Ask HN: How did Sam Altman fail upward so well?
I'm constantly surprised by the fact that Sam Altman is the one in charge of OpenAI. As far as I know, he dropped out of college to start a company that folded (Edit: this is wrong, he sold it, was a bust for investors though), ended up advising companies at YCombinator, Paul G liked him, and he just sort of made lots of connections. Then he became CEO of Open AI? I'm likely missing a step, right?
Don't get me wrong, I don't think he's a moron or anything, but it's fascinating to me that he doesn't have ANY of the following things that I'd assume makes one qualified: * Published AI research * Sold a company * Worked at a Unicorn or top tech company * Reputation in OSS as a hacker/builder
Surely there's more to the story? Do people who he has advised at YCombinator all agree he's brilliant and insightful? What am I missing?
EDIT: I was wrong, he did sell a company. My mistake!
That does change things, but I'd like to hear more from people who have good things to say about him. Maybe he's given some amazing advice to really important companies that we're unaware of. It would be nice to hear more of how he got his reputation.
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I remember thinking Open AI was doomed the day that launched, since that was a clear signal to me that he had zero sense of product market fit.
Well, I was wrong. Good for him, seriously.
A billion dollars, Ilya Sutskever as chief scientist, and some of the most brilliant young minds in ML.
I say it was.
I could understand why someone would buy into Musk’s vision even Gates/Jobs etc. Sam Altman seems like a very ordinary guy without any remarkable attributes.
Also G companies might aim too high even when they try not to? OpenAI can release a shitty chatbot, but a G subsidiary simply can't, they want to solve proteins, aging, cancer, and then maybe we can chat.
It's too easy to mix up cause and effect here. Was he already visible so good that pg put them there, or is pg infatuation so influential?
There's probably more than what meets the eye. Too bad for us that sama doesn't write as much as pg does.
Sam's startup didn't fail miserably, it sold for $40 million, on $30 million raised. You can do worse, but by VC standards, it's not a real success story, let alone what you'd expect from a guy you describe him as one of your top 5 founders.
This doesn't imply an overall assessment of Altman (most startups fail, and so on...). My outsider opinion is Altman's public persona seems ok, it seems like YC did well under his stewardship, etc. But it sure looks like he was annointed. Paul Graham and folks like to talk about how in school, you just try to make the teacher happy. Well, sometimes making Paul Graham happy is really important too.
I've been investing since 2007. One of the things I've seen is a founder that managed to sell a company that by rights should have folded, made a bunch of money for himself and for the investors and ended up starting another one which was a much bigger success. I would bet on that guy any day. The assumption when starting a company is that it will fail. A founder that manages to make it to any kind of exit is already exceptional, and depending on the circumstances their performance may inspire further trust or a reduction of that trust. In this case, apparently even though the business did not see the returns originally envisioned Sam came through in ways that inspired those that invested to increase their trust factor.
And having seen a similar case I don't think that is something strange at all. Maybe another CEO would have caused that $30M to evaporate.
I haven't started a company nor done angel or VC investing, so I obviously down played that part of things.
I would disagree. Seems more prescient to me than ever. Gmail became far more important to the free world which I didn't see coming, and SamA lived up to the hype with OpenAI (before OpenAI he was quite accomplished, but OpenAI put him in the history books).
That said this kind of veiled personal attack is really not nice.
OP think he doesn’t fit the profile required to be head of OpenAI, but, it seems, he’s been quite successful there. It’s easy to judge someone by failed projects but that underestimates one key factor for success: luck. It could be he failed for lack of luck and that he got the job by having a combination of relationships, skills, and luck.
But more to the point, I kind of hate it when someone posts something with an obvious negative/snarky context and then defenders try to pretend "he was just asking a valid question!" In my opinion this would be a much better, and more valid post, if the title were simply "What qualifications led Sam Altman to be CEO of OpenAI" or some such.
And, by the way, your assumptions are wrong, pg has written posts on why he thinks sama is one of the most impressive people he's ever met - they even changed the YC rules after him to make the percentage stake that YC takes standardized and non-negotiable because sama was such a good negotiator.
I don't doubt that sama is talented. What's unexpected to me is that there have been many much more successful YC alums than sama yet PG essentially chose him as his successor. It's not unheard of but you'd expect merit amongst startup founders to be rooted in their ability to build large companies and not on other qualifications or abilities in the abstract.
I don't think this is accurate. The first time I did YC they took 7% (2008). The second time PG offered me 3%. This was 2009, after SamA did YC.
Your assumption has to the best of my knowledge no basis in fact.
I also vouched for your comment here: https://news.ycombinator.com/item?id=34471998, which should not have been flagged.
I disagree because I think stories like this can cause interesting information to rise up. As dang's profile says "Conflict is essential to human life"
Or take the Collison brothers, people talk about them as being out of this world smart as well. They have some great talks about their experience building Stripe and their skills at scaling a business are apparent.
I just haven't seen that or heard about Sam's reputation from anyone but PaulG.
Funny you should say that. OpenAI was launched with a billion dollars in funding. This didn't exactly start out as a bedroom operation.
This isn't the first time this has happened. If you want to come out and make insinuations about a person you should at a minimum flesh out your profile and contribute more than just your 'let's discuss this person' posts and even then it is - in my view - bad form.
edit: absolutely hilarious to see this flagged.
I’ve done a fair bit of open source work and now I work at a FAANG company so I’d like to stay anonymous. Does knowing that make you less likely to flag stuff in the future? It likely shouldn’t…
> there are a few people with such force of will that they're going to get whatever they want.
We discussed nuclear power which was an industry I left but dreamed of building a successful startup in. Sam asked me why I wasn’t building a startup in nuclear power if I thought the technology was so powerful. What I realized in what he was conveying was that if he had the same conviction he would have no doubt about the ability to drive it to success. The more experienced I get the more I value that type of conviction and determination. The more I also see that behavior being rewarded with results.
Folks who truly never compromise or give up are great, except when they pick the wrong horse.
YC is like a doctor which takes a 10% cut of the lifetime earnings of every baby they deliver. Adding some value, yes, and some kids won't earn very much, but the wealth earned by the new human would have almost certainly been earned regardless of the doctor's skill. And this doctor happens to deliver half the babies of the entire state of California.
The cult part was thanks to PaulG. As long as that continues, YC will be successful.
OpenAI was the result of a fear that big tech. was going to monopolize all the fruits from recent deep learning advances, because they had all the data and the money. That was the obvious new hotness to get into. Proprietary AI was an existential risk to VC livelihoods.
My guess is the Sam has a solid combination of vision, determination, intelligence, realism and connections. Strong determination with all those other positive supports can take you a long way.
Sam also got the timing right: doubling down on AI just as the technology was ripe for it to flourish.
I have a lot of complaints about some people at YC (specifically those who say a lot of stuff about people in private—or even worse, on bookface—that they don't say in public, and engage in other childish cowardly behavior), and for all I know SamA has said sh*t about me behind my back (but I don't have any evidence he has ever done so nor do I suspect it), but in all of my interactions with him, he has been generous with his time and helped me figure out some key decisions (like when I was deciding whether to sell to Microsoft in 2014, he did office hours with me and helped me figure it out).
He's also put out a ton of honest, insightful, unique content out there that I've learned a lot from.
I think PG did him no favors by basically saying he was the Lebron James of startups when he was like 20 years old or something, but surprisingly he did live up to the hype.
Definitely someone who is able to see the forest from the trees and identify where the key roots are and act accordingly.
The bigger question is why so many still believe in the myth of meritocracy [1]. Altman, if he failed upward, is not an isolated incident. It is not.
The common traits of "success" here are more closely aligned to sociopathy and narcissism [2]. Look no further than Elon Musk, the once richest man in the world.
[1]: https://www.theguardian.com/news/2018/oct/19/the-myth-of-mer...
[2]: https://www.forbes.com/sites/jackmccullough/2019/12/09/the-p...
I just saw Sam Altman speak at YCNYC and I was impressed. I have never actually met him or heard him speak before Monday, but one of his stories really stuck out and went something like this:
"We were trying to get a big client for weeks, and they said no and went with a competitor. The competitor already had a terms sheet from the company were we trying to sign up. It was real serious.
We were devastated, but we decided to fly down and sit in their lobby until they would meet with us. So they finally let us talk to them after most of the day.
We then had a few more meetings, and the company wanted to come visit our offices so they could make sure we were a 'real' company. At that time, we were only 5 guys. So we hired a bunch of our college friends to 'work' for us for the day so we could look larger than we actually were. It worked, and we got the contract."
I think the reason why PG respects Sam so much is he is charismatic, resourceful, and just overall seems like a genuine person.
Companies can “fail”, for all kinds of reasons, even with perfect execution by the founders. I don’t really know why Loopt failed, but based on sama’s track record since, he is definitely a person who makes a huge impact with whatever he does (even if you think OpenAI hype is overblown, as I do).
https://news.ycombinator.com/item?id=3048944
Yet he admitted to deceiving a customer in that same anecdote
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Edit: Sure, dang. I didn't realize UTF-8 magic was frowned upon. Could be a helpful addition to the guidelines if this is the case.
https://news.ycombinator.com/newsguidelines.html
> we hired a bunch of our college friends to 'work' for us for the day so we could look larger than we actually were
?
It isn't to the same degree as Holmes saying that the blood machines work, but it is in the same direction.
He dropped out of Stanford in 2005, at 19, to co-found Loopt. Yeah, it ultimately failed, but over 7 years they got 5 million users, raised $30 mil in funding, and were acquihired for $43.4 mil.
He was a YC partner at ~25, YC’s president at ~28, and seemed to do a good job leading it for ~5 years. He’s also been pretty personally successful as an Angel investor.
He was an early investor in OpenAI, left YC a few years ago to become their CEO, and they’ve done extremely well under him.
No, he’s not Steve Jobs, Bill Gates, Zuck, etc., but his accomplishments at 37 are pretty damn good. I’m not really seeing how this is failing upwards?
Also, from the outside, he seems to have been an impactful/successful leader at YC and now OpenAI. People who know him personally seem to thing he’s an extremely bright and driven person, and his results at YC and OpenAI indicate they’re probably on to something.
If I could, I'd rephrase my question of what makes him stand out from all the other thousands of people who have sold companies for ~10m net? From an outside perspective it looks like the biggest success of his career pre-open AI was getting PaulG to like him a lot.
Hence why I'm asking if others can vouch for him being brilliant or something.
sold companies for ~10m net
We don't know the exact numbers for this particular case, but you can be sure people lost money. Raising $30m doesn't mean the company was valued at $30m; it means the company was valued at much more. For example if you took $30m in a typical Series A round you'd be valued at $150m. If you then sold for a third of that...
And FWIW, Loopt sold for $43m, but $10m of that went on employee retention. The investors made $3m on their $30m investment. That's an annualized return of 1.3%. It was worse than a zero risk savings account.
Sure, there are other ways of measuring success. Clearly from Altman's view, life has worked out pretty well, presumably in part because of experiences he had and people he met while spending seven years making his investors 1.3%. But doing worse than a savings account is not on it's own a sign that you are a great leader, and clearly Loopt was a failure for its investors.
If you want bigger returns you will have to accept higher risks.
A single starting company is never an alternative investment compared to a much larger spread across a series of established companies.
Investors work with risk by having certain portions of their available capital earmarked for investments in particular risk segments. Typically a large chunk will be allocated in 'safe' (for want of a better word) investments, which may indeed be index funds, real estate or other such. Another portion may be invested in more risky but higher yield such as larger investments in a single blue chip stock that the investors feel good about. And finally there is the bucket 'gambles'. These are considered very high risk and are either huge wins or huge losses, rarely mid range returns, in fact (for the investors, not the founders) they'd rather the company gambles big than to end up playing it safe.
But if such a company is in a spot where it will likely lose it all and then a plan to end up returning the investors just their outlay is already a huge plus, and if they manage to make the investors look good by posting a return, however slim then that will be a much larger win: investors, especially those with LPs do not like to post write-offs not because of their own book (they pocket their management fees regardless) but because it will impact their ability to raise again.
I should probably write a blog post on this one of these days.
Only in a perfectly spherical economic market. In an efficient market rewards are a function of risk. Lots of founders talk about their secret sauce: information they knew that other competitors did not. Information is not equally known, and economic rents exist, so there are areas where bigger returns are available for less risk. And there are definitely lots of examples where high risks do not have expected high returns!
I've come across this a couple of times but in 15 years and 200+ companies not often enough to see it as the big differentiator for success or something that negates the usual risk/reward trade off.
How does your own age 19 to 26 compare to starting a company, raising $30MM, gaining 5 million users, and eventually selling for a profit? I know I don't compare at all.
a super-rich dude might need to work hard, or not, but your born circumstances largely predict your success, imo, as seems to be pointed out by science/stats.
but i figure the key ingredients to getting rich, esp without accomplishing 'much' in a traditional sense, are:
after that, you've got a real good chance of BIG FINANCIAL SUCCESS, if that's your thing.add Stanford, and now you're virtually guaranteed big/huge financial success -- the only question now is how successful/rich do you want to be, and how quickly?
just my take.
i just feel like OP was probably looking for a "BUT WHAT DID HE _DO_??"-type of explanation, and i'm like, well, did he meet the prerequisites -- i.e. what were the circumstances of his birth/upbringing? if so, he was born in the top 1% of the top 1% of the global population -- that's a pretty good start.
i don't know anything about Sam's particular situation other than what comments said here.
i do enjoy learning about people who fail upwards or just do really well after having not done much -- you can see if it fits into your worldview, and if not, learn and change your worldview.
ditto the stories of the lower-class-born people who make it big - someone maybe like Mark Cuban (or sam altman? no idea of his bg).
and groups of people with non-white skin -- say, Asian Indian Americans -- being able to overcome racism is great, but it should not be required, and they had some advantages:
https://www.theatlantic.com/magazine/archive/2021/01/the-mak...
https://archive.ph/ih2Sa
On top of that, you roll out a quote to trivialize a group’s success due to hard work and determination as “social engineering”.
If we had been talking about the Jewish community and you had used that quote, I think many would consider you a bigot, but currently it’s more socially acceptable to attack Indian Americans
As an Asian American you absolutely can attribute our success to "social engineering", we went from rail road workers to laundry mat owners to Harvard graduates. You can't have these kind of change on the societal perception level without some kind of engineering.
He is doing one thing well though - keeping Facebook completely in his grip, despite his shortcomings...
- Ability to promote a company vision (even if you didn’t invent that vision)
- Ability to recognize and recruit excellent high-level leaders
- Ability to raise money by selling a company vision and instill confidence in investors
- Ability to sell product at the highest levels (e.g manage acquisition, sell to ultra-large organizations, get special gov treatment, whatever “big” sale matters most to the company)
- Ability to crisis manage in the short and long run
As far as I can tell, Sam had a lot of experience in the above in his time at YC and his own startup. On top of this, he had enough connections to get him into the pool of candidates and it looks like a lot of very smart/powerful people in SV are impressed by him when they meet or work with him. Seems like a very good choice to lead to me.
I know it’s Silicon Valley koolaide that good hackers == good CEOs, but it’s not true.
http://paulgraham.com/fundraising.html
it's who you know, not what you know.
EQ is a stronger kung fu than IQ by far. The ability to networking has not only longer lasting effect but greater than any knowledge you can have. I.E. Elon, Zuck, Jobs, Gates etc....