Paul Graham's Essays

0:01 how to do what you love to do something well you have to like it that idea is not exactly novel we've got it down to just four words do what you love but it's not enough just to tell people that doing what you love is complicated when I was a kid it seemed as if work and fun were opposites by definition life had two states some of the time adults were making you do things and that was called

0:24 work the rest of the time you could do what you wanted and that was called playing work was pretty much defined as not fun and it did not seem to be an accident school it was implied was tedious because it was preparation for grown-up work if we make kids work on dull stuff it might be wise to tell them that tediousness is not the defining quality of work and indeed that the reason they have to work on dull stuff

0:50 now is so that they can work on more interesting stuff later once when I was about 9 or 10 my father told me that I could be whatever I wanted when I grew up so long as I enjoyed it I didn't think he meant work could literally be fun fun like playing it took me years to grasp that it was not until I was in college that the idea of work finally broke free from the idea of making a

1:15 living then the important question became not how to make money but what to work on the definition of work was now to make some original contribution to the world and in the process not to starve how much are you supposed to like what you do unless you know that you don't know when to stop searching and if like most people you underestimate it you tend to stop searching too early you'll end up doing something chosen for

1:41 you by your parents or the desire to make money or Prestige or sheer inertia here is an upper bound do what you love doesn't mean do what you would like to do most this second even Einstein probably had moments when he wanted to have a cup of coffee but told himself he ought to finish what he was working on first it used to perplex me when I read about people who liked what they did so much that there was nothing they'd

2:07 rather do there didn't seem to be any sort of work that I like that much if I had a choice of a spending the next hour working on something or B Be teleported to Rome and spend the next hour wandering about was there any sort of work I'd prefer honestly no but the fact is almost anyone would rather at any given moment float about in the Caribbean or have sex or eat some delicious food than work on hard

2:37 problems doing what you love doesn't mean do what makes you happiest this second but what will make you happiest over some longer period unproductive Pleasures pale eventually after a while you get tired of lying on the beach if you want to stay happy you have to do something as a lower bound you have to like your work more more than any unproductive pleasure you have to like what you do enough that the concept of quote unquote spare time seems mistaken

3:09 which is not to say that you have to spend all your time working you can only work so much before you get tired and start to screw up then you want to do something else even something mindless but you don't regard this time as the prize and the time you spend working as the pain you endure to earn it I put the lower bound there for practical reasons if your work is not your favorite thing to do you'll have terrible problems with

3:35 procrastination you will have to force yourself to work and when you resort to that the results are distinctly inferior to be happy I think you have to be doing something you not only enjoy but admire you have to be able to say at the end wow that's pretty cool what you should not do I think is worry about the opinion of anyone beyond your friends you should not worry about Prestige Prestige is the opinion of the

4:04 rest of the world when you can ask the opinions of peoples who judgment you respect what does it add to consider the opinions of people you don't even know this is easy advice to give it's hard to follow if you do anything well enough you'll make it prestigious plenty of things we now consider prestigious were anything but at first Jazz comes to mind though almost any established art form would do so just do what you like and

4:31 let Prestige take care of itself the other big Force leading people astray is money the test of whether people love what they do is whether they' do it even if they weren't paid for it even if they had to work at another job to make a living with such powerful forces leading us astray it's not surprising we find it so hard to discover what we like to work on most people are doomed in childhood by accepting the axom that work equals

4:56 pain those who escaped this are nearly all lured onto the rocks by Prestige or money how many people even discover something they love to work on a few 100,000 perhaps out of billions it's hard to find work you love it must be if so few do so don't underestimate this task and don't feel bad if you haven't succeeded yet in fact if you admit to yourself that you're discontented you're a step ahead of most people who are

5:27 still in denial although great work takes less discipline than people think because the way to do great work is to find something you like so much that you don't have to force yourself to do it finding work you love does usually require discipline is there some test you can use to keep yourself honest always produce for example if you have a day job you don't take seriously because you you plan to be a novelist are you

5:52 producing are you writing pages of fiction however bad they may be as long as you're producing you'll know you're not merely using the hazy vision of the grand novel you plan to write one day as an opiate always produce is also a horis for finding work you love it will automatically push you away from things you think you're supposed to work on towards things that you actually like always produce will discover your life's work the way water with the aid of

6:20 gravity finds the whole in your roof this may be my favorite line of the entire essay you have to make a conscious effort to keep your ideas about what you want from being contaminated by what seems possible one has to make a living and it's hard to get paid for doing work you love and then he goes into one reason why it's so difficult to find work that you love to do is the fact that we usually have to

6:44 decide what we're going to do way too early a friend of mine who is quite successful doctor complains constantly about her job when people applying to medical school ask her for advice she wants to shake them and yell don't do it but she never does how did she get into this fix in high school she already wanted to be a doctor and she is so ambitious and determined that she overcame every obstacle along the way including unfortunately not liking it

7:10 now she has a life chosen for her by a high school kid when you're young you're given the impression that you'll get enough information to make each choice before you need to make it but this is certainly not so with work when you're deciding what to do you have to operate on ridiculously incomplete information in the design of lives as in the design of most other things you get better results if you use flexible media your

7:36 best bet maybe to choose a type of work that could turn into either an organic or two job career that is probably part of the reason I chose computers you can be a professor or you can make a lot of money or morph into any number of other kinds of work it is also wise early on to seek jobs that let you do many different things so you can learn faster what various kinds of work are like it

8:01 is harder than it looks constraints give your life shape remove them and most people have no idea what to do look at what happens to those who win lotteries or inherent money much as everyone thinks they want Financial Security the happiest people are not those who have it but those who like what they do whichever route you take expect a struggle finding work you love is very difficult most people fail even if you succeed it's rare to be free to work on

8:31 what you want until your 30s or 40s but if you have the destination in sight you'll be more likely to arrive at it if you know you can love work you're in the home stretch and if you know what work you love you're practically there that was an excerpt from an essay that changed my life it's called how to do what you love and it was written by Paul Graham so I've been reading Paul Graham's essays for years I think they

8:54 are the most influential writing for technology startups ever and they've had had a profound impact on me personally as well so in case you don't know who Paul Graham is he's a programmer a writer he founded this company called V web I think within two years they sold it for close to $50 million to Yahoo this happened back in the late 90s then in the early to mid 2000s he found another company called YC combinator which turned out to be this giant

9:18 machine that made it easier to start a company and to get funding and really just make it easier to allow more people to run experiments that hopefully turn into successful companies and so this episode is going to be a little different from what I normally do obviously normally I read a book and then I tell you what I learned this I I've been working on it for a few weeks and originally put all of his essays

9:36 into like this giant PDF and I was trying to work my way through it I was like you know what this doesn't feel like what I the normal process I do for Founders so what I did is I actually bought a printer I did not have a printer so I bought a printer and then I just started printing out his essays individually and it didn't take me long it took me a day to realize oh no cuz

9:54 not only has he been writing essays and they're amazing essays for over 20 years so I start printing them out I'm like oh my God I had to literally ran out of ink the first day and he is such a gifted writer that as you start working your way through these essays this is why it's taking weeks for me to do this there's no fluff so as a result I have a ton of highlights and notes this is

10:12 going to wind up being two episodes and in the show notes you're going to find timestamps and links to because you can read all his essays for free online you're going to find timestamps and links to every single essay that I talk about and so the reason I started this podcast with how to do what you love is because that essay changed my life I remember exactly where I was I was up one night it was July

10:35 2018 I know it's not the first time I read the the essay might have been second third I can't actually remember but I remember distinctly reading it and just snapping and you can see this in the upload dates of Founders podcast before July 2018 for the previous like two two and a half years my uploads and the the rate I was making podcasts was completely intermittent there was nothing you could even call consistency by any definition I was just making the

10:59 podcast because I like to make the podcast I thought it was interesting but I was hesitating because I had no idea how the hell to turn it into a business and where I can actually do what I love to do and if you print that essay out it is nine pages 10 pages with footnotes of him telling you hey this is really important to figure out it's not easy to do so few people do it but it'll change

11:21 your life and so what I decided that night was that I was going to focus 100% on Founders and then I was willing to spend my last dollar in savings to try to make this work I thought if I gave it my full attention and pursued what I was genuinely interested in something I will work on seven days a week because I felt compelled to that I would find a way to make it work but that decision that like

11:45 that snapping that pushing me over the edge I don't think would have happened without reading this essay so with that I want to jump into his essay what doesn't seem like work my father's a mathematician he was one of those lucky people who knew early on what they want to do when you talk to him about his childhood there's a clear watershed moment at about age 12 when he said he got interested in maths he grew up in a

12:09 small Welsh Sea Coast Town as we retraced his walk to school on Google Street View 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 and so Paul goes into what one of the things he learned from this conversation that he's having with his father few people know so early or or so certainly what they want to

12:32 work on but talking to my father reminded me of a heris 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 actually let me pause that before I go into he he's going to talk about what this is for him which is programming that when I got to this section this is exact when you read

12:54 about I did a I read I think a 700 600 or 700 Page biography of Michael Jordan then I read like his 200 Page autobiography this is episode 212 of Founders and 213 if you haven't listened to him i' go back they were some of my favorite episodes I've ever made but what you hear is everybody around Michael Jordan says stuff like he's the most Michael Jordan's the most driven person I've ever met he's the hardest

13:13 working person I've ever met he's got the best work ethic I've ever met but if you ask Jordan he says he doesn't like working at all and that everything he did it felt like play it just looked like work to other people so there's a Paul has seen now he's got a lifetime EXP erience right but he has seen why commentators funded thousands of of startups so he has like this encyclopedic knowledge because he's just been exposed to to these examples over

13:39 and over again there's so many times when I'm reading his essays that I'm like yep I I've saw the exact same thing by reading hundreds of biographies and that's one of them right there if something that seems like worked to other people doesn't seem like worked 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

14:00 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 what you should do it seemed curious that the same task could be painful to one person and pleasant to another but I didn't realize it at the time what this imbalance implied because I wasn't looking for it I'm going to pause there

14:26 again I I don't want to make too much of this about me but there's so many times I'm like yep I know exactly what you're talking about specifically in my in in my life I don't think I'm unique at all to the the response of that like identifying with what Paul's explained to us obviously I just started it saying hey this this essay pushed me over the edge and really changed my life I feel the same way about reading so in some

14:49 degree I'm almost like a bad person to to ask for like book recommendations from are because I I didn't know this what he's saying is like I didn't it seem curi ious the same task could be painful to one person and pleasant to another because I like I guess I it's not even I guess I definitely like reading more than most other people do and so I'll recommend a book that I enjoy that I learned something from and

15:08 somebody will tell me oh that's boring and I was like I didn't understand that at the time I was like oh I must have a higher tolerance for boredom because I don't I didn't find it boring and so it says it seems curious that the same task could be painful to one person boring is obviously a form of pain to some degree and pleasant to another but I didn't realize at the time what this imbalance implied because I wasn't looking for it

15:27 I didn't realize how hard it can be to decide what you should work on bringing this to your attention too because I'm reading from an essay he wrote in January 2015 I started the podcast with an essay he wrote in January 2006 this is almost 10 years different and yet the idea is the same thing it's like very hard to find out what you should work on but it's extremely important to figure this out maybe we should spend more time

15:46 thinking about it maybe we should come up with ways to F to make it easier for people to do this so it says how hard it can be to decide what you want to work on and that sometimes you have to figure out from subtle Clues like a detective solving a case and 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

16:06 people that doesn't seem like work to you okay so let's go to an essay that he wrote in August 2007 it's called how how not to die this is one of my favorite essays of his I have writing all over the thing so it starts out with hey this is a talk that I gave at the last y combinator date dinner of the summer usually we do not have a speaker at the last dinner it's more of a party but it

16:27 seem worth spoiling the atmosphere if I could save some of the startups from from preventable deaths so that's why it's called how not to die so at the last minute I cooked up this rather Grim talk I didn't mean this as an essay I wrote it down because I only had 2 hours before dinner and I think fastest while writing and I don't know if it's in this essay or other ones but what Paul has a

16:48 great ability to do cuz think about he's taking something he's think thought about for a very long time maybe just sealed it down to you know two pages sometimes 10 pages I think one of them I think the longest one something like 20 p pages long but then he's able to distill that even down further to a line there's lines that I read that I'll never forget he's got this idea of running upstairs which I'll get to later

17:06 or being hard to kill it's like he's very gifted at taking complex information and breaking it down on like an aphorism level so then you can actually carry with you and remember it in whenever you need it in the future so it says a couple days ago I told a reporter that we expected about a third of the companies that we funded to succeed actually I was being conservative I I'm hoping it might be as much as half wouldn't it be amazing if

17:27 we could achieve a 50% success rate remember these are all these are very early companies like at the very very beginning so of course you're going to have a ton that just go out of business another way of saying that is half of you are going to die so remember he's talking to a room full of companies that they're trying to help grow they they all gave initial funding to and then they bundle that with advice and all the

17:46 other things that white comment us today so it says another way of saying that is that half of you are going to die phrase that way it doesn't sound good at all in fact it's kind of weird when you think about it because our definition of success is that the found ERS get rich if half the startups refund succeed then half of you are going to get rich and the other half of you are going to get

18:07 nothing so there's a bunch of things that popped to mind when I read that paragraph the first one comes from Charles the gal I did a podcast on his biography episode 224 it says and his one of my favorite quotes of his was all that matters is to survive the rest is just words and so Paul Graham saying hey this is there's a binary come here if a if a startup succeeds and survives the founders are going to get

18:32 rich if not they're going to die and get nothing right so all that matters is to survive the rest is just words and then maybe think of what Warren Buffett says in order to Su to succeed you must first survive and it also made me think of what Ed Thorp said that you need to avoid ruin at all costs so at its core the idea that Paul is explaining in this paragraph we've seen over and over again you got Buffett

18:55 Thorp deal all saying the same thing if you can just avoid dying you will get rich this sounds like a joke but it's actually a pretty good description of what happens in a typical startup you may have heard that quote about luck consisting of opportunity meeting preparation you've now done the preparation the work you've done so far has in effect put you in a position to get lucky you can now get rich by not letting your company die that is more

19:18 than most people have and then he goes back to the Grim part we've seen a bunch of startups die they generally don't die loudly and heroically mostly they crawl off somewhere and die when startups die the official cause of death is always either running out of money or a critical founder bailing often the two occur simultaneously but I think the underlying cause is usually that they've become demoralized you rarely hear of a startup that's working around the clock

19:46 doing deals and pumping out new features and dies because they can't pay their bills and their ISP unplugs their server and then he gets into a main theme of his essays about just how painful and how difficult it is to create a company if so many startups get demoralized and fail when merely by hanging on they could get rich you have to assume that running a startup can be demoralizing that is certainly true I've been there

20:13 and that is why I've never done another startup and then he goes into the point he like knowing that this is going to be painful and going to be difficult is helpful like it should not be surprising to you the way you and I have talked about this in the past over and over again is that Excellence is the capacity to take pain that is a fantastic quote from the founder of Four Seasons if you know it's going to feel terrible

20:31 sometimes then when it feels terrible you won't think ouch this feels terrible I give up it feels that way for everyone another feeling that will seem alarming but it's in fact normal in a startup is the feeling that what that what you're doing isn't working the reason you can expect to feel this way is what you do probably will not work startups almost never get it right the first time much more commonly you you launch something

20:59 and no one cares don't assume when this happens that you failed it is that's normal for startups but don't sit around and do nothing iterate so then he goes into some ideas on how to avoid death how to avoid your company dying let me mention some things not to do the number one thing not to do is other things if you find yourself saying a sentence that ends with but we're going to keep working on a startup you are in big

21:24 trouble Bob's going to grad school but we're going to keep working on a startup you may as well just translate it to we're giving up on the startup but we're not willing to admit that to ourselves a startup is so hard that working on it cannot be preceded by butt don't start other projects distraction is fatal to startups and this part was actually interesting on like how to kind of reverse hack your own human psychology so you don't quit and it's by just not

21:52 wanting to be embarrassed by other people one of the most interesting things we've disc discover discovered from working on ycombinator is that Founders are more motivated by the fear of looking bad than than by the hope of getting millions of dollars so if you want to get millions of dollars put yourself in a position where failure will be public and humiliating so he tells the the the this quick story of the founders of something called octo

22:14 part and somehow one of the founders winds up getting on the cover of Newsweek with the word billionaire printed printed across his chest and so then Paul makes the point he's like well he can't fail now le is not going to give up on his own like everyone he knows has seen that picture and so it says at this point he is committed to fight to the death and he also talks about the change I shouldn't be laughing

22:36 but I completely understand what he's saying here about the change that this can cause in their demeanor unfortunately when we first knew them they were light-hearted Cherry guys now when we talk to them they seem grimly determined I feel kind of bad that we've transformed these guys from light-hearted hearted to grimly determined but that comes with the territory if a startup succeeds you get millions of dollars and you don't get that kind of money just by asking for it

22:59 you have to assume it takes some amount of pain and so his whole point is like this public humiliation he's like they're it's going to put them in position to be willing to endure more pain they're not going to just crawl off and die and if they can just stay in the game long enough even if they have to change their idea they're more likely to succeed and then he just has a line about them but I wrote it's really a

23:20 predictor of success to I think all of us you and I included right they're smart they're working in a promising field and they just cannot give up and then Paul ends this essay there's so many times I'm I'll probably repeat it on this podcast but it's like I just love the way he ended this essay and this is just fantastic advice so I will tell you now bad is coming it always is in a startup the odds of

23:42 getting from launch to liquidity without some kind of disaster happening are one in a thousand so don't get demoralized when the disaster strike strikes just say to yourself okay this was what Paul was talking about what did he say to do oh yeah don't give up okay so the next ESS I want to talk about is why does start a startup in a bad economy It Was Written in October 2008 right when the great financial crisis right and I just think there is

24:10 specifically you know right now it's a weird economic time that I just happen to recording this in but specifically for for technology startups unfortunately is terrible at least in comparison to you know where things have been the last few years and I just think a lot of the ideas like he's going to start this essay saying everybody says it's so terrible this terrible time for startups in October 2008 and they compare it to the 1970s and he's like Oh

24:34 you mean when Microsoft and Apple were founded so again main theme of this podcast is history doesn't repeat human nature does and so I just I think there's going to be information in here that is valuable to people trying to operate in current day okay and whether it's you listen to this now you listen to a 15 years from now recessions difficult Economic Times that is you know normal it happens over and over again in fact I wish we used to call

24:57 them if you study like back in the 1800s and early 1900s they didn't call them recessions and depressions they call them Financial panics which I think is just a fantastic name but has nothing to do what we're talking about so let me jump into the essay the economic situation is apparently so G that some experts fear that we may be in for a stretch as bad as the mid '70s when Microsoft and Apple were founded as those examples suggest a

25:20 recession may not be such a bad time to start a startup I'm not claiming it's a particularly good time either the truth is more boring the state of the economy doesn't matter much either way and I love what he's about to say here there's a reason this com this podcast is called Founders and not companies I believe in the power of the individual that people make all the difference right if we learn one thing from funding so many

25:42 startups is that they succeed or failed based on the qualities of the founders the economy is a rounding error compared to the founders well popped my mind when he said that there are no shortcuts around quality and quality starts with people that is one of my favorit Steve Jobs quotes there are no shortcuts around quality and quality starts of people which means that what matters is who you are not when you do it yes I I

26:06 just I'm going to stop repeating myself you obviously know I love his writing because I'm doing an entire probably two-part podcast Series this might be three parts hopefully not there's just so much to get to which means what matters is who you are not when you do it if you're the right sort of person you will win even in a bad economy so if you want to improve your chances you should think far more about who you can

26:26 recruit as a co- founder than the state of the economy and if you're worried about threats to the survival oh my God this is so good too and if you're worried about threats to the survival of your company don't look for them in the news look in the mirror and because Paul's focus is on startups investors play a large part of that you'll read his essays like what pops up a lot is at least this is my

26:49 impression and I talked to somebody yesterday that knows more than I do I don't want to say who it is because it was a private conversation I didn't ask if I could put it on the podcast but and I like like he he very familiar with prrams writing and I was like what do you think he thinks of venture like VC and he said he doesn't like it so much so that he like essentially created almost like a new form of it and in some

27:11 ways like I'm not really a good person to comment on this cuz I know nothing about it all I can say is from Reading you know spending weeks now reading Paul's words he just has a lot of criticisms he like he he sees a lot of bad behavior in like the investor Community specifically around private companies there's a line I don't know if it's in this this one or later but I I came to the realization because he just

27:30 repeats this in different essays in different ways I was like oh like Paul's opportunity with why combinator was very similar to Walt Disney's opportunity with amusement parks where Disney's like the reason I have an opportunity to do something really great is because the standard way of doing things left so much room for improvement and so we get into this right now because he talks about hey it's we're in in a financial crisis right now in 20

27:55 2008 your big problem is you know is not that you're going to start a company it's like investors are doing the exact opposite behavior that they should be doing he says investors are more of a problem startups genuinely need to raise some amount of external funding and investors tend to be less willing to invest in bad times they shouldn't be everyone knows you're supposed to buy when times are bad and sell when times are good but of course what makes

28:15 investing so counterintuitive is that in equity markets good times are defined as everyone thinking it's the time to buy you have to be contrarian to be correct and by definition only a minority of investors can be so just as investors in 1999 were tripping over one another trying to buy into lousy startups investors in 2009 will presumably be reluctant to invest even in good ones when I got to that line made me think of one of my favorite things that Warren

28:39 Buffett ever said in his shareholder letters he talks about the difference of like the financial security and like Fortress that birkshire has built how it's so different to most other people and it allows him to quote we play offense While others Scramble for survival back to Paul he says you are going to have to adapt to this but that's nothing new startups always have to adapt to the whims of investors ask any founder in any economy if they

29:04 describe investors as fickle and watch the face they make so then this is absolutely excellent I love this this is what I was mentioning earlier how one line is just going to stick in my mind so it says the way to make your a startup Recession Proof is to do exactly what you should do anyway run it as cheaply as possible for years I've been telling Founders that the shest route to success is to be the Cockroaches of the

29:27 Corp world the immediate cause of death in a startup is always running out of money so the cheaper your company is to operate the harder it is to kill be hard to kill is the metaphor there frugality is just a main reoccurring theme in the history of Entrepreneurship I I said before if you could search every single like episode of Founders I think like the word Frugal or frugality might be the most repeated phrase and I just love

29:52 the way that Paul put that you should be running you should be doing you how to make your startup Recession Proof is to do exactly what you should be doing anyway anyways run it as cheaply as possible the cheaper your companies to operate the harder it is to kill another great line here another advantage of bad times is that there's less competition technology trains leave the station at regular intervals if everyone else is cowering in a corner you may have the

30:12 whole car to yourself and I love the idea behind this next paragraph you're an investor too as a Founder you're buying stock with work the reason Larry and Sergey are so rich is not so much that they've done work worth tens of billions of but that they were the First Investors in Google and like any investor you should buy when times are bad and then he goes back to the theme that really it's always the people that matter and

30:38 this is how he ends the essay so maybe recession is a good time to start a startup it's hard to say whether advantages like a lack of competition outweigh disadvantages like reluctant investors but it doesn't matter much either way it's the people that matter and for a given set of people working on a given technology the time to act is always now okay I want to move on to his essay called relentlessly resourceful the note I put at the very top of this page is

31:04 this is one of those ideas that once it gets in your head it never lets you go I finally got a good startup founder down to just two words relentlessly resourceful till then the best I'd manag was to get the opposite quality down to one Hess Hess implies paity to be hapless is to be battered by circumstances to let the world have its way with you instead of you having your way with the world it's not hard to

31:30 express the quality we're looking for in metaphors the best is probably a running back a good running back is not merely determined but flexible as well they want to get downfield but they adapt their plans on the Fly I have figured out how to express this quality directly I was writing a talk for investors and I had to explain what to look for in Founders what what would someone who was the opposite of haet be like they'd be

31:54 relentlessly resourceful not merely relentless that's not enough to make things go your way except in a few mostly uninterest uninteresting domains in any interesting domain the difficulties will be novel which means you cannot simply plow through them so you have to be resourceful you have to keep trying new things be relentlessly resourceful resourcefulness implies the obstacles are external which they generally are in startups relentlessly

32:26 resourceful is the recipe for success I think that is the best short description we'll find of what makes a good startup founder I doubt it could be made more precise you can even use it use it tactically if I were running a startup this would be the phrase I would tape to the mirror make something people want is the destination but be relentlessly resourceful is how you get there okay so the next essay I want to

32:52 go over is called the anatomy of determination there's actually I'll leave it in the show notes I have I have like personal notes on like 300 I think there's like 300 podcast and lectures on entrepreneurship according to this I took these notes in September 26 2018 it's a a conversation on the why combinator podcast with Paul Graham just going to read this highlight that I think I've mentioned to you a few times but I think reading it up front

33:19 will give you an idea of like what this essay is about and Paul's perspective and again I think it's really interesting something you and I talked about repetition is persuasive you have to be prepared all in your company it's like you have a core set of beliefs and ideas you're going to have to repeat them for decade after decade Jeff Bezos David ogy Warren Buffett Steve Jobs they all do this you see Paul doing it here because the essay I hold

33:40 of my hand is written September 2009 and I think this this conversation with him let me see I took notes on it 2018 it was published August 31st 2018 so almost 10 years apart from when he's writing this essay to again saying repeating an idea about why he feels it's more important to be determined than smart so he says it turns out it is much more important to be determined than smart if you imagine this hypothetical person that is 100 out of

34:06 100 for smart and 100 out of 100 for determination and then you start taking away determination it doesn't take very long until you have this ineffectual but brilliant person whereas if you take someone who's super determined and you take away smartness eventually you'll get to a guy who owns a lot of Taxi medallions or a trash hauling business but is still Rich important note it only takes one person of the founding team to be super determined so I will leave this

34:28 if you're curious if you want to read my through my notebook and I've started add to it kind of like left left alone for like a year or two or something like that but now I've been slowly adding more notes to it anyways the link will be down below so let's get to the essay he says we spent a lot of time trying to learn how to predict which startups will succeed we learned quickly that the most important predictor of

34:46 success is determination at first we thought it might be intelligence Everyone likes to believe that's what makes startups succeed it makes a better story that a company won because its Founders are so smart while it certainly helps be smart it's not the deciding factor there are plenty of people as smart as Bill Gates who achieve nothing in most domains Talent is overrated compared to determination and then I love this line after a while determination starts to look like talent

35:12 and another great line I cannot think of any field in which determination is overrated and then he continues this is the next page the simplest form of determination is sheer willness willfulness when you want something you must have it no matter what a good deal of willfulness must be inborn because it's common to see families where one sibling has much more of it than another I don't think there's much you can do to make a weak-willed person stronger

35:38 willed being strong or willed strong willed is not enough you also have to be hard on yourself someone who was strong willed but self-indulgent would not be called determined determination implies your willfulness is balanced by discipline that word balance is a significant one so this is where where it really gets into like you really have to pay attention to what he's saying the stronger your will the less anyone will be able to argue with you except

36:05 yourself and someone has to argue with you because everyone has base impulses and if you have more will than discipline you will just give into them and a way to think about that on a more simple basis is this next line the more willful you are the more dangerous it is to be undisciplined and then this next paragraph I wrote down this is a very novel thought may be why high levels of achievement are so difficult to maintain

36:30 over a long period of time the dangers of indiscipline increase with temptation if you're sufficiently determined to achieve great things this will probably increase the number of Temptations around you that's a very interesting idea I'm going to read the whole thing again the dangers of indiscipline increase with temptation if you're sufficiently determined to achieve great things this will probably in increase the number of Temptations around you okay so then he

37:01 goes into the role that ambition plays in all of this so far he's been talking about determination and willfulness and then discipline then he says there's one other major component of determination ambition if willfulness and discipline or what gets you to your destination ambition is how you choose it ambition seems to be quite malleable there's a lot you can do to increase it this is a very excellent point I'm going to so in all of his essays he leaves footnotes so

37:27 I'm going to read this paragraph then I'm going to read the footnote right after it ambitious people are rare So if everyone is mixed together randomly as they tend to be early in people's lives then the ambitious ones won't have many other or many ambitious peers when you take people like this and you put them together with other ambitious people so that is another main theme of Paul's essays is the importance of Founders ambitious people in general to be around

37:54 other people like them so a huge component of YC is like that they're constantly getting together there's like a community around them he talks about like being in like either in the same city as people or in like physical events he just that's is very I don't even know why I say surprising but it was surprising how much he mentions this idea it's like there's a huge benefit to being around people and that are like you because being a founder and being

38:16 interested in this stuff is weird and also in this case what he's about to tell us here is like it just it takes you up another level right so it says when you take people like this and put them together with other ambitious people they Blom like dying plants given water fantastic writing probably most ambitious people are starved for the sort of encouragement that they would get from ambitious peers whatever their age and so this is the footnote on that

38:38 paragraph which means one of the best ways to help a society generally is to create events and institutions that bring ambitious people together it's like pulling the control rods out of a reactor The energy they emit encourages other ambitious people instead of being absorbed by the normal people people that they're usually surrounded with what I wrote here and I don't know if I'll do this idea but I wonder if there's like a benefit to having like an

39:03 inperson version of Founders podcast CU Paul is telling us right here is like one of the best ways to help Society is generally create events and institutions that bring ambitious people together I'd have a hard time understanding why somebody that's not ambitious would be even listening to this back to Paul achievements also tend to increase your ambition so here in some is how determination seems to work it see this is what I mean about he just takes this

39:24 unbelievably complicated idea and yet like you finish reading this paragraph you're like okay I have a better deeper understanding of what it mean like what does discipline mean what does determination mean how does it all relate together I don't think I would have been able to come up with this on my own even if you kind of understand on like a subconscious level and if it helps to me helps me a lot seeing it written you know on a page so here

39:47 and some is how determination seems to work and consists of willfulness balance with discipline aim by ambition and fortunately at least two of these qualities or two of these three qualities can be cultivated you may be able to increase your strength of will somewhat you can definitely learn self-discipline and almost everyone is practically malnourished when it comes to ambition and he's tying this all into achievement right and he goes back to that main theme it's like man how do you

40:12 do what you love because you're just going to go so so much deeper and so much further automatically right there's a third factor in achievement how much you like the work if you really love working on something you don't need determination to drive you it's what you would do anyway okay so now this this essay is going to take a while some time to get through it is called what startups are really like it was written in October

40:34 2009 and Paul says this is an essay derived from a talk at the 2009 startup school and so he's like I wasn't sure what to talk about so I decided to ask the founders of the startups that we had funded what I had not written about yet and as a way to find good ideas he sends an email he so he says I've sent all the founders an email asking what surprised them about starting a startup

40:56 and so I'm just going to run through some of the highlights that really jumped out of me before he gets into the list number one is be careful with co-founders which I get to in a second but the paragraph before that was interesting he says there were very clear patterns in their responses it was remarkable how often several people have been surprised by exactly the same thing so I pull that out because I feel like like I discover the exact same

41:17 phenomenon by reading hundreds of biographies of entrepreneurs right and you hear this because I I sometimes I get excited like I just flip my like I kind of lose my because it's extremely exciting when some of the most formidable people in history that did not know each other that did not weren't even alive at the same time worked in different Industries different parts of the lived in different parts of the world and that they came to the same

41:39 conclusion through you know trial and error and and building their not building their company and doing their work and so it's again Paul has like this almost like a if you ever played video games like I don't know if they said this but when I was a kid there was like this God level view right where you could see everything going on in the game I think Paul has a lot of that because he's just sees thousands and very few

42:00 people are going to be exposed to the same stuff he is right so he's like there's very very very clear patterns and responses it's remarkable how how often several people have been surprised by exactly the same thing number one be careful with co-founders this was the surprise mentioned by the most Founders think about that that is crazy what people wish they paid more attention to when choosing co-founders was character and commitment not ability I think Paul

42:23 says it here but if not the best way I heard that this describe it's like you pick your co-founder like youd pick somebody you're going to get married to it's not like a light decision right well people wish they paid more attention to when choosing co-founders was character and commitment not ability this was particularly true when the startups with the startups have failed the lesson don't pick co-founders who will flake here is a typical response so

42:44 you have Paul writing I'll tell you when it's Paul speaking and then in the essay he has quotes from these emails that he got back from the founder so this is an example this is he doesn't tell you who the founder is but he tells you what they said you you haven't seen someone's True Colors unless you've worked with them on a startup so then Paul says we've learned this lesson a long time ago if you look at the YC

43:03 application there are more questions about the commitment and relationships of their Founders than their ability Paul continues founders of successful startups talked about how hard they work to maintain their relationship this is an excerpt from an email that Paul includes about a Founder answering this question and this founder says one thing that surprised me is how the relationship of startup Founders goes from a friendship to a marriage my relationship with my co-founder went from just being friends to seeing each

43:32 other all the time Fring over the finances and cleaning up and the startup was our baby I summed it up once like this it's like we're married but we're not back to Paul several people use the word married it is far more intense relationship than you usually see between co-workers so this relationship has to be built of top quality materials and carefully maintained it is the basis of everything so when I got to this section it made me think of this text

44:02 conversation so I became friends through the podcast with this founder he's actually a two-time founder YC founder his name is John cougan he's also my favorite educational YouTuber he makes excellent videos I'll link below with one that I've probably sent to a dozen people it's called the entire history of Silicon Valley but anyways John text me because he was working on a video and he's got this idea and he was asking about like is there historical

44:25 precedence of two successful Founders working together on a new project after an acquisition and based on his research he seems he said it seems like it always failed and I went through every single episode like the episode titles just trying to see if I come up with anything so I'm just going to read you this long text like thought that I that I sent him and it's not specific to you know Founders one founder buying another

44:46 company's another Founder's company and then working together it's kind of clear theme in the history of Entrepreneurship and it says my get my initial guest is no because it tends to evolve into one clear main founder and even if the co-founder or the partner stays it's usually in a it's clearly in a subordinate role I immediately think of Andrew Carnegie and Henry KCK both two super successful Founders Andrew buys Henry's company episode 73 is on this what happened I Go episode 73 is on

45:14 a book called meet you in hell about their partnership and then their bitter bitter lifelong rivalry years after their fight meet you in hell the title comes from Andrew you know they're like hey we're both old men let bury the hatchet and Henry Clay frck was not having it wrote him back a letter he's like nope we're not squashing the beef and I'll meet you in hell and then I just go through like all these examples

45:34 Henry Ford bought out all of his investors Steve Jobs was in complete control as was Edward L Rockefeller had Partners but they all deferred to him and he owned the most Equity JP Morgan ran his entire show same with Jay gold and Cornelius vanderbel Wilbur Wright was clearly the main founder of of the wri brothers Sam Walton and Jeff Bezos and Enzo Ferrari and Estee Lauder clearly the main person running their companies I can't even think of many

45:55 acquisitions thato well Trader Joe's sells and gets kicked out of his company Paul or F sells to Kinkos sells Kinkos to FedEx and hates it and won't even go into the store anymore Henry Leland sells to Cadillac sells Cadillac to the founder of GM and then leaves to start Lincoln Motors and then sells to Henry Ford Leland didn't like either acquisition I just went through 200 episodes and I can't find one and so back to Paul's Point here hey he's

46:18 seeing it over and over again it's extremely hard to pick a good co-founder it's extremely hard to stay together it's a very important decision take your time with it I think is what Paul's point and then once you do make the the the decision make sure you you spend a lot of time maintaining that relationship because what he says it's the basis of everything next main theme from these emails startups take over your life running a startup is not like

46:39 having a job or being a student because it never stops and this is what the email says I didn't realize it would spend almost every waking moment either working or thinking about our startup you enter a whole different way of life when it's your company versus working for someone else's company and then Paul says in the best case total imer can be exciting here's an example of that it's surprising how much you become consumed by your startup it in that you think

47:02 about it day and night but never once does it feel like work so I mentioned you before I have all these weird ways to brainwash myself these videos I watch these clips I watch over and over again these quotes I st save on my phone one of them is Conor McGregor talking about total immersion at the beginning of his career there's a fantastic documentary on Netflix I think it's called like notorious or something like that and it shows Conor McGregor when he

47:24 was on welfare he was living his parents couldn't pay his bills and you know he just keeps saying he's like I'm going to make it I'm going to dedicate my entire life I'm not going to think about anything else like and he was like talk about visualization he's just like I know I'm going to be Champion one day I know I'm going to have more money to like than I than I know what to do with

47:38 I'm going to be able to take care of my entire family and it's crazy because he's saying these things when he's going he's like leafing through mail and it's like you know bill collector after Bill Collector after Bill Collector and so one quote that I save from Conor McGregor this video says again how he used total essentially this idea of total immersion and whatever you do you've got to to be a little bit gone to it you are not all there you've got to

47:58 be almost insane to your craft not a lot of people can understand that that's why I don't know about anything else I do not pay attention to nothing else normal society is like let's talk about this he's talking about like sports current Advance stuff like that so he says normal society is is says let's talk about this let's engage in this I can't do it people are talking to me and in my head I'm deep in a sequence on the mat

48:20 meaning training for fighting right they're trying to talk to him about current events and sports and in his mind he's just like what's that sequence what have to do next he goes people are talking to me in my head I'm deep in a sequence on the map I cannot pay attention to nothing else and that's difficult too because I think that's the natural like inclination for a lot of people that are running their companies and when you have kids you have a family

48:41 like I mean a lot of large part of Founders podcast is us watching these incredibly intelligent incredibly formidable people mess this area of their life up they can't turn it off and it's probably easier to fall into that trap with the last line of that email it's like well never once does it feel like work next reoccurring theme is it's an emotional roller coaster you and I have talked about that adnasium in a startup things seem great one moment and

49:02 hopeless the next this is an email from the founder the emotional ups and downs were the biggest surprise for me one day we think of ourselves as the next Google the next we'd be pondering how to let our loved ones know of our utter UT utter failure and on and on and on next theme it can be fun this is Paul speaking the good news is the highs are also very high and what Founders tend to

49:23 like is like most is the freedom this is what the founders said I'm surprised by how much better it feels to be working on something that is challenging and creative and something I believe in next theme persistance is the key a lot of Founders were surprised at how important persistence was in startups a quote from an email everyone said how determined and resilient you must be but going through it made me realize that the determination required was still

49:47 understated back to Paul and also by the degree to which persistence alone was able to dissolve obstacles when I got to this part this is when I wrote Paul has said determination was better predictor of success than intelligence I already read that to you earlier so it's this is an email it says if you are persistent even problems that seem out of your control seem to work themselves out several Founders mentioned specifically how much more important

50:11 persistence was an intelligence this is an example of that I've been surprised again and again by just how much more important persistence is than raw intelligence remember the name of this essay is what startups are really like number think long term you need persistence because everything takes longer than you expect a lot of people were surprised by that founder says I'm continually surprised by how long everything can take Paul says one reason Founders are surprised is that because

50:39 they work fast they expect everyone else to and then another reason they're surprised by how long everything takes is because a lot of them are overconfident I think the reason most Founders are surprised by how long it takes is that they're overconfident they think they're going to be an instant success like YouTube or Facebook you tell them only one out of a hundred successful startups has a trajectory like that and they think yep we're going to be that one and so then Paul says

51:01 maybe they'll listen to one of the more successful Founders this is what one of the more successful Founders told Paul the top thing I didn't understand before going into it is that persistence is the name of the game it's going to be a really long journey journey number seven is lots of little things I really like what this founder says here grind over glamour Paul says we often emphasize how rarely startups win simply because they hit on magic idea I think Founders

51:27 have now gotten that into their heads but a lot we're surprised to find this also applies within the startup you have to do a lot of different little things this is a email from a Founder it is much more of a grind than glamorous you are more likely fi you will more likely find me tracking down a bug rather than having a brilliant than having brilliant flashes of some strategic Insight another email from a Founder I learned

51:49 never to bet on any one feature or deal or anything to bring you success it's never just a single thing everything is just incremental and you just keep going you just keep doing lots and lots of these little things until you strike something number eight start with something minimal you should release fast and iterate it is a it is practically a mantra at ycombinator email from a Founder build the absolute smallest thing that can be considered a

52:12 complete application and ship it number nine engage users just one sentence here and I think saay Lauder was a master at this product development is a conversation with the user so again Este la if she's the the example that comes to mind when I think about just how to interact with your customers how to do things that don't scale if you don't know what I'm talking about and why Este laud is a master at this listen to

52:36 episode 217 that is by far one of my most popular episodes I have a ton of people that have told me they listen to it multiple times the next one is change your idea Paul says we've always encouraged Founders to see a startup idea as a hypothesis rather than a blueprint mere determination without flexibility is a greedy algorithm them they may get you nothing more than a mediocre local Maxim and so one of the founders emailed Paul said when someone

53:01 is determined there's still a danger that they'll follow a long hard path that ultimately leads nowhere one founder put it very succinctly fast iteration is the key to success and then Paul says experienced Founders learn to keep an open mind this is a an excerpt from an email on that I don't laugh at ideas anymore because I realize how terrible I was at knowing if they were good or not you you can never tell what will work number 11 is don't worry about

53:29 competitors this made me think of one of my favorite Edwin land quotes that I've been repeating a lot lately that the best way to keep a secret is to shout out from the rooftops when you think you've got a great idea it's sort of like having a guilty conscience about something all someone has to do is look at you funny and you think oh my God they know those alarms are almost always false one reason people overact to

53:47 competitors is that they overv value ideas if ideas really were the key a competitor with the same idea would be a real threat but it's usually execution that matters Paul actually has a great way to describe this in that talk from the why commentator podcast I referenced earlier when he was talking about hey this is why determination is more important than intelligence he also talks about it's like just focus on your customer not your competition and he

54:08 says what makes companies fail most of the time is poor execution by the founders a lot of times Founders are worried about competition YC has founded 1,00 plus companies at the time this is several years ago one was killed by competitors you have the same protection against competitors that light aircraft have against crashing into other light aircraft do you know what that protection is space is large number 12 it's hard to get users a lot of Founders

54:35 complained about hard how hard it was to get users this is a complicated topic when you can't get users and another way to think about this when you can't get customers it's hard to say whether the problem is lack of exposure or whether the product is simply bad the sharpest criticism of whyc came from a Founder who said we did not focus enough on customer acquisition this is what the founder said YC preaches make something people want there is very little focus

54:59 on the cost of customer acquisition and that's actually something I learned from Steve Jobs because he talks a lot about the importance of product the importance of talent but if you saw how he spents his time too he talked about the importance of marketing and then having Innovations and not only marketing but in product marketing and distribution and I remember reading something from him and the note I left myself was CU he talked about he wants every single

55:20 person in the world to have an Apple device and to do that Apple must not only make great products but they must be coming great marketing company and they weren't at the time he was saying this right and the way I interpreted what he was saying in the context of that book was if you believe your product will improve the life of your customer then you have a moral obligation to get good at marketing number 13 this is actually repeated a

55:39 few times through different essays expect the worst with Deals Deals fall through that is a constant of the startup World startups are powerless and they also apply not only to to deals with bigger companies but they say this applies to in investors too this is a Founders email about dealing with an investor in retrospect it would have been much better if we had operated under the assumption that we would never get any additional outside investment that is something that Paul repeats a

56:05 lot in fact let me get to this right now so I don't forget to bring it up somebody asked him if you were 22 years old or just graduated college today what would you do with your life and I think this applies to more than just 22y olds but he says if I were 22 if I was starting a startup I would certainly apply to YC which is not that surprising since it was designed to be what I wish

56:23 I had had when I did start one but assuming I got in I would not get sucked into raising a huge amount on demo day okay and so this is what he would do if he was starting a company now I would raise maybe $500,000 I'd keep the company small for the first year I would work closely with users to make something amazing and otherwise I would stay off of silicon Valley's radar in other words I'd be the opposite of a

56:45 sinster ideally I would get to profitability on that initial 500k later I could raise more if I felt like it or not but it would be on my terms at every point this is I think the part I actually found most interesting personally at every point in the company's growth I'd keep the company as small as I could I'd always want people to be surprised by how few employees we had fewer employees equal lower costs and less need to turn into a

57:12 manager and so that pop to mind when you have this email from the inv excuse me this email from the founder saying it would have been much better if we had operated under the assumption that we would never get any additional outside capital and so then Paul onto that my advice is generally pessimistic assume you won't get money and if someone does offer you any assume you'll never get any more of it and then he talks about

57:33 hey Founders don't take this advice they don't listen to me why do founders ignore me mostly because they're optimistic by Nature the mistake is to be optimistic about things you can't control that is excellent so that's why his whole point is like you need to be in charge of your own destiny and then once you're in there you have a lot more options and you get to pick and choose what's best for you and your company

57:53 number 14 investors are clueless a lot of Founders mentioned how surprised they were by the cluelessness of investors this is one what founder said they don't even know about the stuff they've invested in I met some investors that had invested in a hardware device and when I asked them to demo the device they had difficulty switching it on and then another founder says investors don't know half the time what they're talking about a few were great but 90 95% of the investors we

58:15 dealt with were unprofessional they didn't seem to be very good at business or have any kind of Creative Vision I said Angels were generally much better to talk to number 15 you may have to play games one founder said the thing that surprised him most was quote the degree to which feigning certitude impressed investors I don't think this just works with investors I think works in human nature something that Steve that Nolan Bush now is the founder of

58:37 Atari and Steve Job Mentor picked up on he he hired at Steve when he was like 19 years old to work at Atari and he's one of some of the advice that he gave Steve was he says I taught him that if you act like you can do something then it will work I told him pretend to be completely in control and people will assume that you are number 16 luck is a big factor if you

58:57 think about famous startups it's pretty clear how big a role luck plays where would Microsoft be if IBM insisted on an exclusive license for Doss Paul makes that point with with Bill Gates specifically a few times where he's like listen without that yeah Bill Gates is smart he'd be unbelievably rich but the reason he's at the top of the the world's richest people list is because of this things that were like mistakes that IBM made and that he

59:21 obviously capitalized and execute on well but he he still would have been Rich he just would further down the list Paul's got a fantastic he actually has a great way to put this he has this and eventually I'm going to get to the essay I don't know if I'll get into this episode or the next one but it's called how to make wealth and he describes the role of loan in in company building he says there is a large random

59:42 multiplier in the success of any company and so then he goes back to this he says actually the best model would be to say that the outcome is the product of skill determination and luck number 17 the value of community this is something he repeats in different variations throughout all the like a bunch of different essays this is one of the founders saying the benefit of the community that YC provides Founders the immense value of peer group of YC

60:07 companies and Fa that are all facing or excuse me the immense value of the peer group of YC companies and facing similar obstacles at similar times that is why I actually think like obviously it's very valuable in person it's why my number one recommendation my number one book recommendation is against the odds an autobiography by James Dyson the the last time I read it I read it a few times it was episode 200 because I think James can serve as like

60:32 a mentor in a historical context about how difficult and lonely the job of a Founder can be so I think it's like you're going to find that reading that book there's a a lot of good information on company building in there but I think you'll find it comforting like oh okay it's I'm not the way I feel and the difficulty I'm going through and the pain I'm enduring is not unique to me and then Paul's talks about the value of

60:52 community it's like one of the reasons he likes being part of the world because of this this world is because even as people get super successful they still trying to help I think Bob noise the founder of Intel talked about this the best I think he said something like after he got successful as an entrepreneur he tried to help and Mentor a bunch of people he mentored you know Steve Jobs he mentored Nolan Bushell a bunch of other Founders and he said

61:13 something he was like restocking the fish or restocking the stream that I fished from I think is the way he put it so Paul says this is one of the reasons I like being part of this world creating wealth is not a zero some game so you don't have to stab people in the back to win and then what I love about how he ends not only this essay but another ones he's like listen this is very

61:32 complicated difficult and a lot of this you're just not going to be able to get until you actually do it and so he calls this part the super pattern and it's really about why people don't listen to the advice that he gives right one's first thought when looking at all at them meaning all these like these problems that people R into like what running startup was really like one one's first thought when looking at them all is to ask if there's a super pattern

61:55 a pattern to the patterns I saw it immediately these are supposed to be the surprises the things I didn't tell people what do they all have in common they're all things that I tell people and he gets to the heart of the matter right here people just don't seem to get how different it is until they do it okay let's jump to another essay it's called a word to the resourceful this is fantastic and it fits on like a page and

62:20 a half he says I noticed a pattern in the least successful startup that we funded they all seemed hard to talk to it felt as if there was some kind of wall between us I could never quite tell if they understood what I was saying what was surprising is what comes next where he compares the opposite of this and this is not what you'd expect it to be the the opposite to be again a word to the resourceful this is what

62:45 it's talking about this caught my attention because earlier we noticed a pattern among the most successful startups and it seemed to hinge on a different quality we found the startups that that did the best were the ones with the sort of Founders about whom we'd say they can take care of themselves the startups that do the best and as a for the proxy that you and I are using this for here is like the kind of Founders that we want to be right so

63:08 it's like the startups that do the best the founders that are the best right so it says the startups that do the best are fire and forget it in the sense that all you have to do is give them a lead and they'll close it whatever type of lead it is so just want to go over one line in that parag again we found the STS that did the best were the ones with the sort of Founders about whom

63:27 we'd say they can take care of themselves it seemed odd that the outliers at the two ends of the Spectrum which is failure and success right could be detected by what appeared to be unrelated tests this is why exactly that's exactly what I thought when I was reading this like oh that's odd what's going on here you'd expect that if the founders at one end were distinguished by the presence of quality X at the other end they' be distinguished by the

63:50 lack of X was there some kind of inverse relation between resourcefulness and being hard to talk to it turns out there is and the key to the mystery is the old adage a word to the wise is sufficient if someone is wise all you have to do is say one word to them and they'll understand immediately you don't have to explain in detail they'll chase down all the implications he doesn't say this but what the way I think about what he's

64:14 saying is they'll chase down all the implications on their own back to Paul in much the same way that all you have to do is give the right sort of founder a oneline intro to a VC and he'll chase down the money understanding all the implications is a subset of resourcefulness that is a really unique thought and this is where this is why Paul's writing makes you feel something Paul's writing evokes emotion it's just like wait a minute and in the same way

64:43 that all you have to do is give the right sort of founder a on line intro to VC and he'll chase down the money and then the punch line right here is so fantastic understanding all the implications is a subset of resourcefulness that is a description of the successful Founders then he ties it back to okay so what are the unsuccessful Founders doing wrong and therefore you and I can be like okay what do we want to avoid a

65:04 better way to describe the situation would be to say that the unsuccessful Founders had a sort of conservatism that comes from weakness they traversed idea space as gingerly as a very old person traverses the physical world again now he he his writing evokes emotion but he immediately puts you read that in your mind's eye you see an old person like was a cane and a hunchback right so let me go over that better way to describe

65:27 the situation would be to say that unsuccessful Founders had a sort of un a sort of con conservatism that comes from weakness they traversed idea space as gingerly as a very old person tra traverses the physical world and so he goes back to this this how he's going to end the essay right here and hopefully this this makes sense so being hard to talk to was not what was killing the unsuccessful startups it was a sign of

65:50 an underlying underlying lack of resourcefulness that is what's killing them a lack of resourcefulness as well as failing to chase down the implications of what was said to them the unsuccessful Founders would also fail down to chase funding and users and our customers whatever and source of new ideas but the most immediate evidence I had that something was a Miss was that I couldn't talk to them okay so now we got to one of my absolute favorite essays of

66:18 his called do things that don't scale and so he writes a lot of wouldbe Founders believe that startups either take off or don't you build something make it available and If you and if you made a better mouse trap people beat a path to your door just as promised or they don't in which case the market must not exist actually startups take off because the founders make them take off I had to double underline that one

66:41 that one's fantastic actually startups take off because the founders make them take off the most common unscalable thing Founders have to do at the start is to recruit users manually nearly all startups have to you cannot wait for users to come to you so he's always going to use the word users you obviously we could think about that as customers as well okay you have to go out and get them stripe is the most successful startup we funded and or it's

67:04 one of the most successful startups we funded and the problem they solved was an urgent one if anyone could have sat back and waited for users it was stripe I love this story I've mentioned the story on past podcast a few times too but in fact they're famous for aggressive early user acquisition so they have a term he says at YC we use the term call installation CIS is the last name of the two brothers that

67:28 founded stripe okay so it says YC we use the term cison insulation for the technique they invented more diffident Founders meaning more default passive Founders right would ask will you try our Beta And if the answer is yes they'll say great we'll send you a link but the cison brothers were not going to wait when anyone agreed to try stripe they say right they would say right then give me your laptop and they would set them up on the spot that is the cisin

67:54 insulation that's fantastic for a startup to succeed at least one founder will have to spend a lot of time on sales and marketing when I got to that section made me think of one of my favorite quotes from the book 0 to1 by Peter teal Superior sales and distribution by itself can create a monopoly even with no product differentiation the converse is not true that's crazy and true Superior sales and distribution by itself can create a

68:23 monopoly even even with no product differentiation that's how important this is right the converse is not true the other reason Founders ignore this path is that the absolute number seems so small at first this is why again I've already said it I don't know probably twice so far you got to go back and study Estee Lauder she was a master at this everywhere she'd go she would offer to on individual basis right she's sitting on a train sitting on a bus

68:46 wherever she's at she's like hey she sees a woman sitting there hey do you mind if I do your makeup if I beautify you or I forget the term she uses and she would do like a one-on-one you know maybe 5 10 minutes I don't even know how long it took and then what would happen is she did at the beginning you know when he's saying you have to do things that don't scale one-on-one like make makeovers is

69:05 definitely not that's a definition of thing that doesn't scale right but it does scale with time because she would say decades later she would still be getting cards and letters in the mail from people that she took the time on an individual basis to provide a service for that are still customers so think about that like she recruited a user or customer on a on a bus 30 years earlier that person is still a client of her

69:31 still a customer of her is still sending her information or still sending her communication and letters and things how many other people did that one customer recruit foray Lauder over three decades dozens if not hundreds if you could actually track it's maybe even thousands right if you think about everybody they recruit and who they recruit and so on so forth and that's the point it's like it looks like it doesn't scale but if they like what you do it does as long as

69:53 you're willing to stay in the game long enough I love this essay back to this the other reason Founders ignore this path is that absolute number seems so small at first EST say l she didn't say oh I can't do this because if if I do it for one person I shouldn't be doing things for one person I should be doing things for a thousand at a time well maybe that one person gets you a thousand customers over time right you

70:10 are doing it for thousand it justes it's just not obvious at the point at the time this can't be how the big famous startups got started they think the mistake they make is to underestimate the power of compounding growth we encourage every startup to measure their progress by weekly growth rate and so his point here and what I wrote in the margin is humans do not understand this intuitively we encourage every startup to measure their progress by weekly

70:33 growth rate if you have 100 users you need to get 10 next week 10 more next week to grow 10% a week and while 110 might not see much better than 100 if you keep going at 10% a week you'll be surprised how big the numbers get after a year you'll have 14,000 users and after two years you'll have 2 million almost all startups are fragile initially and that's one of the biggest things inexperienced Founders and

70:54 investors and reporters and knowt alls he lists a bunch of people here get wrong about them they unconsciously judge laral 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 the question oh this is so fantastic the question to ask about early stage startups is not is this company going to take over the world but how big could this company get

71:20 if the founders did the right if the founders did the right things and the right things often seem laborious and inconsequential at the time that is such a good line he's going to reference something that I talked about on Founders 140 which is the the best Bill Gates biography that I've read so far because it covers just the 35 years the first 35 years of his life that's episode 140 if you haven't listened to it so it says the right things can

71:43 often seem laborious and inconsequential at the time Microsoft cannot seem to be very impressive when it was just a couple guys in Albuquerque writing basic interpreters for a market of a few 000 hobbyists as computer users at the time were called but in retrospect that was the optimal path to dominating microcomputer software so skipping ahead a little bit he's like listen you should really instead of trying to go wide Delight get up get a few people to

72:11 really love you than a bunch of people to kind of like you 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 this company called woo woo sent every new user a handwritten thank you note the first users should feel that signing up with you was one of the best choices they ever made and you in turn should be

72:32 racking your brains to think of new ways to Delight them and then just more great advice here 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 one day have too many to do so much for see if you can make that

72:57 happen and the fact that you can Delight customers on a one by one basis when you're just starting out is actually an advantage that big companies do not have Tim Cook of Apple doesn't send you a handwritten 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 and this is fantastic I never thought about this I was trying to think of a

73:18 phrase to convey how extreme your attention to users should be and I realized Steve Jobs had already done it insanely great Steve 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 and he's going to give some advice on how you go about doing this sometimes a right unscalable trick is to focus on a deliberately narrow Market

73:45 that's what Facebook did at first it was just for Harvard students in that form it only had a potential market for a few thousand people but because they felt it was really for them a critical mass of them signed up when I interviewed Mark Zuckerberg he said that while it was a lot of work creating course lists for each school doing that made sure made students feel that the site was their natural home and then he gives some

74:07 ideas not only for people writing St software but for physical products as well for Hardware startups there's a variant of doing things that don't scale that we call pulling a moroi they got started that's the name of the company they got started by doing something that really doesn't scale they assembled their rout themselves and they had to do that because the minimum order for a factory production run is usually 700,000 and so they had to put these

74:32 things together and it was interesting what he's about to say here is like doing things that don't scale is actually a form of Education doing things that don't scale is a form of Education fabricating things yourself turns out to be valuable for Hardware startups you can tweak the design faster when you're when you are the factory and you learn things you would never have known otherwise and then he says you can use Consulting like techniques to

74:53 actually learn more and to do things that don't scale what I wrote this is a long paragraph I'm just going to write read to what I wrote first this is great all of this centers on learning how to better serve your customer another Consulting like technique for recruiting initially lukewarm users is to use your software yourselves on their behalf we did this at V web or we did that at V web when we approached Merchants asking if they wanted to use

75:15 our software to make online stores some said no but they 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 for merchants to use our software sometimes the feedback

75:39 loop was instantaneous in the middle of building some Merchant site I'd find I needed a feature that we didn't have so I'd spent a couple hours implementing it and then I'd resume building the site and then he gives some anti- advice which is which is he's not a big beli in the big launch I should mentioned 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

76:02 than powered aircraft powered aircraft is a great visual for a startup I occasionally meet Founders who seem to believe startups are projectiles rather than powered aircraft and that they'll make it big only if they've launched with sufficient initial velocity 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 set of users and then he goes into like why do

76:25 founders believe this because it's easier right 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 mainly because users have other things to think about thank God he said that mainly because other users have we like you and I think about our company way more 99 a thousand times more than

76:52 anybody that that loves our company does and if you go back and watch what Steve Jobs said right when he came back to Apple he said the same thing he's like listen the world is complicated it is noisy we are not going to get a chance to get people to remember much about us no company is so we have to be really clear about what we want them to know about us I love what he said he's

77:10 like listen even if what you're building is really great getting users is always going to be a gradual process mainly because users have other things to think about yes they're thinking about themselves he goes back to why people shoot for a big launch instead of the laborious task of doing things that don't scale you have to make an extraordinary effort and he italicized effort initially any strategy that omits the effort is suspect I love this Sam

77:34 Walton autobiography Founders 234 if I'm not mistaken he has like at the end he's like you know here's a list of 10 things that are like are really important to know as you build your company and what I the 10 things are great obviously right I love what he said before the 10 things though he said he wouldn't even like he wouldn't even put work hard on the list because he says if you didn't know that already and you weren't

77:58 willing to you wouldn't need his list anyways another way to think about this is what Jerry Seinfeld said about when he made his his very successful show he's like the he's like I don't I'm not into hacks he's like the right way is the hard way or the I think he said the hard way the yeah the right way is the hard way and you're seeing Paul say the same thing he's like forget the big launch you have to make an extraordinary

78:19 effort initially any strategy that omits effort is suspect and then he ends on a fantastically unique Paul gram idea the need to do something unscalable laborious to get started is so nearly Universal that it might be a good idea to stop thinking of startup ideas as scalers instead we should try thinking of them as pairs of what you're going to build plus the unscalable things that you're going to do initially to get your

78:49 company going think of it as a pair what what are you going to build plus the unscalable things that you're going to do initially to get your company going I love this idea now that there are two components you can try to be imaginative about the second as well as the first Founders need to work hard in two dimensions and that is where I'll leave it I have a giant stack of his essays to get to that will be a part two I would

79:19 normally say that's 275 books down although technically this is in a book although I'm interested I wonder because of Paul's relationship with stripe I wonder if there's anybody at stripe press that is thinking about turning I would love I know he did hackers and Painters but I would love like a book version of Paul's essays and I'm sure I'm not the only one so anyways that's 275 kind of books I guess podcast down 1,000 to go and I will talk to you again

79:46 in part two of Paul Graham's essays okay so real quick in case that you want to get access to my version or readwise which is called Founders notes.com you go to Founders notes.com to sign up that's founders with an S just like the podcast so Founders notes.com so when you sign up and you get access I'm going to tell you how what what are the features that I use the most and so at the very top is the main feature the one

80:08 I use by every day and it says search highlights and there's a search bar and very simply I just search by whatever keyword I'm thinking about so it could be about hiring about marketing about Obsession could be about a specific entrepreneur like Rockefeller whatever ever I happened to be thinking about or whatever problem I need to solve at the at the time so like the greatest example and I actually made like a 30 minute like short AMA about this it was asked

80:31 like how do History's Greatest Founders think about hiring and so if you type hiring in that box you'll see what what did Jeff Bezos say about it what did Thomas Edison say about it what did the people that founded Paypal say about it what did Estee Lauder say about it and on and on and on and so I think that's pretty self-explanatory again this is a product for people already rning successful companies I think I don't

80:49 have to elaborate you already know what the value of that would be so the highlights feed is the searching excuse me searching the highlights is what I use the most now the thing I use the second most is called the Highlights feed and the highlights feed I'm loading it right now essentially it's just like these little almost like sized highlights from all different books and so it is completely randomized and it's almost like you have History's Greatest

81:10 entrepreneurs speaking to and then just read through them and see what thoughts respond so like the first thing that came up was actually it's actually a highlight from one of Warren Buffett shareholder letters he's talking about diversification and its relation to risk the next highlight is a quote from Ed KML the founder of Pixar talking about he didn't even realize at the beginning of his company how poor the communication was and that there was things going on in his company that that

81:30 his the people his employees were not telling him and his thoughts on how to fix that then there's a quote from a book that I read like six years ago and it's actually the the biography of Alibaba and he's talking about the importance of listening and that poor listeners actually have second rate negotiation skills and so that is the second most used feature for me personally this might be different for you third feature books you have a list

81:50 of all the books that are in there I think right now says I have 3 7 books in here I still have a bunch I need to put in and then that that's very simple like I just went through the reason I reposted the Mike Bloomberg episode for example is because I've been rereading the highlights and so I went back if I don't have time to reread the book which I will in the future but I just read

82:07 through I think I have like 44 highlights of Bloomberg's autobiography here and you read through them and there's just so many ideas and this is happening like 15 minutes it's absolutely incredible so that's self-explanatory you can search my book The Last feature that I use the most is the favorites feature you know I have 20,000 it's there's a ton of information in here and so what I'll do is as I go back through the highlights and I've

82:29 done this forever and that's why this number will always go up I have 839 favorites now but you know if you're listening to this months from now it's it's going to be higher and whether it's through searching whether it's through rereading the the highlights on a specific book or through the highlights feed which is the random just showing me like the random highlights that I've done if there's something like damn that's a good one I really want to

82:50 remember that and so I I highlight it right I favored it and then now that goes into the favorites feed so then I have an even more like specialized feed of ideas and highlights from different books all on one page so again need to re reiterate I think if you are like me and there's a good chance that you're if you're listening to this you're like me if you're like me you're already running a successful company I think it's a it's

83:13 a no-brainer I would at least test it out for a year there's a chance that you don't like it I not going to share that opinion with you because like I said before I listen to it or should not listen to it I use it every day and I think what I what this is going to be good for and what I hope to do is like man like for a Founder to just have a browser this this notebook sitting in a

83:33 browser that they can tap into any time I think that's going to be very valuable and I can say that because it's been very valuable for me so hopefully that makes sense if you want to test it out it is Founders notes.com again Founders notes.com and I also leave a link down in the show notes if you want to grab the link from the podcast the show notes on your podcast founders notes.com