, as buyers in transactions often do to increase their leverage. Although the founders feel their job is to convince the partners of the potential of their idea, these roles are not infrequently reversed, and the founders leave the interview feeling their idea has more potential than they realized. [ 2 ] In practice, <DATE_TIME> would be enough. You rarely change your mind at <DATE_TIME>. But <DATE_TIME> is socially convenient. [ 3 ] I myself took the first sufficiently large acquisition offer in my first startup, so I don't blame founders for doing this. There's nothing wrong with starting a startup to make money. You need to make money somehow, and for some people startups are the most efficient way to do it. I'm just saying that these are not the startups that get really big. [ 4 ] Not <DATE_TIME>, anyway. There were some big ones during the Internet Bubble, and indeed some big IPOs. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, and Harj Taggar for reading drafts of this.
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The Airbnbs <DATE_TIME> To celebrate Airbnb's IPO and to help future founders, I thought it might be useful to explain what was special about Airbnb. What was special about the <PERSON> was how earnest they were. They did nothing half-way, and we could sense this even in the interview. Sometimes after we interviewed a startup we'd be uncertain what to do, and have to talk it over. Other times we'd just look at one another and smile. The Airbnbs' interview was that kind. We didn't even like the idea that much. Nor did users, at that stage; they had no growth. But the founders seemed so full of energy that it was impossible not to like them. That first impression was not misleading. During the batch our nickname for <PERSON> was The Tasmanian Devil, because like the cartoon character he seemed a tornado of energy. All three of them were like that. No one ever worked harder during YC than the <PERSON> did. When you talked to the Airbnbs, they took notes. If you suggested an idea to them in office <DATE_TIME>, the next time you talked to them they'd not only have implemented it, but also implemented two new ideas they had in the process. "They probably have the best attitude of any startup we've funded" I wrote to <PERSON> during the batch. They're still like that. <PERSON> and I had dinner with <PERSON> in <DATE_TIME>, just the three of us. By this point the company is <DATE_TIME>. He took a page of notes about ideas for new things Airbnb could do. What we didn't realize when we first met <PERSON> and <PERSON> and <PERSON> was that Airbnb was on its last legs. After working on the company for <DATE_TIME> and getting no growth, they'd agreed to give it one last shot. They'd try this Y Combinator thing, and if the company still didn't take off, they'd give up. Any normal person would have given up already. They'd been funding the company with credit cards. They had a binder full of credit cards they'd maxed out. Investors didn't think much of the idea. One investor they met in a cafe walked out in the middle of meeting with them. They thought he was going to the bathroom, but he never came back. "He didn't even finish his smoothie," <PERSON> said. And now, in <DATE_TIME>, it was the worst recession in <DATE_TIME>. The stock market was in free fall and wouldn't hit bottom for <DATE_TIME>. Why hadn't they given up? This is a useful question to ask. People, like matter, reveal their nature under extreme conditions. One thing that's clear is that they weren't doing this just for the money. As a money-making scheme, this was pretty lousy: a <DATE_TIME>'s work and all they had to show for it was a binder full of maxed-out credit cards. So why were they still working on this startup? Because of the experience they'd had as the first hosts. When they first tried renting out airbeds on their floor during a design convention, all they were hoping for was to make enough money to pay their rent <DATE_TIME>. But something surprising happened: they enjoyed having those first three guests staying with them. And the guests enjoyed it too. Both they and the guests had done it because they were in a sense forced to, and yet they'd all had a great experience. Clearly there was something new here: for hosts, a new way to make money that had literally been right under their noses, and for guests, a new way to travel that was in many ways better than hotels. That experience was why the Airbnbs didn't give up. They knew they'd discovered something. They'd seen a glimpse of the future, and they couldn't let it go. They knew that once people tried staying in what is now called "an airbnb," they would also realize that this was the future. But only if they tried it, and they weren't. That was the problem during Y Combinator: to get growth started. Airbnb's goal during YC was to reach what we call ramen profitability , which means making enough money that the company can pay the founders' living expenses, if they live on ramen noodles. Ramen profitability is not, obviously, the end goal of any startup, but it's the most important threshold on the way, because this is the point where you're airborne. This is the point where you no longer need investors' permission to continue existing. For the Airbnbs, ramen profitability was $4000 a month: $3500 for rent, and $500 for food. They taped this goal to the mirror in the bathroom of their apartment. The way to get growth started in something like Airbnb is to focus on the hottest subset of the market. If you can get growth started there, it will spread to the rest. When I asked the <PERSON> where there was most demand, they knew from searches: <LOCATION>. So they focused on <LOCATION>. They went there in person to visit their hosts and help them make their listings more attractive. A big part of that was better pictures. So <PERSON> and <PERSON> rented a professional camera and took pictures of the hosts' places themselves. This didn't just make the listings better. It also taught them about their hosts. When they came back from their first trip to <LOCATION>, I asked what they'd noticed about hosts that surprised them, and they said the biggest surprise was how many of the hosts were in the same position they'd been in: they needed this money to pay their rent. This was, remember, the worst recession in <DATE_TIME>, and it had hit <LOCATION> first. It definitely added to the Airbnbs' sense of mission to feel that people needed them. In <DATE_TIME>, <DATE_TIME> into Y Combinator, their efforts started to show results, and their numbers crept upward. But it was hard to say for sure whether it was growth or just random fluctuation. By <DATE_TIME> it was clear that it was real growth. They made $460 in fees in <DATE_TIME>, $897 in the second, and $1428 in the third. That was it: they were airborne. <PERSON> sent me an email on <DATE_TIME> announcing that they were ramen profitable and giving <DATE_TIME> numbers. "I assume you know what you've now set yourself up for <DATE_TIME>," I responded. <PERSON>'s reply was seven words: "We are not going to slow down."
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How to Think for Yourself <DATE_TIME> There are some kinds of work that you can't do well without thinking differently from your peers. To be a successful scientist, for example, it's not enough just to be correct. Your ideas have to be both correct and novel. You can't publish papers saying things other people already know. You need to say things no one else has realized yet. The same is true for investors. It's not enough for a public market investor to predict correctly how a company will do. If a lot of other people make the same prediction, the stock price will already reflect it, and there's no room to make money. The only valuable insights are the ones most other investors don't share. You see this pattern with startup founders too. You don't want to start a startup to do something that everyone agrees is a good idea, or there will already be other companies doing it. You have to do something that sounds to most other people like a bad idea, but that you know isn't like writing software for a tiny computer used by a few thousand hobbyists, or starting a site to let people rent airbeds on strangers' floors. Ditto for essayists. An essay that told people things they already knew would be boring. You have to tell them something new . But this pattern isn't universal. In fact, it doesn't hold for most kinds of work. In most kinds of work to be an administrator, for example all you need is <DATE_TIME>. All you need is to be right. It's not essential that everyone else be wrong. There's room for a little novelty in most kinds of work, but in practice there's a fairly sharp distinction between the kinds of work where it's essential to be independent-minded, and the kinds where it's not. I wish someone had told me about this distinction when I was a kid, because it's one of the most important things to think about when you're deciding what kind of work you want to do. Do you want to do the kind of work where you can only win by thinking differently from everyone else? I suspect most people's unconscious mind will answer that question before their conscious mind has a chance to. I know mine does. Independent-mindedness seems to be more a matter of nature than nurture. Which means if you pick the wrong type of work, you're going to be unhappy. If you're naturally independent-minded, you're going to find it frustrating to be a middle manager. And if you're naturally conventional-minded, you're going to be sailing into a headwind if you try to do original research. One difficulty here, though, is that people are often mistaken about where they fall on the spectrum from conventional- to independent-minded. Conventional-minded people don't like to think of themselves as conventional-minded. And in any case, it genuinely feels to them as if they make up their own minds about everything. It's just a coincidence that their beliefs are identical to their peers'. And the independent-minded, meanwhile, are often unaware how different their ideas are from conventional ones, at least till they state them publicly. [ 1 ] By the time they reach adulthood, most people know roughly how smart they are (in the narrow sense of ability to solve pre-set problems), because they're constantly being tested and ranked according to it. But schools generally ignore independent-mindedness, except to the extent they try to suppress it. So we don't get anything like the same kind of feedback about how independent-minded we are. There may even be a phenomenon like <PERSON> at work, where the most conventional-minded people are confident that they're independent-minded, while the genuinely independent-minded worry they might not be independent-minded enough. ___________ Can you make yourself more independent-minded? I think so. This quality may be largely inborn, but there seem to be ways to magnify it, or at least not to suppress it. One of the most effective techniques is one practiced unintentionally by most nerds: simply to be less aware what conventional beliefs are. It's hard to be a conformist if you don't know what you're supposed to conform to. Though again, it may be that such people already are independent-minded. A conventional-minded person would probably feel anxious not knowing what other people thought, and make more effort to find out. It matters a lot who you surround yourself with. If you're surrounded by conventional-minded people, it will constrain which ideas you can express, and that in turn will constrain which ideas you have. But if you surround yourself with independent-minded people, you'll have the opposite experience: hearing other people say surprising things will encourage you to, and to think of more. Because the independent-minded find it uncomfortable to be surrounded by conventional-minded people, they tend to self-segregate once they have a chance to. The problem with high school is that they haven't yet had a chance to. Plus high school tends to be an inward-looking little world whose inhabitants lack confidence, both of which magnify the forces of conformism. So high school is often a bad time for the independent-minded. But there is some advantage even here: it teaches you what to avoid. If you later find yourself in a situation that makes you think "this is like high school," you know you should get out. [ 2 ] Another place where the independent- and conventional-minded are thrown together is in successful startups. The founders and early employees are almost always independent-minded; otherwise the startup wouldn't be successful. But conventional-minded people greatly outnumber independent-minded ones, so as the company grows, the original spirit of independent-mindedness is inevitably diluted. This causes all kinds of problems besides the obvious one that the company starts to suck. One of the strangest is that the founders find themselves able to speak more freely with founders of other companies than with their own employees. [ 3 ] Fortunately you don't have to spend all your time with independent-minded people. It's enough to have one or two you can talk to regularly. And once you find them, they're usually as eager to talk as you are; they need you too. Although universities no longer have the kind of monopoly they used to have on education, good universities are still an excellent way to meet independent-minded people. Most students will still be conventional-minded, but you'll at least find clumps of independent-minded ones, rather than the near zero you may have found in high school. It also works to go in the other direction: as well as cultivating a small collection of independent-minded friends, to try to meet as many different types of people as you can. It will decrease the influence of your immediate peers if you have several other groups of peers. Plus if you're part of several different worlds, you can often import ideas from one to another. But by different types of people, I don't mean demographically different. For this technique to work, they have to think differently. So while it's an excellent idea to go and visit other countries, you can probably find people who think differently right around the corner. When I meet someone who knows a lot about something unusual (which includes practically everyone, if you dig deep enough), I try to learn what they know that other people don't. There are almost always surprises here. It's a good way to make conversation when you meet strangers, but I don't do it to make conversation. I really want to know. You can expand the source of influences in time as well as space, by reading history. When I read history I do it not just to learn what happened, but to try to get inside the heads of people who lived in the past. How did things look to them? This is hard to do, but worth the effort for the same reason it's worth travelling far to triangulate a point. You can also take more explicit measures to prevent yourself from automatically adopting conventional opinions. The most general is to cultivate an attitude of skepticism. When you hear someone say something, stop and ask yourself "Is that true?" Don't say it out loud. I'm not suggesting that you impose on everyone who talks to you the burden of proving what they say, but rather that you take upon yourself the burden of evaluating what they say. Treat it as a puzzle. You know that some accepted ideas will later turn out to be wrong. See if you can guess which. The end goal is not to find flaws in the things you're told, but to find the new ideas that had been concealed by the broken ones. So this game should be an exciting quest for novelty, not a boring protocol for intellectual hygiene. And you'll be surprised, when you start asking "Is this true?", how often the answer is not an immediate yes. If you have any imagination, you're more likely to have too many leads to follow than too few. More generally your goal should be not to let anything into your head unexamined, and things don't always enter your head in the form of statements. Some of the most powerful influences are implicit. How do you even notice these? By standing back and watching how other people get their ideas. When you stand back at a sufficient distance, you can see ideas spreading through groups of people like waves. The most obvious are in fashion: you notice a few people wearing a certain kind of shirt, and then more and more, until half the people around you are wearing the same shirt. You may not care much what you wear, but there are intellectual fashions too, and you definitely don't want to participate in those. Not just because you want sovereignty over your own thoughts, but because unfashionable ideas are disproportionately likely to lead somewhere interesting. The best place to find undiscovered ideas is where no one else is looking. [ 4 ] ___________ To go beyond this general advice, we need to look at the internal structure of independent-mindedness at the individual muscles we need to exercise, as it were. It seems to me that it has three components: fastidiousness about truth, resistance to being told what to think, and curiosity. Fastidiousness about truth means more than just not believing things that are false. It means being careful about degree of belief. For most people, degree of belief rushes unexamined toward the extremes: the unlikely becomes impossible, and the probable becomes certain. [ 5 ] To the independent-minded, this seems unpardonably sloppy. They're willing to have anything in their heads, from highly speculative hypotheses to (apparent) tautologies, but on subjects they care about, everything has to be labelled with a carefully considered degree of belief. [ 6 ] 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. Without this fastidiousness about truth, you can't be truly independent-minded. It's not enough just to have resistance to being told what to think. Those kind of people reject conventional ideas only to replace them with the most random conspiracy theories. And since these conspiracy theories have often been manufactured to capture them, they end up being less independent-minded than ordinary people, because they're subject to a much more exacting master than mere convention. [ 7 ] Can you increase your fastidiousness about truth? I would think so. In my experience, merely thinking about something you're fastidious about causes that fastidiousness to grow. If so, this is one of those rare virtues we can have more of merely by wanting it. And if it's like other forms of fastidiousness, it should also be possible to encourage in children. I certainly got a strong dose of it from my father. [ 8 ] The second component of independent-mindedness, resistance to being told what to think, is the most visible of the three. But even this is often misunderstood. The big mistake people make about it is to think of it as a merely negative quality. The language we use reinforces that idea. You're un conventional. You don't care what other people think. But it's not just a kind of immunity. In the most independent-minded people, the desire not to be told what to think is a positive force. It's not mere skepticism, but an active delight in ideas that subvert the conventional wisdom, the more counterintuitive the better. Some of the most novel ideas seemed at the time almost like practical jokes. Think how often your reaction to a novel idea is to laugh. I don't think it's because novel ideas are funny per se, but because novelty and humor share a certain kind of surprisingness. But while not identical, the two are close enough that there is a definite correlation between having a sense of humor and being independent-minded just as there is between being humorless and being conventional-minded. [ 9 ] I don't think we can significantly increase our resistance to being told what to think. It seems the most innate of the three components of independent-mindedness; people who have this quality as adults usually showed all too visible signs of it as children. But if we can't increase our resistance to being told what to think, we can at least shore it up, by surrounding ourselves with other independent-minded people. The third component of independent-mindedness, curiosity, may be the most interesting. To the extent that we can give a brief answer to the question of where novel ideas come from, it's curiosity. That's what people are usually feeling before having them. In my experience, independent-mindedness and curiosity predict one another perfectly. Everyone I know who's independent-minded is deeply curious, and everyone I know who's conventional-minded isn't. Except, curiously, children. All small children are curious. Perhaps the reason is that even the conventional-minded have to be curious in the beginning, in order to learn what the conventions are. Whereas the independent-minded are the gluttons of curiosity, who keep eating even after they're full. [ 10 ] The three components of independent-mindedness work in concert: fastidiousness about truth and resistance to being told what to think leave space in your brain, and curiosity finds new ideas to fill it. Interestingly, the three components can substitute for one another in much the same way muscles can. If you're sufficiently fastidious about truth, you don't need to be as resistant to being told what to think, because fastidiousness alone will create sufficient gaps in your knowledge. And either one can compensate for curiosity, because if you create enough space in your brain, your discomfort at the resulting vacuum will add force to your curiosity. Or curiosity can compensate for them: if you're sufficiently curious, you don't need to clear space in your brain, because the new ideas you discover will push out the conventional ones you acquired by default. Because the components of independent-mindedness are so interchangeable, you can have them to varying degrees and still get the same result. So there is not just a single model of independent-mindedness. Some independent-minded people are openly subversive, and others are quietly curious. They all know the secret handshake though. Is there a way to cultivate curiosity? To start with, you want to avoid situations that suppress it. How much does the work you're currently doing engage your curiosity? If the answer is "not much," maybe you should change something. The most important active step you can take to cultivate your curiosity is probably to seek out the topics that engage it. Few adults are equally curious about everything, and it doesn't seem as if you can choose which topics interest you. So it's up to you to find them. Or invent them, if necessary. Another way to increase your curiosity is to indulge it, by investigating things you're interested in. Curiosity is unlike most other appetites in this respect: indulging it tends to increase rather than to sate it. Questions lead to more questions. Curiosity seems to be more individual than fastidiousness about truth or resistance to being told what to think. To the degree people have the latter two, they're usually pretty general, whereas different people can be curious about very different things. So perhaps curiosity is the compass here. Perhaps, if your goal is to discover novel ideas, your motto should not be "do what you love" so much as "do what you're curious about." Notes [ 1 ] One convenient consequence of the fact that no one identifies as conventional-minded is that you can say what you like about conventional-minded people without getting in too much trouble. When I wrote "The Four Quadrants of Conformism" I expected a firestorm of rage from the aggressively conventional-minded, but in fact it was quite muted. They sensed that there was something about the essay that they disliked intensely, but they had a hard time finding a specific passage to pin it on. [ 2 ] When I ask myself what in my life is like high school, the answer is Twitter. It's not just full of conventional-minded people, as anything its size will inevitably be, but subject to violent storms of conventional-mindedness that remind me of descriptions of <LOCATION>. But while it probably is a net loss to spend time there, it has at least made me think more about the distinction between independent- and conventional-mindedness, which I probably wouldn't have done otherwise. [ 3 ] The decrease in independent-mindedness in growing startups is still an open problem, but there may be solutions. Founders can delay the problem by making a conscious effort only to hire independent-minded people. Which of course also has the ancillary benefit that they have better ideas. Another possible solution is to create policies that somehow disrupt the force of conformism, much as control rods slow chain reactions, so that the conventional-minded aren't as dangerous. The physical separation of Lockheed's Skunk Works may have had this as a side benefit. Recent examples suggest employee forums like Slack may not be an unmitigated good. The most radical solution would be to grow revenues without growing the company. You think hiring that junior PR person will be cheap, compared to a programmer, but what will be the effect on the average level of independent-mindedness in your company? (The growth in staff relative to faculty seems to have had a similar effect on universities.) Perhaps the rule about outsourcing work that's not your "core competency" should be augmented by one about outsourcing work done by people who'd ruin your culture as employees. Some investment firms already seem to be able to grow revenues without growing the number of employees. Automation plus the ever increasing articulation of the "tech stack" suggest this may one day be possible for product companies. [ 4 ] There are intellectual fashions in every field, but their influence varies. One of the reasons politics, for example, tends to be boring is that it's so extremely subject to them. The threshold for having opinions about politics is much lower than the one for having opinions about set theory. So while there are some ideas in politics, in practice they tend to be swamped by waves of intellectual fashion. [ 5 ] The conventional-minded are often fooled by the strength of their opinions into believing that they're independent-minded. But strong convictions are not a sign of independent-mindedness. Rather the opposite. [ 6 ] Fastidiousness about truth doesn't imply that an independent-minded person won't be dishonest, but that he won't be deluded. It's sort of like the definition of a gentleman as someone who is never unintentionally rude. [ 7 ] You see this especially among political extremists. They think themselves nonconformists, but actually they're niche conformists. Their opinions may be different from the average person's, but they are often more influenced by their peers' opinions than the average person's are. [ 8 ] If we broaden the concept of fastidiousness about truth so that it excludes pandering, bogusness, and pomposity as well as falsehood in the strict sense, our model of independent-mindedness can expand further into the arts. [ 9 ] This correlation is far from perfect, though. Gdel and <PERSON> don't seem to have been very strong in the humor department. But someone who is both "neurotypical" and humorless is very likely to be conventional-minded. [ 10 ] Exception: gossip. Almost everyone is curious about gossip. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, Harj Taggar, and <PERSON> for reading drafts of this. <NRP> Translation
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Early Work <DATE_TIME> One of the biggest things holding people back from doing great work is the fear of making something lame. And this fear is not an irrational one. Many great projects go through a stage early on where they don't seem very impressive, even to their creators. You have to push through this stage to reach the great work that lies beyond. But many people don't. Most people don't even reach the stage of making something they're embarrassed by, let alone continue past it. They're too frightened even to start. Imagine if we could turn off the fear of making something lame. Imagine how much more we'd do. Is there any hope of turning it off? I think so. I think the habits at work here are not very deeply rooted. Making new things is itself a new thing for us as a species. It has always happened, but till <DATE_TIME> it happened so slowly as to be invisible to individual humans. And since we didn't need customs for dealing with new ideas, we didn't develop any. We just don't have enough experience with early versions of ambitious projects to know how to respond to them. We judge them as we would judge more finished work, or less ambitious projects. We don't realize they're a special case. Or at least, most of us don't. One reason I'm confident we can do better is that it's already starting to happen. There are already a few places that are living in the future in this respect. <LOCATION> is one of them: an unknown person working on a strange-sounding idea won't automatically be dismissed the way they would back home. In <LOCATION>, people have learned how dangerous that is. The right way to deal with new ideas is to treat them as a challenge to your imagination not just to have lower standards, but to switch polarity entirely, from listing the reasons an idea won't work to trying to think of ways it could. That's what I do when I meet people with new ideas. I've become quite good at it, but I've had a lot of practice. Being a partner at Y Combinator means being practically immersed in strange-sounding ideas proposed by unknown people. <DATE_TIME> you get thousands of new ones thrown at you and have to sort through them, knowing that in a world with a power-law distribution of outcomes, it will be painfully obvious if you miss the needle in this haystack. Optimism becomes urgent. But I'm hopeful that, with time, this kind of optimism can become widespread enough that it becomes a social custom, not just a trick used by a few specialists. It is after all an extremely lucrative trick, and those tend to spread quickly. Of course, inexperience is not the only reason people are too harsh on early versions of ambitious projects. They also do it to seem clever. And in a field where the new ideas are risky, like startups, those who dismiss them are in fact more likely to be right. Just not when their predictions are weighted by outcome . But there is another more sinister reason people dismiss new ideas. If you try something ambitious, many of those around you will hope, consciously or unconsciously, that you'll fail. They worry that if you try something ambitious and succeed, it will put you above them. In some countries this is not just an individual failing but part of the national culture. I wouldn't claim that people in <LOCATION> overcome these impulses because they're morally better. [ 1 ] The reason many hope you'll succeed is that they hope to rise with you. For investors this incentive is particularly explicit. They want you to succeed because they hope you'll make them rich in the process. But many other people you meet can hope to benefit in some way from your success. At the very least they'll be able to say, when you're famous, that they've known you since way back. But even if <LOCATION> encouraging attitude is rooted in self-interest, it has over time actually grown into a sort of benevolence. Encouraging startups has been practiced for so long that it has become a custom. Now it just seems that that's what one does with startups. Maybe <LOCATION> is too optimistic. Maybe it's too easily fooled by impostors. Many less optimistic journalists want to believe that. But the lists of impostors they cite are suspiciously short, and plagued with asterisks. [ 2 ] If you use revenue as the test, <LOCATION> optimism seems better tuned than the rest of the world's. And because it works, it will spread. There's a lot more to new ideas than new startup ideas, of course. The fear of making something lame holds people back in every field. But <LOCATION> shows how quickly customs can evolve to support new ideas. And that in turn proves that dismissing new ideas is not so deeply rooted in human nature that it can't be unlearnt. ___________ Unfortunately, if you want to do new things, you'll face a force more powerful than other people's skepticism: your own skepticism. You too will judge your early work too harshly. How do you avoid that? This is a difficult problem, because you don't want to completely eliminate your horror of making something lame. That's what steers you toward doing good work. You just want to turn it off temporarily, the way a painkiller temporarily turns off pain. People have already discovered several techniques that work. Hardy mentions two in A Mathematician's Apology : Good work is not done by "humble" men. It is one of the first duties of a professor, for example, in any subject, to exaggerate a little both the importance of his subject and his importance in it. If you overestimate the importance of what you're working on, that will compensate for your mistakenly harsh judgment of your initial results. If you look at something that's 20% of the way to a goal worth 100 and conclude that it's 10% of the way to a goal worth 200, your estimate of its expected value is correct even though both components are wrong. It also helps, as <PERSON> suggests, to be slightly overconfident. I've noticed in many fields that the most successful people are slightly overconfident. On the face of it this seems implausible. Surely it would be optimal to have exactly the right estimate of one's abilities. How could it be an advantage to be mistaken? Because this error compensates for other sources of error in the opposite direction: being slightly overconfident armors you against both other people's skepticism and your own. Ignorance has a similar effect. It's safe to make the mistake of judging early work as finished work if you're a sufficiently lax judge of finished work. I doubt it's possible to cultivate this kind of ignorance, but empirically it's a real advantage, especially for the young. Another way to get through the lame phase of ambitious projects is to surround yourself with the right people to create an eddy in the social headwind. But it's not enough to collect people who are always encouraging. You'd learn to discount that. You need colleagues who can actually tell an ugly duckling from a baby swan. The people best able to do this are those working on similar projects of their own, which is why university departments and research labs work so well. You don't need institutions to collect colleagues. They naturally coalesce, given the chance. But it's very much worth accelerating this process by seeking out other people trying to do new things. Teachers are in effect a special case of colleagues. It's a teacher's job both to see the promise of early work and to encourage you to continue. But teachers who are good at this are unfortunately quite rare, so if you have the opportunity to learn from one, take it. [ 3 ] For some it might work to rely on sheer discipline: to tell yourself that you just have to press on through the initial crap phase and not get discouraged. But like a lot of "just tell yourself" advice, this is harder than it sounds. And it gets still harder as you get older, because your standards rise. The old do have one compensating advantage though: they've been through this before. It can help if you focus less on where you are and more on the rate of change. You won't worry so much about doing bad work if you can see it improving. Obviously the faster it improves, the easier this is. So when you start something new, it's good if you can spend a lot of time on it. That's another advantage of being young: you tend to have bigger blocks of time. Another common trick is to start by considering new work to be of a different, less exacting type. To start a painting saying that it's just a sketch, or a new piece of software saying that it's just a quick hack. Then you judge your initial results by a lower standard. Once the project is rolling you can sneakily convert it to something more. [ 4 ] This will be easier if you use a medium that lets you work fast and doesn't require too much commitment up front. It's easier to convince yourself that something is just a sketch when you're drawing in a notebook than when you're carving stone. Plus you get initial results faster. [ 5 ] [ 6 ] It will be easier to try out a risky project if you think of it as a way to learn and not just as a way to make something. Then even if the project truly is a failure, you'll still have gained by it. If the problem is sharply enough defined, failure itself is knowledge: if the theorem you're trying to prove turns out to be false, or you use a structural member of a certain size and it fails under stress, you've learned something, even if it isn't what you wanted to learn. [ 7 ] One motivation that works particularly well for me is curiosity. I like to try new things just to see how they'll turn out. We started Y Combinator in this spirit, and it was one of main things that kept me going while I was working on <PERSON> . Having worked for so long with various dialects of Lisp, I was very curious to see what its inherent shape was: what you'd end up with if you followed the axiomatic approach all the way. But it's a bit strange that you have to play mind games with yourself to avoid being discouraged by lame-looking early efforts. The thing you're trying to trick yourself into believing is in fact the truth. A lame-looking early version of an ambitious project truly is more valuable than it seems. So the ultimate solution may be to teach yourself that. One way to do it is to study the histories of people who've done great work. What were they thinking early on? What was the very first thing they did? It can sometimes be hard to get an accurate answer to this question, because people are often embarrassed by their earliest work and make little effort to publish it. (They too misjudge it.) But when you can get an accurate picture of the first steps someone made on the path to some great work, they're often pretty feeble. [ 8 ] Perhaps if you study enough such cases, you can teach yourself to be a better judge of early work. Then you'll be immune both to other people's skepticism and your own fear of making something lame. You'll see early work for what it is. Curiously enough, the solution to the problem of judging early work too harshly is to realize that our attitudes toward it are themselves early work. Holding everything to the same standard is a crude version 1. We're already evolving better customs, and we can already see signs of how big the payoff will be. Notes [ 1 ] This assumption may be too conservative. There is some evidence that historically <LOCATION> has attracted a different sort of person than, say, <LOCATION>. [ 2 ] One of their great favorites is <PERSON>. But the most conspicuous feature of <PERSON>'s cap table is the absence of <LOCATION> firms. Journalists were fooled by <PERSON>, but <LOCATION> investors weren't. [ 3 ] I made two mistakes about teachers when I was younger. I cared more about professors' research than their reputations as teachers, and I was also wrong about what it meant to be a good teacher. I thought it simply meant to be good at explaining things. [ 4 ] <PERSON> points out that you can go past treating something as a hack in the sense of a prototype and onward to the sense of the word that means something closer to a practical joke: I think there may be something related to being a hack that can be powerful the idea of making the tenuousness and implausibility a feature . "Yes, it's a bit ridiculous, right? I'm just trying to see how far such a naive approach can get." YC seemed to me to have this characteristic. [ 5 ] Much of the advantage of switching from physical to digital media is not the software per se but that it lets you start something new with little upfront commitment. [ 6 ] <PERSON> adds: The value of a medium without a vast gulf between the early work and the final work is exemplified in game mods. The original Quake game was a golden age for mods, because everything was very flexible, but so crude due to technical limitations, that quick hacks to try out a gameplay idea weren't all that far from the official game. Many careers were born from that, but as the commercial game quality improved over <DATE_TIME>, it became almost a full time job to make a successful mod that would be appreciated by the community. This was dramatically reversed with Minecraft and later Roblox, where the entire esthetic of the experience was so explicitly crude that innovative gameplay concepts became the overriding value. These "crude" game mods by single authors are now often bigger deals than massive professional teams' work. [ 7 ] <PERSON> suggests that we treat new things as experiments. That way there's no such thing as failing, since you learn something no matter what. You treat it like an experiment in the sense that if it really rules something out, you give up and move on, but if there's some way to vary it to make it work better, go ahead and do that [ 8 ] <PERSON> points out that the internet has made this easier, because you can see programmers' first commits, musicians' first videos, and so on. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Modeling a Wealth Tax <DATE_TIME> Some politicians are proposing to introduce wealth taxes in addition to income and capital gains taxes. Let's try modeling the effects of various levels of wealth tax to see what they would mean in practice for a startup founder. Suppose you start a successful startup in your <DATE_TIME>, and then live for <DATE_TIME>. How much of your stock will a wealth tax consume? If the wealth tax applies to all your assets, it's easy to calculate its effect. A wealth tax of 1% means you get to keep 99% of your stock <DATE_TIME>. After <DATE_TIME> the proportion of stock you'll have left will be <DATE_TIME>^60, or .547. So a straight 1% wealth tax means the government will over the course of your life take 45% of your stock. (Losing shares does not, obviously, mean becoming net poorer unless the value per share is increasing by less than the wealth tax rate.) Here's how much stock the government would take <DATE_TIME> at various levels of wealth tax: wealth tax government takes 0.1% 6% 0.5% 26% 1.0% 45% 2.0% 70% 3.0% 84% 4.0% 91% 5.0% 95% A wealth tax will usually have a threshold at which it starts. How much difference would a high threshold make? To model that, we need to make some assumptions about the initial value of your stock and the growth rate. Suppose your stock is initially worth $2 million, and the company's trajectory is as follows: the value of your stock grows 3x for <DATE_TIME>, then 2x for <DATE_TIME>, then 50% for <DATE_TIME>, after which you just get a typical public company growth rate, which we'll call 8%. [ 1 ] Suppose the wealth tax threshold is $50 million. How much stock does the government take now? wealth tax government takes 0.1% 5% 0.5% 23% 1.0% 41% 2.0% 65% 3.0% 79% 4.0% 88% 5.0% 93% It may at first seem surprising that such apparently small tax rates produce such dramatic effects. A 2% wealth tax with a $50 million threshold takes about two thirds of a successful founder's stock. The reason wealth taxes have such dramatic effects is that they're applied over and over to the same money. Income tax happens <DATE_TIME>, but only to that <DATE_TIME>'s income. Whereas if you live for <DATE_TIME> after acquiring some asset, a wealth tax will tax that same asset 60 times. A wealth tax compounds. Note [ 1 ] In practice, eventually some of this 8% would come in the form of dividends, which are taxed as income at issue, so this model actually represents the most optimistic case for the founder.
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Orthodox Privilege July 2020 "Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are even incapable of forming such opinions." <PERSON> There has been a lot of talk about privilege lately. Although the concept is overused, there is something to it, and in particular to the idea that privilege makes you blind that you can't see things that are visible to someone whose life is very different from yours. But one of the most pervasive examples of this kind of blindness is one that I haven't seen mentioned explicitly. I'm going to call it orthodox privilege : The more conventional-minded someone is, the more it seems to them that it's safe for everyone to express their opinions. It's safe for them to express their opinions, because the source of their opinions is whatever it's currently acceptable to believe. So it seems to them that it must be safe for everyone. They literally can't imagine a true statement that would get you in trouble. And yet at every point in history, there were true things that would get you in trouble to say. Is ours the first where this isn't so? What an amazing coincidence that would be. Surely it should at least be the default assumption that our time is not unique, and that there are true things you can't say now, just as there have always been. You would think. But even in the face of such overwhelming historical evidence, most people will go with their gut on this one. In the most extreme cases, people suffering from orthodox privilege will not only deny that there's anything true that you can't say, but will accuse you of heresy merely for saying there is. Though if there's more than one heresy current in your time, these accusations will be weirdly non-deterministic: you must either be an xist or a yist. Frustrating as it is to deal with these people, it's important to realize that they're in earnest. They're not pretending they think it's impossible for an idea to be both unorthodox and true. The world really looks that way to them. Indeed, this is a uniquely tenacious form of privilege. People can overcome the blindness induced by most forms of privilege by learning more about whatever they're not. But they can't overcome orthodox privilege just by learning more. They'd have to become more independent-minded. If that happens at all, it doesn't happen on the time scale of one conversation. It may be possible to convince some people that orthodox privilege must exist even though they can't sense it, just as one can with, say, dark matter. There may be some who could be convinced, for example, that it's very unlikely that this is the first point in history at which there's nothing true you can't say, even if they can't imagine specific examples. But in general I don't think it will work to say "check your privilege" about this type of privilege, because those in its demographic don't realize they're in it. It doesn't seem to conventional-minded people that they're conventional-minded. It just seems to them that they're right. Indeed, they tend to be particularly sure of it. Perhaps the solution is to appeal to politeness. If someone says they can hear a high-pitched noise that you can't, it's only polite to take them at their word, instead of demanding evidence that's impossible to produce, or simply denying that they hear anything. Imagine how rude that would seem. Similarly, if someone says they can think of things that are true but that cannot be said, it's only polite to take them at their word, even if you can't think of any yourself. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and Harj Taggar for reading drafts of this.
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Coronavirus and Credibility <DATE_TIME> I recently saw a video of TV journalists and politicians confidently saying that the coronavirus would be no worse than the flu. What struck me about it was not just how mistaken they seemed, but how daring. How could they feel safe saying such things? The answer, I realized, is that they didn't think they could get caught. They didn't realize there was any danger in making false predictions. These people constantly make false predictions, and get away with it, because the things they make predictions about either have mushy enough outcomes that they can bluster their way out of trouble, or happen so far in the future that few remember what they said. An epidemic is different. It falsifies your predictions rapidly and unequivocally. But epidemics are rare enough that these people clearly didn't realize this was even a possibility. Instead they just continued to use their ordinary m.o., which, as the epidemic has made clear, is to talk confidently about things they don't understand. An event like this is thus a uniquely powerful way of taking people's measure. As <PERSON> said, "It's only when the tide goes out that you learn who's been swimming naked." And the tide has just gone out like never before. Now that we've seen the results, let's remember what we saw, because this is the most accurate test of credibility we're ever likely to have. I hope. <NRP> Translation German Translation French Translation
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How to Write Usefully <DATE_TIME> What should an essay be? Many people would say persuasive. That's what a lot of us were taught essays should be. But I think we can aim for something more ambitious: that an essay should be useful. To start with, that means it should be correct. But it's not enough merely to be correct. It's easy to make a statement correct by making it vague. That's a common flaw in academic writing, for example. If you know nothing at all about an issue, you can't go wrong by saying that the issue is a complex one, that there are many factors to be considered, that it's a mistake to take too simplistic a view of it, and so on. Though no doubt correct, such statements tell the reader nothing. Useful writing makes claims that are as strong as they can be made without becoming false. For example, it's more useful to say that Pike's Peak is near the middle of <LOCATION> than merely somewhere in <LOCATION>. But if I say it's in the exact middle of <LOCATION>, I've now gone too far, because it's a bit east of the middle. Precision and correctness are like opposing forces. It's easy to satisfy one if you ignore the other. The converse of vaporous academic writing is the bold, but false, rhetoric of demagogues. Useful writing is bold, but true. It's also two other things: it tells people something important, and that at least some of them didn't already know. Telling people something they didn't know doesn't always mean surprising them. Sometimes it means telling them something they knew unconsciously but had never put into words. In fact those may be the more valuable insights, because they tend to be more fundamental. Let's put them all together. Useful writing tells people something true and important that they didn't already know, and tells them as unequivocally as possible. Notice these are all a matter of degree. For example, you can't expect an idea to be novel to everyone. Any insight that you have will probably have already been had by at least one of the world's 7 billion people. But it's sufficient if an idea is novel to a lot of readers. Ditto for correctness, importance, and strength. In effect the four components are like numbers you can multiply together to get a score for usefulness. Which I realize is almost awkwardly reductive, but nonetheless true. _____ How can you ensure that the things you say are true and novel and important? Believe it or not, there is a trick for doing this. I learned it from my friend <PERSON>, who has a horror of saying anything dumb. His trick is not to say anything unless he's sure it's worth hearing. This makes it hard to get opinions out of him, but when you do, they're usually right. Translated into essay writing, what this means is that if you write a bad sentence, you don't publish it. You delete it and try again. Often you abandon whole branches of four or five paragraphs. Sometimes a whole essay. You can't ensure that every idea you have is good, but you can ensure that every one you publish is, by simply not publishing the ones that aren't. In the sciences, this is called publication bias, and is considered bad. When some hypothesis you're exploring gets inconclusive results, you're supposed to tell people about that too. But with essay writing, publication bias is the way to go. 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. I've never tried to count how many times I proofread essays, but I'm sure there are sentences I've read 100 times before publishing them. When I proofread an essay, there are usually passages that stick out in an annoying way, sometimes because they're clumsily written, and sometimes because I'm not sure they're true. The annoyance starts out unconscious, but after the tenth reading or so I'm saying "Ugh, that part" each time I hit it. They become like briars that catch your sleeve as you walk past. Usually I won't publish an essay till they're all gone till I can read through the whole thing without the feeling of anything catching. I'll sometimes let through a sentence that seems clumsy, if I can't think of a way to rephrase it, but I will never knowingly let through one that doesn't seem correct. You never have to. If a sentence doesn't seem right, all you have to do is ask why it doesn't, and you've usually got the replacement right there in your head. This is where essayists have an advantage over journalists. You don't have a deadline. You can work for as long on an essay as you need to get it right. You don't have to publish the essay at all, if you can't get it right. Mistakes seem to lose courage in the face of an enemy with unlimited resources. Or that's what it feels like. What's really going on is that you have different expectations for yourself. You're like a parent saying to a child "we can sit here <DATE_TIME> till you eat your vegetables." Except you're the child too. I'm not saying no mistake gets through. For example, I added condition (c) in "A Way to Detect Bias" after readers pointed out that I'd omitted it. But in practice you can catch nearly all of them. There's a trick for getting importance too. It's like the trick I suggest to young founders for getting startup ideas: to make something you yourself want. You can use yourself as a proxy for the reader. The reader is not completely unlike you, so if you write about topics that seem important to you, they'll probably seem important to a significant number of readers as well. Importance has two factors. It's the number of people something matters to, times how much it matters to them. Which means of course that it's not a rectangle, but a sort of ragged comb, like a Riemann sum. The way to get novelty is to write about topics you've thought about a lot. Then you can use yourself as a proxy for the reader in this department too. Anything you notice that surprises you, who've thought about the topic a lot, will probably also surprise a significant number of readers. And here, as with correctness and importance, you can use the <PERSON> technique to ensure that you will. If you don't learn anything from writing an essay, don't publish it. You need humility to measure novelty, because acknowledging the novelty of an idea means acknowledging your previous ignorance of it. Confidence and humility are often seen as opposites, but in this case, as in many others, confidence helps you to be humble. If you know you're an expert on some topic, you can freely admit when you learn something you didn't know, because you can be confident that most other people wouldn't know it either. The fourth component of useful writing, strength, comes from two things: thinking well, and the skillful use of qualification. These two counterbalance each other, like the accelerator and clutch in a car with a manual transmission. As you try to refine the expression of an idea, you adjust the qualification accordingly. Something you're sure of, you can state baldly with no qualification at all, as I did the four components of useful writing. Whereas points that seem dubious have to be held at arm's length with perhapses. As you refine an idea, you're pushing in the direction of less qualification. But you can rarely get it down to zero. Sometimes you don't even want to, if it's a side point and a fully refined version would be too long. Some say that qualifications weaken writing. For example, that you should never begin a sentence in an essay with "I think," because if you're saying it, then of course you think it. And it's true that "I think x" is a weaker statement than simply "x." Which is exactly why you need "I think." You need it to express your degree of certainty. But qualifications are not scalars. They're not just experimental error. There must be 50 things they can express: how broadly something applies, how you know it, how happy you are it's so, even how it could be falsified. I'm not going to try to explore the structure of qualification here. It's probably more complex than the whole topic of writing usefully. Instead I'll just give you a practical tip: Don't underestimate qualification. It's an important skill in its own right, not just a sort of tax you have to pay in order to avoid saying things that are false. So learn and use its full range. It may not be fully half of having good ideas, but it's part of having them. There's one other quality I aim for in essays: to say things as simply as possible. But I don't think this is a component of usefulness. It's more a matter of consideration for the reader. And it's a practical aid in getting things right; a mistake is more obvious when expressed in simple language. But I'll admit that the main reason I write simply is not for the reader's sake or because it helps get things right, but because it bothers me to use more or fancier words than I need to. It seems inelegant, like a program that's too long. I realize florid writing works for some people. But unless you're sure you're one of them, the best advice is to write as simply as you can. _____ I believe the formula I've given you, importance + novelty + correctness + strength, is the recipe for a good essay. But I should warn you that it's also a recipe for making people mad. The root of the problem is novelty. When you tell people something they didn't know, they don't always thank you for it. Sometimes the reason people don't know something is because they don't want to know it. Usually because it contradicts some cherished belief. And indeed, if you're looking for novel ideas, popular but mistaken beliefs are a good place to find them. Every popular mistaken belief creates a dead zone of ideas around it that are relatively unexplored because they contradict it. The strength component just makes things worse. If there's anything that annoys people more than having their cherished assumptions contradicted, it's having them flatly contradicted. Plus if you've used the <PERSON> technique, your writing will seem quite confident. Perhaps offensively confident, to people who disagree with you. The reason you'll seem confident is that you are confident: you've cheated, by only publishing the things you're sure of. It will seem to people who try to disagree with you that you never admit you're wrong. In fact you constantly admit you're wrong. You just do it before publishing instead of after. And if your writing is as simple as possible, that just makes things worse. Brevity is the diction of command. If you watch someone delivering unwelcome news from a position of inferiority, you'll notice they tend to use lots of words, to soften the blow. Whereas to be short with someone is more or less to be rude to them. It can sometimes work to deliberately phrase statements more weakly than you mean. To put "perhaps" in front of something you're actually quite sure of. But you'll notice that when writers do this, they usually do it with a wink. I don't like to do this too much. It's cheesy to adopt an ironic tone for a whole essay. I think we just have to face the fact that elegance and curtness are two names for the same thing. You might think that if you work sufficiently hard to ensure that an essay is correct, it will be invulnerable to attack. That's sort of true. It will be invulnerable to valid attacks. But in practice that's little consolation. In fact, the strength component of useful writing will make you particularly vulnerable to misrepresentation. If you've stated an idea as strongly as you could without making it false, all anyone has to do is to exaggerate slightly what you said, and now it is false. Much of the time they're not even doing it deliberately. One of the most surprising things you'll discover, if you start writing essays, is that people who disagree with you rarely disagree with what you've actually written. Instead they make up something you said and disagree with that. For what it's worth, the countermove is to ask someone who does this to quote a specific sentence or passage you wrote that they believe is false, and explain why. I say "for what it's worth" because they never do. So although it might seem that this could get a broken discussion back on track, the truth is that it was never on track in the first place. Should you explicitly forestall likely misinterpretations? Yes, if they're misinterpretations a reasonably smart and well-intentioned person might make. In fact it's sometimes better to say something slightly misleading and then add the correction than to try to get an idea right in one shot. That can be more efficient, and can also model the way such an idea would be discovered. But I don't think you should explicitly forestall intentional misinterpretations in the body of an essay. An essay is a place to meet honest readers. You don't want to spoil your house by putting bars on the windows to protect against dishonest ones. The place to protect against intentional misinterpretations is in end-notes. But don't think you can predict them all. People are as ingenious at misrepresenting you when you say something they don't want to hear as they are at coming up with rationalizations for things they want to do but know they shouldn't. I suspect it's the same skill. _____ As with most other things, the way to get better at writing essays is to practice. But how do you start? Now that we've examined the structure of useful writing, we can rephrase that question more precisely. Which constraint do you relax initially? The answer is, the first component of importance: the number of people who care about what you write. If you narrow the topic sufficiently, you can probably find something you're an expert on. Write about that to start with. If you only have ten readers who care, that's fine. You're helping them, and you're writing. Later you can expand the breadth of topics you write about. The other constraint you can relax is a little surprising: publication. Writing essays doesn't have to mean publishing them. That may seem strange now that the trend is to publish every random thought, but it worked for me. I wrote what amounted to essays in notebooks for <DATE_TIME>. I never published any of them and never expected to. I wrote them as a way of figuring things out. But when the web came along I'd had a lot of practice. Incidentally, <PERSON> did the same thing. In high school he designed computers on paper for fun. He couldn't build them because he couldn't afford the components. But when Intel launched 4K DRAMs in <DATE_TIME>, he was ready. _____ How many essays are there left to write though? The answer to that question is probably the most exciting thing I've learned about essay writing. Nearly all of them are left to write. Although the essay is an old form, it hasn't been assiduously cultivated. In the print era, publication was expensive, and there wasn't enough demand for essays to publish that many. You could publish essays if you were already well known for writing something else, like novels. Or you could write book reviews that you took over to express your own ideas. But there was not really a direct path to becoming an essayist. Which meant few essays got written, and those that did tended to be about a narrow range of subjects. Now, thanks to the internet, there's a path. Anyone can publish essays online. You start in obscurity, perhaps, but at least you can start. You don't need anyone's permission. It sometimes happens that an area of knowledge sits quietly for <DATE_TIME>, till some change makes it explode. Cryptography did this to number theory. The internet is doing it to the essay. The exciting thing is not that there's a lot left to write, but that there's a lot left to discover. There's a certain kind of idea that's best discovered by writing essays. If most essays are still unwritten, most such ideas are still undiscovered. Notes [1] Put railings on the balconies, but don't put bars on the windows. [2] Even now I sometimes write essays that are not meant for publication. I wrote several to figure out what Y Combinator should do, and they were really helpful. Thanks to <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. <NRP> Translation Japanese Translation
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Being a Noob <DATE_TIME> When I was young, I thought old people had everything figured out. Now that I'm old, I know this isn't true. I constantly feel like a noob. It seems like I'm always talking to some startup working in a new field I know nothing about, or reading a book about a topic I don't understand well enough, or visiting some new country where I don't know how things work. It's not pleasant to feel like a noob. And the word "noob" is certainly not a compliment. And yet today I realized something encouraging about being a noob: the more of a noob you are locally, the less of a noob you are globally. For example, if you stay in your home country, you'll feel less of a noob than if you move to Farawavia, where everything works differently. And yet you'll know more if you move. So the feeling of being a noob is inversely correlated with actual ignorance. But if the feeling of being a noob is good for us, why do we dislike it? What evolutionary purpose could such an aversion serve? I think the answer is that there are two sources of feeling like a noob: being stupid, and doing something novel. Our dislike of feeling like a noob is our brain telling us "Come on, come on, figure this out." Which was the right thing to be thinking for most of human history. The life of hunter-gatherers was complex, but it didn't change as much as life does now. They didn't suddenly have to figure out what to do about cryptocurrency. So it made sense to be biased toward competence at existing problems over the discovery of new ones. It made sense for humans to dislike the feeling of being a noob, just as, in a world where food was scarce, it made sense for them to dislike the feeling of being hungry. Now that too much food is more of a problem than too little, our dislike of feeling hungry leads us astray. And I think our dislike of feeling like a noob does too. Though it feels unpleasant, and people will sometimes ridicule you for it, the more you feel like a noob, the better. <NRP> Translation Arabic Translation French Translation Korean Translation Polish Translation Chinese Translation Serbian Translation French Translation
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Haters <DATE_TIME> (I originally intended this for startup founders, who are often surprised by the attention they get as their companies grow, but it applies equally to anyone who becomes famous.) If you become sufficiently famous, you'll acquire some fans who like you too much. These people are sometimes called "fanboys," and though I dislike that term, I'm going to have to use it here. We need some word for them, because this is a distinct phenomenon from someone simply liking your work. A fanboy is obsessive and uncritical. Liking you becomes part of their identity, and they create an image of you in their own head that is much better than reality. Everything you do is good, because you do it. If you do something bad, they find a way to see it as good. And their love for you is not, usually, a quiet, private one. They want everyone to know how great you are. Well, you may be thinking, I could do without this kind of obsessive fan, but I know there are all kinds of people in the world, and if this is the worst consequence of fame, that's not so bad. Unfortunately this is not the worst consequence of fame. As well as fanboys, you'll have haters. A hater is obsessive and uncritical. Disliking you becomes part of their identity, and they create an image of you in their own head that is much worse than reality. Everything you do is bad, because you do it. If you do something good, they find a way to see it as bad. And their dislike for you is not, usually, a quiet, private one. They want everyone to know how awful you are. If you're thinking of checking, I'll save you the trouble. The second and fifth paragraphs are identical except for "good" being switched to "bad" and so on. I spent <DATE_TIME> puzzling about haters. What are they, and where do they come from? Then <DATE_TIME> it dawned on me. Haters are just fanboys with the sign switched. Note that by haters, I don't simply mean trolls. I'm not talking about people who say bad things about you and then move on. I'm talking about the much smaller group of people for whom this becomes a kind of obsession and who do it repeatedly over a long period. Like fans, haters seem to be an automatic consequence of fame. Anyone sufficiently famous will have them. And like fans, haters are energized by the fame of whoever they hate. They hear a song by some pop singer. They don't like it much. If the singer were an obscure one, they'd just forget about it. But instead they keep hearing her name, and this seems to drive some people crazy. Everyone's always going on about this singer, but she's no good! She's a fraud! That word "fraud" is an important one. It's the spectral signature of a hater to regard the object of their hatred as a fraud . They can't deny their fame. Indeed, their fame is if anything exaggerated in the hater's mind. They notice every mention of the singer's name, because every mention makes them angrier. In their own minds they exaggerate both the singer's fame and her lack of talent, and the only way to reconcile those two ideas is to conclude that she has tricked everyone. What sort of people become haters? Can anyone become one? I'm not sure about this, but I've noticed some patterns. Haters are generally losers in a very specific sense: although they are occasionally talented, they have never achieved much. And indeed, anyone successful enough to have achieved significant fame would be unlikely to regard another famous person as a fraud on that account, because anyone famous knows how random fame is. But haters are not always complete losers. They are not always the proverbial guy living in his mom's basement. Many are, but some have some amount of talent. In fact I suspect that a sense of frustrated talent is what drives some people to become haters. They're not just saying "It's unfair that so-and-so is famous," but "It's unfair that so-and-so is famous, and not me." Could a hater be cured if they achieved something impressive? My guess is that's a moot point, because they never will . I've been able to observe for long enough that I'm fairly confident the pattern works both ways: not only do people who do great work never become haters, haters never do great work. Although I dislike the word "fanboy," it's evocative of something important about both haters and fanboys. It implies that the fanboy is so slavishly predictable in his admiration that he's diminished as a result, that he's less than a man. Haters seem even more diminished. I can imagine being a fanboy. I can think of people whose work I admire so much that I could abase myself before them out of sheer gratitude. If <PERSON> were still alive, I could see myself being a <PERSON> fanboy. But I could not imagine being a hater. Knowing that haters are just fanboys with the sign bit flipped makes it much easier to deal with them. We don't need a separate theory of haters. We can just use existing techniques for dealing with obsessive fans. The most important of which is simply not to think much about them. If you're like most people who become famous enough to acquire haters, your initial reaction will be one of mystification. Why does this guy seem to have it in for me? Where does his obsessive energy come from, and what makes him so appallingly nasty? What did I do to set him off? Is it something I can fix? The mistake here is to think of the hater as someone you have a dispute with. When you have a dispute with someone, it's usually a good idea to try to understand why they're upset and then fix things if you can. Disputes are distracting. But it's a false analogy to think of a hater as someone you have a dispute with. It's an understandable mistake, if you've never encountered haters before. But when you realize that you're dealing with a hater, and what a hater is, it's clear that it's a waste of time even to think about them. If you have obsessive fans, do you spend any time wondering what makes them love you so much? No, you just think "some people are kind of crazy," and that's the end of it. Since haters are equivalent to fanboys, that's the way to deal with them too. There may have been something that set them off. But it's not something that would have set off a normal person, so there's no reason to spend any time thinking about it. It's not you, it's them. Notes [1] There are of course some people who are genuine frauds. How can you distinguish between x calling y a fraud because x is a hater, and because y is a fraud? Look at neutral opinion. Actual frauds are usually pretty conspicuous. Thoughtful people are rarely taken in by them. So if there are some thoughtful people who like y, you can usually assume y is not a fraud. [2] I would make an exception for teenagers, who sometimes act in such extreme ways that they are literally not themselves. I can imagine a teenage kid being a hater and then growing out of it. But not anyone over <DATE_TIME>. [3] I have a much worse memory for misdeeds than my wife <PERSON>, who is a connoisseur of character, but I don't wish it were better. Most disputes are a waste of time even if you're in the right, and it's easy to bury the hatchet with someone if you can't remember why you were mad at them. [4] A competent hater will not merely attack you individually but will try to get mobs after you. In some cases you may want to refute whatever bogus claim they made in order to do so. But err on the side of not, because ultimately it probably won't matter. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, Harj Taggar, and <PERSON> for reading drafts of this. <NRP> Translation Arabic Translation Polish Translation
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The Two Kinds of Moderate <DATE_TIME> There are two distinct ways to be politically moderate: on purpose and by accident. Intentional moderates are trimmers, deliberately choosing a position mid-way between the extremes of right and left. Accidental moderates end up in the middle, on average, because they make up their own minds about each question, and the far right and far left are roughly equally wrong. You can distinguish intentional from accidental moderates by the distribution of their opinions. If the far left opinion on some matter is 0 and the far right opinion 100, an intentional moderate's opinion on every question will be near <DATE_TIME>. Whereas an accidental moderate's opinions will be scattered over a broad range, but will, like those of the intentional moderate, average to about 50. Intentional moderates are similar to those on the far left and the far right in that their opinions are, in a sense, not their own. The defining quality of an ideologue, whether on the left or the right, is to acquire one's opinions in bulk. You don't get to pick and choose. Your opinions about taxation can be predicted from your opinions about sex. And although intentional moderates might seem to be the opposite of ideologues, their beliefs (though in their case the word "positions" might be more accurate) are also acquired in bulk. If the median opinion shifts to the right or left, the intentional moderate must shift with it. Otherwise they stop being moderate. Accidental moderates, on the other hand, not only choose their own answers, but choose their own questions. They may not care at all about questions that the left and right both think are terribly important. So you can only even measure the politics of an accidental moderate from the intersection of the questions they care about and those the left and right care about, and this can sometimes be vanishingly small. It is not merely a manipulative rhetorical trick to say "if you're not with us, you're against us," but often simply false. Moderates are sometimes derided as cowards, particularly by the extreme left. But while it may be accurate to call intentional moderates cowards, openly being an accidental moderate requires the most courage of all, because you get attacked from both right and left, and you don't have the comfort of being an orthodox member of a large group to sustain you. Nearly all the most impressive people I know are accidental moderates. If I knew a lot of professional athletes, or people in the entertainment business, that might be different. Being on the far left or far right doesn't affect how fast you run or how well you sing. But someone who works with ideas has to be independent-minded to do it well. Or more precisely, you have to be independent-minded about the ideas you work with. You could be mindlessly doctrinaire in your politics and still be a good mathematician. In <DATE_TIME>, a lot of very smart people were <NRP> just no one who was smart about the subjects <NRP> involves. But if the ideas you use in your work intersect with the politics of your time, you have two choices: be an accidental moderate, or be mediocre. Notes [1] It's possible in theory for one side to be entirely right and the other to be entirely wrong. Indeed, ideologues must always believe this is the case. But historically it rarely has been. [2] For some reason the far right tend to ignore moderates rather than despise them as backsliders. I'm not sure why. Perhaps it means that the far right is less ideological than the far left. Or perhaps that they are more confident, or more resigned, or simply more disorganized. I just don't know. [3] Having heretical opinions doesn't mean you have to express them openly. It may be easier to have them if you don't. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and Harj Taggar for reading drafts of this. <NRP> Translation
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Fashionable Problems <DATE_TIME> I've seen the same pattern in many different fields: even though lots of people have worked hard in the field, only a small fraction of the space of possibilities has been explored, because they've all worked on similar things. Even the smartest, most imaginative people are surprisingly conservative when deciding what to work on. People who would never dream of being fashionable in any other way get sucked into working on fashionable problems. If you want to try working on unfashionable problems, one of the best places to look is in fields that people think have already been fully explored: essays, Lisp, venture funding you may notice a pattern here. If you can find a new approach into a big but apparently played out field, the value of whatever you discover will be multiplied by its enormous surface area. The best protection against getting drawn into working on the same things as everyone else may be to genuinely love what you're doing. Then you'll continue to work on it even if you make the same mistake as other people and think that it's too marginal to matter. <NRP> Translation Arabic Translation French Translation
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Novelty and Heresy <DATE_TIME> If you discover something new, there's a significant chance you'll be accused of some form of heresy. To discover new things, you have to work on ideas that are good but non-obvious; if an idea is obviously good, other people are probably already working on it. One common way for a good idea to be non-obvious is for it to be hidden in the shadow of some mistaken assumption that people are very attached to. But anything you discover from working on such an idea will tend to contradict the mistaken assumption that was concealing it. And you will thus get a lot of heat from people attached to the mistaken assumption. Galileo and <PERSON> are famous examples of this phenomenon, but it's probably always an ingredient in the resistance to new ideas. So it's particularly dangerous for an organization or society to have a culture of pouncing on heresy. When you suppress heresies, you don't just prevent people from contradicting the mistaken assumption you're trying to protect. You also suppress any idea that implies indirectly that it's false. Every cherished mistaken assumption has a dead zone of unexplored ideas around it. And the more preposterous the assumption, the bigger the dead zone it creates. There is a positive side to this phenomenon though. If you're looking for new ideas, one way to find them is by looking for heresies . When you look at the question this way, the depressingly large dead zones around mistaken assumptions become excitingly large mines of new ideas. <NRP> Translation Russian Translation Simplified Chinese Translation
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The Bus Ticket Theory of Genius November 2019 Everyone knows that to do great work you need both natural ability and determination. But there's a third ingredient that's not as well understood: an obsessive interest in a particular topic. To explain this point I need to burn my reputation with some group of people, and I'm going to choose bus ticket collectors. There are people who collect old bus tickets. Like many collectors, they have an obsessive interest in the minutiae of what they collect. They can keep track of distinctions between different types of bus tickets that would be hard for the rest of us to remember. Because we don't care enough. What's the point of spending so much time thinking about old bus tickets? Which leads us to the second feature of this kind of obsession: there is no point. A bus ticket collector's love is disinterested. They're not doing it to impress us or to make themselves rich, but for its own sake. When you look at the lives of people who've done great work, you see a consistent pattern. They often begin with a bus ticket collector's obsessive interest in something that would have seemed pointless to most of their contemporaries. One of the most striking features of <PERSON>'s book about his voyage on the Beagle is the sheer depth of his interest in natural history. His curiosity seems infinite. Ditto for <PERSON>, sitting by <DATE_TIME> working out on his slate what happens to series. It's a mistake to think they were "laying the groundwork" for the discoveries they made later. There's too much intention in that metaphor. Like bus ticket collectors, they were doing it because they liked it. But there is a difference between <PERSON> and a bus ticket collector. Series matter, and bus tickets don't. If I had to put the recipe for genius into one sentence, that might be it: to have a disinterested obsession with something that matters. Aren't I forgetting about the other two ingredients? Less than you might think. An obsessive interest in a topic is both a proxy for ability and a substitute for determination. Unless you have sufficient mathematical aptitude, you won't find series interesting. And when you're obsessively interested in something, you don't need as much determination: you don't need to push yourself as hard when curiosity is pulling you. An obsessive interest will even bring you luck, to the extent anything can. Chance, as Pasteur said, favors the prepared mind, and if there's one thing an obsessed mind is, it's prepared. The disinterestedness of this kind of obsession is its most important feature. Not just because it's a filter for earnestness, but because it helps you discover new ideas. The paths that lead to new ideas tend to look unpromising. If they looked promising, other people would already have explored them. How do the people who do great work discover these paths that others overlook? The popular story is that they simply have better vision: because they're so talented, they see paths that others miss. But if you look at the way great discoveries are made, that's not what happens. <PERSON> didn't pay closer attention to individual species than other people because he saw that this would lead to great discoveries, and they didn't. He was just really, really interested in such things. <PERSON> couldn't turn it off. Neither could <PERSON>. They didn't discover the hidden paths that they did because they seemed promising, but because they couldn't help it. That's what allowed them to follow paths that someone who was merely ambitious would have ignored. What rational person would decide that the way to write great novels was to begin by spending <DATE_TIME> creating an imaginary elvish language, like Tolkien, or visiting every household in southwestern <LOCATION>, like <PERSON>? No one, including Tolkien and Trollope. The bus ticket theory is similar to <PERSON>'s famous definition of genius as an infinite capacity for taking pains. But there are two differences. The bus ticket theory makes it clear that the source of this infinite capacity for taking pains is not infinite diligence, as <PERSON> seems to have meant, but the sort of infinite interest that collectors have. It also adds an important qualification: an infinite capacity for taking pains about something that matters. So what matters? You can never be sure. It's precisely because no one can tell in advance which paths are promising that you can discover new ideas by working on what you're interested in. But there are some heuristics you can use to guess whether an obsession might be one that matters. For example, it's more promising if you're creating something, rather than just consuming something someone else creates. It's more promising if something you're interested in is difficult, especially if it's more difficult for other people than it is for you. And the obsessions of talented people are more likely to be promising. When talented people become interested in random things, they're not truly random. But you can never be sure. In fact, here's an interesting idea that's also rather alarming if it's true: it may be that to do great work, you also have to waste a lot of time. In many different areas, reward is proportionate to risk. If that rule holds here, then the way to find paths that lead to truly great work is to be willing to expend a lot of effort on things that turn out to be every bit as unpromising as they seem. I'm not sure if this is true. On one hand, it seems surprisingly difficult to waste your time so long as you're working hard on something interesting. So much of what you do ends up being useful. But on the other hand, the rule about the relationship between risk and reward is so powerful that it seems to hold wherever risk occurs. Newton's case, at least, suggests that the risk/reward rule holds here. He's famous for one particular obsession of his that turned out to be unprecedentedly fruitful: using math to describe the world. But he had two other obsessions, alchemy and theology, that seem to have been complete wastes of time. He ended up net ahead. His bet on what we now call physics paid off so well that it more than compensated for the other two. But were the other two necessary, in the sense that he had to take big risks to make such big discoveries? I don't know. Here's an even more alarming idea: might one make all bad bets? It probably happens quite often. But we don't know how often, because these people don't become famous. It's not merely that the returns from following a path are hard to predict. They change dramatically over time. <DATE_TIME> was a really good time to be obsessively interested in natural history. If <PERSON> had been born in 1709 instead of <DATE_TIME>, we might never have heard of him. What can one do in the face of such uncertainty? One solution is to hedge your bets, which in this case means to follow the obviously promising paths instead of your own private obsessions. But as with any hedge, you're decreasing reward when you decrease risk. If you forgo working on what you like in order to follow some more conventionally ambitious path, you might miss something wonderful that you'd otherwise have discovered. That too must happen all the time, perhaps even more often than the genius whose bets all fail. The other solution is to let yourself be interested in lots of different things. You don't decrease your upside if you switch between equally genuine interests based on which seems to be working so far. But there is a danger here too: if you work on too many different projects, you might not get deeply enough into any of them. One interesting thing about the bus ticket theory is that it may help explain why different types of people excel at different kinds of work. Interest is much more unevenly distributed than ability. If natural ability is all you need to do great work, and natural ability is evenly distributed, you have to invent elaborate theories to explain the skewed distributions we see among those who actually do great work in various fields. But it may be that much of the skew has a simpler explanation: different people are interested in different things. The bus ticket theory also explains why people are less likely to do great work after they have children. Here interest has to compete not just with external obstacles, but with another interest, and one that for most people is extremely powerful. It's harder to find time for work after you have kids, but that's the easy part. The real change is that you don't want to. But the most exciting implication of the bus ticket theory is that it suggests ways to encourage great work. If the recipe for genius is simply natural ability plus hard work, all we can do is hope we have a lot of ability, and work as hard as we can. But if interest is a critical ingredient in genius, we may be able, by cultivating interest, to cultivate genius. For example, for the very ambitious, the bus ticket theory suggests that the way to do great work is to relax a little. Instead of gritting your teeth and diligently pursuing what all your peers agree is the most promising line of research, maybe you should try doing something just for fun. And if you're stuck, that may be the vector along which to break out. I've always liked <PERSON>'s famous double-barrelled question: what are the most important problems in your field, and why aren't you working on one of them? It's a great way to shake yourself up. But it may be overfitting a bit. It might be at least as useful to ask yourself: if you could take <DATE_TIME> off to work on something that probably wouldn't be important but would be really interesting, what would it be? The bus ticket theory also suggests a way to avoid slowing down as you get older. Perhaps the reason people have fewer new ideas as they get older is not simply that they're losing their edge. It may also be because once you become established, you can no longer mess about with irresponsible side projects the way you could when you were young and no one cared what you did. The solution to that is obvious: remain irresponsible. It will be hard, though, because the apparently random projects you take up to stave off decline will read to outsiders as evidence of it. And you yourself won't know for sure that they're wrong. But it will at least be more fun to work on what you want. It may even be that we can cultivate a habit of intellectual bus ticket collecting in kids. The usual plan in education is to start with a broad, shallow focus, then gradually become more specialized. But I've done the opposite with my kids. I know I can count on their school to handle the broad, shallow part, so I take them deep. When they get interested in something, however random, I encourage them to go preposterously, bus ticket collectorly, deep. I don't do this because of the bus ticket theory. I do it because I want them to feel the joy of learning, and they're never going to feel that about something I'm making them learn. It has to be something they're interested in. I'm just following the path of least resistance; depth is a byproduct. But if in trying to show them the joy of learning I also end up training them to go deep, so much the better. Will it have any effect? I have no idea. But that uncertainty may be the most interesting point of all. There is so much more to learn about how to do great work. As old as human civilization feels, it's really still very young if we haven't nailed something so basic. It's exciting to think there are still discoveries to make about discovery. If that's the sort of thing you're interested in. Notes [1] There are other types of collecting that illustrate this point better than bus tickets, but they're also more popular. It seemed just as well to use an inferior example rather than offend more people by telling them their hobby doesn't matter. [2] I worried a little about using the word "disinterested," since some people mistakenly believe it means not interested. But anyone who expects to be a genius will have to know the meaning of such a basic word, so I figure they may as well start now. [3] Think how often genius must have been nipped in the bud by people being told, or telling themselves, to stop messing about and be responsible. <PERSON>'s mother was a huge enabler. Imagine if she hadn't been. Imagine if his parents had made him go out and get a job instead of sitting around at home doing math. On the other hand, anyone quoting the preceding paragraph to justify not getting a job is probably mistaken. [4] 1709 <PERSON> is to time what the Milanese Leonardo is to space. [5] "An infinite capacity for taking pains" is a paraphrase of what <PERSON> wrote. What he wrote, in his History of Frederick the Great , was "... it is the fruit of 'genius' (which means transcendent capacity of taking trouble, first of all)...." Since the paraphrase seems the name of the idea at this point, I kept it. <PERSON>'s History was published in <DATE_TIME>. In <DATE_TIME> Hrault de Schelles quoted <PERSON> as saying "Le gnie n'est qu'une plus grande aptitude la patience." (Genius is only a greater aptitude for patience.) [6] Trollope was establishing the system of postal routes. He himself sensed the obsessiveness with which he pursued this goal. It is amusing to watch how a passion will grow upon a man. During <DATE_TIME> it was the ambition of my life to cover the country with rural letter-carriers. Even <PERSON> occasionally sensed the degree of his obsessiveness. After computing pi to 15 digits, he wrote in a letter to a friend: I am ashamed to tell you to how many figures I carried these computations, having no other business at the time. Incidentally, <PERSON> was also a compulsive calculator. As <PERSON> writes in his excellent biography: One <PERSON> scholar, <PERSON>, later told how <PERSON>'s research into number theory was often "preceded by a table of numerical results, carried usually to a length from which most of us would shrink." [7] Working to understand the natural world counts as creating rather than consuming. Newton tripped over this distinction when he chose to work on theology. His beliefs did not allow him to see it, but chasing down paradoxes in nature is fruitful in a way that chasing down paradoxes in sacred texts is not. [8] How much of people's propensity to become interested in a topic is inborn? My experience so far suggests the answer is: most of it. Different kids get interested in different things, and it's hard to make a child interested in something they wouldn't otherwise be. Not in a way that sticks. The most you can do on behalf of a topic is to make sure it gets a fair showing to make it clear to them, for example, that there's more to math than the dull drills they do in school. After that it's up to the child. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and my <DATE_TIME> for reading drafts of this. <NRP> Translation Russian Translation Korean Translation Armenian Translation
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General and Surprising <DATE_TIME> The most valuable insights are both general and surprising. F = ma for example. But general and surprising is a hard combination to achieve. That territory tends to be picked clean, precisely because those insights are so valuable. 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). Where things get interesting is the moderately valuable insights. You get those from small additions of whichever quality was missing. The more common case is a small addition of generality: a piece of gossip that's more than just gossip, because it teaches something interesting about the world. But another less common approach is to focus on the most general ideas and see if you can find something new to say about them. Because these start out so general, you only need a small delta of novelty to produce a useful insight. A small delta of novelty is all you'll be able to get most of the time. Which means if you take this route, your ideas will seem a lot like ones that already exist. Sometimes you'll find you've merely rediscovered an idea that did already exist. But don't be discouraged. Remember the huge multiplier that kicks in when you do manage to think of something even a little new. Corollary: the more general the ideas you're talking about, the less you should worry about repeating yourself. If you write enough, it's inevitable you will. Your brain is much the same from year to year and so are the stimuli that hit it. I feel slightly bad when I find I've said something close to what I've said before, as if I were plagiarizing myself. But rationally one shouldn't. You won't say something exactly the same way the second time, and that variation increases the chance you'll get that tiny but critical delta of novelty. And of course, ideas beget ideas. (That sounds familiar .) An idea with a small amount of novelty could lead to one with more. But only if you keep going. So it's doubly important not to let yourself be discouraged by people who say there's not much new about something you've discovered. "Not much new" is a real achievement when you're talking about the most general ideas. It's not true that there's nothing new under the sun. There are some domains where there's almost nothing new. But there's a big difference between nothing and almost nothing, when it's multiplied by the area under the sun. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. <NRP> Translation
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Charisma / Power <DATE_TIME> People who are powerful but uncharismatic will tend to be disliked. Their power makes them a target for criticism that they don't have the charisma to disarm. That was <PERSON> problem. It also tends to be a problem for any CEO who is more of a builder than a schmoozer. And yet the builder-type CEO is (like <PERSON>) probably the best person for the job. I don't think there is any solution to this problem. It's human nature. The best we can do is to recognize that it's happening, and to understand that being a magnet for criticism is sometimes a sign not that someone is the wrong person for a job, but that they're the right one.
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The Risk of Discovery <DATE_TIME> Because biographies of famous scientists tend to edit out their mistakes, we underestimate the degree of risk they were willing to take. And because anything a famous scientist did that wasn't a mistake has probably now become the conventional wisdom, those choices don't seem risky either. Biographies of <LOCATION>, for example, understandably focus more on physics than alchemy or theology. The impression we get is that his unerring judgment led him straight to truths no one else had noticed. How to explain all the time he spent on alchemy and theology? Well, smart people are often kind of crazy. But maybe there is a simpler explanation. Maybe the smartness and the craziness were not as separate as we think. Physics seems to us a promising thing to work on, and alchemy and theology obvious wastes of time. But that's because we know how things turned out. In <LOCATION>'s day the three problems seemed roughly equally promising. No one knew yet what the payoff would be for inventing what we now call physics; if they had, more people would have been working on it. And alchemy and theology were still then in the category <PERSON> would describe as "huge, if true." Newton made three bets. One of them worked. But they were all risky. <NRP> Translation
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How to Make Pittsburgh a Startup Hub <DATE_TIME> (This is a talk I gave at an event called Opt412 in <LOCATION>. Much of it will apply to other towns. But not all, because as I say in the talk, <LOCATION> has some important advantages over most would-be startup hubs.) What would it take to make <LOCATION> into a startup hub, like <LOCATION>? I understand <LOCATION> pretty well, because I grew up here, in <LOCATION>. And I understand <LOCATION> pretty well because that's where I live now. Could you get that kind of startup ecosystem going here? When I agreed to speak here, I didn't think I'd be able to give a very optimistic talk. I thought I'd be talking about what <LOCATION> could do to become a startup hub, very much in the subjunctive. Instead I'm going to talk about what <LOCATION> can do. What changed my mind was an article I read in, of all places, the New York Times food section. The title was " <LOCATION>'s Youth-Driven Food Boom ." To most people that might not even sound interesting, let alone something related to startups. But it was electrifying to me to read that title. I don't think I could pick a more promising one if I tried. And when I read the article I got even more excited. It said "people <DATE_TIME> now make up 7.6 percent of all residents, up from 7 percent <DATE_TIME>." Wow, I thought, <LOCATION> could be the next <LOCATION>. It could become the cool place all the people in their twenties want to go live. When I got here <DATE_TIME>, I could feel the difference. I lived here from <DATE_TIME>. I didn't realize it at the time, but during that whole period the city was in free fall. On top of the flight to the suburbs that happened everywhere, the steel and nuclear businesses were both dying. Boy are things different now. It's not just that downtown seems a lot more prosperous. There is an energy here that was not here when I was a kid. When I was a kid, this was a place young people left. Now it's a place that attracts them. What does that have to do with startups? Startups are made of people, and the average age of the people in a typical startup is right in that 25 to 29 bracket. I've seen how powerful it is for a city to have those people. <DATE_TIME> they shifted the center of gravity of <LOCATION> from the peninsula to <LOCATION>. Google and Facebook are on the peninsula, but the next generation of big winners are all in <LOCATION>. The reason the center of gravity shifted was the talent war, for programmers especially. Most <DATE_TIME> want to live in the city, not down in the boring suburbs. So whether they like it or not, founders know they have to be in the city. I know multiple founders who would have preferred to live down in the <LOCATION> proper, but who made themselves move to <LOCATION> because they knew otherwise they'd lose the talent war. So being a magnet for people in their twenties is a very promising thing to be. It's hard to imagine a place becoming a startup hub without also being that. When I read that statistic about the increasing percentage of <DATE_TIME>, I had exactly the same feeling of excitement I get when I see a startup's graphs start to creep upward off the x axis. Nationally the percentage of <DATE_TIME> is 6.8%. That means you're .8% ahead. The population is 306,000, so we're talking about a surplus of about 2500 people. That's the population of a small town, and that's just the surplus. So you have a toehold. Now you just have to expand it. And though "youth-driven food boom" may sound frivolous, it is anything but. Restaurants and cafes are a big part of the personality of a city. Imagine walking down a street in <LOCATION>. What are you walking past? Little restaurants and cafes. Imagine driving through some depressing random exurb. What are you driving past? Starbucks and McDonalds and Pizza Hut. As <PERSON> said, there is no there there. You could be anywhere. These independent restaurants and cafes are not just feeding people. They're making there be a there here. So here is my first concrete recommendation for turning <LOCATION> into the next <LOCATION>: do everything you can to encourage this youth-driven food boom. What could the city do? Treat the people starting these little restaurants and cafes as your users, and go ask them what they want. I can guess at least one thing they might want: a fast permit process. <LOCATION> has left you a huge amount of room to beat them in that department. I know restaurants aren't the prime mover though. The prime mover, as the Times article said, is cheap housing. That's a big advantage. But that phrase "cheap housing" is a bit misleading. There are plenty of places that are cheaper. What's special about <LOCATION> is not that it's cheap, but that it's a cheap place you'd actually want to live. Part of that is the buildings themselves. I realized a long time ago, back when I was a poor twenty-something myself, that the best deals were places that had once been rich, and then became poor. If a place has always been rich, it's nice but too expensive. If a place has always been poor, it's cheap but grim. But if a place was once rich and then got poor, you can find palaces for cheap. And that's what's bringing people here. When <LOCATION> was rich, <DATE_TIME>, the people who lived here built big solid buildings. Not always in the best taste, but definitely solid. So here is another piece of advice for becoming a startup hub: don't destroy the buildings that are bringing people here. When cities are on the way back up, like <LOCATION> is now, developers race to tear down the old buildings. Don't let that happen. Focus on historic preservation. Big real estate development projects are not what's bringing the twenty-somethings here. They're the opposite of the new restaurants and cafes; they subtract personality from the city. The empirical evidence suggests you cannot be too strict about historic preservation. The tougher cities are about it, the better they seem to do. But the appeal of <LOCATION> is not just the buildings themselves. It's the neighborhoods they're in. Like <LOCATION> and <LOCATION>, <LOCATION> is fortunate in being a pre-car city. It's not too spread out. Because those <DATE_TIME> do not like driving. They prefer walking, or bicycling, or taking public transport. If you've been to <LOCATION> recently you can't help noticing the huge number of bicyclists. And this is not just a fad that the twenty-somethings have adopted. In this respect they have discovered a better way to live. The beards will go, but not the bikes. Cities where you can get around without driving are just better period. So I would suggest you do everything you can to capitalize on this. As with historic preservation, it seems impossible to go too far. Why not make <LOCATION> the most bicycle and pedestrian friendly city in the country? See if you can go so far that you make <LOCATION> seem backward by comparison. If you do, it's very unlikely you'll regret it. The city will seem like a paradise to the young people you want to attract. If they do leave to get jobs elsewhere, it will be with regret at leaving behind such a place. And what's the downside? Can you imagine a headline "City ruined by becoming too bicycle-friendly?" It just doesn't happen. So suppose cool old neighborhoods and cool little restaurants make this the next <LOCATION>. Will that be enough? It will put you in a way better position than <LOCATION> itself, because <LOCATION> has something <LOCATION> lacks: a first-rate research university. CMU plus little cafes means you have more than hipsters drinking lattes. It means you have hipsters drinking lattes while talking about distributed systems. Now you're getting really close to <LOCATION>. In fact you're better off than <LOCATION> in one way, because CMU is downtown, but Stanford and <LOCATION> are out in the suburbs. What can CMU do to help <LOCATION> become a startup hub? Be an even better research university. CMU is one of the best universities in the world, but imagine what things would be like if it were the very best, and everyone knew it. There are a lot of ambitious people who must go to the best place, wherever it is. If CMU were it, they would all come here. There would be kids in <LOCATION> dreaming of <DATE_TIME> living in <LOCATION>. Being that kind of talent magnet is the most important contribution universities can make toward making their city a startup hub. In fact it is practically the only contribution they can make. But wait, shouldn't universities be setting up programs with words like "innovation" and "entrepreneurship" in their names? No, they should not. These kind of things almost always turn out to be disappointments. They're pursuing the wrong targets. The way to get innovation is not to aim for innovation but to aim for something more specific, like better batteries or better 3D printing. And the way to learn about entrepreneurship is to do it, which you can't in school . I know it may disappoint some administrators to hear that the best thing a university can do to encourage startups is to be a great university. It's like telling people who want to lose weight that the way to do it is to eat less. But if you want to know where startups come from, look at the empirical evidence. Look at the histories of the most successful startups, and you'll find they grow organically out of a couple of founders building something that starts as an interesting side project. Universities are great at bringing together founders, but beyond that the best thing they can do is get out of the way. For example, by not claiming ownership of "intellectual property" that students and faculty develop, and by having liberal rules about deferred admission and leaves of absence. In fact, one of the most effective things a university could do to encourage startups is an elaborate form of getting out of the way invented by Harvard. Harvard used to have exams for <DATE_TIME> after <DATE_TIME>. At <DATE_TIME> they had something called "Reading Period" when you were supposed to be studying for exams. And Microsoft and Facebook have something in common that few people realize: they were both started during Reading Period. It's the perfect situation for producing the sort of side projects that turn into startups. The students are all on campus, but they don't have to do anything because they're supposed to be studying for exams. Harvard may have closed this window, because <DATE_TIME> they moved exams before <DATE_TIME> and shortened reading period from <DATE_TIME> to 7. But if a university really wanted to help its students start startups, the empirical evidence, weighted by market cap, suggests the best thing they can do is literally nothing. The culture of <LOCATION> is another of its strengths. It seems like a city has to be socially liberal to be a startup hub, and it's pretty clear why. A city has to tolerate strangeness to be a home for startups, because startups are so strange. And you can't choose to allow just the forms of strangeness that will turn into big startups, because they're all intermingled. You have to tolerate all strangeness. That immediately rules out big chunks of the <LOCATION> . I'm optimistic it doesn't rule out <LOCATION>. One of the things I remember from growing up here, though I didn't realize at the time that there was anything unusual about it, is how well people got along. I'm still not sure why. Maybe one reason was that everyone felt like an immigrant. When I was a kid in <LOCATION>, people didn't call themselves <NRP>. They called themselves <NRP> or <NRP> or <NRP>. Just imagine what it must have been like here <DATE_TIME>, when people were pouring in from twenty different countries. Tolerance was the only option. What I remember about the culture of <LOCATION> is that it was both tolerant and pragmatic. That's how I'd describe the culture of <LOCATION> too. And it's not a coincidence, because <LOCATION> was <LOCATION> of its time. This was a city where people built new things. And while the things people build have changed, the spirit you need to do that kind of work is the same. So although an influx of latte-swilling hipsters may be annoying in some ways, I would go out of my way to encourage them. And more generally to tolerate strangeness, even unto the degree wacko <NRP> do. For <LOCATION> that is a conservative choice: it's a return to the city's roots. Unfortunately I saved the toughest part for last. There is one more thing you need to be a startup hub, and <LOCATION> hasn't got it: investors. <LOCATION> has a big investor community because it's had <DATE_TIME> to grow one. <LOCATION> has a big investor community because it's full of people who like money a lot and are quick to notice new ways to get it. But <LOCATION> has neither of these. And the cheap housing that draws other people here has no effect on investors. If an investor community grows up here, it will happen the same way it did in <LOCATION>: slowly and organically. So I would not bet on having a big investor community in the short term. But fortunately there are three trends that make that less necessary than it used to be. One is that startups are increasingly cheap to start, so you just don't need as much outside money as you used to. The second is that thanks to things like Kickstarter, a startup can get to revenue faster. You can put something on <LOCATION> from anywhere. The third is programs like Y Combinator. A startup from anywhere in the world can go to YC for <DATE_TIME>, pick up funding, and then return home if they want. My advice is to make <LOCATION> a great place for startups, and gradually more of them will stick. Some of those will succeed; some of their founders will become investors; and still more startups will stick. This is not a fast path to becoming a startup hub. But it is at least a path, which is something few other cities have. And it's not as if you have to make painful sacrifices in the meantime. Think about what I've suggested you should do. Encourage local restaurants, save old buildings, take advantage of density, make CMU the best, promote tolerance. These are the things that make <LOCATION> good to live in now. All I'm saying is that you should do even more of them. And that's an encouraging thought. If <LOCATION>'s path to becoming a startup hub is to be even more itself, then it has a good chance of succeeding. In fact it probably has the best chance of any city its size. It will take some effort, and a lot of time, but if any city can do it, <LOCATION> can. Thanks to <PERSON> and <PERSON> for reading drafts of this, and to <PERSON> for organizing Opt412 and inviting me to speak.
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Economic Inequality <DATE_TIME>, economic inequality in the <LOCATION> has increased dramatically. And in particular, the rich have gotten a lot richer. Nearly everyone who writes about the topic says that economic inequality should be decreased. I'm interested in this question because I was one of the founders of a company called Y Combinator that helps people start startups. Almost by definition, if a startup succeeds, its founders become rich. Which means by helping startup founders I've been helping to increase economic inequality. If economic inequality should be decreased, I shouldn't be helping founders. No one should be. But that doesn't sound right. What's going on here? What's going on is that while economic inequality is a single measure (or more precisely, two: variation in income, and variation in wealth), it has multiple causes. Many of these causes are bad, like tax loopholes and drug addiction. But some are good, like <PERSON> and <PERSON> starting the company you use to find things online. If you want to understand economic inequality - and more importantly, if you actually want to fix the bad aspects of it - you have to tease apart the components. And yet the trend in nearly everything written about the subject is to do the opposite: to squash together all the aspects of economic inequality as if it were a single phenomenon. Sometimes this is done for ideological reasons. 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. Sometimes it's because the writer doesn't understand critical aspects of inequality, like the role of technology in wealth creation. Much of the time, perhaps most of the time, writing about economic inequality combines all three. ___ The most common mistake people make about economic inequality is to treat it as a single phenomenon. The most naive version of which is the one based on the pie fallacy: that the rich get rich by taking money from the poor. Usually this is an assumption people start from rather than a conclusion they arrive at by examining the evidence. Sometimes the pie fallacy is stated explicitly: <URL>ose at the top are grabbing an increasing fraction of the nation's income - so much of a larger share that what's left over for the rest is diminished.... [ 1 ] Other times it's more unconscious. But the unconscious form is very widespread. I think because we grow up in a world where the pie fallacy is actually true. To kids, wealth is a fixed pie that's shared out, and if one person gets more, it's at the expense of another. It takes a conscious effort to remind oneself that the real world doesn't work that way. In the real world you can create wealth as well as taking it from others. A woodworker creates wealth. He makes a chair, and you willingly give him money in return for it. A high-frequency trader does not. He makes a dollar only when someone on the other end of a trade loses a dollar. If the rich people in a society got that way by taking wealth from the poor, then you have the degenerate case of economic inequality, where the cause of poverty is the same as the cause of wealth. But instances of inequality don't have to be instances of the degenerate case. If one woodworker makes 5 chairs and another makes none, the second woodworker will have less money, but not because anyone took anything from him. Even people sophisticated enough to know about the pie fallacy are led toward it by the custom of describing economic inequality as a ratio of one quantile's income or wealth to another's. It's so easy to slip from talking about income shifting from one quantile to another, as a figure of speech, into believing that is literally what's happening. Except in the degenerate case, economic inequality can't be described by a ratio or even a curve. In the general case it consists of multiple ways people become poor, and multiple ways people become rich. Which means to understand economic inequality in a country, you have to go find individual people who are poor or rich and figure out why. [ 2 ] If you want to understand change in economic inequality, you should ask what those people would have done when it was different. This is one way I know the rich aren't all getting richer simply from some new system for transferring wealth to them from everyone else. When you use the would-have method with startup founders, you find what most would have done back in <DATE_TIME> , when economic inequality was lower, was to join big companies or become professors. Before <PERSON> started Facebook, his default expectation was that he'd end up working at Microsoft. The reason he and most other startup founders are richer than they would have been in <DATE_TIME> is not because of some right turn the country took during the <PERSON> administration, but because progress in technology has made it much easier to start a new company that grows fast . Traditional economists seem strangely averse to studying individual humans. It seems to be a rule with them that everything has to start with statistics. So they give you very precise numbers about variation in wealth and income, then follow it with the most naive speculation about the underlying causes. But while there are a lot of people who get rich through rent-seeking of various forms, and a lot who get rich by playing zero-sum games, there are also a significant number who get rich by creating wealth. And creating wealth, as a source of economic inequality, is different from taking it - not just morally, but also practically, in the sense that it is harder to eradicate. One reason is that variation in productivity is accelerating. The rate at which individuals can create wealth depends on the technology available to them, and that grows exponentially. The other reason creating wealth is such a tenacious source of inequality is that it can expand to accommodate a lot of people. ___ I'm all for shutting down the crooked ways to get rich. But that won't eliminate great variations in wealth, because as long as you leave open the option of getting rich by creating wealth, people who want to get rich will do that instead. Most people who get rich tend to be fairly driven. Whatever their other flaws, laziness is usually not one of them. Suppose new policies make it hard to make a fortune in finance. Does it seem plausible that the people who currently go into finance to make their fortunes will continue to do so, but be content to work for ordinary salaries? The reason they go into finance is not because they love finance but because they want to get rich. If the only way left to get rich is to start startups, they'll start startups. They'll do well at it too, because determination is the main factor in the success of a startup. [ 3 ] And while it would probably be a good thing for the world if people who wanted to get rich switched from playing zero-sum games to creating wealth, that would not only not eliminate great variations in wealth, but might even exacerbate them. In a zero-sum game there is at least a limit to the upside. Plus a lot of the new startups would create new technology that further accelerated variation in productivity. Variation in productivity is far from the only source of economic inequality, but it is the irreducible core of it, in the sense that you'll have that left when you eliminate all other sources. And if you do, that core will be big, because it will have expanded to include the efforts of all the refugees. Plus it will have a large Baumol penumbra around it: anyone who could get rich by creating wealth on their own account will have to be paid enough to prevent them from doing it. You can't prevent great variations in wealth without preventing people from getting rich, and you can't do that without preventing them from starting startups. So let's be clear about that. Eliminating great variations in wealth would mean eliminating startups. And that doesn't seem a wise move. Especially since it would only mean you eliminated startups in your own country. Ambitious people already move halfway around the world to further their careers, and startups can operate from anywhere nowadays. So if you made it impossible to get rich by creating wealth in your country, people who wanted to do that would just leave and do it somewhere else. Which would certainly get you a lower <PERSON> coefficient, along with a lesson in being careful what you ask for. [ 4 ] I think rising economic inequality is the inevitable fate of countries that don't choose something worse. We had a <DATE_TIME> stretch in <DATE_TIME> that convinced some people otherwise. But as I explained in The Refragmentation , that was an anomaly - a unique combination of circumstances that compressed <NRP> society not just economically but culturally too. [ 5 ] And while some of the growth in economic inequality we've seen since then has been due to bad behavior of various kinds, there has simultaneously been a huge increase in individuals' ability to create wealth. Startups are almost entirely a product of this period. And even within the startup world, there has been a qualitative change in <DATE_TIME>. Technology has decreased the cost of starting a startup so much that founders now have the upper hand over investors. Founders get less diluted, and it is now common for them to retain board control as well. Both further increase economic inequality, the former because founders own more stock, and the latter because, as investors have learned, founders tend to be better at running their companies than investors. While the surface manifestations change, the underlying forces are very, very old. The acceleration of productivity we see in <LOCATION> has been happening for <DATE_TIME>. If you look at the history of stone tools, technology was already accelerating in the Mesolithic. The acceleration would have been too slow to perceive in one lifetime. Such is the nature of the leftmost part of an exponential curve. But it was the same curve. You do not want to design your society in a way that's incompatible with this curve. The evolution of technology is one of the most powerful forces in history. <PERSON> said "We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." That sounds plausible. But if I have to choose between ignoring him and ignoring an exponential curve that has been operating for <DATE_TIME>, I'll bet on the curve. Ignoring any trend that has been operating for <DATE_TIME> is dangerous. But exponential growth, especially, tends to bite you. ___ If accelerating variation in productivity is always going to produce some baseline growth in economic inequality, it would be a good idea to spend some time thinking about that future. Can you have a healthy society with great variation in wealth? What would it look like? Notice how novel it feels to think about that. The public conversation so far has been exclusively about the need to decrease economic inequality. We've barely given a thought to how to live with it. I'm hopeful we'll be able to. <PERSON> was a product of the Gilded Age, and things have changed since then. It's harder to hide wrongdoing now. And to get rich now you don't have to buy politicians the way railroad or oil magnates did. [ 6 ] The great concentrations of wealth I see around me in <LOCATION> don't seem to be destroying democracy. There are lots of things wrong with the <LOCATION> that have economic inequality as a symptom. We should fix those things. In the process we may decrease economic inequality. But we can't start from the symptom and hope to fix the underlying causes. [ 7 ] The most obvious is poverty. I'm sure most of those who want to decrease economic inequality want to do it mainly to help the poor, not to hurt the rich. [ 8 ] Indeed, a good number are merely being sloppy by speaking of decreasing economic inequality when what they mean is decreasing poverty. But this is a situation where it would be good to be precise about what we want. Poverty and economic inequality are not identical. When the city is turning off your water because you can't pay the bill, it doesn't make any difference what <PERSON> net worth is compared to yours. He might only be a few times richer than you, and it would still be just as much of a problem that your water was getting turned off. Closely related to poverty is lack of social mobility. I've seen this myself: you don't have to grow up rich or even upper middle class to get rich as a startup founder, but few successful founders grew up desperately poor. But again, the problem here is not simply economic inequality. There is an enormous difference in wealth between the household <PERSON> grew up in and that of a successful startup founder, but that didn't prevent him from joining their ranks. It's not economic inequality per se that's blocking social mobility, but some specific combination of things that go wrong when kids grow up sufficiently poor. One of the most important principles in <LOCATION> is that "you make what you measure." It means that if you pick some number to focus on, it will tend to improve, but that you have to choose the right number, because only the one you choose will improve; another that seems conceptually adjacent might not. For example, if you're a university president and you decide to focus on graduation rates, then you'll improve graduation rates. But only graduation rates, not how much students learn. Students could learn less, if to improve graduation rates you made classes easier. Economic inequality is sufficiently far from identical with the various problems that have it as a symptom that we'll probably only hit whichever of the two we aim at. If we aim at economic inequality, we won't fix these problems. So I say let's aim at the problems. For example, let's attack poverty, and if necessary damage wealth in the process. That's much more likely to work than attacking wealth in the hope that you will thereby fix poverty. [ 9 ] And if there are people getting rich by tricking consumers or lobbying the government for anti-competitive regulations or tax loopholes, then let's stop them. Not because it's causing economic inequality, but because it's stealing. [ 10 ] If all you have is statistics, it seems like that's what you need to fix. But behind a broad statistical measure like economic inequality there are some things that are good and some that are bad, some that are historical trends with immense momentum and others that are random accidents. If we want to fix the world behind the statistics, we have to understand it, and focus our efforts where they'll do the most good. Notes [ 1 ] <PERSON>, <PERSON>. The Price of Inequality . Norton, <DATE_TIME>. p. 32. [ 2 ] Particularly since economic inequality is a matter of outliers, and outliers are disproportionately likely to have gotten where they are by ways that have little do with the sort of things economists usually think about, like wages and productivity, but rather by, say, ending up on the wrong side of the "War on Drugs." [ 3 ] Determination is the most important factor in deciding between success and failure, which in startups tend to be sharply differentiated. But it takes more than determination to create one of the hugely successful startups. Though most founders start out excited about the idea of getting rich, purely mercenary founders will usually take one of the big acquisition offers most successful startups get on the way up. The founders who go on to the next stage tend to be driven by a sense of mission. They have the same attachment to their companies that an artist or writer has to their work. But it is very hard to predict at the outset which founders will do that. It's not simply a function of their initial attitude. Starting a company changes people. [ 4 ] After reading a draft of this essay, <PERSON> told me how he had once talked to a group of <NRP> "who said they wanted to make <LOCATION> more entrepreneurial and more like <LOCATION>. I said by definition this will give you more inequality. They thought I was insane - they could not process it." [ 5 ] Economic inequality has been decreasing globally. But this is mainly due to the erosion of the kleptocracies that formerly dominated all the poorer countries. Once the playing field is leveler politically, we'll see economic inequality start to rise again. The <LOCATION> is the bellwether. The situation we face here, the rest of the world will sooner or later. [ 6 ] Some people still get rich by buying politicians. My point is that it's no longer a precondition. [ 7 ] As well as problems that have economic inequality as a symptom, there are those that have it as a cause. But in most if not all, economic inequality is not the primary cause. There is usually some injustice that is allowing economic inequality to turn into other forms of inequality, and that injustice is what we need to fix. For example, the police in the <LOCATION> treat the poor worse than the rich. But the solution is not to make people richer. It's to make the police treat people more equitably. Otherwise they'll continue to maltreat people who are weak in other ways. [ 8 ] Some who read this essay will say that I'm clueless or even being deliberately misleading by focusing so much on the richer end of economic inequality - that economic inequality is really about poverty. But that is exactly the point I'm making, though sloppier language than I'd use to make it. The real problem is poverty, not economic inequality. And if you conflate them you're aiming at the wrong target. Others will say I'm clueless or being misleading by focusing on people who get rich by creating wealth - that startups aren't the problem, but corrupt practices in finance, healthcare, and so on. Once again, that is exactly my point. The problem is not economic inequality, but those specific abuses. It's a strange task to write an essay about why something isn't the problem, but that's the situation you find yourself in when so many people mistakenly think it is. [ 9 ] Particularly since many causes of poverty are only partially driven by people trying to make money from them. For example, <LOCATION>'s abnormally high incarceration rate is a major cause of poverty. But although for-profit prison companies and prison guard unions both spend a lot lobbying for harsh sentencing laws, they are not the original source of them. [ 10 ] Incidentally, tax loopholes are definitely not a product of some power shift due to recent increases in economic inequality. The golden age of economic equality in <DATE_TIME> was also the golden age of tax avoidance. Indeed, it was so widespread and so effective that I'm skeptical whether economic inequality was really so low then as we think. In a period when people are trying to hide wealth from the government, it will tend to be hidden from statistics too. One sign of the potential magnitude of the problem is the discrepancy between government receipts as a percentage of GDP, which have remained more or less constant during the entire period from the end of World War II to the present, and tax rates, which have varied dramatically. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. Note: This is a new version from which I removed a pair of metaphors that made a lot of people mad, essentially by macroexpanding them. If anyone wants to see the old version, I put it here . Related: The Short Version A Reply to <PERSON> A Reply to <PERSON> French Translation
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The Refragmentation January 2016 One advantage of being old is that you can see change happen in your lifetime. A lot of the change I've seen is fragmentation. <LOCATION> politics is much more polarized than it used to be. Culturally we have ever less common ground. The creative class flocks to a handful of happy cities, abandoning the rest. And increasing economic inequality means the spread between rich and poor is growing too. I'd like to propose a hypothesis: that all these trends are instances of the same phenomenon. And moreover, that the cause is not some force that's pulling us apart, but rather the erosion of forces that had been pushing us together. Worse still, for those who worry about these trends, the forces that were pushing us together were an anomaly, a one-time combination of circumstances that's unlikely to be repeated - and indeed, that we would not want to repeat. The two forces were war (above all World War II), and the rise of large corporations. The effects of World War II were both economic and social. Economically, it decreased variation in income. Like all modern armed forces, <LOCATION>'s were socialist economically. From each according to his ability, to each according to his need. More or less. Higher ranking members of the military got more (as higher ranking members of socialist societies always do), but what they got was fixed according to their rank. And the flattening effect wasn't limited to those under arms, because the <LOCATION> economy was conscripted too. <DATE_TIME> all wages were set by the National War Labor Board. Like the military, they defaulted to flatness. And this national standardization of wages was so pervasive that its effects could still be <DATE_TIME> after the war ended. [ 1 ] Business owners weren't supposed to be making money either. <PERSON> said "not a single war millionaire" would be permitted. To ensure that, any increase in a company's profits over prewar levels was taxed at 85%. And when what was left after corporate taxes reached individuals, it was taxed again at a marginal rate of 93%. [ 2 ] Socially too the war tended to decrease variation. Over 16 million men and women from all sorts of different backgrounds were brought together in a way of life that was literally uniform. Service rates for men born in <DATE_TIME> approached 80%. And working toward a common goal, often under stress, brought them still closer together. Though strictly speaking World War II lasted <DATE_TIME> for the <LOCATION>, its effects lasted longer. Wars make central governments more powerful, and World War II was an extreme case of this. In the <LOCATION>, as in all the other Allied countries, the federal government was slow to give up the new powers it had acquired. Indeed, in some respects the war didn't end in <DATE_TIME>; the enemy just switched to <LOCATION>. In tax rates, federal power, defense spending, conscription, and nationalism, <DATE_TIME> after the war looked more like wartime than prewar peacetime. [ 3 ] And the social effects lasted too. The kid pulled into the army from behind a mule team in <LOCATION> didn't simply go back to the farm afterward. Something else was waiting for him, something that looked a lot like the army. If total war was the big political story of <DATE_TIME>, the big economic story was the rise of a new kind of company. And this too tended to produce both social and economic cohesion. [ 4 ] <DATE_TIME> was <DATE_TIME> of the big, national corporation. General Electric, General Foods, General Motors. Developments in finance, communications, transportation, and manufacturing enabled a new type of company whose goal was above all scale. Version 1 of this world was low-res: a Duplo world of a few giant companies dominating each big market. [ 5 ] The late 19th and <DATE_TIME> had been a time of consolidation, led especially by <PERSON>. Thousands of companies run by their founders were merged into a couple hundred giant ones run by professional managers. Economies of scale ruled <DATE_TIME>. It seemed to people at the time that this was the final state of things. <PERSON> said in <DATE_TIME> of combination is here to stay. Individualism has gone, never to return. He turned out to be mistaken, but he seemed right for <DATE_TIME>. The consolidation that began in <DATE_TIME> continued for most of <DATE_TIME>. By <DATE_TIME> World War II, as <PERSON> writes, "the major sectors of the economy were either organized as government-backed cartels or dominated by a few oligopolistic corporations." For consumers this new world meant the same choices everywhere, but only a few of them. When I grew up there were only 2 or 3 of most things, and since they were all aiming at the middle of the market there wasn't much to differentiate them. One of the most important instances of this phenomenon was in TV. Here there were 3 choices: NBC, CBS, and ABC. Plus public TV for eggheads and communists. The programs that the 3 networks offered were indistinguishable. In fact, here there was a triple pressure toward the center. If one show did try something daring, local affiliates in conservative markets would make them stop. Plus since TVs were expensive, whole families watched the same shows together, so they had to be suitable for everyone. And not only did everyone get the same thing, they got it at the same time. It's difficult to imagine now, but <DATE_TIME> tens of millions of families would sit down together in front of their TV set watching the same show, at the same time, as their next door neighbors. What happens now with the Super Bowl used to happen every night. We were literally in sync. [ 6 ] In a way <DATE_TIME> TV culture was good. The view it gave of the world was like you'd find in a children's book, and it probably had something of the effect that (parents hope) children's books have in making people behave better. But, like children's books, TV was also misleading. Dangerously misleading, for adults. In his autobiography, <PERSON> talks of seeing gruesome images that had just come in from <LOCATION> and thinking, we can't show these to families while they're having dinner. I know how pervasive the common culture was, because I tried to opt out of it, and it was practically impossible to find alternatives. When I was <DATE_TIME> I realized, more from internal evidence than any outside source, that the ideas we were being fed on TV were crap, and I stopped watching it. [ 7 ] But it wasn't just TV. It seemed like everything around me was crap. The politicians all saying the same things, the consumer brands making almost identical products with different labels stuck on to indicate how prestigious they were meant to be, the balloon-frame houses with fake "colonial" skins, the cars with several feet of gratuitous metal on each end that started to fall apart after <DATE_TIME>, the "red delicious" apples that were red but only nominally apples. And in retrospect, it was crap. [ 8 ] But when I went looking for alternatives to fill this void, I found practically nothing. There was no Internet then. The only place to look was in the chain bookstore in our local shopping mall. [ 9 ] There I found a copy of The <LOCATION> . I wish I could say it became a gateway into a wider world, but in fact I found it boring and incomprehensible. Like a kid tasting whisky for the first time and pretending to like it, I preserved that magazine as carefully as if it had been a book. I'm sure I still have it somewhere. But though it was evidence that there was, somewhere, a world that wasn't red delicious, I didn't find it till college. It wasn't just as consumers that the big companies made us similar. They did as employers too. Within companies there were powerful forces pushing people toward a single model of how to look and act. IBM was particularly notorious for this, but they were only a little more extreme than other big companies. And the models of how to look and act varied little between companies. Meaning everyone within this world was expected to seem more or less the same. And not just those in the corporate world, but also everyone who aspired to it - which in <DATE_TIME> meant most people who weren't already in it. For most of <DATE_TIME>, working-class people tried hard to look middle class. You can see it in old photos. Few adults aspired to look dangerous in <DATE_TIME>. But the rise of national corporations didn't just compress us culturally. It compressed us economically too, and on both ends. Along with giant national corporations, we got giant national labor unions. And in <DATE_TIME> the corporations cut deals with the unions where they paid over market price for labor. Partly because the unions were monopolies. [ 10 ] Partly because, as components of oligopolies themselves, the corporations knew they could safely pass the cost on to their customers, because their competitors would have to as well. And partly because in <DATE_TIME> most of the giant companies were still focused on finding new ways to milk economies of scale. Just as startups rightly pay AWS a premium over the cost of running their own servers so they can focus on growth, many of the big national corporations were willing to pay a premium for labor. [ 11 ] As well as pushing incomes up from the bottom, by overpaying unions, the big companies of <DATE_TIME> also pushed incomes down at the top, by underpaying their top management. Economist <PERSON> wrote in <DATE_TIME> that "There are few corporations in which it would be suggested that executive salaries are at a maximum." [ 12 ] To some extent this was an illusion. Much of the de facto pay of executives never showed up on their income tax returns, because it took the form of perks. The higher the rate of income tax, the more pressure there was to pay employees upstream of it. (In the <LOCATION>, where taxes were even higher than in the <LOCATION>, companies would even pay their kids' private school tuitions.) One of the most valuable things the big companies of <DATE_TIME> gave their employees was job security, and this too didn't show up in tax returns or income statistics. So the nature of employment in these organizations tended to yield falsely low numbers about economic inequality. But even accounting for that, the big companies paid their best people less than market price. There was no market; the expectation was that you'd work for the same company for <DATE_TIME> if not your whole career. [ 13 ] Your work was so illiquid there was little chance of getting market price. But that same illiquidity also encouraged you not to seek it. If the company promised to employ you till you retired and give you a pension afterward, you didn't want to extract as much from it <DATE_TIME> as you could. You needed to take care of the company so it could take care of you. Especially when you'd been working with the same group of people for <DATE_TIME>. If you tried to squeeze the company for more money, you were squeezing the organization that was going to take care of them . Plus if you didn't put the company first you wouldn't be promoted, and if you couldn't switch ladders, promotion on this one was the only way up. [ 14 ] To someone who'd spent <DATE_TIME> in the armed forces, this situation didn't seem as strange as it does to us now. From their point of view, as big company executives, they were high-ranking officers. They got paid a lot more than privates. They got to have expense account lunches at the best restaurants and fly around on the company's Gulfstreams. It probably didn't occur to most of them to ask if they were being paid market price. The ultimate way to get market price is to work for yourself, by starting your own company. That seems obvious to any ambitious person now. But in <DATE_TIME> it was an alien concept. Not because starting one's own company seemed too ambitious, but because it didn't seem ambitious enough. Even as late as the 1970s, when I grew up, the ambitious plan was to get lots of education at prestigious institutions, and then join some other prestigious institution and work one's way up the hierarchy. Your prestige was the prestige of the institution you belonged to. People did start their own businesses of course, but educated people rarely did, because in <DATE_TIME> there was practically zero concept of starting what we now call a startup : a business that starts small and grows big. That was much harder to do in <DATE_TIME>. Starting one's own business meant starting a business that would start small and stay small. Which in <DATE_TIME> of big companies often meant scurrying around trying to avoid being trampled by elephants. It was more prestigious to be one of the executive class riding the elephant. By <DATE_TIME>, no one stopped to wonder where the big prestigious companies had come from in the first place. It seemed like they'd always been there, like the chemical elements. And indeed, there was a double wall between ambitious kids in <DATE_TIME> and the origins of the big companies. Many of the big companies were roll-ups that didn't have clear founders. And when they did, the founders didn't seem like us. Nearly all of them had been uneducated, in the sense of not having been to college. They were what <PERSON> called rude mechanicals. College trained one to be a member of the professional classes. Its graduates didn't expect to do the sort of grubby menial work that <PERSON> or <PERSON> started out doing. [ 15 ] And in <DATE_TIME> there were more and more college graduates. They increased from about 2% of the population in <DATE_TIME> to about 25% in <DATE_TIME>. In <DATE_TIME> our two big forces intersect, in the form of the GI Bill, which sent 2.2 million World War II veterans to college. Few thought of it in these terms, but the result of making college the canonical path for the ambitious was a world in which it was socially acceptable to work for <PERSON>, but not to be <PERSON>. [ 16 ] I remember this world well. I came of age just as it was starting to break up. In my childhood it was still dominant. Not quite so dominant as it had been. We could see from old TV shows and yearbooks and the way adults acted that people in <DATE_TIME> and 60s had been even more conformist than us. The <DATE_TIME> model was already starting to get old. But that was not how we saw it at the time. We would at most have said that one could be a bit more daring in <DATE_TIME> than <DATE_TIME>. And indeed, things hadn't changed much yet. But change was coming soon. And when the Duplo economy started to disintegrate, it disintegrated in several different ways at once. Vertically integrated companies literally dis-integrated because it was more efficient to. Incumbents faced new competitors as (a) markets went global and (b) technical innovation started to trump economies of scale, turning size from an asset into a liability. Smaller companies were increasingly able to survive as formerly narrow channels to consumers broadened. Markets themselves started to change faster, as whole new categories of products appeared. And last but not least, the federal government, which had previously smiled upon <PERSON> world as the natural state of things, began to realize it wasn't the last word after all. What <PERSON> was to the horizontal axis, <PERSON> was to the vertical. He wanted to do everything himself. The giant plant he built at <LOCATION> <DATE_TIME> literally took in iron ore at one end and sent cars out the other. 100,000 people worked there. At the time it seemed the future. But that is not how car companies operate <DATE_TIME>. Now much of the design and manufacturing happens in a long supply chain, whose products the car companies ultimately assemble and sell. The reason car companies operate this way is that it works better. Each company in the supply chain focuses on what they know best. And they each have to do it well or they can be swapped out for another supplier. Why didn't <PERSON> realize that networks of cooperating companies work better than a single big company? One reason is that supplier networks take a while to evolve. In <DATE_TIME>, doing everything himself seemed to Ford the only way to get the scale he needed. And the second reason is that if you want to solve a problem using a network of cooperating companies, you have to be able to coordinate their efforts, and you can do that much better with computers. Computers reduce the transaction costs that <NRP> argued are the raison d'etre of corporations. That is a fundamental change. In <DATE_TIME>, big companies were synonymous with efficiency. In <DATE_TIME> they were synonymous with inefficiency. To some extent this was because the companies themselves had become sclerotic. But it was also because our standards were higher. It wasn't just within existing industries that change occurred. The industries themselves changed. It became possible to make lots of new things, and sometimes the existing companies weren't the ones who did it best. Microcomputers are a classic example. The market was pioneered by upstarts like Apple. When it got big enough, IBM decided it was worth paying attention to. At the time IBM completely dominated the computer industry. They assumed that all they had to do, now that this market was ripe, was to reach out and pick it. Most people at the time would have agreed with them. But what happened next illustrated how much more complicated the world had become. IBM did launch a microcomputer. Though quite successful, it did not crush Apple. But even more importantly, IBM itself ended up being supplanted by a supplier coming in from the side - from software, which didn't even seem to be the same business. IBM's big mistake was to accept a non-exclusive license for DOS. It must have seemed a safe move at the time. No other computer manufacturer had ever been able to outsell them. What difference did it make if other manufacturers could offer DOS too? The result of that miscalculation was an explosion of inexpensive PC clones. Microsoft now owned the PC standard, and the customer. And the microcomputer business ended up being Apple vs Microsoft. Basically, Apple bumped IBM and then Microsoft stole its wallet. That sort of thing did not happen to big companies in <DATE_TIME>. But it was going to happen increasingly often in the future. Change happened mostly by itself in the computer business. In other industries, legal obstacles had to be removed first. Many of the <DATE_TIME> oligopolies had been anointed by the federal government with policies (and in wartime, large orders) that kept out competitors. This didn't seem as dubious to government officials at the time as it sounds to us. They felt a two-party system ensured sufficient competition in politics. It ought to work for business too. Gradually the government realized that anti-competitive policies were doing more harm than good, and during the <PERSON> administration it started to remove them. The word used for this process was misleadingly narrow: deregulation. What was really happening was de-oligopolization. It happened to one industry after another. Two of the most visible to consumers were air travel and long-distance phone service, which both became dramatically cheaper after deregulation. Deregulation also contributed to the wave of hostile takeovers in <DATE_TIME>. In <DATE_TIME> the only limit on the inefficiency of companies, short of actual bankruptcy, was the inefficiency of their competitors. Now companies had to face absolute rather than relative standards. Any public company that didn't generate sufficient returns on its assets risked having its management replaced with one that would. Often the new managers did this by breaking companies up into components that were more valuable separately. [ 17 ] Version 1 of the national economy consisted of a few big blocks whose relationships were negotiated in back rooms by a handful of executives, politicians, regulators, and labor leaders. Version 2 was higher resolution: there were more companies, of more different sizes, making more different things, and their relationships changed faster. In this world there were still plenty of back room negotiations, but more was left to market forces. Which further accelerated the fragmentation. It's a little misleading to talk of versions when describing a gradual process, but not as misleading as it might seem. There was a lot of change in <DATE_TIME>, and what we ended up with was qualitatively different. The companies in the S&P 500 in <DATE_TIME> had been there an average of <DATE_TIME>. By <DATE_TIME> that number was <DATE_TIME>. [ 18 ] The breakup of the Duplo economy happened simultaneously with the spread of computing power. To what extent were computers a precondition? It would take a book to answer that. Obviously the spread of computing power was a precondition for the rise of startups. I suspect it was for most of what happened in finance too. But was it a precondition for globalization or the LBO wave? I don't know, but I wouldn't discount the possibility. It may be that the refragmentation was driven by computers in the way the industrial revolution was driven by steam engines. Whether or not computers were a precondition, they have certainly accelerated it. The new fluidity of companies changed people's relationships with their employers. Why climb a corporate ladder that might be yanked out from under you? Ambitious people started to think of a career less as climbing a single ladder than as a series of jobs that might be at different companies. More movement (or even potential movement) between companies introduced more competition in salaries. Plus as companies became smaller it became easier to estimate how much an employee contributed to the company's revenue. Both changes drove salaries toward market price. And since people vary dramatically in productivity, paying market price meant salaries started to diverge. By no coincidence it was in <DATE_TIME> that the term "yuppie" was coined. That word is not much used now, because the phenomenon it describes is so taken for granted, but at the time it was a label for something novel. Yuppies were young professionals who made lots of money. To someone in their <DATE_TIME>, this wouldn't seem worth naming. Why wouldn't young professionals make lots of money? But until <DATE_TIME>, being underpaid early in your career was part of what it meant to be a professional. Young professionals were paying their dues, working their way up the ladder. The rewards would come later. What was novel about yuppies was that they wanted market price for the work they were doing now. The first yuppies did not work for startups. That was still in the future. Nor did they work for big companies. They were professionals working in fields like law, finance, and consulting. But their example rapidly inspired their peers. Once they saw that new BMW 325i, they wanted one too. Underpaying people at the beginning of their career only works if everyone does it. Once some employer breaks ranks, everyone else has to, or they can't get good people. And once started this process spreads through the whole economy, because at the beginnings of people's careers they can easily switch not merely employers but industries. But not all young professionals benefitted. You had to produce to get paid a lot. It was no coincidence that the first yuppies worked in fields where it was easy to measure that. More generally, an idea was returning whose name sounds old-fashioned precisely because it was so rare for so long: that you could make your fortune. As in the past there were multiple ways to do it. Some made their fortunes by creating wealth, and others by playing zero-sum games. But once it became possible to make one's fortune, the ambitious had to decide whether or not to. A physicist who chose physics over Wall Street in <DATE_TIME> was making a sacrifice that a physicist in <DATE_TIME> didn't have to think about. The idea even flowed back into big companies. CEOs of big companies make more now than they used to, and I think much of the reason is prestige. In <DATE_TIME>, corporate CEOs had immense prestige. They were the winners of the only economic game in town. But if they made as little now as they did then, in real dollar terms, they'd seem like small fry compared to professional athletes and whiz kids making millions from startups and hedge funds. They don't like that idea, so now they try to get as much as they can, which is more than they had been getting. [ 19 ] Meanwhile a similar fragmentation was happening at the other end of the economic scale. As big companies' oligopolies became less secure, they were less able to pass costs on to customers and thus less willing to overpay for labor. And as the Duplo world of a few big blocks fragmented into many companies of different sizes - some of them overseas - it became harder for unions to enforce their monopolies. As a result workers' wages also tended toward market price. Which (inevitably, if unions had been doing their job) tended to be lower. Perhaps dramatically so, if automation had decreased the need for some kind of work. And just as the <DATE_TIME> model induced social as well as economic cohesion, its breakup brought social as well as economic fragmentation. People started to dress and act differently. Those who would later be called the "creative class" became more mobile. People who didn't care much for religion felt less pressure to go to church for appearances' sake, while those who liked it a lot opted for increasingly colorful forms. Some switched from meat loaf to tofu, and others to Hot Pockets. Some switched from driving Ford sedans to driving small imported cars, and others to driving SUVs. Kids who went to private schools or wished they did started to dress "preppy," and kids who wanted to seem rebellious made a conscious effort to look disreputable. In a hundred ways people spread apart. [ 20 ] Almost <DATE_TIME>, fragmentation is still increasing. Has it been net good or bad? I don't know; the question may be unanswerable. Not entirely bad though. We take for granted the forms of fragmentation we like, and worry only about the ones we don't. But as someone who caught the tail end of <DATE_TIME> conformism , I can tell you it was no utopia. [ 21 ] My goal here is not to say whether fragmentation has been good or bad, just to explain why it's happening. With the centripetal forces of total war and <DATE_TIME> oligopoly mostly gone, what will happen next? And more specifically, is it possible to reverse some of the fragmentation we've seen? If it is, it will have to happen piecemeal. You can't reproduce <DATE_TIME> cohesion the way it was originally produced. It would be insane to go to war just to induce more national unity. And once you understand the degree to which the economic history of <DATE_TIME> was a low-res version 1, it's clear you can't reproduce that either. <DATE_TIME> cohesion was something that happened at least in a sense naturally. The war was due mostly to external forces, and the Duplo economy was an evolutionary phase. If you want cohesion now, you'd have to induce it deliberately. And it's not obvious how. I suspect the best we'll be able to do is address the symptoms of fragmentation. But that may be enough. The form of fragmentation people worry most about lately is economic inequality , and if you want to eliminate that you're up against a truly formidable headwind that has been in operation since the stone age. Technology. Technology is a lever. It magnifies work. And the lever not only grows increasingly long, but the rate at which it grows is itself increasing. Which in turn means the variation in the amount of wealth people can create has not only been increasing, but accelerating. The unusual conditions that prevailed in <DATE_TIME> masked this underlying trend. The ambitious had little choice but to join large organizations that made them march in step with lots of other people - literally in the case of the armed forces, figuratively in the case of big corporations. Even if the big corporations had wanted to pay people proportionate to their value, they couldn't have figured out how. But that constraint has gone now. Ever since it started to erode in <DATE_TIME>, we've seen the underlying forces at work again. [ 22 ] Not everyone who gets rich now does it by creating wealth, certainly. But a significant number do, and the Baumol Effect means all their peers get dragged along too. [ 23 ] And as long as it's possible to get rich by creating wealth, the default tendency will be for economic inequality to increase. Even if you eliminate all the other ways to get rich. You can mitigate this with subsidies at the bottom and taxes at the top, but unless taxes are high enough to discourage people from creating wealth, you're always going to be fighting a losing battle against increasing variation in productivity. [ 24 ] That form of fragmentation, like the others, is here to stay. Or rather, back to stay. Nothing is forever, but the tendency toward fragmentation should be more forever than most things, precisely because it's not due to any particular cause. It's simply a reversion to the mean. When Rockefeller said individualism was gone, he was right for <DATE_TIME>. It's back now, and that's likely to be true for longer. I worry that if we don't acknowledge this, we're headed for trouble. If we think <DATE_TIME> cohesion disappeared because of few policy tweaks, we'll be deluded into thinking we can get it back (minus the bad parts, somehow) with a few countertweaks. And then we'll waste our time trying to eliminate fragmentation, when we'd be better off thinking about how to mitigate its consequences. Notes [ 1 ] <PERSON>, writing in <DATE_TIME>, said the wage differentials prevailing at <DATE_TIME> World War II had become so embedded that they "were regarded as 'just' even after the egalitarian pressures of World War II had disappeared. Basically, the same differentials exist to <DATE_TIME>, <DATE_TIME>." But <PERSON> and <PERSON> think market forces in the postwar period also helped preserve the wartime compression of wages - specifically increased demand for unskilled workers, and oversupply of educated ones. (Oddly enough, the <NRP> custom of having employers pay for health insurance derives from efforts by businesses to circumvent NWLB wage controls in order to attract workers.) [ 2 ] As always, tax rates don't tell the whole story. There were lots of exemptions, especially for individuals. And in World War II the tax codes were so new that the government had little acquired immunity to tax avoidance. If the rich paid high taxes during the war it was more because they wanted to than because they had to. After the war, federal tax receipts as a percentage of GDP were about the same as they are now. In fact, for the entire period since the war, tax receipts have stayed close to 18% of GDP, despite dramatic changes in tax rates. The lowest point occurred when marginal income tax rates were highest: 14.1% in <DATE_TIME>. Looking at the data, it's hard to avoid the conclusion that tax rates have had little effect on what people actually paid. [ 3 ] Though in fact <DATE_TIME> preceding the war had been a time of unprecedented federal power, in response to the Depression. Which is not entirely a coincidence, because the Depression was one of the causes of the war. In many ways the New Deal was a sort of dress rehearsal for the measures the federal government took during wartime. The wartime versions were much more drastic and more pervasive though. As <PERSON> wrote, "for many <NRP> the decisive change in their experiences came not with the New Deal but with World War II." [ 4 ] I don't know enough about the origins of the world wars to say, but it's not inconceivable they were connected to the rise of big corporations. If that were the case, <DATE_TIME> cohesion would have a single cause. [ 5 ] More precisely, there was a bimodal economy consisting, in Galbraith's words, of "the world of the technically dynamic, massively capitalized and highly organized corporations on the one hand and the hundreds of thousands of small and traditional proprietors on the other." Money, prestige, and power were concentrated in the former, and there was near zero crossover. [ 6 ] I wonder how much of the decline in families eating together was due to the decline in families watching TV together afterward. [ 7 ] I know when this happened because it was the season <LOCATION> premiered. Everyone else was talking about what was happening on <LOCATION>, and I had no idea what they meant. [ 8 ] I didn't realize it till I started doing research for this essay, but the meretriciousness of the products I grew up with is a well-known byproduct of oligopoly. When companies can't compete on price, they compete on tailfins. [ 9 ] Monroeville Mall was at the time of its completion in <DATE_TIME> the largest in the country. In <DATE_TIME> the movie Dawn of the Dead was shot there. Apparently the mall was not just the location of the movie, but its inspiration; the crowds of shoppers drifting through this huge mall reminded <PERSON> of zombies. My first job was scooping ice cream in <LOCATION>. [ 10 ] Labor unions were exempted from antitrust laws by the Clayton Antitrust Act in <DATE_TIME> on the grounds that a person's work is not "a commodity or article of commerce." I wonder if that means service companies are also exempt. [ 11 ] The relationships between unions and unionized companies can even be symbiotic, because unions will exert political pressure to protect their hosts. According to <PERSON>, when politicians tried to attack the A&P supermarket chain because it was putting local grocery stores out of business, "A&P successfully defended itself by allowing the unionization of its workforce in <DATE_TIME>, thereby gaining organized labor as a constituency." I've seen this phenomenon myself: hotel unions are responsible for more of the political pressure against Airbnb than hotel companies. [ 12 ] Galbraith was clearly puzzled that corporate executives would work so hard to make money for other people (the shareholders) instead of themselves. He devoted much of The New Industrial State to trying to figure this out. His theory was that professionalism had replaced money as a motive, and that modern corporate executives were, like (good) scientists, motivated less by financial rewards than by the desire to do good work and thereby earn the respect of their peers. There is something in this, though I think lack of movement between companies combined with self-interest explains much of observed behavior. [ 13 ] Galbraith (p. 94) says a <DATE_TIME> study of the 800 highest paid executives at 300 big corporations found that three quarters of them had been with their company for <DATE_TIME>. [ 14 ] It seems likely that in <DATE_TIME> executive salaries were low partly because companies then were more dependent on banks, who would have disapproved if executives got too much. This was certainly true in the beginning. The first big company CEOs were <PERSON> hired hands. Companies didn't start to finance themselves with retained earnings till <DATE_TIME>. Till then they had to pay out their earnings in dividends, and so depended on banks for capital for expansion. Bankers continued to sit on corporate boards till the <PERSON>-Steagall act in <DATE_TIME>. By <DATE_TIME> big companies funded 3/4 of their growth from earnings. But <DATE_TIME> of bank dependence, reinforced by the financial controls of World War II, must have had a big effect on social conventions about executive salaries. So it may be that the lack of movement between companies was as much the effect of low salaries as the cause. Incidentally, the switch in <DATE_TIME> to financing growth with retained earnings was one cause of the <DATE_TIME> crash. The banks now had to find someone else to lend to, so they made more margin loans. [ 15 ] Even now it's hard to get them to. One of the things I find hardest to get into the heads of would-be startup founders is how important it is to do certain kinds of menial work early in the life of a company. Doing things that don't scale is to how <PERSON> got started as a high-fiber diet is to the traditional peasant's diet: they had no choice but to do the right thing, while we have to make a conscious effort. [ 16 ] Founders weren't celebrated in the press when I was a kid. "Our founder" meant a photograph of a severe-looking man with a walrus mustache and a wing collar who had died <DATE_TIME>. The thing to be when I was a kid was an executive . If you weren't around then it's hard to grasp the cachet that term had. The fancy version of everything was called the "executive" model. [ 17 ] The wave of hostile takeovers in <DATE_TIME> was enabled by a combination of circumstances: court decisions striking down state anti-takeover laws, starting with the Supreme Court's <DATE_TIME> decision in Edgar v. MITE Corp.; the <PERSON> administration's comparatively sympathetic attitude toward takeovers; the Depository Institutions Act of <DATE_TIME>, which allowed banks and savings and loans to buy corporate bonds; a new SEC rule issued in <DATE_TIME> (rule 415) that made it possible to bring corporate bonds to market faster; the creation of the junk bond business by <PERSON>; a vogue for conglomerates in the preceding period that caused many companies to be combined that never should have been; <DATE_TIME> of inflation that left many public companies trading below the value of their assets; and not least, the increasing complacency of managements. [ 18 ] Foster, <PERSON>. "Creative Destruction Whips through Corporate America." Innosight, <DATE_TIME>. [ 19 ] CEOs of big companies may be overpaid. I don't know enough about big companies to say. But it is certainly not impossible for a CEO to make 200x as much difference to a company's revenues as the average employee. Look at what <PERSON> did for Apple when he came back as CEO. It would have been a good deal for the board to give him 95% of the company. Apple's market cap the day <PERSON> came back in <DATE_TIME> was 1.73 billion. 5% of Apple now (<DATE_TIME>) would be worth about 30 billion. And it would not be if <PERSON> hadn't come back; Apple probably wouldn't even exist anymore. Merely including <PERSON> in the sample might be enough to answer the question of whether public company CEOs in the aggregate are overpaid. And that is not as facile a trick as it might seem, because the broader your holdings, the more the aggregate is what you care about. [ 20 ] The <DATE_TIME> were famous for social upheaval. But that was more rebellion (which can happen in any era if people are provoked sufficiently) than fragmentation. You're not seeing fragmentation unless you see people breaking off to both left and right. [ 21 ] Globally the trend has been in the other direction. While the <LOCATION> is becoming more fragmented, the world as a whole is becoming less fragmented, and mostly in good ways. [ 22 ] There were a handful of ways to make a fortune in <DATE_TIME>. The main one was drilling for oil, which was open to newcomers because it was not something big companies could dominate through economies of scale. How did individuals accumulate large fortunes in an era of such high taxes? Giant tax loopholes defended by two of the most powerful men in Congress, <PERSON> and <PERSON>. But becoming a <LOCATION> oilman was not in <DATE_TIME> something one could aspire to the way starting a startup or going to work on Wall Street were in <DATE_TIME>, because (a) there was a strong local component and (b) success depended so much on luck. [ 23 ] The Baumol Effect induced by startups is very visible in <LOCATION>. Google will pay people millions of dollars a year to keep them from leaving to start or join startups. [ 24 ] I'm not claiming variation in productivity is the only cause of economic inequality in the <LOCATION>. But it's a significant cause, and it will become as big a cause as it needs to, in the sense that if you ban other ways to get rich, people who want to get rich will use this route instead. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. <PERSON> also told me about several valuable sources. <PERSON>, <PERSON>. The Big Change . <PERSON>, <DATE_TIME>. <PERSON>, <PERSON>. The Dual Economy . Norton, <DATE_TIME>. <PERSON>, <PERSON>. The New Deal . <PERSON> and Wang, <DATE_TIME>. <LOCATION>, <PERSON>. The <NRP> . Doubleday, <DATE_TIME>. <PERSON>, <PERSON>. <PERSON> . <LOCATION>, <DATE_TIME>. <PERSON>, <PERSON>. Wheels for the World . Viking, <DATE_TIME>. <PERSON>, <PERSON>. Federal Taxation in <LOCATION> . <LOCATION>, <DATE_TIME>. <PERSON>, <PERSON>. The Visible Hand . Harvard, <DATE_TIME>. <PERSON>, <PERSON>. The House of Morgan . Simon & Schuster, <DATE_TIME>. Chernow, <PERSON>. Titan: The Life of John D. Rockefeller . <PERSON>, <DATE_TIME>. <PERSON>, <PERSON>. The New Industrial State . <PERSON>, <DATE_TIME>. <PERSON>, <PERSON> and <PERSON>. "The Great Compression: The Wage Structure in <LOCATION> at <DATE_TIME>." NBER Working Paper 3817, <DATE_TIME>. <PERSON>, <PERSON>. An Empire of Wealth . HarperCollins, <DATE_TIME>. <PERSON>, <LOCATION>. The Genesis of Industrial America, <DATE_TIME> . <LOCATION>, <DATE_TIME>. <PERSON>, <PERSON>. Land of Promise . HarperCollins, <DATE_TIME>. <PERSON>, <PERSON>, and <PERSON>. The Company . Modern Library, <DATE_TIME>. <PERSON>, <PERSON>. <PERSON> . Penguin, <DATE_TIME>. <PERSON>, <PERSON>. The Age of Giant Corporations . Praeger, <DATE_TIME>. Thurow, <PERSON>. Generating Inequality: Mechanisms of Distribution . Basic Books, <DATE_TIME>. <PERSON>, <PERSON>. The Politics and Development of the Federal Income Tax . <LOCATION>, <DATE_TIME>. Related: Too Many Elite American Men Are Obsessed With Work and Wealth
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<PERSON> <DATE_TIME> an article about Y Combinator said that early on it had been a "one-man show." It's sadly common to read that sort of thing. But the problem with that description is not just that it's unfair. It's also misleading. Much of what's most novel about YC is due to <PERSON>. If you don't understand her, you don't understand YC. So let me tell you a little about Jessica. YC had 4 founders. <PERSON> and I decided <DATE_TIME> to start it, and <DATE_TIME> we recruited my friends <PERSON> and <PERSON>. <PERSON> and I ran YC day to day, and <PERSON> and <PERSON> read applications and did interviews with us. <PERSON> and I were already dating when we started YC. At first we tried to act "professional" about this, meaning we tried to conceal it. In retrospect that seems ridiculous, and we soon dropped the pretense. And the fact that <PERSON> and I were a couple is a big part of what made YC what it was. YC felt like a family. The founders early on were mostly young. We all had dinner together once a week, cooked for <DATE_TIME> by me. Our first building had been a private home. The overall atmosphere was shockingly different from a VC's office on <LOCATION>, in a way that was entirely for the better. There was an authenticity that everyone who walked in could sense. And that didn't just mean that people trusted us. It was the perfect quality to instill in startups. Authenticity is one of the most important things YC looks for in founders, not just because fakers and opportunists are annoying, but because authenticity is one of the main things that separates the most successful startups from the rest. Early YC was a family, and <PERSON> was its mom. And the culture she defined was one of YC's most important innovations. Culture is important in any organization, but at YC culture wasn't just how we behaved when we built the product. At YC, the culture was the product. <PERSON> was also the mom in another sense: she had the last word. Everything we did as an organization went through her first - who to fund, what to say to the public, how to deal with other companies, who to hire, everything. Before we had kids, YC was more or less our life. There was no real distinction <DATE_TIME> and not. We talked about YC all the time. And while there might be some businesses that it would be tedious to let infect your private life, we liked it. We'd started YC because it was something we were interested in. And some of the problems we were trying to solve were endlessly difficult. How do you recognize good founders? You could talk about that for <DATE_TIME>, and we did; we still do. I'm better at some things than Jessica, and she's better at some things than me. One of the things she's best at is judging people. She's one of those rare individuals with x-ray vision for character. She can see through any kind of faker almost immediately. Her nickname within YC was the Social Radar, and this special power of hers was critical in making YC what it is. The earlier you pick startups, the more you're picking the founders. Later stage investors get to try products and look at growth numbers. At the stage where YC invests, there is often neither a product nor any numbers. Others thought YC had some special insight about the future of technology. Mostly we had the same sort of insight <PERSON> claimed: we at least knew we knew nothing. What made YC successful was being able to pick good founders. We thought Airbnb was a bad idea. We funded it because we liked the founders. During interviews, <PERSON> and <PERSON> and I would pepper the applicants with technical questions. <PERSON> would mostly watch. A lot of the applicants probably read her as some kind of secretary, especially early on, because she was the one who'd go out and get each new group and she didn't ask many questions. She was ok with that. It was easier for her to watch people if they didn't notice her. But after the interview, the three of us would turn to Jessica and ask "What does the Social Radar say?" [ 1 ] Having the Social Radar at interviews wasn't just how we picked founders who'd be successful. It was also how we picked founders who were good people. At first we did this because we couldn't help it. Imagine what it would feel like to have x-ray vision for character. Being around bad people would be intolerable. So we'd refuse to fund founders whose characters we had doubts about even if we thought they'd be successful. Though we initially did this out of self-indulgence, it turned out to be very valuable to YC. We didn't realize it in the beginning, but the people we were picking would become the YC alumni network. And once we picked them, unless they did something really egregious, they were going to be part of it for life. Some now think YC's alumni network is its most valuable feature. I personally think YC's advice is pretty good too, but the alumni network is certainly among the most valuable features. The level of trust and helpfulness is remarkable for a group of such size. And <PERSON> is the main reason why. (As we later learned, it probably cost us little to reject people whose characters we had doubts about, because how good founders are and how well they do are not orthogonal . If bad founders succeed at all, they tend to sell early. The most successful founders are almost all good.) If <PERSON> was so important to YC, why don't more people realize it? Partly because I'm a writer, and writers always get disproportionate attention. YC's brand was initially my brand, and our applicants were people who'd read my essays. But there is another reason: <PERSON> hates attention. Talking to reporters makes her nervous. The thought of giving a talk paralyzes her. She was even uncomfortable at our wedding, because the bride is always the center of attention. [ 2 ] It's not just because she's shy that she hates attention, but because it throws off the Social Radar. She can't be herself. You can't watch people when everyone is watching you. Another reason attention worries her is that she hates bragging. In anything she does that's publicly visible, her biggest fear (after the obvious fear that it will be bad) is that it will seem ostentatious. She says being too modest is a common problem for women. But in her case it goes beyond that. She has a horror of ostentation so visceral it's almost a phobia. She also hates fighting. She can't do it; she just shuts down. And unfortunately there is a good deal of fighting in being the public face of an organization. So although Jessica more than anyone made YC unique, the very qualities that enabled her to do it mean she tends to get written out of YC's history. Everyone buys this story that PG started YC and his wife just kind of helped. Even YC's haters buy it. <DATE_TIME> when people were attacking us for not funding more female founders (than exist), they all treated YC as identical with PG. It would have spoiled the narrative to acknowledge Jessica's central role at YC. <PERSON> was boiling mad that people were accusing her company of sexism. I've never seen her angrier about anything. But she did not contradict them. Not publicly. In private there was a great deal of profanity. And she wrote three separate essays about the question of female founders. But she could never bring herself to publish any of them. She'd seen the level of vitriol in this debate, and she shrank from engaging. [ 3 ] It wasn't just because she disliked fighting. She's so sensitive to character that it repels her even to fight with dishonest people. The idea of mixing it up with linkbait journalists or Twitter trolls would seem to her not merely frightening, but disgusting. But Jessica knew her example as a successful female founder would encourage more women to start companies, so <DATE_TIME> she did something YC had never done before and hired a PR firm to get her some interviews. At one of the first she did, the reporter brushed aside her insights about startups and turned it into a sensationalistic story about how some guy had tried to chat her up as she was waiting outside the bar where they had arranged to meet. <PERSON> was mortified, partly because the guy had done nothing wrong, but more because the story treated her as a victim significant only for being a woman, rather than one of the most knowledgeable investors in the <LOCATION>. After that she told the PR firm to stop. You're not going to be hearing in the press about what <PERSON> has achieved. So let me tell you what <PERSON> has achieved. Y Combinator is fundamentally a nexus of people, like a university. It doesn't make a product. What defines it is the people. Jessica more than anyone curated and nurtured that collection of people. In that sense she literally made YC. <PERSON> knows more about the qualities of startup founders than anyone else ever has. Her immense data set and x-ray vision are the perfect storm in that respect. The qualities of the founders are the best predictor of how a startup will do. And startups are in turn the most important source of growth in mature economies. The person who knows the most about the most important factor in the growth of mature economies - that is who <PERSON> is. Doesn't that sound like someone who should be better known? Notes [ 1 ] Harj Taggar reminded me that while Jessica didn't ask many questions, they tended to be important ones: "She was always good at sniffing out any red flags about the team or their determination and disarmingly asking the right question, which usually revealed more than the founders realized." [ 2 ] Or more precisely, while she likes getting attention in the sense of getting credit for what she has done, she doesn't like getting attention in the sense of being watched in real time. Unfortunately, not just for her but for a lot of people, how much you get of the former depends a lot on how much you get of the latter. Incidentally, if you saw <PERSON> at a public event, you would never guess she hates attention, because (a) she is very polite and (b) when she's nervous, she expresses it by smiling more. [ 3 ] The existence of people like <PERSON> is not just something the mainstream media needs to learn to acknowledge, but something feminists need to learn to acknowledge as well. There are successful women who don't like to fight. Which means if the public conversation about women consists of fighting, their voices will be silenced. There's a sort of Gresham's Law of conversations. If a conversation reaches a certain level of incivility, the more thoughtful people start to leave. No one understands female founders better than Jessica. But it's unlikely anyone will ever hear her speak candidly about the topic. She ventured a toe in that water a while ago, and the reaction was so violent that she decided "never again." Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and Harj Taggar for reading drafts of this. And yes, <PERSON>, who made me cut surprisingly little.
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A Way to Detect Bias <DATE_TIME> This will come as a surprise to a lot of people, but in some cases it's possible to detect bias in a selection process without knowing anything about the applicant pool. Which is exciting because among other things it means third parties can use this technique to detect bias whether those doing the selecting want them to or not. You can use this technique whenever (a) you have at least a random sample of the applicants that were selected, (b) their subsequent performance is measured, and (c) the groups of applicants you're comparing have roughly equal distribution of ability. How does it work? Think about what it means to be biased. What it means for a selection process to be biased against applicants of type x is that it's harder for them to make it through. Which means applicants of type x have to be better to get selected than applicants not of type x. [ 1 ] Which means applicants of type x who do make it through the selection process will outperform other successful applicants. And if the performance of all the successful applicants is measured, you'll know if they do. Of course, the test you use to measure performance must be a valid one. And in particular it must not be invalidated by the bias you're trying to measure. But there are some domains where performance can be measured, and in those detecting bias is straightforward. Want to know if the selection process was biased against some type of applicant? Check whether they outperform the others. This is not just a heuristic for detecting bias. It's what bias means. For example, many suspect that venture capital firms are biased against female founders. This would be easy to detect: among their portfolio companies, do startups with female founders outperform those without? <DATE_TIME>, one <LOCATION> firm (almost certainly unintentionally) published a study showing bias of this type. First Round Capital found that among its portfolio companies, startups with female founders outperformed those without by 63%. [ 2 ] The reason I began by saying that this technique would come as a surprise to many people is that we so rarely see analyses of this type. I'm sure it will come as a surprise to First Round that they performed one. I doubt anyone there realized that by limiting their sample to their own portfolio, they were producing a study not of startup trends but of their own biases when selecting companies. I predict we'll see this technique used more in the future. The information needed to conduct such studies is increasingly available. Data about who applies for things is usually closely guarded by the organizations selecting them, but nowadays data about who gets selected is often publicly available to anyone who takes the trouble to aggregate it. Notes [ 1 ] This technique wouldn't work if the selection process looked for different things from different types of applicants-for example, if an employer hired men based on their ability but women based on their appearance. [ 2 ] As <PERSON> points out, First Round excluded their most successful investment, Uber, from the study. And while it makes sense to exclude outliers from some types of studies, studies of returns from startup investing, which is all about hitting outliers, are not one of them. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. Arabic Translation Swedish Translation
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Write Like You Talk <DATE_TIME> Here's a simple trick for getting more people to read what you write: write in spoken language. Something comes over most people when they start writing. They write in a different language than they'd use if they were talking to a friend. The sentence structure and even the words are different. No one uses "pen" as a verb in spoken English. You'd feel like an idiot using "pen" instead of "write" in a conversation with a friend. The last straw for me was a sentence I read <DATE_TIME>: The mercurial <NRP> himself declared: "After <LOCATION>, all is decadence." It's from <PERSON> A History of Ancient Britain . I feel bad making an example of this book, because it's no worse than lots of others. But just imagine calling <PERSON> "the mercurial <NRP>" when talking to a friend. Even one sentence of this would raise eyebrows in conversation. And yet people write whole books of it. Ok, so written and spoken language are different. Does that make written language worse? If you want people to read and understand what you write, yes. Written language is more complex, which makes it more work to read. It's also more formal and distant, which gives the reader's attention permission to drift. But perhaps worst of all, the complex sentences and fancy words give you, the writer, the false impression that you're saying more than you actually are. You don't need complex sentences to express complex ideas. When specialists in some abstruse topic talk to one another about ideas in their field, they don't use sentences any more complex than they do when talking about what to have for lunch. They use different words, certainly. But even those they use no more than necessary. And in my experience, the harder the subject, the more informally experts speak. Partly, I think, because they have less to prove, and partly because the harder the ideas you're talking about, the less you can afford to let language get in the way. Informal language is the athletic clothing of ideas. I'm not saying spoken language always works best. Poetry is as much music as text, so you can say things you wouldn't say in conversation. And there are a handful of writers who can get away with using fancy language in prose. And then of course there are cases where writers don't want to make it easy to understand what they're saying-in corporate announcements of bad news, for example, or at the more bogus end of the humanities. But for nearly everyone else, spoken language is better. It seems to be hard for most people to write in spoken language. So perhaps the best solution is to write your first draft the way you usually would, then afterward look at each sentence and ask "Is this the way I'd say this if I were talking to a friend?" If it isn't, imagine what you would say, and use that instead. After a while this filter will start to operate as you write. When you write something you wouldn't say, you'll hear the clank as it hits the page. Before I publish a new essay, I read it out loud and fix everything that doesn't sound like conversation. I even fix bits that are phonetically awkward; I don't know if that's necessary, but it doesn't cost much. This trick may not always be enough. I've seen writing so far removed from spoken language that it couldn't be fixed sentence by sentence. For cases like that there's a more drastic solution. After writing the first draft, try explaining to a friend what you just wrote. Then replace the draft with what you said to your friend. People often tell me how much my essays sound like me talking. The fact that this seems worthy of comment shows how rarely people manage to write in spoken language. Otherwise everyone's writing would sound like them talking. If you simply manage to write in spoken language, you'll be ahead of 95% of writers. And it's so easy to do: just don't let a sentence through unless it's the way you'd say it to a friend. Thanks to <PERSON> and <PERSON> for reading drafts of this. <NRP> Translation Arabic Translation
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Default Alive or Default Dead? <DATE_TIME> When I talk to a startup that's been operating for more than 8 or <DATE_TIME>, the first thing I want to know is almost always the same. Assuming their expenses remain constant and their revenue growth is what it has been over <DATE_TIME>, do they make it to profitability on the money they have left? Or to put it more dramatically, by default do they live or die? The startling thing is how often the founders themselves don't know. Half the founders I talk to don't know whether they're default alive or default dead. If you're among that number, <PERSON> has made a handy calculator you can use to find out. The reason I want to know first whether a startup is default alive or default dead is that the rest of the conversation depends on the answer. If the company is default alive, we can talk about ambitious new things they could do. If it's default dead, we probably need to talk about how to save it. We know the current trajectory ends badly. How can they get off that trajectory? Why do so few founders know whether they're default alive or default dead? Mainly, I think, because they're not used to asking that. It's not a question that makes sense to ask early on, any more than it makes sense to ask a <DATE_TIME> how he plans to support himself. But as the company grows older, the question switches from meaningless to critical. That kind of switch often takes people by surprise. I propose the following solution: instead of starting to ask too late whether you're default alive or default dead, start asking too early. It's hard to say precisely when the question switches polarity. But it's probably not that dangerous to start worrying too early that you're default dead, whereas it's very dangerous to start worrying too late. The reason is a phenomenon I wrote about earlier: the fatal pinch . The fatal pinch is default dead + slow growth + not enough time to fix it. And the way founders end up in it is by not realizing that's where they're headed. There is another reason founders don't ask themselves whether they're default alive or default dead: they assume it will be easy to raise more money. But that assumption is often false, and worse still, the more you depend on it, the falser it becomes. Maybe it will help to separate facts from hopes. Instead of thinking of the future with vague optimism, explicitly separate the components. Say "We're default dead, but we're counting on investors to save us." Maybe as you say that, it will set off the same alarms in your head that it does in mine. And if you set off the alarms sufficiently early, you may be able to avoid the fatal pinch. It would be safe to be default dead if you could count on investors saving you. As a rule their interest is a function of growth. If you have steep revenue growth, say over 5x a year, you can start to count on investors being interested even if you're not profitable. [ 1 ] But investors are so fickle that you can never do more than start to count on them. Sometimes something about your business will spook investors even if your growth is great. So no matter how good your growth is, you can never safely treat fundraising as more than a plan A. You should always have a plan B as well: you should know (as in write down) precisely what you'll need to do to survive if you can't raise more money, and precisely when you'll have to switch to plan B if plan A isn't working. In any case, growing fast versus operating cheaply is far from the sharp dichotomy many founders assume it to be. In practice there is surprisingly little connection between how much a startup spends and how fast it grows. When a startup grows fast, it's usually because the product hits a nerve, in the sense of hitting some big need straight on. When a startup spends a lot, it's usually because the product is expensive to develop or sell, or simply because they're wasteful. If you're paying attention, you'll be asking at this point not just how to avoid the fatal pinch, but how to avoid being default dead. That one is easy: don't hire too fast. Hiring too fast is by far the biggest killer of startups that raise money. [ 2 ] Founders tell themselves they need to hire in order to grow. But most err on the side of overestimating this need rather than underestimating it. Why? Partly because there's so much work to do. Naive founders think that if they can just hire enough people, it will all get done. Partly because successful startups have lots of employees, so it seems like that's what one does in order to be successful. In fact the large staffs of successful startups are probably more the effect of growth than the cause. And partly because when founders have slow growth they don't want to face what is usually the real reason: the product is not appealing enough. Plus founders who've just raised money are often encouraged to overhire by the <NRP> who funded them. Kill-or-cure strategies are optimal for VCs because they're protected by the portfolio effect. VCs want to blow you up, in one sense of the phrase or the other. But as a founder your incentives are different. You want above all to survive. [ 3 ] Here's a common way startups die. They make something moderately appealing and have decent initial growth. They raise their first round fairly easily, because the founders seem smart and the idea sounds plausible. But because the product is only moderately appealing, growth is ok but not great. The founders convince themselves that hiring a bunch of people is the way to boost growth. Their investors agree. But (because the product is only moderately appealing) the growth never comes. Now they're rapidly running out of runway. They hope further investment will save them. But because they have high expenses and slow growth, they're now unappealing to investors. They're unable to raise more, and the company dies. What the company should have done is address the fundamental problem: that the product is only moderately appealing. Hiring people is rarely the way to fix that. More often than not it makes it harder. At this early stage, the product needs to evolve more than to be "built out," and that's usually easier with fewer people. [ 4 ] Asking whether you're default alive or default dead may save you from this. Maybe the alarm bells it sets off will counteract the forces that push you to overhire. Instead you'll be compelled to seek growth in other ways. For example, by doing things that don't scale , or by redesigning the product in the way only founders can. And for many if not most startups, these paths to growth will be the ones that actually work. Airbnb waited <DATE_TIME> after raising money at the end of Y Combinator before they hired their first employee. In the meantime the founders were terribly overworked. But they were overworked evolving Airbnb into the astonishingly successful organism it is now. Notes [ 1 ] Steep usage growth will also interest investors. Revenue will ultimately be a constant multiple of usage, so x% usage growth predicts x% revenue growth. But in practice investors discount merely predicted revenue, so if you're measuring usage you need a higher growth rate to impress investors. [ 2 ] Startups that don't raise money are saved from hiring too fast because they can't afford to. But that doesn't mean you should avoid raising money in order to avoid this problem, any more than that total abstinence is the only way to avoid becoming an alcoholic. [ 3 ] I would not be surprised if VCs' tendency to push founders to overhire is not even in their own interest. They don't know how many of the companies that get killed by overspending might have done well if they'd survived. My guess is a significant number. [ 4 ] After reading a draft, <PERSON> wrote: "I think you should make the hiring point more strongly. I think it's roughly correct to say that YC's most successful companies have never been the fastest to hire, and one of the marks of a great founder is being able to resist this urge." <PERSON> adds: "A related problem that I see a lot is premature scaling-founders take a small business that isn't really working (bad unit economics, typically) and then scale it up because they want impressive growth numbers. This is similar to over-hiring in that it makes the business much harder to fix once it's big, plus they are bleeding cash really fast." Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Why It's Safe for Founders to Be Nice <DATE_TIME> I recently got an email from a founder that helped me understand something important: why it's safe for startup founders to be nice people. I grew up with a cartoon idea of a very successful businessman (in the cartoon it was always a man): a rapacious, cigar-smoking, table-thumping guy in <DATE_TIME> who wins by exercising power, and isn't too fussy about how. As I've written before, one of the things that has surprised me most about startups is how few of the most successful founders are like that. Maybe successful people in other industries are; I don't know; but not startup founders. [ 1 ] I knew this empirically, but I never saw the math of why till I got this founder's email. In it he said he worried that he was fundamentally soft-hearted and tended to give away too much for free. He thought perhaps he needed "a little dose of sociopath-ness." I told him not to worry about it, because so long as he built something good enough to spread by word of mouth, he'd have a superlinear growth curve. If he was bad at extracting money from people, at worst this curve would be some constant multiple less than 1 of what it might have been. But a constant multiple of any curve is exactly the same shape. The numbers on the Y axis are smaller, but the curve is just as steep, and when anything grows at the rate of a successful startup, the Y axis will take care of itself. Some examples will make this clear. Suppose your company is making $1000 a month now, and you've made something so great that it's growing at 5% a week. <DATE_TIME>, you'll be making about $160k a month. Now suppose you're so un-rapacious that you only extract half as much from your users as you could. That means <DATE_TIME> you'll be making $80k a month instead of $160k. How far behind are you? How long will it take to catch up with where you'd have been if you were extracting every penny? A mere <DATE_TIME>. After <DATE_TIME>, the un-rapacious founder is <DATE_TIME> behind the rapacious one. [ 2 ] If you're going to optimize a number, the one to choose is your growth rate . Suppose as before that you only extract half as much from users as you could, but that you're able to grow 6% a week instead of 5%. Now how are you doing compared to the rapacious founder after <DATE_TIME>? You're already ahead-$214k a month versus $160k-and pulling away fast. In <DATE_TIME> you'll be making $4.4 million a month to the rapacious founder's $2 million. Obviously one case where it would help to be rapacious is when growth depends on that. What makes startups different is that usually it doesn't. Startups usually win by making something so great that people recommend it to their friends. And being rapacious not only doesn't help you do that, but probably hurts. [ 3 ] The reason startup founders can safely be nice is that making great things is compounded, and rapacity isn't. So if you're a founder, here's a deal you can make with yourself that will both make you happy and make your company successful. Tell yourself you can be as nice as you want, so long as you work hard on your growth rate to compensate. Most successful startups make that tradeoff unconsciously. Maybe if you do it consciously you'll do it even better. Notes [ 1 ] Many think successful startup founders are driven by money. In fact the secret weapon of the most successful founders is that they aren't. If they were, they'd have taken one of the acquisition offers that every fast-growing startup gets on the way up. What drives the most successful founders is the same thing that drives most people who make things: the company is their project. [ 2 ] In fact since <DATE_TIME> ^ 15, the un-rapacious founder is always <DATE_TIME> behind the rapacious one. [ 3 ] The other reason it might help to be good at squeezing money out of customers is that startups usually lose money at first, and making more per customer makes it easier to get to profitability before your initial funding runs out. But while it is very common for startups to die from running through their initial funding and then being unable to raise more, the underlying cause is usually slow growth or excessive spending rather than insufficient effort to extract money from existing customers. Thanks to <PERSON>, Harj Taggar, <PERSON>, and <PERSON> for reading drafts of this, and to <PERSON> for being such a nice guy.
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Change Your Name <DATE_TIME> If you have a <LOCATION> startup called X and you don't have <URL>, you should probably change your name. The reason is not just that people can't find you. For companies with mobile apps, especially, having the right domain name is not as critical as it used to be for getting users. The problem with not having the .com of your name is that it signals weakness. Unless you're so big that your reputation precedes you, a marginal domain suggests you're a marginal company. Whereas (as <PERSON> shows) having <URL> signals strength even if it has no relation to what you do. Even good founders can be in denial about this. Their denial derives from two very powerful forces: identity, and lack of imagination. X is what we are , founders think. There's no other name as good. Both of which are false. You can fix the first by stepping back from the problem. Imagine you'd called your company something else. If you had, surely you'd be just as attached to that name as you are to your current one. The idea of switching to your current name would seem repellent. [ 1 ] There's nothing intrinsically great about your current name. Nearly all your attachment to it comes from it being attached to you. [ 2 ] The way to neutralize the second source of denial, your inability to think of other potential names, is to acknowledge that you're bad at naming. Naming is a completely separate skill from those you need to be a good founder. You can be a great startup founder but hopeless at thinking of names for your company. Once you acknowledge that, you stop believing there is nothing else you could be called. There are lots of other potential names that are as good or better; you just can't think of them. How do you find them? One answer is the default way to solve problems you're bad at: find someone else who can think of names. But with company names there is another possible approach. It turns out almost any word or word pair that is not an obviously bad name is a sufficiently good one, and the number of such domains is so large that you can find plenty that are cheap or even untaken. So make a list and try to buy some. That's what <PERSON> did. (Their search also turned up <URL>, which their friends at Parse took.) The reason I know that naming companies is a distinct skill orthogonal to the others you need in a startup is that I happen to have it. Back when I was running YC and did more office <DATE_TIME> with startups, I would often help them find new names. 80% of the time we could find at least one good name in a <DATE_TIME> office hour slot. Now when I do office hours I have to focus on more important questions, like what the company is doing. I tell them when they need to change their name. But I know the power of the forces that have them in their grip, so I know most won't listen. [ 3 ] There are of course examples of startups that have succeeded without having the .com of their name. There are startups that have succeeded despite any number of different mistakes. But this mistake is less excusable than most. It's something that can be fixed in <DATE_TIME> if you have sufficient discipline to acknowledge the problem. 100% of the top 20 YC companies by valuation have the .com of their name. 94% of the top 50 do. But only 66% of companies in the current batch have the .com of their name. Which suggests there are lessons ahead for most of the rest, one way or another. Notes [ 1 ] Incidentally, this thought experiment works for nationality and religion too. [ 2 ] The liking you have for a name that has become part of your identity manifests itself not directly, which would be easy to discount, but as a collection of specious beliefs about its intrinsic qualities. (This too is true of nationality and religion as well.) [ 3 ] Sometimes founders know it's a problem that they don't have the .com of their name, but delusion strikes a step later in the belief that they'll be able to buy it despite having no evidence it's for sale. Don't believe a domain is for sale unless the owner has already told you an asking price. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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What Microsoft Is this the Altair Basic of? <DATE_TIME> One of the most valuable exercises you can try if you want to understand startups is to look at the most successful companies and explain why they were not as lame as they seemed when they first launched. Because they practically all seemed lame at first. Not just small, lame. Not just the first step up a big mountain. More like the first step into a swamp. A Basic interpreter for the <PERSON>? How could that ever grow into a giant company? People sleeping on airbeds in strangers' apartments? A web site for college students to stalk one another? A wimpy little single-board computer for hobbyists that used a TV as a monitor? A new search engine, when there were already about 10, and they were all trying to de-emphasize search? These ideas didn't just seem small. They seemed wrong. They were the kind of ideas you could not merely ignore, but ridicule. Often the founders themselves didn't know why their ideas were promising. They were attracted to these ideas by instinct, because they were living in the future and they sensed that something was missing. But they could not have put into words exactly how their ugly ducklings were going to grow into big, beautiful swans. Most people's first impulse when they hear about a lame-sounding new startup idea is to make fun of it. Even a lot of people who should know better. When I encounter a startup with a lame-sounding idea, I ask "What Microsoft is this the Altair Basic of?" Now it's a puzzle, and the burden is on me to solve it. Sometimes I can't think of an answer, especially when the idea is a made-up one. But it's remarkable how often there does turn out to be an answer. Often it's one the founders themselves hadn't seen yet. Intriguingly, there are sometimes multiple answers. I talked to a startup <DATE_TIME> that could grow into 3 distinct Microsofts. They'd probably vary in size by orders of magnitude. But you can never predict how big a Microsoft is going to be, so in cases like that I encourage founders to follow whichever path is most immediately exciting to them. Their instincts got them this far. Why stop now?
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The Ronco Principle <DATE_TIME> No one, VC or angel, has invested in more of the top startups than <PERSON>. He knows what happened in every deal in the <LOCATION>, half the time because he arranged it. And yet he's a super nice guy. In fact, nice is not the word. Ronco is good. I know of zero instances in which he has behaved badly. It's hard even to imagine. When I first came to <LOCATION> I thought "How lucky that someone so powerful is so benevolent." But gradually I realized it wasn't luck. It was by being benevolent that Ronco became so powerful. All the deals he gets to invest in come to him through referrals. Google did. Facebook did. Twitter was a referral from <PERSON> himself. And the reason so many people refer deals to him is that he's proven himself to be a good guy. Good does not mean being a pushover. I would not want to face an angry Ronco. But if <PERSON>'s angry at you, it's because you did something wrong. <PERSON> is so old school he's Old Testament. He will smite you in his just wrath, but there's no malice in it. In almost every domain there are advantages to seeming good. It makes people trust you. But actually being good is an expensive way to seem good. To an amoral person it might seem to be overkill. In some fields it might be, but apparently not in the startup world. Though plenty of investors are jerks, there is a clear trend among them: the most successful investors are also the most upstanding. [ 1 ] It was not always this way. I would not feel confident saying that about investors <DATE_TIME>. What changed? The startup world became more transparent and more unpredictable. Both make it harder to seem good without actually being good. It's obvious why transparency has that effect. When an investor <PERSON> a founder now, it gets out. Maybe not all the way to the press, but other founders hear about it, and that investor starts to lose deals. [ 2 ] The effect of unpredictability is more subtle. It increases the work of being inconsistent. If you're going to be two-faced, you have to know who you should be nice to and who you can get away with being nasty to. In the startup world, things change so rapidly that you can't tell. The random college kid you talk to <DATE_TIME> might in <DATE_TIME> be the CEO of the hottest startup in the <LOCATION>. If you can't tell who to be nice to, you have to be nice to everyone. And probably the only people who can manage that are the people who are genuinely good. In a sufficiently connected and unpredictable world, you can't seem good without being good. As often happens, <PERSON> discovered how to be the investor of the future by accident. He didn't foresee the future of startup investing, realize it would pay to be upstanding, and force himself to behave that way. It would feel unnatural to him to behave any other way. He was already living in the future . Fortunately that future is not limited to the startup world. The startup world is more transparent and unpredictable than most, but almost everywhere the trend is in that direction. Notes [ 1 ] I'm not saying that if you sort investors by benevolence you've also sorted them by returns, but rather that if you do a scatterplot with benevolence on the x axis and returns on the y, you'd see a clear upward trend. [ 2 ] Y Combinator in particular, because it aggregates data from so many startups, has a pretty comprehensive view of investor behavior. Thanks to <PERSON> and <PERSON> for reading drafts of this. <NRP> Translation
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What Doesn't Seem Like Work? <DATE_TIME> My father is a mathematician. For most of my childhood he worked for Westinghouse, modelling nuclear reactors. He was one of those lucky people who know early on what they want to do. When you talk to him about his childhood, there's a clear watershed at <DATE_TIME>, when he "got interested in maths." He grew up in the small <NRP> seacoast town of <LOCATION> . As we retraced his walk to school on <LOCATION>, he said that it had been nice growing up in the country. "Didn't it get boring when you got to be about 15?" I asked. "No," he said, "by then I was interested in maths." In another conversation he told me that what he really liked was solving problems. To me the exercises at the end of each chapter in a math textbook represent work, or at best a way to reinforce what you learned in that chapter. To him the problems were the reward. The text of each chapter was just some advice about solving them. He said that as soon as he got a new textbook he'd immediately work out all the problems - to the slight annoyance of his teacher, since the class was supposed to work through the book gradually. Few people know so early or so certainly what they want to work on. But talking to my father reminded me of a heuristic the rest of us can use. If something that seems like work to other people doesn't seem like work to you, that's something you're well suited for. For example, a lot of programmers I know, including me, actually like debugging. It's not something people tend to volunteer; one likes it the way one likes popping zits. But you may have to like debugging to like programming, considering the degree to which programming consists of it. The stranger your tastes seem to other people, the stronger evidence they probably are of what you should do. When I was in college I used to write papers for my friends. It was quite interesting to write a paper for a class I wasn't taking. Plus they were always so relieved. It seemed curious that the same task could be painful to one person and pleasant to another, but I didn't realize at the time what this imbalance implied, because I wasn't looking for it. I didn't realize how hard it can be to decide what you should work on, and that you sometimes have to figure it out from subtle clues, like a detective solving a case in a mystery novel. So I bet it would help a lot of people to ask themselves about this explicitly. What seems like work to other people that doesn't seem like work to you? Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, and my father for reading drafts of this. <PERSON>: All About Programming French Translation
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Don't Talk to Corp Dev <DATE_TIME> Corporate Development, aka corp dev, is the group within companies that buys other companies. If you're talking to someone from corp dev, that's why, whether you realize it yet or not. It's usually a mistake to talk to corp dev unless (a) you want to sell your company right now and (b) you're sufficiently likely to get an offer at an acceptable price. In practice that means startups should only talk to corp dev when they're either doing really well or really badly. If you're doing really badly, meaning the company is about to die, you may as well talk to them, because you have nothing to lose. And if you're doing really well, you can safely talk to them, because you both know the price will have to be high, and if they show the slightest sign of wasting your time, you'll be confident enough to tell them to get lost. The danger is to companies in the middle. Particularly to young companies that are growing fast, but haven't been doing it for long enough to have grown big yet. It's usually a mistake for a promising company <DATE_TIME> even to talk to corp dev. But it's a mistake founders constantly make. When someone from corp dev wants to meet, the founders tell themselves they should at least find out what they want. Besides, they don't want to offend Big Company by refusing to meet. Well, I'll tell you what they want. They want to talk about buying you. That's what the title "corp dev" means. So before agreeing to meet with someone from corp dev, ask yourselves, "Do we want to sell the company right now?" And if the answer is no, tell them "Sorry, but we're focusing on growing the company." They won't be offended. And certainly the founders of Big Company won't be offended. If anything they'll think more highly of you. You'll remind them of themselves. They didn't sell either; that's why they're in a position now to buy other companies. [ 1 ] Most founders who get contacted by corp dev already know what it means. And yet even when they know what corp dev does and know they don't want to sell, they take the meeting. Why do they do it? The same mix of denial and wishful thinking that underlies most mistakes founders make. It's flattering to talk to someone who wants to buy you. And who knows, maybe their offer will be surprisingly high. You should at least see what it is, right? No. If they were going to send you an offer immediately by email, sure, you might as well open it. But that is not how conversations with corp dev work. If you get an offer at all, it will be at the end of a long and unbelievably distracting process. And if the offer is surprising, it will be surprisingly low. Distractions are the thing you can least afford in a startup. And conversations with corp dev are the worst sort of distraction, because as well as consuming your attention they undermine your morale. One of the tricks to surviving a grueling process is not to stop and think how tired you are. Instead you get into a sort of flow. [ 2 ] Imagine what it would do to you if at mile 20 of a marathon, someone ran up beside you and said "You must feel really tired. Would you like to stop and take a rest?" Conversations with corp dev are like that but worse, because the suggestion of stopping gets combined in your mind with the imaginary high price you think they'll offer. And then you're really in trouble. If they can, corp dev people like to turn the tables on you. They like to get you to the point where you're trying to convince them to buy instead of them trying to convince you to sell. And surprisingly often they succeed. This is a very slippery slope, greased with some of the most powerful forces that can work on founders' minds, and attended by an experienced professional whose full time job is to push you down it. Their tactics in pushing you down that slope are usually fairly brutal. Corp dev people's whole job is to buy companies, and they don't even get to choose which. The only way their performance is measured is by how cheaply they can buy you, and the more ambitious ones will stop at nothing to achieve that. For example, they'll almost always start with a lowball offer, just to see if you'll take it. Even if you don't, a low initial offer will demoralize you and make you easier to manipulate. And that is the most innocent of their tactics. Just wait till you've agreed on a price and think you have a done deal, and then they come back and say their boss has vetoed the deal and won't do it for more than half the agreed upon price. Happens all the time. If you think investors can behave badly, it's nothing compared to what corp dev people can do. Even corp dev people at companies that are otherwise benevolent. I remember once complaining to a friend at Google about some nasty trick their corp dev people had pulled on a YC startup. "What happened to Don't be Evil?" I asked. "I don't think corp dev got the memo," he replied. The tactics you encounter in M&A conversations can be like nothing you've experienced in the otherwise comparatively upstanding world of <LOCATION>. It's as if a chunk of genetic material from the old-fashioned robber baron business world got incorporated into the startup world. [ 3 ] The simplest way to protect yourself is to use the trick that <PERSON>, whose grandfather was an alcoholic, used to protect himself from becoming one. He once told a <DATE_TIME> school class Boys, do you know why I never became a drunkard? Because I never took the first drink. Do you want to sell your company right now? Not eventually, right now. If not, just don't take the first meeting. They won't be offended. And you in turn will be guaranteed to be spared one of the worst experiences that can happen to a startup. If you do want to sell, there's another set of techniques for doing that. But the biggest mistake founders make in dealing with corp dev is not doing a bad job of talking to them when they're ready to, but talking to them before they are. So if you remember only the title of this essay, you already know most of what you need to know about M&A in <DATE_TIME>. Notes [ 1 ] I'm not saying you should never sell. I'm saying you should be clear in your own mind about whether you want to sell or not, and not be led by manipulation or wishful thinking into trying to sell earlier than you otherwise would have. [ 2 ] In a startup, as in most competitive sports, the task at hand almost does this for you; you're too busy to feel tired. But when you lose that protection, e.g. at the final whistle, the fatigue hits you like a wave. To talk to corp dev is to let yourself feel it mid-game. [ 3 ] To be fair, the apparent misdeeds of corp dev people are magnified by the fact that they function as the face of a large organization that often doesn't know its own mind. Acquirers can be surprisingly indecisive about acquisitions, and their flakiness is indistinguishable from dishonesty by the time it filters down to you. Thanks to <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Let the Other 95% of Great Programmers In <DATE_TIME> <NRP> technology companies want the government to make immigration easier because they say they can't find enough programmers in the <LOCATION>. Anti-immigration people say that instead of letting foreigners take these jobs, we should train more <NRP> to be programmers. Who's right? The technology companies are right. What the anti-immigration people don't understand is that there is a huge variation in ability between competent programmers and exceptional ones, and while you can train people to be competent, you can't train them to be exceptional. Exceptional programmers have an aptitude for and interest in programming that is not merely the product of training. [ 1 ] The <LOCATION> has less than 5% of the world's population. Which means if the qualities that make someone a great programmer are evenly distributed, 95% of great programmers are born outside the <LOCATION>. The anti-immigration people have to invent some explanation to account for all the effort technology companies have expended trying to make immigration easier. So they claim it's because they want to drive down salaries. But if you talk to startups, you find practically every one over a certain size has gone through legal contortions to get programmers into the <LOCATION>, where they then paid them the same as they'd have paid an <NRP>. Why would they go to extra trouble to get programmers for the same price? The only explanation is that they're telling the truth: there are just not enough great programmers to go around. [ 2 ] I asked the CEO of a startup with about 70 programmers how many more he'd hire if he could get all the great programmers he wanted. He said "We'd hire <DATE_TIME>." And this is one of the hot startups that always win recruiting battles. It's the same all over <LOCATION>. Startups are that constrained for talent. It would be great if more <NRP> were trained as programmers, but no amount of training can flip a ratio as overwhelming as 95 to 5. Especially since programmers are being trained in other countries too. Barring some cataclysm, it will always be true that most great programmers are born outside the <LOCATION>. It will always be true that most people who are great at anything are born outside the <LOCATION>. [ 3 ] Exceptional performance implies immigration. A country with only a few percent of the world's population will be exceptional in some field only if there are a lot of immigrants working in it. But this whole discussion has taken something for granted: that if we let more great programmers into the <LOCATION>, they'll want to come. That's true now, and we don't realize how lucky we are that it is. If we want to keep this option open, the best way to do it is to take advantage of it: the more of the world's great programmers are here, the more the rest will want to come here. And if we don't, the <LOCATION> could be seriously fucked. I realize that's strong language, but the people dithering about this don't seem to realize the power of the forces at work here. Technology gives the best programmers huge leverage. The world market in programmers seems to be becoming dramatically more liquid. And since good people like good colleagues, that means the best programmers could collect in just a few hubs. Maybe mostly in one hub. What if most of the great programmers collected in one hub, and it wasn't here? That scenario may seem unlikely now, but it won't be if things change as much in <DATE_TIME> as they did in <DATE_TIME>. We have the potential to ensure that the <LOCATION> remains a technology superpower just by letting in a few thousand great programmers <DATE_TIME>. What a colossal mistake it would be to let that opportunity slip. It could easily be the defining mistake this generation of <NRP> politicians later become famous for. And unlike other potential mistakes on that scale, it costs nothing to fix. So please, get on with it. Notes [ 1 ] How much better is a great programmer than an ordinary one? So much better that you can't even measure the difference directly. A great programmer doesn't merely do the same work faster. A great programmer will invent things an ordinary programmer would never even think of. This doesn't mean a great programmer is infinitely more valuable, because any invention has a finite market value. But it's easy to imagine cases where a great programmer might invent things worth 100x or even 1000x an average programmer's salary. [ 2 ] There are a handful of consulting firms that rent out big pools of foreign programmers they bring in on <US_DRIVER_LICENSE>-B visas. By all means crack down on these. It should be easy to write legislation that distinguishes them, because they are so different from technology companies. But it is dishonest of the anti-immigration people to claim that companies like Google and Facebook are driven by the same motives. An influx of inexpensive but mediocre programmers is the last thing they'd want; it would destroy them. [ 3 ] Though this essay talks about programmers, the group of people we need to import is broader, ranging from designers to programmers to electrical engineers. The best one could do as a general term might be "digital talent." It seemed better to make the argument a little too narrow than to confuse everyone with a neologism. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. Spanish Translation
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How to Be an Expert in a Changing World <DATE_TIME> If the world were static, we could have monotonically increasing confidence in our beliefs. The more (and more varied) experience a belief survived, the less likely it would be false. Most people implicitly believe something like this about their opinions. And they're justified in doing so with opinions about things that don't change much, like human nature. But you can't trust your opinions in the same way about things that change, which could include practically everything else. When experts are wrong, it's often because they're experts on an earlier version of the world. Is it possible to avoid that? Can you protect yourself against obsolete beliefs? To some extent, yes. I spent almost a decade investing in early stage startups, and curiously enough protecting yourself against obsolete beliefs is exactly what you have to do to succeed as a startup investor. Most really good startup ideas look like bad ideas at first, and many of those look bad specifically because some change in the world just switched them from bad to good. I spent a lot of time learning to recognize such ideas, and the techniques I used may be applicable to ideas in general. The first step is to have an explicit belief in change. People who fall victim to a monotonically increasing confidence in their opinions are implicitly concluding the world is static. If you consciously remind yourself it isn't, you start to look for change. Where should one look for it? Beyond the moderately useful generalization that human nature doesn't change much, the unfortunate fact is that change is hard to predict. This is largely a tautology but worth remembering all the same: change that matters usually comes from <DATE_TIME>. So I don't even try to predict it. When I get asked in interviews to predict the future, I always have to struggle to come up with something plausible-sounding on the fly, like a student who hasn't prepared for an exam. [ 1 ] But it's not out of laziness that I haven't prepared. It seems to me that beliefs about the future are so rarely correct that they usually aren't worth the extra rigidity they impose, and that the best strategy is simply to be aggressively open-minded. Instead of trying to point yourself in the right direction, admit you have no idea what the right direction is, and try instead to be super sensitive to the winds of change. It's ok to have working hypotheses, even though they may constrain you a bit, because they also motivate you. It's exciting to chase things and exciting to try to guess answers. But you have to be disciplined about not letting your hypotheses harden into anything more. [ 2 ] I believe this passive m.o. works not just for evaluating new ideas but also for having them. The way to come up with new ideas is not to try explicitly to, but to try to solve problems and simply not discount weird hunches you have in the process. The winds of change originate in the unconscious minds of domain experts. If you're sufficiently expert in a field, any weird idea or apparently irrelevant question that occurs to you is ipso facto worth exploring. [ 3 ] Within Y Combinator, when an idea is described as crazy, it's a compliment-in fact, on average probably a higher compliment than when an idea is described as good. Startup investors have extraordinary incentives for correcting obsolete beliefs. If they can realize before other investors that some apparently unpromising startup isn't, they can make a huge amount of money. But the incentives are more than just financial. Investors' opinions are explicitly tested: startups come to them and they have to say yes or no, and then, fairly quickly, they learn whether they guessed right. The investors who say no to a Google (and there were several) will remember it for the rest of their lives. Anyone who must in some sense bet on ideas rather than merely commenting on them has similar incentives. Which means anyone who wants such incentives can have them, by turning their comments into bets: if you write about a topic in some fairly durable and public form, you'll find you worry much more about getting things right than most people would in a casual conversation. [ 4 ] Another trick I've found to protect myself against obsolete beliefs is to focus initially on people rather than ideas. Though the nature of future discoveries is hard to predict, I've found I can predict quite well what sort of people will make them. Good new ideas come from earnest, energetic, independent-minded people. Betting on people over ideas saved me countless times as an investor. We thought Airbnb was a bad idea, for example. But we could tell the founders were earnest, energetic, and independent-minded. (Indeed, almost pathologically so.) So we suspended disbelief and funded them. This too seems a technique that should be generally applicable. Surround yourself with the sort of people new ideas come from. If you want to notice quickly when your beliefs become obsolete, you can't do better than to be friends with the people whose discoveries will make them so. It's hard enough already not to become the prisoner of your own expertise, but it will only get harder, because change is accelerating. That's not a recent trend; change has been accelerating since the paleolithic era. Ideas beget ideas. I don't expect that to change. But I could be wrong. Notes [ 1 ] My usual trick is to talk about aspects of the present that most people haven't noticed yet. [ 2 ] Especially if they become well enough known that people start to identify them with you. You have to be extra skeptical about things you want to believe, and once a hypothesis starts to be identified with you, it will almost certainly start to be in that category. [ 3 ] In practice "sufficiently expert" doesn't require one to be recognized as an expert-which is a trailing indicator in any case. In many fields a year of focused work plus caring a lot would be enough. [ 4 ] Though they are public and persist indefinitely, comments on e.g. forums and places like Twitter seem empirically to work like casual conversation. The threshold may be whether what you write has a title. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. Spanish Translation Arabic Translation
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How You Know <DATE_TIME> I've read <PERSON>'s chronicle of <LOCATION> at least two times, maybe three. And yet if I had to write down everything I remember from it, I doubt it would amount to much more than a page. Multiply this times several hundred, and I get an uneasy feeling when I look at my bookshelves. What use is it to read all these books if I remember so little from them? <DATE_TIME>, as I was reading <PERSON> excellent biography of <PERSON>, I figured out if not the answer to this question, at least something that made me feel better about it. She writes: <PERSON> had no patience with mathematical lectures which filled the students with facts but did not teach them how to frame a problem and solve it. He often used to tell them that "a perfect formulation of a problem is already half its solution." That has always seemed to me an important point, and I was even more convinced of it after hearing it confirmed by <PERSON>. But how had I come to believe in this idea in the first place? A combination of my own experience and other things I'd read. None of which I could at that moment remember! And eventually I'd forget that <PERSON> had confirmed it too. But my increased belief in the importance of this idea would remain something I'd learned from this book, even after I'd forgotten I'd learned it. Reading and experience train your model of the world. And even if you forget the experience or what you read, its effect on your model of the world persists. Your mind is like a compiled program you've lost the source of. It works, but you don't know why. The place to look for what I learned from <PERSON>'s chronicle is not what I remember from it, but my mental models of the crusades, <LOCATION>, medieval culture, siege warfare, and so on. Which doesn't mean I couldn't have read more attentively, but at least the harvest of reading is not so miserably small as it might seem. This is one of those things that seem obvious in retrospect. But it was a surprise to me and presumably would be to anyone else who felt uneasy about (apparently) forgetting so much they'd read. Realizing it does more than make you feel a little better about forgetting, though. There are specific implications. For example, reading and experience are usually "compiled" at the time they happen, using the state of your brain at that time. The same book would get compiled differently at different points in your life. Which means it is very much worth reading important books multiple times. I always used to feel some misgivings about rereading books. I unconsciously lumped reading together with work like carpentry, where having to do something again is a sign you did it wrong the first time. Whereas now the phrase "already read" seems almost ill-formed. Intriguingly, this implication isn't limited to books. Technology will increasingly make it possible to relive our experiences. When people do that <DATE_TIME> it's usually to enjoy them again (e.g. when looking at pictures of a trip) or to find the origin of some bug in their compiled code (e.g. when <PERSON> succeeded in remembering the childhood trauma that prevented him from singing). But as technologies for recording and playing back your life improve, it may become common for people to relive experiences without any goal in mind, simply to learn from them again as one might when rereading a book. Eventually we may be able not just to play back experiences but also to index and even edit them. So although not knowing how you know things may seem part of being human, it may not be. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. <NRP> Translation
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Investor Herd Dynamics Want to start a startup? Get funded by Y Combinator . <DATE_TIME> The biggest component in most investors' opinion of you is the opinion of other investors. Which is of course a recipe for exponential growth. When one investor wants to invest in you, that makes other investors want to, which makes others want to, and so on. Sometimes inexperienced founders mistakenly conclude that manipulating these forces is the essence of fundraising. They hear stories about stampedes to invest in successful startups, and think it's therefore the mark of a successful startup to have this happen. But actually the two are not that highly correlated. Lots of startups that cause stampedes end up flaming out (in extreme cases, partly as a result of the stampede), and lots of very successful startups were only moderately popular with investors the first time they raised money. So the point of this essay is not to explain how to create a stampede, but merely to explain the forces that generate them. These forces are always at work to some degree in fundraising, and they can cause surprising situations. If you understand them, you can at least avoid being surprised. One reason investors like you more when other investors like you is that you actually become a better investment. Raising money decreases the risk of failure. Indeed, although investors hate it, you are for this reason justified in raising your valuation for later investors. The investors who invested when you had no money were taking more risk, and are entitled to higher returns. Plus a company that has raised money is literally more valuable. After you raise the first million dollars, the company is at least a million dollars more valuable, because it's the same company as before, plus it has a million dollars in the bank. [ 1 ] Beware, though, because later investors so hate to have the price raised on them that they resist even this self-evident reasoning. Only raise the price on an investor you're comfortable with losing, because some will angrily refuse. [ 2 ] The second reason investors like you more when you've had some success at fundraising is that it makes you more confident, and an investors' opinion of you is the foundation of their opinion of your company. Founders are often surprised how quickly investors seem to know when they start to succeed at raising money. And while there are in fact lots of ways for such information to spread among investors, the main vector is probably the founders themselves. Though they're often clueless about technology, most investors are pretty good at reading people. When fundraising is going well, investors are quick to sense it in your increased confidence. (This is one case where the average founder's inability to remain poker-faced works to your advantage.) But frankly the most important reason investors like you more when you've started to raise money is that they're bad at judging startups. Judging startups is hard even for the best investors. The mediocre ones might as well be flipping coins. So when mediocre investors see that lots of other people want to invest in you, they assume there must be a reason. This leads to the phenomenon known in the <LOCATION> as the "hot deal," where you have more interest from investors than you can handle. The best investors aren't influenced much by the opinion of other investors. It would only dilute their own judgment to average it together with other people's. But they are indirectly influenced in the practical sense that interest from other investors imposes a deadline. This is the fourth way in which offers beget offers. If you start to get far along the track toward an offer with one firm, it will sometimes provoke other firms, even good ones, to make up their minds, lest they lose the deal. Unless you're a wizard at negotiation (and if you're not sure, you're not) be very careful about exaggerating this to push a good investor to decide. Founders try this sort of thing all the time, and investors are very sensitive to it. If anything oversensitive. But you're safe so long as you're telling the truth. If you're getting far along with investor B, but you'd rather raise money from investor A, you can tell investor A that this is happening. There's no manipulation in that. You're genuinely in a bind, because you really would rather raise money from A, but you can't safely reject an offer from B when it's still uncertain what A will decide. Do not, however, tell A who B is. VCs will sometimes ask which other VCs you're talking to, but you should never tell them. Angels you can sometimes tell about other angels, because angels cooperate more with one another. But if VCs ask, just point out that they wouldn't want you telling other firms about your conversations, and you feel obliged to do the same for any firm you talk to. If they push you, point out that you're inexperienced at fundraising - which is always a safe card to play - and you feel you have to be extra cautious. [ 3 ] While few startups will experience a stampede of interest, almost all will at least initially experience the other side of this phenomenon, where the herd remains clumped together at a distance. The fact that investors are so much influenced by other investors' opinions means you always start out in something of a hole. So don't be demoralized by how hard it is to get the first commitment, because much of the difficulty comes from this external force. The second will be easier. Notes [ 1 ] An accountant might say that a company that has raised a million dollars is no richer if it's convertible debt, but in practice money raised as convertible debt is little different from money raised in an equity round. [ 2 ] Founders are often surprised by this, but investors can get very emotional. Or rather indignant; that's the main emotion I've observed; but it is very common, to the point where it sometimes causes investors to act against their own interests. I know of one investor who invested in a startup at a $15 million valuation cap. Earlier he'd had an opportunity to invest at a $5 million cap, but he refused because a friend who invested earlier had been able to invest at a $3 million cap. [ 3 ] If an investor pushes you hard to tell them about your conversations with other investors, is this someone you want as an investor? Thanks to <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. Russian Translation
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Do Things that Don't Scale Want to start a startup? Get funded by Y Combinator . <DATE_TIME> One of the most common types of advice we give at Y Combinator is to do things that don't scale. A lot of would-be founders believe that startups either take off or don't. You build something, make it available, and if you've made a better mousetrap, people beat a path to your door as promised. Or they don't, in which case the market must not exist. [ 1 ] Actually startups take off because the founders make them take off. There may be a handful that just grew by themselves, but usually it takes some sort of push to get them going. A good metaphor would be the cranks that car engines had before they got electric starters. Once the engine was going, it would keep going, but there was a separate and laborious process to get it going. Recruit 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. Stripe is one of the most successful startups we've funded, and the problem they solved was an urgent one. If anyone could have sat back and waited for users, it was <PERSON>. But in fact they're famous within YC for aggressive early user acquisition. Startups building things for other startups have a big pool of potential users in the other companies we've funded, and none took better advantage of it than Stripe. At YC we use the term "<PERSON> installation" for the technique they invented. More diffident founders ask "Will you try our beta?" and if the answer is yes, they say "Great, we'll send you a link." But the <PERSON> brothers weren't going to wait. When anyone agreed to try <PERSON> they'd say "Right then, give me your laptop" and set them up on the spot. There are two reasons founders resist going out and recruiting users individually. One is a combination of shyness and laziness. They'd rather sit at home writing code than go out and talk to a bunch of strangers and probably be rejected by most of them. But for a startup to succeed, at least one founder (usually the CEO) will have to spend a lot of time on sales and marketing. [ 2 ] The other reason founders ignore this path is that the absolute numbers seem so small at first. This can't be how the big, famous startups got started, they think. The mistake they make is to underestimate the power of compound growth. We encourage every startup to measure their progress by <DATE_TIME> growth rate . If you have 100 users, you need to get 10 more <DATE_TIME> 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 <DATE_TIME> you'll have 14,000 users, and after <DATE_TIME> 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. [ 3 ] Airbnb is a classic example of this technique. Marketplaces are so hard to get rolling that you should expect to take heroic measures at first. In Airbnb's case, these consisted of going door to door in <LOCATION>, recruiting new users and helping existing ones improve their listings. When I remember the <PERSON> during YC, I picture them with rolly bags, because when they showed up for <DATE_TIME> dinners they'd always just flown back from somewhere. Fragile Airbnb now seems like an unstoppable juggernaut, but early on it was so fragile that <DATE_TIME> of going out and engaging in person with users made the difference between success and failure. That initial fragility was not a unique feature of Airbnb. Almost all startups are fragile initially. And that's one of the biggest things inexperienced founders and investors (and reporters and know-it-alls on forums) get wrong about them. 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." It's harmless if reporters and know-it-alls dismiss your startup. They always get things wrong. It's even ok if investors dismiss your startup; they'll change their minds when they see growth. The big danger is that you'll dismiss your startup yourself. I've seen it happen. I often have to encourage founders who don't see the full potential of what they're building. Even <PERSON> made that mistake. He returned to Harvard for <DATE_TIME> after starting Microsoft. He didn't stay long, but he wouldn't have returned at all if he'd realized Microsoft was going to be even a fraction of the size it turned out to be. [ 4 ] The question to ask about an early stage startup is not "is this company taking over the world?" but "how big could this company get if the founders did the right things?" And the right things often seem both laborious and inconsequential at the time. Microsoft can't have seemed very impressive when it was just a couple guys in <LOCATION> writing Basic interpreters for a market of a few thousand hobbyists (as they were then called), but in retrospect that was the optimal path to dominating microcomputer software. And I know <PERSON> and <PERSON> didn't feel like they were en route to the big time as they were taking "professional" photos of their first hosts' apartments. They were just trying to survive. But in retrospect that too was the optimal path to dominating a big market. 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. For example, <PERSON> noticed that a lot of the earliest Pinterest users were interested in design, so he went to a conference of design bloggers to recruit users, and that worked well. [ 5 ] Delight You should take extraordinary measures not just to acquire users, but also to make them happy. For as long as they could (which turned out to be surprisingly long), Wufoo sent each new user a hand-written thank you note. Your first users should feel that signing up with you was one of the best choices they ever made. And you in turn should be racking your brains to think of new ways to delight them. Why do we have to teach startups this? Why is it counterintuitive for founders? Three reasons, I think. One is that a lot of startup founders are trained as engineers, and customer service is not part of the training of engineers. You're supposed to build things that are robust and elegant, not be slavishly attentive to individual users like some kind of salesperson. Ironically, part of the reason engineering is traditionally averse to handholding is that its traditions date from a time when engineers were less powerful - when they were only in charge of their narrow domain of building things, rather than running the whole show. You can be ornery when you're <PERSON>, but not when you're <PERSON>. Another reason founders don't focus enough on individual customers is that they worry it won't scale. But when founders of larval startups worry about this, I point out that in their current state they have nothing to lose. Maybe if they go out of their way to make existing users super happy, they'll <DATE_TIME> have too many to do so much for. That would be a great problem to have. See if you can make it happen. And incidentally, when it does, you'll find that delighting customers scales better than you expected. Partly because you can usually find ways to make anything scale more than you would have predicted, and partly because delighting customers will by then have permeated your culture. I have never once seen a startup lured down a blind alley by trying too hard to make their initial users happy. But perhaps the biggest thing preventing founders from realizing how attentive they could be to their users is that they've never experienced such attention themselves. Their standards for customer service have been set by the companies they've been customers of, which are mostly big ones. <PERSON> 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. [ 6 ] Once you realize that existing conventions are not the upper bound on user experience, it's interesting in a very pleasant way to think about how far you could go to delight your users. Experience I was trying to think of a phrase to convey how extreme your attention to users should be, and I realized <PERSON> had already done it: insanely great. <PERSON> wasn't just using "insanely" as a synonym for "very." He meant it more literally - that one should focus on quality of execution to a degree that in everyday life would be considered pathological. All the most successful startups we've funded have, and that probably doesn't surprise would-be founders. What novice founders don't get is what insanely great translates to in a larval startup. When <PERSON> started using that phrase, Apple was already an established company. He meant the <PERSON> (and its documentation and even packaging - such is the nature of obsession) should be insanely well designed and manufactured. That's not hard for engineers to grasp. It's just a more extreme version of designing a robust and elegant product. What founders have a hard time grasping (and <PERSON> himself might have had a hard time grasping) is what insanely great morphs into as you roll the time slider back to <DATE_TIME> of a startup's life. It's not the product that should be insanely great, but the experience of being your user. The product is just one component of that. For a big company it's necessarily the dominant one. But you can and should give users an insanely great experience with an early, incomplete, buggy product, if you make up the difference with attentiveness. Can, perhaps, but should? Yes. Over-engaging with early users is not just a permissible technique for getting growth rolling. For most successful startups it's a necessary part of the feedback loop that makes the product good. Making a better mousetrap is not an atomic operation. Even if you start the way most successful startups have, by building something you yourself need, the first thing you build is never quite right. And except in domains with big penalties for making mistakes, it's often better not to aim for perfection initially. In software, especially, it usually works best to get something in front of users as soon as it has a quantum of utility, and then see what they do with it. Perfectionism is often an excuse for procrastination, and in any case your initial model of users is always inaccurate, even if you're one of them. [ 7 ] The feedback you get from engaging directly with your earliest users will be the best you ever get. When you're so big you have to resort to focus groups, you'll wish you could go over to your users' homes and offices and watch them use your stuff like you did when there were only a handful of them. Fire Sometimes the right unscalable trick is to focus on a deliberately narrow market. It's like keeping a fire contained at first to get it really hot before adding more logs. That's what Facebook did. At first it was just for Harvard students. In that form it only had a potential market of a few thousand people, but because they felt it was really for them, a critical mass of them signed up. After Facebook stopped being for Harvard students, it remained for students at specific colleges for quite a while. When I interviewed <PERSON> at Startup School, he said that while it was a lot of work creating course lists for each school, doing that made students feel the site was their natural home. Any startup that could be described as a marketplace usually has to start in a subset of the market, but this can work for other startups as well. It's always worth asking if there's a subset of the market in which you can get a critical mass of users quickly. [ 8 ] Most startups that use the contained fire strategy do it unconsciously. They build something for themselves and their friends, who happen to be the early adopters, and only realize later that they could offer it to a broader market. The strategy works just as well if you do it unconsciously. The biggest danger of not being consciously aware of this pattern is for those who naively discard part of it. E.g. if you don't build something for yourself and your friends, or even if you do, but you come from the corporate world and your friends are not early adopters, you'll no longer have a perfect initial market handed to you on a platter. Among companies, the best early adopters are usually other startups. They're more open to new things both by nature and because, having just been started, they haven't made all their choices yet. Plus when they succeed they grow fast, and you with them. It was one of many unforeseen advantages of the YC model (and specifically of making YC big) that B2B startups now have an instant market of hundreds of other startups ready at hand. Meraki For hardware startups there's a variant of doing things that don't scale that we call "pulling a Meraki." Although we didn't fund Meraki, the founders were <PERSON> grad students, so we know their history. They got started by doing something that really doesn't scale: assembling their routers themselves. Hardware startups face an obstacle that software startups don't. The minimum order for a factory production run is usually several hundred thousand dollars. Which can put you in a catch-22: without a product you can't generate the growth you need to raise the money to manufacture your product. Back when hardware startups had to rely on investors for money, you had to be pretty convincing to overcome this. The arrival of crowdfunding (or more precisely, preorders) has helped a lot. But even so I'd advise startups to pull a Meraki initially if they can. That's what <LOCATION> did. The <PERSON> assembled the first several hundred watches themselves. If they hadn't gone through that phase, they probably wouldn't have sold $10 million worth of watches when they did go on <LOCATION>. Like paying excessive attention to early customers, fabricating things yourself turns out to be valuable for hardware startups. You can tweak the design faster when you're the factory, and you learn things you'd never have known otherwise. <PERSON> of Pebble said one of the things he learned was "how valuable it was to source good screws." Who knew? Consult Sometimes we advise founders of B2B startups to take over-engagement to an extreme, and to pick a single user and act as if they were consultants building something just for that one user. The initial user serves as the form for your mold; keep tweaking till you fit their needs perfectly, and you'll usually find you've made something other users want too. Even if there aren't many of them, there are probably adjacent territories that have more. As long as you can find just one user who really needs something and can act on that need, you've got a toehold in making something people want, and that's as much as any startup needs initially. [ 9 ] Consulting is the canonical example of work that doesn't scale. But (like other ways of bestowing one's favors liberally) it's safe to do it so long as you're not being paid to. That's where companies cross the line. So long as you're a product company that's merely being extra attentive to a customer, they're very grateful even if you don't solve all their problems. But when they start paying you specifically for that attentiveness - when they start paying you by the hour - they expect you to do everything. Another consulting-like technique for recruiting initially lukewarm users is to use your software yourselves on their behalf. We did that at <PERSON>. 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 <DATE_TIME> implementing it and then resume building the site. Manual There's a more extreme variant where you don't just use your software, but are your software. When you only have a small number of users, you can sometimes get away with doing by hand things that you plan to automate later. This lets you launch faster, and when you do finally automate yourself out of the loop, you'll know exactly what to build because you'll have muscle memory from doing it yourself. When manual components look to the user like software, this technique starts to have aspects of a practical joke. For example, the way <PERSON> delivered "instant" merchant accounts to its first users was that the founders manually signed them up for traditional merchant accounts behind the scenes. Some startups could be entirely manual at first. If you can find someone with a problem that needs solving and you can solve it manually, go ahead and do that for as long as you can, and then gradually automate the bottlenecks. It would be a little frightening to be solving users' problems in a way that wasn't yet automatic, but less frightening than the far more common case of having something automatic that doesn't yet solve anyone's problems. Big I should mention one sort of initial tactic that usually doesn't work: the Big Launch. I occasionally meet founders who seem to believe startups are projectiles rather than powered aircraft, and that they'll make it big if and only if they're launched with sufficient initial velocity. They want to launch simultaneously in 8 different publications, with embargoes. And on a <DATE_TIME>, of course, since they read somewhere that's the optimum day to launch something. It's easy to see how little launches matter. Think of some successful startups. How many of their launches do you remember? All you need from a launch is some initial core of users. How well you're doing <DATE_TIME> will depend more on how happy you made those users than how many there were of them. [ 10 ] So why do founders think launches matter? A combination of solipsism and laziness. They think what they're building is so great that everyone who hears about it will immediately sign up. Plus it would be so much less work if you could get users merely by broadcasting your existence, rather than recruiting them one at a time. But even if what you're building really is great, getting users will always be a gradual process - partly because great things are usually also novel, but mainly because users have other things to think about. Partnerships too usually don't work. They don't work for startups in general, but they especially don't work as a way to get growth started. It's a common mistake among inexperienced founders to believe that a partnership with a big company will be their big break. <DATE_TIME> they're all saying the same thing: that was way more work than we expected, and we ended up getting practically nothing out of it. [ 11 ] It's not enough just to do something extraordinary initially. You have to make an extraordinary effort initially. Any strategy that omits the effort - whether it's expecting a big launch to get you users, or a big partner - is ipso facto suspect. Vector The need to do something unscalably laborious to get started is so nearly universal that it might be a good idea to stop thinking of startup ideas as scalars. Instead we should try thinking of them as pairs of what you're going to build, plus the unscalable thing(s) you're going to do initially to get the company going. It could be interesting to start viewing startup ideas this way, because now that there are two components you can try to be imaginative about the second as well as the first. But in most cases the second component will be what it usually is - recruit users manually and give them an overwhelmingly good experience - and the main benefit of treating startups as vectors will be to remind founders they need to work hard in two dimensions. [ 12 ] In the best case, both components of the vector contribute to your company's DNA: the unscalable things you have to do to get started are not merely a necessary evil, but change the company permanently for the better. If you have to be aggressive about user acquisition when you're small, you'll probably still be aggressive when you're big. If you have to manufacture your own hardware, or use your software on users's behalf, you'll learn things you couldn't have learned otherwise. And most importantly, if you have to work hard to delight users when you only have a handful of them, you'll keep doing it when you have a lot. Notes [ 1 ] Actually Emerson never mentioned mousetraps specifically. He wrote "If a man has good corn or wood, or boards, or pigs, to sell, or can make better chairs or knives, crucibles or church organs, than anybody else, you will find a broad hard-beaten road to his house, though it be in the woods." [ 2 ] Thanks to <PERSON> for suggesting I make this explicit. And no, you can't avoid doing sales by hiring someone to do it for you. You have to do sales yourself initially. Later you can hire a real salesperson to replace you. [ 3 ] The reason this works is that as you get bigger, your size helps you grow. <PERSON> wrote "At some point, there was a very noticeable change in how <PERSON> felt. It tipped from being this boulder we had to push to being a train car that in fact had its own momentum." [ 4 ] One of the more subtle ways in which YC can help founders is by calibrating their ambitions, because we know exactly how a lot of successful startups looked when they were just getting started. [ 5 ] If you're building something for which you can't easily get a small set of users to observe - e.g. enterprise software - and in a domain where you have no connections, you'll have to rely on cold calls and introductions. But should you even be working on such an idea? [ 6 ] <PERSON> pointed out an interesting trap founders fall into in the beginning. They want so much to seem big that they imitate even the flaws of big companies, like indifference to individual users. This seems to them more "professional." Actually it's better to embrace the fact that you're small and use whatever advantages that brings. [ 7 ] Your user model almost couldn't be perfectly accurate, because users' needs often change in response to what you build for them. Build them a microcomputer, and suddenly they need to run spreadsheets on it, because the arrival of your new microcomputer causes someone to invent the spreadsheet. [ 8 ] If you have to choose between the subset that will sign up quickest and those that will pay the most, it's usually best to pick the former, because those are probably the early adopters. They'll have a better influence on your product, and they won't make you expend as much effort on sales. And though they have less money, you don't need that much to maintain your target growth rate early on. [ 9 ] Yes, I can imagine cases where you could end up making something that was really only useful for one user. But those are usually obvious, even to inexperienced founders. So if it's not obvious you'd be making something for a market of one, don't worry about that danger. [ 10 ] There may even be an inverse correlation between launch magnitude and success. The only launches I remember are famous flops like the Segway and Google Wave. Wave is a particularly alarming example, because I think it was actually a great idea that was killed partly by its overdone launch. [ 11 ] Google grew big on the back of Yahoo, but that wasn't a partnership. Yahoo was their customer. [ 12 ] It will also remind founders that an idea where the second component is empty - an idea where there is nothing you can do to get going, e.g. because you have no way to find users to recruit manually - is probably a bad idea, at least for those founders. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this. <NRP> Translation Russian Translation French Translation Arabic Translation Italian Translation Korean Translation
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The Hardware Renaissance Want to start a startup? Get funded by Y Combinator . <DATE_TIME> One advantage of Y Combinator's early, broad focus is that we see trends before most other people. And one of the most conspicuous trends in the last batch was the large number of hardware startups. Out of 84 companies, 7 were making hardware. On the whole they've done better than the companies that weren't. They've faced resistance from investors of course. Investors have a deep-seated bias against hardware. But investors' opinions are a trailing indicator. The best founders are better at seeing the future than the best investors, because the best founders are making it. There is no one single force driving this trend. Hardware does well on crowdfunding sites. The spread of tablets makes it possible to build new things controlled by and even incorporating them. Electric motors have improved. Wireless connectivity of various types can now be taken for granted. It's getting more straightforward to get things manufactured. Arduinos, 3D printing, laser cutters, and more accessible CNC milling are making hardware easier to prototype. Retailers are less of a bottleneck as customers increasingly buy online. One question I can answer is why hardware is suddenly cool. It always was cool. Physical things are great. They just haven't been as great a way to start a rapidly growing business as software. But that rule may not be permanent. It's not even that old; it only dates from <DATE_TIME>. Maybe the advantage of software will turn out to have been temporary. Hackers love to build hardware, and customers love to buy it. So if the ease of shipping hardware even approached the ease of shipping software, we'd see a lot more hardware startups. It wouldn't be the first time something was a bad idea till it wasn't. And it wouldn't be the first time investors learned that lesson from founders. So if you want to work on hardware, don't be deterred from doing it because you worry investors will discriminate against you. And in particular, don't be deterred from applying to Y Combinator with a hardware idea, because we're especially interested in hardware startups. We know there's room for the next <PERSON> . But there's almost certainly also room for the first . Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, Harj Taggar, and <PERSON> for reading drafts of this. A Hardware Renaissance while Software Eats the World?
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Startup = Growth Want to start a startup? Get funded by Y Combinator . <DATE_TIME> A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth. If you want to start one it's important to understand that. Startups are so hard that you can't be pointed off to the side and hope to succeed. You have to know that growth is what you're after. The good news is, if you get growth, everything else tends to fall into place. Which means you can use growth like a compass to make almost every decision you face. Redwoods Let's start with a distinction that should be obvious but is often overlooked: not every newly founded company is a startup. Millions of companies are started <DATE_TIME> in the <LOCATION>. Only a tiny fraction are startups. Most are service businesses - restaurants, barbershops, plumbers, and so on. These are not startups, except in a few unusual cases. A barbershop isn't designed to grow fast. Whereas a search engine, for example, is. When I say startups are designed to grow fast, I mean it in two senses. Partly I mean designed in the sense of intended, because most startups fail. But I also mean startups are different by nature, in the same way a redwood seedling has a different destiny from a bean sprout. That difference is why there's a distinct word, "startup," for companies designed to grow fast. If all companies were essentially similar, but some through luck or the efforts of their founders ended up growing very fast, we wouldn't need a separate word. We could just talk about super-successful companies and less successful ones. But in fact startups do have a different sort of DNA from other businesses. Google is not just a barbershop whose founders were unusually lucky and hard-working. Google was different from the beginning. To grow rapidly, you need to make something you can sell to a big market. That's the difference between Google and a barbershop. A barbershop doesn't scale. For a company to grow really big, it must (a) make something lots of people want, and (b) reach and serve all those people. Barbershops are doing fine in the (a) department. Almost everyone needs their hair cut. The problem for a barbershop, as for any retail establishment, is (b). A barbershop serves customers in person, and few will travel far for a haircut. And even if they did, the barbershop couldn't accomodate them. [ 1 ] Writing software is a great way to solve (b), but you can still end up constrained in (a). If you write software to teach <NRP> to <NRP> speakers, you'll be able to reach most of the people who want it, but there won't be many of them. If you make software to teach English to <NRP> speakers, however, you're in startup territory. Most businesses are tightly constrained in (a) or (b). The distinctive feature of successful startups is that they're not. Ideas It might seem that it would always be better to start a startup than an ordinary business. If you're going to start a company, why not start the type with the most potential? The catch is that this is a (fairly) efficient market. If you write software to teach <NRP> to <NRP>, you won't have much competition. If you write software to teach English to <NRP> speakers, you'll face ferocious competition, precisely because that's such a larger prize. [ 2 ] The constraints that limit ordinary companies also protect them. That's the tradeoff. If you start a barbershop, you only have to compete with other local barbers. If you start a search engine you have to compete with the whole world. The most important thing that the constraints on a normal business protect it from is not competition, however, but the difficulty of coming up with new ideas. If you open a bar in a particular neighborhood, as well as limiting your potential and protecting you from competitors, that geographic constraint also helps define your company. Bar + neighborhood is a sufficient idea for a small business. Similarly for companies constrained in (a). Your niche both protects and defines you. Whereas if you want to start a startup, you're probably going to have to think of something fairly novel. A startup has to make something it can deliver to a large market, and ideas of that type are so valuable that all the obvious ones are already taken. That space of ideas has been so thoroughly picked over that a startup generally has to work on something everyone else has overlooked. I was going to write that one has to make a conscious effort to find ideas everyone else has overlooked. But that's not how most startups get started. Usually successful startups happen because the founders are sufficiently different from other people that ideas few others can see seem obvious to them. Perhaps later they step back and notice they've found an idea in everyone else's blind spot, and from that point make a deliberate effort to stay there. [ 3 ] But at the moment when successful startups get started, much of the innovation is unconscious. What's different about successful founders is that they can see different problems. It's a particularly good combination both to be good at technology and to face problems that can be solved by it, because technology changes so rapidly that formerly bad ideas often become good without anyone noticing. <PERSON> problem was that he wanted his own computer. That was an unusual problem to have in <DATE_TIME>. But technological change was about to make it a much more common one. Because he not only wanted a computer but knew how to build them, <PERSON> was able to make himself one. And the problem he solved for himself became one that Apple solved for millions of people in <DATE_TIME>. But by the time it was obvious to ordinary people that this was a big market, Apple was already established. Google has similar origins. <PERSON> and <PERSON> wanted to search the web. But unlike most people they had the technical expertise both to notice that existing search engines were not as good as they could be, and to know how to improve them. Over <DATE_TIME> their problem became everyone's problem, as the web grew to a size where you didn't have to be a picky search expert to notice the old algorithms weren't good enough. But as happened with Apple, by the time everyone else realized how important search was, Google was entrenched. That's one connection between startup ideas and technology. Rapid change in one area uncovers big, soluble problems in other areas. Sometimes the changes are advances, and what they change is solubility. That was the kind of change that yielded Apple; advances in chip technology finally let <PERSON> design a computer he could afford. But in Google's case the most important change was the growth of the web. What changed there was not solubility but bigness. The other connection between startups and technology is that startups create new ways of doing things, and new ways of doing things are, in the broader sense of the word, new technology. When a startup both begins with an idea exposed by technological change and makes a product consisting of technology in the narrower sense (what used to be called "high technology"), it's easy to conflate the two. But the two connections are distinct and in principle one could start a startup that was neither driven by technological change, nor whose product consisted of technology except in the broader sense. [ 4 ] Rate How fast does a company have to grow to be considered a startup? There's no precise answer to that. "Startup" is a pole, not a threshold. Starting one is at first no more than a declaration of one's ambitions. You're committing not just to starting a company, but to starting a fast growing one, and you're thus committing to search for one of the rare ideas of that type. But at first you have no more than commitment. Starting a startup is like being an actor in that respect. "Actor" too is a pole rather than a threshold. At the beginning of his career, an actor is a waiter who goes to auditions. Getting work makes him a successful actor, but he doesn't only become an actor when he's successful. So the real question is not what growth rate makes a company a startup, but what growth rate successful startups tend to have. For founders that's more than a theoretical question, because it's equivalent to asking if they're on the right path. The growth of a successful startup usually has three phases: There's an initial period of slow or no growth while the startup tries to figure out what it's doing. As the startup figures out how to make something lots of people want and how to reach those people, there's a period of rapid growth. Eventually a successful startup will grow into a big company. Growth will slow, partly due to internal limits and partly because the company is starting to bump up against the limits of the markets it serves. [ 5 ] Together these three phases produce an S-curve. The phase whose growth defines the startup is the second one, the ascent. Its length and slope determine how big the company will be. The slope is the company's growth rate. If there's one number every founder should always know, it's the company's growth rate. That's the measure of a startup. If you don't know that number, you don't even know if you're doing well or badly. When I first meet founders and ask what their growth rate is, sometimes they tell me "we get about a hundred new customers <DATE_TIME>." That's not a rate. What matters is not the absolute number of new customers, but the ratio of new customers to existing ones. If you're really getting a constant number of new customers <DATE_TIME>, you're in trouble, because that means your growth rate is decreasing. During Y Combinator we measure growth rate per week, partly because there is so little time before Demo Day, and partly because startups early on need frequent feedback from their users to tweak what they're doing. [ 6 ] 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. That's a reasonable proxy for revenue growth because whenever the startup does start trying to make money, their revenues will probably be a constant multiple of active users. [ 7 ] Compass 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 <DATE_TIME>. 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. Programmers will recognize what we're doing here. We're turning starting a startup into an optimization problem. And anyone who has tried optimizing code knows how wonderfully effective that sort of narrow focus can be. Optimizing code means taking an existing program and changing it to use less of something, usually time or memory. You don't have to think about what the program should do, just make it faster. For most programmers this is very satisfying work. The narrow focus makes it a sort of puzzle, and you're generally surprised how fast you can solve it. Focusing on hitting a growth rate reduces the otherwise bewilderingly multifarious problem of starting a startup to a single problem. You can use that target growth rate to make all your decisions for you; anything that gets you the growth you need is ipso facto right. Should you spend <DATE_TIME> at a conference? Should you hire another programmer? Should you focus more on marketing? Should you spend time courting some big customer? Should you add x feature? Whatever gets you your target growth rate. [ 8 ] Judging yourself by <DATE_TIME> growth doesn't mean you can look no more than a week ahead. Once you experience the pain of missing your target <DATE_TIME> (it was the only thing that mattered, and you failed at it), you become interested in anything that could spare you such pain in the future. So you'll be willing for example to hire another programmer, who won't contribute to this <DATE_TIME>'s growth but perhaps in <DATE_TIME> will have implemented some new feature that will get you more users. But only if (a) the distraction of hiring someone won't make you miss your numbers in the short term, and (b) you're sufficiently worried about whether you can keep hitting your numbers without hiring someone new. It's not that you don't think about the future, just that you think about it no more than necessary. In theory this sort of hill-climbing could get a startup into trouble. They could end up on a local maximum. But in practice that never happens. Having to hit a growth number every week forces founders to act, and acting versus not acting is the high bit of succeeding. Nine times out of ten, sitting around strategizing is just a form of procrastination. Whereas founders' intuitions about which hill to climb are usually better than they realize. Plus the maxima in the space of startup ideas are not spiky and isolated. Most fairly good ideas are adjacent to even better ones. The fascinating thing about optimizing for growth is that it can actually discover startup ideas. You can use the need for growth as a form of evolutionary pressure. If you start out with some initial plan and modify it as necessary to keep hitting, say, 10% <DATE_TIME> growth, you may end up with a quite different company than you meant to start. But anything that grows consistently at 10% a week is almost certainly a better idea than you started with. There's a parallel here to small businesses. Just as the constraint of being located in a particular neighborhood helps define a bar, the constraint of growing at a certain rate can help define a startup. You'll generally do best to follow that constraint wherever it leads rather than being influenced by some initial vision, just as a scientist is better off following the truth wherever it leads rather than being influenced by what he wishes were the case. When <PERSON> said that the imagination of nature was greater than the imagination of man, he meant that if you just keep following the truth you'll discover cooler things than you could ever have made up. For startups, growth is a constraint much like truth. Every successful startup is at least partly a product of the imagination of growth. [ 9 ] Value It's hard to find something that grows consistently at several percent <DATE_TIME>, but if you do you may have found something surprisingly valuable. If we project forward we see why. <DATE_TIME> yearly 1% 1.7x 2% 2.8x 5% 12.6x 7% 33.7x 10% 142.0x A company that grows at 1% a week will grow 1.7x a year, whereas a company that grows at 5% a week will grow <DATE_TIME>. A company making $1000 a month (a typical number early in YC) and growing at 1% a week will <DATE_TIME> be making $7900 a month, which is less than a good programmer makes in salary in <LOCATION>. A startup that grows at 5% a week will in <DATE_TIME> be making $25 million a month. [ 10 ] Our ancestors must rarely have encountered cases of exponential growth, because our intuitions are no guide here. What happens to fast growing startups tends to surprise even the founders. Small variations in growth rate produce qualitatively different outcomes. That's why there's a separate word for startups, and why startups do things that ordinary companies don't, like raising money and getting acquired. And, strangely enough, it's also why they fail so frequently. Considering how valuable a successful startup can become, anyone familiar with the concept of expected value would be surprised if the failure rate weren't high. If a successful startup could make a founder $100 million, then even if the chance of succeeding were only 1%, the expected value of starting one would be $1 million. And the probability of a group of sufficiently smart and determined founders succeeding on that scale might be significantly over 1%. For the right people - e.g. the young <PERSON> - the probability might be 20% or even 50%. So it's not surprising that so many want to take a shot at it. In an efficient market, the number of failed startups should be proportionate to the size of the successes. And since the latter is huge the former should be too. [ 11 ] What this means is that at any given time, the great majority of startups will be working on something that's never going to go anywhere, and yet glorifying their doomed efforts with the grandiose title of "startup." This doesn't bother me. It's the same with other high-beta vocations, like being an actor or a novelist. I've long since gotten used to it. But it seems to bother a lot of people, particularly those who've started ordinary businesses. Many are annoyed that these so-called startups get all the attention, when hardly any of them will amount to anything. If they stepped back and looked at the whole picture they might be less indignant. The mistake they're making is that by basing their opinions on anecdotal evidence they're implicitly judging by the median rather than the average. If you judge by the median startup, the whole concept of a startup seems like a fraud. You have to invent a bubble to explain why founders want to start them or investors want to fund them. But it's a mistake to use the median in a domain with so much variation. If you look at the average outcome rather than the median, you can understand why investors like them, and why, if they aren't median people, it's a rational choice for founders to start them. Deals Why do investors like startups so much? Why are they so hot to invest in photo-sharing apps, rather than solid money-making businesses? Not only for the obvious reason. The test of any investment is the ratio of return to risk. Startups pass that test because although they're appallingly risky, the returns when they do succeed are so high. But that's not the only reason investors like startups. An ordinary slower-growing business might have just as good a ratio of return to risk, if both were lower. So why are VCs interested only in high-growth companies? The reason is that they get paid by getting their capital back, ideally after the startup IPOs, or failing that when it's acquired. The other way to get returns from an investment is in the form of dividends. Why isn't there a parallel VC industry that invests in ordinary companies in return for a percentage of their profits? Because it's too easy for people who control a private company to funnel its revenues to themselves (e.g. by buying overpriced components from a supplier they control) while making it look like the company is making little profit. Anyone who invested in private companies in return for dividends would have to pay close attention to their books. The reason VCs like to invest in startups is not simply the returns, but also because such investments are so easy to oversee. The founders can't enrich themselves without also enriching the investors. [ 12 ] Why do founders want to take the VCs' money? Growth, again. The constraint between good ideas and growth operates in both directions. It's not merely that you need a scalable idea to grow. If you have such an idea and don't grow fast enough, competitors will. Growing too slowly is particularly dangerous in a business with network effects, which the best startups usually have to some degree. Almost every company needs some amount of funding to get started. But startups often raise money even when they are or could be profitable. It might seem foolish to sell stock in a profitable company for less than you think it will later be worth, but it's no more foolish than buying insurance. Fundamentally that's how the most successful startups view fundraising. They could grow the company on its own revenues, but the extra money and help supplied by VCs will let them grow even faster. Raising money lets you choose your growth rate. Money to grow faster is always at the command of the most successful startups, because the VCs need them more than they need the VCs. A profitable startup could if it wanted just grow on its own revenues. Growing slower might be slightly dangerous, but chances are it wouldn't kill them. Whereas VCs need to invest in startups, and in particular the most successful startups, or they'll be out of business. Which means that any sufficiently promising startup will be offered money on terms they'd be crazy to refuse. And yet because of the scale of the successes in the startup business, VCs can still make money from such investments. You'd have to be crazy to believe your company was going to become as valuable as a high growth rate can make it, but some do. Pretty much every successful startup will get acquisition offers too. Why? What is it about startups that makes other companies want to buy them? [ 13 ] Fundamentally the same thing that makes everyone else want the stock of successful startups: a rapidly growing company is valuable. It's a good thing eBay bought Paypal, for example, because Paypal is now responsible for 43% of their sales and probably more of their growth. But acquirers have an additional reason to want startups. A rapidly growing company is not merely valuable, but dangerous. If it keeps expanding, it might expand into the acquirer's own territory. Most product acquisitions have some component of fear. Even if an acquirer isn't threatened by the startup itself, they might be alarmed at the thought of what a competitor could do with it. And because startups are in this sense doubly valuable to acquirers, acquirers will often pay more than an ordinary investor would. [ 14 ] Understand The combination of founders, investors, and acquirers forms a natural ecosystem. It works so well that those who don't understand it are driven to invent conspiracy theories to explain how neatly things sometimes turn out. Just as our ancestors did to explain the apparently too neat workings of the natural world. But there is no secret cabal making it all work. If you start from the mistaken assumption that Instagram was worthless, you have to invent a secret boss to force <PERSON> to buy it. To anyone who knows <PERSON>, that is the reductio ad absurdum of the initial assumption. The reason he bought Instagram was that it was valuable and dangerous, and what made it so was growth. If you want to understand startups, understand growth. Growth drives everything in this world. Growth is why startups usually work on technology - because ideas for fast growing companies are so rare that the best way to find new ones is to discover those recently made viable by change, and technology is the best source of rapid change. Growth is why it's a rational choice economically for so many founders to try starting a startup: growth makes the successful companies so valuable that the expected value is high even though the risk is too. Growth is why VCs want to invest in startups: not just because the returns are high but also because generating returns from capital gains is easier to manage than generating returns from dividends. Growth explains why the most successful startups take VC money even if they don't need to: it lets them choose their growth rate. And growth explains why successful startups almost invariably get acquisition offers. To acquirers a fast-growing company is not merely valuable but dangerous too. It's not just that if you want to succeed in some domain, you have to understand the forces driving it. Understanding growth is what starting a startup consists of. What you're really doing (and to the dismay of some observers, all you're really doing) when you start a startup is committing to solve a harder type of problem than ordinary businesses do. You're committing to search for one of the rare ideas that generates rapid growth. Because these ideas are so valuable, finding one is hard. The startup is the embodiment of your discoveries so far. Starting a startup is thus very much like deciding to be a research scientist: you're not committing to solve any specific problem; you don't know for sure which problems are soluble; but you're committing to try to discover something no one knew before. A startup founder is in effect an economic research scientist. Most don't discover anything that remarkable, but some discover relativity. Notes [ 1 ] Strictly speaking it's not lots of customers you need but a big market, meaning a high product of number of customers times how much they'll pay. But it's dangerous to have too few customers even if they pay a lot, or the power that individual customers have over you could turn you into a de facto consulting firm. So whatever market you're in, you'll usually do best to err on the side of making the broadest type of product for it. [ 2 ] <DATE_TIME> at Startup School <PERSON> encouraged programmers who wanted to start businesses to use a restaurant as a model. What he meant, I believe, is that it's fine to start software companies constrained in (a) in the same way a restaurant is constrained in (b). I agree. Most people should not try to start startups. [ 3 ] That sort of stepping back is one of the things we focus on at Y Combinator. It's common for founders to have discovered something intuitively without understanding all its implications. That's probably true of the biggest discoveries in any field. [ 4 ] I got it wrong in "How to Make Wealth" when I said that a startup was a small company that takes on a hard technical problem. That is the most common recipe but not the only one. [ 5 ] In principle companies aren't limited by the size of the markets they serve, because they could just expand into new markets. But there seem to be limits on the ability of big companies to do that. Which means the slowdown that comes from bumping up against the limits of one's markets is ultimately just another way in which internal limits are expressed. It may be that some of these limits could be overcome by changing the shape of the organization - specifically by sharding it. [ 6 ] This is, obviously, only for startups that have already launched or can launch during YC. A startup building a new database will probably not do that. On the other hand, launching something small and then using growth rate as evolutionary pressure is such a valuable technique that any company that could start this way probably should. [ 7 ] If the startup is taking the Facebook/Twitter route and building something they hope will be very popular but from which they don't yet have a definite plan to make money, the growth rate has to be higher, even though it's a proxy for revenue growth, because such companies need huge numbers of users to succeed at all. Beware too of the edge case where something spreads rapidly but the churn is high as well, so that you have good net growth till you run through all the potential users, at which point it suddenly stops. [ 8 ] Within YC when we say it's ipso facto right to do whatever gets you growth, it's implicit that this excludes trickery like buying users for more than their lifetime value, counting users as active when they're really not, bleeding out invites at a regularly increasing rate to manufacture a perfect growth curve, etc. Even if you were able to fool investors with such tricks, you'd ultimately be hurting yourself, because you're throwing off your own compass. [ 9 ] Which is why it's such a dangerous mistake to believe that successful startups are simply the embodiment of some brilliant initial idea. What you're looking for initially is not so much a great idea as an idea that could evolve into a great one. The danger is that promising ideas are not merely blurry versions of great ones. They're often different in kind, because the early adopters you evolve the idea upon have different needs from the rest of the market. For example, the idea that evolves into Facebook isn't merely a subset of Facebook; the idea that evolves into Facebook is a site for Harvard undergrads. [ 10 ] What if a company grew at <DATE_TIME> for a really long time? Could it not grow just as big as any successful startup? In principle yes, of course. If our hypothetical company making $1000 a month grew at 1% a week for <DATE_TIME>, it would grow as big as a company growing at 5% a week for <DATE_TIME>. But while such trajectories may be common in, say, real estate development, you don't see them much in the technology business. In technology, companies that grow slowly tend not to grow as big. [ 11 ] Any expected value calculation varies from person to person depending on their utility function for money. I.e. the first million is worth more to most people than subsequent millions. How much more depends on the person. For founders who are younger or more ambitious the utility function is flatter. Which is probably part of the reason the founders of the most successful startups of all tend to be on the young side. [ 12 ] More precisely, this is the case in the biggest winners, which is where all the returns come from. A startup founder could pull the same trick of enriching himself at the company's expense by selling them overpriced components. But it wouldn't be worth it for the founders of Google to do that. Only founders of failing startups would even be tempted, but those are writeoffs from the VCs' point of view anyway. [ 13 ] Acquisitions fall into two categories: those where the acquirer wants the business, and those where the acquirer just wants the employees. The latter type is sometimes called an HR acquisition. Though nominally acquisitions and sometimes on a scale that has a significant effect on the expected value calculation for potential founders, HR acquisitions are viewed by acquirers as more akin to hiring bonuses. [ 14 ] I once explained this to some founders who had recently arrived from <LOCATION>. They found it novel that if you threatened a company they'd pay a premium for you. "In <LOCATION> they just kill you," they said, and they were only partly joking. Economically, the fact that established companies can't simply eliminate new competitors may be one of the most valuable aspects of the rule of law. And so to the extent we see incumbents suppressing competitors via regulations or patent suits, we should worry, not because it's a departure from the rule of law per se but from what the rule of law is aiming at. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and Harj Taggar for reading drafts of this. Arabic Translation Estonian Translation Portuguese Translation Italian Translation
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The Top of My Todo List <DATE_TIME> A palliative care nurse called Bronnie Ware made a list of the biggest regrets of the dying . Her list seems plausible. I could see myself - can see myself - making at least 4 of these 5 mistakes. If you had to compress them into a single piece of advice, it might be: don't be a cog. The 5 regrets paint a portrait of post-industrial man, who shrinks himself into a shape that fits his circumstances, then turns dutifully till he stops. The alarming thing is, the mistakes that produce these regrets are all errors of omission. You forget your dreams, ignore your family, suppress your feelings, neglect your friends, and forget to be happy. Errors of omission are a particularly dangerous type of mistake, because you make them by default. I would like to avoid making these mistakes. But how do you avoid mistakes you make by default? Ideally you transform your life so it has other defaults. But it may not be possible to do that completely. As long as these mistakes happen by default, you probably have to be reminded not to make them. So I inverted the 5 regrets, yielding a list of 5 commands Don't ignore your dreams; don't work too much; say what you think; cultivate friendships; be happy. which I then put at the top of the file I use as a todo list. <NRP> Translation
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How Y Combinator Started <DATE_TIME> Y Combinator's 7th birthday was <DATE_TIME>. As usual we were so busy we didn't notice till <DATE_TIME> after. I don't think we've ever managed to remember our birthday on our birthday. On <DATE_TIME>, <PERSON> and I were walking home from dinner in <LOCATION>. <PERSON> was working at an investment bank at the time, but she didn't like it much, so she had interviewed for a job as director of marketing at a Boston VC fund. The VC fund was doing what now seems a comically familiar thing for a VC fund to do: taking a long time to make up their mind. Meanwhile I had been telling <PERSON> all the things they should change about the VC business essentially the ideas now underlying Y Combinator: investors should be making more, smaller investments, they should be funding hackers instead of suits, they should be willing to fund younger founders, etc. At the time I had been thinking about doing some angel investing. I had just given a talk to the undergraduate computer club at Harvard about how to start a startup , and it hit me afterward that although I had always meant to do angel investing, <DATE_TIME> had now passed since I got enough money to do it, and I still hadn't started. I had also been thinking about ways to work with <PERSON> and <PERSON> again. <DATE_TIME> before I had sent them an email trying to figure out what we could do together. <LOCATION> and my house the idea gelled. We'd start our own investment firm and Jessica could work for that instead. As we turned onto <LOCATION> we decided to do it. I agreed to put $100k into the new fund and Jessica agreed to quit her job to work for it. Over <DATE_TIME> I recruited <PERSON> and <PERSON>, who put in another $50k each. So YC started with $200k. <PERSON> was so happy to be able to quit her job and start her own company that I took her picture when we got home. The company wasn't called Y Combinator yet. At first we called it Cambridge Seed. But that name never saw the light of day, because by the time we announced it <DATE_TIME>, we'd changed the name to Y Combinator. We realized early on that what we were doing could be national in scope and we didn't want a name that tied us to one place. Initially we only had part of the idea. We were going to do seed funding with standardized terms. Before YC, seed funding was very haphazard. You'd get that first $10k from your friend's rich uncle. The deal terms were often a disaster; often neither the investor nor the founders nor the lawyer knew what the documents should look like. Facebook's early history as a <LOCATION> LLC shows how random things could be in <DATE_TIME>. We were going to be something there had not been before: a standard source of seed funding. We modelled YC on the seed funding we ourselves had taken when we started <PERSON>. We started <PERSON> with $10k we got from our friend <PERSON> , the husband of <PERSON>, whose painting class I took as a grad student at Harvard. <PERSON> knew about business, but you would not describe him as a suit. Among other things he'd been president of the National Lampoon . He was also a lawyer, and got all our paperwork set up properly. In return for $10k, getting us set up as a company, teaching us what business was about, and remaining calm in times of crisis, <PERSON> got 10% of <PERSON>. I remember thinking once what a good deal <PERSON> got. And then a second later I realized that without <PERSON>, <PERSON> would never have made it. So even though it was a good deal for him, it was a good deal for us too. That's why I knew there was room for something like Y Combinator. Initially we didn't have what turned out to be the most important idea: funding startups synchronously, instead of asynchronously as it had always been done before. Or rather we had the idea, but we didn't realize its significance. We decided very early that the first thing we'd do would be to fund a bunch of startups over <DATE_TIME>. But we didn't realize initially that this would be the way we'd do all our investing. The reason we began by funding a bunch of startups at once was not that we thought it would be a better way to fund startups, but simply because we wanted to learn how to be angel investors, and a <DATE_TIME> program for undergrads seemed the fastest way to do it. No one takes <DATE_TIME> jobs that seriously. The opportunity cost for a bunch of undergrads to spend a summer working on startups was low enough that we wouldn't feel guilty encouraging them to do it. We knew students would already be making plans for <DATE_TIME>, so we did what we're always telling startups to do: we launched fast. Here are the initial announcement and description of what was at the time called the Summer Founders Program. We got lucky in that the length and structure of a <DATE_TIME> program turns out to be perfect for what we do. The structure of the YC cycle is still almost identical to what it was that first summer. We also got lucky in who the first batch of founders were. We never expected to make any money from that first batch. We thought of the money we were investing as a combination of an educational expense and a charitable donation. But the founders in the first batch turned out to be surprisingly good. And great people too. We're still friends with a lot of them <DATE_TIME>. It's hard for people to realize now how inconsequential YC seemed at the time. I can't blame people who didn't take us seriously, because we ourselves didn't take <DATE_TIME> program seriously in the very beginning. But as <DATE_TIME> progressed we were increasingly impressed by how well the startups were doing. Other people started to be impressed too. <PERSON> and I invented a term, "the Y Combinator effect," to describe the moment when the realization hit someone that YC was not totally lame. When people came to YC to speak at the dinners that first summer, they came in the spirit of someone coming to address a <LOCATION> troop. By the time they left the building they were all saying some variant of "Wow, these companies might actually succeed." Now YC is well enough known that people are no longer surprised when the companies we fund are legit, but it took a while for reputation to catch up with reality. That's one of the reasons we especially like funding ideas that might be dismissed as "toys" because YC itself was dismissed as one initially. When we saw how well it worked to fund companies synchronously, we decided we'd keep doing that. We'd fund two batches of startups <DATE_TIME>. We funded the second batch in <LOCATION>. That was a last minute decision. In retrospect I think what pushed me over the edge was going to Foo Camp that fall. The density of startup people in <LOCATION> was so much greater than in <LOCATION>, and the weather was so nice. I remembered that from living there in <DATE_TIME>. Plus I didn't want someone else to copy us and describe it as the Y Combinator of <LOCATION>. I wanted YC to be the Y Combinator of <LOCATION>. So doing the <DATE_TIME> batch in <LOCATION> seemed like one of those rare cases where the self-indulgent choice and the ambitious one were the same. If we'd had enough time to do what we wanted, Y Combinator would have been in <LOCATION>. That was our favorite part of <LOCATION>. But we didn't have time to get a building in <LOCATION>. We didn't have time to get our own building anywhere. The only way to get enough space in time was to convince <PERSON> to let us take over part of his (as it then seemed) giant building in <LOCATION>. Yet again we lucked out, because <LOCATION> turned out to be the ideal place to put something like YC. But even then we barely made it. The first dinner in <LOCATION>, we had to warn all the founders not to touch the walls, because the paint was still wet.
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Defining Property <DATE_TIME> As a child I read a book of stories about a famous judge in <DATE_TIME> <LOCATION> called <LOCATION>. One of the cases he decided was brought by the owner of a food shop. A poor student who could afford only rice was eating his rice while enjoying the delicious cooking smells coming from the food shop. The owner wanted the student to pay for the smells he was enjoying. The student was stealing his smells! This story often comes to mind when I hear the RIAA and MPAA accusing people of stealing music and movies. It sounds ridiculous to us to treat smells as property. But I can imagine scenarios in which one could charge for smells. Imagine we were living on a moon base where we had to buy air by the liter. I could imagine air suppliers adding scents at an extra charge. The reason it seems ridiculous to us to treat smells as property is that it wouldn't work to. It would work on a moon base, though. What counts as property depends on what works to treat as property. And that not only can change, but has changed. Humans may always (for some definition of human and always) have treated small items carried on one's person as property. But hunter gatherers didn't treat land, for example, as property in the way we do. [ 1 ] The reason so many people think of property as having a single unchanging definition is that its definition changes very slowly. [ 2 ] But we are in the midst of such a change now. The record labels and movie studios used to distribute what they made like air shipped through tubes on a moon base. But with the arrival of networks, it's as if we've moved to a planet with a breathable atmosphere. Data moves like smells now. And through a combination of wishful thinking and short-term greed, the labels and studios have put themselves in the position of the food shop owner, accusing us all of stealing their smells. (The reason I say short-term greed is that the underlying problem with the labels and studios is that the people who run them are driven by bonuses rather than equity. If they were driven by equity they'd be looking for ways to take advantage of technological change instead of fighting it. But building new things takes too long. Their bonuses depend on this <DATE_TIME>'s revenues, and the best way to increase those is to extract more money from stuff they do already.) So what does this mean? Should people not be able to charge for content? There's not a single yes or no answer to that question. People should be able to charge for content when it works to charge for content. But by "works" I mean something more subtle than "when they can get away with it." I mean when people can charge for content without warping society in order to do it. After all, the companies selling smells on the moon base could continue to sell them on the <LOCATION>, if they lobbied successfully for laws requiring us all to continue to breathe through tubes down here too, even though we no longer needed to. The crazy legal measures that the labels and studios have been taking have a lot of that flavor. Newspapers and magazines are just as screwed, but they are at least declining gracefully. The RIAA and MPAA would make us breathe through tubes if they could. Ultimately it comes down to common sense. When you're abusing the legal system by trying to use mass lawsuits against randomly chosen people as a form of exemplary punishment, or lobbying for laws that would break the Internet if they passed, that's ipso facto evidence you're using a definition of property that doesn't work. This is where it's helpful to have working democracies and multiple sovereign countries. If the world had a single, autocratic government, the labels and studios could buy laws making the definition of property be whatever they wanted. But fortunately there are still some countries that are not copyright colonies of the <LOCATION>, and even in the <LOCATION>, politicians still seem to be afraid of actual voters, in sufficient numbers. [ 3 ] The people running the <LOCATION> may not like it when voters or other countries refuse to bend to their will, but ultimately it's in all our interest that there's not a single point of attack for people trying to warp the law to serve their own purposes. Private property is an extremely useful idea - arguably one of our greatest inventions. So far, each new definition of it has brought us increasing material wealth. [ 4 ] It seems reasonable to suppose the newest one will too. It would be a disaster if we all had to keep running an obsolete version just because a few powerful people were too lazy to upgrade. Notes [ 1 ] If you want to learn more about hunter gatherers I strongly recommend <PERSON> The Harmless People and The Old Way . [ 2 ] Change in the definition of property is driven mostly by technological progress, however, and since technological progress is accelerating, so presumably will the rate of change in the definition of property. Which means it's all the more important for societies to be able to respond gracefully to such changes, because they will come at an ever increasing rate. [ 3 ] As far as I know, the term "copyright colony" was first used by <PERSON> . [ 4 ] The state of technology isn't simply a function of the definition of property. They each constrain the other. But that being so, you can't mess with the definition of property without affecting (and probably harming) the state of technology. The history of the <LOCATION> offers a vivid illustration of that. Thanks to <PERSON> and <PERSON> for reading drafts of this. <NRP> Translation
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Schlep Blindness Want to start a startup? Get funded by Y Combinator . <DATE_TIME> There are great startup ideas lying around unexploited right under our noses. One reason we don't see them is a phenomenon I call schlep blindness . Schlep was originally a <NRP> word but has passed into general use in the <LOCATION>. It means a tedious, unpleasant task. No one likes schleps, but hackers especially dislike them. Most hackers who start startups wish they could do it by just writing some clever software, putting it on a server somewhere, and watching the money roll in-without ever having to talk to users, or negotiate with other companies, or deal with other people's broken code. Maybe that's possible, but I haven't seen it. One of the many things we do at Y Combinator is teach hackers about the inevitability of schleps. No, you can't start a startup by just writing code. I remember going through this realization myself. There was a point in <DATE_TIME> when I was still trying to convince myself I could start a company by just writing code. But I soon learned from experience that schleps are not merely inevitable, but pretty much what business consists of. A company is defined by the schleps it will undertake. And schleps should be dealt with the same way you'd deal with a cold swimming pool: just jump in. Which is not to say you should seek out unpleasant work per se, but that you should never shrink from it if it's on the path to something great. The most dangerous thing about our dislike of schleps is that much of it is unconscious. Your unconscious won't even let you see ideas that involve painful schleps. That's schlep blindness. The phenomenon isn't limited to startups. Most people don't consciously decide not to be in as good physical shape as <LOCATION> athletes, for example. Their unconscious mind decides for them, shrinking from the work involved. The most striking example I know of schlep blindness is Stripe , or rather Stripe's idea. For <DATE_TIME>, every hacker who'd ever had to process payments online knew how painful the experience was. Thousands of people must have known about this problem. And yet when they started startups, they decided to build recipe sites, or aggregators for local events. Why? Why work on problems few care much about and no one will pay for, when you could fix one of the most important components of the world's infrastructure? Because schlep blindness prevented people from even considering the idea of fixing payments. Probably no one who applied to Y Combinator to work on a recipe site began by asking "should we fix payments, or build a recipe site?" and chose the recipe site. Though the idea of fixing payments was right there in plain sight, they never saw it, because their unconscious mind shrank from the complications involved. You'd have to make deals with banks. How do you do that? Plus you're moving money, so you're going to have to deal with fraud, and people trying to break into your servers. Plus there are probably all sorts of regulations to comply with. It's a lot more intimidating to start a startup like this than a recipe site. That scariness makes ambitious ideas doubly valuable. In addition to their intrinsic value, they're like undervalued stocks in the sense that there's less demand for them among founders. If you pick an ambitious idea, you'll have less competition, because everyone else will have been frightened off by the challenges involved. (This is also true of starting a startup generally.) How do you overcome schlep blindness? Frankly, the most valuable antidote to schlep blindness is probably ignorance. Most successful founders would probably say that if they'd known when they were starting their company about the obstacles they'd have to overcome, they might never have started it. Maybe that's one reason the most successful startups of all so often have young founders. In practice the founders grow with the problems. But no one seems able to foresee that, not even older, more experienced founders. So the reason younger founders have an advantage is that they make two mistakes that cancel each other out. They don't know how much they can grow, but they also don't know how much they'll need to. Older founders only make the first mistake. Ignorance can't solve everything though. Some ideas so obviously entail alarming schleps that anyone can see them. How do you see ideas like that? The trick I recommend is to take yourself out of the picture. Instead of asking "what problem should I solve?" ask "what problem do I wish someone else would solve for me?" If someone who had to process payments before Stripe had tried asking that, <PERSON> would have been one of the first things they wished for. It's too late now to be Stripe, but there's plenty still broken in the world, if you know how to see it. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and Harj Taggar for reading drafts of this.
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Snapshot: <PERSON>, <DATE_TIME> before the Yahoo acquisition was announced in <DATE_TIME> I took a snapshot of <PERSON>'s site . I thought it might be interesting to look at <DATE_TIME>. The first thing one notices is is how tiny the pages are. Screens were a lot smaller in <DATE_TIME>. If I remember correctly, our frontpage used to just fit in the size window people typically used then. Browsers then (IE 6 was still <DATE_TIME> in the future) had few fonts and they weren't antialiased. If you wanted to make pages that looked good, you had to render display text as images. You may notice a certain similarity between the <PERSON> and Y Combinator logos. We did that as an inside joke when we started YC. Considering how basic a red circle is, it seemed surprising to me when we started <PERSON> how few other companies used one as their logo. A bit later I realized why . On the Company page you'll notice a mysterious individual called <PERSON>. <PERSON> (aka Rtm) was so publicity averse after the Worm that he didn't want his name on the site. I managed to get him to agree to a compromise: we could use his bio but not his name. He has since relaxed a bit on that point. <PERSON> graduated at about the same time the acquisition closed, so in the course of <DATE_TIME> he went from impecunious grad student to millionaire PhD. The culmination of my career as a writer of press releases was one celebrating his graduation , illustrated with a drawing I did of him during a meeting. (<PERSON> also appears as <PERSON> in our directory of web designers merchants could hire to build stores for them. We inserted him as a ringer in case some competitor tried to spam our web designers. We assumed his logo would deter any actual customers, but it did not.) Back in <DATE_TIME>, to get users you had to get mentioned in magazines and newspapers. There were not the same ways to get found online that there are <DATE_TIME>. So we used to pay a PR firm $16,000 a month to get us mentioned in the press. Fortunately reporters liked us . In our advice about getting traffic from search engines (I don't think the term SEO had been coined yet), we say there are only 7 that matter: Yahoo, AltaVista, Excite, WebCrawler, InfoSeek, <LOCATION>, and HotBot. Notice anything missing? Google was incorporated that <DATE_TIME>. We supported online transactions via a company called Cybercash , since if we lacked that feature we'd have gotten beaten up in product comparisons. But <PERSON> was so bad and most stores' order volumes were so low that it was better if merchants processed orders like phone orders. We had a page in our site trying to talk merchants out of doing real time authorizations . The whole site was organized like a funnel, directing people to the test drive . It was a novel thing to be able to try out software online. We put cgi-bin in our dynamic urls to fool competitors about how our software worked. We had some well known users . Needless to say, <PERSON>'s of <LOCATION> got the most traffic. We charged a flat fee of $300/month for big stores, so it was a little alarming to have users who got lots of traffic. I once calculated how much <PERSON>'s was costing us in bandwidth, and it was about $300/month. Since we hosted all the stores, which together were getting just over 10 million page views per month in <DATE_TIME>, we consumed what at the time seemed a lot of bandwidth. We had 2 T1s (3 Mb/sec) coming into our offices. In <DATE_TIME> there was no AWS. Even colocating servers seemed too risky, considering how often things went wrong with them. So we had our servers in our offices. Or more precisely, in <PERSON>'s office. In return for the unique privilege of sharing his office with no other humans, he had to share it with 6 shrieking tower servers. His office was nicknamed the Hot Tub on account of the heat they generated. <DATE_TIME> his stack of window air conditioners could keep up. For describing pages, we had a template language called RTML , which supposedly stood for something, but which in fact I named after Rtm. RTML was Common Lisp augmented by some macros and libraries, and concealed under a structure editor that made it look like it had syntax. Since we did continuous releases, our software didn't actually have versions. But in <DATE_TIME> the trade press expected versions, so we made them up. If we wanted to get lots of attention, we made the version number an integer . That "version 4.0" icon was generated by our own button generator, incidentally. The whole <PERSON> site was made with our software, even though it wasn't an online store, because we wanted to experience what our users did. At <DATE_TIME>, we released a general purpose shopping search engine called Shopfind . It was pretty advanced for the time. It had a programmable crawler that could crawl most of the different stores online and pick out the products.
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Why Startup Hubs Work Want to start a startup? Get funded by Y Combinator . <DATE_TIME> If you look at a list of <LOCATION> cities sorted by population, the number of successful startups per capita varies by orders of magnitude. Somehow it's as if most places were sprayed with startupicide. I wondered about this for <DATE_TIME>. I could see the average town was like a roach motel for startup ambitions: smart, ambitious people went in, but no startups came out. But I was never able to figure out exactly what happened inside the motel-exactly what was killing all the potential startups. [ 1 ] <DATE_TIME> I finally figured it out. I was framing the question wrong. The problem is not that most towns kill startups. It's that death is the default for startups, and most towns don't save them. Instead of thinking of most places as being sprayed with startupicide, it's more accurate to think of startups as all being poisoned, and a few places being sprayed with the antidote. Startups in other places are just doing what startups naturally do: fail. The real question is, what's saving startups in places like <LOCATION>? [ 2 ] Environment I think there are two components to the antidote: being in a place where startups are the cool thing to do, and chance meetings with people who can help you. And what drives them both is the number of startup people around you. The first component is particularly helpful in the first stage of a startup's life, when you go from merely having an interest in starting a company to actually doing it. It's quite a leap to start a startup. It's an unusual thing to do. But in <LOCATION> it seems normal. [ 3 ] In most places, if you start a startup, people treat you as if you're unemployed. People in the <LOCATION> aren't automatically impressed with you just because you're starting a company, but they pay attention. Anyone who's been here any amount of time knows not to default to skepticism, no matter how inexperienced you seem or how unpromising your idea sounds at first, because they've all seen inexperienced founders with unpromising sounding ideas who <DATE_TIME> were billionaires. Having people around you care about what you're doing is an extraordinarily powerful force. Even the most willful people are susceptible to it. <DATE_TIME> after we started Y Combinator I said something to a partner at a well known VC firm that gave him the (mistaken) impression I was considering starting another startup. He responded so eagerly that for about half a second I found myself considering doing it. In most other cities, the prospect of starting a startup just doesn't seem real. In the <LOCATION> it's not only real but fashionable. That no doubt causes a lot of people to start startups who shouldn't. But I think that's ok. Few people are suited to running a startup, and it's very hard to predict beforehand which are (as I know all too well from being in the business of trying to predict beforehand), so lots of people starting startups who shouldn't is probably the optimal state of affairs. As long as you're at a point in your life when you can bear the risk of failure, the best way to find out if you're suited to running a startup is to try it . Chance The second component of the antidote is chance meetings with people who can help you. This force works in both phases: both in the transition from the desire to start a startup to starting one, and the transition from starting a company to succeeding. The power of chance meetings is more variable than people around you caring about startups, which is like a sort of background radiation that affects everyone equally, but at its strongest it is far stronger. Chance meetings produce miracles to compensate for the disasters that characteristically befall startups. In the <LOCATION>, terrible things happen to startups all the time, just like they do to startups everywhere. The reason startups are more likely to make it here is that great things happen to them too. In the <LOCATION>, lightning has a sign bit. For example, you start a site for college students and you decide to move to the <LOCATION> for <DATE_TIME> to work on it. And then on a random suburban street in <LOCATION> you happen to run into <PERSON>, who understands the domain really well because he started a similar startup himself, and also knows all the investors. And moreover has advanced views, for <DATE_TIME>, on founders retaining control of their companies. You can't say precisely what the miracle will be, or even for sure that one will happen. The best one can say is: if you're in a startup hub, unexpected good things will probably happen to you, especially if you deserve them. I bet this is true even for startups we fund. Even with us working to make things happen for them on purpose rather than by accident, the frequency of helpful chance meetings in the <LOCATION> is so high that it's still a significant increment on what we can deliver. Chance meetings play a role like the role relaxation plays in having ideas. Most people have had the experience of working hard on some problem, not being able to solve it, giving up and going to bed, and then thinking of the answer in the shower in the morning. What makes the answer appear is letting your thoughts drift a bit-and thus drift off the wrong path you'd been pursuing <DATE_TIME> and onto the right one adjacent to it. Chance meetings let your acquaintance drift in the same way taking a shower lets your thoughts drift. The critical thing in both cases is that they drift just the right amount. The meeting between <PERSON> and <PERSON> was a good example. They let their acquaintance drift, but only a little; they were both meeting someone they had a lot in common with. For <PERSON> the most important component of the antidote was <PERSON>, and vice versa. The antidote is people . It's not the physical infrastructure of <LOCATION> that makes it work, or the weather, or anything like that. Those helped get it started, but now that the reaction is self-sustaining what drives it is the people. Many observers have noticed that one of the most distinctive things about startup hubs is the degree to which people help one another out, with no expectation of getting anything in return. I'm not sure why this is so. Perhaps it's because startups are less of a zero sum game than most types of business; they are rarely killed by competitors. Or perhaps it's because so many startup founders have backgrounds in the sciences, where collaboration is encouraged. A large part of YC's function is to accelerate that process. We're a sort of <LOCATION> within the <LOCATION>, where the density of people working on startups and their willingness to help one another are both artificially amplified. Numbers Both components of the antidote-an environment that encourages startups, and chance meetings with people who help you-are driven by the same underlying cause: the number of startup people around you. To make a startup hub, you need a lot of people interested in startups. There are three reasons. The first, obviously, is that if you don't have enough density, the chance meetings don't happen. [ 4 ] The second is that different startups need such different things, so you need a lot of people to supply each startup with what they need most. <PERSON> was exactly what Facebook needed in <DATE_TIME>. Another startup might have needed a database guy, or someone with connections in the movie business. This is one of the reasons we fund such a large number of companies, incidentally. The bigger the community, the greater the chance it will contain the person who has that one thing you need most. The third reason you need a lot of people to make a startup hub is that once you have enough people interested in the same problem, they start to set the social norms. And it is a particularly valuable thing when the atmosphere around you encourages you to do something that would otherwise seem too ambitious. In most places the atmosphere pulls you back toward the mean. I flew into <LOCATION> <DATE_TIME>. I notice this every time I fly over the <LOCATION>: somehow you can sense something is going on. Obviously you can sense prosperity in how well kept a place looks. But there are different kinds of prosperity. <LOCATION> doesn't look like <LOCATION>, or <LOCATION>, or <LOCATION>, or <LOCATION>. I tried asking myself what word I'd use to describe the feeling the <LOCATION> radiated, and the word that came to mind was optimism. Notes [ 1 ] I'm not saying it's impossible to succeed in a city with few other startups, just harder. If you're sufficiently good at generating your own morale, you can survive without external encouragement. Wufoo was based in <LOCATION> and they succeeded. But the <PERSON> are exceptionally disciplined. [ 2 ] Incidentally, this phenomenon is not limited to startups. Most unusual ambitions fail, unless the person who has them manages to find the right sort of community. [ 3 ] Starting a company is common, but starting a startup is rare. I've talked about the distinction between the two elsewhere, but essentially a startup is a new business designed for scale. Most new businesses are service businesses and except in rare cases those don't scale. [ 4 ] As I was writing this, I had a demonstration of the density of startup people in the <LOCATION>. <PERSON> and I bicycled to University Ave in <LOCATION> to have lunch at the fabulous <PERSON>'s Hummus. As we walked in, we met <PERSON> sitting near the door. <PERSON> stopped to say hello on her way out. Then <PERSON> came in to pick up a take out order. After lunch we went to get frozen yogurt. On the way we met <PERSON>. When we got to the yogurt place, we found <PERSON> there, and as we walked out we ran into <PERSON>. We walked with him for a block or so and we ran into <PERSON>, and then a block later we met <PERSON>. This is everyday life in <LOCATION>. I wasn't trying to meet people; I was just having lunch. And I'm sure for every startup founder or investor I saw that I knew, there were 5 more I didn't. If <PERSON> had been with us he would have met 30 people he knew. Thanks to <PERSON>, <PERSON>, <PERSON>, and Harj Taggar for reading drafts of this.
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The Patent Pledge <DATE_TIME> I realized recently that we may be able to solve part of the patent problem without waiting for the government. I've never been 100% sure whether patents help or hinder technological progress. When I was a kid I thought they helped. I thought they protected inventors from having their ideas stolen by big companies. Maybe that was truer in the past, when more things were physical. But regardless of whether patents are in general a good thing, there do seem to be bad ways of using them. And since bad uses of patents seem to be increasing, there is an increasing call for patent reform. The problem with patent reform is that it has to go through the government. That tends to be slow. But recently I realized we can also attack the problem downstream. As well as pinching off the stream of patents at the point where they're issued, we may in some cases be able to pinch it off at the point where they're used. One way of using patents that clearly does not encourage innovation is when established companies with bad products use patents to suppress small competitors with good products. This is the type of abuse we may be able to decrease without having to go through the government. The way to do it is to get the companies that are above pulling this sort of trick to pledge publicly not to. Then the ones that won't make such a pledge will be very conspicuous. Potential employees won't want to work for them. And investors, too, will be able to see that they're the sort of company that competes by litigation rather than by making good products. Here's the pledge: No first use of software patents against companies with less than 25 people. I've deliberately traded precision for brevity. The patent pledge is not legally binding. It's like Google's "Don't be evil." They don't define what evil is, but by publicly saying that, they're saying they're willing to be held to a standard that, say, Altria is not. And though constraining, "Don't be evil" has been good for Google. Technology companies win by attracting the most productive people, and the most productive people are attracted to employers who hold themselves to a higher standard than the law requires. [ 1 ] The patent pledge is in effect a narrower but open source "Don't be evil." I encourage every technology company to adopt it. If you want to help fix patents, encourage your employer to. Already most technology companies wouldn't sink to using patents on startups. You don't see Google or Facebook suing startups for patent infringement. They don't need to. So for the better technology companies, the patent pledge requires no change in behavior. They're just promising to do what they'd do anyway. And when all the companies that won't use patents on startups have said so, the holdouts will be very conspicuous. The patent pledge doesn't fix every problem with patents. It won't stop patent trolls, for example; they're already pariahs. But the problem the patent pledge does fix may be more serious than the problem of patent trolls. Patent trolls are just parasites. A clumsy parasite may occasionally kill the host, but that's not its goal. Whereas companies that sue startups for patent infringement generally do it with explicit goal of keeping their product off the market. Companies that use patents on startups are attacking innovation at the root. Now there's something any individual can do about this problem, without waiting for the government: ask companies where they stand. Patent Pledge Site Notes: [ 1 ] Because the pledge is deliberately vague, we're going to need common sense when intepreting it. And even more vice versa: the pledge is vague in order to make people use common sense when interpreting it. So for example I've deliberately avoided saying whether the 25 people have to be employees, or whether contractors count too. If a company has to split hairs that fine about whether a suit would violate the patent pledge, it's probably still a dick move. The Investment That Didn't Happen
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Subject: Airbnb March <DATE_TIME> <PERSON> published a remarkable post about missing Airbnb . VCs miss good startups all the time, but it's extraordinarily rare for one to talk about it publicly till long afterward. So that post is further evidence what a rare bird <PERSON> is. He's probably the nicest <LOCATION> I know. Reading <PERSON>'s post made me go back and look at the emails I exchanged with him at the time, trying to convince him to invest in Airbnb. It was quite interesting to read. You can see <PERSON>'s mind at work as he circles the deal. <PERSON> and the Airbnb founders have generously agreed to let me publish this email exchange (with one sentence redacted about something that's strategically important to Airbnb and not an important part of the conversation). It's an interesting illustration of an element of the startup ecosystem that few except the participants ever see: investors trying to convince one another to invest in their portfolio companies. Hundreds if not thousands of conversations of this type are happening now, but if one has ever been published, I haven't seen it. The Airbnbs themselves never even saw these emails at the time. We do a lot of this behind the scenes stuff at YC, because we invest in such a large number of companies, and we invest so early that investors sometimes need a lot of convincing to see their merits. I don't always try as hard as this though. <PERSON> must have found me quite annoying. from: <PERSON> to: <PERSON>, AirBedAndBreakfast Founders date: <DATE_TIME> at <DATE_TIME> subject: meet the airbeds One of the startups from the batch that just started, AirbedAndBreakfast, is in <LOCATION> right now meeting their users. (<LOCATION> is their biggest market.) I'd recommend meeting them if your schedule allows. I'd been thinking to myself that though these guys were going to do really well, I should introduce them to angels, because VCs would never go for it. But then I thought maybe I should give you more credit. You'll certainly like meeting them. Be sure to ask about how they funded themselves with breakfast cereal. There's no reason this couldn't be as big as Ebay. And this team is the right one to do it. --pg from: <PERSON> to: <PERSON> cc: <PERSON>, <PERSON> date: <DATE_TIME> at <DATE_TIME> subject: Re: meet the airbeds PG, Thanks for the intro! <PERSON> from: <PERSON> to: <PERSON> cc: <PERSON>, <PERSON> date: <DATE_TIME> at <DATE_TIME> subject: Re: meet the airbeds It's a longshot, at this stage, but if there was any VC who'd get you guys, it would be <PERSON>. He is the least suburban-golf-playing VC I know. He likes to observe startups for a while before acting, so don't be bummed if he seems ambivalent. --pg from: <PERSON> to: <PERSON>, date: <PERSON>, <DATE_TIME> at <DATE_TIME> subject: Re: meet the airbeds Thanks <PERSON> We are having a bit of a debate inside our partnership about the airbed concept. We'll finish that debate <DATE_TIME> in our <DATE_TIME> meeting and get back to you with our thoughts Thanks <PERSON> from: <PERSON> to: <PERSON> date: <PERSON>, <DATE_TIME> at <DATE_TIME> subject: Re: meet the airbeds I'd recommend having the debate after meeting them instead of before. We had big doubts about this idea, but they vanished on meeting the guys. from: <PERSON> to: <PERSON> date: Mon, Jan 26, <DATE_TIME> at <DATE_TIME> subject: RE: meet the airbeds We are still very suspect of this idea but will take a meeting as you suggest Thanks fred from: <PERSON> to: <PERSON>, AirBedAndBreakfast Founders date: Mon, Jan 26, <DATE_TIME> at <DATE_TIME> subject: RE: meet the airbeds Airbed team - Are you still in <LOCATION>? We'd like to meet if you are Thanks fred from: <PERSON> to: <PERSON> date: Mon, Jan 26, <DATE_TIME> at <DATE_TIME> subject: Re: meet the airbeds Ideas can morph. Practically every really big startup could say, <DATE_TIME>, "believe it or not, we started out doing ___." It just seemed a very good sign to me that these guys were actually on the ground in <LOCATION> hunting down (and understanding) their users. On top of several previous good signs. --pg from: <PERSON> to: <PERSON> date: Sun, <DATE_TIME> at <DATE_TIME> subject: Re: meet the airbeds It's interesting Our two junior team members were enthusiastic The three "old guys" didn't get it from: <PERSON> to: <PERSON> date: <DATE_TIME> at <DATE_TIME> subject: airbnb The Airbeds just won the first poll among all the YC startups in their batch by a landslide. In the past this has not been a 100% indicator of success (if only anything were) but much better than random. --pg from: <PERSON> to: <PERSON> date: <DATE_TIME> at <DATE_TIME> subject: Re: airbnb I met them <DATE_TIME> They have an interesting business I'm just not sure how big it's going to be fred from: <PERSON> to: <PERSON> date: Sat, <DATE_TIME> at <DATE_TIME> subject: Re: airbnb Did they explain the long-term goal of being the market in accommodation the way eBay is in stuff? That seems like it would be huge. Hotels now are like airlines in <DATE_TIME> before they figured out how to increase their load factors. from: <PERSON> to: <PERSON> date: <DATE_TIME> at <DATE_TIME> subject: Re: airbnb They did but I am not sure I buy that ABNB reminds me of Etsy in that it facilitates real commerce in a marketplace model directly between two people So I think it can scale all the way to the bed and breakfast market But I am not sure they can take on the hotel market I could be wrong But even so, if you include short term room rental, second home rental, bed and breakfast, and other similar classes of accommodations, you get to a pretty big opportunity fred from: <PERSON> to: <PERSON> date: <DATE_TIME> at <DATE_TIME> subject: Re: airbnb So invest in them! They're very capital efficient. They would make an investor's money go a long way. It's also counter-cyclical. They just arrived back from <LOCATION>, and when I asked them what was the most significant thing they'd observed, it was how many of their users actually needed to do these rentals to pay their rents. --pg from: <PERSON> to: <PERSON> date: <DATE_TIME> at <DATE_TIME> subject: Re: airbnb There's a lot to like I've done a few things, like intro it to my friends at <LOCATION> who were investors in Service Metrics and understand this model I am also talking to my friend <PERSON> who had an idea like this a few years ago. So we are working on it Thanks for the lead <PERSON> from: <PERSON> to: <PERSON> date: <DATE_TIME> at <DATE_TIME> subject: airbnb already spreading to pros I know you're skeptical they'll ever get hotels, but there's a continuum between private sofas and hotel rooms, and they just moved one step further along it. [link to an airbnb user] This is after <DATE_TIME>. I bet you they will get hotels eventually. It will start with small ones. Just wait till all the 10-room pensiones in <LOCATION> discover this site. And once it spreads to hotels, where is the point (in size of chain) at which it stops? Once something becomes a big marketplace, you ignore it at your peril. --pg from: <PERSON> to: <PERSON> date: Sat, Feb 21, <DATE_TIME> at <DATE_TIME> subject: Re: airbnb already spreading to pros That's true. It's also true that there are quite a few marketplaces out there that serve this same market If you look at many of the people who list at ABNB, they list elsewhere too I am not negative on this one, I am interested, but we are still in the gathering data phase. <PERSON>
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Founder <PERSON> to start a startup? Get funded by Y Combinator . <DATE_TIME> Someone we funded is talking to VCs now, and asked me how common it was for a startup's founders to retain control of the board after a series A round. He said VCs told him this almost never happened. <DATE_TIME> that was true. In the past, founders rarely kept control of the board through a series A. The traditional series A board consisted of two founders, two VCs, and one independent member. More recently the recipe is often one founder, one VC, and one independent. In either case the founders lose their majority. But not always. <PERSON> kept control of Facebook's board through the series A and still has it <DATE_TIME>. <PERSON> has kept control of Zynga's too. But are these just outliers? How common is it for founders to keep control after an A round? I'd heard of several cases among the companies we've funded, but I wasn't sure how many there were, so I emailed the ycfounders list. The replies surprised me. In a dozen companies we've funded, the founders still had a majority of the board seats after the series A round. I feel like we're at a tipping point here. A lot of VCs still act as if founders retaining board control after a series A is unheard-of. A lot of them try to make you feel bad if you even ask - as if you're a noob or a control freak for wanting such a thing. But the founders I heard from aren't noobs or control freaks. Or if they are, they are, like <PERSON>, the kind of noobs and control freaks VCs should be trying to fund more of. Founders retaining control after a series A is clearly heard-of. And barring financial catastrophe, I think in <DATE_TIME> it will become the norm. Control of a company is a more complicated matter than simply outvoting other parties in board meetings. Investors usually get vetos over certain big decisions, like selling the company, regardless of how many board seats they have. And board votes are rarely split. Matters are decided in the discussion preceding the vote, not in the vote itself, which is usually unanimous. But if opinion is divided in such discussions, the side that knows it would lose in a vote will tend to be less insistent. That's what board control means in practice. You don't simply get to do whatever you want; the board still has to act in the interest of the shareholders; but if you have a majority of board seats, then your opinion about what's in the interest of the shareholders will tend to prevail. So while board control is not total control, it's not imaginary either. There's inevitably a difference in how things feel within the company. Which means if it becomes the norm for founders to retain board control after a series A, that will change the way things feel in the whole startup world. The switch to the new norm may be surprisingly fast, because the startups that can retain control tend to be the best ones. They're the ones that set the trends, both for other startups and for VCs. A lot of the reason VCs are harsh when negotiating with startups is that they're embarrassed to go back to their partners looking like they got beaten. When they sign a termsheet, they want to be able to brag about the good terms they got. A lot of them don't care that much personally about whether founders keep board control. They just don't want to seem like they had to make concessions. Which means if letting the founders keep control stops being perceived as a concession, it will rapidly become much more common. Like a lot of changes that have been forced on VCs, this change won't turn out to be as big a problem as they might think. VCs will still be able to convince; they just won't be able to compel. And the startups where they have to resort to compulsion are not the ones that matter anyway. VCs make most of their money from a few big hits, and those aren't them. Knowing that founders will keep control of the board may even help VCs pick better. If they know they can't fire the founders, they'll have to choose founders they can trust. And that's who they should have been choosing all along. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Tablets <DATE_TIME> I was thinking recently how inconvenient it was not to have a general term for iPhones, iPads, and the corresponding things running Android. The closest to a general term seems to be "mobile devices," but that (a) applies to any mobile phone, and (b) doesn't really capture what's distinctive about the iPad. After <DATE_TIME> it struck me that what we'll end up calling these things is tablets. The only reason we even consider calling them "mobile devices" is that the iPhone preceded the iPad. If the iPad had come first, we wouldn't think of the iPhone as a phone; we'd think of it as a tablet small enough to hold up to your ear. The iPhone isn't so much a phone as a replacement for a phone. That's an important distinction, because it's an early instance of what will become a common pattern. Many if not most of the special-purpose objects around us are going to be replaced by apps running on tablets. This is already clear in cases like GPSes, music players, and cameras. But I think it will surprise people how many things are going to get replaced. We funded one startup that's replacing keys . The fact that you can change font sizes easily means the iPad effectively replaces reading glasses. I wouldn't be surprised if by playing some clever tricks with the accelerometer you could even replace the bathroom scale. The advantages of doing things in software on a single device are so great that everything that can get turned into software will. So for <DATE_TIME>, a good recipe for startups will be to look around you for things that people haven't realized yet can be made unnecessary by a tablet app. In <DATE_TIME> <PERSON> coined the term ephemeralization to describe the increasing tendency of physical machinery to be replaced by what we would now call software. The reason tablets are going to take over the world is not (just) that <PERSON> and Co are industrial design wizards, but because they have this force behind them. The iPhone and the iPad have effectively drilled a hole that will allow ephemeralization to flow into a lot of new areas. No one who has studied the history of technology would want to underestimate the power of that force. I worry about the power Apple could have with this force behind them. I don't want to see another era of client monoculture like the Microsoft one in <DATE_TIME>. But if ephemeralization is one of the main forces driving the spread of tablets, that suggests a way to compete with Apple: be a better platform for it. It has turned out to be a great thing that Apple tablets have accelerometers in them. Developers have used the accelerometer in ways Apple could never have imagined. That's the nature of platforms. The more versatile the tool, the less you can predict how people will use it. So tablet makers should be thinking: what else can we put in there? Not merely hardware, but software too. What else can we give developers access to? Give hackers an inch and they'll take you a mile. Thanks to <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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What We Look for in Founders Want to start a startup? Get funded by Y Combinator . <DATE_TIME> (I wrote this for Forbes, who asked me to write something about the qualities we look for in founders. In print they had to cut the last item because they didn't have room.) 1. Determination This has turned out to be the most important quality in startup founders. We thought when we started Y Combinator that the most important quality would be intelligence. That's the myth in the <LOCATION>. And certainly you don't want founders to be stupid. But as long as you're over a certain threshold of intelligence, what matters most is determination. You're going to hit a lot of obstacles. You can't be the sort of person who gets demoralized easily. <PERSON> and <PERSON> of <PERSON> are a good example. They're doing a finance startup, which means endless negotiations with big, bureaucratic companies. When you're starting a startup that depends on deals with big companies to exist, it often feels like they're trying to ignore you out of existence. But when <PERSON> starts calling you, you may as well do what he asks, because he is not going away. 2. Flexibility You do not however want the sort of determination implied by phrases like "don't give up on your dreams." The world of startups is so unpredictable that you need to be able to modify your dreams on the fly. The best metaphor I've found for the combination of determination and flexibility you need is a running back . He's determined to get downfield, but at any given moment he may need to go sideways or even backwards to get there. The current record holder for flexibility may be <PERSON> of <PERSON> . He applied to YC with some bad ecommerce idea. We told him we'd fund him if he did something else. He thought for a second, and said ok. He then went through two more ideas before settling on <PERSON>. He'd only been working on it for <DATE_TIME> when he presented to investors at <DATE_TIME>, but he got a lot of interest. He always seems to land on his feet. 3. Imagination Intelligence does matter a lot of course. It seems like the type that matters most is imagination. It's not so important to be able to solve predefined problems quickly as to be able to come up with surprising new ideas. In the startup world, most good ideas seem bad initially. If they were obviously good, someone would already be doing them. So you need the kind of intelligence that produces ideas with just the right level of craziness. Airbnb is that kind of idea. In fact, when we funded Airbnb, we thought it was too crazy. We couldn't believe large numbers of people would want to stay in other people's places. We funded them because we liked the founders so much. As soon as we heard they'd been supporting themselves by selling <PERSON> and <PERSON> branded breakfast cereal, they were in. And it turned out the idea was on the right side of crazy after all. 4. Naughtiness Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They're not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules , but not rules that matter. This quality may be redundant though; it may be implied by imagination. <PERSON> of <LOCATION> is one of the most successful alumni, so we asked him what question we could put on the Y Combinator application that would help us discover more people like him. He said to ask about a time when they'd hacked something to their advantage-hacked in the sense of beating the system, not breaking into computers. It has become one of the questions we pay most attention to when judging applications. 5. Friendship Empirically it seems to be hard to start a startup with just one founder . Most of the big successes have two or three. And the relationship between the founders has to be strong. They must genuinely like one another, and work well together. Startups do to the relationship between the founders what a dog does to a sock: if it can be pulled apart, it will be. <PERSON> and <PERSON> of <URL> are a good example of close friends who work well together. They've known each other since second grade. They can practically read one another's minds. I'm sure they argue, like all founders, but I have never once sensed any unresolved tension between them. Thanks to <PERSON> and <PERSON> for reading drafts of this.
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The New Funding Landscape Want to start a startup? Get funded by Y Combinator . <DATE_TIME> After barely changing at all for <DATE_TIME>, the startup funding business is now in what could, at least by comparison, be called turmoil. At Y Combinator we've seen dramatic changes in the funding environment for startups. Fortunately one of them is much higher valuations. The trends we've been seeing are probably not YC-specific. I wish I could say they were, but the main cause is probably just that we see trends first-partly because the startups we fund are very plugged into the <LOCATION> and are quick to take advantage of anything new, and partly because we fund so many that we have enough data points to see patterns clearly. What we're seeing now, everyone's probably going to be seeing in <DATE_TIME>. So I'm going to explain what we're seeing, and what that will mean for you if you try to raise money. Super-Angels Let me start by describing what the world of startup funding used to look like. There used to be two sharply differentiated types of investors: angels and venture capitalists. Angels are individual rich people who invest small amounts of their own money, while VCs are employees of funds that invest large amounts of other people's. For <DATE_TIME> there were just those two types of investors, but now a third type has appeared halfway between them: the so-called super-angels. [ 1 ] And VCs have been provoked by their arrival into making a lot of angel-style investments themselves. So the previously sharp line between angels and VCs has become hopelessly blurred. There used to be a no man's land between angels and VCs. Angels would invest $20k to $50k apiece, and VCs usually a million or more. So an angel round meant a collection of angel investments that combined to maybe $200k, and a VC round meant a series A round in which a single VC fund (or occasionally two) invested $1-5 million. The no man's land between angels and VCs was a very inconvenient one for startups, because it coincided with the amount many wanted to raise. Most startups coming out of <DATE_TIME> wanted to raise around $400k. But it was a pain to stitch together that much out of angel investments, and most VCs weren't interested in investments so small. That's the fundamental reason the super-angels have appeared. They're responding to the market. The arrival of a new type of investor is big news for startups, because there used to be only two and they rarely competed with one another. Super-angels compete with both angels and VCs. That's going to change the rules about how to raise money. I don't know yet what the new rules will be, but it looks like most of the changes will be for the better. A super-angel has some of the qualities of an angel, and some of the qualities of a <LOCATION>. They're usually individuals, like angels. In fact many of the current super-angels were initially angels of the classic type. But like VCs, they invest other people's money. This allows them to invest larger amounts than angels: a typical super-angel investment is currently about $100k. They make investment decisions quickly, like angels. And they make a lot more investments per partner than VCs-up to 10 times as many. The fact that super-angels invest other people's money makes them doubly alarming to VCs. They don't just compete for startups; they also compete for investors. What super-angels really are is a new form of fast-moving, lightweight VC fund. And those of us in the technology world know what usually happens when something comes along that can be described in terms like that. Usually it's the replacement. Will it be? As of now, few of the startups that take money from super-angels are ruling out taking VC money. They're just postponing it. But that's still a problem for VCs. Some of the startups that postpone raising VC money may do so well on the angel money they raise that they never bother to raise more. And those who do raise VC rounds will be able to get higher valuations when they do. If the best startups get 10x higher valuations when they raise series A rounds, that would cut VCs' returns from winners at least tenfold. [ 2 ] So I think VC funds are seriously threatened by the super-angels. But one thing that may save them to some extent is the uneven distribution of startup outcomes: practically all the returns are concentrated in a few big successes. The expected value of a startup is the percentage chance it's Google. So to the extent that winning is a matter of absolute returns, the super-angels could win practically all the battles for individual startups and yet lose the war, if they merely failed to get those few big winners. And there's a chance that could happen, because the top VC funds have better brands, and can also do more for their portfolio companies. [ 3 ] Because super-angels make more investments per partner, they have less partner per investment. They can't pay as much attention to you as a <LOCATION> on your board could. How much is that extra attention worth? It will vary enormously from one partner to another. There's no consensus yet in the general case. So for now this is something startups are deciding individually. Till now, VCs' claims about how much value they added were sort of like the government's. Maybe they made you feel better, but you had no choice in the matter, if you needed money on the scale only VCs could supply. Now that VCs have competitors, that's going to put a market price on the help they offer. The interesting thing is, no one knows yet what it will be. Do startups that want to get really big need the sort of advice and connections only the top VCs can supply? Or would super-angel money do just as well? The VCs will say you need them, and the super-angels will say you don't. But the truth is, no one knows yet, not even the <NRP> and super-angels themselves. All the super-angels know is that their new model seems promising enough to be worth trying, and all the VCs know is that it seems promising enough to worry about. Rounds Whatever the outcome, the conflict between VCs and super-angels is good news for founders. And not just for the obvious reason that more competition for deals means better terms. The whole shape of deals is changing. One of the biggest differences between angels and VCs is the amount of your company they want. VCs want a lot. In a series A round they want a third of your company, if they can get it. They don't care much how much they pay for it, but they want a lot because the number of series A investments they can do is so small. In a traditional series A investment, at least one partner from the VC fund takes a seat on your board. [ 4 ] Since board seats last <DATE_TIME> and each partner can't handle more than about 10 at once, that means a VC fund can only do about 2 series A deals per partner per year. And that means they need to get as much of the company as they can in each one. You'd have to be a very promising startup indeed to get a VC to use up one of his 10 board seats for only a few percent of you. Since angels generally don't take board seats, they don't have this constraint. They're happy to buy only a few percent of you. And although the super-angels are in most respects mini VC funds, they've retained this critical property of angels. They don't take board seats, so they don't need a big percentage of your company. Though that means you'll get correspondingly less attention from them, it's good news in other respects. Founders never really liked giving up as much equity as VCs wanted. It was a lot of the company to give up in one shot. Most founders doing series A deals would prefer to take half as much money for half as much stock, and then see what valuation they could get for <DATE_TIME> of the stock after using <DATE_TIME> of the money to increase its value. But VCs never offered that option. Now startups have another alternative. Now it's easy to raise angel rounds about half the size of series A rounds. Many of the startups we fund are taking this route, and I predict that will be true of startups in general. A typical big angel round might be $600k on a convertible note with a valuation cap of $4 million premoney. Meaning that when the note converts into stock (in a later round, or upon acquisition), the investors in that round will get .6 / 4.6, or 13% of the company. That's a lot less than the 30 to 40% of the company you usually give up in a series A round if you do it so early. [ 5 ] But the advantage of these medium-sized rounds is not just that they cause less dilution. You also lose less control. After an angel round, the founders almost always still have control of the company, whereas after a series A round they often don't. The traditional board structure after a series A round is two founders, two VCs, and a (supposedly) neutral fifth person. Plus series A terms usually give the investors a veto over various kinds of important decisions, including selling the company. Founders usually have a lot of de facto control after a series A, as long as things are going well. But that's not the same as just being able to do what you want, like you could before. A third and quite significant advantage of angel rounds is that they're less stressful to raise. Raising a traditional series A round has in <DATE_TIME>, if not <DATE_TIME>. When a VC firm can only do 2 deals per partner per year, they're careful about which they do. To get a traditional series A round you have to go through a series of meetings, culminating in a full partner meeting where the firm as a whole says yes or no. That's the really scary part for founders: not just that series A rounds take so long, but at the end of this long process the VCs might still say no. The chance of getting rejected after the full partner meeting averages about 25%. At some firms it's over 50%. Fortunately for founders, VCs have been getting a lot faster. Nowadays Valley VCs are more likely to take <DATE_TIME>. But they're still not as fast as angels and super-angels, the most decisive of whom sometimes decide in <DATE_TIME>. Raising an angel round is not only quicker, but you get feedback as it progresses. An angel round is not an all or nothing thing like a series A. It's composed of multiple investors with varying degrees of seriousness, ranging from the upstanding ones who commit unequivocally to the jerks who give you lines like "come back to me to fill out the round." You usually start collecting money from the most committed investors and work your way out toward the ambivalent ones, whose interest increases as the round fills up. But at each point you know how you're doing. If investors turn cold you may have to raise less, but when investors in an angel round turn cold the process at least degrades gracefully, instead of blowing up in your face and leaving you with nothing, as happens if you get rejected by a VC fund after a full partner meeting. Whereas if investors seem hot, you can not only close the round faster, but now that convertible notes are becoming the norm, actually raise the price to reflect demand. Valuation However, the VCs have a weapon they can use against the super-angels, and they have started to use it. VCs have started making angel-sized investments too. The term "angel round" doesn't mean that all the investors in it are angels; it just describes the structure of the round. Increasingly the participants include VCs making investments of a hundred thousand or two. And when VCs invest in angel rounds they can do things that super-angels don't like. VCs are quite valuation-insensitive in angel rounds-partly because they are in general, and partly because they don't care that much about the returns on angel rounds, which they still view mostly as a way to recruit startups for series A rounds later. So VCs who invest in angel rounds can blow up the valuations for angels and super-angels who invest in them. [ 6 ] Some super-angels seem to care about valuations. Several turned down YC-funded startups after <DATE_TIME> because their valuations were too high. This was not a problem for the startups; by definition a high valuation means enough investors were willing to accept it. But it was mysterious to me that the super-angels would quibble about valuations. Did they not understand that the big returns come from a few big successes, and that it therefore mattered far more which startups you picked than how much you paid for them? After thinking about it for a while and observing certain other signs, I have a theory that explains why the super-angels may be smarter than they seem. It would make sense for super-angels to want low valuations if they're hoping to invest in startups that get bought early. If you're hoping to hit the next Google, you shouldn't care if the valuation is 20 million. But if you're looking for companies that are going to get bought for 30 million, you care. If you invest at 20 and the company gets bought for 30, you only get 1.5x. You might as well buy Apple. So if some of the super-angels were looking for companies that could get acquired quickly, that would explain why they'd care about valuations. But why would they be looking for those? Because depending on the meaning of "quickly," it could actually be very profitable. A company that gets acquired for 30 million is a failure to a VC, but it could be a 10x return for an angel, and moreover, a quick 10x return. Rate of return is what matters in investing-not the multiple you get, but the multiple per year. If a super-angel gets 10x in <DATE_TIME>, that's a higher rate of return than a VC could ever hope to get from a company that took <DATE_TIME> to go public. To get the same rate of return, the VC would have to get a multiple of 10^6-one million x. Even Google didn't come close to that. So I think at least some super-angels are looking for companies that will get bought. That's the only rational explanation for focusing on getting the right valuations, instead of the right companies. And if so they'll be different to deal with than VCs. They'll be tougher on valuations, but more accommodating if you want to sell early. Prognosis Who will win, the super-angels or the VCs? I think the answer to that is, some of each. They'll each become more like one another. The super-angels will start to invest larger amounts, and the VCs will gradually figure out ways to make more, smaller investments faster. <DATE_TIME> now the players will be hard to tell apart, and there will probably be survivors from each group. What does that mean for founders? One thing it means is that the high valuations startups are presently getting may not last forever. To the extent that valuations are being driven up by price-insensitive VCs, they'll fall again if VCs become more like super-angels and start to become more miserly about valuations. Fortunately if this does happen it will take <DATE_TIME>. The short term forecast is more competition between investors, which is good news for you. The super-angels will try to undermine the VCs by acting faster, and the VCs will try to undermine the super-angels by driving up valuations. Which for founders will result in the perfect combination: funding rounds that close fast, with high valuations. But remember that to get that combination, your startup will have to appeal to both super-angels and VCs. If you don't seem like you have the potential to go public, you won't be able to use VCs to drive up the valuation of an angel round. There is a danger of having VCs in an angel round: the so-called signalling risk. If VCs are only doing it in the hope of investing more later, what happens if they don't? That's a signal to everyone else that they think you're lame. How much should you worry about that? The seriousness of signalling risk depends on how far along you are. If by the next time you need to raise money, you have graphs showing rising revenue or traffic <DATE_TIME> after month, you don't have to worry about any signals your existing investors are sending. Your results will speak for themselves. [ 7 ] Whereas if the next time you need to raise money you won't yet have concrete results, you may need to think more about the message your investors might send if they don't invest more. I'm not sure yet how much you have to worry, because this whole phenomenon of VCs doing angel investments is so new. But my instincts tell me you don't have to worry much. Signalling risk smells like one of those things founders worry about that's not a real problem. As a rule, the only thing that can kill a good startup is the startup itself. Startups hurt themselves way more often than competitors hurt them, for example. I suspect signalling risk is in this category too. One thing YC-funded startups have been doing to mitigate the risk of taking money from VCs in angel rounds is not to take too much from any one <LOCATION>. Maybe that will help, if you have the luxury of turning down money. Fortunately, more and more startups will. After <DATE_TIME> of competition that could best be described as intramural, the startup funding business is finally getting some real competition. That should last <DATE_TIME> at least, and maybe a lot longer. Unless there's some huge market crash, <DATE_TIME> are going to be a good time for startups to raise money. And that's exciting because it means lots more startups will happen. Notes [ 1 ] I've also heard them called "Mini-VCs" and "Micro-VCs." I don't know which name will stick. There were a couple predecessors. <PERSON> had angel funds starting in <DATE_TIME>, and in some ways First Round Capital is closer to a super-angel than a VC fund. [ 2 ] It wouldn't cut their overall returns tenfold, because investing later would probably (a) cause them to lose less on investments that failed, and (b) not allow them to get as large a percentage of startups as they do now. So it's hard to predict precisely what would happen to their returns. [ 3 ] The brand of an investor derives mostly from the success of their portfolio companies. The top VCs thus have a big brand advantage over the super-angels. They could make it self-perpetuating if they used it to get all the best new startups. But I don't think they'll be able to. To get all the best startups, you have to do more than make them want you. You also have to want them; you have to recognize them when you see them, and that's much harder. Super-angels will snap up stars that VCs miss. And that will cause the brand gap between the top VCs and the super-angels gradually to erode. [ 4 ] Though in a traditional series A round VCs put two partners on your board, there are signs now that VCs may begin to conserve board seats by switching to what used to be considered an angel-round board, consisting of two founders and one VC. Which is also to the founders' advantage if it means they still control the company. [ 5 ] In a series A round, you usually have to give up more than the actual amount of stock the VCs buy, because they insist you dilute yourselves to set aside an "option pool" as well. I predict this practice will gradually disappear though. [ 6 ] The best thing for founders, if they can get it, is a convertible note with no valuation cap at all. In that case the money invested in the angel round just converts into stock at the valuation of the next round, no matter how large. Angels and super-angels tend not to like uncapped notes. They have no idea how much of the company they're buying. If the company does well and the valuation of the next round is high, they may end up with only a sliver of it. So by agreeing to uncapped notes, VCs who don't care about valuations in angel rounds can make offers that super-angels hate to match. [ 7 ] Obviously signalling risk is also not a problem if you'll never need to raise more money. But startups are often mistaken about that. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON> and Harj Taggar for reading drafts of this.
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Where to <LOCATION> to start a startup? Get funded by Y Combinator . <DATE_TIME> <LOCATION> proper is mostly suburban sprawl. At first glance it doesn't seem there's anything to see. It's not the sort of place that has conspicuous monuments. But if you look, there are subtle signs you're in a place that's different from other places. 1. Stanford University Stanford is a strange place. Structurally it is to an ordinary university what suburbia is to a city. It's enormously spread out, and feels surprisingly empty much of the time. But notice the weather. It's probably perfect. And notice the beautiful mountains to the west. And though you can't see it, cosmopolitan <LOCATION> is <DATE_TIME> to the north. That combination is much of the reason <LOCATION> grew up around this university and not some other one. 2. University Ave A surprising amount of the work of the <LOCATION> is done in the cafes on or just off University Ave in <LOCATION>. If you visit on a weekday between 10 and 5, you'll often see founders pitching investors. In case you can't tell, the founders are the ones leaning forward eagerly, and the investors are the ones sitting back with slightly pained expressions. 3. The Lucky Office The office at 165 University Ave was Google's first. Then it was Paypal's. (Now it's <PERSON> 's.) The interesting thing about it is the location. It's a smart move to put a startup in a place with restaurants and people walking around instead of in an office park, because then the people who work there want to stay there, instead of fleeing as soon as conventional working <DATE_TIME> end. They go out for dinner together, talk about ideas, and then come back and implement them. It's important to realize that Google's current location in an office park is not where they started; it's just where they were forced to move when they needed more space. Facebook was till recently across the street, till they too had to move because they needed more space. 4. Old <LOCATION> was not originally a suburb. For <DATE_TIME> of its existence, it was a college town out in the countryside. Then in <DATE_TIME> it was engulfed in a wave of suburbia that raced down the peninsula. But <LOCATION> north of <LOCATION> expressway still feels noticeably different from the area around it. It's one of the nicest places in the <LOCATION>. The buildings are old (though increasingly they are being torn down and replaced with generic McMansions) and the trees are tall. But houses are very expensive-around $1000 per square foot. This is post-exit <LOCATION>. 5. Sand Hill Road It's interesting to see the VCs' offices on the north side of <LOCATION> precisely because they're so boringly uniform. The buildings are all more or less the same, their exteriors express very little, and they are arranged in a confusing maze. (I've been visiting them for <DATE_TIME> and I still occasionally get lost.) It's not a coincidence. These buildings are a pretty accurate reflection of the VC business. If you go on a weekday you may see groups of founders there to meet VCs. But mostly you won't see anyone; bustling is the last word you'd use to describe the atmos. Visiting <LOCATION> reminds you that the opposite of "down and dirty" would be "up and clean." 6. Castro Street It's a tossup whether <PERSON> or University Ave should be considered the heart of the <LOCATION> now. University Ave would have been <DATE_TIME>. But <LOCATION> is getting expensive. Increasingly startups are located in <LOCATION>, and <LOCATION> is a place they come to meet investors. <LOCATION> has a lot of different cafes, but there is one that clearly dominates in <LOCATION>: <LOCATION> . 7. Google Google spread out from its first building in <LOCATION> to a lot of the surrounding ones. But because the buildings were built at different times by different people, the place doesn't have the sterile, walled-off feel that a typical large company's headquarters have. It definitely has a flavor of its own though. You sense there is something afoot. The general atmos is vaguely utopian; there are lots of Priuses, and people who look like they drive them. You can't get into Google unless you know someone there. It's very much worth seeing inside if you can, though. Ditto for Facebook, at the end of California Ave in <LOCATION>, though there is nothing to see outside. 8. <LOCATION> runs along the crest of the <LOCATION> mountains. On one side is the <LOCATION>, and on the other is the sea-which because it's cold and foggy and has few harbors, plays surprisingly little role in the lives of people in the <LOCATION>, considering how close it is. Along some parts of Skyline the dominant trees are huge redwoods, and in others they're live oaks. Redwoods mean those are the parts where the fog off the coast comes in at <DATE_TIME>; redwoods condense rain out of fog. The MROSD manages a collection of great walking trails off <LOCATION>. 9. 280 <LOCATION> has two highways running the length of it: 101, which is pretty ugly, and 280, which is one of the more beautiful highways in the world. I always take 280 when I have a choice. Notice the long narrow lake to the west? That's <LOCATION>. It runs along the base of the hills, then heads uphill through <LOCATION>. One of the MROSD trails runs right along the fault . A string of rich neighborhoods runs along the foothills to the west of 280: <LOCATION>, <LOCATION>, <LOCATION>, <LOCATION>, <LOCATION>. <PERSON> goes right under 280 a little bit south of <LOCATION>. And a couple miles south of that is the <LOCATION>'s equivalent of the "Welcome to <LOCATION>" sign: The Dish . Notes I skipped the Computer History Museum because this is a list of where to see the <LOCATION> itself, not where to see artifacts from it. I also skipped <LOCATION>. <LOCATION> calls itself the capital of <LOCATION>, but when people in the <LOCATION> use the phrase "the city," they mean <LOCATION>. <LOCATION> is a dotted line on a map. Thanks to <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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High Resolution Fundraising Want to start a startup? Get funded by Y Combinator . <DATE_TIME> The reason startups have been using more convertible notes in angel rounds is that they make deals close faster. By making it easier for startups to give different prices to different investors, they help them break the sort of deadlock that happens when investors all wait to see who else is going to invest. By far the biggest influence on investors' opinions of a startup is the opinion of other investors. There are very, very few who simply decide for themselves. Any startup founder can tell you the most common question they hear from investors is not about the founders or the product, but "who else is investing?" That tends to produce deadlocks. Raising an old-fashioned fixed-size equity round can take <DATE_TIME>, because all the angels sit around waiting for the others to commit, like competitors in a bicycle sprint who deliberately ride slowly at the start so they can follow whoever breaks first. Convertible notes let startups beat such deadlocks by rewarding investors willing to move first with lower (effective) valuations. Which they deserve because they're taking more risk. It's much safer to invest in a startup <PERSON> has already invested in; someone who comes after him should pay a higher price. The reason convertible notes allow more flexibility in price is that valuation caps aren't actual valuations, and notes are cheap and easy to do. So you can do high-resolution fundraising: if you wanted you could have a separate note with a different cap for each investor. That cap need not simply rise monotonically. A startup could also give better deals to investors they expected to help them most. The point is simply that different investors, whether because of the help they offer or their willingness to commit, have different values for startups, and their terms should reflect that. Different terms for different investors is clearly the way of the future. Markets always evolve toward higher resolution. You may not need to use convertible notes to do it. With sufficiently lightweight standardized equity terms (and some changes in investors' and lawyers' expectations about equity rounds) you might be able to do the same thing with equity instead of debt. Either would be fine with startups, so long as they can easily change their valuation. Deadlocks weren't the only problem with fixed-size equity rounds. Another was that startups had to decide in advance how much to raise. I think it's a mistake for a startup to fix upon a specific number. If investors are easily convinced, the startup should raise more now, and if investors are skeptical, the startup should take a smaller amount and use that to get the company to the point where it's more convincing. It's just not reasonable to expect startups to pick an optimal round size in advance, because that depends on the reactions of investors, and those are impossible to predict. Fixed-size, multi-investor angel rounds are such a bad idea for startups that one wonders why things were ever done that way. One possibility is that this custom reflects the way investors like to collude when they can get away with it. But I think the actual explanation is less sinister. I think angels (and their lawyers) organized rounds this way in unthinking imitation of VC series A rounds. In a series A, a fixed-size equity round with a lead makes sense, because there is usually just one big investor, who is unequivocally the lead. Fixed-size series A rounds already are high res. But the more investors you have in a round, the less sense it makes for everyone to get the same price. The most interesting question here may be what high res fundraising will do to the world of investors. Bolder investors will now get rewarded with lower prices. But more important, in a hits-driven business, is that they'll be able to get into the deals they want. Whereas the "who else is investing?" type of investors will not only pay higher prices, but may not be able to get into the best deals at all. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, Harj Taggar, and <PERSON> for reading drafts of this.
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What Happened to Yahoo Want to start a startup? Get funded by Y Combinator . <DATE_TIME> When I went to work for Yahoo after they bought our startup in <DATE_TIME>, it felt like the center of the world. It was supposed to be the next big thing. It was supposed to be what Google turned out to be. What went wrong? The problems that hosed Yahoo go back a long time, practically to the beginning of the company. They were already very visible when I got there in <DATE_TIME>. Yahoo had two problems Google didn't: easy money, and ambivalence about being a technology company. Money The first time I met <PERSON>, we thought we were meeting for different reasons. He thought we were meeting so he could check us out in person before buying us. I thought we were meeting so we could show him our new technology, Revenue Loop. It was a way of sorting shopping search results. Merchants bid a percentage of sales for traffic, but the results were sorted not by the bid but by the bid times the average amount a user would buy. It was like the algorithm Google uses now to sort ads, but this was in <DATE_TIME>, before Google was founded. Revenue Loop was the optimal sort for shopping search, in the sense that it sorted in order of how much money Yahoo would make from each link. But it wasn't just optimal in that sense. Ranking search results by user behavior also makes search better. Users train the search: you can start out finding matches based on mere textual similarity, and as users buy more stuff the search results get better and better. <PERSON> didn't seem to care. I was confused. I was showing him technology that extracted the maximum value from search traffic, and he didn't care? I couldn't tell whether I was explaining it badly, or he was just very poker faced. I didn't realize the answer till later, after I went to work at Yahoo. It was neither of my guesses. The reason Yahoo didn't care about a technique that extracted the full value of traffic was that advertisers were already overpaying for it. If Yahoo merely extracted the actual value, they'd have made less. Hard as it is to believe now, the big money then was in banner ads. Advertisers were willing to pay ridiculous amounts for banner ads. So Yahoo's sales force had evolved to exploit this source of revenue. Led by a large and terrifyingly formidable man called <PERSON>, Yahoo's sales guys would fly out to Procter & Gamble and come back with million dollar orders for banner ad impressions. The prices seemed cheap compared to print, which was what advertisers, for lack of any other reference, compared them to. But they were expensive compared to what they were worth. So these big, dumb companies were a dangerous source of revenue to depend on. But there was another source even more dangerous: other Internet startups. By <DATE_TIME>, Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the Internet. One reason they were excited was Yahoo's revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more revenue growth for Yahoo, and further convinced investors the Internet was worth investing in. When I realized this one day, sitting in my cubicle, I jumped up like Archimedes in his bathtub, except instead of "<LOCATION>!" I was shouting "Sell!" Both the Internet startups and the Procter & Gambles were doing brand advertising. They didn't care about targeting. They just wanted lots of people to see their ads. So traffic became the thing to get at Yahoo. It didn't matter what type. [ 1 ] It wasn't just Yahoo. All the search engines were doing it. This was why they were trying to get people to start calling them "portals" instead of "search engines." Despite the actual meaning of the word portal, what they meant by it was a site where users would find what they wanted on the site itself, instead of just passing through on their way to other destinations, as they did at a search engine. I remember telling <PERSON> in <DATE_TIME> or <DATE_TIME> that Yahoo should buy Google, because I and most of the other programmers in the company were using it instead of Yahoo for search. He told me that it wasn't worth worrying about. Search was only 6% of our traffic, and we were growing at 10% a month. It wasn't worth doing better. I didn't say "But search traffic is worth more than other traffic!" I said "Oh, ok." Because I didn't realize either how much search traffic was worth. I'm not sure even <PERSON> and <PERSON> did then. If they had, Google presumably wouldn't have expended any effort on enterprise search. If circumstances had been different, the people running Yahoo might have realized sooner how important search was. But they had the most opaque obstacle in the world between them and the truth: money. As long as customers were writing big checks for banner ads, it was hard to take search seriously. Google didn't have that to distract them. Hackers But Yahoo also had another problem that made it hard to change directions. They'd been thrown off balance from the start by their ambivalence about being a technology company. One of the weirdest things about Yahoo when I went to work there was the way they insisted on calling themselves a "media company." If you walked around their offices, it seemed like a software company. The cubicles were full of programmers writing code, product managers thinking about feature lists and ship dates, support people (yes, there were actually support people) telling users to restart their browsers, and so on, just like a software company. So why did they call themselves a media company? One reason was the way they made money: by selling ads. In <DATE_TIME> it was hard to imagine a technology company making money that way. Technology companies made money by selling their software to users. Media companies sold ads. So they must be a media company. Another big factor was the fear of Microsoft. If anyone at Yahoo considered the idea that they should be a technology company, the next thought would have been that Microsoft would crush them. It's hard for anyone much younger than me to understand the fear Microsoft still inspired in <DATE_TIME>. Imagine a company with several times the power Google has now, but way meaner. It was perfectly reasonable to be afraid of them. Yahoo watched them crush the first hot Internet company, Netscape. It was reasonable to worry that if they tried to be the next Netscape, they'd suffer the same fate. How were they to know that Netscape would turn out to be Microsoft's last victim? It would have been a clever move to pretend to be a media company to throw Microsoft off their scent. But unfortunately Yahoo actually tried to be one, sort of. Project managers at Yahoo were called "producers," for example, and the different parts of the company were called "properties." But what Yahoo really needed to be was a technology company, and by trying to be something else, they ended up being something that was neither here nor there. That's why Yahoo as a company has never had a sharply defined identity. The worst consequence of trying to be a media company was that they didn't take programming seriously enough. Microsoft (back in <DATE_TIME>), Google, and Facebook have all had hacker-centric cultures. But Yahoo treated programming as a commodity. At Yahoo, user-facing software was controlled by product managers and designers. The job of programmers was just to take the work of the product managers and designers the final step, by translating it into code. One obvious result of this practice was that when Yahoo built things, they often weren't very good. But that wasn't the worst problem. The worst problem was that they hired bad programmers. Microsoft (back in <DATE_TIME>), Google, and Facebook have all been obsessed with hiring the best programmers. Yahoo wasn't. They preferred good programmers to bad ones, but they didn't have the kind of single-minded, almost obnoxiously elitist focus on hiring the smartest people that the big winners have had. And when you consider how much competition there was for programmers when they were hiring, during the Bubble, it's not surprising that the quality of their programmers was uneven. In technology, once you have bad programmers, you're doomed. I can't think of an instance where a company has sunk into technical mediocrity and recovered. Good programmers want to work with other good programmers. So once the quality of programmers at your company starts to drop, you enter a death spiral from which there is no recovery. [ 2 ] At Yahoo this death spiral started early. If there was ever a time when Yahoo was a Google-style talent magnet, it was over by the time I got there in <DATE_TIME>. The company felt prematurely old. Most technology companies eventually get taken over by suits and middle managers. At Yahoo it felt as if they'd deliberately accelerated this process. They didn't want to be a bunch of hackers. They wanted to be suits. A media company should be run by suits. The first time I visited Google, they had about 500 people, the same number Yahoo had when I went to work there. But boy did things seem different. It was still very much a hacker-centric culture. I remember talking to some programmers in the cafeteria about the problem of gaming search results (now known as SEO), and they asked "what should we do?" Programmers at Yahoo wouldn't have asked that. Theirs was not to reason why; theirs was to build what product managers spec'd. I remember coming away from Google thinking "Wow, it's still a startup." There's not much we can learn from Yahoo's first fatal flaw. It's probably too much to hope any company could avoid being damaged by depending on a bogus source of revenue. But startups can learn an important lesson from the second one. In the software business, you can't afford not to have a hacker-centric culture. Probably the most impressive commitment I've heard to having a hacker-centric culture came from <PERSON>, when he spoke at Startup School in <DATE_TIME>. He said that in <DATE_TIME> Facebook made a point of hiring programmers even for jobs that would not ordinarily consist of programming, like HR and marketing. So which companies need to have a hacker-centric culture? Which companies are "in the software business" in this respect? As Yahoo discovered, the area covered by this rule is bigger than most people realize. The answer is: any company that needs to have good software. Why would great programmers want to work for a company that didn't have a hacker-centric culture, as long as there were others that did? I can imagine two reasons: if they were paid a huge amount, or if the domain was interesting and none of the companies in it were hacker-centric. Otherwise you can't attract good programmers to work in a suit-centric culture. And without good programmers you won't get good software, no matter how many people you put on a task, or how many procedures you establish to ensure "quality." Hacker culture often seems kind of irresponsible. That's why people proposing to destroy it use phrases like "adult supervision." That was the phrase they used at Yahoo. But there are worse things than seeming irresponsible. Losing, for example. Notes [ 1 ] The closest we got to targeting when I was there was when we created <URL> in order to provoke a bidding war between 3 pet supply startups for the spot as top sponsor. [ 2 ] In theory you could beat the death spiral by buying good programmers instead of hiring them. You can get programmers who would never have come to you as employees by buying their startups. But so far the only companies smart enough to do this are companies smart enough not to need to. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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The Future of Startup Funding Want to start a startup? Get funded by Y Combinator . <DATE_TIME> I wrote about what I called " a huge, unexploited opportunity in startup funding:" the growing disconnect between VCs, whose current business model requires them to invest large amounts, and a large class of startups that need less than they used to. Increasingly, startups want a couple hundred thousand dollars, not a couple million. [ 1 ] The opportunity is a lot less unexploited now. Investors have poured into this territory from both directions. VCs are much more likely to make angel-sized investments than they were <DATE_TIME>. And meanwhile <DATE_TIME> has seen a dramatic increase in a new type of investor: the super-angel, who operates like an angel, but using other people's money, like a <LOCATION>. Though a lot of investors are entering this territory, there is still room for more. The distribution of investors should mirror the distribution of startups, which has the usual power law dropoff. So there should be a lot more people investing tens or hundreds of thousands than millions. [ 2 ] In fact, it may be good for angels that there are more people doing angel-sized deals, because if angel rounds become more legitimate, then startups may start to opt for angel rounds even when they could, if they wanted, raise series A rounds from VCs. One reason startups prefer series A rounds is that they're more prestigious. But if angel investors become more active and better known, they'll increasingly be able to compete with VCs in brand. Of course, prestige isn't the main reason to prefer a series A round. A startup will probably get more attention from investors in a series A round than an angel round. So if a startup is choosing between an angel round and an A round from a good VC fund, I usually advise them to take the A round. [ 3 ] But while series A rounds aren't going away, I think VCs should be more worried about super-angels than vice versa. Despite their name, the super-angels are really mini VC funds, and they clearly have existing VCs in their sights. They would seem to have history on their side. The pattern here seems the same one we see when startups and established companies enter a new market. Online video becomes possible, and YouTube plunges right in, while existing media companies embrace it only half-willingly, driven more by fear than hope, and aiming more to protect their turf than to do great things for users. Ditto for PayPal. This pattern is repeated over and over, and it's usually the invaders who win. In this case the super-angels are the invaders. Angel rounds are their whole business, as online video was for YouTube. Whereas VCs who make angel investments mostly do it as a way to generate deal flow for series A rounds. [ 4 ] On the other hand, startup investing is a very strange business. Nearly all the returns are concentrated in a few big winners. If the super-angels merely fail to invest in (and to some extent produce) the big winners, they'll be out of business, even if they invest in all the others. VCs Why don't VCs start doing smaller series A rounds? The sticking point is board seats. In a traditional series A round, the partner whose deal it is takes a seat on the startup's board. If we assume the average startup runs for <DATE_TIME> and a partner can bear to be on 12 boards at once, then a VC fund can do 2 series A deals per partner per year. It has always seemed to me the solution is to take fewer board seats. You don't have to be on the board to help a startup. Maybe VCs feel they need the power that comes with board membership to ensure their money isn't wasted. But have they tested that theory? Unless they've tried not taking board seats and found their returns are lower, they're not bracketing the problem. I'm not saying VCs don't help startups. The good ones help them a lot. What I'm saying is that the kind of help that matters, you may not have to be a board member to give. [ 5 ] How will this all play out? Some VCs will probably adapt, by doing more, smaller deals. I wouldn't be surprised if by streamlining their selection process and taking fewer board seats, VC funds could do 2 to 3 times as many series A rounds with no loss of quality. But other VCs will make no more than superficial changes. VCs are conservative, and the threat to them isn't mortal. The VC funds that don't adapt won't be violently displaced. They'll edge gradually into a different business without realizing it. They'll still do what they will call series A rounds, but these will increasingly be de facto series B rounds. [ 6 ] In such rounds they won't get the 25 to 40% of the company they do now. You don't give up as much of the company in later rounds unless something is seriously wrong. Since the VCs who don't adapt will be investing later, their returns from winners may be smaller. But investing later should also mean they have fewer losers. So their ratio of risk to return may be the same or even better. They'll just have become a different, more conservative, type of investment. Angels In the big angel rounds that increasingly compete with series A rounds, the investors won't take as much equity as VCs do now. And VCs who try to compete with angels by doing more, smaller deals will probably find they have to take less equity to do it. Which is good news for founders: they'll get to keep more of the company. The deal terms of angel rounds will become less restrictive too-not just less restrictive than series A terms, but less restrictive than angel terms have traditionally been. In the future, angel rounds will less often be for specific amounts or have a lead investor. In <DATE_TIME>, the standard m.o. for startups was to find one angel to act as the lead investor. You'd negotiate a round size and valuation with the lead, who'd supply some but not all of the money. Then the startup and the lead would cooperate to find the rest. The future of angel rounds looks more like this: instead of a fixed round size, startups will do a rolling close, where they take money from investors one at a time till they feel they have enough. [ 7 ] And though there's going to be one investor who gives them the first check, and his or her help in recruiting other investors will certainly be welcome, this initial investor will no longer be the lead in the old sense of managing the round. The startup will now do that themselves. There will continue to be lead investors in the sense of investors who take the lead in advising a startup. They may also make the biggest investment. But they won't always have to be the one terms are negotiated with, or be the first money in, as they have in the past. Standardized paperwork will do away with the need to negotiate anything except the valuation, and that will get easier too. If multiple investors have to share a valuation, it will be whatever the startup can get from the first one to write a check, limited by their guess at whether this will make later investors balk. But there may not have to be just one valuation. Startups are increasingly raising money on convertible notes, and convertible notes have not valuations but at most valuation caps : caps on what the effective valuation will be when the debt converts to equity (in a later round, or upon acquisition if that happens first). That's an important difference because it means a startup could do multiple notes at once with different caps. This is now starting to happen, and I predict it will become more common. Sheep The reason things are moving this way is that the old way sucked for startups. Leads could (and did) use a fixed size round as a legitimate-seeming way of saying what all founders hate to hear: I'll invest if other people will. Most investors, unable to judge startups for themselves, rely instead on the opinions of other investors. If everyone wants in, they want in too; if not, not. Founders hate this because it's a recipe for deadlock, and delay is the thing a startup can least afford. Most investors know this m.o. is lame, and few say openly that they're doing it. But the craftier ones achieve the same result by offering to lead rounds of fixed size and supplying only part of the money. If the startup can't raise the rest, the lead is out too. How could they go ahead with the deal? The startup would be underfunded! In the future, investors will increasingly be unable to offer investment subject to contingencies like other people investing. Or rather, investors who do that will get last place in line. Startups will go to them only to fill up rounds that are mostly subscribed. And since hot startups tend to have rounds that are oversubscribed, being last in line means they'll probably miss the hot deals. Hot deals and successful startups are not identical, but there is a significant correlation. [ 8 ] So investors who won't invest unilaterally will have lower returns. Investors will probably find they do better when deprived of this crutch anyway. Chasing hot deals doesn't make investors choose better; it just makes them feel better about their choices. I've seen feeding frenzies both form and fall apart many times, and as far as I can tell they're mostly random. [ 9 ] If investors can no longer rely on their herd instincts, they'll have to think more about each startup before investing. They may be surprised how well this works. Deadlock wasn't the only disadvantage of letting a lead investor manage an angel round. The investors would not infrequently collude to push down the valuation. And rounds took too long to close, because however motivated the lead was to get the round closed, he was not a tenth as motivated as the startup. Increasingly, startups are taking charge of their own angel rounds. Only a few do so far, but I think we can already declare the old way dead, because those few are the best startups. They're the ones in a position to tell investors how the round is going to work. And if the startups you want to invest in do things a certain way, what difference does it make what the others do? Traction In fact, it may be slightly misleading to say that angel rounds will increasingly take the place of series A rounds. What's really happening is that startup-controlled rounds are taking the place of investor-controlled rounds. This is an instance of a very important meta-trend, one that Y Combinator itself has been based on from the beginning: founders are becoming increasingly powerful relative to investors. So if you want to predict what the future of venture funding will be like, just ask: how would founders like it to be? One by one, all the things founders dislike about raising money are going to get eliminated. [ 10 ] Using that heuristic, I'll predict a couple more things. One is that investors will increasingly be unable to wait for startups to have "traction" before they put in significant money. It's hard to predict in advance which startups will succeed. So most investors prefer, if they can, to wait till the startup is already succeeding, then jump in quickly with an offer. Startups hate this as well, partly because it tends to create deadlock, and partly because it seems kind of slimy. If you're a promising startup but don't yet have significant growth, all the investors are your friends in words, but few are in actions. They all say they love you, but they all wait to invest. Then when you start to see growth, they claim they were your friend all along, and are aghast at the thought you'd be so disloyal as to leave them out of your round. If founders become more powerful, they'll be able to make investors give them more money upfront. (The worst variant of this behavior is the tranched deal, where the investor makes a small initial investment, with more to follow if the startup does well. In effect, this structure gives the investor a free option on the next round, which they'll only take if it's worse for the startup than they could get in the open market. Tranched deals are an abuse. They're increasingly rare, and they're going to get rarer.) [ 11 ] Investors don't like trying to predict which startups will succeed, but increasingly they'll have to. Though the way that happens won't necessarily be that the behavior of existing investors will change; it may instead be that they'll be replaced by other investors with different behavior-that investors who understand startups well enough to take on the hard problem of predicting their trajectory will tend to displace suits whose skills lie more in raising money from LPs. Speed The other thing founders hate most about fundraising is how long it takes. So as founders become more powerful, rounds should start to close faster. Fundraising is still terribly distracting for startups. If you're a founder in the middle of raising a round, the round is the top idea in your mind , which means working on the company isn't. If a round takes <DATE_TIME> to close, which is reasonably fast by present standards, that means <DATE_TIME> during which the company is basically treading water. That's the worst thing a startup could do. So if investors want to get the best deals, the way to do it will be to close faster. Investors don't need <DATE_TIME> to make up their minds anyway. We decide based on <DATE_TIME> of reading an application plus <DATE_TIME> of in person interview, and we only regret about 10% of our decisions. If we can decide in <DATE_TIME>, surely the next round of investors can decide in <DATE_TIME>. [ 12 ] There are a lot of institutionalized delays in startup funding: the multi-week mating dance with investors; the distinction between termsheets and deals; the fact that each series A has enormously elaborate, custom paperwork. Both founders and investors tend to take these for granted. It's the way things have always been. But ultimately the reason these delays exist is that they're to the advantage of investors. More time gives investors more information about a startup's trajectory, and it also tends to make startups more pliable in negotiations, since they're usually short of money. These conventions weren't designed to drag out the funding process, but that's why they're allowed to persist. Slowness is to the advantage of investors, who have in the past been the ones with the most power. But there is no need for rounds to take <DATE_TIME> or even <DATE_TIME> to close, and once founders realize that, it's going to stop. Not just in angel rounds, but in series A rounds too. The future is simple deals with standard terms, done quickly. One minor abuse that will get corrected in the process is option pools. In a traditional series A round, before the VCs invest they make the company set aside a block of stock for future hires-usually between 10 and 30% of the company. The point is to ensure this dilution is borne by the existing shareholders. The practice isn't dishonest; founders know what's going on. But it makes deals unnecessarily complicated. In effect the valuation is 2 numbers. There's no need to keep doing this. [ 13 ] The final thing founders want is to be able to sell some of their own stock in later rounds. This won't be a change, because the practice is now quite common. A lot of investors hated the idea, but the world hasn't exploded as a result, so it will happen more, and more openly. Surprise I've talked here about a bunch of changes that will be forced on investors as founders become more powerful. Now the good news: investors may actually make more money as a result. <DATE_TIME> an interviewer asked me if founders having more power would be better or worse for the world. I was surprised, because I'd never considered that question. Better or worse, it's happening. But after a second's reflection, the answer seemed obvious. Founders understand their companies better than investors, and it has to be better if the people with more knowledge have more power. One of the mistakes novice pilots make is overcontrolling the aircraft: applying corrections too vigorously, so the aircraft oscillates about the desired configuration instead of approaching it asymptotically. It seems probable that investors have till now on average been overcontrolling their portfolio companies. In a lot of startups, the biggest source of stress for the founders is not competitors but investors. Certainly it was for us at <PERSON>. And this is not a new phenomenon: investors were <PERSON> biggest problem too. If having less power prevents investors from overcontrolling startups, it should be better not just for founders but for investors too. Investors may end up with less stock per startup, but startups will probably do better with founders more in control, and there will almost certainly be more of them. Investors all compete with one another for deals, but they aren't one another's main competitor. Our main competitor is employers. And so far that competitor is crushing us. Only a tiny fraction of people who could start a startup do. Nearly all customers choose the competing product, a job. Why? Well, let's look at the product we're offering. An unbiased review would go something like this: Starting a startup gives you more freedom and the opportunity to make a lot more money than a job, but it's also hard work and at times very stressful. Much of the stress comes from dealing with investors. If reforming the investment process removed that stress, we'd make our product much more attractive. The kind of people who make good startup founders don't mind dealing with technical problems-they enjoy technical problems-but they hate the type of problems investors cause. Investors have no idea that when they maltreat one startup, they're preventing 10 others from happening, but they are. Indirectly, but they are. So when investors stop trying to squeeze a little more out of their existing deals, they'll find they're net ahead, because so many more new deals appear. One of our axioms at Y Combinator is not to think of deal flow as a zero-sum game. Our main focus is to encourage more startups to happen, not to win a larger share of the existing stream. We've found this principle very useful, and we think as it spreads outward it will help later stage investors as well. "Make something people want" applies to us too. Notes [ 1 ] In this essay I'm talking mainly about software startups. These points don't apply to types of startups that are still expensive to start, e.g. in energy or biotech. Even the cheap kinds of startups will generally raise large amounts at some point, when they want to hire a lot of people. What has changed is how much they can get done before that. [ 2 ] It's not the distribution of good startups that has a power law dropoff, but the distribution of potentially good startups, which is to say, good deals. There are lots of potential winners, from which a few actual winners emerge with superlinear certainty. [ 3 ] As I was writing this, I asked some founders who'd taken series A rounds from top VC funds whether it was worth it, and they unanimously said yes. The quality of investor is more important than the type of round, though. I'd take an angel round from good angels over a series A from a mediocre VC. [ 4 ] Founders also worry that taking an angel investment from a VC means they'll look bad if the VC declines to participate in the next round. The trend of VC angel investing is so new that it's hard to say how justified this worry is. Another danger, pointed out by <PERSON>, is that if VCs are only doing angel deals to generate series A deal flow, then their incentives aren't aligned with the founders'. The founders want the valuation of the next round to be high, and the VCs want it to be low. Again, hard to say yet how much of a problem this will be. [ 5 ] <PERSON> pointed out that another way to be on fewer boards at once is to take board seats for shorter periods. [ 6 ] Google was in this respect as so many others the pattern for the future. It would be great for VCs if the similarity extended to returns. That's probably too much to hope for, but the returns may be somewhat higher, as I explain later. [ 7 ] Doing a rolling close doesn't mean the company is always raising money. That would be a distraction. The point of a rolling close is to make fundraising take less time, not more. With a classic fixed sized round, you don't get any money till all the investors agree, and that often creates a situation where they all sit waiting for the others to act. A rolling close usually prevents this. [ 8 ] There are two (non-exclusive) causes of hot deals: the quality of the company, and domino effects among investors. The former is obviously a better predictor of success. [ 9 ] Some of the randomness is concealed by the fact that investment is a self fulfilling prophecy. [ 10 ] The shift in power to founders is exaggerated now because it's a seller's market. On the next downtick it will seem like I overstated the case. But on the next uptick after that, founders will seem more powerful than ever. [ 11 ] More generally, it will become less common for the same investor to invest in successive rounds, except when exercising an option to maintain their percentage. When the same investor invests in successive rounds, it often means the startup isn't getting market price. They may not care; they may prefer to work with an investor they already know; but as the investment market becomes more efficient, it will become increasingly easy to get market price if they want it. Which in turn means the investment community will tend to become more stratified. [ 12 ] The two 10 minuteses have <DATE_TIME> between them so founders can get cheap plane tickets, but except for that they could be adjacent. [ 13 ] I'm not saying option pools themselves will go away. They're an administrative convenience. What will go away is investors requiring them. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, <PERSON>, Harj Taggar, and <PERSON> for reading drafts of this.
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The Acceleration of Addictiveness <DATE_TIME> What hard liquor, cigarettes, heroin, and crack have in common is that they're all more concentrated forms of less addictive predecessors. Most if not all the things we describe as addictive are. And the scary thing is, the process that created them is accelerating. We wouldn't want to stop it. It's the same process that cures diseases: technological progress. Technological progress means making things do more of what we want. When the thing we want is something we want to want, we consider technological progress good. If some new technique makes solar cells x% more efficient, that seems strictly better. When progress concentrates something we don't want to want - when it transforms opium into heroin - it seems bad. But it's the same process at work. [ 1 ] No one doubts this process is accelerating, which means increasing numbers of things we like will be transformed into things we like too much. [ 2 ] As far as I know there's no word for something we like too much. The closest is the colloquial sense of "addictive." That usage has become increasingly common during my lifetime. And it's clear why: there are an increasing number of things we need it for. At the extreme end of the spectrum are crack and meth. Food has been transformed by a combination of factory farming and innovations in food processing into something with way more immediate bang for the buck, and you can see the results in any town in <LOCATION>. Checkers and solitaire have been replaced by World of Warcraft and FarmVille. TV has become much more engaging, and even so it can't compete with Facebook. The world is more addictive than it was <DATE_TIME>. And unless the forms of technological progress that produced these things are subject to different laws than technological progress in general, the world will get more addictive in <DATE_TIME> than it did in <DATE_TIME>. <DATE_TIME> will bring us some wonderful things. I don't mean to imply they're all to be avoided. Alcohol is a dangerous drug, but I'd rather live in a world with wine than one without. Most people can coexist with alcohol; but you have to be careful. More things we like will mean more things we have to be careful about. Most people won't, unfortunately. Which means that as the world becomes more addictive, the two senses in which one can live a normal life will be driven ever further apart. One sense of "normal" is statistically normal: what everyone else does. The other is the sense we mean when we talk about the normal operating range of a piece of machinery: what works best. These two senses are already quite far apart. Already someone trying to live well would seem eccentrically abstemious in most of the <LOCATION>. That phenomenon is only going to become more pronounced. 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. Societies eventually develop antibodies to addictive new things. I've seen that happen with cigarettes. When cigarettes first appeared, they spread the way an infectious disease spreads through a previously isolated population. Smoking rapidly became a (statistically) normal thing. There were ashtrays everywhere. We had ashtrays in our house when I was a kid, even though neither of my parents smoked. You had to for guests. As knowledge spread about the dangers of smoking, customs changed. In <DATE_TIME>, smoking has been transformed from something that seemed totally normal into a rather seedy habit: from something movie stars did in publicity shots to something small huddles of addicts do outside the doors of office buildings. A lot of the change was due to legislation, of course, but the legislation couldn't have happened if customs hadn't already changed. It took a while though-on the order of <DATE_TIME>. And unless the rate at which social antibodies evolve can increase to match the accelerating rate at which technological progress throws off new addictions, we'll be increasingly unable to rely on customs to protect us. [ 3 ] Unless we want to be canaries in the coal mine of each new addiction-the people whose sad example becomes a lesson to future generations-we'll have to figure out for ourselves what to avoid and how. It will actually become a reasonable strategy (or a more reasonable strategy) to suspect everything new . In fact, even that won't be enough. We'll have to worry not just about new things, but also about existing things becoming more addictive. That's what bit me. I've avoided most addictions, but the Internet got me because it became addictive while I was using it. [ 4 ] Most people I know have problems with Internet addiction. We're all trying to figure out our own customs for getting free of it. That's why I don't have an iPhone, for example; the last thing I want is for the Internet to follow me out into the world. [ 5 ] My latest trick is taking long hikes. I used to think running was a better form of exercise than hiking because it took less time. Now the slowness of hiking seems an advantage, because the longer I spend on the trail, the longer I have to think without interruption. Sounds pretty eccentric, doesn't it? It always will when you're trying to solve problems where there are no customs yet to guide you. Maybe I can't plead Occam's razor; maybe I'm simply eccentric. But if I'm right about the acceleration of addictiveness, then this kind of lonely squirming to avoid it will increasingly be the fate of anyone who wants to get things done. We'll increasingly be defined by what we say no to. Notes [ 1 ] Could you restrict technological progress to areas where you wanted it? Only in a limited way, without becoming a police state. And even then your restrictions would have undesirable side effects. "Good" and "bad" technological progress aren't sharply differentiated, so you'd find you couldn't slow the latter without also slowing the former. And in any case, as Prohibition and the "war on drugs" show, bans often do more harm than good. [ 2 ] Technology has always been accelerating. By Paleolithic standards, technology evolved at a blistering pace in the Neolithic period. [ 3 ] Unless we mass produce social customs. I suspect the recent resurgence of evangelical <NRP> in the <LOCATION> is partly a reaction to drugs. In desperation people reach for the sledgehammer; if their kids won't listen to them, maybe they'll listen to God. But that solution has broader consequences than just getting kids to say no to drugs. You end up saying no to science as well. I worry we may be heading for a future in which only a few people plot their own itinerary through no-land, while everyone else books a package tour. Or worse still, has one booked for them by the government. [ 4 ] People commonly use the word "procrastination" to describe what they do on the Internet. It seems to me too mild to describe what's happening as merely not-doing-work. We don't call it procrastination when someone gets drunk instead of working. [ 5 ] Several people have told me they like the iPad because it lets them bring the Internet into situations where a laptop would be too conspicuous. In other words, it's a hip flask. (This is true of the iPhone too, of course, but this advantage isn't as obvious because it reads as a phone, and everyone's used to those.) Thanks to <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Organic Startup Ideas Want to start a startup? Get funded by Y Combinator . <DATE_TIME> The best way to come up with startup ideas is to ask yourself the question: what do you wish someone would make for you? There are two types of startup ideas: those that grow organically out of your own life, and those that you decide, from afar, are going to be necessary to some class of users other than you. Apple was the first type. Apple happened because <PERSON> wanted a computer. Unlike most people who wanted computers, he could design one, so he did. And since lots of other people wanted the same thing, Apple was able to sell enough of them to get the company rolling. They still rely on this principle <DATE_TIME>, incidentally. The iPhone is the phone <PERSON> wants. [ 1 ] Our own startup, <PERSON>, was of the second type. We made software for building online stores. We didn't need this software ourselves. We weren't direct marketers. We didn't even know when we started that our users were called "direct marketers." But we were comparatively old when we started the company (I was <DATE_TIME> and <PERSON> was <DATE_TIME>), so we'd seen enough to know users would need this type of software. [ 2 ] There is no sharp line between the two types of ideas, but the most successful startups seem to be closer to the Apple type than the <PERSON> type. When he was writing that first Basic interpreter for the <PERSON>, <PERSON> was writing something he would use, as were <PERSON> and <PERSON> when they wrote the first versions of Google. Organic ideas are generally preferable to the made up kind, but particularly so when the founders are young. It takes experience to predict what other people will want. The worst ideas we see at Y Combinator are from young founders making things they think other people will want. So if you want to start a startup and don't know yet what you're going to do, I'd encourage you to focus initially on organic ideas. What's missing or broken in your daily life? Sometimes if you just ask that question you'll get immediate answers. It must have seemed obviously broken to <PERSON> that you could only program the Altair in machine language. You may need to stand outside yourself a bit to see brokenness, because you tend to get used to it and take it for granted. You can be sure it's there, though. There are always great ideas sitting right under our noses. In <DATE_TIME> it was ridiculous that Harvard undergrads were still using a Facebook printed on paper. Surely that sort of thing should have been online. There are ideas that obvious lying around now. The reason you're overlooking them is the same reason you'd have overlooked the idea of building Facebook in <DATE_TIME>: organic startup ideas usually don't seem like startup ideas at first. We know now that Facebook was very successful, but put yourself back in <DATE_TIME>. Putting undergraduates' profiles online wouldn't have seemed like much of a startup idea. And in fact, it wasn't initially a startup idea. When <PERSON> spoke at a YC dinner <DATE_TIME> he said he wasn't trying to start a company when he wrote the first version of Facebook. It was just a project. So was the Apple I when <PERSON> first started working on it. He didn't think he was starting a company. If these guys had thought they were starting companies, they might have been tempted to do something more "serious," and that would have been a mistake. So 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. [ 3 ] 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 overlooking the idea. The first microcomputers were dismissed as toys. And the first planes, and the first cars. At this point, when someone comes to us with something that users like but that we could envision forum trolls dismissing as a toy, it makes us especially likely to invest. While young founders are at a disadvantage when coming up with made-up ideas, they're the best source of organic ones, because they're at the forefront of technology. They use the latest stuff. They only just decided what to use, so why wouldn't they? And because they use the latest stuff, they're in a position to discover valuable types of fixable brokenness first. There's nothing more valuable than an unmet need that is just becoming fixable. If you find something broken that you can fix for a lot of people, you've found a gold mine. As with an actual gold mine, you still have to work hard to get the gold out of it. But at least you know where the seam is, and that's the hard part. Notes [ 1 ] This suggests a way to predict areas where Apple will be weak: things <PERSON> doesn't use. E.g. I doubt he is much into gaming. [ 2 ] In retrospect, we should have become direct marketers. If I were doing <PERSON> again, I'd open our own online store. If we had, we'd have understood users a lot better. I'd encourage anyone starting a startup to become one of its users, however unnatural it seems. [ 3 ] Possible exception: It's hard to compete directly with open source software. You can build things for programmers, but there has to be some part you can charge for. Thanks to <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Persuade xor Discover <DATE_TIME> When meeting people you don't know very well, the convention is to seem extra friendly. You smile and say "pleased to meet you," whether you are or not. There's nothing dishonest about this. Everyone knows that these little social lies aren't meant to be taken literally, just as everyone knows that "Can you pass the salt?" is only grammatically a question. I'm perfectly willing to smile and say "pleased to meet you" when meeting new people. But there is another set of customs for being ingratiating in print that are not so harmless. The reason there's a convention of being ingratiating in print is that most essays are written to persuade. And as any politician could tell you, the way to persuade people is not just to baldly state the facts. You have to add a spoonful of sugar to make the medicine go down. For example, a politician announcing the cancellation of a government program will not merely say "The program is canceled." That would seem offensively curt. Instead he'll spend most of his time talking about the noble effort made by the people who worked on it. The reason these conventions are more dangerous is that they interact with the ideas. Saying "pleased to meet you" is just something you prepend to a conversation, but the sort of spin added by politicians is woven through it. We're starting to move from social lies to real lies. Here's an example of a paragraph from an essay I wrote about labor unions . As written, it tends to offend people who like unions. People who think the labor movement was the creation of heroic union organizers have a problem to explain: why are unions shrinking now? The best they can do is fall back on the default explanation of people living in fallen civilizations. Our ancestors were giants. The workers of <DATE_TIME> must have had a moral courage that's lacking <DATE_TIME>. Now here's the same paragraph rewritten to please instead of offending them: Early union organizers made heroic sacrifices to improve conditions for workers. But though labor unions are shrinking now, it's not because present union leaders are any less courageous. An employer couldn't get away with hiring thugs to beat up union leaders <DATE_TIME>, but if they did, I see no reason to believe <DATE_TIME>'s union leaders would shrink from the challenge. So I think it would be a mistake to attribute the decline of unions to some kind of decline in the people who run them. Early union leaders were heroic, certainly, but we should not suppose that if unions have declined, it's because present union leaders are somehow inferior. The cause must be external. [ 1 ] It makes the same point: that it can't have been the personal qualities of early union organizers that made unions successful, but must have been some external factor, or otherwise present-day union leaders would have to be inferior people. But written this way it seems like a defense of <DATE_TIME> union organizers rather than an attack on early ones. That makes it more persuasive to people who like unions, because it seems sympathetic to their cause. I believe everything I wrote in the second version. Early union leaders did make heroic sacrifices. And present union leaders probably would rise to the occasion if necessary. People tend to; I'm skeptical about the idea of "the greatest generation." [ 2 ] If I believe everything I said in the second version, why didn't I write it that way? Why offend people needlessly? Because I'd rather offend people than pander to them, and if you write about controversial topics you have to choose one or the other. The degree of courage of past or present union leaders is beside the point; all that matters for the argument is that they're the same. But if you want to please people who are mistaken, you can't simply tell the truth. You're always going to have to add some sort of padding to protect their misconceptions from bumping against reality. Most writers do. Most writers write to persuade, if only out of habit or politeness. But I don't write to persuade; I write to figure out. I write to persuade a hypothetical perfectly unbiased reader. Since the custom is to write to persuade the actual reader, someone who doesn't will seem arrogant. In fact, worse than arrogant: since readers are used to essays that try to please someone, an essay that displeases one side in a dispute reads as an attempt to pander to the other. To a lot of pro-union readers, the first paragraph sounds like the sort of thing a right-wing radio talk show host would say to stir up his followers. But it's not. Something that curtly contradicts one's beliefs can be hard to distinguish from a partisan attack on them, but though they can end up in the same place they come from different sources. Would it be so bad to add a few extra words, to make people feel better? Maybe not. Maybe I'm excessively attached to conciseness. I write code the same way I write essays, making pass after pass looking for anything I can cut. But I have a legitimate reason for doing this. You don't know what the ideas are until you get them down to the fewest words. [ 3 ] The danger of the second paragraph is not merely that it's longer. It's that you start to lie to yourself. The ideas start to get mixed together with the spin you've added to get them past the readers' misconceptions. I think the goal of an essay should be to discover surprising things. That's my goal, at least. And most surprising means most different from what people currently believe. So writing to persuade and writing to discover are diametrically opposed. The more your conclusions disagree with readers' present beliefs, the more effort you'll have to expend on selling your ideas rather than having them. As you accelerate, this drag increases, till eventually you reach a point where 100% of your energy is devoted to overcoming it and you can't go any faster. It's hard enough to overcome one's own misconceptions without having to think about how to get the resulting ideas past other people's. I worry that if I wrote to persuade, I'd start to shy away unconsciously from ideas I knew would be hard to sell. When I notice something surprising, it's usually very faint at first. There's nothing more than a slight stirring of discomfort. I don't want anything to get in the way of noticing it consciously. Notes [ 1 ] I had a strange feeling of being back in high school writing this. To get a good grade you had to both write the sort of pious crap you were expected to, but also seem to be writing with conviction. The solution was a kind of method acting. It was revoltingly familiar to slip back into it. [ 2 ] Exercise for the reader: rephrase that thought to please the same people the first version would offend. [ 3 ] Come to think of it, there is one way in which I deliberately pander to readers, because it doesn't change the number of words: I switch person. This flattering distinction seems so natural to the average reader that they probably don't notice even when I switch in mid-sentence, though you tend to notice when it's done as conspicuously as this. Thanks to <PERSON> and <PERSON> for reading drafts of this. Note: An earlier version of this essay began by talking about why people dislike <PERSON>. I now believe that was mistaken, and that most people don't dislike him for the same reason I did when I first met him, but simply because he writes about controversial things.
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Post-Medium Publishing <DATE_TIME> Publishers of all types, from news to music, are unhappy that consumers won't pay for content anymore. At least, that's how they see it. In fact consumers never really were paying for content, and publishers weren't really selling it either. If the content was what they were selling, why has the price of books or music or movies always depended mostly on the format? Why didn't better content cost more? [ 1 ] A copy of Time costs $5 for 58 pages, or 8.6 cents a page. The Economist costs $7 for 86 pages, or 8.1 cents a page. Better journalism is actually slightly cheaper. Almost every form of publishing has been organized as if the medium was what they were selling, and the content was irrelevant. Book publishers, for example, set prices based on the cost of producing and distributing books. They treat the words printed in the book the same way a textile manufacturer treats the patterns printed on its fabrics. Economically, the print media are in the business of marking up paper. We can all imagine an old-style editor getting a scoop and saying "this will sell a lot of papers!" Cross out that final S and you're describing their business model. The reason they make less money now is that people don't need as much paper. <DATE_TIME> I ran into a friend in a cafe. I had a copy of the New York Times , which I still occasionally buy on weekends. As I was leaving I offered it to him, as I've done countless times before in the same situation. But this time something new happened. I felt that sheepish feeling you get when you offer someone something worthless. "Do you, er, want a printout of <DATE_TIME>'s news?" I asked. (He didn't.) Now that the medium is evaporating, publishers have nothing left to sell. Some seem to think they're going to sell content-that they were always in the content business, really. But they weren't, and it's unclear whether anyone could be. Selling There have always been people in the business of selling information, but that has historically been a distinct business from publishing. And the business of selling information to consumers has always been a marginal one. When I was a kid there were people who used to sell newsletters containing stock tips, printed on colored paper that made them hard for the copiers of <DATE_TIME> to reproduce. That is a different world, both culturally and economically, from the one publishers currently inhabit. People will pay for information they think they can make money from. That's why they paid for those stock tip newsletters, and why companies pay now for Bloomberg terminals and Economist Intelligence Unit reports. But will people pay for information otherwise? History offers little encouragement. If audiences were willing to pay more for better content, why wasn't anyone already selling it to them? There was no reason you couldn't have done that in the era of physical media. So were the print media and the music labels simply overlooking this opportunity? Or is it, rather, nonexistent? What about iTunes? Doesn't that show people will pay for content? Well, not really. iTunes is more of a tollbooth than a store. Apple controls the default path onto the iPod. They offer a convenient list of songs, and whenever you choose one they ding your credit card for a small amount, just below the threshold of attention. Basically, iTunes makes money by taxing people, not selling them stuff. You can only do that if you own the channel, and even then you don't make much from it, because a toll has to be ignorable to work. Once a toll becomes painful, people start to find ways around it, and that's pretty easy with digital content. The situation is much the same with digital books. Whoever controls the device sets the terms. It's in their interest for content to be as cheap as possible, and since they own the channel, there's a lot they can do to drive prices down. Prices will fall even further once writers realize they don't need publishers. Getting a book printed and distributed is a daunting prospect for a writer, but most can upload a file. Is software a counterexample? People pay a lot for desktop software, and that's just information. True, but I don't think publishers can learn much from software. Software companies can charge a lot because (a) many of the customers are businesses, who get in trouble if they use pirated versions, and (b) though in form merely information, software is treated by both maker and purchaser as a different type of thing from a song or an article. A Photoshop user needs Photoshop in a way that no one needs a particular song or article. That's why there's a separate word, "content," for information that's not software. Software is a different business. Software and content blur together in some of the most lightweight software, like casual games. But those are usually free. To make money the way software companies do, publishers would have to become software companies, and being publishers gives them no particular head start in that domain. [ 2 ] The most promising countertrend is the premium cable channel. People still pay for those. But broadcasting isn't publishing: you're not selling a copy of something. That's one reason the movie business hasn't seen their revenues decline the way the news and music businesses have. They only have one foot in publishing. To the extent the movie business can avoid becoming publishers, they may avoid publishing's problems. But there are limits to how well they'll be able to do that. Once publishing-giving people copies-becomes the most natural way of distributing your content, it probably doesn't work to stick to old forms of distribution just because you make more that way. If free copies of your content are available online, then you're competing with publishing's form of distribution, and that's just as bad as being a publisher. Apparently some people in the music business hope to retroactively convert it away from publishing, by getting listeners to pay for subscriptions. It seems unlikely that will work if they're just streaming the same files you can get as <PERSON>. Next What happens to publishing if you can't sell content? You have two choices: give it away and make money from it indirectly, or find ways to embody it in things people will pay for. The first is probably the future of most current media. Give music away and make money from concerts and t-shirts. Publish articles for free and make money from one of a dozen permutations of advertising. Both publishers and investors are down on advertising at the moment, but it has more potential than they realize. I'm not claiming that potential will be realized by the existing players. The optimal ways to make money from the written word probably require different words written by different people. It's harder to say what will happen to movies. They could evolve into ads. Or they could return to their roots and make going to the theater a treat. If they made the experience good enough, audiences might start to prefer it to watching pirated movies at home. [ 3 ] Or maybe the movie business will dry up, and the people working in it will go to work for game developers. I don't know how big embodying information in physical form will be. It may be surprisingly large; people overvalue physical stuff . There should remain some market for printed books, at least. I can see the evolution of book publishing in the books on my shelves. Clearly at some point in <DATE_TIME> the big publishing houses started to ask: how cheaply can we make books before people refuse to buy them? The answer turned out to be one step short of phonebooks. As long as it isn't floppy, consumers still perceive it as a book. That worked as long as buying printed books was the only way to read them. If printed books are optional, publishers will have to work harder to entice people to buy them. There should be some market, but it's hard to foresee how big, because its size will depend not on macro trends like the amount people read, but on the ingenuity of individual publishers. [ 4 ] Some magazines may thrive by focusing on the magazine as a physical object. Fashion magazines could be made lush in a way that would be hard to match digitally, at least for a while. But this is probably not an option for most magazines. I don't know exactly what the future will look like, but I'm not too worried about it. This sort of change tends to create as many good things as it kills. Indeed, the really interesting question is not what will happen to existing forms, but what new forms will appear. The reason I've been writing about existing forms is that I don't know what new forms will appear. But though I can't predict specific winners, I can offer a recipe for recognizing them. When you see something that's taking advantage of new technology to give people something they want that they couldn't have before, you're probably looking at a winner. And when you see something that's merely reacting to new technology in an attempt to preserve some existing source of revenue, you're probably looking at a loser. Notes [ 1 ] I don't like the word "content" and tried for a while to avoid using it, but I have to admit there's no other word that means the right thing. "Information" is too general. Ironically, the main reason I don't like "content" is the thesis of this essay. The word suggests an undifferentiated slurry, but economically that's how both publishers and audiences treat it. Content is information you don't need. [ 2 ] Some types of publishers would be at a disadvantage trying to enter the software business. Record labels, for example, would probably find it more natural to expand into casinos than software, because the kind of people who run them would be more at home at the mafia end of the business spectrum than the don't-be-evil end. [ 3 ] I never watch movies in theaters anymore. The tipping point for me was the ads they show first. [ 4 ] Unfortunately, making physically nice books will only be a niche within a niche. Publishers are more likely to resort to expedients like selling autographed copies, or editions with the buyer's picture on the cover. Thanks to <PERSON>, <PERSON>, <PERSON>, <PERSON>, and <PERSON> for reading drafts of this.
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Basecamp: Project management software, online collaboration We'd like to use cookies to help understand if our ads are working or not. No Yes, that's fine There are lots of ways to manage projects. And there's plenty of software promising to help. You've probably tried some. Yet, here you are. Unfortunately, most project management systems are either overwhelming, inadequate, bewildering, or chaotic. You know? Not Basecamp. Basecamp is refreshingly straightforward, with a <DATE_TIME> track record to back it up. Longevity isn't luck - it's proof it works. And you'll work better with it too. Basecamp is famously no-nonsense, effective, and reliable. The trifecta. It's designed for smaller, hungrier businesses , not big, sluggish ones. Over 30 pages of customer testimonials detail how things run better on <LOCATION>. So, we invite you to poke around, watch the video below, and try Basecamp for free . We'd be honored to have you as a customer. Thank you. <PERSON> , <EMAIL_ADDRESS> Co-founder & CEO Hit play to see how Basecamp is different The home screen organizes your projects, assignments, and upcoming events together on one screen. It's your calm, comfortable, simple starting point every morning. What's my week look like? What's on my plate <DATE_TIME>? Which projects am I on? A project is where the tasks, discussions, deliverables, and decisions happen. Projects hold everything - and everyone - together in one tidy, predictably structured place. A project page organizes everything What to do + who's doing? Who said what when? What's due next? Where's the latest version? Got a quick question? How's the process flowing? <PERSON>'s reports aren't numbers, percentages, or abstract representations - they're the real work, actual evidence of progress being made (or not made). What's overdue? How much time have we spent? Who's responsible for what? What's actually been happening? Basecamp's Lineup, Mission Control, and Hill Charts are visual tools that help you clearly see where projects really stand. Notice progress at a glance, know reality in an instant. How far along are we? How are we feeling? What still needs to be figured out? The Hey! menu aggregates your notifications in a never-annoying single menu. And "Pings", our flavor of direct messages, let you kick off ad hoc chats 1:1 or in small groups. Have private 1-1 or small group conversations Notifications in one place, not in your face Basecamp keeps both sides organized, everyone's feedback on the record, and all decisions, approvals, files, tasks, deadlines, and communications safe and centralized. Can the client see this? Where's the final version so we can show the client? Did the client officially approve it? Where's the client's email they sent? Can software be simple, straightforward, and easy, yet powerfully full-featured? With Basecamp the answer is absolutely YES! Can I prevent our clients from seeing unfinished work? Can I link up files from Google Docs, Figma, Dropbox, Airtable, and other apps? Can I see everything I need to do on a single screen? Can I see everything that's overdue on a single screen? Can I use <LOCATION> even if some of my team prefers just to use email? Can I see all the work that was completed on <DATE_TIME>? Can I set up projects that only some of my team can see? Can I see everything that's happened across multiple projects in one place? Can I @mention someone so they're notified about something? Can I see all the work someone's done over a long period of time? Can I see everything that's assigned to someone on a single page? Can I see exactly who worked on what <DATE_TIME>? <DATE_TIME>? <DATE_TIME>? Can I easily reference an entire conversation from <DATE_TIME>? Can I follow a project quietly without receiving notifications? Can I assign tasks to multiple people at once? Can I see all our projects laid out on a visual timeline? Can I keep all the discussion about a to-do attached to that to-do? Can I follow-up directly with someone without anyone else knowing? Can our clients respond to our questions via email? Can our clients see a record of everything we've asked them? Can I organize ideas and setup workflows on a Kanban board? Can Basecamp tell me when someone completed an assignment? Can Basecamp help me get a client to approve a design? Can Basecamp help me hold my team accountable for deadlines? You wrote some books on how to run a business , too, right? Team super busy, but running in circles? It's time for <LOCATION>. Finding stuff easy to start, but hard to finish? It's time for Basecamp. Things taking longer than they should? It's time for Basecamp. <NRP> increasingly scattered across different apps? It's time for Basecamp. Subscription fees keep adding up? It's time for Basecamp. Growing into dysfunction? It's time for Basecamp. Tired of looking disorganized in front of clients? It's time for Basecamp. How long have you been around? Can we trust you? The company that designed, owns, and operates <LOCATION> is called 37signals , and we've been around as a company since <DATE_TIME>. We launched <LOCATION>, the product, in <DATE_TIME> and have been improving it <DATE_TIME> ever since. Running a sane, responsible, sustainable business is part of our commitment to you. We've been profitable for <DATE_TIME>, we have zero debt, we're privately held, and built to stay, not exit. Our employee handbook is also public for everyone to see how we run our business and treat our employees. We've also written a number of bestselling books (REWORK, Remote, It Doesn't Have to Be Crazy at Work) as well. The books detail how we've built, and run, such a unique, long-lasting company in a field full of sameness and short-term thinking. You can email <PERSON>, our Co-Founder and CEO, any time at <EMAIL_ADDRESS> . He doesn't have an assistant, so he'll read and respond to your emails personally. What about reliability and uptime? We can make endless promises, but the numbers are what matter here. Our historical uptime over <DATE_TIME> is well over 99.99%, and you can see recent real-time history on our Status Page . What's your refund policy like? We aim to be fair and reasonable, just as we'd want to be treated. Our refund policy reflects that. Can I ask ownership a question directly? Absolutely. Our Co-Founder and CEO (<PERSON>) is available direct at <EMAIL_ADDRESS> , and our other Co-Founder and CTO (<PERSON>) is at <EMAIL_ADDRESS> . Please do reach out. They don't have assistants or anyone who reads their emails, so you'll hear from them directly. How secure is Basecamp? We have a full security write-up available on the 37signals site. 37signals is the company behind Basecamp. Is our data backed up? How often? Data customers enter into <LOCATION> is stored in multiple, redundant data centers. That data is backed up several times a day, and copies of those backups are stored both locally and off-site to further reduce points of possible failure. Files customers upload are stored off-site and backed up to servers in a different geographic region. Where are the servers that store our data? Our servers are located in multiple data centers in <LOCATION>. We service customers from over 160 countries from these servers. We do not currently have data centers outside the <LOCATION>. Can you fill our custom security questionnaires? We don't fill out custom security questionnaires, but we've prepared a summary security PDF which you can provide to your IT staff. Can I export our data if we ever want to leave? Absolutely, you can do it as often as you'd like. Plus, it's entirely self-service and easy so you don't need to ask anyone for help or permission. Further, we provide it in a format that allows you to browse it in a web browser so it's actually useful. Here's how exporting works . Does Basecamp have an API? Can we integrate with Basecamp? Yes, Basecamp has a full-featured API (docs are hosted on GitHub) . Hundreds of companies have written custom integrations, and our Integrations page links up third-party solutions for invoicing, accounting, time tracking, reporting, planning, asset management, contracts, proposals, and more. What's your customer support like? What if we need help? Our customer support is widely considered to be among the best of the best. Everyone who works on our support team are expert specialists who know Basecamp inside and out, many having been with us for <DATE_TIME>, <DATE_TIME>. Further, we occasionally cycle every employee through support - including our CEO - so everyone has a chance to directly interact with customers. You can ask support a question , or watch tutorials , or review the help guides , or attend a live walkthrough class and Q&A . Is Basecamp available in languages other than English? Currently we only offer Basecamp's interface in English, although we have people in over 160 countries writing and sharing in their own native languages using <LOCATION>. If we go with <LOCATION>, will we still need stuff like <PERSON>? Asana? <PERSON>? Nope, Basecamp replaces a whole set of separate products and saves you a ton of money. Basecamp has chat built in (no more <PERSON>). Basecamp has exceptional task management in the form of to-dos and kanban-style Card Tables (no more <PERSON>). And you can store and share all the files you need in a project (no more Dropbox). Basecamp also replaces document-based tools like Google Docs, Notion, etc. And yet, if you need to continue to use some of those tools, you can always link them up right from inside Basecamp using the Doors feature. What kind of companies, in which industries, use <LOCATION>? Basecamp is used by top notch marketers, ad agencies, designers, client services firms, consultants, software developers, freelancers, PR agencies, contractors, religious institutions, schools, non-profits, first responders, and many others. Over 75,000 organizations, across every industry imaginable, in 166 countries, use Basecamp for project management. Our customers are primarily small or medium-sized companies with fewer than 100 full-time employees, but Basecamp is also used by teams inside many of the world's largest companies. Do you offer classes to learn more about Basecamp? Yes, see our upcoming classes below. We'll answer questions about setting up <LOCATION>, rolling it out to your team, and anything else you'd like to ask. We'll teach you the basics of using <LOCATION>, with plenty of time set aside for questions. See all our upcoming classes . "Extremely user friendly" "Truly amazing!" "A godsend for our org" "Simple, quick, powerful" "So glad I found Basecamp" "The perfect solution" "Really great" "Outstanding" "Best app for teams" "Awesome service" "Gets better and better" "Great collaboration tool" "Great software" "Gold standard PM app" "Brilliant solution" "Clean and easy to use" "Fantastic app" "Organized and on point" "Extremely user friendly" "Truly amazing!" "A godsend for our org" "Simple, quick, powerful" "So glad I found Basecamp" "The perfect solution" "Really great" "Outstanding" "Best app for teams" "Awesome service" "Gets better and better" "Great collaboration tool" "Great software" "Gold standard PM app" "Brilliant solution" "Clean and easy to use" "Fantastic app" "Organized and on point"
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Basecamp: Books we've written We'd like to use cookies to help understand if our ads are working or not. No Yes, that's fine On top of making <LOCATION>, we write books about what we've learned running our own business. They're filled with practical advice you won't find anywhere else. Shape Up Shape Up is for product development teams who struggle to ship. Written by the innovators behind <LOCATION> - one of the biggest and longest-running software as a service apps - the book gives teams the tools to address the risks and unknowns at each stage of the product development process. Full of eye-opening insights, Shape Up will help you break free of "best practices" that aren't really working, think deeper about the right problems, and start shipping meaningful projects your team can celebrate. Buy the print edition Read it online Download a PDF It Doesn't Have to Be Crazy at Work Chaos shouldn't be the natural state at work. Anxiety isn't a prerequisite for progress. Sitting in meetings <DATE_TIME> isn't required for success. These are all perversions of work - side effects of broken models and "best" practices. This book treats the patient, calls out false cures, and pushes back against ritualistic time-sucks that have infected the way people work <DATE_TIME>. Amazon Apple Books Barnes & Noble Indiebound Porchlight REWORK New York Times bestseller! Most business books give you the same old advice: write a business plan, study the competition, seek investors, yadda yadda. If you're looking for a book like that, put this one back on the shelf. REWORK is the perfect playbook for anyone who's ever dreamed of doing it on their own. Entrepreneurs, small-business owners, and artists who don't want to starve will all find valuable guidance in these pages. Amazon Apple Books Barnes & Noble Indiebound Porchlight REMOTE Office not required. As an employer , restricting hiring to your local region means you're not getting the best people you can. As an employee , restricting your job search to companies within a reasonable commute means you're not working for the best company you can. REMOTE shows both employers and employees how they can work together, remotely, from any desk, in any space, in any place, anytime, anywhere. Amazon Apple Books Barnes & Noble Indiebound Porchlight Getting Real The smarter, faster, easier way to build a successful web application. Getting Real is packed with keep-it-simple insights, contrarian points of view, and unconventional approaches to software design. This isn't a technical book or a design tutorial, it's a book of ideas . Anyone working on a web app - including entrepreneurs, designers, programmers, executives, or marketers - will find value and inspiration in this book. Read it online Download a PDF Amazon Apple Books Barnes & Noble "Extremely user friendly" "Truly amazing!" "A godsend for our org" "Simple, quick, powerful" "So glad I found Basecamp" "The perfect solution" "Really great" "Outstanding" "Best app for teams" "Awesome service" "Gets better and better" "Great collaboration tool" "Great software" "Gold standard PM app" "Brilliant solution" "Clean and easy to use" "Fantastic app" "Organized and on point" "Extremely user friendly" "Truly amazing!" "A godsend for our org" "Simple, quick, powerful" "So glad I found Basecamp" "The perfect solution" "Really great" "Outstanding" "Best app for teams" "Awesome service" "Gets better and better" "Great collaboration tool" "Great software" "Gold standard PM app" "Brilliant solution" "Clean and easy to use" "Fantastic app" "Organized and on point"
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Basecamp: The people's path to Basecamp We'd like to use cookies to help understand if our ads are working or not. No Yes, that's fine For many, tools like Asana, Trello, Notion, <DATE_TIME>, <PERSON>, and Slack were underwhelming stops along the road before finally arriving at <LOCATION>. <PERSON> Comics Before finally landing on <LOCATION>, <PERSON> went through tools like Jira, Slack, and plain old email. First there were Emails + Meetings Fine for a while, but eventually not enough. Google Docs didn't do it More documents and spreadsheets didn't make things better. Next it was Slack Chat made communication faster than email, but there's so much more to collaborating than just talking. Then <PERSON> got a shot Too technical, too task-oriented. Finally, <PERSON> found Basecamp "Basecamp is my second brain, it's where I go to document upcoming features, build user stories, and track work. I couldn't get by without Basecamp!" -Brian Garside, Manage Comics Start your path with Basecamp Brett Robison Tinnacity Tinnacity's path is a common one of combining multiple tools only to find more isn't better. They did try Basecamp early, but left to play the field a bit. But after exploring other tools, they circled back and rediscovered Basecamp. The rest is history. They tried Trello + Slack Trello for tracking work and Slack for communications didn't cut it. Then switched to Basecamp Next they gave Basecamp a try but it didnt't stick. Yet. Next they tried Airtable + Slack Back to a combo, this time Airtable and Slack. But again, not right. Notion + Slack came next They kept <PERSON> and swapped in Notion for Airtable. But still, too many holes. Finally, back to just Basecamp for good "Eventually we landed back on <LOCATION> because we like the peacefulness of it (versus Slack status and getting interrupted <DATE_TIME>). We really enjoy To-dos and Automatic Check-ins to keep our company connected." -Brett Robison, Tinnacity Start your path with <PERSON> Straight from the Heart A common path from texting and email through a handful of popular tools, only to continually feel like something was lacking. Until they tried Basecamp. Started with Texts + Emails "We started with texting and email but it just got too crazy and messy." Next, moved to <NRP> "We didn't use it for long because it was just like emails and texting. We wanted to be able to do more (documents, lists, etc)." Then over to Slack Chat was chaotic and inadequate. Then layered-in <LOCATION> "Slack + Google Drive gave us documents with communication, but the project part was lacking." Maybe <DATE_TIME> would do it? Nope. "Just fell short of what we were looking to do." Finally, they found Basecamp "Once we used Basecamp, it had everything we wanted. Thanks for a wonderful product and giving a nonprofit discount. We wouldn't be able to afford without it, but also wouldn't be functioning as sufficiently. Forever thankful!" -Dan Unger, Straight from the Heart Start your path with Basecamp Johanne Brierre NYbeautysuites A friend recommended Basecamp to <PERSON> after her false starts with Slack, Asana, and Google Docs. First up was Slack Needed more than chat. Then it was Asana Not the right fit. She tried Google Docs Wasn't getting it done. Then her friend recommended Basecamp "My friend <PERSON>, who runs a digital agency, recommended Basecamp to me. It's become a game-changer - one of the best platforms for managing a small team, especially for women founders like myself." -Johanne Brierre, NYbeautysuites Start your path with Basecamp <PERSON> After a number of false starts and frustrations - even building their own app - they finally found Basecamp, the perfect hassle-free solution they needed. They began with WhatsApp "Our first attempt. We realized that the easier the access to chat, the less we produced." Gave Slack a shot "Too much chat, but we started to understand the value of organized debates." Moved over to Notion "Wow, we could document here! But there were too many features, it was hard to know where to start." Even built their own app! "We built an asynchronous app (a bold move, huh?! lol), but it still lacked balance." Tried out Teams " Teams has everything you need, they said. We found the interruptions via chat, video, audio outweighed collaboration." Simple, distraction-free, with only the essentials "A friend introduced me to Basecamp. It was simple and distraction-free. It doesn't have all the features I might want - and that's exactly why it's so good. It focuses only on the essentials." -Fernando Araujo, <PERSON> Start your path with Basecamp <PERSON> Another common path through some big names and popular options, but they kept running into needless complexity and chaos along the way. Basecamp was their simple salvation. First they tried Trello Started here in <DATE_TIME>, was simple to use for Kanban-type features but at the time it lacked some features which took us to <DATE_TIME>. Then came <DATE_TIME> Started getting chaotic for roadmap and feature planning. Items were lost, the card view was confusing to use. Slack got a swing Too many channels (more channels than employees) as it morphed into a task management product. Didn't work for task management. Then it was Notion Style was too free-form, pages took a long time to load, OK for help center & internal documentation but not for collaboration and task management (which is what we needed). Basecamp just made sense " We landed with Basecamp for simplicity and ease of use. Pricing helped too, fair pricing and scales with us. With Basecamp our team is more focused (less distracted than with Slack) and can get tasks done in their own focused time." -Alex <PERSON>, <PERSON> Start your path with Basecamp Ryan Almusawi Clarion Accounting Like so many others, they bounced around from one tool to the next, never finding the perfect fit - until they discovered Basecamp. They started out with Texts "Vital details vanish into the void, leaving us piecing things together like a mystery. It's too unreliable to trust with our business operations." Then they moved on to ClickUp "A labyrinth of endless features that suffocates simplicity. We spent more time figuring it out than actually getting work done." Next up, it was Notion "Notifications are a lost cause, like shouting into the void. If we can't rely on it to nudge us, what's the point?" And over to Airtable "Just Google Sheets in fancy clothing, trying too hard to be what it isn't. We needed solutions, not repackaging." Then they gave Slack a try "Chaos disguised as communication. It's noisy, overwhelming, and managing external clients was a nightmare - they struggled to learn the platform and rarely used it consistently." Finally, they discovered Basecamp "Overall, Basecamp just gets us - it's simple, clear, and keeps everything running smoothly without us pulling our hair out. Even our clients love it; no confusion, no hassle, just seamless communication and a sense of calm we didn't know we needed. It's been a game-changer. " -Ryan Almusawi, Clarion Accounting Start your path with Basecamp Ian Parsons Matogen Digital Fun path! Lots of trials and combinations and trying to stick multiple tools together only to find out that complexity never pays off. That's why Matogen Digital traded up for the simplicity of Basecamp. Got started with Email + Todos The standard one-two punch of email and simple to-dos. Then layered in Google Sheets They needed to track some stuff, so here comes the spreadsheet. Next it was Asana They needed something more sophisticated, so they gave Asana a try. Then <DATE_TIME> got a shot <DATE_TIME> was put in place to replace everything else, but it fell flat. Then back to Slack + Asana Asana enters the picture again, this time paired with Slack for chat. Then Jira + Slack + Asana Now they added <PERSON> to the mix. Things are getting messy and complicated. Too many tools. Eventually, they dropped everything and picked up Basecamp When you can replace <PERSON>, <PERSON>, and <DATE_TIME> with one product, it's a very good day. That's exactly what <PERSON> did when he went with Basecamp. "Thanks for keeping things simple." -Ian Parsons, Matogen Digital Start your path with Basecamp Sebastien Bossi <LOCATION> <PERSON> kept trying Slack plus something else, including <LOCATION> together, but in the end, <LOCATION> alone was the sole survivor. It did everything, simpler. First was Asana + Slack A common pairing because each is deficient at what the other offers. Then Notion + Slack Slack stayed, but Notion replaced Asana. But it didn't pan out. Then a Basecamp + Slack combo Next, Basecamp entered the picture, but Slack stayed too. Ultimately, Basecamp replaced them all In the end, it was better to have everything in one tool, in one place. And since <LOCATION> offers real-time chat, DMing, and external integrations, Slack was no longer needed at all. <PERSON>, <PERSON> your path with Basecamp <PERSON> involve marketing GmbH Starting with emails and tons of meetings, <PERSON> and team cycled though Slack and Teams, before falling back to email. Then they discovered Basecamp. They started with Email Email "and tons of meetings". A common starting point. They gave Slack a shot Ineffective chaos - the worst kind of busy. Next, it was Microsoft Teams Similiar to Slack, but part of the Microsoft stack. It didn't work for all the same reasons. Then back to <PERSON> for a bit Once the tools failed them, they fell back to old habits. Finally, they found Basecamp "And here the journey ends. Thank god." <PERSON>, involve marketing GmbH Start your path with Basecamp Helen Ryan Flex Design Group A bunch of tries lead to a bunch of letdowns. Until she found the right fit in <LOCATION>. They started with Trello "Too basic". Then came Notion "Too heavy". <PERSON> was next "Too much". Asana got a try "Not quite right". They even tried <PERSON> "Not strong enough". Finally, <PERSON> found Basecamp "I was looking for a simple solution that was easy for both me and clients to keep track of work." <PERSON>, Flex Design Group Start your path with Basecamp Doug Seidl Straight-up Digital Marketing Doug's path rolls through many of the usual suspects like Trello, ClickUp, and Notion, but ultimately after finding frustration and sliding back to email, <PERSON> found Basecamp. Things started with <PERSON> A common starting spot, especially when just starting out and basic communication is all you need. Then, they tried Trello Kanban just wasn't enough. Next it was <PERSON>'s turn It had a lot more, but too much more. More isn't better when it gets in the way. Then <PERSON> again Back to good old (but messy) email. Then it was Notion Was a document-centric approach the right one? No, it wasn't. Nope, back to Email An old standby gets called off the bench once again. But the same weakness emerge. Finally, they found Basecamp "Best solution for what I do that I've tried… and one clients ACTUALLY participate in when I need that." -Doug Seidl, Straight-up Digital Marketing Start your path with Basecamp Lucien Odey Projektt Technologies This one features a relapse to Jira + Confluence, only to realize it didn't work the second time for the same reasons it didn't work the first time. Then they found their fit in <LOCATION>. First up, it was Jira + Confluence They used Jira + Confluence together, but "left because they were too fiddly". Then they tried Microsoft Azure Boards Looking for something more Kanban-esque, they went with Azure Boards, but "the UI was cluttered with tons of Microsoft services". Then back to <PERSON> didn't pan out, they went back to Jira + Confluence but it "encouraged the wrong engineering mindset". Like returning to a bad relationship, the second time around didn't work for the same reasons as the first time. Finally, <PERSON> found Basecamp "I think it's great. You guys have built a fantastic product. The most interesting 'feature' for me is the disciplined thinking it encourages. There's something about that focused UI view when creating a new message or doc that forces better writing from me. Its value is actually pretty hard to capture in words. Perhaps best say 'it makes me think better.' " -Lucien Odey, Projektt Technologies Start your path with <LOCATION> "Extremely user friendly" "Truly amazing!" "A godsend for our org" "Simple, quick, powerful" "So glad I found Basecamp" "The perfect solution" "Really great" "Outstanding" "Best app for teams" "Awesome service" "Gets better and better" "Great collaboration tool" "Great software" "Gold standard PM app" "Brilliant solution" "Clean and easy to use" "Fantastic app" "Organized and on point" "Extremely user friendly" "Truly amazing!" "A godsend for our org" "Simple, quick, powerful" "So glad I found Basecamp" "The perfect solution" "Really great" "Outstanding" "Best app for teams" "Awesome service" "Gets better and better" "Great collaboration tool" "Great software" "Gold standard PM app" "Brilliant solution" "Clean and easy to use" "Fantastic app" "Organized and on point"
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Basecamp: Pricing We'd like to use cookies to help understand if our ads are working or not. No Yes, that's fine And don't stress - you can always switch packages later. sign ups <DATE_TIME> Free forever Run one project at a time. Sign up free $15/user per month We only bill you for employees. Invite guests/clients for free. Try it free for <DATE_TIME> $299/month billed <DATE_TIME>, all-inclusive Your whole organization for one fixed price. Every feature & upgrade. No per-user pricing or fees. Try it free for <DATE_TIME> From Free to Pro Unlimited, you get all the essential fundamentals built in. Message Boards for internal announcements replaces email To-dos for tracking work and accountability replaces Asana, <PERSON>, etc Card Tables is our take on Kanban for process tracking replaces Trello Campfires & Pings for group chat and direct messaging replaces Slack, Teams, etc Scheduling for deadlines, milestones, and events works with Google, Apple, and Outlook Docs & Files for storing assets replaces (or works with) Notion, Dropbox, Google Docs, etc Reports & Automatic Check-ins for staying up on things replaces status meetings We've been running an upstanding, trustworthy, sustainable business for <DATE_TIME>. You can't build reliable software unless you build a reliable company. 25 profitable, financially responsible years in business Zero debt, privately held, and built to stay, not exit 99.99% historical uptime , with full transparency Gold standard, famously great customer service Extensive learning library free for all customers Direct access to our CEO via email We asked our customers: What changed for the better since you switched to Basecamp? Thousands responded, here's some of what they said… For the first time in a long time our team is truly collaborating, and everyone is moving in the same direction, with the same goals. It's truly remarkable how quickly things have changed in <DATE_TIME>. <PERSON>, WP Site Care This is the first time that the people in the organization are actually using project management app . And not looking at it as if it was a nuisance. It's a tool, and a good one. <PERSON>, Leadux GmbH We are consistently meeting deadlines because all the facts, files and comments are in one place. And everyone is accountable for their contribution to the project. Very user friendly. <PERSON>, Kim Curry Design We have actually accomplished things that have been waiting forever to get done. <PERSON>, <PERSON> LLC I've tried a million things with clients. I work really closely with them, and finding something clients will use to collaborate with me is difficult. My clients just "get" Basecamp, right away, and use it all the time. <PERSON>, Wildfire Studios Our company has grown immensely in organization and efficiency . We have everything organized according to clients, projects, employees, etc., resulting in clear and concise communication. <PERSON>, Health Economic Advisors, Inc. The transparency across departments, and the ability to eliminate bottlenecks in projects that were not previously visible. Our throughput time on standard projects has decreased by 30% with Basecamp . <PERSON>, iCONN Systems Simply put, we get more work done, quicker, and better. Productivity is up. Errors are down. Clients are happier. <PERSON>, Moore Communications Group It has eliminated the need for a lot of extra communication and reduced a lot of miscommunication between my team members . <PERSON>, Clark Partners Realty Group Execution of projects. Instead of drowning in an endless chain of emails, there is clear, and easy accountability meaning tasks actually get done! <PERSON>, LATE Nation & <PERSON> Before Basecamp, I ran my freelance web development business basically from a spreadsheet, then I moved to Basecamp and my life is so much less stressful. Basecamp has increased my happiness exponentially. <PERSON>, Sad Robot Software I feel like I am better organized and more efficient because of Basecamp . It has also greatly increased our ability to collaborate on projects large or small and have a better idea of the project and all of its pieces, rather than just what I am responsible for. <PERSON>, Luther College I no longer have to wonder whether I've asked for something to be done or whether it has in fact been done. Every member of my team is more accountable than we were before <LOCATION>. <PERSON>, <PERSON> See more customer responses With Basecamp, cancellation is entirely self-serve, no questions asked, no retention specialists trying to talk you out of it. Cancel any time, no long-term contracts to lock you in. Simple, straightforward, and fair, just as it should be. We started our business without outside funding, and you probably did too. We know your money's precious, and we want to help. That's why Basecamp is intentionally affordable for start-ups, freelancers, and small businesses just getting started. There's no more paying separate bills, onboarding people in multiple places, training people how to use different tools, managing expenses across vendors, etc… the benefits of <LOCATION> go beyond price. Can we upgrade, downgrade, switch packages, or cancel whenever we want? Yes, you can upgrade from Free to Plus or from Plus to Pro Unlimited whenever you'd like. Yes, you can downgrade from Pro Unlimited to Plus or Free as long as your usage fits on the lower package. For example, if you still had five projects, you couldn't downgrade to the Free package which only allows one project. You'd have to delete four of those projects before downgrading. Yes, you can cancel any time , no questions asked, no forms to fill out, no person to talk to. If you cancel an <DATE_TIME> package, the difference will be prorated back to your credit card. Do you offer non-profit or educational discounts? Absolutely. Basecamp is 10% off for registered 501(c)(3) non-profits, and 100% free for K-12, homeschoolers, or Universities as long as it's used for class work only. For non-profits: Email us a copy of your 501(c)(3) paperwork right after you sign up. We'll apply the discount once we verify your status. For teachers and homeschool parents: Right after you sign up, email us from your school account with the name of your school, the class you teach, and proof you're a teacher. We'll apply the discount after we verify everything. For students: Right after you sign up, email us from your school account with the name of your school, what you're studying, and when you expect to graduate. We'll apply the discount after we verify everything. Note: We can only discount one account. If you need to support multiple groups, one account will give you everything you need to support them. If you've been paying for <LOCATION>, we can't refund or discount payments made before your discount started. We reserve the right to end the discount program due to chronic abuse of the free accounts or other circumstances. If we do, anyone who is already participating will continue to have their discounts applied. We just won't offer up new free or discounted accounts. Could we really add 1000 users and still just pay $299/month total on Pro Unlimited? Yes. Basecamp is one of the few products in the entire industry with an all-inclusive, unlimited users package for one fixed, capped price. We pioneered this all-in package, and have been offering it for <DATE_TIME>. If we have clients, or work with contractors, do we have to pay for them too? No. Clients and contractors can be added to your account for free. On the Plus package, we only bill you $15/user/month for employees or full users, not clients or temporary contractors. Do I need a credit card to try Basecamp? Nope. We don't require a credit card on the Free account, or for any of the free trials. If you choose a pay package with a free trial, you'll be asked to enter your credit card at the end of your trial if you want to continue. It's entirely up to you. Will I automatically be charged when my 30 or <DATE_TIME> free trial is up? No. We don't ask for a credit card to try Basecamp, so we couldn't charge you even if we wanted to. If you want to continue once your trial is up, then you'd enter your credit card. You're in complete control. How do upgrades work? What's included with Timesheet or the Admin Pro Pack? While Timesheet and Admin Pro Pack are included on the Pro Unlimited package, customers on the Plus package can optionally upgrade to either or both whenever they'd like. Timesheet allows you to track time spent on tasks, writing, meetings, or other pieces of work within a <LOCATION> project. You can then run reports to aggregate time spent across projects, or per-person, to help with resource allocation or client billing. You can also export the data to bring into an accounting or billing system of your choice. The Timesheet upgrade is $50/month flat no matter how many people you have on your account. this video shows you how it works . <PERSON> gives account owners and admins greater control over access and permissions and allows them to: Change who can send Pings (per company) Change who can edit project details Change who can edit people on a project Change who can move, archive, and delete content Change who can turn on public links Limit editing and deleting comments & chat lines to <DATE_TIME> after posting Require two-factor authentication Change chat history settings Set Out of Office for others The Admin Pro Pack upgrade is $50/month flat no matter how many people you have on your account. You can learn more about Admin Pro Pack here . Can we buy more storage if we need it? How much is it? Yes. You can add an additional 1 terabyte (that's 1000 gigabytes) of storage for $50/month flat. The storage can be used by all users across your entire account. On the free one project package, can I delete the project and start another one? Yes. You can only run one project at time on the Free package, but if you complete a project, or just want to get rid of the one you're currently running, you can delete it and free up the slot to start a new one. You can't, however, keep more than one around. So in order to start a new one, you must delete the current one. "Extremely user friendly" "Truly amazing!" "A godsend for our org" "Simple, quick, powerful" "So glad I found Basecamp" "The perfect solution" "Really great" "Outstanding" "Best app for teams" "Awesome service" "Gets better and better" "Great collaboration tool" "Great software" "Gold standard PM app" "Brilliant solution" "Clean and easy to use" "Fantastic app" "Organized and on point" "Extremely user friendly" "Truly amazing!" 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Basecamp: Download Basecamp for Mac, Windows, iOS, and Android We'd like to use cookies to help understand if our ads are working or not. No Yes, that's fine <PERSON>, Windows, iOS, Android, and on the web - Basecamp is ready whenever and wherever you are. When it's time to roll up your sleeves and get to work, use <LOCATION> as a standalone app alongside the apps you use every day. Or, see our guide on progressive web apps . Comment, catch-up, chat, or even put those notifications on snooze - you can do it all with Basecamp apps for iPhone , iPad , or Android . Basecamp works anywhere you've got a web browser and the internet. Laptop, phone, tablet, hotel lounge, school computer lab, etc. Sign in to <LOCATION> more out of <LOCATION> by integrating it with the other tools you already use. View the full list of Basecamp integrations here . Prefer your email inbox over apps? No problem! You can reply to most <LOCATION> emails right from your inbox - or Imbox .
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Basecamp: Join us for a free live class We'd like to use cookies to help understand if our ads are working or not. No Yes, that's fine We'll answer questions about setting up <LOCATION>, rolling it out to your team, and anything else you'd like to ask. Intro to Basecamp We'll teach you the basics of using <LOCATION>, with plenty of time set aside for questions. Become a Pro We'll take a deep dive into the features and tools to help you get the most out of <LOCATION>. Ask Us Anything Not sure how something works? Need setup tips? Bring your questions to a live Q&A. "Extremely user friendly" "Truly amazing!" "A godsend for our org" "Simple, quick, powerful" "So glad I found Basecamp" "The perfect solution" "Really great" "Outstanding" "Best app for teams" "Awesome service" "Gets better and better" "Great collaboration tool" "Great software" "Gold standard PM app" "Brilliant solution" "Clean and easy to use" "Fantastic app" "Organized and on point" "Extremely user friendly" "Truly amazing!" "A godsend for our org" "Simple, quick, powerful" "So glad I found Basecamp" "The perfect solution" "Really great" "Outstanding" "Best app for teams" "Awesome service" "Gets better and better" "Great collaboration tool" "Great software" "Gold standard PM app" "Brilliant solution" "Clean and easy to use" "Fantastic app" "Organized and on point"
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Basecamp: Reply to everyone, don't confuse stalking and selling, and when to jump into AI We'd like to use cookies to help understand if our ads are working or not. No Yes, that's fine Features we've added Reply to Everyone: Have you ever found yourself typing the same email over and over again? Maybe you got 14 emails asking for details about the family reunion. Or, if you're using HEY Workflows , and you want to send the same response to all your new sales leads, HEY's Reply to Everyone feature is for you. Just select any number of individual email threads and compose a single message that's sent to all. Remove To-dos from Your Schedule: The Schedule is the place to see all the events and due dates for your Basecamp projects. But for projects with lots of to-dos, it can be difficult for important events to stand out. That's why we've added the option to remove to-dos from the Schedule, allowing you to keep your calendar free of everything but events. Thoughts we've shared Good Selling Isn't Stalking: Cold contacting someone 15 times in <DATE_TIME> is downright creepy. Would you do business with someone like that? <PERSON> writes about why who you do business with matters . Would You Work If You Didn't Have to?: "I'll go out on a limb here and posit that most successful people actually like what they do… and the drive that got them to where they are isn't extinguished by achieving personal, material wellbeing." Read <PERSON>'s full post here . Speaking of work, designers (including the ones at 37signals) often use Figma or other design tools. But is that really necessary? <PERSON> argues that the design process is faster and more efficient when "its iterations flow through updates to the real code that runs the real app." Things we're excited about Recently on REWORK: <DATE_TIME> of The REWORK Podcast is in full swing. Check out some of our listeners' favorite recent episodes, including When to Jump Into AI , why 37signals works in Two-Person Teams , and our final discussion on Leaving the Cloud , a conversation with 37signals' Co-Founder and CTO David Heinemeier Hansson and Director of Operations <PERSON>.
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Basecamp: How we work We'd like to use cookies to help understand if our ads are working or not. No Yes, that's fine Hey there- There are a couple truths about working at 37signals that cause my friends to cock their heads in confusion. One of those truths is that we have an active comic book & video game chat room. Another is that we have no full time managers . "Who's responsible for who does what?!" is a common, incredulous question. My response is, well, everyone! Everyone's responsible for the charter of their team and the quality and momentum of projects. And everyone at the company is conscientious and comfortable being individually accountable for their work and impact. That's not to say that we're all on our own with no guidance or camaraderie. Senior staff mentor more junior staff . Our small team structure provides support and community in our can-be-isolating remote environment. Sticky performance problems are bubbled up to senior leadership to handle. Hiring and on-boarding new employees is a joint effort. We also use a number of mechanisms to assume some tasks that would typically fall to a manager. In place of stand-ups or status checks, we employ the automatic check-in feature in <LOCATION> . Everyone's expected to answer a <DATE_TIME> question about what they worked on. It keeps us accountable, our work visible, and <DATE_TIME> focused on work, not meetings. We also use Heartbeats and Kickoffs to communicate what we're working on and the impact it's had. At <DATE_TIME> cycle , each team writes a kickoff outlining planned work. At the end of the cycle, we write a corresponding heartbeat summarizing what we accomplished. <PERSON>, <PERSON>, and <PERSON> discussed Heartbeats and Kickoffs in depth in the latest episode of the REWORK podcast . Like check-ins, heartbeats and kickoffs are shared widely at the company. They offer a comprehensive look into what others are working on, what went well, and what didn't. They're a chance to celebrate the work of each individual on the team. And they act as a durable record of progress over the course of <DATE_TIME>, even <DATE_TIME> in our case. While many companies couldn't operate without their managers, we've found it works for us. Even if you're ride or die for your managers, it's possible to distribute some of that important work to the eager members of your team! Streamline status checks in <LOCATION> . Or give a version of heartbeats or kickoffs a try, if your team would benefit from the act of writing and sharing their plans and achievements. Some recent updates and news Give Pings a Name We use the Basecamp Pings feature a lot at 37signals. Pings are great for real-time communication, when you want to hash out something quickly 1-to-1 or in a small group. Now you can assign names and pictures to Pings, to make them easier to spot in your Hey menu. Keep in mind, everyone on the Ping can see the title and image you select. So maybe save the especially clever names for your co-worker buddies group ping. Journal for HEY Calendar HEY Calendar is a lot more than just events on a schedule. You can track time, log habits, and add tasks - all in one place. Now, it's even more personal with the addition of Journal, a dedicated spot for <DATE_TIME> notes. Use it to jot down reminders, take notes during a meeting, or simply reflect on <DATE_TIME>. You can even add photo highlights. It's your private space to use as you'd like! Try HEY and its Calendar free for <DATE_TIME> . Talk to you next time! - Andrea, People Ops at 37signals
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basecamp
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for-profit
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