Video Of The Week: Paul Graham in 2005

There are a lot of awesome people in the startup community, but Paul is among the most awesome.

#entrepreneurship#VC & Technology

Comments (Archived):

  1. BillMcNeely

    Just got back from the Inc. Magazine 500 conference in DC last night. Here is the link to there piece on Paul Graham in that issue:

    1. fredwilson

      thanks Bill

      1. SubstrateUndertow


      2. LE

        Paul Graham’s appetite for small talk is waning. “Are we starting yet? Is this the interview?” he stops midsentence to ask on a hot summer afternoon in June. It’s hard to blame Graham, an angel investor known for being brusque, for placing a premium on his time. If there’s one thing he values, it’s speed. As co-founder of Y Combinator, the Silicon Valley tech accelerator, Graham has made a career of turning half-cooked business ideas into fast-growing companies in a matter of months. (my emphasis)I’ve been following these fawning b magazine stories since the late 70’s early 80’s. (Stopped reading them a long long time ago since they are so predictably lop sided with the occasional “to be sure”) So much so that I remember doing a parody photo shoot in the 80’s with my ex wife posed in front of a bed and breakfast in New England with something like “she sold her first company and is now on to her next challenge after completing her 10th marathon and …” It was such a cliche.

    2. SubstrateUndertow

      My favourite tidbit:”everything has some adjacent territory”

  2. takingpitches

    Just curious: how often is it true that programmers briefly do startups to make money so they can go back to open source coding?

    1. fredwilson

      i don’t think that’s exactly what he was saying. i think what he said was programmers sometimes focus on open source stuff once they’ve become wealthy. that’s a slightly different thing

      1. takingpitches

        cool – got it.

      2. Elia Freedman

        There’s a strong desire among developers to give back and I also think developers generally feel that there is a limit to the amount of money they desire. I think that combination is why a lot of developers want to give back once they make It.

    2. falicon

      I think it’s more about having the financial freedom to focus on your art (sometimes that’s open source, sometimes it’s just software without a revenue model, and sometimes it has nothing at all to do with computers or software — though that last one is a bit more rare with ‘true hackers’).As an aside, I’m reading a really great Kindle Serial called “Make Art Make Money” in which the author talks about how Jim Henson took this basic approach as well (HIGHLY recommend it if you can afford the $1.99!) ->

  3. jason wright

    you need to speak up a little Fred when you ask the questions.

    1. fredwilson

      yeah, i wish i was the one doing the interview. not sure who that was.

      1. jason wright

        twas mr. mumbles on christmas eve, the bete noire of all interviewees.

  4. Richard

    PG’s take on what sinks 9/10 startups. (Or to put it another way, what PG asks himself before investing.)1) You built something that people don’t want.2) Your team failed to execute on a product that people want.3) Another team built a product that is a few (really important) features better than your product.

    1. fredwilson

      he is spot on

    2. awaldstein

      #1 got to be the biggest by a large margin.

      1. Matt A. Myers

        Yeah. The others are more factors of not having a long enough runway to compete – meaning investor interest or sources of income dry up.If you have money and time you should be able to find a team that can execute.Most markets there is room for more than one competitor who are differentiated, so there’s more time than you could imagine – though clock is still ticking – especially if you have a constant burn rate.

        1. Richard

          Maybe .. But a funny thing about a long run body really chooses to be on it and most times it leads no where.

      2. LE

        #1 Seems to be very trite. (Contrast of course with the meme of “people don’t know what they want”).Back when I was in b school it was said that an entrepreneur “found a need (or niche) and filled it”. I’m sure same thing was thought 100 years prior as well. Sell them pick axes so they can mine the gold.There is much more. And while it might be useful to try and reduce things down to talking points the devil is in the details. (#2 is part of this)Twitter?Twitter without celebrities using it or a few big world events [1] which catapulted it to fame and fortune would be nothing.No way shape or form would it be where it is today without that shit coming together.And that shit coming together is one of those random unpredictable things that just happened. It was not preordained or a “for sure” happening. (And that’s even assuming twitter ends up pulling off the advertising and profitability that it will need to do).Ebay is perhaps an example of something that people want so with that it’s on to #2 and hoping that someone else doesn’t outrun the bear (#3).[1] And the major media humping it and using it to their advantage.

        1. Richard

          No doubt LUCK and TIMING are inherently on this host list. It like modeling y = a + bx + e. The random e can have a lot to do with success.

        2. Dave Pinsen

          That’s an interesting point re: Twitter, but the participation of journalists (pro and amateur) may have had a bigger impact on Twitter than celebs. It could’ve just been a microblog version of MySpace otherwise.

        3. JamesHRH

          You are wrong on trite.Because you can tell the difference.Many cannot.

        4. Drew Meyers

          “Twitter without celebrities using it or a few big world events [1] which catapulted it to fame and fortune would be nothing.”But, surely celebs didn’t “just” use it…that was part of the strategy from the beginning (I would guess)

      3. Richard

        We often hear great ideas are a dime a dozen, What’s interesting about PG back of the envelope analysis is that both 1 and 3 are all the idea.

        1. awaldstein

          True…For a writing project I’m thinking of, I went through each and every job I’ve ever had, from publishing computer programs written by parents for their handicapped kids, to creating the lite computer game as a lead in to second tier sales, avatar communities, and 3D as a format for entertainment. Many.I’ve never failed because of execution.Been too early. Owned an enthusiast market that couldn’t jump the chasm. Was just plain wrong. And got beaten twice handily by competition.To me products are where ideas touch the market. They are everything.

        2. JamesHRH

          Ideas area dime a dozen because 3 is the key.The idea must come to life with the exact orientation that aligns with success.MySpace v FBall search v GOOGetc, etc, etc

      4. JamesHRH

        2 is far, far, far more common.You run with a comeptent crowd. Thousands of startups you have never heard of are on to something useful but the people in charge were totally incompetent.

        1. awaldstein

          Maybe so…or maybe I’m just seeing the world I either control or influence.Are there really thousands of great ideas in process that are broad or deep enough to be knock it out of the park markets?I question that…

          1. JamesHRH

            There are not thousands that would knock it out of the park, but there are thousands that could be viable businesses.

          2. awaldstein

            Of course but the we are taking about VCs and knock-it-out-of-the-park business. Not the same. Different value scale.

  5. JimHirshfield

    I think I heard him say people who work on Wall St are dicks. LOL. Or they’re nice people who feel like they have to act like dicks to be taken seriously. And programmers might sometimes be dicks, but have to act benevolently ’cause that’s what’s expected. 🙂

      1. Anne Libby

        New looks great!

        1. kidmercury

          that is awesome! i’m going to participate there, hopefully annoy some folks. to whoever is the designer in charge, may i suggest considering a font change? lucida grande off the top of my head, though a true designer would know better. but there’s gotta be something better than what’s there. small thing to make a huge difference!

          1. LE

            All this is a matter of taste of course. But now that I’ve gotten that out of the way although the design is clean and the “about” “portfolio” and “network” pages are fine, the home page needs work.The combination of the smaller items on the left and the larger blocks on the right just doesn’t work well.Your eye is drawn to much to the right of the page. It’s not balanced well.The “about” page is balanced but I would make “our focus” a separate tab.The “portfolio” page looks nice but the sort is alpha and, hey, “that’s not fair”. Nice though to see that (as any locksmith would tell you) having “a” in your company name has it’s small benefits.

        2. fredwilson

          thanks. we opened up an internal tool we have been using to share information with each other. figured it would be even more useful if we shared with everyone and they shared back

  6. Anthony Catanese

    At 22:00, is one of the greatest points describing how to learn from others. Thank you for posting this, Fred. We always get caught up on new content and it’s always interesting to learn from the past.

  7. William Mougayar

    Really good foundational conversation for anyone thinking about joining or founding a startup.I liked the part at the beginning where he describes what makes a great software product – one that lets you do things you didn’t know you could do.

    1. LE

      Because of “feature creep” there are many things you can do with software that you don’t know you could do.Really good foundational conversationAn idea for you for http://www.startupmanagemen… would be to condense and edit some of these videos to highlight the important parts. Same as readers digest used to do. (I understand this is time consuming but if you could get some interns to do the heavy lifting..)

      1. William Mougayar

        Yup. It does take some time to put together, but it’s a good idea. I did that once with a Marc Andreessen interview, combined with a Fred Wilson/Ben Horowitz debate, and it was a very popular post with 175 re-tweets:http://startupmanagement.or

        1. LE

          Good.My idea though was to take the original long clip and break it down into smaller sound bites followed by your summary of each clip. So each clip would be, say, less than 20 seconds and there might be 10 of them or whatever.In order to do this you simply take the youtube clip using a utility and move it into imovie and then export back to youtube and reference the new url.In Firefox for example you can use the “downloadhelper” addon to grab any youtube video and then import into imovie.(Even if you don’t do this you might want to practice that it’s great when someone pulls a youtube video and you have a copy on your local drive.)Of course this is very time consuming. Which is why I said “intern”! But that’s good it provides a barrier to someone else doing the same thing. (After all there is no barrier to someone writing a blog post.)

  8. Spencer Fry

    Thanks for sharing. Great video.”The test is ‘make something users want or not’.”

  9. jason wright

    Paul Graham is English? he sounds so very assimilated. i’m shocked by his accent.

    1. LE

      Funny I thought the same thing. Then I found out he grew up around (iirc) Pittsburgh PA.Remember also thinking early on there was some connection between wikipedia and the UK because of “Jimmy Wales”.As I have said before naming matters. You can use things like that to your advantage when coming up with a name for your startup. Of course your birth name is what it is.

      1. jason wright

        the immigrant sees what the native does not see?

  10. Nick Mango

    You always hear the chess comparison being used for many things that involve strategy. Thinking many moves ahead, is usually what’s referenced in the comparison. When I had the time, chess was a huge part of my life. There’s really 2 types of chess players. Someone who reads books about chess, and someone who doesn’t. I was the reading books type. To be great at chess, it needs to take over your entire life. No matter how much god given talent you have, you need to live it, to be among the best. I use to walk around with a pocket chessboard in my jacket. I would have an image of a chess position, as my lock screen on my phone, just so I could study it easily. I would spend hours at coffee shops going over situations. I was a student of the game. So for someone that spent years studying this game, I understand why this reference is used for strategy, but I believe there’s a more important comparison that should be made for getting somewhere in life. In chess you don’t “think ahead”. This is just a generalization. You actually think about where you want to be on the board, then figure out how to get there. You say, I need to get my Rook to X, to force my opponents piece to Y, so I can threaten, check, checkmate, etc. Then you backtrack. You say, ok to get my Rook to X, I need to do this, and to do that I need to do this, and so on and so forth. You essentially figure out where you want to be in life, and then go chart your moves backward to where you are now. You do this because it’s impossible to be a great chess player, if you have no idea where you need to be, to win the game. This is what life is like. And I believe it’s a better comparison than the business and strategy analogy. When you’re a child you want to be a ballerina, cowboy, astronaut, superhero, etc. Basically you have no idea where you want to really be, until you learn more about yourself and who you are as a person. Some never figure it out. Some do. Some then backtrack, and plot their course to their goal. Very few succeed.Now obviously the real key in the above example, is predicting how your opponent will try and thwart you, and then finding ways around that. And even MORE importantly than that, is knowing where your opponent wants to be, and stopping them. But this is so deep into the strategy of chess, that it’s really too gigantic of a task to relate to something as small as business. This is why chess is more closely related to something like life, and business should be compared to something like Poker or Fly Fishing. This is in no way an insult to Poker or Fly Fishing. Two things I also love. Arguably more than chess right now. They’re just very different than chess, as it pertains to possibilities and chance. In life, I believe you make your own luck.I’m going to stop now before I find out if Disqus has a character cap.

  11. vruz

    Bill Gates didn’t go to business school.Sergey Brin and Larry page didn’t go to business school.Steve Jobs didn’t go to business school.Larry Ellison didn’t go to business school.Of those, only Sergey and Larry didn’t drop out of school.Then you can safely argue that that was then, and now it’s different, right?Well maybe not, @ev has founded or co-founded two of the 10 most successful startups of the past decade, and this is what he has to say about formal education and how he became a successful programmer/entrepreneur: (programmeur??)……In short:My take is that people who are very successful and have a solid formal education don’t succeed because of it, but ***despite*** it.

    1. Matt A. Myers

      Anyone know if Gary Vaynerchuk go to business school? He’s learned a lot through experience, I know through his family business – though not sure if further than that. He’s basically Fred but on steroids when it comes to engaging people – one-to-one relationships being what Gary sings from the rooftop, and to do what you enjoy and are passionate about. His way is a quantity over quality play, both valuable if you can maintain – though clearly he’s passionate about what he does.

      1. bsoist

        I met Gary through our mutual love of the Jets before I knew anything about his business pursuits. He has since promised me he won’t make an offer on the team without checking with me first :)He tweeted something yesterday that sheds some light on his view of education –

      2. fredwilson

        i would be shocked if he went to business school

    2. awaldstein

      You are going from a general to a misassumed specific.Because the list doesn’t show that B school is the key in NO way implies that it is something to be overcome.I’m with you that it is not necessary. Not with you that is is a liability in any way.

      1. vruz

        Well, maybe you can show examples of very successful programmeurs for whom this wasn’t a liability?Jack Dorsey and Mark Zuckerberg? They seem to fit the ‘despite’ model.

        1. LE

          Zuckerbergs strongest suit was not programming. Besides no question it was a benefit to him that he at least got into Harvard. The halo helps quite a bit and can’t be denied. And the fact that in order to get in (with nominal family connections in this case) shows a certain aptitude to being with. Being a dropout from Harvard is better than having a complete degree from a third rate school in many cases. (Had his idea not worked he could have easily continued school at any number of places and he had his dad the dentist to fall back on. Ditto for Gates his family was fairly well off and connected.)In life you need all the advantages you can get. A degree is an advantage.Of course if someone wants to take a gamble on the startup lottery anything is possible.I don’t want to draw conclusions from what Paul Graham thinks (back then or now) but what PG espouses is something where he doesn’t suffer the downside of any particular path, only the upside. And of course he can offer all the fine print disclaimers that he desires but in the end people don’t follow or read the fine print. The act on the body copy message and the headlines.It’s like if I have a 100 friends and encouraging all of them to skip college and do a starup and I will invest $1000 in each of them. If they make it? Good for me! I have all upside and no downside. A good deal for sure. So what am I going to be biased toward advice wise?

          1. vruz

            Well, there is a difference between “got into Harvard and the right connections” and “learnt something useful in Harvard”.

          2. LE

            College isn’t all about learning though. Just like being in a relationship is not all about sex or companionship.

          3. vruz

            I don’t have a definite answer, but I tend to agree with you.

          4. Elia Freedman

            What part of “going to Harvard” didn’t help Zuckerberg? The whole idea for Facebook came from Facebook, the viral model for distribution happened directly because he was a Facebook student. I could argue that Zuckerberg’s success was directly related to him going to Harvard.

          5. vruz

            Are you reading what I said?Oh, it’s you again.

          6. LE

            I agree of course obviously that going to Harvard helped Zuckerberg.But to be clear we had a “facebook” [2] (wasn’t called that) at my high school with pictures and home addresses and that was before Mark was even born.It’s funny a few weeks ago I watched “Prozac Nation” which takes place at Harvard. There is a scene where they mention “facebook” [1][1] Prozac Nation came out in 2001. It was really odd hearing them mention “the facebook” and realize the movie was about events way before “facebook”…[2] The original 70’s look that is so popular now.

        2. Elia Freedman

          I think the point is that the argument has no counter argument. If you didn’t go to college and were successful than you were obviously successful without going to school.If they did go to school and were successful than you can’t prove either way whether going to school contributed to their success or not.Finally, this is a very limited look at success over all, one defined by self promotion and major media publication. There are a lot of very successful people who did go to school, and a loud of very successful people that didn’t.

      2. LE

        I can also cherry pick any number of examples to prove a particular point. [1]I happened to attend a good business school and learned very little as far as anything that was applicable to actually running the business that I ended up doing (after graduating).But the confidence and the skills that I did learn came in handy. By confidence I mean in the sense of “never having to say you’re sorry”. And when I needed to get a loan from a bank (back when they did things like that) it did make a difference where I went to school. It’s as much of a mindset as anything else. It’s like being at a party when you are single vs. when you know someone is at home for you when you return. (Hard to put in words the confidence thing). Ok it’s the “party in your brain” thing that I speak of. Doesn’t matter what others think it’s what you think they think.Even to this day it doesn’t bother me if I make a grammatical error or don’t know something because, well, I went to a good school. So fuck you. I’ve seen the same behavior in other people with advanced degrees (say a physician or a professor). They laugh off things they don’t know they don’t feel as if “shit I don’t have the degree that’s why”. (Like when people made fun of Dan Qualyle as if a guy who gets picked to be VP really cares that he can’t spell a word correctly.)[1] I can point to any number of people who were immigrants and made money and a good living and have no “formal” degree. My father took night courses in real estate but has no degree. Neighbors I grew up with, ditto. I have no doubt you could do the same.

    3. Drew Meyers

      Business school is certainly not a required pre-req

    4. Richard

      Yes, but hanging around Wharton for a few years is right up there with a 13 years olds first vacation week in Disney Land.

  12. Stephen Candelmo

    Really enjoyed that. Thanks for posting. Found it interesting in how he viewed Y-Combinator as an “experimentation”… which ultimately could be viewed as a “hack” of start-ups/business and funding models.

  13. Nick Grossman

    That was really nice. I really like his manner of speaking.I love the example of blogging about ideas being like flying small aircraft — the planes are so small and the air is so big, that you don’t need to worry about colliding.

  14. Tyler Hayes

    “You might wonder: ‘Why would anyone goes to business school?'”…Bazinga.

    1. ShanaC

      i really love your name 🙂

  15. Yuval

    Can someone please count the number of times PG says “um” in this video?

    1. Cam MacRae

      How about I count the ways that it doesn’t matter instead?

  16. @stoikerty

    wow, there’s so many comments! You have a busy life sir.I have never seen anyone describe programmers and hackers so accurately, paul hit the nail on the head precisely. Silicon Valley contains possibly the most interesting industries of this era.

  17. vadimoss

    What a charismatic man! At 18:20 PG mentioned “your data should be available on the network from any client, your desktop, your mobile phone whatever…” 2 years later dropbox was accepted into the yc and became one of the most successful alumni of the accelerator program.

  18. MA

    As this post is about Paul Graham, here is a question about the future of startup funding that was asked after his article on this topic: http://instinctentrepreneur…He’s been good at guessing it until now. Will the coming trend still be the same though?

  19. Cam MacRae

    True of all industries, no?