paul graham essay scale

Episode 117: Do things that don’t scale

This is an episode for: presenters, founders, anyone running their own business and startup enthusiasts..

Molly Geoghegan

Apr 18, 2024

Paul Graham’s blog post, “Do things that don’t scale”, has largely been heralded as the best advice given for startups—maybe ever? But what can we takeaway from it as presenters? 

As the founder of renowned accelerator Y Combinator, people trust Paul and are still talking about this post over ten years later. (A big deal for today’s Age of Information). 

Mikey and Molly dive into the many conversations around doing things that don’t scale, what that means, and how presentation people might be able to implement it into their day-to-day as well.

What's in the Spice Cabinet??

Catch up on Paul’s famous blog post “Do things that don’t scale” here

• Learn more about Paul Graham
• Learn more about Y Combinator

We love all these conversations about it

• (Podcast) Tropical MBA’s “#749 Do things that don’t scale”
• (Video) This YouTube video from Academy of Project Management
• (Podcast) Startups for the Rest of Us Episode #687

Need custom illustration

• Our very own NoNo Flores that does our podcast episode artwork is amazingly talented

Paul’s walkout song (according to Molly and Mikey)

• Zero to Hero - Hercules
• Go Your Own Way - Fleetwood Mac

All brought to you by GhostRanch Communications. Send us an email!

Click here to see the podcast transcript

Michael Mioduski  00:21

Welcome back to presentation thinking, aka the storyteller Study Club. This is your co host, Mikey Madhu, ski founder, CEO of presentation design agency called Ghost ranch communications. And I'm here to nerd out on all things presentation with my friend, my co host, your favorite, Molly Geoghegan live out of Colorado. What's going on?

Molly Geoghegan  00:42

It's me. It's Molly, you guys. It's so nice to be here again, Mikey. It's been a maybe a couple of weeks since we recorded together, catching together and episodes. And I'm a Narrative Strategist over at ghost ranch communications, also a storytelling presentation nerd. And Mikey, what are we going to talk about today?

Michael Mioduski  01:02

Yeah, Molly, you've been going down this like startup school, basically, you know, like deep dive into all things early stage startup. And there's one name that is cited, often in that community. fella named Paul Graham, a PhD, named Paul Graham, I should say, very smart, you know, kind of thought leader in the space has been around for a while in the startup space. And I was listening to the Tropical MBA a couple episodes ago. And they covered a timeless essay written by Paul Graham that they thought was worth revisiting on their show. And they had heard it from another podcast, they listened to startups for the rest of us who was citing this Paul Graham essay. And if you Google, do things that don't scale, you'll see like almost a billion results in Google. So many companies from Forbes to Inc, to every accelerator, talks about and recites this essay that he wrote over a decade ago called do things that don't scale. And it's on his website, Paul graham.com. You can check him out on Twitter, at Paul G. Yeah, he's pretty prolific there. He's been an active user for a long time. But people love what this dude writes. And you can kind of tell why Molly, I don't know if you'd heard of him before? Or if you know, this was a first encounter. Not

Molly Geoghegan  02:20

really no, this was one of the first encounters. But then as I was reading this article, from 2013, as you said, at some of these tenants of advice that he gives to startups, basically, is stuff I've seen before, repackaged in different ways. And so it's really interesting, because I think in this world of like constant information on the internet and different blogs and newsletters to follow, it's harder and harder. The Tropical MBA guys talk about this at the beginning. But like, yeah, they're like, the Bible has been around forever. And people forever always be you know, following that, but, but for information in today's Internet age to stick and like be quoted for 10 plus years, is already like a little testament that it's standing with standing the test of time. And I said that even with a Guy Kawasaki blog post for the with the 1020 30 PowerPoint rule, that's a blog post from 2005, that really shook up how pitch decks were supposed to look and kind of like a hot, edgy take maybe for VCs to want to expect in a pitch deck. And so I think it's been fun to kind of go down this rabbit hole of stories that stick. We've talked about that in the past, like, what makes stories stick. And here's some really helpful information for not only founders, but people that are part of a business and yeah, capacity. And certainly presenters will kind of throw our classic presenter twist on this as well. Yeah, and

Michael Mioduski  03:45

it's funny because it's almost like a hot take at the time. You know, I think like the co founder of Y Combinator, you know, one of the most coveted sought after accelerators to get into telling these founders who want to be the next Mark Zuckerberg, you know, who wants to start the next unicorn, not to think about scaling, but to think about like, tiny detail, you know, super manual things when they're starting. And so it's very counterintuitive. And it's almost like, the thought is no, like, we can't do things that won't scale. And so yeah, it's really a reality check to encourage these founders to actually focus really early on the things that matter because only only by doing those right, can you actually build this sort of crank that's gonna keep going.

Molly Geoghegan  04:29

And that kind of turns it's I'm sure it was still trivia in 2013. Mikey with the word scale, if you're in the startup space at all, I'm sure is like, your biggest enemy for enemy because people are always throwing out the words like scale and all the startup jargon that I think can get a little bit lost for what it actually means. So I think for his title to say do things that don't scale is like the perfect clickbait honestly, in titling, yeah, that just flipped it on its head. So people would immediately intrigued because they're like, all you've been maybe talking about in your startup space is how to scale. And so to hear from Paul Graham, founder of Y Combinator, you know, oh, the Tropical MBA guy say like, if you have an invitation to go to Harvard or Y Combinator people might choose, well, Combinator, it's the Ivy League, startup accelerators, for sure. It's a big deal. And I think that's just an interesting way to kick off the blog.

Michael Mioduski  05:25

Yeah. All right, well, we don't have to go through, you know, the full essay, it's worth a read if you haven't checked it out. But Molly, you know, just kind of starts off with a little overview. And then he breaks it up into something like 10 Mini sections, refers to some of the founders he's worked with at Y Combinator over the years. And really like the big high level takeaways, like, This is advice, they commonly give Y Combinator founders. And it is that you need to do things that seem like they won't scale. Startups take off, because the founders make them take off. You know, it's not like you build it, they will come kind of thing, which is often what we think we're going to build this amazing product, people are going to flock to it. No, no, no, that's not what happens. And so, yeah, so Paul goes into a list of ways that you need to overcome and think a little differently.

Molly Geoghegan  06:10

Exactly. He says, a good metaphor would be the cranks that car engines had before they got electric starters. So once the engine was going, it would keep going, but there was a separate and laborious process to get it going. So for me, I was just thinking, yeah, the parts that make a hole, you have to do a lot of work individually with little mini processes before it creates a bigger one. Yeah. Even if those feel silly, dumb, lame. He even says at one point in the essay, and yeah, Mikey, what's Yeah, do you want to go through a few examples of like, what those are for? Yeah, like, well, lucru, my favorite overview so that you don't have to hear again, let's go into all 10. But it's stuff you wouldn't expect.

Michael Mioduski  06:51

I loved Yeah, the idea of recruiting the story of stripe who he said like they actually had a product so hot that people actually probably would have flocked to it. But these founders invented something or that YC terms, the collision installation, I forget if the brothers who started stripe with the founders, or one of their last name is collision, but it's more like, they're not gonna sit back, like a lot of times founders will be like, I validated the idea. I asked my friend if they would use this. And they said, Yeah, and so stripe was like, no, no. Will you install this on your computer? And they're like, Yeah, I probably would. And they're like, Okay, give me your computer. And they they manually installed stripe on these people's computers to make sure it was there. And that is like that next level step that he says like, whether it's shyness or laziness, just a fear of actually asking and doing that most founders don't do.

Molly Geoghegan  07:38

Yeah, I he also has that example with manually aggressively recruiting. That's the first point with the Airbnb founders going door to door in New York City. And literally just asking people if they would host there explained to the visitors and asking if they would be a host. And I'm reminded of shout out to Jay Sassani of meal sharing who I believe we've had a conversation with together Mikey, who always be in Chicago, during his like, when this startup was just beginning, he would tell every Lyft driver he got into the car with and by consequence, I even like I would start to tell people were that I was helping out at this startup and the Lyft drivers already knew who I was talking about. They're like, Oh, Jay, I work with Jay. And so he really immersed himself in, you know, meal sharing was kind of part of a little corner of the gig economy and Lyft was just become like becoming a big giant in the gig of gig economy. And yeah, that's manual recruiting. For sure.

Michael Mioduski  08:32

Yeah. He says don't underestimate the power of compound growth. Any other Yeah. What else? Molly? There's he talked about fragility almost like being okay. And like expected.

Molly Geoghegan  08:43

Yeah. Yeah, this. The second point, fragile, I think is kind of like his just quick nod to founders to be like, hey, like, it's okay. If people dismiss you, like, don't let those get you down. But it's more than that. You don't dismiss the growth yourself. So even though you might feel a little silly and yet overly analog or manual with some of these things I'm suggesting, like, that's, you need to put yourself through that mud and the awkwardness, because you'll see, it has to be small. First, I'm reminded of Austin Klingons creativity advice, where it's like, every artist was bad when they started out, like no one's putting out their best novel first. You can't just expect to get from like the beginning to the best seller you have to be bad. And you have so this like moving through this awkwardness moving through the motions. Like don't dismiss yourself for that. I was like, Ah, thanks, Paul. I think that seems super simple. He's the word I thought this was funny Mikey larval, a lot larval, like as in like these really like in like that. Grow spots. I don't know if that speaks to his like interest and biology or something. But he just just thought that was a funny detail that was a constant descriptor of startups like this really, like just super fragile, kind of gross, like Yeah, spot to be in a Then you can't quite see what it's going to become. Yep.

Michael Mioduski  10:02

I love these next to delight and experience. I think they kind of go a little bit hand in hand. But he says I've never once seen a startup lured down a blind alley by trying too hard to make their initial users happy. Yeah. Like he says go to extraordinary measures to do so he then he then cites Steve Jobs like around the the idea of experience and just like, the need to be insanely great, right? It were Steve Jobs phrasing of it, not like very, but like, I think he really made like, be insane about it. No,

Molly Geoghegan  10:30

totally. Yeah, he's like, I think he's actually talking about like, a point of neurosis there. Yeah. The delight I really got where it's like, yeah, these first initial customers, like you should give them so much attention, like abandon all boundaries, and like, answer their questions at 9:10pm at night, etc. And then as far as the experience, like the attention, like the user experience is kind of what I took that for, and that should be extreme like, yeah, the way that you and I can't quite differentiate this from a little bit later, when they're talking about the konsult. One, I'd be curious to see your thoughts on that, Mikey. But this should be over engaging with early users, he says, is not just a permissible technique for getting growth rolling. For most successful startups. It's a necessary part of the feedback loop. So keep that feedback loop, like super open so that you know all the kinks in the beginning. Because if you don't do that, in the beginning, it'll get bigger and then you'll have like a harder time catching up on it, basically. So delight customers and get in the weeds with experience. I liked this next one, he has fire. Yeah,

Michael Mioduski  11:29

I love it. Sometimes the right unscalable trick is to focus on a deliberately narrow market. It's like keeping a fire contained at first to get it really hot before adding more logs. And then he cites how Facebook started just with Harvard, right? And then slowly added a couple more colleges, but like, I think it's brilliant. I love starting small I love I love focus. We know what it's done for our business. And yeah, I think it's a better way to build word of mouth is by zoned in on that that one persona or that one niche or industry and then you can always expand from there. Exactly. He

Molly Geoghegan  12:04

is reminded, or maybe the Tropical MBA guy said this, give them lots of credit here. But um, the Amazon started with just selling books, I totally forgot about that. Just books. And I mean, Netflix was just DVDs. And Uber was just driving cars and before it was delivering food. Yeah, treated like kindling. Precious, powerful.

Michael Mioduski  12:26

The Mirage, what they call the pulling them Rocky is assembling the parts yourself like so when you're, I'm sure you can find a metaphor or an analogy for your own niche. But in the hardware type of a startup, to have to commit to a massive amount of like inventory before actually getting to QA it is a scary proposition. So I guess what Meraki did was like, we're gonna assemble it ourselves to make sure we're building these the right way. And yeah, obviously that doesn't scale. Well, right, Molly, but like, they were closer to the development of it. And then yeah, the T MBA guys say, I think Elon Musk, like slept in the factory, you know, in the early days of Tesla to be like, right up in it, you know, for the development of those early cars,

Molly Geoghegan  13:07

being a startup founder is more and more overlapping with the Venn diagram for me of like, like totally committed professional creatives in that, like, you know, they say, if you're, if you want to be an actor, if there's anything else you want to be like, go do it. But this startup like this has to be the thing that you have to pursue, because you'll wonder for the rest of your life if you didn't, yeah, and I'm not saying that in a judgmental way. It's like, but that is sometimes what it takes this like, total abandonment of normalcy in a job like this is not normal. But yeah, the commitment really does pay off, you know, so yeah, I liked the Meraki. Even though I'm unfamiliar with exactly what this application was with the Meraki ultimately, like micromanaging that supply chain. Super, super important. Yes. Interesting. Okay, so number seven might use console anyway. So we're gonna go through them all now. We're just totally doing it yet. But yeah, what's too good? Console versus experience kind of that? They say with console, pick an anchor client? And like, Yeah, almost use your software as if you're the client, uncover those bugs. But I see this is so similar with experience, what do you think makes them different? Yeah,

Michael Mioduski  14:14

I think in software, there's a, you don't want to get into the trap of like, becoming one customer's like, fix all you like. So if they they're finding bugs, they want these certain features built for their one specific use case. I think a more mature software company will be like, great. Finally, you know, we're gonna think about that in our roadmap. But the larval state, you know, might say, man, if you got this one customer, this client, and they're sending you great ideas and and they are really using your your software. Why don't you just like prioritize those and just treat them as if they're a paying client, because other people will probably need the same things. So it is something that if you were to tell like a software engineer, or like Head of Development You know, I think they would get a little gun shy about this because it's like, no, we have to stick to our vision, this and that. And he does call out like you do start to cross a line, when you start to take money for this like, then you really are turning into a consultancy rather than a software company, which makes its money from subscriptions and, you know, licenses, which is a better business model, consulting, you get in the trap of like, time for money, right. And so that is not something that Y Combinator or like big time Sequoia is going to invest in because it's there's smaller multiples all that but, but if you can treat the first ones, like the consultancy, build custom features for these clients, you'll probably roll them into your bigger product set, and it could pay off for others who might have similar problems, right? Yeah.

Molly Geoghegan  15:47

And assuming like you don't have a ton and ton of users yet, this is like much more realistic to do. Now, pretty much one of the only opportunities you'll get to see exactly, similarly with the next point is called manual. And it's basically saying that you should do things by hand that you plan to automate later. Again, like I think this is such a software specific stuff. But even still, I mean, even the processes and the user experience that someone gets from a service, or as we'll talk about in a second here, presentations, there's so many ways you can do things by hand, that so much is automated, whether it be AI, or a template, or whatever it is. So like, there's a lot of benefits to getting in those weeds. And seeing it when you have the time to do it. Before you automate like a bot that might end up glossing over an issue or a

Michael Mioduski  16:33

bug. It's such a good way to differentiate even like, do you remember the story of Zappos, and they're, they're commonly associated with great customer service. And in that book, by their founder, Tony, say, they talked about how like, they actually let their customer service agents pretty much just do their thing. Like, there wasn't a script to follow. There wasn't like, you know, try to get them off the phone as quickly as possible kind of stuff. It was like, you know, treat them how you'd want to be treated and solve their problem. And they didn't put any, like hard parameters on that. And I guess there's some like story of a customer service rep at Zappos, like who sells shoes online? who spent like something like six hours with a customer on a call one time, just kind of like, you know, sorting something out? Yeah. And those are the things that build the ultimate word of mouth, ultimate loyalty. And certainly, they don't seem like something that would be profitable. Yeah, yeah. But they're playing the long game.

Molly Geoghegan  17:30

You know, one time I got with a really small skincare company, good light, I'll just say, oh, free cloud for the girlies is I got like a, the wrong product and my subscription, and I let them know. And they were like, oh my god, we're so sorry. So they sent you know, they were like, keep it and let us know what you think. And now those guys now I ordered that one, too. You know what I mean? Yeah. And so, but they send what I what I wanted as well with an extra freebie. And so it was like this really quick correction. They're like, Oh, so sorry. And said something else with like a little bit of swag. And now, you know, and I got to try. I'm like, did that do that on purpose? Like, swap in different product on but the customer service was easy to reach? And very human, human human? And did not? I don't think it was automated

Michael Mioduski  18:13

at all. It stands out these days, you know, for sure. Yeah. I don't know, the last couple points. Like, basically he talks about, like, how a lot of founders think they have to like, roll out this massive big launch all at once. And then world is just going to be jaws dropped? Oh, my gosh, you see that? And what does he advise instead?

Molly Geoghegan  18:33

Yeah, he's like, almost like this lady's like little launches here and there as you grow and get more users is better in the long term, because you're just gonna spend all this time and energy and likely money into a big launch and getting like, you know, six, or a handful of journal publications, and maybe an interview or whatever. And it's like, it's not going to be as big of a splash as you think, especially in today's market. This is I think, even more relevant now in something like this has become more salient in the 10 years since it's been written, is because the markets are so crowded, and it's way less likely that you're inventing something brand new, and unless you are unless you already apple that is established. And we've like even covered a product launch that Apple did, right, Mikey? Yeah, on the pod. But that's because they've already established themselves. So it doesn't make sense to have a big hurrah unless people know who you are, or there's something brand new going on. And I don't think there's I don't think this is common. Well, yeah,

Michael Mioduski  19:26

I think there's so much written on this article. This one essay, you know, has legs and I'm sure like so many founders have been influenced by it in a positive way. I think it's amazing. There's, there's another podcast masters of scale from Reed Hoffman, who's the co founder of LinkedIn partner, Greylock, I highly recommend, you know, Googling that one masters of scale with Brian Chesky of Airbnb, and Chesky talks about their early days, how they actually got into Y Combinator and had a very like fortuitous encounter. with Paul Graham, who is like, alright, hearing about this Airbnb idea. And so the founders moved out to California to do the Y Combinator thing. And Paul is like, Alright, where's your business? And they're like, Well, yeah, we have these apartments out in, in New York. And he's like, Well, what are you doing out here? You know, and he's like, told them like, you need to go. And so for the first couple of years, they they started like commuting, basically, back to New York, just to have interviews, they would knock on doors, they would ask the owners of the Airbnb ease, if they could come in, ask them questions. And then they're like, well, that's creepy. So they're, like, we'll take professional pictures of your house, you know, like, that you can use to market it, and they're like, Okay, and, but yeah, they just got all up in it. And they just sort of cracked the code, through these very manual conversations with customers and the hosts about how to make the most delightful, you know, like, 11 star experience, you know, and they very much credit that hard, laborious work upfront for the big payoff. So,

Molly Geoghegan  20:58

so true. Yeah. And I think yeah, the fact that it's been covered so much, we there's a cool YouTube video about this, too. So I let's link in the spice cabinet. Mikey, let's link like our favorite cover, Paul Graham's thing that got us to this point anyway, because if this resonates with you even a little bit, then it's worth hearing some other people's thoughts. And certainly, yeah, Chesky is Trotsky Chesky is experienced this kind of just quintessential iconic startup story, right? Yeah. So cool. Yeah. The last note there is called vector and this is a this really shows his PhD level. I think Paul Graham and the Tropical MBA guys were really making fun of it too. Because it's so if physics related talking about scalar versus and basically I just think this is like you gotta have two dimensions to this long term run like do these little things in the upfront for your long term vision right? That's what I took away from things

Michael Mioduski  21:53

that don't scale. I did we wrote that into the the lens the world of us we presentation, crafters, presenters. I tried to come up with a couple that I think maybe they're hot takes, maybe they're, you know, counterintuitive like this, but I think maybe they're worth considering to stand out with your presentation. Yeah,

Molly Geoghegan  22:12

I love this. When you brought this up this morning. I was like, I don't know what you put on the list in full but one of the things that I thought is on your list so I'm giving you complete credit for this. This is by Mikey Madhu ski things that downscale presentation edition what to do for you. Okay, so what's uh, yeah, what's number one?

Michael Mioduski  22:30

All right, Molly. Number one, customize your presentations. Is that is that a bold, hot take these days? I think it is. And that's sad, right? Yeah, I think this is a huge opportunity. So I think the general principle rule of thumb, hey, we got to make this scalable is, look, we've got this, this big tech company, we have all these products and features that we could sell, we have like 20 different personas. So instead of making really custom presentations, we're going to try to make this one first call deck that kind of covers everything. And we're gonna give it to our sellers. And they're gonna talk and give this genericized pitch, that won't alienate anybody. And it's kind of gets to the point, but boom, we don't want them spending time customizing it. That's, that's the general status quo. I would say, would you would you disagree with that?

Molly Geoghegan  23:20

I think that's so good. When we talk about audience first messaging, like there's some way you can customize your presentation every time you get it, whether it be the opening line, even if it's not like the actual slides themselves, right? The way you give your talk and the way you open it and engage with the people you're talking to, has to shift because otherwise, if you're just doing the same size fits all, it won't land in the way that you want it to every time. So thinking of audience first messaging, I think, yeah, you wrote, you know, spend an hour customizing a few key slides. But I also think just like even a few key lines, you know, yeah, to check in with your audience. If it's a bigger, maybe it's a bigger place you're presenting to maybe it's a new industry, so you need to like yet tap into Yeah, what might be their priorities and their their problems that they'd want to be hearing from? And I think, yeah, that's just, that's just, I mean, that's what you're paid to do. So even if this amazing, successful talk that you've done again, like lots and lots of times and you have good experience, it's worth spending that extra time so that you can get asked when keynote speaker come on, right? Because yeah, presentations seems I mean, yeah, even like opening up your PowerPoint file. You might be like, Oh, God, so and do this every time. Yeah, like, you need a little version. Save. Yeah, yeah. Score. Score. Phoenix, Arizona, wherever you're going. Do it.

Michael Mioduski  24:39

I mean, Jay Baer, world famous, you know, he's in the speaking Hall of Fame. He's told me, he's never given the same presentation twice. Right. Yeah. It's always customized and yeah, like, maybe 90% is the same, but he can repackage it for the right occasion to make it feel like this was meant for us, you know, and yeah, I think for a seller look like, you know, I love that Dale Carnegie quote Molly, like the sweetest sound in any language is that of like someone's own name, right and cheese, even if it's just like, alright, Jessica, Jessica Jessica here, like use their name or what's what's Jessica's title, like, maybe you can slip that into your deck somehow, like make them feel heard, make them feel seen. If all things are equal, you're pitching against your competitor, there's product parity, it's a mature market, I think this the person who gets the more tailored sale is going to feel a little more seen. And I think the presentation customization is, is a great way to do it.

Molly Geoghegan  25:35

Quicker close. So number two,

Michael Mioduski  25:39

number two, Molly, this is this is gonna just set you know, presentation, Twitter, LinkedIn on fire, but don't use a template. I know even Steve Steve sheets on our team is gonna just flip a table when he hears this, but I think there's my little secret is like, I actually start with a blank presentation, like the blank PowerPoint theme, almost every time I create a new deck. And I know there's the work smarter, not harder kind of thing. But as I see them, you know, sometimes I feel like templates are unhealthy, they kind of put blinders on to what the actual content should be, or like how it should feel and come across. When I think of like really good art direction, I think of magazine articles in some of the the high end, the best publications in the world, every article, the good ones are stylized, and are directed to the content, like whatever the substance of the story is, you know, it might have that feel pulled forward. And it doesn't fit in with the rest of the magazine. And that's fine. It's like this one piece is about this one thing. Maybe it's about music concerts, and it's directed like rock and roll, you know, whatever it is, or fashion. And it's super fascinating. I love seeing presentations that were built for that one specific talk and reason and everything about the design and the visual story comes to life and enhances the copy the content, everything about it. Yeah, completely.

Molly Geoghegan  27:06

Yeah, I, I agree, I think and even like, even if you're really intimidated by the design, and you do, you know, maybe import a template to get started. There's so many ways in which you can break away and make sure that the content really, I think you'd have a two things open, I think you have that you have your entire link skeleton deck with the content, first and foremost, and then figure out how to implement that within elements of a template of design if the design is truly what you're leaning on a template for. But I think prove your point, Mikey, like it can really like obscure some of the content that needs to be shining in the store, aka the story. Come on. Yeah, it's a harder thing to pull off these days. But depending on what the purpose of the presentation, is it almost certainly for a keynote. Yeah, certainly for something that is trying to inspire people. Yeah, I just think there's many instances in which templates are overused. So they can

Michael Mioduski  27:57

be limiting. They can limit what our creativity can do. Yeah, I think pretty soon this conversation is going to be, I'm going to I'm going to start saying like, don't use AI for your presentation. I know, it's easier. I know, it's more scalable, because it's going to like, spit out 15 slides that you can build your presentation for you. But I worried that then you lose the creative act, Molly, like it's the process that I think helps a lot of presenters know what they want to say. And so when something is telling you, very abrupt boom, say this, I think something is gonna get lost. And it's I think there's something about those evolutions, and doing the hard work to get to that more fluid, natural story. Yeah, I think only a human can do it and work through it. And I think, sure, you know, I don't think this is gonna be a popular take. But I think build by hand until you can't is it was the mantra from like, do things that don't scale? And I think I think it can pay off to make you a better thinker in the end is doing some more manual work.

Molly Geoghegan  28:54

And once you have that good that could that one good presentation really nailed down. And then maybe there are a few variations of that. But you've done that one by hand. And you can duplicate that and then customize the path in which it might take differently for a different product or a different audience or something. Like there's different ways in which you can scale that manual NIST once you've done it, but I feel like you've got to do that legwork upfront and yeah, and really get it. Get it right. Do things by hand until you can't Yeah, Mikey. I think you

Michael Mioduski  29:21

know, I think I was ripping that off from Reed Hoffman. Hey, Dan was probably exciting, Paul. Okay, number three, Molly, presentation, things that don't scale, but maybe you should consider doing asked to talk with your attendees about your session. Yeah. So I think you'd have this the easy way to go. The more you know, natural, safe route, is like you'll get some feedback from the session, right people, you know, they're like, Oh, here's a QR code. Tell us what you thought about the session. Then the Event Manager will give you your your feedback via written form. And that's that right? You could take that I think the do things that won't scale, pay off approach again. into like, hardcore recruiting users would be all right. After that event manager, can I get a list of everyone in my session? Maybe it's 100 people, right? Doesn't seem like that scale, they do one to one outreach to each of them. But it might be worth it if you can glean. If you can get on a call with them, just to be like, Yo, can I have five minutes of your time? Can you tell me what you remember from my session? If you can ask like 20 people what they remember? And if everything is different, then they're gonna be like, the clearly maybe you didn't have that red thread or that big idea really centralized or hammered. But if everyone's like, Oh, I remember Read, read read, or I remember like, yeah, just do it. Demos. Yeah, then you might have something there. And your Northstar concept might be coming through. So yeah, again, it's like it's more manual to have these these one to one conversations. But I do think people speak a little differently than how they write, you might be able to extract a little more insights on what could you have done better? What was getting lost? I think it's just a different experience, Molly? Yeah.

Molly Geoghegan  31:00

I think it's important to like develop a process for that in case there's, you know, sometimes after a keynote, specifically, there might be like a break Reverend goes into the coffee or is at the bar, and you can talk to people organically. And that could work to get just truly as people might be tempting just to peace out. But I think that's a really useful opportunity. But if that doesn't exist in a helpful process that isn't just the QR code, like you said, and like a truly one on one outreach, we'll be like, Hey, you were there in the audience? How did it go and harass the people that hired you? You know, like, there's a reason that you might or might not get called back and it'd be worth knowing the feedback. Don't be afraid of it. Yeah,

Michael Mioduski  31:37

it's useful. All right, number four. Molly, I think you do a great job of this one it ghost ranch with our webinar series, and forcing this. But what I don't I don't see a lot of corporations implementing these, in a lead up to their big corporate conferences, surprisingly. So this is rehearsals. I know it sounds obvious. But I think it's often overlooked is a formal rehearsal. I'd say just like, from my hip, I bet 5% of the companies we work with actually have they budget for and implement a formal rehearsal process that is like, a couple of weeks before the big event. And holy cow, are they effective? Right? Like, they'll there's only a few where we've actually they'll fly out the ghost ranch presentation designer to be there for two days of rehearsals, while all the executives and breakouts, like run through their, their keynote. And a lot can happen. Like when you force people to thrash early, get in front of a room with like at speaker coach. And you know, the C suites are like looking over you. It's good to get the nerves out there. And if you just like vomit on your shoes, it's better to do it there and get their input than to go up on stage and think that you had it figured out and you don't because Yeah, speaking something out loud is so much different than like looking at it in your notes, right, Molly? Oh,

Molly Geoghegan  32:57

for sure. I encountered this every time I started to, like, have a talk track. And I think I'm gonna say it one way, and it's the first time I say it out loud. I'm like, why would I ever? Why would I ever can write that down? Because writing is so much different than speaking aloud. And again, you're always trying to keep this human to human messaging audience first, and if it doesn't, if it sounds like something that people don't say in conversation, not in every sense, I think sometimes there's a time and a place to be more formal presentations, I guess. But if you want people to truly just remember he was like a human and stuff. I don't think I've seen rehearsals and just reading from your top drag is gonna fly. Yeah. And it's funny because something like with the podcast, right Mikey, where it's like, we just do this off the cuff. We never rehearsed. And I think that's such a different presentation style than what it is with, with slides and pitch decks and sales decks and demos. And so it's funny to have experience in variety of things where they are and do people think we rehearse these every day.

Michael Mioduski  33:56

Obviously not well, helps a lot. Thank you. W camera audio. Yeah, human nature helps. It's just human nature to like, want to delay and procrastinate when especially for something as scary as a keynote, right? And so, I think the savvy event planners, it does not seem like something that would scale because executives are busy. It's hard to get everybody together. But by gosh, the people who can pull this off, they are doing they're doing it right and it really comes through in the final production. Yeah, and similar similar vein last but not least things that don't scale with better presentations, but maybe we should think about them. Treat your breakouts as speakers you know, I always say breakouts or speakers to I feel like they always get shafted Mali like yeah, event planners always have budget for like, ghost ranch will come in will dress up the C suite, their general session, big stage keynote, and then these poor breakout speakers. There's like 30 of them. That's like, all right, you're on your own. You know, I think we've seen some event planners who shove off some budget to either help coach breakout speakers on what is better storytelling, give them a better template easier to use template, or supply a little bit of some hours for a presentation design expert to come in, and actually help them elevate their slides. So that's, that's the rare air. But for those who actually do it, I think it's important because breakouts are actually, I think, where most people go to actually get the real, the real presentations about like, what they're working on. I think more people take away, like breakout presentation, like information because it's a little more like direct and hands on. And I think like those power users just drink it up. Whereas they might see the general session stages, like it's lofty, you know, Will Smith's coming in cool, you know, but it's like it's a little more abstract and ethereal. I don't know, it's what

Molly Geoghegan  35:51

people get to choose. So like the keynotes, people don't really choose, they're just like, yeah, and hopefully it's something that excites them or inspires them. But it's what people get to choose how they spend their next hour or a couple of hours during during each day of a conference. And so for them to miss that one on one time. Yeah, like and haven't be super mean mean as meaningful as possible. When these conference tickets are 1000s of dollars a pop, right, you know, that's worth it that's worth putting your budget in that. And even if someone that doesn't have slides, just like if you're a breakout speaker, like how are your presentation skills, hurry facilitation skills, you know, like, I think that's worth that. That's something that doesn't scale either something that like, is like, Do you need a presentation coach for an hour and a half or something? Yeah, let us know. But like I think that's just something that you can't do every every time and certainly like jogger nuts don't think to do that, you know, but yeah, yeah, breakouts are important. I just went to a conference in the roundtables was one of the best spots. Now this wasn't like a breakup presentation. But throughout the table, like giving, providing some more one to one conversation where you can actually like, talk about be like, Hey, this is problem I'm having or I really relate to what you just did there for that project. Can we talk about that? And you get a little like deeper insights than just the amazing keynotes that are hopefully awesome and fun and memorable.

Michael Mioduski  37:07

Molly, did you hear that? I think we're in the spice cabinet.

Molly Geoghegan  37:11

And Poppins snack. You

Michael Mioduski  37:12

editor will.

Molly Geoghegan  37:13

Okay. Yeah. Okay, here we are.

Michael Mioduski  37:16

I'm glad we finally got into this things that don't scale. Super excited. You know, what doesn't scale probably is custom illustration for each of our podcast episodes that we've ever done. But I wouldn't change it. I love No, no Flores artwork too much.

Molly Geoghegan  37:31

Yeah, yeah, totally. Every week, there's a new Yeah, in the same style. I'm sure I'm sure you've seen if you're listening, but I mean, no, no Flores if you need some custom illustrations, look, are there and there are a lot of things about producing a podcast that don't feel that I could could get into but I think it's fun to reflect and see what's worth but the numbers grow up, you know, so compounded growth, let's go compounded growth, but it's worth it. It's worth it. Especially because it gives us so much social media content to use. No, no.

Michael Mioduski  38:04

Have you thought about what Paul Graham's walkout song might be? I've given a

Molly Geoghegan  38:09

sliver of thought and I need to sit with a little more. See, I wanna see him in an interview kind of hear what he talks like. Yeah, get a further I'm always here with these on the nose punny, kind of walk out song. So I'll say that one first just to just to get it going. But I'm thinking of zero to hero from Hercules. Good because not that startups start at zero necessarily but they start at this like kind of rough, awkward toddler larval growth stage as Paul would say. And you know zero to hero that's kind of a rags to riches situation. And it's an inspiring becomes a very fast paced, and I think there could be a good things that don't scale. pulgram. Look at some specific,

Michael Mioduski  39:02

please lovely. Yeah, I like it a lot. I don't think I can do much better than that. I was thinking maybe, maybe Fleetwood Mac, like being a Brit. You know, I think he's got dual citizenship, maybe but singing like, Go your own way.

Molly Geoghegan  39:21

Yeah, like look,

Michael Mioduski  39:23

most most founders are gonna just they're gonna try to do the easy thing. But not you if you want this to be the next big thing. You're gonna you're gonna go your own way.

Molly Geoghegan  39:30

And then what else is in the spice cabinet Mikey? I love this trap. i We both listen to this Tropical MBA podcast. Thanks. Thanks to you guys. If you're listening for the inspiration, definitely tune into their pod. It's weekly right? Isn't it like

Michael Mioduski  39:43

it is every Thursday morning? 8am. Eastern Standard Time.

Molly Geoghegan  39:47

How would you describe them?

Michael Mioduski  39:48

They were digital nomads early. And then they turned into their middle ages. And like had one had a kid one settle down, but they still they still try to embrace that YOLO Um, you know, pack up a suitcase work from Barcelona for the summer. So yeah, the appeal to people who like are into the lifestyle design thing, entrepreneurship, digital marketing, that kind of stuff. But yeah, I've listened to it for like over a decade. Yeah.

Molly Geoghegan  40:13

Great, good. You're always sending me some links. And every time I tune it, and it's it is fun, and I think they cover some really great variety of topics. So that link cool YouTube video on this on this topic as well, in addition to of course, Paul Graham's original 2013, blog post, things that don't scale, do things that don't scale. If you don't know what Y Combinator is, we'll link that to Yeah, and anything else we need in the space? Ghost

Michael Mioduski  40:39

ranch.com dedicated our partner visual storytelling presentation design agency. Yeah, give us give us a look. You might know someone who's struggling with PowerPoint or Google Slides. And now yeah, you can send him a lifeline. Yeah, yeah. Until then, Molly, presentation nation. Thanks for listening. Send us. If you want to talk about anything related to storytelling presentations, give us a shout. And until then, keep on pitching

About The Author

Molly Geoghegan is a writer, organizer, and film school dropout. She hikes frequently with her dog, Guinness, and signs up for too many email newsletters. Having lived in Chicago, Paris, Dublin and Galway, Molly has made her way back to the Rockies and calls Denver, CO home.

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Do things that don’t scale

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Why 'do things that don't scale' doesn't always work.

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Having ideas for scaling is crucial for justifying doing things that don't scale initially.

Last month, Paul Graham wrote a great essay on why startups should "Do Things That Don't Scale"- essentially forget about growth in early stages in order to have significant customer interaction or even acquire customers individually. It's something that's counterintuitive to most startups because they want to see explosive growth, and doing things that don't scale can seem counterproductive to achieve that kind of growth.

There are a couple of things that bother me about this line of thinking, and I'll speak from experience in explaining why there has to be a balance between doing things that don't scale, and doing things that do. The first thing that's truly wrong in Paul's essay is something you see all the time, in every day life- his essay suffers from classic omission neglect.

Omission neglect is the psychological term for failing to consider all the information that's relevant to a situation. In the essay's case, it's the fact that examples of successful startups are called out to reinforce the main idea, while there are likely hundreds of others who did the same thing, and failed. There's a reason why the author calls out Facebook, Stripe, and AirBnB as examples: they were successful! There are currently 440 graduates of YCombinator (the accelerator Paul Graham runs). They were likely all given this same advice- yet we are only hearing about the companies that were successful. In order to make the proper judgment on whether this advice is useful, we have to consider all (or as many as we can) examples of companies that used this strategy, and what the outcomes were.

Doing things that don't scale can also hurt you if you can't adapt quickly enough. When we first launched matchist (my startup), our goal was to have a conversation on the phone with every single user. We knew from customer development that freelance web developers were frustrated with sites that just treated them like pieces of data, and business owners looking to hire web developers were frustrated by automated responses from outsourced developers. (Think: "Dear Sir/Madam").

At first, it worked perfectly. We developed relationships with everyone, formed a basis of trust, and got users to view our service more favorably than even we expected. Our advisors told us, "This phone call thing won't scale." We pushed back saying we would figure it out and that the personal, human touch was vital to our process.

Guess what? It didn't scale. Luckily, matchist was growing quickly and all of a sudden our hands on process began to hurt us and provide customers with a negative experience. It was taking us days to get back to clients who were looking for developers and scheduling calls with hundreds of developers and business owners became a juggling act. Some would fall through the cracks because we'd forget to follow up, and all of a sudden the quality of our service was compromised. We knew we had to introduce automation and began mapping out how we could automate most of the processes while still keeping a human touch. We came up with a solution, but it's still evolving as matchist grows every month. We know we will outgrow our current solution quickly.

One other implicit assumption in Paul Graham's article is that you'll have access to capital in order to help you scale your processes. Once VCs see the rampant growth you're developing with your unscalable processes, you'll be able to hire employees or have access to capital to build solutions to handle the flow. This is most often not the case and is an obvious, what I like to call, Silicon Valley Bias. Most tech startups are built to need VC funding to scale. For startups outside of Silicon Valley, relying on the ability to raise capital can lead to a dubious future. It's one where you rely on others to judge your business and may take terms that aren't great for the business because you NEED growth capital to survive.

I would hedge this risk by doing things that don't scale, but having a roadmap with scenarios planned out. For example, if we grow at X% month over month in the next year, we'll need X number of employees. We'll achieve this by raising $XX from angels or we'll have revenue coming from these three potential revenue streams.

One last note: It's important to consider the context in which Paul Graham writes his article. I'm based in Chicago, but travel to Silicon Valley frequently to meet with partners and potential investors. Whenever I read an article about what's happening out West, I have to put my Silicon Valley goggles on (metaphorically, I don't own Google Glasses...yet!). The reality is that in other parts of the country, investors and thought leaders have different views based on their own contexts.

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Lecture 3: Counterintuitive Parts of Startups, and How to Have Ideas

Lecture 3: counterintuitive parts of startups, and how to have ideas lyrics.

One of the advantages of having kids is that when you have to give advice to people you can ask yourself, "what would I tell my own kids?", and actually you'll find this really focuses you. So even though my kids are little, my two year old today, when asked what he'll be after two, said "a bat." The correct answer was three, but "a bat" is so much more interesting. So even though my kids are little, I already know what I would tell them about startups, if they were in college, so that is what I'm going to tell you. You're literally going to get what I would tell my own kids , since most of you are young enough to be my own kids. Startups are very counterintuitive and I'm not sure exactly why . It could be simply because knowledge about them has not permeated our culture yet, but whatever the reason , this is an area where you cannot trust your intuition all the time. It's like skiing in that way - any of you guys learn to ski as adults? When you first try skiing and you want to slow down, your first impulse is to lean back, just like in everything else. But lean back on the skis and you fly down the hill out of control. So, as I learned, part of learning to ski is learning to suppress that impulse . Eventually you get new habits, but in the beginning there is this list of things you're trying to remember as you start down the hill: alternate feet, make s-turns, do not drag the inside foot, all this stuff. Startups are as unnatural as skiing and there is a similar list of stuff you have to remember for startups. What I'm going to give you today is the beginning of the list, the list of the counterintuitive stuff you have to remember to prevent your existing instincts from leading you astray. The first thing on it is the fact I just mentioned: startups are so weird that if you follow your instincts they will lead you astray. If you remember nothing more than that, when you're about to make a mistake, you can pause before making it. When I was running Y Combinator we used to joke that our function was to tell founders things they would ignore, and it's really true. Batch after batch the YC partners warned founders about mistakes they were about to make and the founders ignored them, and they came back a year later and said, "I wish we'd listened." But that dude is in their cap table and there is nothing they can do. Q: Why do founders persistently ignore the partner’s advice? A: That's the thing about counterintuitive ideas, they contradict your intuitions, they seem wrong, so of course your first impulse is to ignore them and, in fact, that's not just the curse of Y Combinator, but to some extent our raison d'être . You don't need people to give you advice that does not surprise you. If founders' existing intuition gave them the right answers, they would not need us. That's why there are a lot of ski instructors, and not many running instructors; you don't see those words together, "running instructor," as much as you see "ski instructor." It's because skiing is counterintuitive, sort of what YC is—business ski instructors—except you are going up slopes instead of down them, well ideally. You can, however, trust your instincts about people. Your life so far hasn't been much like starting a startup, but all the interactions you've had with people are just like the interactions you have with people in the business world. In fact, one of the big mistakes that founders make is to not trust their intuition about people enough. They meet someone, who seems impressive, but about whom they feel some misgivings and then later when things blow up, they say, "You know I knew there was something wrong about that guy, but I ignored it because he seemed so impressive." There is this specific sub-case in business, especially if you come from an engineering background, as I believe you all do. You think business is supposed to be this slightly distasteful thing. So when you meet people who seem smart, but somehow distasteful, you think, "Okay this must be normal for business," but it's not. Just pick people the way you would pick people if you were picking friends. This is one of those rare cases where it works to be self indulgent. Work with people you would generally like and respect and that you have known long enough to be sure about because there are a lot of people who are really good at seeming likable for a while . Just wait till your interests are opposed and then you’ll see. The second counterintuitive point, this might come as a little bit of a disappointment, but what you need to succeed in a startup is not expertise in startups. That makes this class different from most other classes you take. You take a French class, at the end of it you've learned how to speech French. You do the work, you may not sound exactly like a French person, but pretty close, right? This class can teach you about startups, but that is not what you need to know. What you need to know to succeed in a startup is not expertise in startups, what you need is expertise in your own users. Mark Zuckerberg did not succeed at Facebook because he was an expert in startups, he succeeded despite being a complete noob at startups; I mean Facebook was first incorporated as a Florida LLC. Even you guys know better than that. He succeeded despite being a complete noob at startups because he understood his users very well. Most of you don't know the mechanics of raising an angel round, right? If you feel bad about that, don't, because I can tell you Mark Zuckerberg probably doesn't know the mechanics of raising an angel round either; if he was even paying attention when Ron Conway wrote him the big check, he probably has forgotten about it by now. In fact, I worry it's not merely unnecessary for people to learn in detail about the mechanics of starting a startup, but possibly somewhat dangerous because another characteristic mistake of young founders starting startups is to go through the motions of starting a startup. They come up with some plausible sounding idea, they raise funding to get a nice valuation, then the next step is they rent a nice office in SoMa and hire a bunch of their friends, until they gradually realize how completely fucked they are because while imitating all the outward forms of starting a startup, they have neglected the one thing that is actually essential, which is to make something people want. By the way that's the only use of that swear word, except for the initial one, that was involuntary and I did check with Sam if it would be okay; he said he had done it several times, I mean use the word. We saw this happen so often, people going through the motion of starting a startup, that we made up a name for it: "Playing House." Eventually I realized why it was happening, the reason young founders go though the motions of starting a startup is because that is what they have been trained to do, their whole life, up to this point. Think about what it takes to get into college: extracurricular activities? Check. Even in college classes most of the work you do is as artificial as running laps, and I'm not attacking the educational system for being this way, inevitably the work that you do to learn something is going to have some amount of fakeness to it. And if you measure people’s performance they will inevitably exploit the difference to the degree that what you’re measuring is largely an artifact of the fakeness. I confess that I did this myself in college; in fact, here is a useful tip on getting good grades. I found that in a lot of classes there might only be twenty or thirty ideas that had the right shape to make good exam questions. So the way I studied for exams in these classes was not to master the material in the class, but to try and figure out what the exam questions would be and work out the answers in advance. For me the test was not like, what my answers would be on my exam, for me the test was which of my exam questions would show up on the exam. So I would get my grade instantly, I would walk into the exam and look at the questions and see how many I got right, essentially. It works in a lot of classes, especially CS classes. I remember automata theory, there are only a few things that make sense to ask about automata theory. So it's not surprising that after being effectively trained for their whole lives to play such games, young founders' first impulse on starting a startup is to find out what the tricks are for this new game. What are the extracurricular activities of startups, what are things I have to do? They always want to know, since apparently the measure of success for a startup is fundraising, another noob mistake. They always want to know, what are the tricks for convincing investors? And we have to tell them the best way to convince investors is to start a startup that is actually doing well, meaning growing fast, and then simply tell investors so. Then they ask okay, so what are the tricks for growing fast, and this is exacerbated by the existence of this term, "Growth Hacks." Whenever you hear somebody talk about Growth Hacks, just mentally translate it in your mind to "bullshit," because what we tell them is the way to make your startup grow is to make something that users really love, and then tell them about it. So that's what you have to do: that's Growth Hacks right there. So many of the conversations the YC partners have with the founders begin with the founders saying a sentence that begins with, "How do I," and the partners answering with a sentence that begins with, "Just." Why do they make things so complicated? The reason, I realized, after years of being puzzled by this, is they're looking for the trick, they've been trained to look for the trick. So, this is the third counterintuitive thing to remember about startups: starting a startup is where gaming the system stops working. Gaming the system may continue to work, if you go to work for a big company, depending on how broken the company is, you may be able to succeed by sucking up to the right person; Giving the impression of productivity by sending emails late at night, or if you're smart enough changing the clock on your computer, cause who's going to check the headers, right? I like an audience I can tell jokes to and they laugh. Over in the business school: "headers?" Okay, God this thing is being recorded, I just realized that. Alright for now on we are sticking strictly to the script. But, in startups, that does not work. There is no boss to trick, how can you trick people, when there is nobody to trick? There are only users and all users care about is whether your software does what they want, right? They're like sharks, sharks are too stupid to fool, you can't wave a red flag and fool it, it's like meat or no meat. You have to have what people want and you only prosper to the extent that you do. The dangerous thing is, especially for you guys, the dangerous thing is that faking does work to some extent with investors. If you’re really good at knowing what you’re talking about, you can fool investors, for one, maybe two rounds of funding, but it's not in your interest to do. I mean, you're all doing this for equity, you're puling a confidence trick on yourself. Wasting your own time, because the startup is doomed and all you’re doing is wasting your time writing it down. So, stop looking for the trick. There are tricks in startups, as there are in any domain, but they are an order of magnitude less important than solving the real problem. Someone who knows zero about fundraising, but has made something users really love, will have an easier time raising money than someone who knows every trick in the book, but has a flat usage graph. Though, in a sense, it's bad news that gaming the system stops working now, in the sense that you're deprived of your most powerful weapons and, after all, you spent twenty years mastering them. I find it very exciting that there even exist parts of the world where gaming the system is not how you win. I would have been really excited in college if I explicitly realized that there are parts of the world where gaming the system matters less than others, and some where it hardly matters at all. But there are, and this is one of the most important thing to think about when planning your future. How do you win at each type of work, and what do you want to win by doing it? That brings us to our fourth counterintuitive point, startups are all consuming. If you start a startup, it will take over your life to a degree that you cannot imagine and if it succeeds it will take over your life for a long time; for several years, at the very least, maybe a decade, maybe the rest of your working life. So there is a real opportunity cost here. It may seem to you that Larry Page has an enviable life, but there are parts of it that are defiantly unenviable. The way the world looks to him is that he started running as fast as he could, at age twenty-five, and he has not stopped to catch his breath since. Every day shit happens within the Google empire that only the emperor can deal with and he, as the emperor, has to deal with it. If he goes on vacation for even a week, a whole backlog of shit accumulates, and he has to bear this, uncomplaining, because: number one, as the company’s daddy, he cannot show fear or weakness; and number two, if you’re a billionaire, you get zero, actually less than zero sympathy, if you complain about having a difficult life. Which has this strange side effect that the difficulty of being a successful startup founder is concealed from almost everyone who has done it. People who win the one-hundred meter in the Olympics, you walk up to them and they're out of breath. Larry Page is doing that too, but you never get to see it. Y Combinator has now funded several companies that could be called big successes and in every single case the founder says the same thing, "It never gets any easier." The nature of the problems change, so you're maybe worrying about more glamorous problems like construction delays in your new London offices rather than the broken air conditioner in your studio apartment, but the total volume of worry never decreases. If anything, it increases. Starting a successful startup is similar to having kids; it's like a button you press and it changes your life irrevocably. While it's honestly the best thing—having kids—if you take away one thing from this lecture, remember this: There are a lot of things that are easier to do before you have kids than after, many of which will make you a better parent when you do have kids. In rich countries , most people delay pushing the button for a while and I'm sure you are all intimately familiar with that procedure . Yet when it comes to starting startups a lot of people seem to think they are supposed to start them in college. Are you crazy? What are the universities thinking – they go out of their way to ensure that their students are well supplied with contraceptives, and yet they are starting up entrepreneurship programs and startup incubators left and right. To be fair, the universities have their hand forced here. A lot of incoming students are interested in start-ups. Universities are at least de-facto supposed to prepare you for your career, and so if you're interested in startups, it seems like universities are supposed to teach you about startups and if they don't maybe they lose applicants to universities that do claim to do that. So can universities teach you about startups? Well, if not, what are we doing here? Yes and no, as I've explained to you about start-ups. Essentially, if you want to learn French, universities can teach you linguistics. That is what this is. This is linguistics: we're teaching you how to learn languages and what you need to know is how a particular language. What you need to know are the needs of your own users. You can't learn those until you actually start the company, which means that starting a startup is something you can intrinsically only learn by doing it. You can't do that in college for the reason I just explained. Startups take over your entire life. If you start a startup in college, if you start a startup as a student, you can't start a startup as a student because if you start a startup you’re not a student anymore. You may be nominally a student but you won't even be that for very much longer. Given this dichotomy: which of the two paths should you take? Be a real student and not start a startup or start a real startup and not be a student. Well, I can answer that one for you. I'm talking to my own kids here. Do not start a startup in college. I hope I'm not disappointing anyone seriously. Starting a startup could be a good component of a good life for a lot of ambitious people. This is just a part of a much bigger problem that you are trying to solve. How to have a good life, right. Those that are starting a startup could be a good thing to do at some point. Twenty is not the optimal time to do it. There are things that you can do in your early twenties that you cannot do as well before or after. Like plunge deeply into projects on a whim that seem like they will have no pay off. Travel super cheaply with no sense of a deadline. In fact they are really isomorphic shapes in different domains. For unambitious people your thing can be the dreaded failure to launch. For the ambitious ones it’s a really valuable sort of exploration and if you start a startup at twenty and you are sufficiently successful you will never get to do it. Mark Zuckerberg will never get to bum around a foreign country. If he goes to a foreign county, it's either as a de-facto state visit or like he's hiding out incognito at George V in Paris . He's never going to just like backpack around Thailand if that’s still what people do. Do people still backpack around Thailand? That's the first real enthusiasm I've ever seen from this class. Should have given this talk in Thailand. He can do things you can't do, like charter jets to fly him to foreign countries. Really big jets. But success has taken a lot of the serendipity out of his life. Facebook is running him as much as he's running Facebook. While it can be really cool to be in the grip of some project you consider your life's work, there are advantages to serendipity . Among other things, it gives you more options to choose your life's work from. There's not even a trade off here. You’re not sacrificing anything if you forgo starting a start up at twenty because you will be more likely to succeed if you wait. In the astronomically unlikely case that you are twenty and you have some side project that takes off like Facebook did, then you face a choice to either be running with it or not and maybe it’s reasonable to run with it. Usually the way that start ups take off is for the founders to make them take off. It's gratuitously stupid to do that at twenty. Should you do it at any age? Starting a startup may sound kind of hard, if I haven't made that clear let me try again. Starting a startup is really hard. If it’s too hard, what if you are not up to this challenge? The answer is the fifth counter intuitive point. You can't tell. Your life so far has given you some idea of what your prospects might be if you wanted to become a mathematician or a professional football player. Boy, it’s not every audience you can say that to. Unless you have had a very strange life indeed you have not done much that’s like starting a startup. Meaning starting a startup will change you a lot if it works out. So what you’re trying to estimate is not just what you are, but what you could become. And who can do that? Well, not me. for the last nine years it was my job to try to guess ( I wrote "predict" in here and it came out as "guess"—that’s a very informative Freudian slip ). Seriously it’s easy to tell how smart people are in ten minutes. Hit a few tennis balls over the net, and do they hit them back at you or into the net? The hard part and the most important part was predicting how tough and ambitious they would become. There may be no one at this point who has more experience than me in doing this. I can tell you how much an expert can know about that. The answer is not much. I learned from experience to keep completely open mind about which start ups in each batch would turn out to be the stars. The founders sometimes thought they knew. Some arrived feeling confident that they would ace Y Combinator just as they had aced every one of the few easy artificial tests they had faced in life so far. Others arrived wondering what mistake had caused them to be admitted and hoping that no one discover it. There is little to no correlation between these attitudes and how things turn out. I've read the same is true in the military. The swaggering recruits are no more than likely to turn out to be really tough than the quiet ones and probably for the same reason. The tests are so different from tests in people’s previous lives. If you are absolutely terrified of starting a startup you probably shouldn’t do it. Unless you are one of those people who gets off on doing things you're afraid of . Otherwise if you are merely unsure of whether you are going to be able to do it, the only way to find out is to try , just not now. So if you want to start a startup one day, what do you do now in college? There are only two things you need initially, an idea and cofounders. The MO for getting both of those is the same which leads to our sixth and last counterintuitive point. The way to get start up ideas is not to try to think of startup ideas. I have written a whole essay on this and I am not going to repeat the whole thing here. But the short version is that if you make a conscious effort to try to think of startup ideas, you will think of ideas that are not only bad but bad and plausible sounding. Meaning you and everybody else will be fooled by them. You'll waste a lot of time before realizing they're no good. The way to come up with good startup ideas is to take a step back. Instead of trying to make a conscious effort to think of startup ideas, turn your brain into the type that has startup ideas unconsciously. In fact, so unconsciously that you don't even realize at first that they're startup ideas. This is not only possible: Yahoo, Google, Facebook, Apple all got started this way. None of these companies were supposed to be companies at first, they were all just side projects. The very best ideas almost always have to start as side projects because they're always such outliers that your conscious mind would reject them as ideas for companies. How do you turn your mind into the kind that has startup ideas unconsciously? One, learn about a lot of things that matter. Two, work on problems that interest you. Three, with people you like and or respect. That's the third part incidentally, is how you get cofounders at the same time as the idea. The first time I wrote that paragraph, instead of learn a lot about things that matter, I wrote become good at some technology. But that prescription is too narrow. What was special about Brain Chesky and Joe Gebbia from Airbnb was not that they were experts in technology. They went to art school, they were experts in design. Perhaps more importantly they were really good at organizing people in getting projects done. So you don't have to work on technology per se, so long as you work on things that stretch you. What kinds of things are those? Now that is very hard to answer in the general case. History is full of examples of young people who were working on problems that no one else at the time thought were important. In particular that their parents didn't think were important. On the other hand, history is even fuller of examples of parents that thought their kids were wasting their time and who were right. How do you know if you’re working on real stuff? I mean when Twitch TV switched from being Justin.tv to Twitch TV and they were going to broadcast people playing video games, I was like, "What?" But it turned out to be a good business. I know how I know real problems are interesting, and I am self-indulgent: I always like working on anything interesting things even if no one cares about them. I find it very hard to make myself work on boring things even if they're supposed to be important. My life is full of case after case where I worked on things just because I was interested and they turned out to be useful later in some worldly way. Y Combinator itself is something I only did because it seemed interesting. I seem to have some internal compass that helps me out. This is for you not me and I don't know what you have in your heads. Maybe if I think more about it I can come up some heuristics for recognizing genuinely interesting ideas. For now all I can give you is the hopelessly question begging advice. Incidentally this is the actual meaning of the phrase begging the question. The hopelessly question begging advice that if you’re interested in generally interesting problems, gratifying your interest energetically is the best way to prepare yourself for a startup and probably best way to live. Although I can't explain in the general case what counts as an interesting problem I can tell you about a large subset of them. If you think of technology as something that’s spreading like a sort of fractal stain, every point on the edge represents an interesting problem. Steam engine not so much maybe you never know. One guaranteed way to turn your mind into the type to start up ideas for them unconsciously. Is to get yourself to the leading edge of some technology. To, as Paul Buchheit put it, "Live in the future." And when you get there, ideas that seem uncannily prescient to other people will seem obvious to you. You may not realize they're start up ideas, but you will know they are something that ought to exist. For example back at Harvard in the mid 90s. A fellow grad student of my friends Robert and Trevor wrote his own voice over IP software. It wasn't meant to be a startup, he never tried to turn it into one. He just wanted to talk to his girlfriend in Taiwan without paying for long distance calls. Since he was an expert on networks, it seemed obvious to him that thing to do was to turn the sound into packets and ship them over the internet for free. Why didn't everybody do this? They were not good at writing this type of software. He never did anything with this. He never tried to turn this into a startup. That is how the best startups tend to happen. Strangely enough the optimal thing to do in college if you want to be a successful startup founder is not some sort of new vocational version of college focused on entrepreneurship. It's the classic version of college is education its own sake. If you want to start your own startup what you should do in college is learn powerful things and if you have genuine intellectual curiosity that’s what you’ll naturally tend to do if you just follow your own inclinations. The component of entrepreneurship, can never quite say that word with a straight face, that really matters is domain expertise. Larry Page is Larry Page because he was an expert on search and the way he became an expert on search was because he was genuinely interested and not because of some ulterior motive. At its best starting a startup is merely a ulterior motive for curiosity and you’ll do it best if you introduce the ulterior motive at the end of the process. So here is ultimate advice for young would be startup founders reduced to two words: just learn. Alright how much time do we have left? Eighteen minutes for questions good god. Do you guys have the questions? Q: Sure we will start with two questions. How can a nontechnical founder most efficiently contribute to a startup? A: I f the startup is, if the startup is working in some domain, if it’s not a pure technology startup but is working in some very specific domain, like if it is Uber and the non technical founder was an expert in the limo business then actually then the non technical founder would be doing most of the work. Recruiting drivers and doing whatever else Uber has to do and the technical founder would be just writing the iPhone app which probably less, well iPhone and android app, which is less than half of it. If it’s purely a technical start up the non technical founder does sales and brings coffee and cheeseburgers to the programmer . Q: Do you see any value in business school for people who want to pursue entrepreneurship? A: Basically no, it sounds undiplomatic, but business school was designed to teach people management. Management is a problem that you only have in a startup if you are sufficiently successful. So really what you need to know early on to make a start up successful is developing products. You would be better off going to design school if you would want to go to some sort of school. Although frankly the way to learn how to do it is just to do it. One of the things I got wrong early on is that I advised people who were interested in starting a startup to go work for some other company for a few years before starting their own . Honestly the best way to learn on how to start a startup is just to just try to start it. You may not be successful but you will learn faster if you just do it. Business schools are trying really hard to do this. They were designed to train the officer core of large companies, which is what business seemed to be back when it was a choice to be either the officer core of large companies or Joe's Shoe Store. Then there was this new thing, Apple, that started as small as Joe's Shoe Store and turns into this giant mega company but they were not designed for that world they are good at what they’re good at. They should just do that and screw this whole entrepreneurship thing. Q: Management is a problem only if you are successful. What about those first two or three people? A: Ideally you are successful before you even hire two or three people. Ideally you don't even have two or three people for quite awhile. When you do the first hires in a startup they are almost like founders. They should be motivated by the same things, they can’t be people you have to manage. This is not like the office, these have to be your peers, you shouldn’t have to manage them much. Q: So is it just a big no no, someone has to be managed no way they should be on the founding team. A: In the case were you are doing something were you need some super advanced technical thing and there is some boffin that knows this thing and no one else in this world including on how to wipe his mouth. It may be to your advantage to hire said boffin and wipe his mouth for him. As a general rule you want people who are self motivated early on they should just be like founders. Q: Do you think we are currently in a bubble? A: I’ll give you two answers to this question. One, ask me questions that are useful to this audience because these people are here to learn how to start startups, and I have more data in my head than anybody else and you're asking me questions a reporter does because they cannot think of anything interesting to ask . I will answer your question. There is a difference between prices merely being high and a bubble. A bubble is a very specific form of prices being high where people knowingly pay high prices for something in the hope that they will be able to unload it later on some greater fool. That's what happened in the late 90's, when VC's knowingly invested in bullshit startups thinking that they would be able to take those things public and unload them on other retail investors before everything blew up I was there for that at the epicenter of it all. That is not what is happening today. Prices are high, valuations are high, but valuations being high does not mean a bubble. Every commodity has prices that go up and down in some sort of sine wave. Definitely prices are high. We tell people if you raise money, don't think the next time you raise money it’s going to be so easy, who knows maybe between now and then the Chinese economy will have exploded then there's a giant disaster recession. Assume the worst. But bubble? No. Q: I am seeing a trend among young people and successful entrepreneurs where they don’t want to start one great company but twenty. You are starting to see a rise in these labs attempts were they are going to try to launch a whole bunch of stuff, I don't have any stellar examples yet. A: Do you mean like IDEO? Q: No, like Idealab , Garrett Camp’s new one ... A: Oh yeah. There's this new thing were people start labs that are supposed to spin off startups. It might work, that's how Twitter started. In fact, I meant Idealab, not IDEO, that was another Freudian slip. Twitter was not Twitter at first. Twitter was a side project at a company called Odeo that was supposed to be in the podcasting business, and you like podcasting business, do those words even grammatically go together? The answer turned out to be no as Evan discovered. As a side project they spun off Twitter and boy was that a dog wagging tail, people are starting these things that are supposed to spin off startups, will it work? Quite possibly if the right people do it. You can't do it though, because you have to do it with your own money. Q: What advice do you have for female co-founders as they are pursuing funding? A: It probably is true that women have a harder time raising money. I have noticed this empirically and Jessica is just about to publish a bunch of interviews on female founders and a lot of them said that they thought they had a harder time raising money, too. Remember I said the way to raise money? Make your start up actually do well and that's just especially true in any case if you miss the ideal target from the VC's point of view in any respect. The way to solve that problem is make the startup do really well. In fact, there was a point a year or two ago when I tweeted this growth graph of this company and I didn't say who they were. I knew it would get people to start asking and it was actually a female founded startup that was having trouble raising money, but their growth graph was stupendous. So I tweeted it, knowing all these VC's would start asking me, “Who is that?” Growth graphs have no gender, so if they see the growth graph first, let them fall in love with that. Do well, which is generally good advice for all startups. Q: What would you learn in college right now? A: Literary theory, no just kidding. Honestly, I think I might try and study physics that’s the thing I feel I missed. For some reason, when I was a kid computers were the thing, maybe they still are. I got very excited learning to write code and you can write real programs in your bedroom. You can't build real accelerators, well maybe you can. Maybe physics, I noticed I sort of look longingly at physics so maybe. I don't know if that’s going to be helpful starting a startup and I just told you to follow your own curiosity so who cares if it's helpful, it'll turn out to be helpful. Q: What are your reoccurring systems in your work and personal life that make you efficient? A: Having kids is a good way to be efficient. Because you have no time left so if you want to get anything done, the amount of done you do per time is high. Actually many parents, start up founders who have kids have made that point explicitly. They cause you to focus because you have no choice. I wouldn't actually recommend having kids just to make you more focused. You know, I don't think I am very efficient, I have two ways of getting work done. One is during Y Combinator, the way I worked on Y Combinator is I was forced to. I had to set the application deadline, and then people would apply, and then there were all these applications that I had to respond to by a certain time. So I had to read them and I knew if I read them badly, we would get bad startups so I tried really hard to read them well. So I set up this situation that forced me to work. The other kind of work I do is writing essays. And I do that voluntarily, I am walking down the street and the essay starts writing itself in my head. I either force myself to work on less exciting things; I can't help working on exciting things. I don't have any useful techniques for making myself efficient. If you work on things you like, you don't have to force yourself to be efficient. Q: When is a good time to turn a side project into a startup? A: You will know, right. So the question is when you turn a side project into a startup, you will know that it is becoming a real startup when it takes over a alarming large percentage of your life, right. My god I've just spent all day working on this thing that’s supposed to be a side project, I am going to fail all of my classes what am I going to do, right. Then maybe it’s turning into a startup. Q: I know you talked a lot, earlier, about you'll know when your start up is doing extremely well, but I feel like in a lot of cases it's a gray line, where you have some users but not explosive growth that is up and to the right, what would you do or what would you recommend in those situations? Considering allocating time and resources, how do you balance? A: When a start up is growing but not much. Didn't you tell them they were supposed to read Do Things that Don't Scale? You sir have not done the readings, you are busted. Because there are four, I wrote a whole essay answered that question and that is to do things that don't scale. Just go read that, because I can't remember everything I said. It's about exactly that problem. Q: What kind of startup should not go through incubation, in your opinion? A: Definitely any that will fail. Or if you'll succeed but you're an intolerable person. That also Sam would probably sooner do without. Short of that, I cannot think of any, because a large percentage, founders are often surprised by how large a percentage of the problems that start ups have are the same regardless of what type of thing they're working on. And those tend to be kind of problems that YC helps the most not the ones that are domain specific. Can you think of the class of startups? That YC wouldn't work for? We had fission and fusion startups in the last batch. Q: You mentioned that it's good advice to learn a lot about something that matters, what are some good strategies to figure out what matters? A: If you think of technology as something that’s spreading as a sort of fractal stain. Anything on the edge represents an interesting idea, sounds familiar. Like I said that was the problem, you have correctly identified the thing I didn't really answer the question were I gave this question begging answer. I said I'm interested in interesting things and you said you were interested in interesting things, work on them and things will work out. How do you tell what is a real problem ? I don't know, that's like important enough to write a whole essay about. I don't know the answer and I probably should write something about that, but I don't know. I figured out a technique for detecting whether you have a taste for generally interesting problems. Which is whether you find working on boring things intolerable and there are known boring things. Like literary theory and working in middle management in some large company. So if you can tolerate those things, then you must have stupendous self-discipline or you don't have a taste for genially interesting problems and vice versa. Q: Do you like Snapchat? A: Snapchat? What do I know about Snapchat? We didn't fund them. I want another question. Q: If you hire people you like, you might get a monoculture and how do you deal with the blind spots that arise? A: Starting a startup is where many things will be going wrong. You can't expect it to be perfect. The advantage is of hiring people you know and like are far greater than the small disadvantage of having some monoculture. You look at it empirically, at all the most successful startups, someone just hires all their pals out of college. Alright you guys thank you.

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Lecture 3 of How to Start a Startup : Counterintuitive Parts of Startups, and How to Have Ideas

The recommended readings for lecture 3:

Paul Graham — How to Get Ideas

Transcript – Excerpt from Steve Jobs’s 1995 interview with Computerworld’s Oral History Project

https://www.youtube.com/watch?v=ii1jcLg-eIQ

Find answers to frequently asked questions about the song and explore its deeper meaning

• 1. Lecture 1: How to Start a Startup
• 2. Lecture 2: Ideas, Products, Teams and Execution Part II
• 3. Lecture 3: Counterintuitive Parts of Startups, and How to Have Ideas
• 4. Lecture 4: Building Product, Talking to Users, and Growing
• 5. Lecture 5: Business Strategy and Monopoly Theory
• 6. Lecture 6: Growth
• 7. Lecture 7: How to Build Products Users Love, Part I
• 8. Lecture 8: Doing Things That Don’t Scale, PR, and How to Get Started
• 9. Lecture 9: How to Raise Money
• 10. Lecture 10: Company Culture and Building a Team, Part I
• 11. Lecture 11: Company Culture and Building a Team, Part II
• 12. Lecture 12: Sales and Marketing
• 13. Lecture 13: How To Be A Great Founder
• 14. Lecture 14: How to Operate
• 15. Lecture 15: How to Manage
• 16. Lecture 16: How to Run a User Interview
• 17. Lecture 17: How to Build Products Users Love, Part II
• 18. Lecture 18: Mechanics--Legal, Finance, HR, etc.
• 19. Lecture 19: Sales and Marketing, How to Pitch, and Investor Meeting Roleplaying
• 20. Lecture 20: Closing Thoughts and Later-Stage Advice
• Advice for Ambitious 19 Year Olds
• Do Things That Don’t Scale
• 1995 Interview with Computerworld’s Oral History Project
• Good and Bad Reasons to Become an Entrepreneur

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Academy of Product Management

Do 10 things that don't scale

A quick breakdown of paul graham’s famous essay.

This week, we’re breaking down Paul Graham’s famous essay, Do Things that Don't Scale . All product people have read this essay. If you haven’t, you better watch this video now. Graham, a co-founder of Y Combinator , published this essay ten years ago, but it’s still highly relevant today. 

Doing things that don’t scale seems counter-intuitive when building a business, but giving your product the jump start it needs is necessary. Whether you’re a startup founder or a product manager launching a new feature or product, you need to do things that don’t scale to get your first users and feedback so that you can make your product the best it can be. 

Without further ado, here’s our breakdown of the critical lessons in this essay. Enjoy!

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The Startups For the Rest of Us Podcast

The startup podcast with more than 650 episodes to help you launch and grow. 10 million+ downloads. 1000+ five-star reviews.

January 21, 2014 / 1 Comment /

Episode 168 | Things That Don’t Scale (And Why You Should Do Them)

Do things that don’t scale  by Paul Graham (July 2013)

• Recruit users manually
• Expect to be Fragile
• Delight early customers
• Start in a niche
• Human automation
• The Big Launch Usually Doesn’t Work (and neither do partnerships)

[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I talked about things that don’t scale and why you should do them. This ladies and gentlemen is Startups for the Rest of Us: Episode 168.

[00:10] Music

[00:17] Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.

[00:27] Mike: And I’m Mike.

[00:28] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week Mike?

[00:33] Mike: Well we had a listener write in earlier this week named Denis Hennessey and he suggested, he was listening to the episode where we talked about some of the different apps we used and I mentioned that I was doing Commit to make sure that I do certain things on a very regular basis. And he actually suggested that I try out Goal Streaks and I really liked Goal Streaks because I checked it out and essentially the idea is very similar to Commit except that you can put in what are basically skip days which I think would work out actually a little bit better for me because there are certain days of the week where I know that I’m not going to do those things.

[01:06] So for example, working out on Friday is just never going to happen. Commit doesn’t allow me to put that in and say no, I’m not going to do that so I can’t schedule those sorts of things. I’m going to give it a shot and see how things go.

[01:17] Rob: Very cool. Well first of all, this is an IOS app is that right?

[01:20] Mike: Yes.

[01:21] Rob: Okay. And then what kinds of things do you have in there? I guess working out is one?

[01:24] Mike: I have working out. I have writing and then I also have working on Audit Shark.

[01:27] Rob: Good. So yeah, give Goal Streaks a try.

[01:30] Mike: What about you? What are you up to this week?

[01:31] Rob: Well I was pleasantly surprised this week. We started selling MicroConf tickets to Micropreneur Academy members. They get a slight discount and then they get early access to the tickets before the general public. We sold out their allotment pretty quickly and in fact we got a few emails from academy members wanting to buy kind of after all the tickets were gone and so it looks to be a sold out crowd again this year. And by the time this airs, we’ll likely already be sold out.

[01:58] But some tickets do become available so if you’re still interested in going to MicroConf, you can always go to microconf.com and click on the ticket link. We tend to have a pretty hefty wait list and if you get in that early, you do have a high likelihood of getting contacted because we have some tickets that become available as the conference approaches.

[02:17] Then the other thing I’ve been up to, my wife right now is on her two day annual retreat and I’m gearing up for mine here in about two weeks and that’s where I go off and don’t check email and look at my goals for the year, figure out really verify those are the things I want to do and then map out as closely as I can over the course of two days exactly how I’m going to achieve them and figure out what it’s going to take on a monthly or a quarterly basis and basically setup my game plan.

[02:42] The reason I do this, I’ve talked about it before. But it’s because I like pursuing too many things. So once this list is locked, I will do almost nothing else that is not on this list for the next year and that’s the only way I’ve found that I’ve been able to stick to things and grow them without wandering all over the place as the next new fun idea comes my way. So needless to say I’m looking forward to that. Looking forward to the quiet time, the thinking time and really getting down to business in 2014.

[03:12] Mike: I’ve been working on Audit Shark and talking to a few different customers getting some ideas about what their needs are for moving forward with the product. It looks like I’ve got a little bit more work to do. There’s a couple of demos that I’m trying to schedule but in order to actually do those demos there’s a few more features that I need to implement because I know there are things that they basically already told me that these are things that they need. So in an effort to kind of make the demo align very well with what their needs are, then I’ve got a little bit more work to do on the product to make sure that can do those things before I can show it off to them.

[03:44] But the demos are for more in the enterprise space so I’m really hoping those go well but again I think that it can definitely go the route of software plus services to make those things work. So I’m pretty excited about it and just kind of looking forward to banging out some of that code and seeing what comes out of those demos. How are things working with Drip?

[04:03] Rob: Drip’s going good. I’ve really started diving in heavy to paid acquisition and just in the learning phase, as usual I’m pretty impatient with things and I don’t know how many months it’s going to take for me to find the Drip flywheel but I certainly haven’t found it in the past maybe 7 to 8 days since I started and yet I’m already wondering why I haven’t. They’re just trial and error at this point to get into the marketing plan, have a bunch of different things going on, an eBook that’s already been written. It’s being designed. I’m working on an infographic. I have a bunch of blog posts in the hopper, stuff that’s just things that I’m going to be experimenting with.

[04:39] But really over the past 7-10 days I’ve wrote some long form sales copy cranked out several variations of landing pages and then basically testing those the traffic that I’m able to generate via the various advertising venues.

[04:53] Music

[04:56] Today we’re going to be talking about doing things that don’t scale. And this phrase has been bandied about quite a bit. I think Paul Graham since he has the largest kind of platform, he wrote an essay on it on July of 2013 so that’s seven months ago. The interesting thing is Paul Graham has such a larger view right? Because he’s invested in hundreds of companies and he thinks very critically about this stuff.

[05:20] The first time I’ve read this because I’ve heard about this essay for the last seven months since it came out but the first time I read it was preparing the outline for the interview and I was surprised at how many things not just the title of do things that don’t scale but how many specific things in his essay align directly with things that we’ve said in the past on the podcast. So that was kind of a nice confirmation that when multiple scientists do multiple experiments and they all arrive at the same results, its multiple confirmation that this theory may at least be more correct than the things people have been saying for the hundred years before that.

[05:55] So that’s the idea here is that multiple people coming up with things independently helps reinforce it and makes me believe that these things are not just our thoughts or our opinions but they’re actually things that multiple experts are starting to embrace. So I think to kick us off, we have seven things that you should do that don’t scale. And to kick us off before that, there’s a little intro piece I want to bring up and Paul kind of attacked this on the end of the episode but he says that people should start thinking of startups as two dimensional objects instead of just one dimension and what he means by that is most people think of a startup as an idea. It’s what you’re going to build.

[06:29] He says the idea of doing things that don’t scale is so important that we need to start thinking of startups as two dimensional objects. Basically the first dimension is what you’re going to build and the second is the unscalable things you’re going to do to get that company going. Now what that means is that when you come up with a startup idea, he’s saying that’s incomplete. That’s not actually a full pledged startup idea that you actually need not just a product idea but the plan to get those initial 100 users or whatever it’s going to take to kind of get you out of the earth’s atmosphere and into orbit. I thought that was kind of a fascinating thought that he thinks this concept of unscalable things is so powerful that he’s actually saying that a startup idea is incomplete unless you’ve fought those early days through.

[07:13] Mike: Well we’ve talked about that as well though. I mean we didn’t phrase it as like a two dimensional thing but we’ve also talked about and say there’s the idea itself and the second is how are you going to bring it to market? How are you going to get in touch with your target customer base? And in a lot of ways, in order to do that, you have to do those things that don’t scale.

[07:31] Rob: Very good. So let’s dive in. Our first point of seven is to recruit users manually. So Paul Graham says that the most common unscalable things founders have to do is recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them. And then he gives a few examples, Stripe, Airbnb and a couple others.

[07:54] Well it lines up with two phases of stuff I’ve talked about recently with Drip. There was that initial phase of just vetting the idea where I emailed 17 founders and I’ve got 11 go ahead of yes I would buy this. I mean that was a very manual user recruiting process. And then the second part of it where once I had a launch list in the end it was about 3500 emails and I basically handpicked some early users and started inviting them in but it was that slow launch. It was the heavy on boarding heavy customer development time of basically walking users manually through your app, manually boarding them, finding out what they like, don’t like. If they’re going to stick around and if not, why not. I view that a lot as relating to this concept that he’s saying about recruiting users manually.

[08:38] Mike: I think there’s a couple of different things there. In the early days, you really have to do that because if you just setup a website and you have people sign up and you don’t really know anything about them, what you’re essentially doing is you’re basically taking a stab in the dark at what resonates with people and you don’t get any of that feedback. And they may come to your site and they just leave and you have absolutely no idea why versus if you start a mailing list and you get people – you kind of give them a one or two sentence description of what it is that you’re building or you’re talking to people and you’re giving them invested in it as well that you get to close that feedback loop.

[09:16] So it’s no longer this open loop system where it’s just hitting the gas and you’ve got no idea whether you’re going in the right direction or not. And I think that’s really the important part here is that you have to be able to get that feedback loop closed so that you understand about what direction it is that you’re going in.

[09:33] Rob: The next point that Paul Graham makes is he basically says expect your startup to be fragile in the early days. He says the question to ask about an early stage startup is not is this company going to take over the world? But the question is how big could this company get if the founders did things right? And he brings up Microsoft as an example. He says Microsoft can’t have seem very impressive when it was a couple guys in Albuquerque writing basic interpreters for a market of a few thousand hobbyists. But in retrospect that was the optimal path to dominating micro computer software.

[10:05] And then he also brings up the Airbnb founders and how earl on they were just manually taking professional photos of their first host apartment and that they were just trying to survive. So you couldn’t see them taking over the world at that point. It was very fragile and it was basically a 30 day swing where he says going out and engaging with users as the difference between Airbnb taking off and completely failing.

[10:28] Mike: I think this thought from Paul comes from a little bit of a different perspective than kind of where we come from because most of the stuff that we talk about generally speak in a lot of the people that I talk to and interact with tend to be starting stuff on the side. So this idea of like a 30 day swing before you go out of business just isn’t there because we don’t have investors to account to. Yes there’s these few people who’s decide that they’re going to burn the bridges behind them, quit their job and they’ve got 6 or 9 months worth of money in the bank and that’s it but that is probably the exception rather than a role. So I think to people like us, this is a lot less of it in issue than it is for funded companies where they’ve got to get to a certain point and they have a very, very tight timeline to do it or they’re toast.

[11:14] Rob: Yeah. I’d agree. This one doesn’t apply as much to bootstrappers. The piece of this I do think applies is I would change the world fragile to unstable. And what I mean by that is in their early days as they’re recruiting users, trying to turn them into customers, trying to retain them, you just don’t have enough information to have any kind of stability in your metrics or even in confidence in your sales process, confidence in your user retention, confidence even at sometimes unfortunately in your app.

[11:42] Bottom-line is if you’ve launched and you’re in the first 60 or 90 days and a customer emails and says wow there’s a major bug and there was some issue when I clicked the button and did this, if you’re in the first few months of your app, you really don’t know if you’ve introduced a bug. If your app’s been running for years and its mature and all this stuff, you know that there’s stability there. But I would say expect instability in the early days and expect a lot of uncertainty when there’s any type of challenge. If someone says your pricing is too high, that creates uncertainty because suddenly like oh man, is my pricing too high? You just don’t know yet. Once you’re successful and once you have a lot of people using it, you know that your pricing is fine. If anything, it’s probably too low.

[12:21] The other thing that I’ve seen is in the early days of Drip, someone email and said I would totally try this out but you’re asking for credit card upfront. You shouldn’t do that. And tells me why I shouldn’t do that. Now I know that I want to ask for credit card upfront for a bunch of reasons and for all my trial and error with all my apps, this is how I’m going to start. And yet at that moment the uncertainty and kind of the instability of that moment made me question and think oh, should I take the credit card wall down? I had to think about it. And of course I didn’t because I went back to all the research and the data on this and decided not to. I actually asked someone in my mastermind and he told me I was crazy for thinking about it. Instead of thinking about fragility, I think its more about instability and uncertainty is something that you should anticipate especially in those early days.

[13:06] Mike: Yeah. I’ve definitely gotten already I mean I’ve gotten people saying that the pricing of Audit Shark is too high for them and for some of them I look at their situation I’m like you’re really not in my target market but then there’s other people who are kind of are and it definitely does make you think about it and it does give you that level of uncertainty about whether or not you’re doing the right thing. And part of it’s just because there isn’t this giant history of customers or people that I’ve interacted with to be able to say one way or the other.

[13:36] Rob: Paul’s third point is about delighting early customers. And he says you should take extraordinary measures not just to acquire users but also to make them happy. And he says this whole concept of doing things manually to delight early users is counterintuitive for founders and then he gives three reasons why that is. 1) He says because a lot of founders are trained as engineers and customer service is not part of our training as engineers. Another is we’re worried that it won’t scale and then the third is that we’ve never received attention like that from other companies and so we just don’t feel like it’s something that you can do or should do as a business because frankly when you go into the Sprint store or call Verizon customer service you’re not going to see that kind service so naturally we think that it’s not something that we need to do off the bat.

[14:25] Mike: I agree that I think that this is not something that is widespread but I’ve seen it before. I’ve seen companies do it before and it makes an impression and I’ll give you an example. When I signed up for male chimp, after I had sent one of my first campaigns and made a payment with them, they sent me an email and said hey we’ve got a special gift for you. Click here. And I clicked there and I went to a page and it opened up just a form that I was supposed to fill out where I put in my name, address and everything else and then they would send me something. They sent me a mailchimp t-shirt. That kind of gave me the idea to do something similar for Audit Shark and it’s something that I’ve had kind of down the road.

[15:02] But I definitely wouldn’t say that those types of things couldn’t scale because I think one of the examples he uses is Wufoo sending each new user a handwritten thank you note. I think that if you start acquiring a thousand customers a week, that’s not going to scale as well but you can certainly – like if you’re sending people t-shirts for example, there are services that you can integrate with where they will print the t-shirts and send them and really all you need to do is give them an XML data feed that says hey, send this t-shirt here and here’s our information that says who to charge it to. There are ways to make other things scale but there’s definitely things that you can do that surprise and delight your customers that would not and I think it’s just a matter of hosing the right things it will.

[15:40] Rob: Yeah. I think delighting early customers ties back in with a lot of the manual on boarding stuff we’ve talked about. I do like the idea of t-shirts. I’ve been doing that with HitTail, with certain users when they hit a milestone they get it. Also people blog about it, they get a HitTail t-shirt. Drip, if you get your first conversion, you get an email that says roll out the red carpets. Your first subscriber converted to a paying customer because you can setup a goal in Drip and you can see when they convert and then we give them a link to a form where they can get a t-shirt. So that stuff does scale pretty easily. Once the t-shirts are printed it’s just like slapping an address label on it. So I think that all that rolls into it.

[16:17] Another piece of this and this is a little further down the essay but Paul Graham says over engaging with early users is not just a permissible technique for getting growth rolling. For most successful startups, it’s a necessary part of the feedback loop that makes the product good. Making a better mousetrap is not an atomic operation. Even if you start to weigh most successful startups have by building something you need yourself, the best thing you build is never quite right and so is conjectures that you need those early users to give you feedback on how to improve it.

[16:47] The fourth point we have from Paul Graham is to start in a niche. And he actually has an odd subheading for this. He calls it fire because he says it’s like keeping a fire contained before you go horizontal. But this actually lines up with the very fundamentals of the Micropreneur approach. What’s funny is he uses Facebook as the example of starting in a niche because it was a Harvard student network and then it was a university student network and then it went to everyone. I think more in terms of B to B startups so I think of like Kiss Metrics and how they really started as Saas metrics back in the day and now they’re much more all web and metrics and analytics.

[17:25] Another example that’s happening right now is Drip. Drip has started in kind of the Saas and software space and we’re building out some features that are going to move us more broader into the email marketing space. It’s more become marketing automation tool where you can move people to and from different lists based on their behavior. That is – it’s not completed yet but that’s kind of in the works right now and is the next couple of weeks we’ll be rolling that out.

[17:49] Bidsketch is another example I can think of. Ruben’s app. Remember when Bidsketch was proposal software made for designers? Well that for designers went away a long time ago because there was just so many consultants in a number of niches and designers and developers and all types of people are using it. And so he eventfully went horizontal and opened up this market. But what that niche allows you to do is it allows you to take advantage of those early niche things like the fact that the market’s small that you can out market everyone else in the niche that you can provide a tool that is so good just for that group of people that you could beat out a broader horizontal product.

[18:23] Obviously this is one that I definitely agree with and especially with a startup that doesn’t have early funding, I don’t know how else he would do it. I don’t know many if any horizontal startups that come out guns blazing without funding at their backs.

[18:38] Mike: I think this is one of those things that for people who are launching something on the side, they have this idea in their head that if they make it too small or if they go after too small of a thing then they’re not going to be able to get enough customers to support what it is that they’re doing. And the other challenge that kind of goes hand in hand with that is that when you start thinking of a product and then you go through the process of building it, you always have these grand plans for what it’s eventually going to become. And it’s incredibly time consuming to make those plans come to fruition but at the same time you’re always thinking in the back of your head I want to do this and I want to do this and I want to do this and because of that, you end up with a lot of scope creep in your products. It starts making it larger and larger and you take more and more time to develop it as opposed to taking it to market and really nailing it for one small group of people.

[19:31] This is something that I’ve struggled with Audit Shark because I have thoughts and plans for the product 3, 5, 8 years down the road that I know are going to take a very, very long time to implement. And I’ve got to focus on today, not five years down the road. And it kind of sucks because I can only do so much in the next two weeks or eight weeks or whatever but in the back of my mind I always have these thoughts about oh, what am I going to do for X when X is really something that’s not going to be implemented for probably another three years?

[20:00] Rob: The fifth point that Paul makes about doing things that don’t scale is about consulting. He says sometimes we advice founders of B to B startups to take over engagement to an extreme and to pick a single user and act as if they were consultants building something just for that one user. The initial user serves as a form for your mold. Keep tweaking until you fit their needs perfectly and you’ll usually find you’ve made something other users want to.

[20:26] I have a bit of a tough time with this one. I think it’s dangerous unless you really know that customer number one and you know that they have a clear vision of what they need and that you somehow have other inputs in especially if it’s a domain that you don’t understand or that you’re not familiar with. Taking direction from just a single client I think could be pretty dangerous and could get you into a pigeon hole where basically you’ve built a super specific app for a single client and the one that doesn’t generalize to other people. And that the second side of that is just validating that there’s a market for it. Because finding that one person or one company needs an app is really not enough. You have to go out and verify that need expands into a full pledged market and that’s something I would definitely do before taking this consulting approach.

[21:15] Mike: Yeah. I think the consulting approach can definitely work if you have a product and you have knowledge of that particular space where you already know the space. It’s not that you’re trying to validate a market or doing MVP. You know that there’s money to be had there and you know what types of products are going to be successful. The problem that you have is maybe cash flow or something like that or you don’t have enough of the products built to be able to sell it as a standalone product so you essentially need to couple some services with it. That’s the place where I see consulting working really well but if you’re still trying to validate the market because you don’t necessarily understand it and it’s not some place you’ve worked before, I think this really starts to fall apart because it’s going to be hit or miss depending on the company that you end up working with.

[22:01] Rob: Yeah. That’s a good point. The other thing he points out, I think it’s kind of cool with this consulting. He says another consulting like technique for recruiting initially lukewarm users is to use your software on their behalf. His startup that he sold back in the 90’s was called via web and it was an early shopping cart software. And he says when we approached merchants asking if they wanted to use our software to make online store, some said no. But they’d let us make one for them. Now this is concierge. Right? That’s really what we’re talking about here is essentially a free concierge service to get everything setup and to go beyond and do really manual things that don’t scale to get those early users involved. And if you show them that they’re a success then hopefully they’ll stick around with you.

[22:42] And I love this quote. He says 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 thought us how it would feel to merchants to use our software.

[22:58] The sixth point that Paul brings up is he calls it manual and he says there’s an extreme variant where you don’t even write software. You just do all the manual leg work behind it. I’ve called this human automation. I talked about it in my book. We’ve talked about it in the podcast in terms of if I were to launch something like HitTail, I would just do manual keyword research and manually email reports back to someone instead of having any type of software do it and frankly probably hire a VA to do it as well.

[23:22] I think that if at all possible, that’s how you start a startup. That’s how you vet that there is in fact a need and you can get so much information out of working with customers without writing a line of code and without spending anytime. If you’re not a developer, finding a developer and so by the time you do in fact go to find a developer you have so much more information not only about what you want to build but you have the validation that this is in fact going to work and that you can get money from people for it and that it provides enough value that you’re willing to do the cash outlay or the time out lay to go and build it yourself.

[23:59] Mike: I think one thing to keep in mind about that is it’s really about vetting the idea. It’s about testing your hypotheses and that’s really what lean startup is about as well. It’s doing that MVP. And the reason you do an MVP is because you don’t know what the answer is. And if you don’t know what the answer is then you have to figure out a way to test it. And what’s the least amount of work that you can do to test that? And this really falls under that umbrella but again it goes back to the idea like if you know that there’s money there and you don’t necessarily need to prove it to yourself then building software might be the right thing to do especially if you already know how to solve those problems.

[24:38] Rob: The seventh and final point we took away from Paul’s essay is that the big launch usually doesn’t work and neither do partnerships. This one made me pretty happy when I read it. I mean he’s basically saying the tech crunch launch doesn’t work and I’m sitting there squealing with glee because we’ve said this so many times and I get halfway down and he says partnerships too usually don’t work. They don’t work for startups in general but they especially don’t work as a way to get growth started. It’s a common mistake among experienced founders to believe that a partnership with a big company will be their break. Six months later they’re all saying the same thing. That was way more work than we expected and we ended up getting practically nothing out of it.

[25:16] I’ve run into this a number of times and this is why these days partnerships are last on my list for growing things unless I know the founder, unless I know that they have a lot of customers and experience and they’re going to be easy to work with. I would almost never partner with a much larger and impersonal Fortune 500 company as a way to try to stem growth. The partnerships that have worked for me have typically been when I’ve gone and sought them out and when I actually have something to offer. So I already have a large enough customer base that I’m able to cold email or try to get a warm introduction to a founder or somewhat high up in another organization but it tends to be a smaller organization.

[25:55] Even if it’s a multimillion dollar in sales organization it’s still run by one or two decision makers and there’s not a big group at the top where it’s all corporate. I can talk to a single person and they can make a decision as to whether or not we want to do a joint mail and or whether or not we want to do an integration and promote it to everyone or one of these things. I mean these are the partnership things that I’m thinking about that I’ve seen win and unless they bring a lot of traffic and or existing paying customers to the table, it’s almost never worth pursuing.

[26:26] Mike: I think if you look back at the growth curves for I would say probably any successful company, there’s very few where you can look at their growth curve and you see these giant spikes in there from pretty much anything. You’ll see these gradual curves where thing start to work and they figure them out and then they double down on them and you get what’s called the hockey stick growth curve. But there’s never a hockey stick growth curve that I’ve ever seen where things will be going along and then suddenly they vault up like by a magnitude of 3 to 5 and then they level out again and that just doesn’t happen. The great big launch as you said, it doesn’t really work. It helps you get customers but it’s more of a gradual thing. It helps get things started. And the same thing with partnerships. They will help get things started. I think with partnerships, there’s so much work and so much effort involved that early on it’s just not worth the time and effort.

[27:21] Rob: Yeah. This is why with Drip I didn’t go for a big launch. Really didn’t get mentioned via mini press outlets the day that the Drip launched but I’ve been marketing it for what? Maybe 10 months before that and during that 10 months, it was building the email launch list. Right? And then gradually doing that slow launch over 90 days was almost the opposite of the big tech crunch launch where you want to get mentioned on Mashable and the next web and tech crunch and 20 other places all in that one day but that creates A) a lot of headache B) it’s a huge time investment to try to work with all those venues. It’s kind of a crazy thing. People’s sites go down because they get linked to by so many things.

[27:59] If you haven’t already spent time on boarding and figuring out if your software even works and if it’s going to retain people, you can get let’s say get 100,000 uniques in two days and everybody poof goes away then what do you have? You don’t have any assets after that because you haven’t built up something over a longer term. Suffice to say that I agree with Paul’s assertion here that the big launch usually doesn’t work and neither do partnerships.

[28:22] Mike: Well the other thing about that is if you do get at that giant influx of traffic as you said, even if you get a bunch of sign ups out of it, you don’t really know what to over them next and you don’t know how to capitalize on those people who did visit but didn’t sign up to bring them back. I think Joel Spolsky at one point had a blog article where he put it out there where if you have this giant launch and tons of people come and they look at your app and they say it sucks, then they’ll never come back and that’s going to be a big problem especially if you try to make a huge splash in the market about an app that quite frankly is really still in the very, very early stages.

[28:59] So that gradual build up over time is the better approach anyway. I mean you don’t want to go too big too fast because with any given startup, if you grow too fast in too many directions well I mean there’s several directions you kind of have to grow in. But if you grow in a way that is skewed in one direction and it goes much, much further than any of the others, so let’s say that your revenue scales much, much faster than the number of employees. Well, you’re going to have some serious growing pains because you have to grow quickly which means you’re going to drop your standards to bring people on faster. Bringing in too much traffic all at once is very similar. You’re not going to be able to capitals on that in a way that is going to be effective for your business long term.

[29:42] Rob: So to recap, the seven points we pulled out of Paul Graham’s essay do things that don’t scale are number 1) recruit users manually. 2) Expect to be fragile or unstable as we put it. 3) Delight early customers. 4) Start in a niche. 5) Consult. 6) Try human automation and 7) the big launch usually doesn’t work and neither do partnerships.

[30:06] Mike: If you have question for us, you can call it into our voice mail number at 1-888-801-9690 or you can email it to us at [email protected] . Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening and we’ll see you next time.

Reader Interactions

January 22, 2014 at 11:20 am

Amen to the idea of “no partnerships (24+ min. mark). My business coach warned me off from the idea of partnerships, but this is after I had formed up said partnerships. I have found that a partnership is like chaining two cars together– you’re unlikely to get the velocity and direction right. I have found that busy-ness by myself and my partner means that we’re moving at the lowest common denominator for speed and energy, because time demands are limiting how much we can do to drive the company forwards. We’re throwing more bodies at the problems, but we’re going slower and we’re not always on the same page for our messaging.

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Paul Graham 101

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

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

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

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

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

Boring disclaimer stuff:

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

Okay, let’s jump in.

Paul Graham on Startups

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

Startups in 13 sentences :

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

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

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

Essays mentioned in this section:

Startups in 13 sentences

How to Start a Startup

Startup = Growth  

How to Make Wealth

After Credentials

The Lesson to Unlearn

The Power of the Marginal

News from the Front

A Student's Guide to Startups

What Startups Are Really Like

Before the Startup

Hiring is Obsolete

Why to Not Not Start a Startup

The Hardest Lessons for Startups to Learn

Organic Startup Ideas

Six Principles for Making New Things

Frighteningly Ambitious Startup Ideas

Black Swan Farming

Crazy New Ideas

Why There Aren't More Googles

Ideas for Startups

Jessica Livingston

Startup FAQ

Earnestness

Relentlessly Resourceful

A Word to the Resourceful

The Anatomy of Determination

Mean People Fail

Why It's Safe for Founders to Be Nice

Design and Research

A Version 1.0

What Microsoft Is this the Altair Basic of?

Beating the Averages

Do Things that Don't Scale

Ramen Profitable

Default Alive or Default Dead?

Maker's Schedule, Manager's Schedule

Holding a Program in One's Head

How Not to Die

Disconnecting Distraction

Good and Bad Procrastination

Don’t talk to Corp Dev

The Top Idea in Your Mind

The Fatal Pinch

Startups are fundamentally different

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

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

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

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

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

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

Startups are wealth-creation machines

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

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

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

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

Why are startups optimized for wealth-creation?

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

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

More detail in How to Make Wealth . 

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

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

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

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

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

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

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

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

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

Founders make the startup

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

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

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

Earnestness and resourcefulness make a good founder

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

According to Graham, a good founder is:

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

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

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

Relentless = make things go your way

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

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

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

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

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

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

Make something people want

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

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

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

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

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

Get close to users

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

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

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

Launch fast, then iterate

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

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

Some ideas from these essays:

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

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

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

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

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

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

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

Do Things that Don’t Scale

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

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

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

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

Get Ramen Profitable

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

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

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

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

Maintain a Maker’s Schedule

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

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

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

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

What not to do

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

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

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

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

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

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

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

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

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

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

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

Paul Graham on What to work on

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

What Doesn't Seem Like Work?

Why Nerds are Unpopular

Fashionable Problems

How to Do What You Love

You Weren't Meant to Have a Boss

A Project of One's Own

Great Hackers

Follow intrinsic motivation

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

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

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

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

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

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

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

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

You should be working on your own projects

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

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

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

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

Work on things that you want to take over your life

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

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

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

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

Paul Graham on Thinking & Decision-making

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

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

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

The Four Quadrants of Conformism

The Two Kinds of Moderate

Orthodox Privilege

Novelty and Heresy

How to Disagree

How to Think for Yourself

The Bus Ticket Theory of Genius

Is It Worth Being Wise?

Beyond Smart

How to Work Hard

Mind the Gap

Being a Noob

How to Be an Expert in a Changing World

How Art Can Be Good

Taste for Makers

The Island Test

Independent-mindedness vs conventional-mindedness

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

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

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

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

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

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

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

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

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

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

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

Intelligence

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

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

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

Hard work and courage

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

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

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

Good taste is necessary for good work

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

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

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

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

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

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

Is your argument testable?

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

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

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

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

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

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

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

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

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

Paul Graham on Writing

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

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

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

Writing, Briefly

Writing and Speaking

The List of N Things

Persuade xor Discover

General and Surprising

The Age of the Essay

How to Write Usefully

Write Simply

Write Like You Talk

Economic Inequality

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

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

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

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

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

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

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

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

An essay should be new

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

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

“ Essays should aim for maximum surprise. ”

An essay should be useful

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

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

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

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

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

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

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

When possible, find a metaphor for your idea

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

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

Some of my favorite metaphors from Paul Graham:

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

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

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

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

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

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

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

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

Paul Graham on Society

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

The Refragmentation

Inequality and Risk

What You Can't Say

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

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

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

By default, we think wealth inequality is inherently bad. 

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

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

Wealth inequality can be a sign of good things.

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

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

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

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

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

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

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

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

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

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

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

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

Graham’s proposition:

Allow those who create wealth to keep it.

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

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

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

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

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

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

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

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

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

Paul Graham on Life

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

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

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

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

What You'll Wish You'd Known

Life is Short

The Acceleration of Addictiveness

• How to Lose Time and Money

Lies We Tell Kids

Keep Your Identity Small

Cities and Ambition

The Top of My Todo List

Life is short

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

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

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

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

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

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

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

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

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

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

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

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

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

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

You have a lot of unconditioning to do

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

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

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

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

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

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

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

Paul Graham’s 5 commandments for life

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

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

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

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

Paul Graham’s Best Essays

Paul Graham’s favorites ‍

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

My favorites

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

Final words

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

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

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

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

Thanks for reading.

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Mike Fishbein

Paul Graham’s Do Things that Don’t Scale

I loved Paul Graham’s essay, Do Things that Don’t Scale . This article covers my key takeaways and commentary.

“A lot of would-be founders believe that startups either take off or don’t. You build something, make it available, and if you’ve made a better mousetrap, people beat a path to your door as promised. Or they don’t, in which case the market must not exist. Actually startups take off because the founders make them take off.”

-I’ve learned that the “if you build it they will come” theory is largely a myth. It’s very rare for a company to acquire customers without some kind of distribution. And to the last sentence, at a startup, nothing happens until you make it happen. No one’s going to come to you or do it for you. Gravity is against you.

“How do you find users to recruit manually? If you build something to solve your own problems , then you only have to find your peers, which is usually straightforward.”

-Per a previous post of mine, I think it’s best to start with a discrete customer segment to serve. Even yourself and your peers. If you do that you should have no problem finding more customers. I also think it’s important for the team to have unique access to customers as a competitive advantage.

“You should take extraordinary measures not just to acquire users, but also to make them happy.” “For most successful startups it’s a necessary part of the feedback loop that makes the product good.”

-Customer development is not just to validate a product, it should take place over the life of a company. A company’s goal is to relentlessly serve customers.

“part of the reason engineering is traditionally averse to handholding is that its traditions date from a time when engineers were less powerful—when they were only in charge of their narrow domain of building things, rather than running the whole show.”   

-This speaks to how startup best practices have been widely spread and are now operating more efficiently than ever.

“Another reason founders don’t focus enough on individual customers is that they worry it won’t scale.”

-Scalability should be a concern for any startup, but doesn’t have to be right away. I think it’s important to test your riskiest assumptions first. The riskiest part of an early stage startup is usually not distribution – it’s having something people want. Doing things that don’t scale can cost you a bit in the short-term, but save you a lot in the longer-term.

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

-This is another competitive advantage that startups have over big companies. It’s an important advantage.

“Some startups could be entirely manual at first. If you can find someone with a problem that needs solving and you can solve it manually, go ahead and do that for as long as you can, and then gradually automate the bottlenecks. It would be a little frightening to be solving users’ problems in a way that wasn’t yet automatic, but less frightening than the far more common case of having something automatic that doesn’t yet solve anyone’s problems.”

-Absolutely love this. I would go as far as to say if customers need to see the product, it’s probably not solving a deep enough problem.

I highly recommend reading Paul Graham’s essay, “Do Things That Don’t Scale,” in full.

Copyright 2024

This is Amara Ventures' reading of Paul Graham's essays. At Amara, we rever Paul Graham and we strongly believe that his essays are a must-read for everyone in the world of tech and beyond. This podcast is divided into TWO segments. The first segment is a verbatim reading of a particular essay and the second segment is a discussion with a guest who helps us connect the core ideas of essay with the contemporary world of startups in India and the valley by sharing insightful stories and anecdotes. Visit www.amaraventres.co to know more.

Paul Graham Essays: Readalouds and Discussions with Amara Ventures Amara Ventures

• 15 MAR 2021

Ep 4.2: Vivek Joshi discussing Good and Bad Procrastination by Paul Graham

Can procrastination be good? If yes, when? Can you afford to forget the 'small stuff' because you are focused on the bigger things?  But then doesn't God lie in the details?  This and much more is discussed in this fantastic discussion with Vivek Joshi on the ever-green essay by Paul Graham. Vivek Joshi is a seasoned entrepreneur and an avid investor who is interested in startups, stock markets and social change.  You can reach Vivek on Twitter at https://twitter.com/startupfundas.

• 14 MAR 2021

Ep 4.1 Read aloud of 'Good and Bad Procrastination' by Paul Graham

Good and Bad Procrastination is a fantastic essay by Paul Graham written in 2005. Long before Tim Urban's TED talk - Inside the mind of a master Procrastinator came out, this is one essay that spoke of how procrastination plays a huge role in one's life.   Contrary to the common wisdom of staying organized and keeping a tab on the To-Do list, the essay makes a case for forgetting 'small stuff' if you can put your brain to better use. Harping on the difference between creativity and productivity, the essay is a must-hear for everyone.  The essay reading is done by Minal Desai of Amara Ventures, an angel investment firm in India. To know more about them visit www.amaraventures.co

Ep 3.2: Vivek Khare discussing Do Things That don't Scale to Investors by Paul Graham

Startups must have a DNA that lets them scale faster than a normal business. But what does that DNA comprise of? To understand that we have Vivek Khare ex-Naukri and a stellar investor (zomato, Vastra, Nivesh, etc) who shares many of his personal stories about founders' hustle Hear Vivek Khare answer this and much more in this enticing discussion with Minal Desai of Amara Ventures. You can connect with Vivek on Twitter @Vivekstartupguy and know more about Amara Ventures at www.amaraventures.co

Ep 3.1: Read-aloud of 'Do Things That Don't Scale' by Paul Graham

Written in 2013, Do Things that Don't Scale remains one of the topmost essays ever written by our beloved Paul Graham. It talks of how startup in its initial days must do things that seem impossible to scale but are extremely valuable to be done in the early days.  Drawing from examples of Airbnb and Stripe, Paul makes a compelling case for founders to focus on the user and simply do whatever it takes to delight them.  The essay reading is done by Minal Desai of Amara Ventures, an angel investment firm in India. To know more about them visit www.amaraventures.co

• 21 FEB 2021

Ep 2.2: Sanjay Mehta discussing A Hacker's Guide to Investors by Paul Graham

The Indian startup ecosystem is growing at a frantic pace. And Sanjay Mehta of 100x is one of the handful of people who are shaping it.  But what is it to raise money and approach investors in today's day and age? How much time does it take to raise money?  What do investors look for in startups? Hear Sanjay Mehta answer this and much more in this enticing discussion with Minal Desai of Amara Ventures.  You can connect with Sanjay on Twitter @mehtasanjay and know more about Amara Ventures at www.amaraventures.co 

Ep 2.1: Readaloud of A Hacker's Guide to Investors by Paul Graham

Written in 2007, this is mecca of guides to investors by none other than our beloved Paul Graham. The expansive essays lists down 23 things a founder should keep in mind when approaching investors. The timeless advice shared by Paul is as relevant today as it was then and if you are a founder starting out to raise funds, this is a MUST hear essay.  The essay reading is done by Minal Desai of Amara Ventures, an angel investment firm in India. To know more about them visit www.amaraventures.co

• © Amara Ventures

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Paul Graham: 'Do Things That Don't Scale'

Don't have a big launch and keep an eye on your market, explains the y combinator co-founder..

Paul Graham, co-founder of top start-up accelerator program Y Combinator, has some counter-intuitive advice for founders:  Do things that don't scale.

Start-ups don't often experience hockey stick growth by themselves. They need a nudge from founders, who need to aggressively market their products and be overly attentive to users in the beginning.

How do you force a start-up to scale? According to Graham:

Go out and manually recruit your early users, even if it seems tedious and inefficient . Graham cites payment company Stripe as an example. " At YC we use the term 'Collison installation' for the technique they invented," he writes. "More diffident founders ask [potential clients] 'Will you try our beta?' But the Collison brothers weren't going to wait. When anyone agreed to try Stripe they'd say 'Right then, give me your laptop' and set them up on the spot."

Recognize that your start-up is extremely fragile and can break at any point.   One of the biggest reasons a start-up can break early on is a lack of confidence in the founders. " The question to ask about an early stage start-up is not 'is this company taking over the world?' but 'how big could this company get if the founders did the right things?'" Graham writes. "And the right things often seem both laborious and inconsequential at the time."

Create an "insanely great" experience for early users and cater to their every need.  "I have never once seen a start-up lured down a blind alley by trying too hard to make their initial users happy," Graham writes.

Keep the fire contained.  In other words, focus on a narrow market, says Graham. He refers to Facebook, which was only at Harvard until it obtained critical mass there. Then it spread to other Ivy League schools. Finally, it opened up to other colleges which already had built up demand. "It's like keeping a fire contained at first to get it really hot before adding more logs," Graham says. If you're a hardware start-up though, Graham recommends trying to scale via pre-orders or crowdfunding, like Pebble did on Kickstarter.

Make your product perfect for a single user.  Graham suggests this strategy particularly for B2B start-ups. If you keep tweaking the product until one early user is extremely happy with it, you'll probably create a product many of their peers also love.

Don't have a big launch.  It's often a  mistake to have a big buzzy launch  complete with embargoes and articles in eight different publications, Graham writes. The idea of creating initial buzz is a lazy way to onboard users, and doesn't guarantee start-up success. "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," Graham says. "But even if what you're building really is great, getting users will be always be a gradual process-;partly because great things are usually also novel, but mainly because users have other things to think about." He also cautions start-ups to stay away from partnerships with big companies at first. It may seem like a user-onboarding shortcut, but it often ends up being too much work for too little reward. 

In conclusion: "It's not enough just to do something extraordinary initially. You have to make an extraordinary  effort  initially," Graham says.

This story originally appeared on   Business Insider.

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