> Succeeding as a musician takes determination as well as talent, so this answer works out to be the right advice for everyone. The ones who are uncertain believe it and give up, and the ones who are sufficiently determined think "screw that, I'll succeed anyway."
> So our official policy now is only to fund undergrads we can't talk out of it.
Speculating wildly on something we still haven't been able to figure out...
I was talking with an old colleague, and one of the biggest problems we've heard of in too many startups is founders with little-to-no experience who seem mind-bogglingly, clinically sure of themselves. Even in fields in which they have zero education or experience, even when all the highly-skilled specialists they hired are telling them the opposite. Even when they're told the good employees and customers will leave if they do a stupid thing that they have no business even considering. But why are so many of these people getting funded?
Going back to the article: imagine you're pitching, and startup experts who seem to be on your side are nevertheless trying to talk inexperienced you out of it. You can't make an argument that convinces them to stop trying to talk you out of it. Maybe they know something you don't? Nope, then you're rewarded for irrational confidence in yourself, and perhaps for manipulative fake-it-till-you-make-it behaviors.
Even if this wasn't the nature of the discouragement PG wrote about, given how influential PG's articles seemed early in tech startups, maybe a lot of investors since then have been selecting for, and encouraging, some traits that we've seen destroy more companies than they make?
If that's the case, was that part of some angel/VC formulas all along, to make some percentage of the investments be in narcissists, till you hit a high-functioning one? Or that, plus roll the dice on whether the necessary mitigating/complementary external factors align at random? Maybe that's not a bad strategy, especially when the investment environment is such that you can have an apparently skyrocketing property, and exit rich, before anyone realizes the rocket has deep-seated problems and is going to blow up.
Obviously, personalities like this have existed before tech startups, but maybe not as frequently enabled by professional investors?
Speculating wildly here, but the not-unusual clinically overconfident startup founder (to the point of self-destructive) is a phenomenon we haven't been able to figure out in any satisfying way, and only have guesses.
Impossible to comment without you providing specifics of the things that founders do that are so obviously wrong.
You're also giving way, WAY, WAAAY too much credit to "experts".
Two prominent counter-examples: AirBnB and SpaceX.
If AirBnB founders asked anyone involved in hotel industry, they would tell them it'll surely fail. The laws, the liability (what if someone trashes the place?), who will want to sleep in stranger's bed? who will allow strangers to sleep in their bed?
And yet AirBnB is amazingly successful.
Not because those were not valid concerns but because they were overblown.
Same with SpaceX: it was ridiculed on principle (what does internet guy know about rockets?) and it was ridiculed for their methodology (fail fast, iterate quickly, blow up rockets to learn from failures).
Armstrong, the guy who landed on the moon, testified before Congress telling them to not award SpaceX any contracts because they will surely fail.
Doesn't get more "expert" or more wrong than that.
Also, framing "fake it until you make it" as "manipulative" suggests that you're coming at this with some chip on the shoulder. The nature of learning is that first you don't know and then you know.
If only experts could do stuff then there would be no experts. Even Einstein didn't know physics.
> Impossible to comment without you providing specifics of the things that founders do that are so obviously wrong.
I don't find it impossible at all. One example that everyone knows is Theranos. Elizabeth Holmes was a know-nothing with total conviction -- exactly the kind of young person Paul Graham lionizes in his post. She dropped out of Stanford at 19 to found a medical equipment company! When tons of experts believed that the samples Theranos relied upon were too small to yield accurate results! Which turned out to be true!!
There are, of course, a handful of businesses that have done quite well and defied all expectations in the process. But they are the exception rather than the rule. Most startups fail, and it's not at all obvious that being completely sure of yourself despite (because of?) your ignorance is an advantage.
I think the Airbnb story is made up. Or at least, I doubt many people told them it would never work. That's just something founders add to their story to make it more appealing.
It was basically a web 2.0 clone of VRBO which was already worth billions by the time Airbnb was getting started.
Why were people telling them that a proven business model wasn't going to work?
The thing you gotta remember about this is that YC etc are Venture Capitalists. They're a subset of the funding industry that is primary concerned with funding extreme long-shots that have a small chance of becoming massively and wildly successful. They're not out to build stable businesses or to make the world a better place (per se), they're out to find the unicorns and get in on them early in hopes of wild profits, enough to outshine all of the attempts that fail dismally. Of course they want the founders to be like that, that's the entire purpose of their operation.
> Does that mean you can't start a startup in college? Not at all. Sam Altman, the co-founder of Loopt, had just finished his sophomore year when we funded them, and Loopt is probably the most promising of all the startups we've funded so far. But Sam Altman is a very unusual guy. Within about three minutes of meeting him, I remember thinking "Ah, so this is what Bill Gates must have been like when he was 19."
I wonder what this Sam Altman guy will be up to 17 years later
Altman's had huge success, but that comparison to Gates aged like milk. Gates is one of America's great industrialists, founding and growing a company into becoming one of the most valuable in the world.
Loopt mostly failed, and Altman's other founded company is WorldCoin, which also has basically failed. Altman's talent has been as an operator within the YCombinator rocketship. He hasn't shown he can build technology or great companies.
You mean, unlike the genious idea of stealing MS-DOS from Gary Kildall?
I mean, sure, you can make great profits when you put morality asides.
Which Gates did again and again.
People forget about this today because of the extensive PR of the last decades to wash the sins of the past, but Gates and MS were basically in the middle of a scandal every 6 months in the 90. Quite amazing since twitter did not exist to report it.
Although Microsoft has stolen things (e.g. from Stac Electronics¹) in this circumstance I believe you've confused "stealing" from Gary Kildall with "licensing" from Tim Patterson².
In fact, when IBM came to Microsoft to talk about licensing their programming languages for the PC, it was IBM who wanted a packaged deal i.e. get the OS from Microsoft as well.
And it was Gates who told IBM reps to go talk to Kildall.
Only when Kildall apparently blew them off Gates took a great risk by promising to deliver an OS as well. And he did it by buying an existing product to use as a base and evolving it.
It's all well document from both Microsoft people and IBM people.
He’s been playing long game, working at this since 2015. That’s a long time to be playing without much of a payoff, but it’s all come to fruition now. That to me shows a lot of leadership ability.
7 or 8 years is only considered the "long game" in Nintendo or JavaScript framework time. I'd also argue jumping between substantially different industries, ideas and companies is NOT the long game, rather he's continued to play a game, and with significant systemic advantages found something that might be a moderate to large success.
When big tech companies started paying $200k-$300k salaries to fresh grads, the startup dream kind of started to fade. Realistically speaking, going to whatever big tech co has probably yielded a far better ROI to the majority of engineers if we look at their 10 year employment history, compared to their peers that went all-in on startups.
The big tech companies generally have a positive cash flow and proven products so they can still pay those big salaries.
It's the startups that will have to pay less, since they can borrow less. Also if startups pay less, big tech can pay less too.
Big tech is mostly a mature business now, where the decision makers dont know what to do with cash. Facebook tried the metaverse garbage and failed, Google doesnt know how to do anything (even search sucks). Microsoft seems to have more rational ideas.
All those companies are at the outsourcing stage, where they outsource their core product to low cost countries... and the product starts to suck.
Good luck with your job search, perhaps try to find a boring compabyny doing boring stuff. Those horrible CRUDs are lifeblood of many moloch companies.
Yeah but those guys had to work at big tech companies. Not everything is about ROI or money, even in business. Some people genuinely prefer working on “their own thing” or somewhere they feel they have more impact even if there is less financial reward.
The pool of people who want to work on their own thing as a career and livelihood is likely smaller than you think. Lots of smart creatives apply this within their jobs and/or do their own thing outside of work. Doing what you love as a job can be a great way to kill it.
Oh sure, but like all human traits it occurs along a spectrum, and fulfilling that need gets balanced against others - a tech salary solveth a multitude of problems after all. And I imagine for many getting started in tech seems like a great idea, learn a bunch and put aside a nest egg, and find out about the golden handcuffs later.
My point being that the sort of intrinsic motivation you are describing gets sort of overwhelmed by huge benefits packages and total comp.
> Recent grads can live on practically nothing, and this gives you an edge over older founders
Seems like this was every other startup in the 2020-2021 period. Zero experience founders raising a ton of money. I wonder if this is shifting a bit with the financial markets tightening up.
Ya this is the point where I stopped reading. People seem to have a misconception about the poor: that they can live on next to nothing. In reality, the poorer a person is, the more they work just to survive.
Not to mention that the world is profoundly less allowing of entrepreneurship than it used to be. I graduated from college in 1999 with about $25,000 in student loans with a $340/mo payment and my rent was $250. I was able to get by on a $10/hr seasonal furniture moving job. Today those numbers would be at least $50,000, $500/mo loan payment and $750 rent, so a person would need $20+/hr just to survive. Which means a real job and 40 hour workweeks with no time or motivation left over for a side business. Same city, double the population, half the independence. Trapped.
I'm disillusioned with it all because nobody ever solved the funding problem. Kickstarter is opinionated in what it will fund. Crypto turned into a Ponzi scheme instead of a way to fund startups. So it's probably over, and I'm just waiting now for AI to disrupt society so completely that it's forced to adopt UBI or face 50% unemployment.
Yet another reminder not to take on debt. It's better to put the extra work in to pay for stuff upfront then move the burden to after college unless you have the network and guarantees to know you have a job lined up.
First, this is one of those things which is easy to say but for many (most?) people hard to implement. Sure, some people's family may be able to give them the money they need to go to university but this is not the case for most people, and in this case it is really hard to earn enough money _before starting_ to pay for your university education.
The second is that debt can be good (our society is literally built on it) in many cases (e.g. home loans, provided you can afford to pay them off) if you are not in a highly asymmetrical power relationship with your lender.
While I don't disagree with you, I want to say that this idea of it being impossible to go to collage without taking out loans is not true. I know multiple people who worked, applied for grants, and used cheaper/affordable colleges first before uni.
> debt can be good (our society is literally built on it)
I would argue that our countries increased reliance on debt over the past 50 years has decimated the lower class and harmed the middle class while the wealthiest class has seen their influence and ownership percentages surge.
Student loan debt is typically not the good kind - its doled out in far larger amounts than the lender can typically acquire because it cant be discharged like other forms of debt.
This isn't terrible advice for dumb new grads who don't know better, but there are very different types of debt. Consumer debt is almost always bad, but capital debt can be good, preferred or necessary. The challenge is something like a college education could be either.
it's not apples to apples. Older founders usually have a network they can tap into, yes, but also usually have a lifestyle that requires a bit more than the average college grad. One thing I've told folks who ask "how do I start a startup with little money?" "You start with what you got". Sometimes selling things off to reduce your expenses to be able to give your startup more runway. Or not take any money at all (I met with a pair that did this for almost 2 years!).
In the end, it's all situational. Younger founders are lower maintenance to the balance sheets and have more potential but it's more risk. I'm not a VC so I couldn't say what goes into the decision making there other than "he's younger and smarter so I'm betting on this horse".
>> but also usually have a lifestyle that requires a bit more than the average college grad
I've noticed that an entire generation of essentially 0% interest rates has skewed this substantially. I'm in my 40's and I've scrimped and saved and have very few "premium lifestyle tastes", while many 20-somethings have lived well beyond their means financed for free their entire lives. Their expectation for the baseline standard is much higher than 15-20 years ago
I'm the same demographic as you. 40s, not rich (especially compared to some other HN readers) but not hurting per se. I live well below my means. When I was younger it was a different story. I had higher tastes for things but couldn't afford them. I didn't go run up the credit card though just because I wanted it. I think that's the difference. Buy Now, Pay Later only applied to cars and houses for me.
> So our official policy now is only to fund undergrads we can't talk out of it.
Speculating wildly on something we still haven't been able to figure out...
I was talking with an old colleague, and one of the biggest problems we've heard of in too many startups is founders with little-to-no experience who seem mind-bogglingly, clinically sure of themselves. Even in fields in which they have zero education or experience, even when all the highly-skilled specialists they hired are telling them the opposite. Even when they're told the good employees and customers will leave if they do a stupid thing that they have no business even considering. But why are so many of these people getting funded?
Going back to the article: imagine you're pitching, and startup experts who seem to be on your side are nevertheless trying to talk inexperienced you out of it. You can't make an argument that convinces them to stop trying to talk you out of it. Maybe they know something you don't? Nope, then you're rewarded for irrational confidence in yourself, and perhaps for manipulative fake-it-till-you-make-it behaviors.
Even if this wasn't the nature of the discouragement PG wrote about, given how influential PG's articles seemed early in tech startups, maybe a lot of investors since then have been selecting for, and encouraging, some traits that we've seen destroy more companies than they make?
If that's the case, was that part of some angel/VC formulas all along, to make some percentage of the investments be in narcissists, till you hit a high-functioning one? Or that, plus roll the dice on whether the necessary mitigating/complementary external factors align at random? Maybe that's not a bad strategy, especially when the investment environment is such that you can have an apparently skyrocketing property, and exit rich, before anyone realizes the rocket has deep-seated problems and is going to blow up.
Obviously, personalities like this have existed before tech startups, but maybe not as frequently enabled by professional investors?
Speculating wildly here, but the not-unusual clinically overconfident startup founder (to the point of self-destructive) is a phenomenon we haven't been able to figure out in any satisfying way, and only have guesses.