"If you look at the lists of the richest people that occasionally get published in the press, nearly all of them did it by starting their own companies."
"Of the 137 people in the global study who achieved billionaire status in the 12-month study period, 53 of them inherited $150.8 billion collectively, more than the $140.7 billion that was earned by the 84 new self-made billionaires in the same time period, the UBS study says.Nov 30, 2023"
And still not taking into consideration that the majority of those "self-made" billionaires anyway inherited many privileges from their parents that helped them to "self make".
Maybe merely having a billion dollars isn't what pg was thinking of when talking about "the richest people". If you look at the top 100, like he quotes in his article, only 27 inherited their fortune.
Maybe only 27 inherited large fortunes, but many more started at a much more privileged position than anyone in the rooms Paul is talking to. Maybe they're not from billionaire families, but almost all of them come from families the top 1-3% in terms of wealth.
Who was he talking to? I have no idea what kids pg was talking to, but if it was to peers of his own kids, chances are they are already firmly in the 1%. In any case, to go from top 1-3% to the top 0.0000001% is still incredibly rare and noteworthy. Just because it is easier to do that than go from the top 50th% to the top 0.0000001% doesn't mean it is actually easy.
"Of the 137 people in the global study who achieved billionaire status in the 12-month study period, 53 of them inherited $150.8 billion collectively, more than the $140.7 billion that was earned by the 84 new self-made billionaires in the same time period, the UBS study says.Nov 30, 2023"
He left out the part about starting your company at a unique point in history where a generational technology shift was taking place that also happens to be a time when antitrust laws had recently been enforced (making your main competitor wary) but were about to be completely ignored for the next 20 years, so you could exploit your initial market position and engage in anti-competitive behavior to grow huge.
Or the part where your parents are professors and provide the educational opportunities and financial freedom to take risks that 99% of people don't have.
I don't mean that to even sound bitter or cynical, but it's just a fact if you look at most founders, even the ones that fail miserably.
There is always an excuse. The parents are professors, or upper middle class dentists, or your mom does charity for United Way and managed to become the leader of the charitable organization and managed to meet some exec from IBM. Given how diverse these professions are and that they basically describe a slightly upper middle class family, im gonna guess their children account for more than 1%.
> It's more exciting to work on your own project than someone else's. And you can also get a lot richer. In fact, this is the standard way to get really rich. If you look at the lists of the richest people that occasionally get published in the press, nearly all of them did it by starting their own companies.
People like Paul Graham telling 14-year-olds that basically getting rich is the most important thing is one of the reasons we got into this late-stage capitalism nightmare in the first place. Fuck this.
Edit: Sorry, to update after my rant. So many things wrong with this advice. For most people, starting a company is not the best path to happiness. Sure, if you have a job, there's a "boss" that tells you what to do as Graham notes, but if you think for a second you can do whatever the fuck you want when you start your own company, you're dead wrong. Of course, Graham knows this.
He's telling kids that they don't have to get a job, and one of the key objections is obviously going to be "but how will I get money". The emphasis in the essay is not getting rich, it's that it's a much more interesting path. And it is.
And then they hit the reality that thier startup is going to fail, even if they get funding in a non zero interest rate environment and they would have been better off just “grinding leetCode and working for a FAANG” (tm r/cscareerquestions) or even just working as a CRUD/Enterprise Corp dev and still be able to make the median household income in the US a couple of years out of school
They might have been better off financially - statistically, they probably would've been. But even my failed startups were more rewarding experiences by far than working in large companies.
And it doesn't preclude you from going and getting paid too much at a big tech co afterwards if it doesn't work. This field has been so lucrative recently that you can generally afford to not be earning at peak potential for a bit, so why not roam free for at least a bit, and let your interest take you where it will, rather than doing something you describe as a grind, just to earn the privilege to go sit in meetings for most of the day and count the years till you can afford retirement?
Yes, I am blessed to have wonderful parents who would let me move back in. Fortunately, I only got to the "crashing on friends' couches and at my girlfriend/now wife's place" phase. Great way to tell if someone's worth marrying, by the way, partly moving in while appearing to have slim financial prospects.
Obviously it's not right for everyone, nothing is. But it's right for more people than the number who do it, and it's worth letting the others know it's an option. A similar talk by PG at my university is why I realized that this was a realistic option, and I'm incredibly grateful he gave it.
So the secret of being able to fail at a startup is being able to sponge off of other people who do have jobs at the types of companies you want to avoid working for?
Well, I didn't fail in that case, the company started making money, and they were repaid handsomely. But yeah, having a familial, social, or financial safety net is pretty important. If you never want to have to depend on anyone, or can't for whatever reason, then sure, play it safe. Sounds like you'd judge yourself harshly for taking this sort of risk.
You just admitted that in no case whether you succeeded or failed were you in any danger of being homeless and hungry because you were being supported by people who were willing to “grind it out” in corporate America.
When Paul Graham is saying this is a talk he gives to 14 and 15 year olds, let's think of who those kids are exactly. There is zero chance he is giving this advice to a general audience at some arbitrary high school, much less students from even a modestly disadvantaged background. People at those places don't know or, even if they did know, wouldn't care who Paul Graham is. No, he's at the school his kids go to. The students are all in the same affluent circles as he is.
This is a pep talk for trust fund kids who can afford to mess around with start ups. It's probably lousy advice for most people outside the affluenza bubble.
It's even worse than that. Not only is he saying that, he's parroting the bullshit idea that "starting your own company" is the relevant skillset, rather than "absolutely ruthlessly exploiting every moral and legal grey area to hoard as much value for yourself as possible with extreme urgency."
But I mean this is the guy that foisted Sam Altman onto the world, so clearly he already knows that. Which makes an article like this understandable as the propaganda that it is.
You don't write an article like this to influence kids, you write it to rationalize the giant pile of money you find yourself sitting on.
14 year old need good role models (preferably from their trusted social circles). These people should, ideally before the child turns 14, give him or her a strong moral framework to judge advice that they might come across.
On the topic of being rich (which can be a good goal if pursued along with a strong moral compass), it's much better to take advice from a Paul Graham rather from some grifter selling courses on "how to be a rich as me" on the net.
Yes. I think this is genuinely under emphasised. However, when one's risk tolerance is high, there's a lot to be gained from even a failed startup. There's not much to be gained from repeatedly buying and losing at the lottery.
It is in a way. I couldn't jump into the startup world because I had financial commitments that necessitated an income. Several of my friends who didn't have that burden started companies.
* Inequality in societies is as large as ever, and inequality is one of the main predcitors how happy a society is
* Influence of people and corporations with money on politics and society is unprecedented (i.e. lobbyism)
* In the US, but also in many Western European "developed" countries, basic human rights like education, health, housing and food are fucked by capitalism
PG is putting a big emphasis on getting rich and building your own company. Better advice for 14-year-olds would be, just off the top of my head:
* Money is important, but it's not the most important thing
* You are not your job or your company. Find something interesting to work for, but don't define yourself over it
* Participating democray is important: Fight for a more equal society and help make your community better
* Don't focus your education on one hard skill like computer science. Learn about arts, literature, philosophy and all other things that interest you
He said "more exciting" at the beginning of your quote. And if the 14-year-olds somehow don't already want to be rich, how is Paul Graham telling them how to do it going to teach them that it is the most important thing?
Many people seem to survive 7 hours of advice on how to write properly, solve math problems, and understand history and science for 175 days a year over 12 of their most impressionable years without thinking any of those things are important. That doesn't give me a lot of cause for alarm over a 15 minute Paul Graham talk
>In fact, this is the standard way to get really rich.
No. The standard way of getting "rich" is to get into a good career that pays a lot. Before Silicon Valley, people got "rich" by working at Wall Street, law or Congress. Getting rich through business is a lottery.
I would have attributed this article from Graham to relative inexperience had he written this early on, say in the 2000s. But him writing this now is just bad-faith preaching intended to give VCs another lottery ticket with a very low success probability of forming a unicorn.
And for the record, 14 and 15 year olds, the best way to get rich is still Wall Street, Congress or law.
> The standard way of getting "rich" is to get into a good career that
> pays a lot. Before Silicon Valley, people got "rich" by working at
> Wall Street, law or Congress
I'm afraid this isn't really true. Through most of the industrial revolution and after (i.e. after the early 1800's), professionals (lawyers, bankers, accountants, doctors, etc.) made a smaller multiple of unskilled labor wages than they do today. In America at least, the way to get "rich" has always been to start your own business.
This was true in the 1800's and it's true today. There have been repeated waves of change as new technologies spread: textile mills, cotton production, mining, railroads, telecom, electricity, appliances, automobiles, department stores, advertising, aviation, broadcasting, computing, etc, etc. Each wave of innovation saw the creation of thousands of new businesses. Sure most eventually fail, but hundreds did pretty well and a handful got insanely wealthy.
American culture and laws (usually) rewards this sort of risky behavior. One can debate whether it's, moral, just, or good for society. But generally speaking, not much has changed wrt this facet of our culture over the last 200 years.
How many businesses succeed enough to make you millions? Most businesses are loss making entities, still more are just subsistence businesses. The ones which make you "rich" will still only make you worth a few millions, not what Paul Graham is referring to as "rich". You could get that same level of "rich" by working in Big Tech in a cushiony job, Wall Street, law or Congress (lobbyist or Congressman). Getting to what PG calls rich is just a lottery game in the big picture of things.
I've started one of the "small rich" businesses before, and made a few millions out of it when I was too young. Those millions enabled me to make certain bets that, though risky, would still have a huge upside. That huge upside allowed me to make very good money, the kind of "rich" that PG actually means, without the risk that comes with starting up a business that your VCs want to push to unicorn status. That's basically what most sensible rich folks in America have done, even the ones that you celebrate in your comment. And yet they'll all send their kids to Harvard and Stanford to attend MBAs and grad school because they don't want to put their kid's futures to the whims of a lottery.
"Making your first million is the hardest, so start with a second million." - Arnold Schwarzenegger
Most people are rich because they were born rich. Very few millionaires and billionaires were middle-class or poor and then started a company to get rich. And even those had an unfair advantage (e.g., born at the right time, at the right place, have the "right" genetic makeup, etc.).
There's another comment here that links to staticstics regarding this topic here somewhere
> People like Paul Graham telling 14-year-olds that basically getting rich is the most important thing is one of the reasons we got into this late-stage capitalism nightmare in the first place.
I don't think that's a fair summary of the article. Yes, he says you can get rich. But he also says, and says first, that it's less annoying and more fun (and also more actual work).
Then for the rest of the article, he doesn't harp on "you can get rich". He talks about getting good at some technology, and doing projects because they're interesting, and finding other people to do things with.
> but if you think for a second you can do whatever the fuck you want when you start your own company
I know too many people born rich who think exactly this. And in their experience it works like that; they have no money stress anyway, take a little bit more risk and if it fails, well, they just fold and brag about ‘at least I tried’ and then try again or, you know, sit on the boat and get slobbered. Same thing. The rest of us don’t quite have this and especially bootstrapping your own company is hard, really hard; you will be doing a great deal of things that have nothing to do with what you want or set out to do and those probably turn out to be more important than what you started it for.
Leetcode style interviews were always a reasonable option for a particular type of company. But they became a trend for companies that weren't a good fit.
Sadly, yes, at least for a certain type of job. Probably not the best, but considering the effort involved on the part of the employer (ie very little) combined with the result, it's pretty good. Anything better requires a ton more effort (work trials) and/or doesn't scale well (personal referrals).
If you consider that >10 years ago there were blog posts talking about how hard the "FizzBuzz" question was to implement when asked in-person as a way to demonstrate how you approach solving problems, there's definitely a reasonable assertion that these types of interviewing methods help weed out applicants unable to write basic compound statements. Might not be the best way as a single pass/fail criterion though.
>It's more exciting to work on your own project than someone else's. And you can also get a lot richer. In fact, this is the standard way to get really rich.
> You might have thought I was joking when I said I was going to tell you how to start Google. You might be thinking "How could we start Google?" But that's effectively what the people who did start Google were thinking before they started it.
We shouldn't be telling young people to start companies like Google or to aim for being really rich in the first place. We should be teaching children how to be more sustainable. Companies like Google are a net harm to society and the really rich like Sergey Brin and Larry Page are parasites, promoting the unsustainable ruthless capitalism that has caused the immense climactic problems of the world today.
- I agree that we shouldn‘t tell young people to aim for companies like Google / aim to get really really rich
- I agree that we should tell young children to aim for sustainable companies
- I at least partially disagree with warning against the unsustainable ruthless capitalism in case your sustainable ideas do get really big. Some companies would get really really big, and I would prefer to see those reaching there to be those who had a (comparatively) caring mind (the others would not listen anyway)
- but I would agree to explain young children that what and where they buy does impact climatic problems. And that supporting small-medium sized companies (or creating one) is the most beneficial for our future
Ok, so I am having a hard time buying the idea that just make a fun project if you want to create a something like 'Google'. Startup 101 teaches us that you need to solve a painful problem that lot of people have, that is the best way to create 'Google', so isn't the advise contradictory?
- Work on a personal project that is motivating to you (obviously you won't work on it if it's not motivating to you)
- It's a good sign if the project you're motivated to work on solves a problem that you and your friends care a lot about, because there's a good chance many more people will also want that problem solved and will buy/use your product.
Sure, plenty of big companies were started via different paths, but not many were founded by kids barely out of high school.
Also, Larry was 23 when PageRank was first published - that's not much older than "barely out of high school", even if we have to be so literal about everything :)
As long as Paul Graham doesn't tell the truth that most if not all school kids won't ever make the next Google, then I'm okay with influencers (like Paul Graham, for instance) lying about the possibility of enormous opportunities being available to people.
Yes. I was reinforcing your point. Not even the example he uses is directly applicable to the audience. Just out of highschool and 6 years in one of the most rigorous CS programs are very different.
I don't think there is a contradiction. The argument is that building fun projects helps you gain expertise to the point where you can more easily recognize painful problems to solve.
This advice is for 14/15 year olds. I think the advice would be different for 22-year-olds. It would be different still for 35-year-olds.
22-year-olds have a hard time selling to enterprises, 14-year-olds will find it impossible. Whereas if they build something cool that they and their friends love they will gain many of the skills that might be useful later on.
PG has made the point many times that the superpower 22-year-olds have is that they can live on ramen and work 16 hours a day. The superpower that 14-year-olds have is that (in many cases) they don't even need to find the $1,000 a month to survive.
Compared to my 25 and 15 year old self, my 35 (now 40) self is a lot wiser in terms of dealing with people, applying humility and being crisp on the wide gulf between "what I find is worth doing at the moment" and "what's valuable." I think these are all hugely valuable and serve me well.
I don't think of humility as a soft skill, it's an internal assumption about where the ultimate truth resides based on which you reason and engage with reality.
Man even once AI takes all our jobs or whatever there's still gonna be 8 billion people wandering around. We're still gonna need to talk to each other.
Viewing things like wisdom, patience, discipline, and humility as both "soft" and "skills" is one of the single most problematic aspects of the tech industry.
I am not seeing any mention of a certain US security state 'investor'that gave them a bunch of money and PR, either in the article or in comments. I suppose it's uncouth within polite company to speak of such things.
We now have a single organization shaping the information access patterns of the people all over the world ostensibly paid by ads. Right.
Trying to solve people’s painful problems is an exercise in futility unless you’re already very good at solving problems. And you don’t get good at solving problems by sitting and twiddling your thumbs until a sufficiently worthy problem drops into your lap.
He says you have to be interested in it, it should excite you, and it should be your own project.
That’s absolutely not at odds with solving a problem. In fact, there’s a good chance that people are interested in solving a problem, likely one that is painful to you.
> So Mark Zuckerberg shows up at Harvard in 2003, and the university still hasn't gotten the facebook online. [...] But Mark is a programmer. He looks at this situation and thinks "Well, this is stupid. I could write a program to fix this in one night. Just let people upload their own photos and then combine the data into a new site for the whole university." So he does. And almost literally overnight he has thousands of users.
You are too kind. It's a complete lie, or worse, utter BS fabricated to back up the OP argument. Zuckerberg stole photos (and the website name!) from the already existing online facebook.
Facebook was actually based on something he was hired by Winklevoss to create, and he decided to keep it for himself instead of delivering it. That's the "naughtiness" that YC seeks out in its Founder application process.
Note, by the way, in the recent "cancellation" of President Gay, the false claim that behavior like this would get a Harvard student expelled (although Zuck did end up "expelling" himself.)
While I agree with a lot of the criticisms that have been posted here (first and foremost that it is exceedingly bad advice to take advice on being successful from someone who is like six sigmas to the right of the curve on how their efforts were rewarded - it's like reading from Taylor Swift or Simone Biles or Usain Bolt about "to succeed you just need hard work and to believe!". As it's taken many, many years of therapy for me to internalize, if you get the majority of your self-worth through what you do, you're gonna have a bad time...) I think it's also a good idea to keep in mind the general HN guideline of "Please respond to the strongest plausible interpretation of what someone says."
In that sense, I do strongly agree with the overall conclusion, "That's it, just two things, build stuff and do well in school." Building stuff for your own edification, and soaking up as much knowledge and relationships while you're in school, is really sound advice that works regardless of your end goal.
> soaking up as much knowledge and relationships while you're in school
A family friend was recently admitted to a magnet school - it's not like an Ivy League level institution, but it's fairly prestigious in the area, and not easy to get to. I need to make sure to remind him that while it's good that he's feeling academically challenged, he should also focus on building friendships with people who are statistically likely (much as he is, tbh) to be successful in life - they can help pull him up when he's down, and he can do the same for them.
I didn't get that much out of college, academically - but the relationships I built there got me my first two jobs, and I still treasure the friends I made there.
Aristotle said friendships were the best example of happiness in life - not fame or success which rarely lead to happiness or even social benefit. Friendship is the best example because that's the only way to not only exercise your curiosity and virtues, but do so in knowing concert with people who understand and appreciate what you're doing, who are entirely different beings. I would hope that even high-achieving friendships can be built not on mutual utility but on common interest and expression.
> I think it's also a good idea to keep in mind the general HN guideline of "Please respond to the strongest plausible interpretation of what someone says."
"strongest" is highly subjective. I also don't think we should make things up and pretend the other person said them, which is much more commonly used to strawman, but steelmanning involves the same process.
My point is that the probability of getting that rich is really low. You need to combine hard work with incredible luck. A very few percentage will get 100x richer than a FAANG engineer.
A typical founder, 10 years in, is less rich than he could have been if he had taken a high paid tech job.
But anyway, PG is saying the same thing he's been saying for years. He wants people to launch startups, and he wants them to shoot for the moon with VC money. He has no interest in bootstrapped companies. Because he's a VC, so he's talking in his own interest first and foremost.
Take the old comparison between Gates and Jordan. "If Jordan saves 100% of his income for the next 450 years, he'll still have less than Bill Gates has today."
You can become wealthy and comfortable working for a salary. But, the canonical way to get "FU money" is to win the lottery.
I agree, and the reason is housing. If housing in this country wasn't fucked up I think it would be possible. As of now, to do this as a janitor you would need to live with roommates or family. You would also need to avoid smoking, alcohol, gambling, and any other money sinks. Then you would need to invest all your savings for years.
Housing cost is the single defining factor in retirability now and if you're a janitor, you seriously need to consider where you are living, because moving from a VHCOL state to a lower one could be all you need.
Sure the pay is lower, but the housing costs are substantially lower.
Fun fact, this converges quickly to 1-1/e ~ 0.632.
If you had a 1 in a million chance of winning something and you tried a million times, the chance of winning once is about 63.2%, not much different from when n=100.
I always wondered why people would ask to analyse the chances of a coinflip during logical interviews, according to you, after 2 flips you have both result happening? Its not like that, if you have 1 in 100 chances of making it, each time you re try you have a 1 in 100 chances
right, parent probably isn't aware of complement rule. Sibling comment properly calculated 63.4% probability of at least one success in 100 trials where each has 1% of success.
Parent here :) Yeah i am, but i think the thing few consider (although some did provide the remark here) was that while the chances are good (given infinite time), the reality is no one has that.
So yeah, give someone 500 years, hopefully they keep going at it and the odds play out...but in the lets call it 50 productive years I feel I probably have been given, plus a few distractions along the way, there are maybe 5-10 serious bets one can place? Feels like that needs to be considered in conjunction with the mathematical probability "just keep trying" misleads us to believe.
10 coin flips can happen in less time than it took to type this reply. Those odds are a little more predictable because of the time span involved.
I think each earnest attempt would probably occupy about 3 years of your lifespan, so you probably can try at most 20 times. If these are independent, then it's still an 82% chance of failure. But successive attempts after repeated failures might also make it harder to attract confidence from investors, not to mention loss of your own self-confidence. And if you finally succeed in founding Google when you're 80, you might find that you don't have that much use for the money anymore, nor much interest in running Google.
Ask anyone who has ever failed at a startup before, how easy it is to get funding again. VC's would rather take a chance on someone they don't know vs. rip open old emotional bags with a failed founder.
As someone thats on startup #7 and is ~37 years old I can attest to this: I have had 5 flat out failures, 1 break even experience and 1 life changing experience (I don't own a private jet unfortunately). I'm fucking tired. I really hope theres something huge in the future, but the reality is I struggle to believe I have enough left in me to finish this one, let alone more.
Also, I'm just more interested in family and enjoying the mobility of the youth I have left, much more than chasing down unlimited resources.
Apart from the math being off there, who do you know who has the time and resources to try and start 100 startups? Most people barely have the time and resources for 1.
Yeah so i didn't put it well, but that was literally my point. Feels very "developer brain" of us to say "thats technically possible, heres the math and you're thinking about it wrong" and not consider the human aspect.
You're mixing up percent that succeed (a statistic) with percent chance of success (a probability). IOW, the fact that 1% of businesses succeed does not mean that a particular business has a 1% chance of success. The reason is that business success is not a function of pure random chance (like a die roll). Sure there are random factors but there are also non-random factors (which, IMO, dominate). The problem is that there is no way to determine what your business's chance of success actually is.
The thing is you don't start with a 1:100 shot of becoming Google. You, hopefully, level up each shot you get. Your first shot, you'll probably make something no one wants. The second time, you can't figure out how to get anyone to pay attention to you. The third time, you can't get enough people to hand over their cash for it. The fourth time...
Each time, you learn and get better, your odds go up. Now the real question is whether your odds are going from 1:1000 to 1:100 or from 1:100 to 10:100?
I wonder, over the course of a career in startups, what is the probability that you'll either found or be an early employee at one that makes up (financially) for the rest? Not hugely rich, but better than "normal" career.
Given it's a repeated game, and you gain knowledge at each round, I'd say the odds are probably pretty good that the highly dynamic / fast learning environment of early companies yields returns over a lifetime.
Well you can calculate that somewhat, right. If you're "top-1%" in skill, enough to get hired at Google (even if you did it for the badge), then did you or did you not start a business?
Google: 180,000 employees. Let's say including ex-employees 250,000
These started 1,200 companies, according to the only source I could find. These collectively apparently made their founders ~20 billion. Let's say (heh) that it's a power law, let's say the top 10 got 1 billion each.
So we're talking the odds for an "average" software engineer to get to 1 billion is about 0.1% * 10/180000 = 0.000005556%, or about 1 in 18 million.
Odds for a current or ex-Google engineer: 1 in 18,000.
The number of billionaires yc has produced in 4000 or so startups (with many future billionaires in the pipeline) suggests your numbers are off by, what, 100x? If we assume that a Google Engineer is as qualified as a yc founder, which isn’t quite true but still.
The challenge here is not simply being in the right startup but having the right combination of startup founders (& contributors) for that particular idea at that particular time. Now, it's not like there's only one great fit for each role, but it's far from rolling a d100 too.
I agree most startups fail, but no they don't die a horrible death nor do the majority of them earn no money for their founders. Many founders could have made more money through traditional employment, but you'll find very few startup founders are actually poor or become poor due to a startup.
There is an opportunity cost to starting your own company, but it's not some kind of horrible experience that will drive you to bankruptcy unless you're part of the 1% who manages a spectacular exit.
I was sad to search for the word "luck" and come up empty. You can do everything right and still fail. You can do everything wrong and win. Sometimes you're just in the right place at the right time, and that external factor is completely out of your control and can be the difference you need.
use the knowledge that your plans may not succeed despite your best efforts to set expectations so that you are not emotionally devastated if this happens, and so that you are prepared in other ways as well.
take the shot, but have a back-up plan, basically.
Learn how to manage bets. Some people have the resources to fail many times and keep going. Others do not. Knowing that a huge portion of starting a business is luck, you can better weigh your options and hopefully select different opportunities depending on your situation.
And, in the unfortunately common case, recognize when you cannot take any bets and instead focus on getting yourself to a place where you can, rather than betting everything and losing everything.
A 15-year-old hearing this talk from Graham as-is might take from it, "wow, if I learn programming, work on things that interest me, do well in school, and go to a good university, I'm guaranteed to build a Google-scale successful startup!"
Telling that kid that there's also a component of luck involved, and that the vast majority of startups fail, would temper that enthusiasm in a much more honest way. If that means fewer kids decide to start companies, that's obviously a negative in Graham's book, but may not be a negative for those kids themselves.
I think it's a jump to assume the kid will believe there is a _guarantee_
If the kid is motivated from this essay to learn programming, work on things that interest them, do well in school, and go to a good university -- I think they're well setup for success in their life.
- discount the useless advice you get from people who got lucky and are unaware of this fact
- target trying to be in the right place at the right time and have a plan B if you don't get lucky, rather than waking up at 0400 every day to eat raw eggs or whatever
- respect yourself and your employees more
- be more generous with what luck brings you
etc etc etc
a much better question is why do YC and co not talk about luck and connections more? why do they pretend it's all some imaginary meritocracy rather than hugely dependent on going to the right school / being born into the right social class, and then hugely advantaged by having YC's name recognition and tame lendors attached?
Just to follow up, we’re discussing advice to young teenagers here.
I think it’s reasonable to inspire more than hedge. They’ll presumably already hear lots about what the least risky things to do are from many, many sources — that’s the default.
Yes, ive played professionally. To be charitable I’ll explain it to you. In poker you play a massive number of hands and if you are good you play a preplanned strategy and sometimes when following that strategy you lose but over the long run, assuming you are playing a winning strategy, you make money.
The luck is seen in the short term fluctuations but over the long run when executing your strategy there is no luck.
This requires proper bankroll management among other things.
Also starting a business is easier than poker, poker is zero sum (more often negative sum due to rake).
Business is positive sum. What this means is people will gladly hand you money if your product generates more value for them than holding that money does. In poker, every single hand is like a fist fight because there is always a loser in every hand.
Poker is actually a good analogy. It is luck in the short term but skill over the long term. You can't confidently predict that you will win any specific upcoming hand but, given a particular set of opponents, you can reasonably predict whether you will be up or down over a number of hands. I may beat Chris Moneymaker on a hand or two but he's going to take all my money over the long haul.
The insight here is to only play in games that you have the advantage (or are at least evenly matched) and be very, very careful not to put yourself in a position to go bust on any one hand.
I completely agree with the sentiment, and as someone who’s mostly focused on a startup for pro poker players to study game theory more effectively (https://www.livepokertheory.com) , I find countless parallels between poker and entrepreneurship.
Also, people don’t realize that startups aren’t one single event. There’s a million events and each one has its own luck. For example, you make a piece of content marketing there’s luck in whether it performs well, but that luck can be managed and the risk spread across many events by doing lots of small pieces of content marketing.
I also wrote a blog post about how a popular psychology book oriented towards poker pros (The Mental Game of Poker) can be easily reframed for entrepreneurs:
With all that said, it’s highly ironic you picked Moneymaker as your example poker pro, since he’s famous in the poker world for being a very bad amateur player who got extremely lucky at the perfect time . It’s a bit like talking about the importance of hard work and deep technology skills for founders, and using Adam Neumann and WeWork as your example of that.
> it’s highly ironic you picked Moneymaker as your example poker pro, since he’s famous in the poker world for being a very bad amateur player who got extremely lucky at the perfect time
You may be overly generous in your estimation of MY poker skills! However bad Chris is, I am sure I am not anywhere close.
The problem with this is that attempting a startup takes 2-10 years, while a poker hand takes a few minutes. Poker would be a lot more luck based if you only played 20 hands and then stopped.
Maybe don't start a startup, because you do not have the connections or resources necessary to make it successful. Same with any other "speculative" venture: it's dominated by insiders who know how to minimize risk to a point it no longer becomes speculative.
Maybe start an actual, scaleable business that makes money. It's not sexy, but it's within the realm of possibility to get it off the ground yourself; and usually those within the gilded class are not interested in such things.
If you're a regular schmuck, maybe take a page from the countless immigrants in the U.S. that start various businesses (trade, real estate, etc.) that make them enough money to allow them to live like kings back in their home countries.
There's something to be said about the severe glaucoma of understanding class in the U.S. Very few (notably the middle class) are willing to internalize they're serfs, whose current comfort is more a product of luck than anything more. It's a precarious situation, and any notions of aspiring to "life satisfaction" or other leisure-class values is just foolish, in my opinion.
Agree but he doesn't do this because he makes money because people try this. Like other vcs he doesn't really care if the vast majority fail as long as he makes bank on a few who dont' fail.
That's a prism it's really worth applying to all advice given by VCs: What's the outcome for me if I fail vs what's the outcome for them if I fail?
> "The National Science Foundation led the multi-agency Digital Library Initiative (DLI) that, in 1994, made its first six awards. One of those awards supported a Stanford University project led by professors Hector Garcia-Molina and Terry Winograd... Around the same time, one of the graduate students funded under the NSF-supported DLI project at Stanford took an interest in the Web as a "collection." The student was Larry Page.... Page was soon joined by Sergey Brin, another Stanford graduate student working on the DLI project. (Brin was supported by an NSF Graduate Student Fellowship.)"
Under a rational and fair approach to patents, anything created with taxpayer funds would be available to all American businesses under a non-exclusive licensing program. However, in the 1980s, Bayh-Dole was pushed through which allowed exclusive licensing of those inventions to private parties. This is nothing but theft from the taxpayer, the entity who funds the NSF, which funded this research effort, which generated PageRank.
As a result, Google didn't face market competition for some time, and was able to create a monopolistic situation, and as with all monopolies, this resulted in the degradation of their product, which is why, as everyone seems to agree, Google search results are much worse today than they used to be.
[edit: contemplate the outcome if Brin & Page had instead invented PageRank as Apple or Microsoft employees - would they have been able to run off with the IP and found a company?]
The PageRank patent expired 5 years ago, and frankly a lot of other search engines were copying the method a long time before that. Search results have been deteriorating since "SEO" became a thing.
If PageRank had been available to all US companies who wanted to build a search engine around it at the time of publication, then we might have a half-dozen major search engine-based companies right now, which would be a competitive situation that would drive innovation (and solution of the SEO problem), which is how free market capitalism theory works IIRC.
Since universities are publicly funded by taxpayers, their inventions should be thrown to the capitalist wolves who will compete to provide the best implementation of the idea to the consumers. If the corporations want to instead finance their own research centers, then they'd own all the patents outright - but it's cheaper to steal from the public.
I love the opening because the mission statement of my company has always been "make sure taneq doesn't ever have to go back to a real job". Don't get me wrong, at most points a 'real job' would have been easier but easier wasn't the mission.
This is entirely fair in its goal and perspective.
It's not about starting Koch Industries or Disney.
It's not about some ideal world where connections and funding don't matter.
It's about a kind of productive problem solving that creates value for other people by solving problems they just accept as friction in their lives.
It's insightful in focusing on how projects you love can end up helping others.
But it's a little misleading in that people are listening not because they are doing what they love, but because they want to be successful - ideally to take what they love and turn it into success - according to this plan.
Let's say each year 10,000 people would love to become professional football players, 500 make it to the NFL, and 5 become household names - success stories.
There's no real accounting for the time wasted by the 9,500 doing the extra required not out of enjoyment of the game but to become successful (leaving aside any actual costs like TBI). It's at least an exported cost. But it might have other downstream effects, making someone less confident in their judgement, less likely to engage in making a better world of whatever sort.
One of the Buddhist precepts is not to sell the wine of delusion (in some translations). But it's also soul-killing to tell someone how likely they are to fail; who says that at a wedding? What benefit is that?
Paul Graham made a success of helping others be successful. That's a really good model to consider: to do and teach and help. So I would take this as good teaching for teens.
I was the first graduating class from one of the first public high schools in the country with an IT magnet program.
I remember the program coordinator telling us and our parents in a big presentation that we could be making $70-80k out of high school. He was really selling it.
I was not making anywhere near that out of high school. =P
But I wasn't doing bad either. In fact, I'd had two jobs with tech companies before I even graduated. I had a job lined up in the engineering department of an OEM prior to receiving my high school diploma. That same administrator was always encouraging us, cheering us on with our various projects, helping where he could.
I never thought for a moment I'd been mislead that my salary wasn't that high or that I didn't make it "rich". Any kid who'd sat through a school fundraiser presentation in middle school knows that those awesome prizes of a computer or game console or whatnot is just meant to hype you up. But you might be able to land a CD player. (My age is showing here. =P )
I expect any 14-15yo he's talking to will get the gist. The kids are not stupid. They get the pitch. And I think they intrinsically know the odds too. Those 9,500 football players are not all going to see it as a loss, even if they didn't achieve their ultimate goal. People turn losses into wins and salvage the good from a failed attempt all of the time.
My son is 3, and already has fun mashing computer parts together and wanting to see how things work. I'm excited to see if he wants to do this as well. Will I tell him "Dude, that guy said I'd be making $90k and that was B.S." Nah. I'll give him simple version of Paul's advice. Even if he doesn't go into entrepreneurship, it'll set him up well if he follows it.
It’s so deflating to see both YC & PG focus their content almost solely on the younger generations. As someone who came to tech later in their mid-30s, it’s not hard to feel like expired goods when the “thought leaders” of tech are unabashedly gunning for younger minds with little to no acknowledgement of those who may want to start ventures during later stages of life.
The more I try to plug myself in, the more it seems like starting a company at this age is borderline schizophrenic delusion.
That makes them sound a bit more predatory than the reality of it but I get what you mean. When you're younger, by definition, you've got more shots on goal, you don't have other responsibilities (mortgage, kids, partners etc.) so you can take more riskier decisions, and you more have to rely on first principle thinking instead of experience (because you don't have any).
Saying that, I would like to see the advice for higher age ranges as I have a feeling more successful startups tend to be around there.
As someone of a higher age, I would suggest that we don’t really need any advice.
I read all his essays long ago, when I was young, and it sounded persuading to me. I think it even influenced me here and there. Now, somewhat a decade or two later, I take it with a grain of salt, and don’t get it as it is. Some things are just quite manipulative. I can read them as someone’s point of view, but not as someone I would even listen to, not to say follow the advice. I know much better for myself and what’s around me.
E.g. a man like me would never go to a VC, it’s a waste of my time and energy, and I can easily earn all the money I need to run my idea till the production. Why would I want anyone like him, to give me money and help grow my idea infinitely? People like him are interested in Unicorns, that’s how he multiplies his money, that’s how the system works. People like me are interested in steady, reliable businesses that actually deliver.
Personally, I’m very disappointed with most of the unicorns I used before. They’re non-existent to me. Hence, I wouldn’t listen to people who follow the Unicorns. I think that’s why we don’t have any advice for a higher age.
I think it’s partially because of the nature of VCs (which is partially why I’d never use a vc but rather bootstrap and fail). If your parent organisation’s goal is a 100x return you don’t mind 9/10 startups burning up in an attempt.
YC in that sense is a full “all guns blazing” thing. It’s generally younger folks who don’t mind eating ramen and don’t have to take care of a large family, and hence are more likely to go into a startup full time. Combine these two and I think you see what I mean.
Btw this isn’t a new criticism of YC/VCs, it’s something that’s been around for a while.
Don't be deflated - it is not a negative statement on you. For most people, going the startup route is bad advice. Older people know that and take much more care to set up safety nets for themselves before going into the VC world. I don't want to go so far to say that YC & PC are exploiting the naivety of youth... but they certainly know which demographics will embrace the risk vs. which will not, and they speak accordingly.
I had the same sort of reaction, even though I felt like the article was not intending to invoke that.
Looking back, when I was the age in the article I was way too insecure and nervous to be able to take this advice. Looking at it now I think it is great and want to set my children up with that way of thinking.
I know people mention that this advice smacks of survivorship bias, and I think that's pretty obviously going to be a part of any advice given about economic outcomes whose odds of working out are perhaps a whole order of magnitude better than lottery tickets
I think it's more important to note how talks like this use "children" as an excuse to present a very sanitized version of the history being discussed. I think a massively underappreciated mechanism by which American culture distorts history is by its very lax and sometimes supportive norms about fudging the truth and sometimes even outright lying to children
The biggest thing missing from this talk -- something that would have been easy to include, even for a younger audience -- is that the majority of startups fail, and even many startups that do well enough end up making their founders less money than if they went to work for another company.
It feels irresponsible to tell kids how they can build the next Google, without also telling them how likely it is they won't succeed at it.
Granted, most people in their early 20s have very little to lose, so a failed startup may not be much of a problem, outside of the stress and emotional effects.
I mean, like most advice from my generation and prior ones, the notion that people in their 20s can't fuck up too badly because they have little to lose applies considerably less well to all but the fairly affluent people in their 20s today. For many, taking risks means being gated out of the financial system by bad credit, being behind in an unforgiving job market, and possibly even destitution if they don't have a safety net of some kind
To be clear, this was always true to some degree, but inequality is higher, industries have more power and thus workers have less, and safety nets that don't come from your parents being well-off are weaker (and fewer people's parents are well-off) than when I was a kid, and this has actually been true for a few subsequent generations of kids
The best advice to give children is that they should be born to rich, influential and well-connected parents. That will give them a huge advantage in all walks of life including if they want to start a startup. Larry and Sergei had the benefit of rich, influential and well-connected parents, as did Peter Thiel, Elon Musk, and Paul Graham himself.
I think the place where this is most apparent in the speech is the bit about selective universities. It's interesting the way people like Graham talk about how universities work, because they're actually kind of the primary place where a particular sleight of hand happens. Every very wealthy person I've ever met believes wealth and intelligence to be tightly coupled. Some will even talk about these things as though they're completely equivalent.
Universities kind of double down on this equivalence in some ways, as they are the de facto credentialing system for the job market, although there's some evidence that this is for the first time in quite a while becoming less true in some sectors, it's still a huge part of the reality of how social mobility is gated.
So when Graham frames the role of "selective" universities in the success of various famous startups, he's totally right that they're excellent places to network. But his conception of their selectivity is pretty strange. It's pretty well-understood by now that a lot of mechanisms can get people into great schools via the wealth and influence of their parents rather than "smarts and determination". I once read someone who pointed out that bringing in a few "scholarship" kids who are less well off makes it seem like anyone could get in with the right grades and test scores, and the incentive is to have just enough of these to ambiguate who is there for what reasons. To launder the "wealthy, well-connected" with some "smart, determined" cred. It's telling therefore that he leaves out one of the most important parts of the networking value of universities: They're a great place to meet funders, and the top tier universities also have significant resources to facilitate student projects that may turn into companies, compared to other institutions
Paul is fundamentally wrong with one thiing here: Larry knew google was going to be huge from the beginning. His brother Carl was already a multimillionare in tech and taught him everything required to set up a future successful company.
Larry made it clear to me that he always planned Google to be a large cash-generating cow to invest in long-term AGI and there were only a few times at the beginning when he truly feared that wouldn't happen.
> Paul is fundamentally wrong with one thiing here: Larry knew google was going to be huge from the beginning.
Nobody can know such a thing -- especially turning around a billion-dollar business, a thing with a near-zero prior probability. It's more reasonable to say that Larry had the drive, the aptitude, and the resources to maximize his odds (which would still be low.)
If you're one of the smartest people in the world, working in one of the most impactful areas... the posterior probability is more like 90% than near-zero.
Depends- for example, duirng the time that Google started up, I was in grad school with a great deal of support for starting biotech companies, but when I looked... even the geniuses were struggling because at the time, biotech companies could take a decade or more to be profitable or fail. It was clear, as we were exiting the late 90s dot com crash that the economy and money for tech was going to come back, and companies that took advantage of rapidly increasing specs on cheap machines (versus buying expensive Suns, DECs, or SGIs) were going to be able to scale to immense amounts of traffic, and deliver ads for profit.
I don't think at that time biotech could be considered very impactful. After all, search engines were literally impacting billions of peoples' lives within a few years, but a new drug would take a decade to get to market, and impact "only" millions of people.
Do you have any sources for this? If he knew it was going to be this huge, why were they looking for an acquisition for north of a million dollars? On AGI: are you referencing this clip? [1] To me, it seems like an ordinary vision when you stretch your imagination. He didn't have any realistic idea how Google might achieve AGI, just something that could happen in the future. And this was in 2000. Google, I imagine, was pretty successful by then.
Larry Page's original ambition was to digitize books and knowledge in the world [2].
> Page had always wanted to digitize books. Way back in 1996, the student project that eventually became Google—a “crawler” that would ingest documents and rank them for relevance against a user’s query—was actually conceived as part of an effort “to develop the enabling technologies for a single, integrated and universal digital library.”
my source is larry himself- I used to work there and volunteered at SciFoo, which he attended and I chatted with him about it. The digital library is basically building a corpus for training AGI.
His dad was a computer scientist and larry read a lot of AGI sci fi as a kid, so it's not really that hard to extrapolate 1980s technology to 2040s outcomes.
I'm the same age as Larry and started working in machine learning in the early 90s, and to me, it seemed pretty obvious at the time that AGI would ultimately need a large corpus of text (and video) to be useful. What's kind of funny is the models I worked with at the time- hidden markov models of (biological) text anticipated the validity of this approach, although by design, they don't work with long contexts.
His dad wasn't "just" a computer scientist, he was a professor for computer science and artificial intelligence at Michigan State. Sergey Brin's father was equally a professor in mathematics at the University of Maryland.
> It's obvious in retrospect that this was a great idea for a startup. It wasn't obvious at the time.
It may not have been obvious, but the decision was damn well near as engineered with data as it could be. They also were _insanely_ well connected through their and their parents academic career. Both Sergey and Larry had obtained their PhD prior to starting the company. I can also remember reading that they obtained significant amounts of funding through connections Larry's dad had into the industry.
You can ignore the rest of my comment, what follows is just my take.
Their success story is imo one of the most blatant examples on how privilege really does give you a boost in life. I am not arguing that anyone could have done it, but I do wonder how the world would look like if we were all kids of academics with a successful career, with a relatively safe, secure and stable childhood home and a family background that really incentivizes learning and academic success over succumbing to the pressure of, you know, having an income at some point.
I don't think larry or sergey got their phd - larry got a masters and I think sergey left before he got any degree.
Don't forget that Larry's older brother Carl went through the whole VC process with egroups and gained extreme experience with how to maximize his position in negotiation.
But yes, I agree completely that kids of academics raised in an environment that incentivzes learning is a reliable way to transform the future.
So to correct my original statement: Both have a masters degree and both were pursuing PhD's before they focused on Google. But I consider them more than halfway there, afaik both have published papers separate from the paper that eventually lead to Google. This is taken from their own testimonials from their paper [0]
The timing is a little muddled here - Scott Hassan (who, interestingly enough, wrote most of the original code for Google) founded eGroups with Carl Page in 1997, after working on BackRub/Google. The two should be viewed as parallel projects - Google actually started first, but eGroups raised money first. It’s true that Larry got valuable experience through having his brother raise capital first, but much of that also came from having supportive angels like (Sun founder) Andy Bechtolsteim, (Stanford professor and Granite Systems founder) David Cheriton, (Junglee and Netscape exec) Ram Shriram, and (Amazon founder) Jeff Bezos.
> Their success story is imo one of the most blatant examples on how privilege really does give you a boost in life. I am not arguing that anyone could have done it, but I do wonder how the world would look like if we were all kids of academics with a successful career, with a relatively safe, secure and stable childhood home and a family background that really incentivizes learning and academic success over succumbing to the pressure of, you know, having an income at some point.
I recently read something that played out a thought experiment about "imagine the world could only hold 10,000 people". It may have been a comment somewhere on HN honestly. The idea was that if the world could only hold 10,000 people, there never would have been enough division of basic duties for any one individual to dive so deep that they could invent semi-conductors (insert any modern tech really). I mean we likely wouldn't even have mastered locomotion by now if that was the case.
Lets assume we're "all kids of academics with a successful career, with a relatively safe, secure and stable childhood home and a family background that really incentivizes learning and academic success over succumbing to the pressure of, you know, having an income at some point." Most of us will still just be working on the basic societal problems of producing food and taking out the trash.
> I recently read something that played out a thought experiment
With all due respect, the world isn't a thought experiment and the dynamics of a system with 10.000 people is not comparable to that of 7 billion.
My argument was pointing at the fact that it may be pointless to compare your own plans to success against someone elses success story, when they had completely different starting variables in life and people who refuse to at least consider this are either trapped in the Silicon Valley hustle culture or are, sorry, completely ignorant, bordering on idiotic.
With that same logic ala "Not everyone can be X" I can justify almost all of human suffering in the world. I refuse to believe that you follow an ideology like this if you're on this site, because if you did, you were already rich by means of some criminal enterprise exploiting humans far beyond what tech startups are capable of.
This isn't some appeal to idk, introducing communism and making everyone equal but this argument is as dumb as making a healthy runner compete in the paralympics.
This is what all these blogs don't really mention and I have seen this over and over and over again. You need a fundamental place in society: really high up to attempt to do any of this.
Well you can still be Larry Page's dad (or his grandad) and attempt to give your children a launching place to become Google. Most success have to be built multi generationally.
Also worked at Google in the 00s, and have spoken personally with several people who worked on Google when it was still a Stanford grad project.
To hear Larry tell it, his original idea for Google was to download the whole web and throw away everything but the links, and he was inspired by academic notions of citation indexes. It wasn’t specifically (or really at all, until Google books came out) about books - that sounds like a cover story to get grad student funding for his actual idea, because you can’t really go to a university and say “I want to download the whole web and throw away everything but the links” without telling them why or connecting it to some plausibly useful idea.
The acquisition offer is often cited, but I don’t think Larry and Sergey were ever really serious about taking it. They didn’t, after all. But if you’re living on a grad student stipend (which was like $20k in the 90s), a million bucks is a lot of money.
And they absolutely knew it would be big, they just didn’t know how it would be big. It was quite popular within the Stanford lab as well…it’s interesting, looking through the early CVS commits for Google, how much work was done by people who ended up not actually becoming employees of Google or having a major part in its story. I think the real genius of Google was treating the web as an object that could be studied and manipulated, and not as some amorphous thing you were part of. That was exciting even if people didn’t know how it would be.
In the “Measure What Matters” book the author talks about investing in Google in early 1999, and the founders were indeed projecting billions of dollars in revenue, using ads.
I chatted with him several times. One thing I've noticed is that Larry and Carl both have some behaviors that are consistent with ... inflexible thinking ... that I recognize in myself and have worked to correct.
Anyway ,we chatted about his latest company, which I can't find now. The idea was this: industrial facilities often return really noisy signals on the electrical supply lines, and the electrical company has to do a lot of work to clean it up (hey, I'm not an EE). Like, motors, etc, all severely distort the waveform. So his company made and I guess sold a product that you'd put at your electrical service panel that "cleaned up" the signal before it went back to the power company. In response, the company would give you cheaper power prices.
I was reminded of this when Larry Page met with Donald Trump early in the Trump administration and brought up one of his favorite plans- to rebuild the US electrical grid around DC distribution. He's truly made for another world.
That’s a super thoughtful response, thanks. Also my armchair understanding is that HVDC electric is superior and our electrical grid needs the rework anyways haha
This essay isn't a step-by-step guide to building 'Google', rather, a call for young people to consider entrepreneurship as a fulfilling alternative to traditional careers.
To maximise their chances of success, Paul suggests:
1. Become a builder: Gain expertise in technology or other fields you're passionate about. (Does not have to just be coding, either!)
2. Start personal projects: Build things you and your friends find useful. Paul suggests this is the fastest way to learn and potentially discover startup ideas.
3. Collaborate: Work on projects with like-minded people. This fosters skill development and could lead to finding potential cofounders.
I liked how Paul also emphasises the importance of good grades in order to access top universities, where you'll find other bright collaborators.
There are obviously many other paths, but if I wish I had this advice at 14 or 15.
It might have been better if Paul Graham used one of the companies founded by YCombinator instead, but that would be less impressive to 14 to 15 year olds since those 4000 or so startups are not quite Google-scale yet.
I don't disagree with Paul's choice to focus on entrepreneurship and getting rich here. If you're looking to excite people, tell an exciting story. Captivate imagination. No one gets pumped up (especially at that age) at the mediocre story.
What I find great about his advice is that it is by no means limited to entrepreneurship. Working on passion projects, doing well in school, and learning how to build relationships is valuable even if you're working for someone else.
There's a big space in tech jobs between the "grinding away at code/help desk" and "startup bro" that I feel doesn't get described enough. And that's one thing I'd tack on to Paul's advice, notwithstanding the need to sell the message above. That advice he espouses can also lead to being a really standout contributor at a tech firm, and probably with a higher rate of success than getting a startup to stick. One doesn't have to form a startup to contribute ideas, and there's good money to be made in that space.
I think your choice of wording above is important to call out: The advice "maximizes" the chance of success; but it doesn't guarantee it.
> "I think your choice of wording above is important to call out: The advice "maximizes" the chance of success; but it doesn't guarantee it."
This is a great observation!
I agree that Paul is framing an inspiring narrative, especially when targeting younger people. You're spot on, suggesting that this advice sets people up for success in general, whether they become entrepreneurs, standout employees, or something else entirely.
We need more narratives about those successful 'in-between' tech roles.
Paul's giving the ingredients for good outcomes, but the recipe is up to the individual.
I am baffled by the criticisms of this essay. I can't identify any statements here which are false. We're on hacker news, which is a site about programming and startups and capitalism. There theoretically couldn't be a better audience.
I suppose the strongest criticism would be that pg's advice outlines necessary conditions to start the next Google but are not sufficient. Yes, the stuff you "make" needs to feel like a fun project, but without the "...something people want" then your company will not make you rich. As with any advice, there there will always be exceptions ("do you really need a cofounder?") but as far as "here is some advice to achieve x", where x is "create a billion-dollar company" this isn't a bad start.
It's misleading and poor advice to children. You see this issue a lot in certain immigrant communities where the equivalent "talk" might be: "How to become a Doctor [and be rich and successful]". Becoming a doctor is orders of magnitudes more in an individual's control but even _then_ we observe the plethora of issues that occur.
I'm wondering if there is a research about which percentile of these two groups became rich:
People who started a company vs People who worked for Tech companies.
Unless you're very early (and/or very lucky), you can't get "rich" (i.e., can choose never to work again and can invest in many other things) as an employee (though of course a highly-paid employee can become very well off and comfortable).
Yes you need to be lucky to get super-rich as a founder too, but you have a lot more control, i.e., you make the primary decisions that determine whether the company will make good products that people will use/buy.
While agreed the chances are still low, if you joined Tesla or Nvidia in the last 10 years and especially before 2020, you very well and likely are rich if you're still working at either and kept all your stock.
Hell if you joined Facebook last year and got in when the stock was around 100, your initial equity grant just 5x.
I edited the parenthesised part of the first sentence from "and very lucky" to "and/or very lucky" to make allowances for your objection. And sure, you can always point out exceptions.
The real point is that it's misguided to try and compare percentages of tech company employees with percentages of founders; they're very different things.
Of course, out of all the founders of all the companies, a relatively tiny percentage will be vastly rich. And out of all the employees of all the tech companies, most will be quite wealthy and comfortable, and a small percentage will be vastly rich.
But that doesn't tell you anything about what is the most reliable path for any given individual to get vastly rich; it entirely depends on whether you're the kind of person you are how well you can learn how to build successful products and companies.
You could have been investing in Nvidia the whole time.
Decision inertia means that employees often don't sell vested stock, and end up being lucky. Similarly, external investors aren't willing to put 30-50% of their networth into one bet and therefore miss out on the kind of luck that can set them up for life.
There is nothing that a lowly engineer at Tesla or Nvidia knows, that can't be found out by an external investor. They are operating in the same information landscape, but different outcomes when they give into decision inertia.
It's not about joining Tesla or Nvidia early. It's about betting on them.
How rich do you insist on being? The bar to "can choose never to work again" is surprisingly low, it just requires a high savings rate which is quite achievable in this line of work.
In the context of this article we're talking about the difference between the kind of rich you become from founding a hugely successful ("unicorn?") tech company, vs working hard for a salary for years and saving hard. It's more a qualitative thing than a specific number of dollars saved from a salary.
I'm well aware that the definition of rich can be very different in other contexts. I'm talking about the context of this article.
“Never work again” money is crazy-high for younger folks (like, not already close to qualifying for Medicare) in the US, on account of the costs and financial risks of our healthcare system.
Most of the FIRE bloggers who bother to account for this—like MMM—have a (perhaps implicit) fallback plan of returning to work somewhere with decent health insurance if they or a family member becomes very sick, but that’s quite a gamble.
(Never mind that a bunch of those sorts have jobs and couldn’t remain comfortably “retired” without them—god I really hate that part of the blogosphere, “look it’s so easy you dumb idiot” but then you start reading between the lines and realize how much of it’s just a bit)
> “Never work again” money is crazy-high for younger folks (like, not already close to qualifying for Medicare) in the US, on account of the costs and financial risks of our healthcare system.
Exchange plans are fine enough, and like, they're not that cheap, but they're also not that expensive either. Depending on how much you make from investments on your never have to work again horde, you may be able to qualify for rate subsidies, and then it's even less expensive. In my county, if I were 64 years old, assigned male at birth, I'm looking at about $17,000/year for a Blue Cross Bronze plan (less costly options available), with $9,200 out of pocket max. Budgeting $26,000/year for healthcare means less than $1 M should cover you for life (assume 3% perpetual withdrawal rate). Rates are lower for younger people, but budgeting based on current costs for the oldest people should help the numbers work. Double the budget if you have a spouse; do some math if you have kids you need to cover until they become independent. Definitely make sure you work until you have earned Medicare eligibility, cause it'll be handy when you reach that age.
Is $1-2 M crazy-high? Kind of, but depending on what your annual withdrawal rate target was, maybe you can just say if you've got enough to pull $100,000/year, you're good on healthcare too. Hopefully most years you won't hit the out of pocket max.
> maybe you can just say if you've got enough to pull $100,000/year, you're good on healthcare too.
You’ll be exposed to tens of thousands in risk per year on top of (low) tens of thousands in premiums per year for a family Exchange plan. You’ll be burning nearly half of that (and spending all your free time trying to keep hospitals and insurers taking even more) if one of you gets cancer—or, if it’s you who gets cancer, you better hope someone else can handle that.
You also can’t withdraw at as high a “safe rate” as people planning for an ordinary retirement at ~65 do, because your fund needs to last a lot longer despite inflation and such. $2m isn’t “retire at 35” (… or 45) money. It might be “take a big gamble and maybe get lucky… for a while” money. Or semi-retire money.
[edit] at constant 2% inflation (ha!) you need a very safe source of consistent (not average!) 6% returns to retire with 80,000/yr income on $2m, without eating into principal. Anything goes wrong (“whoops, ‘safe’ wasn’t as safe as I thought!” or “whoops, we had a year of 7% inflation and my investments didn’t benefit from that!”) and you can find yourself burning principal while your account value is already down. It won’t take a lot of that before $80k is no longer your safe-withdrawal amount. A couple such years and you may be back to work. 30+ years is a long time…
[edit edit] also damn under $10k max out of pocket on a family plan at the bronze level for $17k? I gotta get out of my shithole state. That’s better than our Gold plans (also our plans tend not to cover like 2/3 of area providers, which may include 100% of area specialists for certain situations)
My budget includes the premiums and the individual out of pocket max. If that's not good enough, what number am I supposed to be looking at? My with a spouse budget is just 2x the individual budget, family out of pockets are usually around 2x individual in my neck of the woods, so that doesn't make a big difference; if there's kids, then it would, but the modelling there gets tricky because you've got to figure out what age you're kicking them off the plan (assuming they don't have a debilitating condition that leaves them dependent on you for their whole life... that falls outside my plan).
> You also can’t withdraw at as high a “safe rate” as people planning for an ordinary retirement at ~65 do, because your fund needs to last a lot longer despite inflation and such. $2m isn’t “retire at 35” (… or 45) money. It might be “take a big gamble and maybe get lucky… for a while” money. Or semi-retire money.
The $2 M is the budged accumulation only to pay for premiums and out of pocket until you hit Medicare; and that's assuming a spouse. Budgeting that based on perpetual withdrawl rate gives yet another buffer, because it only has to last until Medicare eligibility age. Yeah, there's unknowns, but whatever. I'm not saying $2 M is enough to accumulate for early retirement. It could be, but a lot of people want to spend more money than that. $2 M doesn't generate that much income, so you'll likely qualify for health plan subsidies, which would help a bit too.
Edit: I used zipcode 98110, birthday for illustration 01/01/1960. Going into the less expensive side of my state, zipcode 99336; there's no blue cross out there, but the most expensive bronze plan for that birthdate is $14,000 / year with the same $9200 out of pocket max. And yeah, limited networks suck ... I'm not going to shop for hypotheticals there --- I'm pretty sure if there's no reasonable in network doctors, you can fight your insurance to get covered at a reasonable doctor, regardless of the insurance and state, and if you're early retired, you'll have time for it.
Some people think that if you can't spend a million dollars a year on healthcare for 50 years, you are poor. In a sense they are right, because nothing is more valuable than life, but if you lower your expectations beyond the tippy top 0.1%, and take up a nice hobby like skydiving or motorcycling, you can get by with a lot less.
> You also can’t withdraw at as high a “safe rate” as people planning for an ordinary retirement at ~65 do
Solvable, including consideration of valuations via CAPE PE 10. Based on past data, the safe withdrawal rate (SWR) happens to be around 3.25-3.5% of assets to extend to a 60-year time horizon [1]
> at constant 2% inflation (ha!) you need a very safe source of consistent (not average!) 6% returns to retire with 80,000/yr income on $2m, without eating into principal.
For most of this research, "failure" constitutes running out of money. Preserving the initial portfolio value in inflation-adjusted terms can also be solved for. It takes the SWR closer to 2.8-3% for 60-year horizon with high equity valuation corrections.
> You’ll be exposed to tens of thousands in risk per year on top of (low) tens of thousands in premiums per year for a family Exchange plan.
Better to cap expenses and be ready to pay for it than live in fear. Save, invest, and move on with life.
> $2m isn’t “retire at 35” (… or 45) money. It might be “take a big gamble and maybe get lucky… for a while” money. Or semi-retire money.
Depends on how much money you need to spend every year to be happy. Sounds like you need a lot of it. For many, $2m would be fine, even with a very long time horizon. And if any problems crop up, there would be a 15-20 year warning during which a small income boost could top things up.
Threshold for wealthy enough to "never work again" is actually very high if you have a mortgage and a couple kids you want to put through school, and are thinking about living past 75. Even here in Canada where healthcare is not really a cost, retirement and nursing homes constitute a huge expense that could go on for years in your last phase.
I'm sitting on the accumulated wealth of 25 rather up-and-downish years in this industry, 10 years at Google, an almost paid-off mortgage, and a decent lump sum I got from when Google bought my employer, I turn 50 this year, and there's no way I can retire. Not without selling my home and moving somewhere a lot cheaper (hard to find here).
Maybe I've made some bad financial choices (not that many), but mostly it's that compensation packages in our industry are set just high enough to keep people on the upper side of comfortable middle class.
If you don't own capital -- haven't invested in rental properties or starting your own business --getting out of the job market isn't really a thing before 65 for most people even in our very well compensated industry.
If I were single or it were just me and my wife, sure.
I've been through tldroptions, and looked at enough options agreement given out by startups in the last few years, to know that as an IC engineer... even if you are lucky enough to be part of the very few startups that have a liquidity event... you're likely gonna get $300k, $400k USD tops.
Unless you're 25 and can shove that in the bank without touching it at all... that's not the life changing event some people think it is. Once the gov't takes their share, it's enough for a house downpayment or a very nice car, and you're certainly not going mortgage free with it.
Hmmm. I don't know exactly what your personal financial circumstances are...but from what I understand salaries and benefits to be at Google, you're getting paid plenty, and it should be possible to save at least some of that. Do it for ten years, put it in a nice boring low-cost index fund, and watch the investment returns roll in, and you're looking at a pretty big nest egg by normal people standards.
Part of the complication is the insane housing price inflation that has happened in Canada, combined with the relatively lower compensation rates of SWEs here. Also I don't work at Google anymore.
Even very early these days won't get you much. Just a bit of a lump sum you could apply to your 401k/RRSP or whatever and inch you ahead by 5-10 years on retirement. If you got it early enough in your life (20s, 30s) that it can gain interest. VCs and founders are writing stock option agreements these days with very low ownership stakes for even very early employees.
Back in the early y2ks, and late 90s, yes, you could get rich and be up and out if you were lucky and played your cards right. Those days are done.
There are tens of not hundreds of thousands of people who could retire comfortably after working at Google, Facebook, Apple, MSFT for a decade during their growth years. How many startup founders can do that?
Sure, becoming a billionaire is a different story but who cares?
My guess is that it is much easier to get rich from working at a tech company and rising through the ranks. Being a FANG middle manager for a couple of years and managing your money well should put you in a very comfortable position. However, if you want to be private island rich, you need to do your own startup.
Certainly in my own circle, people who were fortunate enough to work at FAANG during the right window of time became comfortably rich. Many of my own investors just worked as engineers at Microsoft for the right decade and are worth tens of millions. They worked really hard and sacrificed a lot, but they got paid every step of the way.
Predicting which big tech company will do well enough in future to give you that big stock reward over time is a big gamble, but certainly a smaller gamble than doing a startup.
I know plenty of people who have joined half a dozen startups, none of which yielded any gain. And many entrepreneurs who worked super hard many times and have nothing to show for it but scar tissue.
Whatever you do, the best advice is to ensure you are enjoying the journey. Don’t waste your life just to be rich. That path nearly always yields a Pyrrhic victory.
it really depends on what you mean by rich: the surest path to end up with $2-5M over ~10 years is job at ~FAANG, do it well to get promoted, and manage your savings/investments well. that path is very unlikely to get you to $10-100M in the same 10 years, and starting a startup seems to be one of the best ways to do that.
According to levels.fyi, E5 at Google gets you $385k TC annually. If you save a third of that (which is not easy) for 10 years you get to approximately $1.3 million. Maybe your investments get you above $2 million, but it would really depend on what decade that was. If you had the Great Recession in the middle of that, not so great.
If you think it is easy to save more than a third of your income, remember you’ll have a federal marginal tax rate of 35% or higher, will probably have to work onsite in a HCOL state, and unless you’re lucky enough to live in WA, a high state income tax. Yes you can shield some of your income via 401ks and Roths, but for the former you’re going to get taxed on withdrawal, and for the latter you get penalized if you touch it before you’re 59.5.
Now if you’re dual cogs with no kids, maybe. If you do have kids, you’re not retiring until long after ten years.
This is very easy, actually. You just happen to like fancy things and houses, probably.
> Now if you’re dual cogs with no kids, maybe. If you do have kids, you’re not retiring until long after ten years.
I find it depressing that so many people use kids as an excuse to avoid facing their own problems with money and spending. Look deeper and you can find happiness with a lot less.
Actually I just looked at my last year at a FAANG in California.
I earned about $370 K (including 401K match). $135 K went to taxes (Federal, Social Security, Medicare, State).
If I save absolutely everything left ($235 K) for 10 years that gets me to 2.35 million.
The parent post mentioned saving $2-5 million. To get to $ 2 M I have to live off $35 K a year (I realize I'm ignoring investment activities).
EDIT: additionally to minimize taxation you’re probably doing some of that savings in a 401k. Let’s say $25k * 10 year (I was). But that actually creates a deferred tax obligation. Let’s say the tax rate you pay that at is 20% (very optimistic but by the time you pay it you’ll likely be used to living below the poverty line). That takes you down to $30k a year. Actually even worse the employer match is taxable when you withdraw it, so another deferred tax obligation means that to get to $2M (accounting for future tax obligations) in 10 years you need to live on $25K a year.
That seems challenging in Northern California. Also why would I want to do that? - living at that spending level is likely to affect my long-term health and happiness, so the motivation is not clear to me.
> But that actually creates a deferred tax obligation. Let’s say the tax rate you pay that at is 20% (very optimistic
There are also ways to get at this money with almost no taxes paid later IF you are not working--look for "Roth IRA conversion ladder".
Also look into "Mega Backdoor Roth" for more tax sheltering.
> That seems challenging in Northern California
You don't have to retire to California. Just pay minimal costs while you're there. Many places in US are beautiful, have great infrastructure and health care, and don't cost as much.
And investment growth is a LOT; don't ignore it. And after just a few years of not working, unless you have a bad start you can probably live off of much more than the initial safe withdrawal rate.
Of course, a bad market makes it longer, but the converse is also true: it's more likely a good market makes it shorter! (historically markets go up more than down, of course)
Add a spouse that also saves and invests, and you can have MORE than $45,000/yr of expenses covered within 7 years of earning at that rate. You can also back off to part time or have one spouse continue working after having kids, and all you need to do is cover SOME (not even all!) of your expenses.
> I want to do that? - living at that spending level is likely to affect my long-term health and happiness
The freedom of not dealing with "the cult of impact" [1] and other such silly things is amazing. Having a huge pile of money allows solid peace of mind in a way most people can't even conceive.
And finding out how much happiness you can get independently of spending money is truly eye-opening. Most people are too scared to even TRY finding fulfillment away from what society tells us is "fun".
Not to mention numerous competitors with billions of dollars to burn "outcompeting" startups, with political and other ties if that fails. It's a great story though.
PG is remarkably consistent in his advice; much of his writing is about developing a nose for "what's missing" and having the chops and resources to attempt a solution.
Also, I think 'Google' in this instance is more for motivation rather than a literal comparison. He's leaving out the part that Google was founded by graduate CS students a) looking for a thesis, b) into node-link graphs, and c) inspired by academic citation metrics. Would PG advise anyone to go to grad school to learn how to find scientific-discovery-based startup ideas these days?
This is what is fundamentally missing from most talk about "tech" startups by VC types these days. They're not actually interested in the nerdy stuff, just in the "disruption" stuff.
L&S were, and they hired other people who were. They didn't start with a business idea, but with a technical one. They filled in the blanks on the business side after they survived the .com crash.
I didn't get to Google until 2011, but it became clear to me after joining that in the past they had gone on a very nerdy mission to hire all the nerdy people and collect them into one place to do nerdy things.
(Unfortunately that nerdy thing ended up being selling ads really efficient, but that's another story.)
My fundamental point is that the Google story is very unlike the kind of stories that YCombinator or a16z like. It started, like you said, as a set of intellectual/technical interests. The other stuff, that VCs today like, came later.
In a way they did the opposite of the usual advice. They started with the hammer (the tech) rather than the nail (the business problem.) They certainly didn't start with a "Like X but for Y" statement like seems to be desired by VC today. And they didn't look like the typical .com story at the time (which was usually: give us lots of VC $$ so we can sell something on the web that is currently not sold on the web, but we'll just use the $$ to buy customers and make no profit...)
I would posit that if today's Google came to YCombinator today they'd be shown the "no thanks" door.
Very interesting to hear your thoughts and experience.
I wonder if we really shouldn't make a bit more out of the fact that there are different types of startups: those that pick off low-hanging fruit really well, those that combine novel technology with novel problems (for instance, the recent YC LLM meeting note-taking / transcription service), those that are scientific-discovery based (see, for example the NSF Small Business Innovation Research program), etc. I am not experienced enough to create an ontology of startup ideas, but I think it'd be an interesting exercise.
The nsf program basically exists to fill the gap between research and product market fit. Except They focus on commercialization plans which we know that in reality is subject to change (aka meaningless).
Hopefully 2 Stanford CS PhD students hacking on their project would be funded by YC today :)
You bring up a good point about starting from the tech rather than the problem. Usually the advice from VCs is to start from the problem and iterate on the tech until you solve it. What was very fortunate for Google is that the tech translated into a great business problem. Open up any CS textbook and 'Search' is always a major section. It was also a great business because the problem is important, frequent, and had not been properly solved by the big players in the mid 90s.
"And then we realized that we had a querying tool..." (Page)
But that's the thing. "Search" was not a great business problem. It still isn't. I used Google for years before their IPO and people were always like "how is this thing going to make money" and believe it or not there was a lot of skepticism even at IPO time that they even had a possible reasonable business model. (Same for Facebook at their IPO, too.)
Search is not a good business. Ad sales over top of search turned out to be. AdWords is the thing that catapulted Google towards (insane) profitability. And for the first few years, Google didn't really sell ads, or market themselves as even aiming to sell ads. But AdWords could only be successful because they had already captured the market on search, and so had a captive audience to show ads to (and relevance information based on their searches).
AdWords rolled out in 2000. Many of us had been using Google as a search engine since before the company had even been founded (1998).
Totally agree. What I mean is many research topics can be very interesting from a technical perspective but don't translate into solving problems that are frequent and important enough to build a business around. In the case of Search many business gurus didn't understand at the time that you can make a fortune with a free product. What matters is who has the traffic and who they're selling it to = eyeball meets ad. Page and Brin initially "expected that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers" (foreshadowing). Also they tried to sell to Yahoo for $1M so it took time to see the full potential, as you describe.
When Google started, you didn't need a business model for a "dotcom" (as we called them, before "tech stocks" became the "tech" that we now call ourselves).
We already realized the necessity of finding information amongst the exponentially growing wealth of Web servers (sites).
And Google obviously worked much better than the existing crawler-based search indexes and curated directories.
And lots of people thought a "portal" was a good place to be, if you could manage it.
> And Google obviously worked much better than the existing crawler-based search indexes and curated directories.
Funny thing is I recall using Google from the very day I first saw it come across Slashdot -- probably late 1997 -- before they were incorporated even... but I also recall that at some point around 1999 I actually switched back to using AltaVista or something similar for a bit. Because I preferred the search results I got.
It was actually a more competitive situation than people might remember in hindsight.
The big difference is that Google made it through the .com crash filter better than anybody else. That and they kept the good will of their customers by keeping minimal and straightforward and (for a while) ad free.
I recall once google came on the scene I ditched altavista and never looked back. I was a teen but my recollection was that Google included the relevant paragraph of text from the page shown in in the search results whereas altavista showed one line that was often indecipherable gobbledygook - perhaps the page title matched a keyword - and it made it so much easier to scroll through ten results and identify the one that was the highest quality
Plus the no fast no clutter homepage for google compared to how many links can we fit in one screen for the portals
There was a brief window where AltaVista improved and I went back to it after being Google since 98. Probably only for a few months. I often preferred the query hints you could give it to get very specific output. No matter, they went out of business.
The turning point that brought me fulltime to Google from then on (until recently switching to Kagi) was when they started having almost live results. It's hard to remember or imagine but search indices were often days, weeks out of sync for critical things like news, etc and Google was really the first to fix that.
> Hopefully 2 Stanford CS PhD students hacking on their project would be funded by YC today :)
Around the dawn of YC, IIRC, when PG did the "summer founders" or something like that, a group of 4 of us Lisp hackers applied as a team. No response.
We were mostly in grad student-like lifestyle modes, and not tied down, were energetic, and already had various applicable experience.
But I think PG was mostly looking for barely-20 year-olds to drop out of college, rent an apartment in Harvard Square together, and sit around hacking in towels.
Since that's what he wrote in one article. Which I guess trumped the article in which he said Lisp hackers are great for startups.
Now his latest article says he's going after 14 and 15 year-olds. :)
I always wonder about the success rate of advice. Do we have any student from this talk of PG who succeeded later in life? Joined an ivy league school? Proceeded to create a startup? Had success with it?
Don’t get me wrong. This folklore is extremely important, if not just to raise the grades of one student. But as a founder, when I give advice, out of inflated ego generally, I also have vertigo from the height of everything that could go wrong about being mistaken about my advice.
I feel that worry too, but I can validate his advice, somewhat.
I'm 44 and spent most of my career working individually and with my closest friends on projects that felt interesting, and it went really well for us in all of the ways. I also met these friends at a selective school, though it was a state-funded high school (massacademy.org), not a university.
Also, someone once came to my very conventional elementary school in 5th grade on career day to talk about a very unconventional career path (being a full-time peace activist) and this had a huge impact on me, both because it validated activism as a career and perhaps more importantly because it validated not having a normal job.
Getting a very short lecture in school from an interesting non-teacher can be at least very memorable and perhaps life-changing.
> Be careful whose advice you buy, but be patient with those who supply it. Advice is a form of nostalgia. Dispensing it is a way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it’s worth.
Maybe? YC seems to have an inconsistent view on things that are research vs product. But it’s probably more nuanced than that. Search was a market though at that time. If you pitched an AI LLM before chat-gpt what would the odds have been?
I dunno, I toyed with the starting phase of YC application a couple years ago, and started working my way through what was involved in their application process and reading their materials, even watching some YouTube content, etc.
I didn't really see how a business that was starting from a more R&D angle would make it through.
And a lot of it seemed really pitched to the bizdev "hustler" founder personality, not to engineers/nerds.
The foundational $$ that has gone into the research to make the LLM stuff happen... was inside the existing big corporations (Google, FB, MS, etc.) and only left there once it had been proven.
Ilya Sutskever (OpenAI) for example was employed inside Google doing that kind of work and only left when he ran up against the limits of what he felt he could get done there. But the fundamental R&D had already been done. When I was at Google I saw some of it from a distance before I ever heard of OpenAI.
The VCs have come along at the tail end of the R&D cycle on this stuff in hopes of cashing in. Same as they did with crypto and N number of trends before. They're trailing, not innovating.
They're primarily interested in successful business models capitalizing on existing technology, not the actual development of new technology. Unless one has distorted the meaning of "technology" significantly.
The real trick that made Google possible, and the following web 2.0 era startups, was that linux and commodity hardware was all that was needed at the time so engineers could strike out on their own. Comparing it to the current ML era where you need many millions of dollars of data and many millions of dollars of hardware to compete, the guys that wrote the transformers paper are stuck in bigcorp and aren't going to be the next Larry and Sergey. OpenAI might be one of the few new big companies but it's run by a VC/CEO, not the engineers that figured the stuff out, and he had to sell half the company to Microsoft anyway.
These things always happen at intersections. There are lots of smart people with ideas. The magic happens at the intersection of ideas, time (what technology is available) and luck. Apple Newton was too early. Apple iPhone was just right. Doom 3D was just at the right time when commodity hardware could do what the amazing software needed it to do.
The point I was trying to make is what are the situation where an independent small startup can make it big. Your examples are instructive, engineers were able to make id Software big because you didn't need a lot of hardware to invent 3D shooters, but Jobs gets the credit for the iPhone because the engineers needed hundreds of millions of dollars in capital to pull it off.
pg is giving advice based on him getting rich from that period of time where the small startup could make it big. But those conditions are probably rare going forward.
maybe. right now, if a startup has a new ML training technique or whatever, for a specific niche, cloud and VC capital will let them make a model that does way better for their niche than repackaging well funded models from OpenAI.
Wild to think that potentially the most innovative company of the last five years, and next five, was run/founded by a VC. It goes against all of the VC hate
I think there's a connection here to the old adage that "small companies make it possible, big companies make it inexpensive".
The purpose of VC can be viewed as trying to take a company from nonexistent to big while skipping the small stage, but small is where the action really is.
Yep, unless some new thing is acquired in a buyout, or if an entire group is spun off with almost no oversight, large companies are horrifically bad at creating new things. It's nearly impossible for them to do it in the case where the new product would affect existing revenue streams.
> Unfortunately that nerdy thing ended up being selling ads really efficient, but that's another story.
The irony is that both the thing and its side effects were anticipated very early on.
"Currently, the predominant business model for commercial search engines is advertising. The goals of the advertising business model do not always correspond to providing quality search to users. ... It is clear that a search engine which was taking money for showing cellular phone ads would have difficulty justifying the page that our system returned to its paying advertisers. For this type of reason and historical experience with other media, we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers."
(The Anatomy of a Large-Scale Hypertextual Web Search Engine, Sergey Brin and Lawrence Page, 1998)
Google in 1999 had the the fortuitous alignment of every possible factor: brains, Stanford connections, timing, extremely scalable and lucrative business model, funding, etc.
It was very different from the punch-the-monkey style ads that had taken over the Internet, though. Google ads were exclusively text based and unobtrusive. They relied on showing you the right ad for what you happened to be searching for at the moment, rather than grabbing your attention and forcing you to think about stuff you didn't really care about.
He should! As I hope to convince people of next month, there’s a wealth of classical AI knowledge that’s just begging to be applied to modern systems. That’s not to speak of the wizardry happening in neuroscience and drug discovery right now…
Isn’t “you shouldn’t focus on science to start a good tech company” a good indicator that our conception of “tech” company is completely broken? That we’re really talking about ways to milk money from gambling billionaires, not change the world with successful products?
I wouldn't fixate on the Google part too much. It's pretty clear he is using it as a common point of reference for 14 and 15 year olds. "You guys know about Google?, the giant company with the web site? Okay well let me tell you how companies like that are built."
Building a successful company depends on many things. The point made here is that you are unlikely to be expert enough, and motivated enough to build a successful business in an area you are not interested in, and haven't played around in. So to increase the amount of domains that you could create a business in from 0 to a small positive integer you should build things that interest you.
Of course if you have money, or know how to persuade people who have money, you can be something of an idiot and still develop a successful business. Usually you are not really developing the business in this case, more attaching yourself to a business that smart people are running for you.
In a pool of high school freshmen, most probably have a better chance of success following the first path, than the second.
> You need three things. You need to be good at some kind of technology, you need an idea for what you're going to build, and you need cofounders to start the company with.
So no word about funding from the CIA and NSA. If you want to build something that changes the world in such a profound way as Google did, you can not possibly expect the powerful not having a word with you. I am inclined to believe that these days you will need influential "friends" with aligned interests at some point.
Am surprised PG gave this talk at a UK school without mentioning an important assumption that they will need to migrate to the US in his opening paragraph.
All the examples he mentioned Google, himself and the Irish Stripe founders had to do the same for their startups.
Sadly in the UK all the current unicorn "startups" are a bit iffy: XTX (high frequency hedgefund), betfair (betting company), tripledot studios (Zynga like company).
Unfortunately mega success in startups doing soemthing innovative is non-existent in Europe and UK in particular. Mistral stands out to how exceptional it is to the rule, and the closest other one I can think of is BioNtech.
Sadly the highest expected route to fortune in the UK remains quant trading in finance. Including starting your own hedge fund.
> Am surprised PG gave this talk at a UK school without mentioning an important assumption that they will need to migrate to the US in his opening paragraph.
Seems kinda reasonable for a motivational speech not to mention it (even assuming it's entirely true.)
You say all this like it's a bad thing, but maybe it's ultimately better for a society if there isn't a financial lottery that enables a small number of people to become insanely wealthy and powerful.
I'd rather a government that enables a thousand mid-sized companies with moderately well-paid executives and employees than one that enables a single monopolistic mega-corporation with billionaires whose power rivals states and whose incentives are not aligned with most of the world.
Of course it is a monumentally bad thing for the UK economy it doesn't have any big tech companies! I actually don't understand your point at all.
To say nothing of the lost revenue from tech export do you think it is better for the UK that it depends on AWS cloud for running the majority of its public services, Apple for almost 70% of the phones used by it's citizens, Google for the other 30%?
Which midsize company is going to be able to compete with AWS on offering cloud computing services, Apple on developing smart phones or Nvidia on GPUs?
Actually the UK has the worst of both worlds: US big tech opens office here leading to well-paid executives and engineer, while all revenue (and none of the taxes) from selling the products these engineers develop goes to the US.
Yes, and of course you cannot just move to the USA especially if you're a young guy in the UK. I know, I faced the same issue. 2006, recruited by Google before I'd even graduated. I wanted to go to California but... they hit the H1B cap that year and I wasn't important enough to get one. So I ended up in Switzerland.
If Google in 2006 wasn't powerful enough to get someone as culturally unthreatening as a Brit into the USA, it cannot be easier to do so as a startup founder.
That said I did know someone later who was able to make it in and become a startup CTO there (a German guy). Hilariously he did it by making a viral YouTube video. And by "make" I mean he hired an agency to make it. This was sufficient to get him in on an artist visa, which was easier than getting in on an H1B.
Not anymore, London is the biggest startup hub in Europe and top AI companies like Google Deep Mind and Stability AI were founded and HQ is based in London. These days all you need is talent and funding, once you have that you can do it from anywhere.
Paul Graham sounds like a boomer telling their kids to go apply in person or go door to door for jobs. Especially talking about Software startups, which will increasingly have a lower and lower barrier to entry (aka lower profitability)
Theres simply no way to get away with what Google, Facebook or Uber did today. You will not sneak your software into enterprise customers, you will not be able to skirt regulations.
Hell the big money pot of getting acquired may be dead too, e.g. Figma.
For most startups, you will fail. For the top 1% of companies you can hope to at best make a comfortable living at a multi-million dollar valuation. Only the .0001% will become a Google.
While you are right, the trick is to find the new unturned stone. Google, Facebook and Uber developed playbooks for their respective environments. One cannot replay their playbook and expect it to work
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[ 0.20 ms ] story [ 368 ms ] thread"Of the 137 people in the global study who achieved billionaire status in the 12-month study period, 53 of them inherited $150.8 billion collectively, more than the $140.7 billion that was earned by the 84 new self-made billionaires in the same time period, the UBS study says.Nov 30, 2023"
The citation for this quote appears to be https://www.forbes.com/sites/maryroeloffs/2023/11/30/new-bil... , but I don't believe that limits to those "that occasionally get published in the press".
I don't mean that to even sound bitter or cynical, but it's just a fact if you look at most founders, even the ones that fail miserably.
There is always an excuse. The parents are professors, or upper middle class dentists, or your mom does charity for United Way and managed to become the leader of the charitable organization and managed to meet some exec from IBM. Given how diverse these professions are and that they basically describe a slightly upper middle class family, im gonna guess their children account for more than 1%.
I mean, it's not the worst thing he could do but it would be great if he at least acknowledged the privilege filter once in a while.
People like Paul Graham telling 14-year-olds that basically getting rich is the most important thing is one of the reasons we got into this late-stage capitalism nightmare in the first place. Fuck this.
Edit: Sorry, to update after my rant. So many things wrong with this advice. For most people, starting a company is not the best path to happiness. Sure, if you have a job, there's a "boss" that tells you what to do as Graham notes, but if you think for a second you can do whatever the fuck you want when you start your own company, you're dead wrong. Of course, Graham knows this.
And it doesn't preclude you from going and getting paid too much at a big tech co afterwards if it doesn't work. This field has been so lucrative recently that you can generally afford to not be earning at peak potential for a bit, so why not roam free for at least a bit, and let your interest take you where it will, rather than doing something you describe as a grind, just to earn the privilege to go sit in meetings for most of the day and count the years till you can afford retirement?
Yes most people would rather not work to support those addictions I mentioned. But that’s what most people have to do.
Obviously it's not right for everyone, nothing is. But it's right for more people than the number who do it, and it's worth letting the others know it's an option. A similar talk by PG at my university is why I realized that this was a realistic option, and I'm incredibly grateful he gave it.
You were never not “safe”
This is a pep talk for trust fund kids who can afford to mess around with start ups. It's probably lousy advice for most people outside the affluenza bubble.
But I mean this is the guy that foisted Sam Altman onto the world, so clearly he already knows that. Which makes an article like this understandable as the propaganda that it is.
You don't write an article like this to influence kids, you write it to rationalize the giant pile of money you find yourself sitting on.
14 year old need good role models (preferably from their trusted social circles). These people should, ideally before the child turns 14, give him or her a strong moral framework to judge advice that they might come across.
On the topic of being rich (which can be a good goal if pursued along with a strong moral compass), it's much better to take advice from a Paul Graham rather from some grifter selling courses on "how to be a rich as me" on the net.
He could tell the truth instead about how most startups fail miserably and the founders see nothing.
Not to mention that the only way this works is if you have parents as a financial back stop.
- Concretly what's the late-stage capitalism nightmare? How do you define it and what do you compare it against?
- What do you define what PG is concretely telling kids and how that's related to what you describe as capitalism nightmare.
Finally, would you care to share some examples of better scenarios that could inspire advice for 14-year olds?
* Inequality in societies is as large as ever, and inequality is one of the main predcitors how happy a society is
* Influence of people and corporations with money on politics and society is unprecedented (i.e. lobbyism)
* In the US, but also in many Western European "developed" countries, basic human rights like education, health, housing and food are fucked by capitalism
PG is putting a big emphasis on getting rich and building your own company. Better advice for 14-year-olds would be, just off the top of my head:
* Money is important, but it's not the most important thing
* You are not your job or your company. Find something interesting to work for, but don't define yourself over it
* Participating democray is important: Fight for a more equal society and help make your community better
* Don't focus your education on one hard skill like computer science. Learn about arts, literature, philosophy and all other things that interest you
>In fact, this is the standard way to get really rich.
No. The standard way of getting "rich" is to get into a good career that pays a lot. Before Silicon Valley, people got "rich" by working at Wall Street, law or Congress. Getting rich through business is a lottery.
I would have attributed this article from Graham to relative inexperience had he written this early on, say in the 2000s. But him writing this now is just bad-faith preaching intended to give VCs another lottery ticket with a very low success probability of forming a unicorn.
And for the record, 14 and 15 year olds, the best way to get rich is still Wall Street, Congress or law.
> pays a lot. Before Silicon Valley, people got "rich" by working at
> Wall Street, law or Congress
I'm afraid this isn't really true. Through most of the industrial revolution and after (i.e. after the early 1800's), professionals (lawyers, bankers, accountants, doctors, etc.) made a smaller multiple of unskilled labor wages than they do today. In America at least, the way to get "rich" has always been to start your own business.
This was true in the 1800's and it's true today. There have been repeated waves of change as new technologies spread: textile mills, cotton production, mining, railroads, telecom, electricity, appliances, automobiles, department stores, advertising, aviation, broadcasting, computing, etc, etc. Each wave of innovation saw the creation of thousands of new businesses. Sure most eventually fail, but hundreds did pretty well and a handful got insanely wealthy.
American culture and laws (usually) rewards this sort of risky behavior. One can debate whether it's, moral, just, or good for society. But generally speaking, not much has changed wrt this facet of our culture over the last 200 years.
I've started one of the "small rich" businesses before, and made a few millions out of it when I was too young. Those millions enabled me to make certain bets that, though risky, would still have a huge upside. That huge upside allowed me to make very good money, the kind of "rich" that PG actually means, without the risk that comes with starting up a business that your VCs want to push to unicorn status. That's basically what most sensible rich folks in America have done, even the ones that you celebrate in your comment. And yet they'll all send their kids to Harvard and Stanford to attend MBAs and grad school because they don't want to put their kid's futures to the whims of a lottery.
"Making your first million is the hardest, so start with a second million." - Arnold Schwarzenegger
There's another comment here that links to staticstics regarding this topic here somewhere
I don't think that's a fair summary of the article. Yes, he says you can get rich. But he also says, and says first, that it's less annoying and more fun (and also more actual work).
Then for the rest of the article, he doesn't harp on "you can get rich". He talks about getting good at some technology, and doing projects because they're interesting, and finding other people to do things with.
I know too many people born rich who think exactly this. And in their experience it works like that; they have no money stress anyway, take a little bit more risk and if it fails, well, they just fold and brag about ‘at least I tried’ and then try again or, you know, sit on the boat and get slobbered. Same thing. The rest of us don’t quite have this and especially bootstrapping your own company is hard, really hard; you will be doing a great deal of things that have nothing to do with what you want or set out to do and those probably turn out to be more important than what you started it for.
So Leetcode is actually a good way to hire?
> You might have thought I was joking when I said I was going to tell you how to start Google. You might be thinking "How could we start Google?" But that's effectively what the people who did start Google were thinking before they started it.
We shouldn't be telling young people to start companies like Google or to aim for being really rich in the first place. We should be teaching children how to be more sustainable. Companies like Google are a net harm to society and the really rich like Sergey Brin and Larry Page are parasites, promoting the unsustainable ruthless capitalism that has caused the immense climactic problems of the world today.
- I agree that we should tell young children to aim for sustainable companies
- I at least partially disagree with warning against the unsustainable ruthless capitalism in case your sustainable ideas do get really big. Some companies would get really really big, and I would prefer to see those reaching there to be those who had a (comparatively) caring mind (the others would not listen anyway)
- but I would agree to explain young children that what and where they buy does impact climatic problems. And that supporting small-medium sized companies (or creating one) is the most beneficial for our future
- Work on a personal project that is motivating to you (obviously you won't work on it if it's not motivating to you)
- It's a good sign if the project you're motivated to work on solves a problem that you and your friends care a lot about, because there's a good chance many more people will also want that problem solved and will buy/use your product.
Sure, plenty of big companies were started via different paths, but not many were founded by kids barely out of high school.
And neither was Google. Sergey Brin and Larry Page both hold masters degrees in Computer Science from Stanford.
22-year-olds have a hard time selling to enterprises, 14-year-olds will find it impossible. Whereas if they build something cool that they and their friends love they will gain many of the skills that might be useful later on.
PG has made the point many times that the superpower 22-year-olds have is that they can live on ramen and work 16 hours a day. The superpower that 14-year-olds have is that (in many cases) they don't even need to find the $1,000 a month to survive.
And the fact that most people don't see a problem with a statement like this a _big_ problem.
We now have a single organization shaping the information access patterns of the people all over the world ostensibly paid by ads. Right.
He says you have to be interested in it, it should excite you, and it should be your own project.
That’s absolutely not at odds with solving a problem. In fact, there’s a good chance that people are interested in solving a problem, likely one that is painful to you.
Kinda, but this skips over the whole Facemash thing https://www.thecrimson.com/article/2003/11/19/facemash-creat...
Facebook was actually based on something he was hired by Winklevoss to create, and he decided to keep it for himself instead of delivering it. That's the "naughtiness" that YC seeks out in its Founder application process.
Note, by the way, in the recent "cancellation" of President Gay, the false claim that behavior like this would get a Harvard student expelled (although Zuck did end up "expelling" himself.)
In that sense, I do strongly agree with the overall conclusion, "That's it, just two things, build stuff and do well in school." Building stuff for your own edification, and soaking up as much knowledge and relationships while you're in school, is really sound advice that works regardless of your end goal.
A family friend was recently admitted to a magnet school - it's not like an Ivy League level institution, but it's fairly prestigious in the area, and not easy to get to. I need to make sure to remind him that while it's good that he's feeling academically challenged, he should also focus on building friendships with people who are statistically likely (much as he is, tbh) to be successful in life - they can help pull him up when he's down, and he can do the same for them.
I didn't get that much out of college, academically - but the relationships I built there got me my first two jobs, and I still treasure the friends I made there.
"strongest" is highly subjective. I also don't think we should make things up and pretend the other person said them, which is much more commonly used to strawman, but steelmanning involves the same process.
You only get rich by starting your own company if you win the startup lottery. Otherwise you're better off getting a high paid job.
PG's definition of rich is probably 100x what yours is.
A typical founder, 10 years in, is less rich than he could have been if he had taken a high paid tech job.
But anyway, PG is saying the same thing he's been saying for years. He wants people to launch startups, and he wants them to shoot for the moon with VC money. He has no interest in bootstrapped companies. Because he's a VC, so he's talking in his own interest first and foremost.
I don’t think he’s being malicious. I think he genuinely just doesnt see a $5-10m NW as rich.
Take the old comparison between Gates and Jordan. "If Jordan saves 100% of his income for the next 450 years, he'll still have less than Bill Gates has today."
You can become wealthy and comfortable working for a salary. But, the canonical way to get "FU money" is to win the lottery.
Can a janitor save enough money to rival Gates? No. Not even close.
But the same janitor could save enough money to have "FU money" later in life, and only continue working as a janitor if he chose to do so.
That is exceedingly doubtful
Sure the pay is lower, but the housing costs are substantially lower.
The average Janitor I salary in the United States is $34,623 as of February 26, 2024.
Average home price in the United States: $417,700.
Monthly payment for 30-year mortgage is $2,950.
Monthly gross pay is $34,623 / 12 = $2885.25...
Hm...it's literally not doable.
Bill Gates, Zuck, Jobs, etc....
Students should quit school. -> (?) -> profit
https://en.m.wikipedia.org/wiki/Steve_Jobs
Somewhere in this essay it needs to say “99% of you who try this will fail”.
If you had a 1 in a million chance of winning something and you tried a million times, the chance of winning once is about 63.2%, not much different from when n=100.
So yeah, give someone 500 years, hopefully they keep going at it and the odds play out...but in the lets call it 50 productive years I feel I probably have been given, plus a few distractions along the way, there are maybe 5-10 serious bets one can place? Feels like that needs to be considered in conjunction with the mathematical probability "just keep trying" misleads us to believe.
10 coin flips can happen in less time than it took to type this reply. Those odds are a little more predictable because of the time span involved.
Also, I'm just more interested in family and enjoying the mobility of the youth I have left, much more than chasing down unlimited resources.
Each time, you learn and get better, your odds go up. Now the real question is whether your odds are going from 1:1000 to 1:100 or from 1:100 to 10:100?
Given it's a repeated game, and you gain knowledge at each round, I'd say the odds are probably pretty good that the highly dynamic / fast learning environment of early companies yields returns over a lifetime.
Google: 180,000 employees. Let's say including ex-employees 250,000
These started 1,200 companies, according to the only source I could find. These collectively apparently made their founders ~20 billion. Let's say (heh) that it's a power law, let's say the top 10 got 1 billion each.
So we're talking the odds for an "average" software engineer to get to 1 billion is about 0.1% * 10/180000 = 0.000005556%, or about 1 in 18 million.
Odds for a current or ex-Google engineer: 1 in 18,000.
There is an opportunity cost to starting your own company, but it's not some kind of horrible experience that will drive you to bankruptcy unless you're part of the 1% who manages a spectacular exit.
take the shot, but have a back-up plan, basically.
And, in the unfortunately common case, recognize when you cannot take any bets and instead focus on getting yourself to a place where you can, rather than betting everything and losing everything.
A 15-year-old hearing this talk from Graham as-is might take from it, "wow, if I learn programming, work on things that interest me, do well in school, and go to a good university, I'm guaranteed to build a Google-scale successful startup!"
Telling that kid that there's also a component of luck involved, and that the vast majority of startups fail, would temper that enthusiasm in a much more honest way. If that means fewer kids decide to start companies, that's obviously a negative in Graham's book, but may not be a negative for those kids themselves.
If the kid is motivated from this essay to learn programming, work on things that interest them, do well in school, and go to a good university -- I think they're well setup for success in their life.
- discount the useless advice you get from people who got lucky and are unaware of this fact
- target trying to be in the right place at the right time and have a plan B if you don't get lucky, rather than waking up at 0400 every day to eat raw eggs or whatever
- respect yourself and your employees more
- be more generous with what luck brings you
etc etc etc
a much better question is why do YC and co not talk about luck and connections more? why do they pretend it's all some imaginary meritocracy rather than hugely dependent on going to the right school / being born into the right social class, and then hugely advantaged by having YC's name recognition and tame lendors attached?
I think it’s reasonable to inspire more than hedge. They’ll presumably already hear lots about what the least risky things to do are from many, many sources — that’s the default.
The luck is seen in the short term fluctuations but over the long run when executing your strategy there is no luck.
This requires proper bankroll management among other things.
Also starting a business is easier than poker, poker is zero sum (more often negative sum due to rake).
Business is positive sum. What this means is people will gladly hand you money if your product generates more value for them than holding that money does. In poker, every single hand is like a fist fight because there is always a loser in every hand.
Yes you can win if you are a VC. Less clear what to do if you’re just a card.
The insight here is to only play in games that you have the advantage (or are at least evenly matched) and be very, very careful not to put yourself in a position to go bust on any one hand.
Also, people don’t realize that startups aren’t one single event. There’s a million events and each one has its own luck. For example, you make a piece of content marketing there’s luck in whether it performs well, but that luck can be managed and the risk spread across many events by doing lots of small pieces of content marketing.
I also wrote a blog post about how a popular psychology book oriented towards poker pros (The Mental Game of Poker) can be easily reframed for entrepreneurs:
https://writing.billprin.com/p/the-mental-game-of-entreprene...
With all that said, it’s highly ironic you picked Moneymaker as your example poker pro, since he’s famous in the poker world for being a very bad amateur player who got extremely lucky at the perfect time . It’s a bit like talking about the importance of hard work and deep technology skills for founders, and using Adam Neumann and WeWork as your example of that.
You may be overly generous in your estimation of MY poker skills! However bad Chris is, I am sure I am not anywhere close.
Maybe start an actual, scaleable business that makes money. It's not sexy, but it's within the realm of possibility to get it off the ground yourself; and usually those within the gilded class are not interested in such things.
If you're a regular schmuck, maybe take a page from the countless immigrants in the U.S. that start various businesses (trade, real estate, etc.) that make them enough money to allow them to live like kings back in their home countries.
There's something to be said about the severe glaucoma of understanding class in the U.S. Very few (notably the middle class) are willing to internalize they're serfs, whose current comfort is more a product of luck than anything more. It's a precarious situation, and any notions of aspiring to "life satisfaction" or other leisure-class values is just foolish, in my opinion.
That's a prism it's really worth applying to all advice given by VCs: What's the outcome for me if I fail vs what's the outcome for them if I fail?
https://new.nsf.gov/news/origins-google
> "The National Science Foundation led the multi-agency Digital Library Initiative (DLI) that, in 1994, made its first six awards. One of those awards supported a Stanford University project led by professors Hector Garcia-Molina and Terry Winograd... Around the same time, one of the graduate students funded under the NSF-supported DLI project at Stanford took an interest in the Web as a "collection." The student was Larry Page.... Page was soon joined by Sergey Brin, another Stanford graduate student working on the DLI project. (Brin was supported by an NSF Graduate Student Fellowship.)"
Under a rational and fair approach to patents, anything created with taxpayer funds would be available to all American businesses under a non-exclusive licensing program. However, in the 1980s, Bayh-Dole was pushed through which allowed exclusive licensing of those inventions to private parties. This is nothing but theft from the taxpayer, the entity who funds the NSF, which funded this research effort, which generated PageRank.
As a result, Google didn't face market competition for some time, and was able to create a monopolistic situation, and as with all monopolies, this resulted in the degradation of their product, which is why, as everyone seems to agree, Google search results are much worse today than they used to be.
[edit: contemplate the outcome if Brin & Page had instead invented PageRank as Apple or Microsoft employees - would they have been able to run off with the IP and found a company?]
Since universities are publicly funded by taxpayers, their inventions should be thrown to the capitalist wolves who will compete to provide the best implementation of the idea to the consumers. If the corporations want to instead finance their own research centers, then they'd own all the patents outright - but it's cheaper to steal from the public.
It's not about starting Koch Industries or Disney.
It's not about some ideal world where connections and funding don't matter.
It's about a kind of productive problem solving that creates value for other people by solving problems they just accept as friction in their lives.
It's insightful in focusing on how projects you love can end up helping others.
But it's a little misleading in that people are listening not because they are doing what they love, but because they want to be successful - ideally to take what they love and turn it into success - according to this plan.
Let's say each year 10,000 people would love to become professional football players, 500 make it to the NFL, and 5 become household names - success stories.
There's no real accounting for the time wasted by the 9,500 doing the extra required not out of enjoyment of the game but to become successful (leaving aside any actual costs like TBI). It's at least an exported cost. But it might have other downstream effects, making someone less confident in their judgement, less likely to engage in making a better world of whatever sort.
One of the Buddhist precepts is not to sell the wine of delusion (in some translations). But it's also soul-killing to tell someone how likely they are to fail; who says that at a wedding? What benefit is that?
Paul Graham made a success of helping others be successful. That's a really good model to consider: to do and teach and help. So I would take this as good teaching for teens.
I was the first graduating class from one of the first public high schools in the country with an IT magnet program.
I remember the program coordinator telling us and our parents in a big presentation that we could be making $70-80k out of high school. He was really selling it.
I was not making anywhere near that out of high school. =P
But I wasn't doing bad either. In fact, I'd had two jobs with tech companies before I even graduated. I had a job lined up in the engineering department of an OEM prior to receiving my high school diploma. That same administrator was always encouraging us, cheering us on with our various projects, helping where he could.
I never thought for a moment I'd been mislead that my salary wasn't that high or that I didn't make it "rich". Any kid who'd sat through a school fundraiser presentation in middle school knows that those awesome prizes of a computer or game console or whatnot is just meant to hype you up. But you might be able to land a CD player. (My age is showing here. =P )
I expect any 14-15yo he's talking to will get the gist. The kids are not stupid. They get the pitch. And I think they intrinsically know the odds too. Those 9,500 football players are not all going to see it as a loss, even if they didn't achieve their ultimate goal. People turn losses into wins and salvage the good from a failed attempt all of the time.
My son is 3, and already has fun mashing computer parts together and wanting to see how things work. I'm excited to see if he wants to do this as well. Will I tell him "Dude, that guy said I'd be making $90k and that was B.S." Nah. I'll give him simple version of Paul's advice. Even if he doesn't go into entrepreneurship, it'll set him up well if he follows it.
The more I try to plug myself in, the more it seems like starting a company at this age is borderline schizophrenic delusion.
Saying that, I would like to see the advice for higher age ranges as I have a feeling more successful startups tend to be around there.
I read all his essays long ago, when I was young, and it sounded persuading to me. I think it even influenced me here and there. Now, somewhat a decade or two later, I take it with a grain of salt, and don’t get it as it is. Some things are just quite manipulative. I can read them as someone’s point of view, but not as someone I would even listen to, not to say follow the advice. I know much better for myself and what’s around me.
E.g. a man like me would never go to a VC, it’s a waste of my time and energy, and I can easily earn all the money I need to run my idea till the production. Why would I want anyone like him, to give me money and help grow my idea infinitely? People like him are interested in Unicorns, that’s how he multiplies his money, that’s how the system works. People like me are interested in steady, reliable businesses that actually deliver.
Personally, I’m very disappointed with most of the unicorns I used before. They’re non-existent to me. Hence, I wouldn’t listen to people who follow the Unicorns. I think that’s why we don’t have any advice for a higher age.
YC in that sense is a full “all guns blazing” thing. It’s generally younger folks who don’t mind eating ramen and don’t have to take care of a large family, and hence are more likely to go into a startup full time. Combine these two and I think you see what I mean.
Btw this isn’t a new criticism of YC/VCs, it’s something that’s been around for a while.
Looking back, when I was the age in the article I was way too insecure and nervous to be able to take this advice. Looking at it now I think it is great and want to set my children up with that way of thinking.
I am 34 and found the message inspiring.
I think it's more important to note how talks like this use "children" as an excuse to present a very sanitized version of the history being discussed. I think a massively underappreciated mechanism by which American culture distorts history is by its very lax and sometimes supportive norms about fudging the truth and sometimes even outright lying to children
It feels irresponsible to tell kids how they can build the next Google, without also telling them how likely it is they won't succeed at it.
Granted, most people in their early 20s have very little to lose, so a failed startup may not be much of a problem, outside of the stress and emotional effects.
To be clear, this was always true to some degree, but inequality is higher, industries have more power and thus workers have less, and safety nets that don't come from your parents being well-off are weaker (and fewer people's parents are well-off) than when I was a kid, and this has actually been true for a few subsequent generations of kids
Universities kind of double down on this equivalence in some ways, as they are the de facto credentialing system for the job market, although there's some evidence that this is for the first time in quite a while becoming less true in some sectors, it's still a huge part of the reality of how social mobility is gated.
So when Graham frames the role of "selective" universities in the success of various famous startups, he's totally right that they're excellent places to network. But his conception of their selectivity is pretty strange. It's pretty well-understood by now that a lot of mechanisms can get people into great schools via the wealth and influence of their parents rather than "smarts and determination". I once read someone who pointed out that bringing in a few "scholarship" kids who are less well off makes it seem like anyone could get in with the right grades and test scores, and the incentive is to have just enough of these to ambiguate who is there for what reasons. To launder the "wealthy, well-connected" with some "smart, determined" cred. It's telling therefore that he leaves out one of the most important parts of the networking value of universities: They're a great place to meet funders, and the top tier universities also have significant resources to facilitate student projects that may turn into companies, compared to other institutions
The author is British, for one.
That said, the US and Britain are both quite world-class at both endorsing lying to children and revisionist history are definitely among
Nobody can know such a thing -- especially turning around a billion-dollar business, a thing with a near-zero prior probability. It's more reasonable to say that Larry had the drive, the aptitude, and the resources to maximize his odds (which would still be low.)
Larry Page's original ambition was to digitize books and knowledge in the world [2].
> Page had always wanted to digitize books. Way back in 1996, the student project that eventually became Google—a “crawler” that would ingest documents and rank them for relevance against a user’s query—was actually conceived as part of an effort “to develop the enabling technologies for a single, integrated and universal digital library.”
[1]: https://twitter.com/jam3scampbell/status/1608270969763729415
[2]: https://www.theatlantic.com/technology/archive/2017/04/the-t...
His dad was a computer scientist and larry read a lot of AGI sci fi as a kid, so it's not really that hard to extrapolate 1980s technology to 2040s outcomes.
(Still not obvious if you ask me.)
> It's obvious in retrospect that this was a great idea for a startup. It wasn't obvious at the time.
It may not have been obvious, but the decision was damn well near as engineered with data as it could be. They also were _insanely_ well connected through their and their parents academic career. Both Sergey and Larry had obtained their PhD prior to starting the company. I can also remember reading that they obtained significant amounts of funding through connections Larry's dad had into the industry.
You can ignore the rest of my comment, what follows is just my take.
Their success story is imo one of the most blatant examples on how privilege really does give you a boost in life. I am not arguing that anyone could have done it, but I do wonder how the world would look like if we were all kids of academics with a successful career, with a relatively safe, secure and stable childhood home and a family background that really incentivizes learning and academic success over succumbing to the pressure of, you know, having an income at some point.
Don't forget that Larry's older brother Carl went through the whole VC process with egroups and gained extreme experience with how to maximize his position in negotiation.
But yes, I agree completely that kids of academics raised in an environment that incentivzes learning is a reliable way to transform the future.
The rest of my statement is true.
[0] http://infolab.stanford.edu/pub/papers/google.pdf
I recently read something that played out a thought experiment about "imagine the world could only hold 10,000 people". It may have been a comment somewhere on HN honestly. The idea was that if the world could only hold 10,000 people, there never would have been enough division of basic duties for any one individual to dive so deep that they could invent semi-conductors (insert any modern tech really). I mean we likely wouldn't even have mastered locomotion by now if that was the case.
Lets assume we're "all kids of academics with a successful career, with a relatively safe, secure and stable childhood home and a family background that really incentivizes learning and academic success over succumbing to the pressure of, you know, having an income at some point." Most of us will still just be working on the basic societal problems of producing food and taking out the trash.
With all due respect, the world isn't a thought experiment and the dynamics of a system with 10.000 people is not comparable to that of 7 billion.
My argument was pointing at the fact that it may be pointless to compare your own plans to success against someone elses success story, when they had completely different starting variables in life and people who refuse to at least consider this are either trapped in the Silicon Valley hustle culture or are, sorry, completely ignorant, bordering on idiotic.
With that same logic ala "Not everyone can be X" I can justify almost all of human suffering in the world. I refuse to believe that you follow an ideology like this if you're on this site, because if you did, you were already rich by means of some criminal enterprise exploiting humans far beyond what tech startups are capable of.
This isn't some appeal to idk, introducing communism and making everyone equal but this argument is as dumb as making a healthy runner compete in the paralympics.
To hear Larry tell it, his original idea for Google was to download the whole web and throw away everything but the links, and he was inspired by academic notions of citation indexes. It wasn’t specifically (or really at all, until Google books came out) about books - that sounds like a cover story to get grad student funding for his actual idea, because you can’t really go to a university and say “I want to download the whole web and throw away everything but the links” without telling them why or connecting it to some plausibly useful idea.
The acquisition offer is often cited, but I don’t think Larry and Sergey were ever really serious about taking it. They didn’t, after all. But if you’re living on a grad student stipend (which was like $20k in the 90s), a million bucks is a lot of money.
And they absolutely knew it would be big, they just didn’t know how it would be big. It was quite popular within the Stanford lab as well…it’s interesting, looking through the early CVS commits for Google, how much work was done by people who ended up not actually becoming employees of Google or having a major part in its story. I think the real genius of Google was treating the web as an object that could be studied and manipulated, and not as some amorphous thing you were part of. That was exciting even if people didn’t know how it would be.
I don't know what point you are trying to make.
Googles mission was always to know everything for everyone.
Anyway ,we chatted about his latest company, which I can't find now. The idea was this: industrial facilities often return really noisy signals on the electrical supply lines, and the electrical company has to do a lot of work to clean it up (hey, I'm not an EE). Like, motors, etc, all severely distort the waveform. So his company made and I guess sold a product that you'd put at your electrical service panel that "cleaned up" the signal before it went back to the power company. In response, the company would give you cheaper power prices.
I was reminded of this when Larry Page met with Donald Trump early in the Trump administration and brought up one of his favorite plans- to rebuild the US electrical grid around DC distribution. He's truly made for another world.
To maximise their chances of success, Paul suggests:
1. Become a builder: Gain expertise in technology or other fields you're passionate about. (Does not have to just be coding, either!)
2. Start personal projects: Build things you and your friends find useful. Paul suggests this is the fastest way to learn and potentially discover startup ideas.
3. Collaborate: Work on projects with like-minded people. This fosters skill development and could lead to finding potential cofounders.
I liked how Paul also emphasises the importance of good grades in order to access top universities, where you'll find other bright collaborators.
There are obviously many other paths, but if I wish I had this advice at 14 or 15.
I don't disagree with Paul's choice to focus on entrepreneurship and getting rich here. If you're looking to excite people, tell an exciting story. Captivate imagination. No one gets pumped up (especially at that age) at the mediocre story.
What I find great about his advice is that it is by no means limited to entrepreneurship. Working on passion projects, doing well in school, and learning how to build relationships is valuable even if you're working for someone else.
There's a big space in tech jobs between the "grinding away at code/help desk" and "startup bro" that I feel doesn't get described enough. And that's one thing I'd tack on to Paul's advice, notwithstanding the need to sell the message above. That advice he espouses can also lead to being a really standout contributor at a tech firm, and probably with a higher rate of success than getting a startup to stick. One doesn't have to form a startup to contribute ideas, and there's good money to be made in that space.
I think your choice of wording above is important to call out: The advice "maximizes" the chance of success; but it doesn't guarantee it.
Overall, completely agreed. =)
This is a great observation!
I agree that Paul is framing an inspiring narrative, especially when targeting younger people. You're spot on, suggesting that this advice sets people up for success in general, whether they become entrepreneurs, standout employees, or something else entirely.
We need more narratives about those successful 'in-between' tech roles.
Paul's giving the ingredients for good outcomes, but the recipe is up to the individual.
I suppose the strongest criticism would be that pg's advice outlines necessary conditions to start the next Google but are not sufficient. Yes, the stuff you "make" needs to feel like a fun project, but without the "...something people want" then your company will not make you rich. As with any advice, there there will always be exceptions ("do you really need a cofounder?") but as far as "here is some advice to achieve x", where x is "create a billion-dollar company" this isn't a bad start.
Yes you need to be lucky to get super-rich as a founder too, but you have a lot more control, i.e., you make the primary decisions that determine whether the company will make good products that people will use/buy.
Hell if you joined Facebook last year and got in when the stock was around 100, your initial equity grant just 5x.
The real point is that it's misguided to try and compare percentages of tech company employees with percentages of founders; they're very different things.
Of course, out of all the founders of all the companies, a relatively tiny percentage will be vastly rich. And out of all the employees of all the tech companies, most will be quite wealthy and comfortable, and a small percentage will be vastly rich.
But that doesn't tell you anything about what is the most reliable path for any given individual to get vastly rich; it entirely depends on whether you're the kind of person you are how well you can learn how to build successful products and companies.
Decision inertia means that employees often don't sell vested stock, and end up being lucky. Similarly, external investors aren't willing to put 30-50% of their networth into one bet and therefore miss out on the kind of luck that can set them up for life.
There is nothing that a lowly engineer at Tesla or Nvidia knows, that can't be found out by an external investor. They are operating in the same information landscape, but different outcomes when they give into decision inertia.
It's not about joining Tesla or Nvidia early. It's about betting on them.
It's also possible to bet on Tesla/Nvidia and lose. Badly.
That was a bet.
If they hadn't made the bet and sold stocks as soon as they vested, then the returns wouldn't have been as incredible.
I'm well aware that the definition of rich can be very different in other contexts. I'm talking about the context of this article.
Most of the FIRE bloggers who bother to account for this—like MMM—have a (perhaps implicit) fallback plan of returning to work somewhere with decent health insurance if they or a family member becomes very sick, but that’s quite a gamble.
(Never mind that a bunch of those sorts have jobs and couldn’t remain comfortably “retired” without them—god I really hate that part of the blogosphere, “look it’s so easy you dumb idiot” but then you start reading between the lines and realize how much of it’s just a bit)
Exchange plans are fine enough, and like, they're not that cheap, but they're also not that expensive either. Depending on how much you make from investments on your never have to work again horde, you may be able to qualify for rate subsidies, and then it's even less expensive. In my county, if I were 64 years old, assigned male at birth, I'm looking at about $17,000/year for a Blue Cross Bronze plan (less costly options available), with $9,200 out of pocket max. Budgeting $26,000/year for healthcare means less than $1 M should cover you for life (assume 3% perpetual withdrawal rate). Rates are lower for younger people, but budgeting based on current costs for the oldest people should help the numbers work. Double the budget if you have a spouse; do some math if you have kids you need to cover until they become independent. Definitely make sure you work until you have earned Medicare eligibility, cause it'll be handy when you reach that age.
Is $1-2 M crazy-high? Kind of, but depending on what your annual withdrawal rate target was, maybe you can just say if you've got enough to pull $100,000/year, you're good on healthcare too. Hopefully most years you won't hit the out of pocket max.
You’ll be exposed to tens of thousands in risk per year on top of (low) tens of thousands in premiums per year for a family Exchange plan. You’ll be burning nearly half of that (and spending all your free time trying to keep hospitals and insurers taking even more) if one of you gets cancer—or, if it’s you who gets cancer, you better hope someone else can handle that.
You also can’t withdraw at as high a “safe rate” as people planning for an ordinary retirement at ~65 do, because your fund needs to last a lot longer despite inflation and such. $2m isn’t “retire at 35” (… or 45) money. It might be “take a big gamble and maybe get lucky… for a while” money. Or semi-retire money.
[edit] at constant 2% inflation (ha!) you need a very safe source of consistent (not average!) 6% returns to retire with 80,000/yr income on $2m, without eating into principal. Anything goes wrong (“whoops, ‘safe’ wasn’t as safe as I thought!” or “whoops, we had a year of 7% inflation and my investments didn’t benefit from that!”) and you can find yourself burning principal while your account value is already down. It won’t take a lot of that before $80k is no longer your safe-withdrawal amount. A couple such years and you may be back to work. 30+ years is a long time…
[edit edit] also damn under $10k max out of pocket on a family plan at the bronze level for $17k? I gotta get out of my shithole state. That’s better than our Gold plans (also our plans tend not to cover like 2/3 of area providers, which may include 100% of area specialists for certain situations)
> You also can’t withdraw at as high a “safe rate” as people planning for an ordinary retirement at ~65 do, because your fund needs to last a lot longer despite inflation and such. $2m isn’t “retire at 35” (… or 45) money. It might be “take a big gamble and maybe get lucky… for a while” money. Or semi-retire money.
The $2 M is the budged accumulation only to pay for premiums and out of pocket until you hit Medicare; and that's assuming a spouse. Budgeting that based on perpetual withdrawl rate gives yet another buffer, because it only has to last until Medicare eligibility age. Yeah, there's unknowns, but whatever. I'm not saying $2 M is enough to accumulate for early retirement. It could be, but a lot of people want to spend more money than that. $2 M doesn't generate that much income, so you'll likely qualify for health plan subsidies, which would help a bit too.
Edit: I used zipcode 98110, birthday for illustration 01/01/1960. Going into the less expensive side of my state, zipcode 99336; there's no blue cross out there, but the most expensive bronze plan for that birthdate is $14,000 / year with the same $9200 out of pocket max. And yeah, limited networks suck ... I'm not going to shop for hypotheticals there --- I'm pretty sure if there's no reasonable in network doctors, you can fight your insurance to get covered at a reasonable doctor, regardless of the insurance and state, and if you're early retired, you'll have time for it.
Solvable, including consideration of valuations via CAPE PE 10. Based on past data, the safe withdrawal rate (SWR) happens to be around 3.25-3.5% of assets to extend to a 60-year time horizon [1]
> at constant 2% inflation (ha!) you need a very safe source of consistent (not average!) 6% returns to retire with 80,000/yr income on $2m, without eating into principal.
For most of this research, "failure" constitutes running out of money. Preserving the initial portfolio value in inflation-adjusted terms can also be solved for. It takes the SWR closer to 2.8-3% for 60-year horizon with high equity valuation corrections.
> You’ll be exposed to tens of thousands in risk per year on top of (low) tens of thousands in premiums per year for a family Exchange plan.
Better to cap expenses and be ready to pay for it than live in fear. Save, invest, and move on with life.
> $2m isn’t “retire at 35” (… or 45) money. It might be “take a big gamble and maybe get lucky… for a while” money. Or semi-retire money.
Depends on how much money you need to spend every year to be happy. Sounds like you need a lot of it. For many, $2m would be fine, even with a very long time horizon. And if any problems crop up, there would be a 15-20 year warning during which a small income boost could top things up.
----
Things don't always have to be so gloomy.
[1] https://earlyretirementnow.com/2017/09/13/the-ultimate-guide...
I'm sitting on the accumulated wealth of 25 rather up-and-downish years in this industry, 10 years at Google, an almost paid-off mortgage, and a decent lump sum I got from when Google bought my employer, I turn 50 this year, and there's no way I can retire. Not without selling my home and moving somewhere a lot cheaper (hard to find here).
Maybe I've made some bad financial choices (not that many), but mostly it's that compensation packages in our industry are set just high enough to keep people on the upper side of comfortable middle class.
If you don't own capital -- haven't invested in rental properties or starting your own business --getting out of the job market isn't really a thing before 65 for most people even in our very well compensated industry.
If I were single or it were just me and my wife, sure.
I've been through tldroptions, and looked at enough options agreement given out by startups in the last few years, to know that as an IC engineer... even if you are lucky enough to be part of the very few startups that have a liquidity event... you're likely gonna get $300k, $400k USD tops.
Unless you're 25 and can shove that in the bank without touching it at all... that's not the life changing event some people think it is. Once the gov't takes their share, it's enough for a house downpayment or a very nice car, and you're certainly not going mortgage free with it.
Still, I'm in a 500x better position than most.
Back in the early y2ks, and late 90s, yes, you could get rich and be up and out if you were lucky and played your cards right. Those days are done.
There are tens of not hundreds of thousands of people who could retire comfortably after working at Google, Facebook, Apple, MSFT for a decade during their growth years. How many startup founders can do that?
Sure, becoming a billionaire is a different story but who cares?
Predicting which big tech company will do well enough in future to give you that big stock reward over time is a big gamble, but certainly a smaller gamble than doing a startup.
I know plenty of people who have joined half a dozen startups, none of which yielded any gain. And many entrepreneurs who worked super hard many times and have nothing to show for it but scar tissue.
Whatever you do, the best advice is to ensure you are enjoying the journey. Don’t waste your life just to be rich. That path nearly always yields a Pyrrhic victory.
If you think it is easy to save more than a third of your income, remember you’ll have a federal marginal tax rate of 35% or higher, will probably have to work onsite in a HCOL state, and unless you’re lucky enough to live in WA, a high state income tax. Yes you can shield some of your income via 401ks and Roths, but for the former you’re going to get taxed on withdrawal, and for the latter you get penalized if you touch it before you’re 59.5.
Now if you’re dual cogs with no kids, maybe. If you do have kids, you’re not retiring until long after ten years.
This is very easy, actually. You just happen to like fancy things and houses, probably.
> Now if you’re dual cogs with no kids, maybe. If you do have kids, you’re not retiring until long after ten years.
I find it depressing that so many people use kids as an excuse to avoid facing their own problems with money and spending. Look deeper and you can find happiness with a lot less.
If I save absolutely everything left ($235 K) for 10 years that gets me to 2.35 million.
The parent post mentioned saving $2-5 million. To get to $ 2 M I have to live off $35 K a year (I realize I'm ignoring investment activities).
EDIT: additionally to minimize taxation you’re probably doing some of that savings in a 401k. Let’s say $25k * 10 year (I was). But that actually creates a deferred tax obligation. Let’s say the tax rate you pay that at is 20% (very optimistic but by the time you pay it you’ll likely be used to living below the poverty line). That takes you down to $30k a year. Actually even worse the employer match is taxable when you withdraw it, so another deferred tax obligation means that to get to $2M (accounting for future tax obligations) in 10 years you need to live on $25K a year.
That seems challenging in Northern California. Also why would I want to do that? - living at that spending level is likely to affect my long-term health and happiness, so the motivation is not clear to me.
There are also ways to get at this money with almost no taxes paid later IF you are not working--look for "Roth IRA conversion ladder".
Also look into "Mega Backdoor Roth" for more tax sheltering.
> That seems challenging in Northern California
You don't have to retire to California. Just pay minimal costs while you're there. Many places in US are beautiful, have great infrastructure and health care, and don't cost as much.
And investment growth is a LOT; don't ignore it. And after just a few years of not working, unless you have a bad start you can probably live off of much more than the initial safe withdrawal rate.
https://ibb.co/qyFz1C3
Of course, a bad market makes it longer, but the converse is also true: it's more likely a good market makes it shorter! (historically markets go up more than down, of course)
Add a spouse that also saves and invests, and you can have MORE than $45,000/yr of expenses covered within 7 years of earning at that rate. You can also back off to part time or have one spouse continue working after having kids, and all you need to do is cover SOME (not even all!) of your expenses.
> I want to do that? - living at that spending level is likely to affect my long-term health and happiness
The freedom of not dealing with "the cult of impact" [1] and other such silly things is amazing. Having a huge pile of money allows solid peace of mind in a way most people can't even conceive.
And finding out how much happiness you can get independently of spending money is truly eye-opening. Most people are too scared to even TRY finding fulfillment away from what society tells us is "fun".
[1] https://old.reddit.com/r/ExperiencedDevs/comments/1bh80wl/go...
Also, I think 'Google' in this instance is more for motivation rather than a literal comparison. He's leaving out the part that Google was founded by graduate CS students a) looking for a thesis, b) into node-link graphs, and c) inspired by academic citation metrics. Would PG advise anyone to go to grad school to learn how to find scientific-discovery-based startup ideas these days?
L&S were, and they hired other people who were. They didn't start with a business idea, but with a technical one. They filled in the blanks on the business side after they survived the .com crash.
I didn't get to Google until 2011, but it became clear to me after joining that in the past they had gone on a very nerdy mission to hire all the nerdy people and collect them into one place to do nerdy things.
(Unfortunately that nerdy thing ended up being selling ads really efficient, but that's another story.)
My fundamental point is that the Google story is very unlike the kind of stories that YCombinator or a16z like. It started, like you said, as a set of intellectual/technical interests. The other stuff, that VCs today like, came later.
In a way they did the opposite of the usual advice. They started with the hammer (the tech) rather than the nail (the business problem.) They certainly didn't start with a "Like X but for Y" statement like seems to be desired by VC today. And they didn't look like the typical .com story at the time (which was usually: give us lots of VC $$ so we can sell something on the web that is currently not sold on the web, but we'll just use the $$ to buy customers and make no profit...)
I would posit that if today's Google came to YCombinator today they'd be shown the "no thanks" door.
I wonder if we really shouldn't make a bit more out of the fact that there are different types of startups: those that pick off low-hanging fruit really well, those that combine novel technology with novel problems (for instance, the recent YC LLM meeting note-taking / transcription service), those that are scientific-discovery based (see, for example the NSF Small Business Innovation Research program), etc. I am not experienced enough to create an ontology of startup ideas, but I think it'd be an interesting exercise.
You bring up a good point about starting from the tech rather than the problem. Usually the advice from VCs is to start from the problem and iterate on the tech until you solve it. What was very fortunate for Google is that the tech translated into a great business problem. Open up any CS textbook and 'Search' is always a major section. It was also a great business because the problem is important, frequent, and had not been properly solved by the big players in the mid 90s.
"And then we realized that we had a querying tool..." (Page)
Search is not a good business. Ad sales over top of search turned out to be. AdWords is the thing that catapulted Google towards (insane) profitability. And for the first few years, Google didn't really sell ads, or market themselves as even aiming to sell ads. But AdWords could only be successful because they had already captured the market on search, and so had a captive audience to show ads to (and relevance information based on their searches).
AdWords rolled out in 2000. Many of us had been using Google as a search engine since before the company had even been founded (1998).
We already realized the necessity of finding information amongst the exponentially growing wealth of Web servers (sites).
And Google obviously worked much better than the existing crawler-based search indexes and curated directories.
And lots of people thought a "portal" was a good place to be, if you could manage it.
Funny thing is I recall using Google from the very day I first saw it come across Slashdot -- probably late 1997 -- before they were incorporated even... but I also recall that at some point around 1999 I actually switched back to using AltaVista or something similar for a bit. Because I preferred the search results I got.
It was actually a more competitive situation than people might remember in hindsight.
The big difference is that Google made it through the .com crash filter better than anybody else. That and they kept the good will of their customers by keeping minimal and straightforward and (for a while) ad free.
Plus the no fast no clutter homepage for google compared to how many links can we fit in one screen for the portals
Maybe AltaVista improved after that, which could explain how the parent commenter could go back to it.
The turning point that brought me fulltime to Google from then on (until recently switching to Kagi) was when they started having almost live results. It's hard to remember or imagine but search indices were often days, weeks out of sync for critical things like news, etc and Google was really the first to fix that.
Around the dawn of YC, IIRC, when PG did the "summer founders" or something like that, a group of 4 of us Lisp hackers applied as a team. No response.
We were mostly in grad student-like lifestyle modes, and not tied down, were energetic, and already had various applicable experience.
But I think PG was mostly looking for barely-20 year-olds to drop out of college, rent an apartment in Harvard Square together, and sit around hacking in towels.
Since that's what he wrote in one article. Which I guess trumped the article in which he said Lisp hackers are great for startups.
Now his latest article says he's going after 14 and 15 year-olds. :)
Don’t get me wrong. This folklore is extremely important, if not just to raise the grades of one student. But as a founder, when I give advice, out of inflated ego generally, I also have vertigo from the height of everything that could go wrong about being mistaken about my advice.
I'm 44 and spent most of my career working individually and with my closest friends on projects that felt interesting, and it went really well for us in all of the ways. I also met these friends at a selective school, though it was a state-funded high school (massacademy.org), not a university.
Also, someone once came to my very conventional elementary school in 5th grade on career day to talk about a very unconventional career path (being a full-time peace activist) and this had a huge impact on me, both because it validated activism as a career and perhaps more importantly because it validated not having a normal job.
Getting a very short lecture in school from an interesting non-teacher can be at least very memorable and perhaps life-changing.
(Excerpt from the “wear sunscreen” speech: http://plodplod.blogspot.com/2006/07/advice-like-youth-proba...)
I didn't really see how a business that was starting from a more R&D angle would make it through.
And a lot of it seemed really pitched to the bizdev "hustler" founder personality, not to engineers/nerds.
I disagree. The AI stuff seems pretty nerdy. Same for GitHub and other levels of abstraction. The disruption talk is just the branding by the media.
Ilya Sutskever (OpenAI) for example was employed inside Google doing that kind of work and only left when he ran up against the limits of what he felt he could get done there. But the fundamental R&D had already been done. When I was at Google I saw some of it from a distance before I ever heard of OpenAI.
The VCs have come along at the tail end of the R&D cycle on this stuff in hopes of cashing in. Same as they did with crypto and N number of trends before. They're trailing, not innovating.
They're primarily interested in successful business models capitalizing on existing technology, not the actual development of new technology. Unless one has distorted the meaning of "technology" significantly.
pg is giving advice based on him getting rich from that period of time where the small startup could make it big. But those conditions are probably rare going forward.
Yes, there are also all kinds of completely unrelated to your idea things that can succeed or kill your business.
Happen to launch your idea the day before a global economic collapse, well, better be exceptionally lucky.
Happen to launch when interest rates drop though the floor and banks are handing out money to anyone. You're going to have a harder time failing.
The purpose of VC can be viewed as trying to take a company from nonexistent to big while skipping the small stage, but small is where the action really is.
The irony is that both the thing and its side effects were anticipated very early on.
"Currently, the predominant business model for commercial search engines is advertising. The goals of the advertising business model do not always correspond to providing quality search to users. ... It is clear that a search engine which was taking money for showing cellular phone ads would have difficulty justifying the page that our system returned to its paying advertisers. For this type of reason and historical experience with other media, we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers."
(The Anatomy of a Large-Scale Hypertextual Web Search Engine, Sergey Brin and Lawrence Page, 1998)
For quite a while at least before they joined the crowd.
Nope, ended up going to scientific-discovery-based-startup-ideas-R-us instead, by client demand.
Isn’t “you shouldn’t focus on science to start a good tech company” a good indicator that our conception of “tech” company is completely broken? That we’re really talking about ways to milk money from gambling billionaires, not change the world with successful products?
Building a successful company depends on many things. The point made here is that you are unlikely to be expert enough, and motivated enough to build a successful business in an area you are not interested in, and haven't played around in. So to increase the amount of domains that you could create a business in from 0 to a small positive integer you should build things that interest you.
Of course if you have money, or know how to persuade people who have money, you can be something of an idiot and still develop a successful business. Usually you are not really developing the business in this case, more attaching yourself to a business that smart people are running for you.
In a pool of high school freshmen, most probably have a better chance of success following the first path, than the second.
So no word about funding from the CIA and NSA. If you want to build something that changes the world in such a profound way as Google did, you can not possibly expect the powerful not having a word with you. I am inclined to believe that these days you will need influential "friends" with aligned interests at some point.
All the examples he mentioned Google, himself and the Irish Stripe founders had to do the same for their startups.
Sadly in the UK all the current unicorn "startups" are a bit iffy: XTX (high frequency hedgefund), betfair (betting company), tripledot studios (Zynga like company).
Unfortunately mega success in startups doing soemthing innovative is non-existent in Europe and UK in particular. Mistral stands out to how exceptional it is to the rule, and the closest other one I can think of is BioNtech.
Sadly the highest expected route to fortune in the UK remains quant trading in finance. Including starting your own hedge fund.
Seems kinda reasonable for a motivational speech not to mention it (even assuming it's entirely true.)
It would be dishonest if he intentionally left it out since for some (arguably a minority of young people) it is a deal breaker.
I'd rather a government that enables a thousand mid-sized companies with moderately well-paid executives and employees than one that enables a single monopolistic mega-corporation with billionaires whose power rivals states and whose incentives are not aligned with most of the world.
To say nothing of the lost revenue from tech export do you think it is better for the UK that it depends on AWS cloud for running the majority of its public services, Apple for almost 70% of the phones used by it's citizens, Google for the other 30%?
Which midsize company is going to be able to compete with AWS on offering cloud computing services, Apple on developing smart phones or Nvidia on GPUs?
Actually the UK has the worst of both worlds: US big tech opens office here leading to well-paid executives and engineer, while all revenue (and none of the taxes) from selling the products these engineers develop goes to the US.
If Google in 2006 wasn't powerful enough to get someone as culturally unthreatening as a Brit into the USA, it cannot be easier to do so as a startup founder.
That said I did know someone later who was able to make it in and become a startup CTO there (a German guy). Hilariously he did it by making a viral YouTube video. And by "make" I mean he hired an agency to make it. This was sufficient to get him in on an artist visa, which was easier than getting in on an H1B.
Theres simply no way to get away with what Google, Facebook or Uber did today. You will not sneak your software into enterprise customers, you will not be able to skirt regulations.
Hell the big money pot of getting acquired may be dead too, e.g. Figma.
For most startups, you will fail. For the top 1% of companies you can hope to at best make a comfortable living at a multi-million dollar valuation. Only the .0001% will become a Google.