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| February 2009 Hacker News was two years old last week. Initially it was supposed to be a side project—an application to sharpen Arc on, and a place for current and future Y Combinator founders to exchange news. It's grown bigger and taken up more time than I expected, but I don't regret that because I've learned so much from working on it. **Growth** When we launched in February 2007, weekday traffic was around 1600 daily uniques. It's since grown to around 22,000. This growth rate is a bit higher than I'd like. I'd like the site to grow, since a site that isn't growing at least slowly is probably dead. But I wouldn't want it to grow as large as Digg or Reddit—mainly because that would dilute the character of the site, but also because I don't want to spend all my time dealing with scaling. I already have problems enough with that. Remember, the original motivation for HN was to test a new programming language, and moreover one that's focused on experimenting with language design, not performance. Every time the site gets slow, I fortify myself by recalling McIlroy and Bentley's famous quote > The key to performance is elegance, not battalions of special cases. and look for the bottleneck I can remove with least code. So far I've been able to keep up, in the sense that performance has remained consistently mediocre despite 14x growth. I don't know what I'll do next, but I'll probably think of something. This is my attitude to the site generally. Hacker News is an experiment, and an experiment in a very young field. Sites of this type are only a few years old. Internet conversation generally is only a few decades old. So we've probably only discovered a fraction of what we eventually will. That's why I'm so optimistic about HN. When a technology is this young, the existing solutions are usually terrible; which means it must be possible to do much better; which means many problems that seem insoluble aren't. Including, I hope, the problem that has afflicted so many previous communities: being ruined by growth. **Dilution** Users have worried about that since the site was a few months old. So far these alarms have been false, but they may not always be. Dilution is a hard problem. But probably soluble; it doesn't mean much that open conversations have "always" been destroyed by growth when "always" equals 20 instances. But it's important to remember we're trying to solve a new problem, because that means we're going to have to try new things, most of which probably won't work. A couple weeks ago I tried displaying the names of users with the highest average comment scores in orange. That was a mistake. Suddenly a culture that had been more or less united was divided into haves and have- nots. I didn't realize how united the culture had been till I saw it divided. It was painful to watch. So orange usernames won't be back. (Sorry about that.) But there will be other equally broken-seeming ideas in the future, and the ones that turn out to work will

seem just as broken as those that don't. Probably the most important thing I've learned about dilution is that it's measured more in behavior than users. It's bad behavior you want to keep out more than bad people. User behavior turns out to be surprisingly malleable. If people are expected to behave well, they tend to; and vice versa. Though of course forbidding bad behavior does tend to keep away bad people, because they feel uncomfortably constrained in a place where they have to behave well. But this way of keeping them out is gentler and probably also more effective than overt barriers. It's pretty clear now that the broken windows theory applies to community sites as well. The theory is that minor forms of bad behavior encourage worse ones: that a neighborhood with lots of graffiti and broken windows becomes one where robberies occur. I was living in New York when Giuliani introduced the reforms that made the broken windows theory famous, and the transformation was miraculous. And I was a Reddit user when the opposite happened there, and the transformation was equally dramatic. I'm not criticizing Steve and Alexis. What happened to Reddit didn't happen out of neglect. From the start they had a policy of censoring nothing except spam. Plus Reddit had different goals from Hacker News. Reddit was a startup, not a side project; its goal was to grow as fast as possible. Combine rapid growth and zero censorship, and the result is a free for all. But I don't think they'd do much differently if they were doing it again. Measured by traffic, Reddit is much more successful than Hacker News. But what happened to Reddit won't inevitably happen to HN. There are several local maxima. There can be places that are free for alls and places that are more thoughtful, just as there are in the real world; and people will behave differently depending on which they're in, just as they do in the real world. I've observed this in the wild. I've seen people cross-posting on Reddit and Hacker News who actually took the trouble to write two versions, a flame for Reddit and a more subdued version for HN. **Submissions** There are two major types of problems a site like Hacker News needs to avoid: bad stories and bad comments. So far the danger of bad stories seems smaller. The stories on the frontpage now are still roughly the ones that would have been there when HN started. I once thought I'd have to weight votes to keep crap off the frontpage, but I haven't had to yet. I wouldn't have predicted the frontpage would hold up so well, and I'm not sure why it has. Perhaps only the more thoughtful users care enough to submit and upvote links, so the marginal cost of one random new user approaches zero. Or perhaps the frontpage protects itself, by advertising what type of submission is expected. The most dangerous thing for the frontpage is stuff that's too easy to upvote. If someone proves a new theorem, it takes some work by the reader to decide whether or not to upvote it.

amusing cartoon takes less. A rant with a rallying cry as the title takes zero, because people vote it up without even reading it. Hence what I call the Fluff Principle: on a user-voted news site, the links that are easiest to judge will take over unless you take specific measures to prevent it. Hacker News has two kinds of protections against fluff. The most common types of fluff links are banned as off-topic. Pictures of kittens, political diatribes, and so on are explicitly banned. This keeps out most fluff, but not all of it. Some links are both fluff, in the sense of being very short, and also on topic. There's no single solution to that. If a link is just an empty rant, editors will sometimes kill it even if it's on topic in the sense of being about hacking, because it's not on topic by the real standard, which is to engage one's intellectual curiosity. If the posts on a site are characteristically of this type I sometimes ban it, which means new stuff at that url is auto- killed. If a post has a linkbait title, editors sometimes rephrase it to be more matter-of-fact. This is especially necessary with links whose titles are rallying cries, because otherwise they become implicit "vote up if you believe such-and-such" posts, which are the most extreme form of fluff. The techniques for dealing with links have to evolve, because the links do. The existence of aggregators has already affected what they aggregate. Writers now deliberately write things to draw traffic from aggregators—sometimes even specific ones. (No, the irony of this statement is not lost on me.) Then there are the more sinister mutations, like linkjacking—posting a paraphrase of someone else's article and submitting that instead of the original. These can get a lot of upvotes, because a lot of what's good in an article often survives; indeed, the closer the paraphrase is to plagiarism, the more survives. I think it's important that a site that kills submissions provide a way for users to see what got killed if they want to. That keeps editors honest, and just as importantly, makes users confident they'd know if the editors stopped being honest. HN users can do this by flipping a switch called showdead in their profile. **Comments** Bad comments seem to be a harder problem than bad submissions. While the quality of links on the frontpage of HN hasn't changed much, the quality of the median comment may have decreased somewhat. There are two main kinds of badness in comments: meanness and stupidity. There is a lot of overlap between the two—mean comments are disproportionately likely also to be dumb—but the strategies for dealing with them are different. Meanness is easier to control. You can have rules saying one shouldn't be mean, and if you enforce them it seems possible to keep a lid on meanness. Keeping a lid on stupidity is harder, perhaps because stupidity is not so easily distinguishable. Mean people are more likely to know they're being mean than stupid people are to know

being stupid. The most dangerous form of stupid comment is not the long but mistaken argument, but the dumb joke. Long but mistaken arguments are actually quite rare. There is a strong correlation between comment quality and length; if you wanted to compare the quality of comments on community sites, average length would be a good predictor. Probably the cause is human nature rather than anything specific to comment threads. Probably it's simply that stupidity more often takes the form of having few ideas than wrong ones. Whatever the cause, stupid comments tend to be short. And since it's hard to write a short comment that's distinguished for the amount of information it conveys, people try to distinguish them instead by being funny. The most tempting format for stupid comments is the supposedly witty put-down, probably because put-downs are the easiest form of humor. So one advantage of forbidding meanness is that it also cuts down on these. Bad comments are like kudzu: they take over rapidly. Comments have much more effect on new comments than submissions have on new submissions. If someone submits a lame article, the other submissions don't all become lame. But if someone posts a stupid comment on a thread, that sets the tone for the region around it. People reply to dumb jokes with dumb jokes. Maybe the solution is to add a delay before people can respond to a comment, and make the length of the delay inversely proportional to some prediction of its quality. Then dumb threads would grow slower. **People** I notice most of the techniques I've described are conservative: they're aimed at preserving the character of the site rather than enhancing it. I don't think that's a bias of mine. It's due to the shape of the problem. Hacker News had the good fortune to start out good, so in this case it's literally a matter of preservation. But I think this principle would also apply to sites with different origins. The good things in a community site come from people more than technology; it's mainly in the prevention of bad things that technology comes into play. Technology certainly can enhance discussion. Nested comments do, for example. But I'd rather use a site with primitive features and smart, nice users than a more advanced one whose users were idiots or trolls. So the most important thing a community site can do is attract the kind of people it wants. A site trying to be as big as possible wants to attract everyone. But a site aiming at a particular subset of users has to attract just those—and just as importantly, repel everyone else. I've made a conscious effort to do this on HN. The graphic design is as plain as possible, and the site rules discourage dramatic link titles. The goal is that the only thing to interest someone arriving at HN for the first time should be the ideas expressed there. The downside of tuning a site to attract certain people is that, to those people, it can be too attractive. I'm all too aware how addictive Hacker News

be. For me, as for many users, it's a kind of virtual town square. When I want to take a break from working, I walk into the square, just as I might into Harvard Square or University Ave in the physical world. But an online square is more dangerous than a physical one. If I spent half the day loitering on University Ave, I'd notice. I have to walk a mile to get there, and sitting in a cafe feels different from working. But visiting an online forum takes just a click, and feels superficially very much like working. You may be wasting your time, but you're not idle. Someone is wrong on the Internet, and you're fixing the problem. Hacker News is definitely useful. I've learned a lot from things I've read on HN. I've written several essays that began as comments there. So I wouldn't want the site to go away. But I would like to be sure it's not a net drag on productivity. What a disaster that would be, to attract thousands of smart people to a site that caused them to waste lots of time. I wish I could be 100% sure that's not a description of HN. I feel like the addictiveness of games and social applications is still a mostly unsolved problem. The situation now is like it was with crack in the 1980s: we've invented terribly addictive new things, and we haven't yet evolved ways to protect ourselves from them. We will eventually, and that's one of the problems I hope to focus on next. **

| May 2008 Adults lie constantly to kids. I'm not saying we should stop, but I think we should at least examine which lies we tell and why. There may also be a benefit to us. We were all lied to as kids, and some of the lies we were told still affect us. So by studying the ways adults lie to kids, we may be able to clear our heads of lies we were told. I'm using the word "lie" in a very general sense: not just overt falsehoods, but also all the more subtle ways we mislead kids. Though "lie" has negative connotations, I don't mean to suggest we should never do this—just that we should pay attention when we do. One of the most remarkable things about the way we lie to kids is how broad the conspiracy is. All adults know what their culture lies to kids about: they're the questions you answer "Ask your parents." If a kid asked who won the World Series in 1982 or what the atomic weight of carbon was, you could just tell him. But if a kid asks you "Is there a God?" or "What's a prostitute?" you'll probably say "Ask your parents." Since we all agree, kids see few cracks in the view of the world presented to them. The biggest disagreements are between parents and schools, but even those are small. Schools are careful what they say about controversial topics, and if they do contradict what parents want their kids to believe, parents either pressure the school into keeping quiet or move their kids to a new school. The conspiracy is so thorough that most kids who discover it do so only by discovering internal contradictions in what they're told. It can be traumatic for the ones who wake up during the operation. Here's what happened to Einstein: > Through the reading of popular scientific books I soon reached the > conviction that much in the stories of the Bible could not be true. The > consequence was a positively fanatic freethinking coupled with the > impression that youth is intentionally being deceived by the state through > lies: it was a crushing impression. I remember that feeling. By 15 I was convinced the world was corrupt from end to end. That's why movies like _The Matrix_ have such resonance. Every kid grows up in a fake world. In a way it would be easier if the forces behind it were as clearly differentiated as a bunch of evil machines, and one could make a clean break just by taking a pill. **Protection** If you ask adults why they lie to kids, the most common reason they give is to protect them. And kids do need protecting. The environment you want to create for a newborn child will be quite unlike the streets of a big city. That seems so obvious it seems wrong to call it a lie. It's certainly not a bad lie to tell, to give a baby the impression the world is quiet and warm and safe. But this harmless type of lie can turn sour if left unexamined. Imagine if you tried to keep someone in as protected an environment as a newborn till age 18. To mislead someone so grossly about the world would seem not protection but abuse. That's an extreme example,

course; when parents do that sort of thing it becomes national news. But you see the same problem on a smaller scale in the malaise teenagers feel in suburbia. The main purpose of suburbia is to provide a protected environment for children to grow up in. And it seems great for 10 year olds. I liked living in suburbia when I was 10. I didn't notice how sterile it was. My whole world was no bigger than a few friends' houses I bicycled to and some woods I ran around in. On a log scale I was midway between crib and globe. A suburban street was just the right size. But as I grew older, suburbia started to feel suffocatingly fake. Life can be pretty good at 10 or 20, but it's often frustrating at 15\. This is too big a problem to solve here, but certainly one reason life sucks at 15 is that kids are trapped in a world designed for 10 year olds. What do parents hope to protect their children from by raising them in suburbia? A friend who moved out of Manhattan said merely that her 3 year old daughter "saw too much." Off the top of my head, that might include: people who are high or drunk, poverty, madness, gruesome medical conditions, sexual behavior of various degrees of oddness, and violent anger. I think it's the anger that would worry me most if I had a 3 year old. I was 29 when I moved to New York and I was surprised even then. I wouldn't want a 3 year old to see some of the disputes I saw. It would be too frightening. A lot of the things adults conceal from smaller children, they conceal because they'd be frightening, not because they want to conceal the existence of such things. Misleading the child is just a byproduct. This seems one of the most justifiable types of lying adults do to kids. But because the lies are indirect we don't keep a very strict accounting of them. Parents know they've concealed the facts about sex, and many at some point sit their kids down and explain more. But few tell their kids about the differences between the real world and the cocoon they grew up in. Combine this with the confidence parents try to instill in their kids, and every year you get a new crop of 18 year olds who think they know how to run the world. Don't all 18 year olds think they know how to run the world? Actually this seems to be a recent innovation, no more than about 100 years old. In preindustrial times teenage kids were junior members of the adult world and comparatively well aware of their shortcomings. They could see they weren't as strong or skillful as the village smith. In past times people lied to kids about some things more than we do now, but the lies implicit in an artificial, protected environment are a recent invention. Like a lot of new inventions, the rich got this first. Children of kings and great magnates were the first to grow up out of touch with the world. Suburbia means half the population can live like kings in that respect. **Sex (and Drugs)** I'd have different worries about raising teenage kids in New York. I'd worry less

what they'd see, and more about what they'd do. I went to college with a lot of kids who grew up in Manhattan, and as a rule they seemed pretty jaded. They seemed to have lost their virginity at an average of about 14 and by college had tried more drugs than I'd even heard of. The reasons parents don't want their teenage kids having sex are complex. There are some obvious dangers: pregnancy and sexually transmitted diseases. But those aren't the only reasons parents don't want their kids having sex. The average parents of a 14 year old girl would hate the idea of her having sex even if there were zero risk of pregnancy or sexually transmitted diseases. Kids can probably sense they aren't being told the whole story. After all, pregnancy and sexually transmitted diseases are just as much a problem for adults, and they have sex. What really bothers parents about their teenage kids having sex? Their dislike of the idea is so visceral it's probably inborn. But if it's inborn it should be universal, and there are plenty of societies where parents don't mind if their teenage kids have sex—indeed, where it's normal for 14 year olds to become mothers. So what's going on? There does seem to be a universal taboo against sex with prepubescent children. One can imagine evolutionary reasons for that. And I think this is the main reason parents in industrialized societies dislike teenage kids having sex. They still think of them as children, even though biologically they're not, so the taboo against child sex still has force. One thing adults conceal about sex they also conceal about drugs: that it can cause great pleasure. That's what makes sex and drugs so dangerous. The desire for them can cloud one's judgement—which is especially frightening when the judgement being clouded is the already wretched judgement of a teenage kid. Here parents' desires conflict. Older societies told kids they had bad judgement, but modern parents want their children to be confident. This may well be a better plan than the old one of putting them in their place, but it has the side effect that after having implicitly lied to kids about how good their judgement is, we then have to lie again about all the things they might get into trouble with if they believed us. If parents told their kids the truth about sex and drugs, it would be: the reason you should avoid these things is that you have lousy judgement. People with twice your experience still get burned by them. But this may be one of those cases where the truth wouldn't be convincing, because one of the symptoms of bad judgement is believing you have good judgement. When you're too weak to lift something, you can tell, but when you're making a decision impetuously, you're all the more sure of it. **Innocence** Another reason parents don't want their kids having sex is that they want to keep them innocent. Adults have a certain model of how kids are supposed to behave, and it's different from what they expect of other adults. One

the most obvious differences is the words kids are allowed to use. Most parents use words when talking to other adults that they wouldn't want their kids using. They try to hide even the existence of these words for as long as they can. And this is another of those conspiracies everyone participates in: everyone knows you're not supposed to swear in front of kids. I've never heard more different explanations for anything parents tell kids than why they shouldn't swear. Every parent I know forbids their children to swear, and yet no two of them have the same justification. It's clear most start with not wanting kids to swear, then make up the reason afterward. So my theory about what's going on is that the _function_ of swearwords is to mark the speaker as an adult. There's no difference in the meaning of "shit" and "poopoo." So why should one be ok for kids to say and one forbidden? The only explanation is: by definition. Why does it bother adults so much when kids do things reserved for adults? The idea of a foul-mouthed, cynical 10 year old leaning against a lamppost with a cigarette hanging out of the corner of his mouth is very disconcerting. But why? One reason we want kids to be innocent is that we're programmed to like certain kinds of helplessness. I've several times heard mothers say they deliberately refrained from correcting their young children's mispronunciations because they were so cute. And if you think about it, cuteness is helplessness. Toys and cartoon characters meant to be cute always have clueless expressions and stubby, ineffectual limbs. It's not surprising we'd have an inborn desire to love and protect helpless creatures, considering human offspring are so helpless for so long. Without the helplessness that makes kids cute, they'd be very annoying. They'd merely seem like incompetent adults. But there's more to it than that. The reason our hypothetical jaded 10 year old bothers me so much is not just that he'd be annoying, but that he'd have cut off his prospects for growth so early. To be jaded you have to think you know how the world works, and any theory a 10 year old had about that would probably be a pretty narrow one. Innocence is also open-mindedness. We want kids to be innocent so they can continue to learn. Paradoxical as it sounds, there are some kinds of knowledge that get in the way of other kinds of knowledge. If you're going to learn that the world is a brutal place full of people trying to take advantage of one another, you're better off learning it last. Otherwise you won't bother learning much more. Very smart adults often seem unusually innocent, and I don't think this is a coincidence. I think they've deliberately avoided learning about certain things. Certainly I do. I used to think I wanted to know everything. Now I know I don't. **Death** After sex, death is the topic adults lie most conspicuously about to kids. Sex I believe they conceal because of deep taboos. But why do we conceal death from kids?

because small children are particularly horrified by it. They want to feel safe, and death is the ultimate threat. One of the most spectacular lies our parents told us was about the death of our first cat. Over the years, as we asked for more details, they were compelled to invent more, so the story grew quite elaborate. The cat had died at the vet's office. Of what? Of the anaesthesia itself. Why was the cat at the vet's office? To be fixed. And why had such a routine operation killed it? It wasn't the vet's fault; the cat had a congenitally weak heart; the anaesthesia was too much for it; but there was no way anyone could have known this in advance. It was not till we were in our twenties that the truth came out: my sister, then about three, had accidentally stepped on the cat and broken its back. They didn't feel the need to tell us the cat was now happily in cat heaven. My parents never claimed that people or animals who died had "gone to a better place," or that we'd meet them again. It didn't seem to harm us. My grandmother told us an edited version of the death of my grandfather. She said they'd been sitting reading one day, and when she said something to him, he didn't answer. He seemed to be asleep, but when she tried to rouse him, she couldn't. "He was gone." Having a heart attack sounded like falling asleep. Later I learned it hadn't been so neat, and the heart attack had taken most of a day to kill him. Along with such outright lies, there must have been a lot of changing the subject when death came up. I can't remember that, of course, but I can infer it from the fact that I didn't really grasp I was going to die till I was about 19. How could I have missed something so obvious for so long? Now that I've seen parents managing the subject, I can see how: questions about death are gently but firmly turned aside. On this topic, especially, they're met half-way by kids. Kids often want to be lied to. They want to believe they're living in a comfortable, safe world as much as their parents want them to believe it. **Identity** Some parents feel a strong adherence to an ethnic or religious group and want their kids to feel it too. This usually requires two different kinds of lying: the first is to tell the child that he or she is an X, and the second is whatever specific lies Xes differentiate themselves by believing. Telling a child they have a particular ethnic or religious identity is one of the stickiest things you can tell them. Almost anything else you tell a kid, they can change their mind about later when they start to think for themselves. But if you tell a kid they're a member of a certain group, that seems nearly impossible to shake. This despite the fact that it can be one of the most premeditated lies parents tell. When parents are of different religions, they'll often agree between themselves that their children will be "raised as Xes." And it works. The kids obligingly grow up considering themselves as Xes, despite the fact

if their parents had chosen the other way, they'd have grown up considering themselves as Ys. One reason this works so well is the second kind of lie involved. The truth is common property. You can't distinguish your group by doing things that are rational, and believing things that are true. If you want to set yourself apart from other people, you have to do things that are arbitrary, and believe things that are false. And after having spent their whole lives doing things that are arbitrary and believing things that are false, and being regarded as odd by "outsiders" on that account, the cognitive dissonance pushing children to regard themselves as Xes must be enormous. If they aren't an X, why are they attached to all these arbitrary beliefs and customs? If they aren't an X, why do all the non-Xes call them one? This form of lie is not without its uses. You can use it to carry a payload of beneficial beliefs, and they will also become part of the child's identity. You can tell the child that in addition to never wearing the color yellow, believing the world was created by a giant rabbit, and always snapping their fingers before eating fish, Xes are also particularly honest and industrious. Then X children will grow up feeling it's part of their identity to be honest and industrious. This probably accounts for a lot of the spread of modern religions, and explains why their doctrines are a combination of the useful and the bizarre. The bizarre half is what makes the religion stick, and the useful half is the payload. **Authority** One of the least excusable reasons adults lie to kids is to maintain power over them. Sometimes these lies are truly sinister, like a child molester telling his victims they'll get in trouble if they tell anyone what happened to them. Others seem more innocent; it depends how badly adults lie to maintain their power, and what they use it for. Most adults make some effort to conceal their flaws from children. Usually their motives are mixed. For example, a father who has an affair generally conceals it from his children. His motive is partly that it would worry them, partly that this would introduce the topic of sex, and partly (a larger part than he would admit) that he doesn't want to tarnish himself in their eyes. If you want to learn what lies are told to kids, read almost any book written to teach them about "issues." Peter Mayle wrote one called _Why Are We Getting a Divorce?_ It begins with the three most important things to remember about divorce, one of which is: > You shouldn't put the blame on one parent, because divorce is never only one > person's fault. Really? When a man runs off with his secretary, is it always partly his wife's fault? But I can see why Mayle might have said this. Maybe it's more important for kids to respect their parents than to know the truth about them. But because adults conceal their flaws, and at the same time insist on high standards of behavior for kids, a lot of kids grow up feeling

fall hopelessly short. They walk around feeling horribly evil for having used a swearword, while in fact most of the adults around them are doing much worse things. This happens in intellectual as well as moral questions. The more confident people are, the more willing they seem to be to answer a question "I don't know." Less confident people feel they have to have an answer or they'll look bad. My parents were pretty good about admitting when they didn't know things, but I must have been told a lot of lies of this type by teachers, because I rarely heard a teacher say "I don't know" till I got to college. I remember because it was so surprising to hear someone say that in front of a class. The first hint I had that teachers weren't omniscient came in sixth grade, after my father contradicted something I'd learned in school. When I protested that the teacher had said the opposite, my father replied that the guy had no idea what he was talking about—that he was just an elementary school teacher, after all. _Just_ a teacher? The phrase seemed almost grammatically ill-formed. Didn't teachers know everything about the subjects they taught? And if not, why were they the ones teaching us? The sad fact is, US public school teachers don't generally understand the stuff they're teaching very well. There are some sterling exceptions, but as a rule people planning to go into teaching rank academically near the bottom of the college population. So the fact that I still thought at age 11 that teachers were infallible shows what a job the system must have done on my brain. **School** What kids get taught in school is a complex mix of lies. The most excusable are those told to simplify ideas to make them easy to learn. The problem is, a lot of propaganda gets slipped into the curriculum in the name of simplification. Public school textbooks represent a compromise between what various powerful groups want kids to be told. The lies are rarely overt. Usually they consist either of omissions or of over-emphasizing certain topics at the expense of others. The view of history we got in elementary school was a crude hagiography, with at least one representative of each powerful group. The famous scientists I remember were Einstein, Marie Curie, and George Washington Carver. Einstein was a big deal because his work led to the atom bomb. Marie Curie was involved with X-rays. But I was mystified about Carver. He seemed to have done stuff with peanuts. It's obvious now that he was on the list because he was black (and for that matter that Marie Curie was on it because she was a woman), but as a kid I was confused for years about him. I wonder if it wouldn't have been better just to tell us the truth: that there weren't any famous black scientists. Ranking George Washington Carver with Einstein misled us not only about science, but about the obstacles blacks faced in his time. As subjects got softer, the lies got more frequent. By the time you got to politics and recent history,

we were taught was pretty much pure propaganda. For example, we were taught to regard political leaders as saints—especially the recently martyred Kennedy and King. It was astonishing to learn later that they'd both been serial womanizers, and that Kennedy was a speed freak to boot. (By the time King's plagiarism emerged, I'd lost the ability to be surprised by the misdeeds of famous people.) I doubt you could teach kids recent history without teaching them lies, because practically everyone who has anything to say about it has some kind of spin to put on it. Much recent history _consists_ of spin. It would probably be better just to teach them metafacts like that. Probably the biggest lie told in schools, though, is that the way to succeed is through following "the rules." In fact most such rules are just hacks to manage large groups efficiently. **Peace** Of all the reasons we lie to kids, the most powerful is probably the same mundane reason they lie to us. Often when we lie to people it's not part of any conscious strategy, but because they'd react violently to the truth. Kids, almost by definition, lack self-control. They react violently to things—and so they get lied to a lot. A few Thanksgivings ago, a friend of mine found himself in a situation that perfectly illustrates the complex motives we have when we lie to kids. As the roast turkey appeared on the table, his alarmingly perceptive 5 year old son suddenly asked if the turkey had wanted to die. Foreseeing disaster, my friend and his wife rapidly improvised: yes, the turkey had wanted to die, and in fact had lived its whole life with the aim of being their Thanksgiving dinner. And that (phew) was the end of that. Whenever we lie to kids to protect them, we're usually also lying to keep the peace. One consequence of this sort of calming lie is that we grow up thinking horrible things are normal. It's hard for us to feel a sense of urgency as adults over something we've literally been trained not to worry about. When I was about 10 I saw a documentary on pollution that put me into a panic. It seemed the planet was being irretrievably ruined. I went to my mother afterward to ask if this was so. I don't remember what she said, but she made me feel better, so I stopped worrying about it. That was probably the best way to handle a frightened 10 year old. But we should understand the price. This sort of lie is one of the main reasons bad things persist: we're all trained to ignore them. **Detox** A sprinter in a race almost immediately enters a state called "oxygen debt." His body switches to an emergency source of energy that's faster than regular aerobic respiration. But this process builds up waste products that ultimately require extra oxygen to break down, so at the end of the race he has to stop and pant for a while to recover. We arrive at adulthood with a kind of truth debt. We were told a lot of lies to get us (and our parents) through our childhood. Some may have been necessary. Some

weren't. But we all arrive at adulthood with heads full of lies. There's never a point where the adults sit you down and explain all the lies they told you. They've forgotten most of them. So if you're going to clear these lies out of your head, you're going to have to do it yourself. Few do. Most people go through life with bits of packing material adhering to their minds and never know it. You probably never can completely undo the effects of lies you were told as a kid, but it's worth trying. I've found that whenever I've been able to undo a lie I was told, a lot of other things fell into place. Fortunately, once you arrive at adulthood you get a valuable new resource you can use to figure out what lies you were told. You're now one of the liars. You get to watch behind the scenes as adults spin the world for the next generation of kids. The first step in clearing your head is to realize how far you are from a neutral observer. When I left high school I was, I thought, a complete skeptic. I'd realized high school was crap. I thought I was ready to question everything I knew. But among the many other things I was ignorant of was how much debris there already was in my head. It's not enough to consider your mind a blank slate. You have to consciously erase it. **

| November 2008 One of the differences between big companies and startups is that big companies tend to have developed procedures to protect themselves against mistakes. A startup walks like a toddler, bashing into things and falling over all the time. A big company is more deliberate. The gradual accumulation of checks in an organization is a kind of learning, based on disasters that have happened to it or others like it. After giving a contract to a supplier who goes bankrupt and fails to deliver, for example, a company might require all suppliers to prove they're solvent before submitting bids. As companies grow they invariably get more such checks, either in response to disasters they've suffered, or (probably more often) by hiring people from bigger companies who bring with them customs for protecting against new types of disasters. It's natural for organizations to learn from mistakes. The problem is, people who propose new checks almost never consider that the check itself has a cost. _Every check has a cost._ For example, consider the case of making suppliers verify their solvency. Surely that's mere prudence? But in fact it could have substantial costs. There's obviously the direct cost in time of the people on both sides who supply and check proofs of the supplier's solvency. But the real costs are the ones you never hear about: the company that would be the best supplier, but doesn't bid because they can't spare the effort to get verified. Or the company that would be the best supplier, but falls just short of the threshold for solvency—which will of course have been set on the high side, since there is no apparent cost of increasing it. Whenever someone in an organization proposes to add a new check, they should have to explain not just the benefit but the cost. No matter how bad a job they did of analyzing it, this meta-check would at least remind everyone there had to _be_ a cost, and send them looking for it. If companies started doing that, they'd find some surprises. Joel Spolsky recently spoke at Y Combinator about selling software to corporate customers. He said that in most companies software costing up to about $1000 could be bought by individual managers without any additional approvals. Above that threshold, software purchases generally had to be approved by a committee. But babysitting this process was so expensive for software vendors that it didn't make sense to charge less than $50,000. Which means if you're making something you might otherwise have charged $5000 for, you have to sell it for $50,000 instead. The purpose of the committee is presumably to ensure that the company doesn't waste money. And yet the result is that the company pays 10 times as much. Checks on purchases will always be expensive, because the harder it is to sell something to you, the more it has to cost. And not merely linearly, either. If you're hard enough to sell to, the people who are best at making things don't want to bother. The only people

will sell to you are companies that specialize in selling to you. Then you've sunk to a whole new level of inefficiency. Market mechanisms no longer protect you, because the good suppliers are no longer in the market. Such things happen constantly to the biggest organizations of all, governments. But checks instituted by governments can cause much worse problems than merely overpaying. Checks instituted by governments can cripple a country's whole economy. Up till about 1400, China was richer and more technologically advanced than Europe. One reason Europe pulled ahead was that the Chinese government restricted long trading voyages. So it was left to the Europeans to explore and eventually to dominate the rest of the world, including China. In more recent times, Sarbanes-Oxley has practically destroyed the US IPO market. That wasn't the intention of the legislators who wrote it. They just wanted to add a few more checks on public companies. But they forgot to consider the cost. They forgot that companies about to go public are usually rather stretched, and that the weight of a few extra checks that might be easy for General Electric to bear are enough to prevent younger companies from being public at all. Once you start to think about the cost of checks, you can start to ask other interesting questions. Is the cost increasing or decreasing? Is it higher in some areas than others? Where does it increase discontinuously? If large organizations started to ask questions like that, they'd learn some frightening things. I think the cost of checks may actually be increasing. The reason is that software plays an increasingly important role in companies, and the people who write software are particularly harmed by checks. Programmers are unlike many types of workers in that the best ones actually prefer to work hard. This doesn't seem to be the case in most types of work. When I worked in fast food, we didn't prefer the busy times. And when I used to mow lawns, I definitely didn't prefer it when the grass was long after a week of rain. Programmers, though, like it better when they write more code. Or more precisely, when they release more code. Programmers like to make a difference. Good ones, anyway. For good programmers, one of the best things about working for a startup is that there are few checks on releases. In true startups, there are no external checks at all. If you have an idea for a new feature in the morning, you can write it and push it to the production servers before lunch. And when you can do that, you have more ideas. At big companies, software has to go through various approvals before it can be launched. And the cost of doing this can be enormous—in fact, discontinuous. I was talking recently to a group of three programmers whose startup had been acquired a few years before by a big company. When they'd been independent, they could release changes instantly. Now, they said, the absolute fastest they could get code released on the production

was two weeks. This didn't merely make them less productive. It made them hate working for the acquirer. Here's a sign of how much programmers like to be able to work hard: these guys would have _paid_ to be able to release code immediately, the way they used to. I asked them if they'd trade 10% of the acquisition price for the ability to release code immediately, and all three instantly said yes. Then I asked what was the maximum percentage of the acquisition price they'd trade for it. They said they didn't want to think about it, because they didn't want to know how high they'd go, but I got the impression it might be as much as half. They'd have sacrificed hundreds of thousands of dollars, perhaps millions, just to be able to deliver more software to users. And you know what? It would have been perfectly safe to let them. In fact, the acquirer would have been better off; not only wouldn't these guys have broken anything, they'd have gotten a lot more done. So the acquirer is in fact getting worse performance at greater cost. Just like the committee approving software purchases. And just as the greatest danger of being hard to sell to is not that you overpay but that the best suppliers won't even sell to you, the greatest danger of applying too many checks to your programmers is not that you'll make them unproductive, but that good programmers won't even want to work for you. Steve Jobs's famous maxim "artists ship" works both ways. Artists aren't merely capable of shipping. They insist on it. So if you don't let people ship, you won't have any artists. --- * * * ---

| December 2010 I was thinking recently how inconvenient it was not to have a general term for iPhones, iPads, and the corresponding things running Android. The closest to a general term seems to be "mobile devices," but that (a) applies to any mobile phone, and (b) doesn't really capture what's distinctive about the iPad. After a few seconds it struck me that what we'll end up calling these things is tablets. The only reason we even consider calling them "mobile devices" is that the iPhone preceded the iPad. If the iPad had come first, we wouldn't think of the iPhone as a phone; we'd think of it as a tablet small enough to hold up to your ear. The iPhone isn't so much a phone as a replacement for a phone. That's an important distinction, because it's an early instance of what will become a common pattern. Many if not most of the special-purpose objects around us are going to be replaced by apps running on tablets. This is already clear in cases like GPSes, music players, and cameras. But I think it will surprise people how many things are going to get replaced. We funded one startup that's replacing keys. The fact that you can change font sizes easily means the iPad effectively replaces reading glasses. I wouldn't be surprised if by playing some clever tricks with the accelerometer you could even replace the bathroom scale. The advantages of doing things in software on a single device are so great that everything that can get turned into software will. So for the next couple years, a good recipe for startups will be to look around you for things that people haven't realized yet can be made unnecessary by a tablet app. In 1938 Buckminster Fuller coined the term ephemeralization to describe the increasing tendency of physical machinery to be replaced by what we would now call software. The reason tablets are going to take over the world is not (just) that Steve Jobs and Co are industrial design wizards, but because they have this force behind them. The iPhone and the iPad have effectively drilled a hole that will allow ephemeralization to flow into a lot of new areas. No one who has studied the history of technology would want to underestimate the power of that force. I worry about the power Apple could have with this force behind them. I don't want to see another era of client monoculture like the Microsoft one in the 80s and 90s. But if ephemeralization is one of the main forces driving the spread of tablets, that suggests a way to compete with Apple: be a better platform for it. It has turned out to be a great thing that Apple tablets have accelerometers in them. Developers have used the accelerometer in ways Apple could never have imagined. That's the nature of platforms. The more versatile the tool, the less you can predict how people will use it. So tablet makers should be thinking: what else can we put in there? Not merely hardware, but software too. What else can we give developers access to? Give hackers an inch and they'll take you a mile.

to Sam Altman, Paul Buchheit, Jessica Livingston, and Robert Morris for reading drafts of this. --- * * * ---

| | **Want to start a startup?** Get funded by Y Combinator. --- January 2012 There are great startup ideas lying around unexploited right under our noses. One reason we don't see them is a phenomenon I call _schlep blindness_. Schlep was originally a Yiddish word but has passed into general use in the US. It means a tedious, unpleasant task. No one likes schleps, but hackers especially dislike them. Most hackers who start startups wish they could do it by just writing some clever software, putting it on a server somewhere, and watching the money roll in—without ever having to talk to users, or negotiate with other companies, or deal with other people's broken code. Maybe that's possible, but I haven't seen it. One of the many things we do at Y Combinator is teach hackers about the inevitability of schleps. No, you can't start a startup by just writing code. I remember going through this realization myself. There was a point in 1995 when I was still trying to convince myself I could start a company by just writing code. But I soon learned from experience that schleps are not merely inevitable, but pretty much what business consists of. A company is defined by the schleps it will undertake. And schleps should be dealt with the same way you'd deal with a cold swimming pool: just jump in. Which is not to say you should seek out unpleasant work per se, but that you should never shrink from it if it's on the path to something great. The most dangerous thing about our dislike of schleps is that much of it is unconscious. Your unconscious won't even let you see ideas that involve painful schleps. That's schlep blindness. The phenomenon isn't limited to startups. Most people don't consciously decide not to be in as good physical shape as Olympic athletes, for example. Their unconscious mind decides for them, shrinking from the work involved. The most striking example I know of schlep blindness is Stripe, or rather Stripe's idea. For over a decade, every hacker who'd ever had to process payments online knew how painful the experience was. Thousands of people must have known about this problem. And yet when they started startups, they decided to build recipe sites, or aggregators for local events. Why? Why work on problems few care much about and no one will pay for, when you could fix one of the most important components of the world's infrastructure? Because schlep blindness prevented people from even considering the idea of fixing payments. Probably no one who applied to Y Combinator to work on a recipe site began by asking "should we fix payments, or build a recipe site?" and chose the recipe site. Though the idea of fixing payments was right there in plain sight, they never saw it, because their unconscious mind shrank from the complications involved. You'd have to make deals with banks. How do you do that? Plus you're moving money, so you're going to have to deal with fraud, and people trying to break into your servers. Plus there are probably all sorts

regulations to comply with. It's a lot more intimidating to start a startup like this than a recipe site. That scariness makes ambitious ideas doubly valuable. In addition to their intrinsic value, they're like undervalued stocks in the sense that there's less demand for them among founders. If you pick an ambitious idea, you'll have less competition, because everyone else will have been frightened off by the challenges involved. (This is also true of starting a startup generally.) How do you overcome schlep blindness? Frankly, the most valuable antidote to schlep blindness is probably ignorance. Most successful founders would probably say that if they'd known when they were starting their company about the obstacles they'd have to overcome, they might never have started it. Maybe that's one reason the most successful startups of all so often have young founders. In practice the founders grow with the problems. But no one seems able to foresee that, not even older, more experienced founders. So the reason younger founders have an advantage is that they make two mistakes that cancel each other out. They don't know how much they can grow, but they also don't know how much they'll need to. Older founders only make the first mistake. Ignorance can't solve everything though. Some ideas so obviously entail alarming schleps that anyone can see them. How do you see ideas like that? The trick I recommend is to take yourself out of the picture. Instead of asking "what problem should I solve?" ask "what problem do I wish someone else would solve for me?" If someone who had to process payments before Stripe had tried asking that, Stripe would have been one of the first things they wished for. It's too late now to be Stripe, but there's plenty still broken in the world, if you know how to see it. **Thanks** to Sam Altman, Paul Buchheit, Patrick Collison, Aaron Iba, Jessica Livingston, Emmett Shear, and Harj Taggar for reading drafts of this. * * * ---

| November 2015 A few months ago an article about Y Combinator said that early on it had been a "one-man show." It's sadly common to read that sort of thing. But the problem with that description is not just that it's unfair. It's also misleading. Much of what's most novel about YC is due to Jessica Livingston. If you don't understand her, you don't understand YC. So let me tell you a little about Jessica. YC had 4 founders. Jessica and I decided one night to start it, and the next day we recruited my friends Robert Morris and Trevor Blackwell. Jessica and I ran YC day to day, and Robert and Trevor read applications and did interviews with us. Jessica and I were already dating when we started YC. At first we tried to act "professional" about this, meaning we tried to conceal it. In retrospect that seems ridiculous, and we soon dropped the pretense. And the fact that Jessica and I were a couple is a big part of what made YC what it was. YC felt like a family. The founders early on were mostly young. We all had dinner together once a week, cooked for the first couple years by me. Our first building had been a private home. The overall atmosphere was shockingly different from a VC's office on Sand Hill Road, in a way that was entirely for the better. There was an authenticity that everyone who walked in could sense. And that didn't just mean that people trusted us. It was the perfect quality to instill in startups. Authenticity is one of the most important things YC looks for in founders, not just because fakers and opportunists are annoying, but because authenticity is one of the main things that separates the most successful startups from the rest. Early YC was a family, and Jessica was its mom. And the culture she defined was one of YC's most important innovations. Culture is important in any organization, but at YC culture wasn't just how we behaved when we built the product. At YC, the culture was the product. Jessica was also the mom in another sense: she had the last word. Everything we did as an organization went through her first — who to fund, what to say to the public, how to deal with other companies, who to hire, everything. Before we had kids, YC was more or less our life. There was no real distinction between working hours and not. We talked about YC all the time. And while there might be some businesses that it would be tedious to let infect your private life, we liked it. We'd started YC because it was something we were interested in. And some of the problems we were trying to solve were endlessly difficult. How do you recognize good founders? You could talk about that for years, and we did; we still do. I'm better at some things than Jessica, and she's better at some things than me. One of the things she's best at is judging people. She's one of those rare individuals with x-ray vision for character. She can see through any kind of faker almost immediately. Her nickname within YC was the Social Radar, and this special power of hers

critical in making YC what it is. The earlier you pick startups, the more you're picking the founders. Later stage investors get to try products and look at growth numbers. At the stage where YC invests, there is often neither a product nor any numbers. Others thought YC had some special insight about the future of technology. Mostly we had the same sort of insight Socrates claimed: we at least knew we knew nothing. What made YC successful was being able to pick good founders. We thought Airbnb was a bad idea. We funded it because we liked the founders. During interviews, Robert and Trevor and I would pepper the applicants with technical questions. Jessica would mostly watch. A lot of the applicants probably read her as some kind of secretary, especially early on, because she was the one who'd go out and get each new group and she didn't ask many questions. She was ok with that. It was easier for her to watch people if they didn't notice her. But after the interview, the three of us would turn to Jessica and ask "What does the Social Radar say?" Having the Social Radar at interviews wasn't just how we picked founders who'd be successful. It was also how we picked founders who were good people. At first we did this because we couldn't help it. Imagine what it would feel like to have x-ray vision for character. Being around bad people would be intolerable. So we'd refuse to fund founders whose characters we had doubts about even if we thought they'd be successful. Though we initially did this out of self-indulgence, it turned out to be very valuable to YC. We didn't realize it in the beginning, but the people we were picking would become the YC alumni network. And once we picked them, unless they did something really egregious, they were going to be part of it for life. Some now think YC's alumni network is its most valuable feature. I personally think YC's advice is pretty good too, but the alumni network is certainly among the most valuable features. The level of trust and helpfulness is remarkable for a group of such size. And Jessica is the main reason why. (As we later learned, it probably cost us little to reject people whose characters we had doubts about, because how good founders are and how well they do are _not orthogonal_. If bad founders succeed at all, they tend to sell early. The most successful founders are almost all good.) If Jessica was so important to YC, why don't more people realize it? Partly because I'm a writer, and writers always get disproportionate attention. YC's brand was initially my brand, and our applicants were people who'd read my essays. But there is another reason: Jessica hates attention. Talking to reporters makes her nervous. The thought of giving a talk paralyzes her. She was even uncomfortable at our wedding, because the bride is always the center of attention. It's not just because she's shy that she hates attention, but because it throws off the Social Radar. She can't be herself. You can't watch people when

is watching you. Another reason attention worries her is that she hates bragging. In anything she does that's publicly visible, her biggest fear (after the obvious fear that it will be bad) is that it will seem ostentatious. She says being too modest is a common problem for women. But in her case it goes beyond that. She has a horror of ostentation so visceral it's almost a phobia. She also hates fighting. She can't do it; she just shuts down. And unfortunately there is a good deal of fighting in being the public face of an organization. So although Jessica more than anyone made YC unique, the very qualities that enabled her to do it mean she tends to get written out of YC's history. Everyone buys this story that PG started YC and his wife just kind of helped. Even YC's haters buy it. A couple years ago when people were attacking us for not funding more female founders (than exist), they all treated YC as identical with PG. It would have spoiled the narrative to acknowledge Jessica's central role at YC. Jessica was boiling mad that people were accusing _her_ company of sexism. I've never seen her angrier about anything. But she did not contradict them. Not publicly. In private there was a great deal of profanity. And she wrote three separate essays about the question of female founders. But she could never bring herself to publish any of them. She'd seen the level of vitriol in this debate, and she shrank from engaging. It wasn't just because she disliked fighting. She's so sensitive to character that it repels her even to fight with dishonest people. The idea of mixing it up with linkbait journalists or Twitter trolls would seem to her not merely frightening, but disgusting. But Jessica knew her example as a successful female founder would encourage more women to start companies, so last year she did something YC had never done before and hired a PR firm to get her some interviews. At one of the first she did, the reporter brushed aside her insights about startups and turned it into a sensationalistic story about how some guy had tried to chat her up as she was waiting outside the bar where they had arranged to meet. Jessica was mortified, partly because the guy had done nothing wrong, but more because the story treated her as a victim significant only for being a woman, rather than one of the most knowledgeable investors in the Valley. After that she told the PR firm to stop. You're not going to be hearing in the press about what Jessica has achieved. So let me tell you what Jessica has achieved. Y Combinator is fundamentally a nexus of people, like a university. It doesn't make a product. What defines it is the people. Jessica more than anyone curated and nurtured that collection of people. In that sense she literally made YC. Jessica knows more about the qualities of startup founders than anyone else ever has. Her immense data set and x-ray vision are the perfect storm in that respect. The qualities of the founders are the best predictor of how

startup will do. And startups are in turn the most important source of growth in mature economies. The person who knows the most about the most important factor in the growth of mature economies — that is who Jessica Livingston is. Doesn't that sound like someone who should be better known? **

| January 2017 People who are powerful but uncharismatic will tend to be disliked. Their power makes them a target for criticism that they don't have the charisma to disarm. That was Hillary Clinton's problem. It also tends to be a problem for any CEO who is more of a builder than a schmoozer. And yet the builder-type CEO is (like Hillary) probably the best person for the job. I don't think there is any solution to this problem. It's human nature. The best we can do is to recognize that it's happening, and to understand that being a magnet for criticism is sometimes a sign not that someone is the wrong person for a job, but that they're the right one. --- * * * ---

| September 2017 The most valuable insights are both general and surprising. F = ma for example. But general and surprising is a hard combination to achieve. That territory tends to be picked clean, precisely because those insights are so valuable. Ordinarily, the best that people can do is one without the other: either surprising without being general (e.g. gossip), or general without being surprising (e.g. platitudes). Where things get interesting is the moderately valuable insights. You get those from small additions of whichever quality was missing. The more common case is a small addition of generality: a piece of gossip that's more than just gossip, because it teaches something interesting about the world. But another less common approach is to focus on the most general ideas and see if you can find something new to say about them. Because these start out so general, you only need a small delta of novelty to produce a useful insight. A small delta of novelty is all you'll be able to get most of the time. Which means if you take this route, your ideas will seem a lot like ones that already exist. Sometimes you'll find you've merely rediscovered an idea that did already exist. But don't be discouraged. Remember the huge multiplier that kicks in when you do manage to think of something even a little new. Corollary: the more general the ideas you're talking about, the less you should worry about repeating yourself. If you write enough, it's inevitable you will. Your brain is much the same from year to year and so are the stimuli that hit it. I feel slightly bad when I find I've said something close to what I've said before, as if I were plagiarizing myself. But rationally one shouldn't. You won't say something exactly the same way the second time, and that variation increases the chance you'll get that tiny but critical delta of novelty. And of course, ideas beget ideas. (That sounds _familiar_.) An idea with a small amount of novelty could lead to one with more. But only if you keep going. So it's doubly important not to let yourself be discouraged by people who say there's not much new about something you've discovered. "Not much new" is a real achievement when you're talking about the most general ideas. It's not true that there's nothing new under the sun. There are some domains where there's almost nothing new. But there's a big difference between nothing and almost nothing, when it's multiplied by the area under the sun. **Thanks** to Sam Altman, Patrick Collison, and Jessica Livingston for reading drafts of this. --- --- Japanese Translation * * * ---

| January 2016 One advantage of being old is that you can see change happen in your lifetime. A lot of the change I've seen is fragmentation. US politics is much more polarized than it used to be. Culturally we have ever less common ground. The creative class flocks to a handful of happy cities, abandoning the rest. And increasing economic inequality means the spread between rich and poor is growing too. I'd like to propose a hypothesis: that all these trends are instances of the same phenomenon. And moreover, that the cause is not some force that's pulling us apart, but rather the erosion of forces that had been pushing us together. Worse still, for those who worry about these trends, the forces that were pushing us together were an anomaly, a one-time combination of circumstances that's unlikely to be repeated — and indeed, that we would not want to repeat. The two forces were war (above all World War II), and the rise of large corporations. The effects of World War II were both economic and social. Economically, it decreased variation in income. Like all modern armed forces, America's were socialist economically. From each according to his ability, to each according to his need. More or less. Higher ranking members of the military got more (as higher ranking members of socialist societies always do), but what they got was fixed according to their rank. And the flattening effect wasn't limited to those under arms, because the US economy was conscripted too. Between 1942 and 1945 all wages were set by the National War Labor Board. Like the military, they defaulted to flatness. And this national standardization of wages was so pervasive that its effects could still be seen years after the war ended. Business owners weren't supposed to be making money either. FDR said "not a single war millionaire" would be permitted. To ensure that, any increase in a company's profits over prewar levels was taxed at 85%. And when what was left after corporate taxes reached individuals, it was taxed again at a marginal rate of 93%. Socially too the war tended to decrease variation. Over 16 million men and women from all sorts of different backgrounds were brought together in a way of life that was literally uniform. Service rates for men born in the early 1920s approached 80%. And working toward a common goal, often under stress, brought them still closer together. Though strictly speaking World War II lasted less than 4 years for the US, its effects lasted longer. Wars make central governments more powerful, and World War II was an extreme case of this. In the US, as in all the other Allied countries, the federal government was slow to give up the new powers it had acquired. Indeed, in some respects the war didn't end in 1945; the enemy just switched to the Soviet Union. In tax rates, federal power, defense spending, conscription, and nationalism, the decades after the war looked more like wartime than prewar peacetime. And the social effects lasted too. The kid

into the army from behind a mule team in West Virginia didn't simply go back to the farm afterward. Something else was waiting for him, something that looked a lot like the army. If total war was the big political story of the 20th century, the big economic story was the rise of a new kind of company. And this too tended to produce both social and economic cohesion. The 20th century was the century of the big, national corporation. General Electric, General Foods, General Motors. Developments in finance, communications, transportation, and manufacturing enabled a new type of company whose goal was above all scale. Version 1 of this world was low-res: a Duplo world of a few giant companies dominating each big market. The late 19th and early 20th centuries had been a time of consolidation, led especially by J. P. Morgan. Thousands of companies run by their founders were merged into a couple hundred giant ones run by professional managers. Economies of scale ruled the day. It seemed to people at the time that this was the final state of things. John D. Rockefeller said in 1880 > The day of combination is here to stay. Individualism has gone, never to > return. He turned out to be mistaken, but he seemed right for the next hundred years. The consolidation that began in the late 19th century continued for most of the 20th. By the end of World War II, as Michael Lind writes, "the major sectors of the economy were either organized as government-backed cartels or dominated by a few oligopolistic corporations." For consumers this new world meant the same choices everywhere, but only a few of them. When I grew up there were only 2 or 3 of most things, and since they were all aiming at the middle of the market there wasn't much to differentiate them. One of the most important instances of this phenomenon was in TV. Here there were 3 choices: NBC, CBS, and ABC. Plus public TV for eggheads and communists. The programs that the 3 networks offered were indistinguishable. In fact, here there was a triple pressure toward the center. If one show did try something daring, local affiliates in conservative markets would make them stop. Plus since TVs were expensive, whole families watched the same shows together, so they had to be suitable for everyone. And not only did everyone get the same thing, they got it at the same time. It's difficult to imagine now, but every night tens of millions of families would sit down together in front of their TV set watching the same show, at the same time, as their next door neighbors. What happens now with the Super Bowl used to happen every night. We were literally in sync. In a way mid-century TV culture was good. The view it gave of the world was like you'd find in a children's book, and it probably had something of the effect that (parents hope) children's books have in making people behave better. But, like children's books, TV was also misleading. Dangerously misleading, for adults. In his autobiography, Robert MacNeil talks

seeing gruesome images that had just come in from Vietnam and thinking, we can't show these to families while they're having dinner. I know how pervasive the common culture was, because I tried to opt out of it, and it was practically impossible to find alternatives. When I was 13 I realized, more from internal evidence than any outside source, that the ideas we were being fed on TV were crap, and I stopped watching it. But it wasn't just TV. It seemed like everything around me was crap. The politicians all saying the same things, the consumer brands making almost identical products with different labels stuck on to indicate how prestigious they were meant to be, the balloon-frame houses with fake "colonial" skins, the cars with several feet of gratuitous metal on each end that started to fall apart after a couple years, the "red delicious" apples that were red but only nominally apples. And in retrospect, it _was_ crap. But when I went looking for alternatives to fill this void, I found practically nothing. There was no Internet then. The only place to look was in the chain bookstore in our local shopping mall. There I found a copy of _The Atlantic_. I wish I could say it became a gateway into a wider world, but in fact I found it boring and incomprehensible. Like a kid tasting whisky for the first time and pretending to like it, I preserved that magazine as carefully as if it had been a book. I'm sure I still have it somewhere. But though it was evidence that there was, somewhere, a world that wasn't red delicious, I didn't find it till college. It wasn't just as consumers that the big companies made us similar. They did as employers too. Within companies there were powerful forces pushing people toward a single model of how to look and act. IBM was particularly notorious for this, but they were only a little more extreme than other big companies. And the models of how to look and act varied little between companies. Meaning everyone within this world was expected to seem more or less the same. And not just those in the corporate world, but also everyone who aspired to it — which in the middle of the 20th century meant most people who weren't already in it. For most of the 20th century, working-class people tried hard to look middle class. You can see it in old photos. Few adults aspired to look dangerous in 1950. But the rise of national corporations didn't just compress us culturally. It compressed us economically too, and on both ends. Along with giant national corporations, we got giant national labor unions. And in the mid 20th century the corporations cut deals with the unions where they paid over market price for labor. Partly because the unions were monopolies. Partly because, as components of oligopolies themselves, the corporations knew they could safely pass the cost on to their customers, because their competitors would have to as well. And partly because in mid- century most of the giant companies were still focused on finding new

to milk economies of scale. Just as startups rightly pay AWS a premium over the cost of running their own servers so they can focus on growth, many of the big national corporations were willing to pay a premium for labor. As well as pushing incomes up from the bottom, by overpaying unions, the big companies of the 20th century also pushed incomes down at the top, by underpaying their top management. Economist J. K. Galbraith wrote in 1967 that "There are few corporations in which it would be suggested that executive salaries are at a maximum." To some extent this was an illusion. Much of the de facto pay of executives never showed up on their income tax returns, because it took the form of perks. The higher the rate of income tax, the more pressure there was to pay employees upstream of it. (In the UK, where taxes were even higher than in the US, companies would even pay their kids' private school tuitions.) One of the most valuable things the big companies of the mid 20th century gave their employees was job security, and this too didn't show up in tax returns or income statistics. So the nature of employment in these organizations tended to yield falsely low numbers about economic inequality. But even accounting for that, the big companies paid their best people less than market price. There was no market; the expectation was that you'd work for the same company for decades if not your whole career. Your work was so illiquid there was little chance of getting market price. But that same illiquidity also encouraged you not to seek it. If the company promised to employ you till you retired and give you a pension afterward, you didn't want to extract as much from it this year as you could. You needed to take care of the company so it could take care of you. Especially when you'd been working with the same group of people for decades. If you tried to squeeze the company for more money, you were squeezing the organization that was going to take care of _them_. Plus if you didn't put the company first you wouldn't be promoted, and if you couldn't switch ladders, promotion on this one was the only way up. To someone who'd spent several formative years in the armed forces, this situation didn't seem as strange as it does to us now. From their point of view, as big company executives, they were high-ranking officers. They got paid a lot more than privates. They got to have expense account lunches at the best restaurants and fly around on the company's Gulfstreams. It probably didn't occur to most of them to ask if they were being paid market price. The ultimate way to get market price is to work for yourself, by starting your own company. That seems obvious to any ambitious person now. But in the mid 20th century it was an alien concept. Not because starting one's own company seemed too ambitious, but because it didn't seem ambitious enough. Even as late as the 1970s, when I grew up, the ambitious plan was to get lots of education at prestigious institutions,

then join some other prestigious institution and work one's way up the hierarchy. Your prestige was the prestige of the institution you belonged to. People did start their own businesses of course, but educated people rarely did, because in those days there was practically zero concept of starting what we now call a _startup_: a business that starts small and grows big. That was much harder to do in the mid 20th century. Starting one's own business meant starting a business that would start small and stay small. Which in those days of big companies often meant scurrying around trying to avoid being trampled by elephants. It was more prestigious to be one of the executive class riding the elephant. By the 1970s, no one stopped to wonder where the big prestigious companies had come from in the first place. It seemed like they'd always been there, like the chemical elements. And indeed, there was a double wall between ambitious kids in the 20th century and the origins of the big companies. Many of the big companies were roll-ups that didn't have clear founders. And when they did, the founders didn't seem like us. Nearly all of them had been uneducated, in the sense of not having been to college. They were what Shakespeare called rude mechanicals. College trained one to be a member of the professional classes. Its graduates didn't expect to do the sort of grubby menial work that Andrew Carnegie or Henry Ford started out doing. And in the 20th century there were more and more college graduates. They increased from about 2% of the population in 1900 to about 25% in 2000. In the middle of the century our two big forces intersect, in the form of the GI Bill, which sent 2.2 million World War II veterans to college. Few thought of it in these terms, but the result of making college the canonical path for the ambitious was a world in which it was socially acceptable to work for Henry Ford, but not to be Henry Ford. I remember this world well. I came of age just as it was starting to break up. In my childhood it was still dominant. Not quite so dominant as it had been. We could see from old TV shows and yearbooks and the way adults acted that people in the 1950s and 60s had been even more conformist than us. The mid- century model was already starting to get old. But that was not how we saw it at the time. We would at most have said that one could be a bit more daring in 1975 than 1965. And indeed, things hadn't changed much yet. But change was coming soon. And when the Duplo economy started to disintegrate, it disintegrated in several different ways at once. Vertically integrated companies literally dis-integrated because it was more efficient to. Incumbents faced new competitors as (a) markets went global and (b) technical innovation started to trump economies of scale, turning size from an asset into a liability. Smaller companies were increasingly able to survive as formerly narrow channels to consumers broadened. Markets themselves started to change faster,

whole new categories of products appeared. And last but not least, the federal government, which had previously smiled upon J. P. Morgan's world as the natural state of things, began to realize it wasn't the last word after all. What J. P. Morgan was to the horizontal axis, Henry Ford was to the vertical. He wanted to do everything himself. The giant plant he built at River Rouge between 1917 and 1928 literally took in iron ore at one end and sent cars out the other. 100,000 people worked there. At the time it seemed the future. But that is not how car companies operate today. Now much of the design and manufacturing happens in a long supply chain, whose products the car companies ultimately assemble and sell. The reason car companies operate this way is that it works better. Each company in the supply chain focuses on what they know best. And they each have to do it well or they can be swapped out for another supplier. Why didn't Henry Ford realize that networks of cooperating companies work better than a single big company? One reason is that supplier networks take a while to evolve. In 1917, doing everything himself seemed to Ford the only way to get the scale he needed. And the second reason is that if you want to solve a problem using a network of cooperating companies, you have to be able to coordinate their efforts, and you can do that much better with computers. Computers reduce the transaction costs that Coase argued are the raison d'etre of corporations. That is a fundamental change. In the early 20th century, big companies were synonymous with efficiency. In the late 20th century they were synonymous with inefficiency. To some extent this was because the companies themselves had become sclerotic. But it was also because our standards were higher. It wasn't just within existing industries that change occurred. The industries themselves changed. It became possible to make lots of new things, and sometimes the existing companies weren't the ones who did it best. Microcomputers are a classic example. The market was pioneered by upstarts like Apple. When it got big enough, IBM decided it was worth paying attention to. At the time IBM completely dominated the computer industry. They assumed that all they had to do, now that this market was ripe, was to reach out and pick it. Most people at the time would have agreed with them. But what happened next illustrated how much more complicated the world had become. IBM did launch a microcomputer. Though quite successful, it did not crush Apple. But even more importantly, IBM itself ended up being supplanted by a supplier coming in from the side — from software, which didn't even seem to be the same business. IBM's big mistake was to accept a non-exclusive license for DOS. It must have seemed a safe move at the time. No other computer manufacturer had ever been able to outsell them. What difference did it make if other manufacturers could offer DOS too? The result of that miscalculation was an explosion

inexpensive PC clones. Microsoft now owned the PC standard, and the customer. And the microcomputer business ended up being Apple vs Microsoft. Basically, Apple bumped IBM and then Microsoft stole its wallet. That sort of thing did not happen to big companies in mid-century. But it was going to happen increasingly often in the future. Change happened mostly by itself in the computer business. In other industries, legal obstacles had to be removed first. Many of the mid-century oligopolies had been anointed by the federal government with policies (and in wartime, large orders) that kept out competitors. This didn't seem as dubious to government officials at the time as it sounds to us. They felt a two-party system ensured sufficient competition in politics. It ought to work for business too. Gradually the government realized that anti-competitive policies were doing more harm than good, and during the Carter administration it started to remove them. The word used for this process was misleadingly narrow: deregulation. What was really happening was de-oligopolization. It happened to one industry after another. Two of the most visible to consumers were air travel and long- distance phone service, which both became dramatically cheaper after deregulation. Deregulation also contributed to the wave of hostile takeovers in the 1980s. In the old days the only limit on the inefficiency of companies, short of actual bankruptcy, was the inefficiency of their competitors. Now companies had to face absolute rather than relative standards. Any public company that didn't generate sufficient returns on its assets risked having its management replaced with one that would. Often the new managers did this by breaking companies up into components that were more valuable separately. Version 1 of the national economy consisted of a few big blocks whose relationships were negotiated in back rooms by a handful of executives, politicians, regulators, and labor leaders. Version 2 was higher resolution: there were more companies, of more different sizes, making more different things, and their relationships changed faster. In this world there were still plenty of back room negotiations, but more was left to market forces. Which further accelerated the fragmentation. It's a little misleading to talk of versions when describing a gradual process, but not as misleading as it might seem. There was a lot of change in a few decades, and what we ended up with was qualitatively different. The companies in the S&P 500 in 1958 had been there an average of 61 years. By 2012 that number was 18 years. The breakup of the Duplo economy happened simultaneously with the spread of computing power. To what extent were computers a precondition? It would take a book to answer that. Obviously the spread of computing power was a precondition for the rise of startups. I suspect it was for most of what happened in finance too. But was it a precondition for globalization or the LBO wave? I don't know,

I wouldn't discount the possibility. It may be that the refragmentation was driven by computers in the way the industrial revolution was driven by steam engines. Whether or not computers were a precondition, they have certainly accelerated it. The new fluidity of companies changed people's relationships with their employers. Why climb a corporate ladder that might be yanked out from under you? Ambitious people started to think of a career less as climbing a single ladder than as a series of jobs that might be at different companies. More movement (or even potential movement) between companies introduced more competition in salaries. Plus as companies became smaller it became easier to estimate how much an employee contributed to the company's revenue. Both changes drove salaries toward market price. And since people vary dramatically in productivity, paying market price meant salaries started to diverge. By no coincidence it was in the early 1980s that the term "yuppie" was coined. That word is not much used now, because the phenomenon it describes is so taken for granted, but at the time it was a label for something novel. Yuppies were young professionals who made lots of money. To someone in their twenties today, this wouldn't seem worth naming. Why wouldn't young professionals make lots of money? But until the 1980s, being underpaid early in your career was part of what it meant to be a professional. Young professionals were paying their dues, working their way up the ladder. The rewards would come later. What was novel about yuppies was that they wanted market price for the work they were doing now. The first yuppies did not work for startups. That was still in the future. Nor did they work for big companies. They were professionals working in fields like law, finance, and consulting. But their example rapidly inspired their peers. Once they saw that new BMW 325i, they wanted one too. Underpaying people at the beginning of their career only works if everyone does it. Once some employer breaks ranks, everyone else has to, or they can't get good people. And once started this process spreads through the whole economy, because at the beginnings of people's careers they can easily switch not merely employers but industries. But not all young professionals benefitted. You had to produce to get paid a lot. It was no coincidence that the first yuppies worked in fields where it was easy to measure that. More generally, an idea was returning whose name sounds old-fashioned precisely because it was so rare for so long: that you could make your fortune. As in the past there were multiple ways to do it. Some made their fortunes by creating wealth, and others by playing zero-sum games. But once it became possible to make one's fortune, the ambitious had to decide whether or not to. A physicist who chose physics over Wall Street in 1990 was making a sacrifice that a physicist in 1960 didn't have to think about. The idea even flowed back into big companies.

of big companies make more now than they used to, and I think much of the reason is prestige. In 1960, corporate CEOs had immense prestige. They were the winners of the only economic game in town. But if they made as little now as they did then, in real dollar terms, they'd seem like small fry compared to professional athletes and whiz kids making millions from startups and hedge funds. They don't like that idea, so now they try to get as much as they can, which is more than they had been getting. Meanwhile a similar fragmentation was happening at the other end of the economic scale. As big companies' oligopolies became less secure, they were less able to pass costs on to customers and thus less willing to overpay for labor. And as the Duplo world of a few big blocks fragmented into many companies of different sizes — some of them overseas — it became harder for unions to enforce their monopolies. As a result workers' wages also tended toward market price. Which (inevitably, if unions had been doing their job) tended to be lower. Perhaps dramatically so, if automation had decreased the need for some kind of work. And just as the mid-century model induced social as well as economic cohesion, its breakup brought social as well as economic fragmentation. People started to dress and act differently. Those who would later be called the "creative class" became more mobile. People who didn't care much for religion felt less pressure to go to church for appearances' sake, while those who liked it a lot opted for increasingly colorful forms. Some switched from meat loaf to tofu, and others to Hot Pockets. Some switched from driving Ford sedans to driving small imported cars, and others to driving SUVs. Kids who went to private schools or wished they did started to dress "preppy," and kids who wanted to seem rebellious made a conscious effort to look disreputable. In a hundred ways people spread apart. Almost four decades later, fragmentation is still increasing. Has it been net good or bad? I don't know; the question may be unanswerable. Not entirely bad though. We take for granted the forms of fragmentation we like, and worry only about the ones we don't. But as someone who caught the tail end of mid-century _conformism_, I can tell you it was no utopia. My goal here is not to say whether fragmentation has been good or bad, just to explain why it's happening. With the centripetal forces of total war and 20th century oligopoly mostly gone, what will happen next? And more specifically, is it possible to reverse some of the fragmentation we've seen? If it is, it will have to happen piecemeal. You can't reproduce mid-century cohesion the way it was originally produced. It would be insane to go to war just to induce more national unity. And once you understand the degree to which the economic history of the 20th century was a low-res version 1, it's clear you can't reproduce that either. 20th century cohesion was something that happened at least in a sense naturally.

war was due mostly to external forces, and the Duplo economy was an evolutionary phase. If you want cohesion now, you'd have to induce it deliberately. And it's not obvious how. I suspect the best we'll be able to do is address the symptoms of fragmentation. But that may be enough. The form of fragmentation people worry most about lately is _economic inequality_, and if you want to eliminate that you're up against a truly formidable headwind that has been in operation since the stone age. Technology. Technology is a lever. It magnifies work. And the lever not only grows increasingly long, but the rate at which it grows is itself increasing. Which in turn means the variation in the amount of wealth people can create has not only been increasing, but accelerating. The unusual conditions that prevailed in the mid 20th century masked this underlying trend. The ambitious had little choice but to join large organizations that made them march in step with lots of other people — literally in the case of the armed forces, figuratively in the case of big corporations. Even if the big corporations had wanted to pay people proportionate to their value, they couldn't have figured out how. But that constraint has gone now. Ever since it started to erode in the 1970s, we've seen the underlying forces at work again. Not everyone who gets rich now does it by creating wealth, certainly. But a significant number do, and the Baumol Effect means all their peers get dragged along too. And as long as it's possible to get rich by creating wealth, the default tendency will be for economic inequality to increase. Even if you eliminate all the other ways to get rich. You can mitigate this with subsidies at the bottom and taxes at the top, but unless taxes are high enough to discourage people from creating wealth, you're always going to be fighting a losing battle against increasing variation in productivity. That form of fragmentation, like the others, is here to stay. Or rather, back to stay. Nothing is forever, but the tendency toward fragmentation should be more forever than most things, precisely because it's not due to any particular cause. It's simply a reversion to the mean. When Rockefeller said individualism was gone, he was right for a hundred years. It's back now, and that's likely to be true for longer. I worry that if we don't acknowledge this, we're headed for trouble. If we think 20th century cohesion disappeared because of few policy tweaks, we'll be deluded into thinking we can get it back (minus the bad parts, somehow) with a few countertweaks. And then we'll waste our time trying to eliminate fragmentation, when we'd be better off thinking about how to mitigate its consequences. **

| January 2012 A few hours before the Yahoo acquisition was announced in June 1998 I took a snapshot of Viaweb's site. I thought it might be interesting to look at one day. The first thing one notices is is how tiny the pages are. Screens were a lot smaller in 1998. If I remember correctly, our frontpage used to just fit in the size window people typically used then. Browsers then (IE 6 was still 3 years in the future) had few fonts and they weren't antialiased. If you wanted to make pages that looked good, you had to render display text as images. You may notice a certain similarity between the Viaweb and Y Combinator logos. We did that as an inside joke when we started YC. Considering how basic a red circle is, it seemed surprising to me when we started Viaweb how few other companies used one as their logo. A bit later I realized why. On the Company page you'll notice a mysterious individual called John McArtyem. Robert Morris (aka Rtm) was so publicity averse after the Worm that he didn't want his name on the site. I managed to get him to agree to a compromise: we could use his bio but not his name. He has since relaxed a bit on that point. Trevor graduated at about the same time the acquisition closed, so in the course of 4 days he went from impecunious grad student to millionaire PhD. The culmination of my career as a writer of press releases was one celebrating his graduation, illustrated with a drawing I did of him during a meeting. (Trevor also appears as Trevino Bagwell in our directory of web designers merchants could hire to build stores for them. We inserted him as a ringer in case some competitor tried to spam our web designers. We assumed his logo would deter any actual customers, but it did not.) Back in the 90s, to get users you had to get mentioned in magazines and newspapers. There were not the same ways to get found online that there are today. So we used to pay a PR firm $16,000 a month to get us mentioned in the press. Fortunately reporters liked us. In our advice about getting traffic from search engines (I don't think the term SEO had been coined yet), we say there are only 7 that matter: Yahoo, AltaVista, Excite, WebCrawler, InfoSeek, Lycos, and HotBot. Notice anything missing? Google was incorporated that September. We supported online transactions via a company called Cybercash, since if we lacked that feature we'd have gotten beaten up in product comparisons. But Cybercash was so bad and most stores' order volumes were so low that it was better if merchants processed orders like phone orders. We had a page in our site trying to talk merchants out of doing real time authorizations. The whole site was organized like a funnel, directing people to the test drive. It was a novel thing to be able to try out software online. We put cgi- bin in our dynamic urls to fool competitors about how our software worked. We had some well known users. Needless to say, Frederick's of Hollywood got the most traffic. We charged a flat fee of

for big stores, so it was a little alarming to have users who got lots of traffic. I once calculated how much Frederick's was costing us in bandwidth, and it was about $300/month. Since we hosted all the stores, which together were getting just over 10 million page views per month in June 1998, we consumed what at the time seemed a lot of bandwidth. We had 2 T1s (3 Mb/sec) coming into our offices. In those days there was no AWS. Even colocating servers seemed too risky, considering how often things went wrong with them. So we had our servers in our offices. Or more precisely, in Trevor's office. In return for the unique privilege of sharing his office with no other humans, he had to share it with 6 shrieking tower servers. His office was nicknamed the Hot Tub on account of the heat they generated. Most days his stack of window air conditioners could keep up. For describing pages, we had a template language called RTML, which supposedly stood for something, but which in fact I named after Rtm. RTML was Common Lisp augmented by some macros and libraries, and concealed under a structure editor that made it look like it had syntax. Since we did continuous releases, our software didn't actually have versions. But in those days the trade press expected versions, so we made them up. If we wanted to get lots of attention, we made the version number an integer. That "version 4.0" icon was generated by our own button generator, incidentally. The whole Viaweb site was made with our software, even though it wasn't an online store, because we wanted to experience what our users did. At the end of 1997, we released a general purpose shopping search engine called Shopfind. It was pretty advanced for the time. It had a programmable crawler that could crawl most of the different stores online and pick out the products. --- * * * ---

| | **Want to start a startup?** Get funded by Y Combinator. --- October 2010 _(I wrote this for Forbes, who asked me to write something about the qualities we look for in founders. In print they had to cut the last item because they didn't have room.)_ **1\. Determination** This has turned out to be the most important quality in startup founders. We thought when we started Y Combinator that the most important quality would be intelligence. That's the myth in the Valley. And certainly you don't want founders to be stupid. But as long as you're over a certain threshold of intelligence, what matters most is determination. You're going to hit a lot of obstacles. You can't be the sort of person who gets demoralized easily. Bill Clerico and Rich Aberman of WePay are a good example. They're doing a finance startup, which means endless negotiations with big, bureaucratic companies. When you're starting a startup that depends on deals with big companies to exist, it often feels like they're trying to ignore you out of existence. But when Bill Clerico starts calling you, you may as well do what he asks, because he is not going away. **2\. Flexibility** You do not however want the sort of determination implied by phrases like "don't give up on your dreams." The world of startups is so unpredictable that you need to be able to modify your dreams on the fly. The best metaphor I've found for the combination of determination and flexibility you need is a running back. He's determined to get downfield, but at any given moment he may need to go sideways or even backwards to get there. The current record holder for flexibility may be Daniel Gross of Greplin. He applied to YC with some bad ecommerce idea. We told him we'd fund him if he did something else. He thought for a second, and said ok. He then went through two more ideas before settling on Greplin. He'd only been working on it for a couple days when he presented to investors at Demo Day, but he got a lot of interest. He always seems to land on his feet. **3\. Imagination** Intelligence does matter a lot of course. It seems like the type that matters most is imagination. It's not so important to be able to solve predefined problems quickly as to be able to come up with surprising new ideas. In the startup world, most good ideas seem bad initially. If they were obviously good, someone would already be doing them. So you need the kind of intelligence that produces ideas with just the right level of craziness. Airbnb is that kind of idea. In fact, when we funded Airbnb, we thought it was too crazy. We couldn't believe large numbers of people would want to stay in other people's places. We funded them because we liked the founders so much. As soon as we heard they'd been supporting themselves by selling Obama and McCain branded breakfast cereal, they were in. And it turned out the idea was on the right side of crazy after all. **4\. Naughtiness** Though the most successful founders are usually good people, they

to have a piratical gleam in their eye. They're not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules, but not rules that matter. This quality may be redundant though; it may be implied by imagination. Sam Altman of Loopt is one of the most successful alumni, so we asked him what question we could put on the Y Combinator application that would help us discover more people like him. He said to ask about a time when they'd hacked something to their advantage—hacked in the sense of beating the system, not breaking into computers. It has become one of the questions we pay most attention to when judging applications. **5\. Friendship** Empirically it seems to be hard to start a startup with just one founder. Most of the big successes have two or three. And the relationship between the founders has to be strong. They must genuinely like one another, and work well together. Startups do to the relationship between the founders what a dog does to a sock: if it can be pulled apart, it will be. Emmett Shear and Justin Kan of Justin.tv are a good example of close friends who work well together. They've known each other since second grade. They can practically read one another's minds. I'm sure they argue, like all founders, but I have never once sensed any unresolved tension between them. **Thanks** to Jessica Livingston and Chris Steiner for reading drafts of this. * * * ---

| | **Want to start a startup?** Get funded by Y Combinator. --- October 2008 The economic situation is apparently so grim that some experts fear we may be in for a stretch as bad as the mid seventies. When Microsoft and Apple were founded. As those examples suggest, a recession may not be such a bad time to start a startup. I'm not claiming it's a particularly good time either. The truth is more boring: the state of the economy doesn't matter much either way. If we've learned one thing from funding so many startups, it's that they succeed or fail based on the qualities of the founders. The economy has some effect, certainly, but as a predictor of success it's rounding error compared to the founders. Which means that what matters is who you are, not when you do it. If you're the right sort of person, you'll win even in a bad economy. And if you're not, a good economy won't save you. Someone who thinks "I better not start a startup now, because the economy is so bad" is making the same mistake as the people who thought during the Bubble "all I have to do is start a startup, and I'll be rich." So if you want to improve your chances, you should think far more about who you can recruit as a cofounder than the state of the economy. And if you're worried about threats to the survival of your company, don't look for them in the news. Look in the mirror. But for any given team of founders, would it not pay to wait till the economy is better before taking the leap? If you're starting a restaurant, maybe, but not if you're working on technology. Technology progresses more or less independently of the stock market. So for any given idea, the payoff for acting fast in a bad economy will be higher than for waiting. Microsoft's first product was a Basic interpreter for the Altair. That was exactly what the world needed in 1975, but if Gates and Allen had decided to wait a few years, it would have been too late. Of course, the idea you have now won't be the last you have. There are always new ideas. But if you have a specific idea you want to act on, act now. That doesn't mean you can ignore the economy. Both customers and investors will be feeling pinched. It's not necessarily a problem if customers feel pinched: you may even be able to benefit from it, by making things that save money. Startups often make things cheaper, so in that respect they're better positioned to prosper in a recession than big companies. Investors are more of a problem. Startups generally need to raise some amount of external funding, and investors tend to be less willing to invest in bad times. They shouldn't be. Everyone knows you're supposed to buy when times are bad and sell when times are good. But of course what makes investing so counterintuitive is that in equity markets, good times are defined as everyone thinking it's time to buy. You have to be a contrarian to be correct, and by definition only a minority of investors can be. So just as investors in 1999 were tripping over one

trying to buy into lousy startups, investors in 2009 will presumably be reluctant to invest even in good ones. You'll have to adapt to this. But that's nothing new: startups always have to adapt to the whims of investors. Ask any founder in any economy if they'd describe investors as fickle, and watch the face they make. Last year you had to be prepared to explain how your startup was viral. Next year you'll have to explain how it's recession-proof. (Those are both good things to be. The mistake investors make is not the criteria they use but that they always tend to focus on one to the exclusion of the rest.) Fortunately the way to make a startup recession-proof is to do exactly what you should do anyway: run it as cheaply as possible. For years I've been telling founders that the surest route to success is to be the cockroaches of the corporate world. The immediate cause of death in a startup is always running out of money. So the cheaper your company is to operate, the harder it is to kill. And fortunately it has gotten very cheap to run a startup. A recession will if anything make it cheaper still. If nuclear winter really is here, it may be safer to be a cockroach even than to keep your job. Customers may drop off individually if they can no longer afford you, but you're not going to lose them all at once; markets don't "reduce headcount." What if you quit your job to start a startup that fails, and you can't find another? That could be a problem if you work in sales or marketing. In those fields it can take months to find a new job in a bad economy. But hackers seem to be more liquid. Good hackers can always get some kind of job. It might not be your dream job, but you're not going to starve. Another advantage of bad times is that there's less competition. Technology trains leave the station at regular intervals. If everyone else is cowering in a corner, you may have a whole car to yourself. You're an investor too. As a founder, you're buying stock with work: the reason Larry and Sergey are so rich is not so much that they've done work worth tens of billions of dollars, but that they were the first investors in Google. And like any investor you should buy when times are bad. Were you nodding in agreement, thinking "stupid investors" a few paragraphs ago when I was talking about how investors are reluctant to put money into startups in bad markets, even though that's the time they should rationally be most willing to buy? Well, founders aren't much better. When times get bad, hackers go to grad school. And no doubt that will happen this time too. In fact, what makes the preceding paragraph true is that most readers won't believe it—at least to the extent of acting on it. So maybe a recession is a good time to start a startup. It's hard to say whether advantages like lack of competition outweigh disadvantages like reluctant investors. But it doesn't matter much either way. It's the people that matter. And for a given set of people working on

given technology, the time to act is always now. --- Russian Translation | | Chinese Translation Japanese Translation * * * ---

| April 2008 _(This essay is derived from a talk at the 2008 Startup School.)_ About a month after we started Y Combinator we came up with the phrase that became our motto: Make something people want. We've learned a lot since then, but if I were choosing now that's still the one I'd pick. Another thing we tell founders is not to worry too much about the business model, at least at first. Not because making money is unimportant, but because it's so much easier than building something great. A couple weeks ago I realized that if you put those two ideas together, you get something surprising. Make something people want. Don't worry too much about making money. What you've got is a description of a charity. When you get an unexpected result like this, it could either be a bug or a new discovery. Either businesses aren't supposed to be like charities, and we've proven by reductio ad absurdum that one or both of the principles we began with is false. Or we have a new idea. I suspect it's the latter, because as soon as this thought occurred to me, a whole bunch of other things fell into place. **Examples** For example, Craigslist. It's not a charity, but they run it like one. And they're astoundingly successful. When you scan down the list of most popular web sites, the number of employees at Craigslist looks like a misprint. Their revenues aren't as high as they could be, but most startups would be happy to trade places with them. In Patrick O'Brian's novels, his captains always try to get upwind of their opponents. If you're upwind, you decide when and if to engage the other ship. Craigslist is effectively upwind of enormous revenues. They'd face some challenges if they wanted to make more, but not the sort you face when you're tacking upwind, trying to force a crappy product on ambivalent users by spending ten times as much on sales as on development. I'm not saying startups should aim to end up like Craigslist. They're a product of unusual circumstances. But they're a good model for the early phases. Google looked a lot like a charity in the beginning. They didn't have ads for over a year. At year 1, Google was indistinguishable from a nonprofit. If a nonprofit or government organization had started a project to index the web, Google at year 1 is the limit of what they'd have produced. Back when I was working on spam filters I thought it would be a good idea to have a web-based email service with good spam filtering. I wasn't thinking of it as a company. I just wanted to keep people from getting spammed. But as I thought more about this project, I realized it would probably have to be a company. It would cost something to run, and it would be a pain to fund with grants and donations. That was a surprising realization. Companies often claim to be benevolent, but it was surprising to realize there were purely benevolent projects that had to be embodied as companies to work. I didn't want to start another company, so I didn't do it. But if someone had,

probably be quite rich now. There was a window of about two years when spam was increasing rapidly but all the big email services had terrible filters. If someone had launched a new, spam-free mail service, users would have flocked to it. Notice the pattern here? From either direction we get to the same spot. If you start from successful startups, you find they often behaved like nonprofits. And if you start from ideas for nonprofits, you find they'd often make good startups. **Power** How wide is this territory? Would all good nonprofits be good companies? Possibly not. What makes Google so valuable is that their users have money. If you make people with money love you, you can probably get some of it. But could you also base a successful startup on behaving like a nonprofit to people who don't have money? Could you, for example, grow a successful startup out of curing an unfashionable but deadly disease like malaria? I'm not sure, but I suspect that if you pushed this idea, you'd be surprised how far it would go. For example, people who apply to Y Combinator don't generally have much money, and yet we can profit by helping them, because with our help they could make money. Maybe the situation is similar with malaria. Maybe an organization that helped lift its weight off a country could benefit from the resulting growth. I'm not proposing this is a serious idea. I don't know anything about malaria. But I've been kicking ideas around long enough to know when I come across a powerful one. One way to guess how far an idea extends is to ask yourself at what point you'd bet against it. The thought of betting against benevolence is alarming in the same way as saying that something is technically impossible. You're just asking to be made a fool of, because these are such powerful forces. For example, initially I thought maybe this principle only applied to Internet startups. Obviously it worked for Google, but what about Microsoft? Surely Microsoft isn't benevolent? But when I think back to the beginning, they were. Compared to IBM they were like Robin Hood. When IBM introduced the PC, they thought they were going to make money selling hardware at high prices. But by gaining control of the PC standard, Microsoft opened up the market to any manufacturer. Hardware prices plummeted, and lots of people got to have computers who couldn't otherwise have afforded them. It's the sort of thing you'd expect Google to do. Microsoft isn't so benevolent now. Now when one thinks of what Microsoft does to users, all the verbs that come to mind begin with F. And yet it doesn't seem to pay. Their stock price has been flat for years. Back when they were Robin Hood, their stock price rose like Google's. Could there be a connection? You can see how there would be. When you're small, you can't bully customers, so you have to charm them. Whereas when you're big you can maltreat them at will, and you tend to, because it's easier than satisfying them. You grow big by being nice,

you can stay big by being mean. You get away with it till the underlying conditions change, and then all your victims escape. So "Don't be evil" may be the most valuable thing Paul Buchheit made for Google, because it may turn out to be an elixir of corporate youth. I'm sure they find it constraining, but think how valuable it will be if it saves them from lapsing into the fatal laziness that afflicted Microsoft and IBM. The curious thing is, this elixir is freely available to any other company. Anyone can adopt "Don't be evil." The catch is that people will hold you to it. So I don't think you're going to see record labels or tobacco companies using this discovery. **Morale** There's a lot of external evidence that benevolence works. But how does it work? One advantage of investing in a large number of startups is that you get a lot of data about how they work. From what we've seen, being good seems to help startups in three ways: it improves their morale, it makes other people want to help them, and above all, it helps them be decisive. Morale is tremendously important to a startup—so important that morale alone is almost enough to determine success. Startups are often described as emotional roller-coasters. One minute you're going to take over the world, and the next you're doomed. The problem with feeling you're doomed is not just that it makes you unhappy, but that it makes you _stop working_. So the downhills of the roller-coaster are more of a self fulfilling prophecy than the uphills. If feeling you're going to succeed makes you work harder, that probably improves your chances of succeeding, but if feeling you're going to fail makes you stop working, that practically guarantees you'll fail. Here's where benevolence comes in. If you feel you're really helping people, you'll keep working even when it seems like your startup is doomed. Most of us have some amount of natural benevolence. The mere fact that someone needs you makes you want to help them. So if you start the kind of startup where users come back each day, you've basically built yourself a giant tamagotchi. You've made something you need to take care of. Blogger is a famous example of a startup that went through really low lows and survived. At one point they ran out of money and everyone left. Evan Williams came in to work the next day, and there was no one but him. What kept him going? Partly that users needed him. He was hosting thousands of people's blogs. He couldn't just let the site die. There are many advantages of launching quickly, but the most important may be that once you have users, the tamagotchi effect kicks in. Once you have users to take care of, you're forced to figure out what will make them happy, and that's actually very valuable information. The added confidence that comes from trying to help people can also help you with investors. One of the founders of Chatterous told me recently that he and his cofounder had decided that this service was something the world

so they were going to keep working on it no matter what, even if they had to move back to Canada and live in their parents' basements. Once they realized this, they stopped caring so much what investors thought about them. They still met with them, but they weren't going to die if they didn't get their money. And you know what? The investors got a lot more interested. They could sense that the Chatterouses were going to do this startup with or without them. If you're really committed and your startup is cheap to run, you become very hard to kill. And practically all startups, even the most successful, come close to death at some point. So if doing good for people gives you a sense of mission that makes you harder to kill, that alone more than compensates for whatever you lose by not choosing a more selfish project. **Help** Another advantage of being good is that it makes other people want to help you. This too seems to be an inborn trait in humans. One of the startups we've funded, Octopart, is currently locked in a classic battle of good versus evil. They're a search site for industrial components. A lot of people need to search for components, and before Octopart there was no good way to do it. That, it turned out, was no coincidence. Octopart built the right way to search for components. Users like it and they've been growing rapidly. And yet for most of Octopart's life, the biggest distributor, Digi-Key, has been trying to force them take their prices off the site. Octopart is sending them customers for free, and yet Digi-Key is trying to make that traffic stop. Why? Because their current business model depends on overcharging people who have incomplete information about prices. They don't want search to work. The Octoparts are the nicest guys in the world. They dropped out of the PhD program in physics at Berkeley to do this. They just wanted to fix a problem they encountered in their research. Imagine how much time you could save the world's engineers if they could do searches online. So when I hear that a big, evil company is trying to stop them in order to keep search broken, it makes me really want to help them. It makes me spend more time on the Octoparts than I do with most of the other startups we've funded. It just made me spend several minutes telling you how great they are. Why? Because they're good guys and they're trying to help the world. If you're benevolent, people will rally around you: investors, customers, other companies, and potential employees. In the long term the most important may be the potential employees. I think everyone knows now that good hackers are much better than mediocre ones. If you can attract the best hackers to work for you, as Google has, you have a big advantage. And the very best hackers tend to be idealistic. They're not desperate for a job. They can work wherever they want. So most want to work on things that will make the world better. **Compass** But the most important advantage of being good is

it acts as a compass. One of the hardest parts of doing a startup is that you have so many choices. There are just two or three of you, and a thousand things you could do. How do you decide? Here's the answer: Do whatever's best for your users. You can hold onto this like a rope in a hurricane, and it will save you if anything can. Follow it and it will take you through everything you need to do. It's even the answer to questions that seem unrelated, like how to convince investors to give you money. If you're a good salesman, you could try to just talk them into it. But the more reliable route is to convince them through your users: if you make something users love enough to tell their friends, you grow exponentially, and that will convince any investor. Being good is a particularly useful strategy for making decisions in complex situations because it's stateless. It's like telling the truth. The trouble with lying is that you have to remember everything you've said in the past to make sure you don't contradict yourself. If you tell the truth you don't have to remember anything, and that's a really useful property in domains where things happen fast. For example, Y Combinator has now invested in 80 startups, 57 of which are still alive. (The rest have died or merged or been acquired.) When you're trying to advise 57 startups, it turns out you have to have a stateless algorithm. You can't have ulterior motives when you have 57 things going on at once, because you can't remember them. So our rule is just to do whatever's best for the founders. Not because we're particularly benevolent, but because it's the only algorithm that works on that scale. When you write something telling people to be good, you seem to be claiming to be good yourself. So I want to say explicitly that I am not a particularly good person. When I was a kid I was firmly in the camp of bad. The way adults used the word good, it seemed to be synonymous with quiet, so I grew up very suspicious of it. You know how there are some people whose names come up in conversation and everyone says "He's _such_ a great guy?" People never say that about me. The best I get is "he means well." I am not claiming to be good. At best I speak good as a second language. So I'm not suggesting you be good in the usual sanctimonious way. I'm suggesting it because it works. It will work not just as a statement of "values," but as a guide to strategy, and even a design spec for software. Don't just not be evil. Be good. **

| | **Want to start a startup?** Get funded by Y Combinator. --- Watch how this essay was written. --- February 2009 One of the things I always tell startups is a principle I learned from Paul Buchheit: it's better to make a few people really happy than to make a lot of people semi-happy. I was saying recently to a reporter that if I could only tell startups 10 things, this would be one of them. Then I thought: what would the other 9 be? When I made the list there turned out to be 13: **1\. Pick good cofounders.** Cofounders are for a startup what location is for real estate. You can change anything about a house except where it is. In a startup you can change your idea easily, but changing your cofounders is hard. And the success of a startup is almost always a function of its founders. **2\. Launch fast.** The reason to launch fast is not so much that it's critical to get your product to market early, but that you haven't really started working on it till you've launched. Launching teaches you what you should have been building. Till you know that you're wasting your time. So the main value of whatever you launch with is as a pretext for engaging users. **3\. Let your idea evolve.** This is the second half of launching fast. Launch fast and iterate. It's a big mistake to treat a startup as if it were merely a matter of implementing some brilliant initial idea. As in an essay, most of the ideas appear in the implementing. **4\. Understand your users.** You can envision the wealth created by a startup as a rectangle, where one side is the number of users and the other is how much you improve their lives. The second dimension is the one you have most control over. And indeed, the growth in the first will be driven by how well you do in the second. As in science, the hard part is not answering questions but asking them: the hard part is seeing something new that users lack. The better you understand them the better the odds of doing that. That's why so many successful startups make something the founders needed. **5\. Better to make a few users love you than a lot ambivalent.** Ideally you want to make large numbers of users love you, but you can't expect to hit that right away. Initially you have to choose between satisfying all the needs of a subset of potential users, or satisfying a subset of the needs of all potential users. Take the first. It's easier to expand userwise than satisfactionwise. And perhaps more importantly, it's harder to lie to yourself. If you think you're 85% of the way to a great product, how do you know it's not 70%? Or 10%? Whereas it's easy to know how many users you have. **6\. Offer surprisingly good customer service.** Customers are used to being maltreated. Most of the companies they deal with are quasi-monopolies that get away with atrocious customer service. Your own ideas about what's possible have been unconsciously lowered by such experiences. Try making your customer service not merely good, but surprisingly good.

out of your way to make people happy. They'll be overwhelmed; you'll see. In the earliest stages of a startup, it pays to offer customer service on a level that wouldn't scale, because it's a way of learning about your users. **7\. You make what you measure.** I learned this one from Joe Kraus. Merely measuring something has an uncanny tendency to improve it. If you want to make your user numbers go up, put a big piece of paper on your wall and every day plot the number of users. You'll be delighted when it goes up and disappointed when it goes down. Pretty soon you'll start noticing what makes the number go up, and you'll start to do more of that. Corollary: be careful what you measure. **8\. Spend little.** I can't emphasize enough how important it is for a startup to be cheap. Most startups fail before they make something people want, and the most common form of failure is running out of money. So being cheap is (almost) interchangeable with iterating rapidly. But it's more than that. A culture of cheapness keeps companies young in something like the way exercise keeps people young. **9\. Get ramen profitable.** "Ramen profitable" means a startup makes just enough to pay the founders' living expenses. It's not rapid prototyping for business models (though it can be), but more a way of hacking the investment process. Once you cross over into ramen profitable, it completely changes your relationship with investors. It's also great for morale. **10\. Avoid distractions.** Nothing kills startups like distractions. The worst type are those that pay money: day jobs, consulting, profitable side-projects. The startup may have more long-term potential, but you'll always interrupt working on it to answer calls from people paying you now. Paradoxically, fundraising is this type of distraction, so try to minimize that too. **11\. Don't get demoralized.** Though the immediate cause of death in a startup tends to be running out of money, the underlying cause is usually lack of focus. Either the company is run by stupid people (which can't be fixed with advice) or the people are smart but got demoralized. Starting a startup is a huge moral weight. Understand this and make a conscious effort not to be ground down by it, just as you'd be careful to bend at the knees when picking up a heavy box. **12\. Don't give up.** Even if you get demoralized, don't give up. You can get surprisingly far by just not giving up. This isn't true in all fields. There are a lot of people who couldn't become good mathematicians no matter how long they persisted. But startups aren't like that. Sheer effort is usually enough, so long as you keep morphing your idea. **13\. Deals fall through.** One of the most useful skills we learned from Viaweb was not getting our hopes up. We probably had 20 deals of various types fall through. After the first 10 or so we learned to treat deals as background processes that we should ignore till they terminated. It's very dangerous to morale to start

depend on deals closing, not just because they so often don't, but because it makes them less likely to. Having gotten it down to 13 sentences, I asked myself which I'd choose if I could only keep one. Understand your users. That's the key. The essential task in a startup is to create wealth; the dimension of wealth you have most control over is how much you improve users' lives; and the hardest part of that is knowing what to make for them. Once you know what to make, it's mere effort to make it, and most decent hackers are capable of that. Understanding your users is part of half the principles in this list. That's the reason to launch early, to understand your users. Evolving your idea is the embodiment of understanding your users. Understanding your users well will tend to push you toward making something that makes a few people deeply happy. The most important reason for having surprisingly good customer service is that it helps you understand your users. And understanding your users will even ensure your morale, because when everything else is collapsing around you, having just ten users who love you will keep you going. **

| July 2008 At this year's startup school, David Heinemeier Hansson gave a talk in which he suggested that startup founders should do things the old fashioned way. Instead of hoping to get rich by building a valuable company and then selling stock in a "liquidity event," founders should start companies that make money and live off the revenues. Sounds like a good plan. Let's think about the optimal way to do this. One disadvantage of living off the revenues of your company is that you have to keep running it. And as anyone who runs their own business can tell you, that requires your complete attention. You can't just start a business and check out once things are going well, or they stop going well surprisingly fast. The main economic motives of startup founders seem to be freedom and security. They want enough money that (a) they don't have to worry about running out of money and (b) they can spend their time how they want. Running your own business offers neither. You certainly don't have freedom: no boss is so demanding. Nor do you have security, because if you stop paying attention to the company, its revenues go away, and with them your income. The best case, for most people, would be if you could hire someone to manage the company for you once you'd grown it to a certain size. Suppose you could find a really good manager. Then you would have both freedom and security. You could pay as little attention to the business as you wanted, knowing that your manager would keep things running smoothly. And that being so, revenues would continue to flow in, so you'd have security as well. There will of course be some founders who wouldn't like that idea: the ones who like running their company so much that there's nothing else they'd rather do. But this group must be small. The way you succeed in most businesses is to be fanatically attentive to customers' needs. What are the odds that your own desires would coincide exactly with the demands of this powerful, external force? Sure, running your own company can be fairly interesting. Viaweb was more interesting than any job I'd had before. And since I made much more money from it, it offered the highest ratio of income to boringness of anything I'd done, by orders of magnitude. But was it _the_ most interesting work I could imagine doing? No. Whether the number of founders in the same position is asymptotic or merely large, there are certainly a lot of them. For them the right approach would be to hand the company over to a professional manager eventually, if they could find one who was good enough. _____ So far so good. But what if your manager was hit by a bus? What you really want is a management company to run your company for you. Then you don't depend on any one person. If you own rental property, there are companies you can hire to manage it for you. Some will do everything, from finding tenants to fixing leaks. Of course, running companies is a lot more complicated than managing rental property,

let's suppose there were management companies that could do it for you. They'd charge a lot, but wouldn't it be worth it? I'd sacrifice a large percentage of the income for the extra peace of mind. I realize what I'm describing already sounds too good to be true, but I can think of a way to make it even more attractive. If company management companies existed, there would be an additional service they could offer clients: they could let them insure their returns by pooling their risk. After all, even a perfect manager can't save a company when, as sometimes happens, its whole market dies, just as property managers can't save you from the building burning down. But a company that managed a large enough number of companies could say to all its clients: we'll combine the revenues from all your companies, and pay you your proportionate share. If such management companies existed, they'd offer the maximum of freedom and security. Someone would run your company for you, and you'd be protected even if it happened to die. Let's think about how such a management company might be organized. The simplest way would be to have a new kind of stock representing the total pool of companies they were managing. When you signed up, you'd trade your company's stock for shares of this pool, in proportion to an estimate of your company's value that you'd both agreed upon. Then you'd automatically get your share of the returns of the whole pool. The catch is that because this kind of trade would be hard to undo, you couldn't switch management companies. But there's a way they could fix that: suppose all the company management companies got together and agreed to allow their clients to exchange shares in all their pools. Then you could, in effect, simultaneously choose all the management companies to run yours for you, in whatever proportion you wanted, and change your mind later as often as you wanted. If such pooled-risk company management companies existed, signing up with one would seem the ideal plan for most people following the route David advocated. Good news: they do exist. What I've just described is an acquisition by a public company. _____ Unfortunately, though public acquirers are structurally identical to pooled- risk company management companies, they don't think of themselves that way. With a property management company, you can just walk in whenever you want and say "manage my rental property for me" and they'll do it. Whereas acquirers are, as of this writing, extremely fickle. Sometimes they're in a buying mood and they'll overpay enormously; other times they're not interested. They're like property management companies run by madmen. Or more precisely, by Benjamin Graham's Mr. Market. So while on average public acquirers behave like pooled-risk company managers, you need a window of several years to get average case performance. If you wait long enough (five years, say) you're likely to hit an up cycle where some acquirer is hot to buy you. But you can't

when it happens. You can't assume investors will carry you for as long as you might have to wait. Your company has to make money. Opinions are divided about how early to focus on that. Joe Kraus says you should try charging customers right away. And yet some of the most successful startups, including Google, ignored revenue at first and concentrated exclusively on development. The answer probably depends on the type of company you're starting. I can imagine some where trying to make sales would be a good heuristic for product design, and others where it would just be a distraction. The test is probably whether it helps you to understand your users. You can choose whichever revenue strategy you think is best for the type of company you're starting, so long as you're profitable. Being profitable ensures you'll get at least the average of the acquisition market—in which public companies do behave as pooled-risk company management companies. David isn't mistaken in saying you should start a company to live off its revenues. The mistake is thinking this is somehow opposed to starting a company and selling it. In fact, for most people the latter is merely the optimal case of the former. **Thanks** to Trevor Blackwell, Jessica Livingston, Michael Mandel, Robert Morris, and Fred Wilson for reading drafts of this. --- --- Russian Translation * * * ---

| April 2008 There are some topics I save up because they'll be so much fun to write about. This is one of them: a list of my heroes. I'm not claiming this is a list of the _n_ most admirable people. Who could make such a list, even if they wanted to? Einstein isn't on the list, for example, even though he probably deserves to be on any shortlist of admirable people. I once asked a physicist friend if Einstein was really as smart as his fame implies, and she said that yes, he was. So why isn't he on the list? Because I had to ask. This is a list of people who've influenced me, not people who would have if I understood their work. My test was to think of someone and ask "is this person my hero?" It often returned surprising answers. For example, it returned false for Montaigne, who was arguably the inventor of the essay. Why? When I thought about what it meant to call someone a hero, it meant I'd decide what to do by asking what they'd do in the same situation. That's a stricter standard than admiration. After I made the list, I looked to see if there was a pattern, and there was, a very clear one. Everyone on the list had two qualities: they cared almost excessively about their work, and they were absolutely honest. By honest I don't mean trustworthy so much as that they never pander: they never say or do something because that's what the audience wants. They are all fundamentally subversive for this reason, though they conceal it to varying degrees. **Jack Lambert** I grew up in Pittsburgh in the 1970s. Unless you were there it's hard to imagine how that town felt about the Steelers. Locally, all the news was bad. The steel industry was dying. But the Steelers were the best team in football — and moreover, in a way that seemed to reflect the personality of the city. They didn't do anything fancy. They just got the job done. Other players were more famous: Terry Bradshaw, Franco Harris, Lynn Swann. But they played offense, and you always get more attention for that. It seemed to me as a twelve year old football expert that the best of them all was Jack Lambert. And what made him so good was that he was utterly relentless. He didn't just care about playing well; he cared almost too much. He seemed to regard it as a personal insult when someone from the other team had possession of the ball on his side of the line of scrimmage. The suburbs of Pittsburgh in the 1970s were a pretty dull place. School was boring. All the adults around were bored with their jobs working for big companies. Everything that came to us through the mass media was (a) blandly uniform and (b) produced elsewhere. Jack Lambert was the exception. He was like nothing else I'd seen. **Kenneth Clark** Kenneth Clark is the best nonfiction writer I know of, on any subject. Most people who write about art history don't really like art; you can tell from a thousand little signs. But Clark did, and not just intellectually, but the way one anticipates a delicious dinner. What really makes

stand out, though, is the quality of his ideas. His style is deceptively casual, but there is more in his books than in a library of art monographs. Reading _The Nude_ is like a ride in a Ferrari. Just as you're getting settled, you're slammed back in your seat by the acceleration. Before you can adjust, you're thrown sideways as the car screeches into the first turn. His brain throws off ideas almost too fast to grasp them. Finally at the end of the chapter you come to a halt, with your eyes wide and a big smile on your face. Kenneth Clark was a star in his day, thanks to the documentary series _Civilisation_. And if you read only one book about art history, _Civilisation_ is the one I'd recommend. It's much better than the drab Sears Catalogs of art that undergraduates are forced to buy for Art History 101. **Larry Mihalko** A lot of people have a great teacher at some point in their childhood. Larry Mihalko was mine. When I look back it's like there's a line drawn between third and fourth grade. After Mr. Mihalko, everything was different. Why? First of all, he was intellectually curious. I had a few other teachers who were smart, but I wouldn't describe them as intellectually curious. In retrospect, he was out of place as an elementary school teacher, and I think he knew it. That must have been hard for him, but it was wonderful for us, his students. His class was a constant adventure. I used to like going to school every day. The other thing that made him different was that he liked us. Kids are good at telling that. The other teachers were at best benevolently indifferent. But Mr. Mihalko seemed like he actually wanted to be our friend. On the last day of fourth grade, he got out one of the heavy school record players and played James Taylor's "You've Got a Friend" to us. Just call out my name, and you know wherever I am, I'll come running. He died at 59 of lung cancer. I've never cried like I cried at his funeral. **Leonardo** One of the things I've learned about making things that I didn't realize when I was a kid is that much of the best stuff isn't made for audiences, but for oneself. You see paintings and drawings in museums and imagine they were made for you to look at. Actually a lot of the best ones were made as a way of exploring the world, not as a way to please other people. The best of these explorations are sometimes more pleasing than stuff made explicitly to please. Leonardo did a lot of things. One of his most admirable qualities was that he did so many different things that were admirable. What people know of him now is his paintings and his more flamboyant inventions, like flying machines. That makes him seem like some kind of dreamer who sketched artists' conceptions of rocket ships on the side. In fact he made a large number of far more practical technical discoveries. He was as good an engineer as a painter. His most impressive work, to me, is his drawings. They're clearly made more as a way of studying the world than producing

beautiful. And yet they can hold their own with any work of art ever made. No one else, before or since, was that good when no one was looking. **Robert Morris** Robert Morris has a very unusual quality: he's never wrong. It might seem this would require you to be omniscient, but actually it's surprisingly easy. Don't say anything unless you're fairly sure of it. If you're not omniscient, you just don't end up saying much. More precisely, the trick is to pay careful attention to how you qualify what you say. By using this trick, Robert has, as far as I know, managed to be mistaken only once, and that was when he was an undergrad. When the Mac came out, he said that little desktop computers would never be suitable for real hacking. It's wrong to call it a trick in his case, though. If it were a conscious trick, he would have slipped in a moment of excitement. With Robert this quality is wired-in. He has an almost superhuman integrity. He's not just generally correct, but also correct about how correct he is. You'd think it would be such a great thing never to be wrong that everyone would do this. It doesn't seem like that much extra work to pay as much attention to the error on an idea as to the idea itself. And yet practically no one does. I know how hard it is, because since meeting Robert I've tried to do in software what he seems to do in hardware. **P. G. Wodehouse** People are finally starting to admit that Wodehouse was a great writer. If you want to be thought a great novelist in your own time, you have to sound intellectual. If what you write is popular, or entertaining, or funny, you're ipso facto suspect. That makes Wodehouse doubly impressive, because it meant that to write as he wanted to, he had to commit to being despised in his own lifetime. Evelyn Waugh called him a great writer, but to most people at the time that would have read as a chivalrous or deliberately perverse gesture. At the time any random autobiographical novel by a recent college grad could count on more respectful treatment from the literary establishment. Wodehouse may have begun with simple atoms, but the way he composed them into molecules was near faultless. His rhythm in particular. It makes me self- conscious to write about it. I can think of only two other writers who came near him for style: Evelyn Waugh and Nancy Mitford. Those three used the English language like they owned it. But Wodehouse has something neither of them did. He's at ease. Evelyn Waugh and Nancy Mitford cared what other people thought of them: he wanted to seem aristocratic; she was afraid she wasn't smart enough. But Wodehouse didn't give a damn what anyone thought of him. He wrote exactly what he wanted. **Alexander Calder** Calder's on this list because he makes me happy. Can his work stand up to Leonardo's? Probably not. There might not be anything from the 20th Century that can. But what was good about Modernism, Calder had, and had in a way that he made seem effortless. What was good

Modernism was its freshness. Art became stuffy in the nineteenth century. The paintings that were popular at the time were mostly the art equivalent of McMansions—big, pretentious, and fake. Modernism meant starting over, making things with the same earnest motives that children might. The artists who benefited most from this were the ones who had preserved a child's confidence, like Klee and Calder. Klee was impressive because he could work in so many different styles. But between the two I like Calder better, because his work seemed happier. Ultimately the point of art is to engage the viewer. It's hard to predict what will; often something that seems interesting at first will bore you after a month. Calder's sculptures never get boring. They just sit there quietly radiating optimism, like a battery that never runs out. As far as I can tell from books and photographs, the happiness of Calder's work is his own happiness showing through. **Jane Austen** Everyone admires Jane Austen. Add my name to the list. To me she seems the best novelist of all time. I'm interested in how things work. When I read most novels, I pay as much attention to the author's choices as to the story. But in her novels I can't see the gears at work. Though I'd really like to know how she does what she does, I can't figure it out, because she's so good that her stories don't seem made up. I feel like I'm reading a description of something that actually happened. I used to read a lot of novels when I was younger. I can't read most anymore, because they don't have enough information in them. Novels seem so impoverished compared to history and biography. But reading Austen is like reading nonfiction. She writes so well you don't even notice her. **John McCarthy** John McCarthy invented Lisp, the field of (or at least the term) artificial intelligence, and was an early member of both of the top two computer science departments, MIT and Stanford. No one would dispute that he's one of the greats, but he's an especial hero to me because of Lisp. It's hard for us now to understand what a conceptual leap that was at the time. Paradoxically, one of the reasons his achievement is hard to appreciate is that it was so successful. Practically every programming language invented in the last 20 years includes ideas from Lisp, and each year the median language gets more Lisplike. In 1958 these ideas were anything but obvious. In 1958 there seem to have been two ways of thinking about programming. Some people thought of it as math, and proved things about Turing Machines. Others thought of it as a way to get things done, and designed languages all too influenced by the technology of the day. McCarthy alone bridged the gap. He designed a language that was math. But designed is not really the word; discovered is more like it. **The Spitfire** As I was making this list I found myself thinking of people like Douglas Bader and R.J. Mitchell and Jeffrey Quill and I realized that though all of them

done many things in their lives, there was one factor above all that connected them: the Spitfire. This is supposed to be a list of heroes. How can a machine be on it? Because that machine was not just a machine. It was a lens of heroes. Extraordinary devotion went into it, and extraordinary courage came out. It's a cliche to call World War II a contest between good and evil, but between fighter designs, it really was. The Spitfire's original nemesis, the ME 109, was a brutally practical plane. It was a killing machine. The Spitfire was optimism embodied. And not just in its beautiful lines: it was at the edge of what could be manufactured. But taking the high road worked. In the air, beauty had the edge, just. **Steve Jobs** People alive when Kennedy was killed usually remember exactly where they were when they heard about it. I remember exactly where I was when a friend asked if I'd heard Steve Jobs had cancer. It was like the floor dropped out. A few seconds later she told me that it was a rare operable type, and that he'd be ok. But those seconds seemed long. I wasn't sure whether to include Jobs on this list. A lot of people at Apple seem to be afraid of him, which is a bad sign. But he compels admiration. There's no name for what Steve Jobs is, because there hasn't been anyone quite like him before. He doesn't design Apple's products himself. Historically the closest analogy to what he does are the great Renaissance patrons of the arts. As the CEO of a company, that makes him unique. Most CEOs delegate taste to a subordinate. The design paradox means they're choosing more or less at random. But Steve Jobs actually has taste himself — such good taste that he's shown the world how much more important taste is than they realized. **Isaac Newton** Newton has a strange role in my pantheon of heroes: he's the one I reproach myself with. He worked on big things, at least for part of his life. It's so easy to get distracted working on small stuff. The questions you're answering are pleasantly familiar. You get immediate rewards — in fact, you get bigger rewards in your time if you work on matters of passing importance. But I'm uncomfortably aware that this is the route to well-deserved obscurity. To do really great things, you have to seek out questions people didn't even realize were questions. There have probably been other people who did this as well as Newton, for their time, but Newton is my model of this kind of thought. I can just begin to understand what it must have felt like for him. You only get one life. Why not do something huge? The phrase "paradigm shift" is overused now, but Kuhn was onto something. And you know more are out there, separated from us by what will later seem a surprisingly thin wall of laziness and stupidity. If we work like Newton. **Thanks** to Trevor Blackwell, Jessica Livingston, and Jackie McDonough for reading drafts of this. --- --- Japanese Translation * * * ---

| August 2011 I realized recently that we may be able to solve part of the patent problem without waiting for the government. I've never been 100% sure whether patents help or hinder technological progress. When I was a kid I thought they helped. I thought they protected inventors from having their ideas stolen by big companies. Maybe that was truer in the past, when more things were physical. But regardless of whether patents are in general a good thing, there do seem to be bad ways of using them. And since bad uses of patents seem to be increasing, there is an increasing call for patent reform. The problem with patent reform is that it has to go through the government. That tends to be slow. But recently I realized we can also attack the problem downstream. As well as pinching off the stream of patents at the point where they're issued, we may in some cases be able to pinch it off at the point where they're used. One way of using patents that clearly does not encourage innovation is when established companies with bad products use patents to suppress small competitors with good products. This is the type of abuse we may be able to decrease without having to go through the government. The way to do it is to get the companies that are above pulling this sort of trick to pledge publicly not to. Then the ones that won't make such a pledge will be very conspicuous. Potential employees won't want to work for them. And investors, too, will be able to see that they're the sort of company that competes by litigation rather than by making good products. Here's the pledge: > No first use of software patents against companies with less than 25 people. I've deliberately traded precision for brevity. The patent pledge is not legally binding. It's like Google's "Don't be evil." They don't define what evil is, but by publicly saying that, they're saying they're willing to be held to a standard that, say, Altria is not. And though constraining, "Don't be evil" has been good for Google. Technology companies win by attracting the most productive people, and the most productive people are attracted to employers who hold themselves to a higher standard than the law requires. The patent pledge is in effect a narrower but open source "Don't be evil." I encourage every technology company to adopt it. If you want to help fix patents, encourage your employer to. Already most technology companies wouldn't sink to using patents on startups. You don't see Google or Facebook suing startups for patent infringement. They don't need to. So for the better technology companies, the patent pledge requires no change in behavior. They're just promising to do what they'd do anyway. And when all the companies that won't use patents on startups have said so, the holdouts will be very conspicuous. The patent pledge doesn't fix every problem with patents. It won't stop patent trolls, for example; they're already pariahs. But the problem the patent pledge does fix may be more serious than

problem of patent trolls. Patent trolls are just parasites. A clumsy parasite may occasionally kill the host, but that's not its goal. Whereas companies that sue startups for patent infringement generally do it with explicit goal of keeping their product off the market. Companies that use patents on startups are attacking innovation at the root. Now there's something any individual can do about this problem, without waiting for the government: ask companies where they stand. Patent Pledge Site **

| | **Want to start a startup?** Get funded by Y Combinator. --- October 2010 Silicon Valley proper is mostly suburban sprawl. At first glance it doesn't seem there's anything to see. It's not the sort of place that has conspicuous monuments. But if you look, there are subtle signs you're in a place that's different from other places. **1.Stanford University** Stanford is a strange place. Structurally it is to an ordinary university what suburbia is to a city. It's enormously spread out, and feels surprisingly empty much of the time. But notice the weather. It's probably perfect. And notice the beautiful mountains to the west. And though you can't see it, cosmopolitan San Francisco is 40 minutes to the north. That combination is much of the reason Silicon Valley grew up around this university and not some other one. **2.University Ave** A surprising amount of the work of the Valley is done in the cafes on or just off University Ave in Palo Alto. If you visit on a weekday between 10 and 5, you'll often see founders pitching investors. In case you can't tell, the founders are the ones leaning forward eagerly, and the investors are the ones sitting back with slightly pained expressions. **3.The Lucky Office** The office at 165 University Ave was Google's first. Then it was Paypal's. (Now it's Wepay's.) The interesting thing about it is the location. It's a smart move to put a startup in a place with restaurants and people walking around instead of in an office park, because then the people who work there want to stay there, instead of fleeing as soon as conventional working hours end. They go out for dinner together, talk about ideas, and then come back and implement them. It's important to realize that Google's current location in an office park is not where they started; it's just where they were forced to move when they needed more space. Facebook was till recently across the street, till they too had to move because they needed more space. **4.Old Palo Alto** Palo Alto was not originally a suburb. For the first 100 years or so of its existence, it was a college town out in the countryside. Then in the mid 1950s it was engulfed in a wave of suburbia that raced down the peninsula. But Palo Alto north of Oregon expressway still feels noticeably different from the area around it. It's one of the nicest places in the Valley. The buildings are old (though increasingly they are being torn down and replaced with generic McMansions) and the trees are tall. But houses are very expensive—around $1000 per square foot. This is post-exit Silicon Valley. **5.Sand Hill Road** It's interesting to see the VCs' offices on the north side of Sand Hill Road precisely because they're so boringly uniform. The buildings are all more or less the same, their exteriors express very little, and they are arranged in a confusing maze. (I've been visiting them for years and I still occasionally get lost.) It's not a coincidence. These buildings are a pretty accurate reflection

the VC business. If you go on a weekday you may see groups of founders there to meet VCs. But mostly you won't see anyone; bustling is the last word you'd use to describe the atmos. Visiting Sand Hill Road reminds you that the opposite of "down and dirty" would be "up and clean." **6.Castro Street** It's a tossup whether Castro Street or University Ave should be considered the heart of the Valley now. University Ave would have been 10 years ago. But Palo Alto is getting expensive. Increasingly startups are located in Mountain View, and Palo Alto is a place they come to meet investors. Palo Alto has a lot of different cafes, but there is one that clearly dominates in Mountain View: Red Rock. **7.Google** Google spread out from its first building in Mountain View to a lot of the surrounding ones. But because the buildings were built at different times by different people, the place doesn't have the sterile, walled-off feel that a typical large company's headquarters have. It definitely has a flavor of its own though. You sense there is something afoot. The general atmos is vaguely utopian; there are lots of Priuses, and people who look like they drive them. You can't get into Google unless you know someone there. It's very much worth seeing inside if you can, though. Ditto for Facebook, at the end of California Ave in Palo Alto, though there is nothing to see outside. **8.Skyline Drive** Skyline Drive runs along the crest of the Santa Cruz mountains. On one side is the Valley, and on the other is the sea—which because it's cold and foggy and has few harbors, plays surprisingly little role in the lives of people in the Valley, considering how close it is. Along some parts of Skyline the dominant trees are huge redwoods, and in others they're live oaks. Redwoods mean those are the parts where the fog off the coast comes in at night; redwoods condense rain out of fog. The MROSD manages a collection of great walking trails off Skyline. **9.280** Silicon Valley has two highways running the length of it: 101, which is pretty ugly, and 280, which is one of the more beautiful highways in the world. I always take 280 when I have a choice. Notice the long narrow lake to the west? That's the San Andreas Fault. It runs along the base of the hills, then heads uphill through Portola Valley. One of the MROSD trails runs right along the fault. A string of rich neighborhoods runs along the foothills to the west of 280: Woodside, Portola Valley, Los Altos Hills, Saratoga, Los Gatos. SLAC goes right under 280 a little bit south of Sand Hill Road. And a couple miles south of that is the Valley's equivalent of the "Welcome to Las Vegas" sign: The Dish. **

| November 2019 If you discover something new, there's a significant chance you'll be accused of some form of heresy. To discover new things, you have to work on ideas that are good but non- obvious; if an idea is obviously good, other people are probably already working on it. One common way for a good idea to be non-obvious is for it to be hidden in the shadow of some mistaken assumption that people are very attached to. But anything you discover from working on such an idea will tend to contradict the mistaken assumption that was concealing it. And you will thus get a lot of heat from people attached to the mistaken assumption. Galileo and Darwin are famous examples of this phenomenon, but it's probably always an ingredient in the resistance to new ideas. So it's particularly dangerous for an organization or society to have a culture of pouncing on heresy. When you suppress heresies, you don't just prevent people from contradicting the mistaken assumption you're trying to protect. You also suppress any idea that implies indirectly that it's false. Every cherished mistaken assumption has a dead zone of unexplored ideas around it. And the more preposterous the assumption, the bigger the dead zone it creates. There is a positive side to this phenomenon though. If you're looking for new ideas, one way to find them is by _looking for heresies_. When you look at the question this way, the depressingly large dead zones around mistaken assumptions become excitingly large mines of new ideas. --- --- Japanese Translation | | Russian Translation Simplified Chinese Translation * * * ---

| January 2016 Life is short, as everyone knows. When I was a kid I used to wonder about this. Is life actually short, or are we really complaining about its finiteness? Would we be just as likely to feel life was short if we lived 10 times as long? Since there didn't seem any way to answer this question, I stopped wondering about it. Then I had kids. That gave me a way to answer the question, and the answer is that life actually is short. Having kids showed me how to convert a continuous quantity, time, into discrete quantities. You only get 52 weekends with your 2 year old. If Christmas-as-magic lasts from say ages 3 to 10, you only get to watch your child experience it 8 times. And while it's impossible to say what is a lot or a little of a continuous quantity like time, 8 is not a lot of something. If you had a handful of 8 peanuts, or a shelf of 8 books to choose from, the quantity would definitely seem limited, no matter what your lifespan was. Ok, so life actually is short. Does it make any difference to know that? It has for me. It means arguments of the form "Life is too short for x" have great force. It's not just a figure of speech to say that life is too short for something. It's not just a synonym for annoying. If you find yourself thinking that life is too short for something, you should try to eliminate it if you can. When I ask myself what I've found life is too short for, the word that pops into my head is "bullshit." I realize that answer is somewhat tautological. It's almost the definition of bullshit that it's the stuff that life is too short for. And yet bullshit does have a distinctive character. There's something fake about it. It's the junk food of experience. If you ask yourself what you spend your time on that's bullshit, you probably already know the answer. Unnecessary meetings, pointless disputes, bureaucracy, posturing, dealing with other people's mistakes, traffic jams, addictive but unrewarding pastimes. There are two ways this kind of thing gets into your life: it's either forced on you, or it tricks you. To some extent you have to put up with the bullshit forced on you by circumstances. You need to make money, and making money consists mostly of errands. Indeed, the law of supply and demand ensures that: the more rewarding some kind of work is, the cheaper people will do it. It may be that less bullshit is forced on you than you think, though. There has always been a stream of people who opt out of the default grind and go live somewhere where opportunities are fewer in the conventional sense, but life feels more authentic. This could become more common. You can do it on a smaller scale without moving. The amount of time you have to spend on bullshit varies between employers. Most large organizations (and many small ones) are steeped in it. But if you consciously prioritize bullshit avoidance over other factors like money and prestige, you can probably find employers that will waste less of your time. If you're a

or a small company, you can do this at the level of individual customers. If you fire or avoid toxic customers, you can decrease the amount of bullshit in your life by more than you decrease your income. But while some amount of bullshit is inevitably forced on you, the bullshit that sneaks into your life by tricking you is no one's fault but your own. And yet the bullshit you choose may be harder to eliminate than the bullshit that's forced on you. Things that lure you into wasting your time have to be really good at tricking you. An example that will be familiar to a lot of people is arguing online. When someone contradicts you, they're in a sense attacking you. Sometimes pretty overtly. Your instinct when attacked is to defend yourself. But like a lot of instincts, this one wasn't designed for the world we now live in. Counterintuitive as it feels, it's better most of the time not to defend yourself. Otherwise these people are literally taking your life. Arguing online is only incidentally addictive. There are more dangerous things than that. As I've written before, one byproduct of technical progress is that things we like tend to become _more addictive_. Which means we will increasingly have to make a conscious effort to avoid addictions — to stand outside ourselves and ask "is this how I want to be spending my time?" As well as avoiding bullshit, one should actively seek out things that matter. But different things matter to different people, and most have to learn what matters to them. A few are lucky and realize early on that they love math or taking care of animals or writing, and then figure out a way to spend a lot of time doing it. But most people start out with a life that's a mix of things that matter and things that don't, and only gradually learn to distinguish between them. For the young especially, much of this confusion is induced by the artificial situations they find themselves in. In middle school and high school, what the other kids think of you seems the most important thing in the world. But when you ask adults what they got wrong at that age, nearly all say they cared too much what other kids thought of them. One heuristic for distinguishing stuff that matters is to ask yourself whether you'll care about it in the future. Fake stuff that matters usually has a sharp peak of seeming to matter. That's how it tricks you. The area under the curve is small, but its shape jabs into your consciousness like a pin. The things that matter aren't necessarily the ones people would call "important." Having coffee with a friend matters. You won't feel later like that was a waste of time. One great thing about having small children is that they make you spend time on things that matter: them. They grab your sleeve as you're staring at your phone and say "will you play with me?" And odds are that is in fact the bullshit-minimizing option. If life is short, we should expect its shortness to take us by surprise. And that is just what tends

happen. You take things for granted, and then they're gone. You think you can always write that book, or climb that mountain, or whatever, and then you realize the window has closed. The saddest windows close when other people die. Their lives are short too. After my mother died, I wished I'd spent more time with her. I lived as if she'd always be there. And in her typical quiet way she encouraged that illusion. But an illusion it was. I think a lot of people make the same mistake I did. The usual way to avoid being taken by surprise by something is to be consciously aware of it. Back when life was more precarious, people used to be aware of death to a degree that would now seem a bit morbid. I'm not sure why, but it doesn't seem the right answer to be constantly reminding oneself of the grim reaper hovering at everyone's shoulder. Perhaps a better solution is to look at the problem from the other end. Cultivate a habit of impatience about the things you most want to do. Don't wait before climbing that mountain or writing that book or visiting your mother. You don't need to be constantly reminding yourself why you shouldn't wait. Just don't wait. I can think of two more things one does when one doesn't have much of something: try to get more of it, and savor what one has. Both make sense here. How you live affects how long you live. Most people could do better. Me among them. But you can probably get even more effect by paying closer attention to the time you have. It's easy to let the days rush by. The "flow" that imaginative people love so much has a darker cousin that prevents you from pausing to savor life amid the daily slurry of errands and alarms. One of the most striking things I've read was not in a book, but the title of one: James Salter's _Burning the Days_. It is possible to slow time somewhat. I've gotten better at it. Kids help. When you have small children, there are a lot of moments so perfect that you can't help noticing. It does help too to feel that you've squeezed everything out of some experience. The reason I'm sad about my mother is not just that I miss her but that I think of all the things we could have done that we didn't. My oldest son will be 7 soon. And while I miss the 3 year old version of him, I at least don't have any regrets over what might have been. We had the best time a daddy and a 3 year old ever had. Relentlessly prune bullshit, don't wait to do things that matter, and savor the time you have. That's what you do when life is short. **

| April 2012 A palliative care nurse called Bronnie Ware made a list of the biggest regrets of the dying. Her list seems plausible. I could see myself — _can_ see myself — making at least 4 of these 5 mistakes. If you had to compress them into a single piece of advice, it might be: don't be a cog. The 5 regrets paint a portrait of post-industrial man, who shrinks himself into a shape that fits his circumstances, then turns dutifully till he stops. The alarming thing is, the mistakes that produce these regrets are all errors of omission. You forget your dreams, ignore your family, suppress your feelings, neglect your friends, and forget to be happy. Errors of omission are a particularly dangerous type of mistake, because you make them by default. I would like to avoid making these mistakes. But how do you avoid mistakes you make by default? Ideally you transform your life so it has other defaults. But it may not be possible to do that completely. As long as these mistakes happen by default, you probably have to be reminded not to make them. So I inverted the 5 regrets, yielding a list of 5 commands > Don't ignore your dreams; don't work too much; say what you think; cultivate > friendships; be happy. which I then put at the top of the file I use as a todo list. --- --- Japanese Translation * * * ---

| March 2012 I'm not a very good speaker. I say "um" a lot. Sometimes I have to pause when I lose my train of thought. I wish I were a better speaker. But I don't wish I were a better speaker like I wish I were a better writer. What I really want is to have good ideas, and that's a much bigger part of being a good writer than being a good speaker. Having good ideas is most of writing well. If you know what you're talking about, you can say it in the plainest words and you'll be perceived as having a good style. With speaking it's the opposite: having good ideas is an alarmingly small component of being a good speaker. I first noticed this at a conference several years ago. There was another speaker who was much better than me. He had all of us roaring with laughter. I seemed awkward and halting by comparison. Afterward I put my talk online like I usually do. As I was doing it I tried to imagine what a transcript of the other guy's talk would be like, and it was only then I realized he hadn't said very much. Maybe this would have been obvious to someone who knew more about speaking, but it was a revelation to me how much less ideas mattered in speaking than writing. A few years later I heard a talk by someone who was not merely a better speaker than me, but a famous speaker. Boy was he good. So I decided I'd pay close attention to what he said, to learn how he did it. After about ten sentences I found myself thinking "I don't want to be a good speaker." Being a really good speaker is not merely orthogonal to having good ideas, but in many ways pushes you in the opposite direction. For example, when I give a talk, I usually write it out beforehand. I know that's a mistake; I know delivering a prewritten talk makes it harder to engage with an audience. The way to get the attention of an audience is to give them _your_ full attention, and when you're delivering a prewritten talk, your attention is always divided between the audience and the talk — even if you've memorized it. If you want to engage an audience, it's better to start with no more than an outline of what you want to say and ad lib the individual sentences. But if you do that, you might spend no more time thinking about each sentence than it takes to say it. Occasionally the stimulation of talking to a live audience makes you think of new things, but in general this is not going to generate ideas as well as writing does, where you can spend as long on each sentence as you want. If you rehearse a prewritten speech enough, you can get asymptotically close to the sort of engagement you get when speaking ad lib. Actors do. But here again there's a tradeoff between smoothness and ideas. All the time you spend practicing a talk, you could instead spend making it better. Actors don't face that temptation, except in the rare cases where they've written the script, but any speaker does. Before I give a talk I can usually be found sitting in a corner somewhere with a copy printed out on paper, trying

rehearse it in my head. But I always end up spending most of the time rewriting it instead. Every talk I give ends up being given from a manuscript full of things crossed out and rewritten. Which of course makes me um even more, because I haven't had any time to practice the new bits. Depending on your audience, there are even worse tradeoffs than these. Audiences like to be flattered; they like jokes; they like to be swept off their feet by a vigorous stream of words. As you decrease the intelligence of the audience, being a good speaker is increasingly a matter of being a good bullshitter. That's true in writing too of course, but the descent is steeper with talks. Any given person is dumber as a member of an audience than as a reader. Just as a speaker ad libbing can only spend as long thinking about each sentence as it takes to say it, a person hearing a talk can only spend as long thinking about each sentence as it takes to hear it. Plus people in an audience are always affected by the reactions of those around them, and the reactions that spread from person to person in an audience are disproportionately the more brutish sort, just as low notes travel through walls better than high ones. Every audience is an incipient mob, and a good speaker uses that. Part of the reason I laughed so much at the talk by the good speaker at that conference was that everyone else did. So are talks useless? They're certainly inferior to the written word as a source of ideas. But that's not all talks are good for. When I go to a talk, it's usually because I'm interested in the speaker. Listening to a talk is the closest most of us can get to having a conversation with someone like the president, who doesn't have time to meet individually with all the people who want to meet him. Talks are also good at motivating me to do things. It's probably no coincidence that so many famous speakers are described as motivational speakers. That may be what public speaking is really for. It's probably what it was originally for. The emotional reactions you can elicit with a talk can be a powerful force. I wish I could say that this force was more often used for good than ill, but I'm not sure. **

| January 2016 Since the 1970s, economic inequality in the US has increased dramatically. And in particular, the rich have gotten a lot richer. Nearly everyone who writes about the topic says that economic inequality should be decreased. I'm interested in this question because I was one of the founders of a company called Y Combinator that helps people start startups. Almost by definition, if a startup succeeds, its founders become rich. Which means by helping startup founders I've been helping to increase economic inequality. If economic inequality should be decreased, I shouldn't be helping founders. No one should be. But that doesn't sound right. What's going on here? What's going on is that while economic inequality is a single measure (or more precisely, two: variation in income, and variation in wealth), it has multiple causes. Many of these causes are bad, like tax loopholes and drug addiction. But some are good, like Larry Page and Sergey Brin starting the company you use to find things online. If you want to understand economic inequality — and more importantly, if you actually want to fix the bad aspects of it — you have to tease apart the components. And yet the trend in nearly everything written about the subject is to do the opposite: to squash together all the aspects of economic inequality as if it were a single phenomenon. Sometimes this is done for ideological reasons. Sometimes it's because the writer only has very high-level data and so draws conclusions from that, like the proverbial drunk who looks for his keys under the lamppost, instead of where he dropped them, because the light is better there. Sometimes it's because the writer doesn't understand critical aspects of inequality, like the role of technology in wealth creation. Much of the time, perhaps most of the time, writing about economic inequality combines all three. ___ The most common mistake people make about economic inequality is to treat it as a single phenomenon. The most naive version of which is the one based on the pie fallacy: that the rich get rich by taking money from the poor. Usually this is an assumption people start from rather than a conclusion they arrive at by examining the evidence. Sometimes the pie fallacy is stated explicitly: > ...those at the top are grabbing an increasing fraction of the nation's > income — so much of a larger share that what's left over for the rest is > diminished.... Other times it's more unconscious. But the unconscious form is very widespread. I think because we grow up in a world where the pie fallacy is actually true. To kids, wealth _is_ a fixed pie that's shared out, and if one person gets more, it's at the expense of another. It takes a conscious effort to remind oneself that the real world doesn't work that way. In the real world you can create wealth as well as taking it from others. A woodworker creates wealth. He makes a chair, and you willingly give him money in return for it. A high-frequency trader does not.

makes a dollar only when someone on the other end of a trade loses a dollar. If the rich people in a society got that way by taking wealth from the poor, then you have the degenerate case of economic inequality, where the cause of poverty is the same as the cause of wealth. But instances of inequality don't have to be instances of the degenerate case. If one woodworker makes 5 chairs and another makes none, the second woodworker will have less money, but not because anyone took anything from him. Even people sophisticated enough to know about the pie fallacy are led toward it by the custom of describing economic inequality as a ratio of one quantile's income or wealth to another's. It's so easy to slip from talking about income shifting from one quantile to another, as a figure of speech, into believing that is literally what's happening. Except in the degenerate case, economic inequality can't be described by a ratio or even a curve. In the general case it consists of multiple ways people become poor, and multiple ways people become rich. Which means to understand economic inequality in a country, you have to go find individual people who are poor or rich and figure out why. If you want to understand _change_ in economic inequality, you should ask what those people would have done when it was different. This is one way I know the rich aren't all getting richer simply from some new system for transferring wealth to them from everyone else. When you use the would-have method with startup founders, you find what most would have done _back in 1960_, when economic inequality was lower, was to join big companies or become professors. Before Mark Zuckerberg started Facebook, his default expectation was that he'd end up working at Microsoft. The reason he and most other startup founders are richer than they would have been in the mid 20th century is not because of some right turn the country took during the Reagan administration, but because progress in technology has made it much easier to start a new company that _grows fast_. Traditional economists seem strangely averse to studying individual humans. It seems to be a rule with them that everything has to start with statistics. So they give you very precise numbers about variation in wealth and income, then follow it with the most naive speculation about the underlying causes. But while there are a lot of people who get rich through rent-seeking of various forms, and a lot who get rich by playing zero-sum games, there are also a significant number who get rich by creating wealth. And creating wealth, as a source of economic inequality, is different from taking it — not just morally, but also practically, in the sense that it is harder to eradicate. One reason is that variation in productivity is accelerating. The rate at which individuals can create wealth depends on the technology available to them, and that grows exponentially. The other reason creating wealth is such a tenacious source of inequality

that it can expand to accommodate a lot of people. ___ I'm all for shutting down the crooked ways to get rich. But that won't eliminate great variations in wealth, because as long as you leave open the option of getting rich by creating wealth, people who want to get rich will do that instead. Most people who get rich tend to be fairly driven. Whatever their other flaws, laziness is usually not one of them. Suppose new policies make it hard to make a fortune in finance. Does it seem plausible that the people who currently go into finance to make their fortunes will continue to do so, but be content to work for ordinary salaries? The reason they go into finance is not because they love finance but because they want to get rich. If the only way left to get rich is to start startups, they'll start startups. They'll do well at it too, because determination is the main factor in the success of a startup. And while it would probably be a good thing for the world if people who wanted to get rich switched from playing zero-sum games to creating wealth, that would not only not eliminate great variations in wealth, but might even exacerbate them. In a zero-sum game there is at least a limit to the upside. Plus a lot of the new startups would create new technology that further accelerated variation in productivity. Variation in productivity is far from the only source of economic inequality, but it is the irreducible core of it, in the sense that you'll have that left when you eliminate all other sources. And if you do, that core will be big, because it will have expanded to include the efforts of all the refugees. Plus it will have a large Baumol penumbra around it: anyone who could get rich by creating wealth on their own account will have to be paid enough to prevent them from doing it. You can't prevent great variations in wealth without preventing people from getting rich, and you can't do that without preventing them from starting startups. So let's be clear about that. Eliminating great variations in wealth would mean eliminating startups. And that doesn't seem a wise move. Especially since it would only mean you eliminated startups in your own country. Ambitious people already move halfway around the world to further their careers, and startups can operate from anywhere nowadays. So if you made it impossible to get rich by creating wealth in your country, people who wanted to do that would just leave and do it somewhere else. Which would certainly get you a lower Gini coefficient, along with a lesson in being careful what you ask for. I think rising economic inequality is the inevitable fate of countries that don't choose something worse. We had a 40 year stretch in the middle of the 20th century that convinced some people otherwise. But as I explained in _The Refragmentation_, that was an anomaly — a unique combination of circumstances that compressed American society not just economically but culturally too. And while some of the growth in economic

we've seen since then has been due to bad behavior of various kinds, there has simultaneously been a huge increase in individuals' ability to create wealth. Startups are almost entirely a product of this period. And even within the startup world, there has been a qualitative change in the last 10 years. Technology has decreased the cost of starting a startup so much that founders now have the upper hand over investors. Founders get less diluted, and it is now common for them to retain _board control_ as well. Both further increase economic inequality, the former because founders own more stock, and the latter because, as investors have learned, founders tend to be better at running their companies than investors. While the surface manifestations change, the underlying forces are very, very old. The acceleration of productivity we see in Silicon Valley has been happening for thousands of years. If you look at the history of stone tools, technology was already accelerating in the Mesolithic. The acceleration would have been too slow to perceive in one lifetime. Such is the nature of the leftmost part of an exponential curve. But it was the same curve. You do not want to design your society in a way that's incompatible with this curve. The evolution of technology is one of the most powerful forces in history. Louis Brandeis said "We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." That sounds plausible. But if I have to choose between ignoring him and ignoring an exponential curve that has been operating for thousands of years, I'll bet on the curve. Ignoring any trend that has been operating for thousands of years is dangerous. But exponential growth, especially, tends to bite you. ___ If accelerating variation in productivity is always going to produce some baseline growth in economic inequality, it would be a good idea to spend some time thinking about that future. Can you have a healthy society with great variation in wealth? What would it look like? Notice how novel it feels to think about that. The public conversation so far has been exclusively about the need to decrease economic inequality. We've barely given a thought to how to live with it. I'm hopeful we'll be able to. Brandeis was a product of the Gilded Age, and things have changed since then. It's harder to hide wrongdoing now. And to get rich now you don't have to buy politicians the way railroad or oil magnates did. The great concentrations of wealth I see around me in Silicon Valley don't seem to be destroying democracy. There are lots of things wrong with the US that have economic inequality as a symptom. We should fix those things. In the process we may decrease economic inequality. But we can't start from the symptom and hope to fix the underlying causes. The most obvious is poverty. I'm sure most of those who want to decrease economic inequality want to do it mainly to help the poor, not to hurt the rich. Indeed, a good number