Founders - #276 Paul Graham’s Essays Part 2

Episode Date: November 9, 2022

What I learned from reading Paul Graham’s essays.----Get access to the World’s Most Valuable Notebook for Founders at Founders Notes.com----[4:01] You don't want to start a startup to do something that everyone agrees is a good idea, or there will already be other companies doing it. You have but that you know isn't to do something that sounds to most other people like a bad idea.[5:20] The independent-minded are often unaware how different their ideas are from conventional ones, at least till they state them publicly.[6:20] Founders find themselves able to speak more freely with founders of other companies than with their own employees.[7:40] There are intellectual fashions too, and you definitely don't want to participate in those. Because unfashionable ideas are disproportionately likely to lead somewhere interesting. The best place to find undiscovered ideas is where no one else is looking.[8:30] How much does the work you're currently doing engage your curiosity? If the answer is "not much," maybe you should change something.[9:00] How To Think For Yourself by Paul Graham[9:00] How To Work Hard by Paul Graham[10:00] Hackers and Painters by Paul Graham[11:00] Paul on Twitter: "Maybe better founders could have..." Presumably Patrick knows what he means by that, but in case it's not clear, he's describing the empty set. If Patrick and John Collison had to work long hours to build something great, you will too. Link to tweet[13:00] Less is more but you have to do more to get to less. — Rick Rubin: In the Studio by Jake Brown. (Founders #245)[13:00] If great talent and great drive are both rare, then people with both are rare squared.[14:30] Can’t Hurt Me by David Goggins[15:30] Aliens, Jedis, & Cults[16:30] How To Do What You Love by Paul Graham[19:00] Fear's a powerful thing. I mean it's got a lot of firepower. If you can figure out a way to wrestle that fear to push you from behind rather than to stand in front of you, that's very powerful. I always felt that I had to work harder than the next guy, just to do as well as the next guy. And to do better than the next guy, I had to just kill.And you know, to a certain extent, that's still with me in how I work, you know, I just go in. —Jimmy Iovine[20:00] Many problems have a hard core at the center, surrounded by easier stuff at the edges. Working hard means aiming toward the center to the extent you can. Some days you may not be able to; some days you'll only be able to work on the easier, peripheral stuff. But you should always be aiming as close to the center as you can without stalling.[22:00] Find work that feels like play. —The Almanack of Naval Ravikant: A Guide to Wealth and Happiness by Naval Ravikant and Eric Jorgenson. (Founders #191)[23:00] A deep interest in a topic makes people work harder than any amount of discipline can.[23:00] Mozart: A Life by Paul Johnson. (Founders #240)[25:00] Working hard is not just a dial you turn up to 11. It's a complicated, dynamic system that has to be tuned just right at each point. You have to understand the shape of real work, see clearly what kind you're best suited for, aim as close to the true core of it as you can, accurately judge at each moment both what you're capable of and how you're doing, and put in as many hours each day as you can without harming the quality of the result. This network is too complicated to trick. But if you're consistently honest and clearsighted, it will automatically assume an optimal shape, and you'll be productive in a way few people are.[26:00] How to Lose Time and Money by Paul Graham[30:00] Schlep Blindness by Paul Graham[31:00] 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.[33:00] What I’ve Learned From Users by Paul Graham[34:00] The first thing that came to mind was that most startups have the same problems. No two have exactly the same problems, but it's surprising how much the problems remain the same, regardless of what they're making. Once you've advised 100 startups all doing different things, you rarely encounter problems you haven't seen before.[34:00] Today I talked to a startup doing so well that they had no current problems that needed solving. Profitable, growing ~20x a year (not a typo), only 9 employees. This is so rare that I didn't know what to do. We ended up talking about problems they might have in the future.I advised them never to raise another round, so to get equity you're going to have to get hired there. So learn to program. Link to tweet[35:00] But knowing (nearly) all the problems startups can encounter doesn't mean that advising them can be automated, or reduced to a formula.[37:00] It's not about pop culture, and it's not about fooling people, and it's not about convincing people that they want something they don't. We figure out what we want.And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. —Steve Jobs[39:00] That was another big surprise: how often founders don't listen to us.[39:00] Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger by Janet Lowe. (Founders #221)[40:00] The reason startups are so counterintuitive is that they're so different from most people's other experiences. No one knows what it's like except those who've done it.[42:00] Speed defines startups. Focus enables speed. YC improves focus.[42:00] Alexander combined an excessive tolerance of fatigue with an intolerence for slowness. Alexander the Great: The Brief Life and Towering Exploits of History's Greatest Conqueror--As Told By His Original Biographers (Founders #232)[43:00] However good you are, good colleagues make you better. Indeed, very ambitious people probably need colleagues more than anyone else, because they're so starved for them in everyday life.[45:00] Leading By Design: The Ikea Story (Founders #104)----Get access to the World’s Most Valuable Notebook for Founders at Founders Notes.com----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast ----Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. ----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast

There are some kinds of work that you can't do well without thinking differently from your peers. Your ideas have to be both correct and novel. You see this pattern with startup founders. You don't want to start a startup to do something that everyone agrees is a good idea, or there will already be other companies doing it. You have to do something that sounds to most other people like a bad idea, but that you know isn't. Like writing software for a tiny computer used by a few thousand hobbyists

or starting a site to let people rent airbeds on strangers' floors. He's referencing Microsoft and Airbnb there. Do you want to do the kind of work where you can only win by thinking differently from everyone else? Independent-mindedness seems to be more a matter of nature than nurture,

which means if you pick the wrong type of work, you're going to be unhappy. If you're naturally independent-minded, you're going to find it frustrating to be a middle manager. And if you're naturally conventional- minded, you're going to be sailing into a headwind if you try to do original research. One difficulty here is that people are often mistaken about where they fall on the spectrum from conventional to independent-minded. Conventional-minded people don't like to think of themselves as conventional-minded. It genuinely feels to them as if they make up their own minds about everything.

It's just a coincidence that their beliefs are identical to their peers. And the independent-minded, meanwhile, are often unaware how different their ideas are from conventional ones, at least till they state them publicly. Can you make yourself more independent-minded? I think so. It matters a lot who you surround yourself with. If you surround yourself with independent-minded people, hearing other people say surprising things will encourage you to and to think of more. The independent minded find it uncomfortable to be surrounded by conventional minded people. A place where the

independent and conventional minded are thrown together is in successful startups. The founders and early employees are almost always independent minded. Otherwise, the startup wouldn't be successful. But conventional minded people greatly outnumber independent-minded ones. So as the company grows, the original spirit of independent-mindedness is inevitably diluted. This causes all kinds of problems, besides the obvious one, that the company starts to suck. One of the strangest is that the founders find themselves able to speak more freely with founders of other companies than with their own employees. The importance of founders knowing other founders is repeated a lot in Paul's essays. I'm going to read that one more time because I think it's important. One of the strangest is that the founders find

themselves able to speak more freely with founders of other companies than with their own employees. You don't have to spend all your time with independent minded people. It's enough to have one or two who you can talk to regularly, and once you find them, they're usually as eager to talk as you are. They need you too. You can expand the source of influences in time as well as space by reading history. When I read history, I do it not just to learn what happened, but to try to get inside the heads of people who lived in the past.

How did things look to them? This is why I say every entrepreneur needs a library. It's a tool for entrepreneurs. Back to his idea about how to make yourself more independent-minded. More generally, your goal should be not to let anything into your head unexamined. And things don't always enter your head in the form of statements. Some of the most powerful influences are implicit. How do you even notice these? By standing back and watching how other people get their ideas. When you stand back at a sufficient distance, you can see these ideas spreading through groups of people like waves. The most obvious are in fashion. You notice a few people wearing a certain kind of shirt, and then more and more and more until half the people around you are wearing the same shirt.

There are intellectual fashions too, and you definitely don't want to participate in those. Because unfashionable ideas are disproportionately likely to lead somewhere interesting. The best place to find undiscovered ideas is where no one else is looking. Novel ideas come from curiosity. Independent-mindedness and curiosity predict one another perfectly. Everyone I know who's independent-minded is deeply curious and everyone I know who's conventional minded isn't. The independent-minded are the gluttons of curiosity who keep eating even after they're full.

And this is what I think the most important sentence in this entire essay is. How much does the work you're currently doing engage your curiosity? If the answer is not much, maybe you should change something. Curiosity is unlike most other appetites. Indulging it tends to increase rather than to satiate it. Questions lead to more questions. So perhaps curiosity is the compass. Perhaps if your goal is to discover novel ideas,

your motto should not be do what you love so much as do what you're curious about. That is an excerpt from Paul Graham's excellent essay, How to Think for Yourself. And so before I jump into his next excellent essay, which is How to Work Hard, if I sound funny, what I went through this week is going to be very familiar to anybody with school-aged children. My daughter brought home some kind of sickness. It was spread to my son, then spread to my wife, and then now I finally have gotten it. And so for the last few days, I've just been holed up in bed reading and reading and reading anytime I'm not asleep. So I have spent the last few weeks living inside the mind of Paul Graham, and it has been an amazing experience. So not only have I finished reading all his essays,

since I was sick in bed, I had the opportunity. I've already finished reading his book, which is a collection of essays, too, called Hackers and Painters, which will be the next episode of Founders. I also have a collection of essays that I read and highlighted and made notes on that I won't get to today. I'll probably do it in maybe like a few weeks, maybe a few months. I'll just do like bonus episodes on Paul Graham's essays, you know, maybe every few months because I do think they're extremely valuable for founders. So let's jump into, so my apologies if I sound a little funny, let's jump into how to work hard. And so Paul writes, it might not seem there's much to learn about how to work hard. Anyone who's been to school knows what it entails, even if they chose not to do it. And yet when I ask if I know more about working hard now than when I was in school, the answer is definitely yes. One thing I know is that this is so good. I'm just going to repeat

myself over and over again because I'm a huge fan of his writing. One thing I know is that if you want to do great things, you'll have to work very hard. I wasn't sure of that as a kid. Was there perhaps, I thought about this way and you might might have as well, when I was younger, I was like, everybody told me, it's like, don't work hard, work, don't work harder, work smarter. And then what you realize is when you start studying people that reach the top of their profession, and if you want to be excellent at what you do and really do great work, that you do both. They all do both. They work hard and smart. And so Paul's kind of going back to his inner monologue that he was having as a kid. He's like, was there perhaps some way to evade hard work through sheer brilliance? Now I know the answer to that question. There isn't. In fact, Paul has this great quote where he's responding

on Twitter. He's responding back to Patrick Collison, the founder of Stripe, saying, hey, you know, Stripe was really hard to build. It took a lot of intensity and we had to work really hard. And he said something like, hey, you know, maybe better founders are able to build something great without working hard, but we couldn't figure out a way to do that. And Paul's response was, that's an empty set. If Patrick and John Collison had to work both smart and hard, you're going to have to too. And so I feel that's where he's, that's very much his perspective in this essay. The reason famous adults seem to do things effortlessly was years of practice. They made it look easy because they were practicing in private. I mean, you talk about this all the time. There are three ingredients in great work, natural ability, practice, and effort. This is

really special to me because I feel in the last like six months, maybe 12 months, I feel you and I've been talking about practice just over and over and over again. I've become obsessed with the idea. You can do pretty well with just two, but to do the best work, you need all three. Bill Gates, for example, was among the smartest people in business in his era, but he was also among the hardest working. I never took a day off in my 20s, he said. Not one. It was similar with Lionel Messi. When his youth coaches talk about him, what they remember is not his talent, but his dedication and his desire to win. P.G. Woodenhouse would probably get my vote for the best English writer of the 20th century. No one has ever made it look easier, but no one ever worked harder. At 74, he wrote, with each new book of mine, I have

the feeling that this time I've picked a lemon in the garden of literature. A good thing, really, I suppose. It keeps one up on one's toes and makes one rewrite every sentence 10 times, or in many cases, 20 times. That line reminded me of something Rick Rubin said back on episode 245 of Founders. And he says, less is more, but you have to do more to get less. And there's many examples when Rick is working with some of the best musicians that have ever lived, and they'll redo like a section of the guitar 30 times. If they want 10 great songs, they might have to write 100

just to get able to reduce it down to 10. So this idea keeps you on one's toes, makes one rewrite every sentence 10 times, or in many cases, 20 times. That is somebody that's at the top of their profession and had decades of experience with time. He's 74 when he wrote that. It sounds a bit extreme, you think, and yet Bill Gates sounds even more extreme. Not one day off in 10 years? These two had about as much natural ability as anyone could have, and yet they also worked about as hard as anyone could work. So remember, to go back to the title of the essay, How to Work Hard. They had as much natural ability as anyone could have, and yet they also worked about as hard as anyone could work. You need both.

If great talent and great drive are both rare, then people with both are rare squared. And since you can't really change how much natural talent you have, in practice doing great work insofar as you can reduces to working very hard. What I've learned since I was a kid is how to work towards goals. This is really the description of the founder's journey, right? to working very hard. What I've learned since I was a kid is how to work towards goals that are, this is really the description of the founder's journey, right? He's saying you have to work towards goals that are neither clearly defined nor externally imposed. You'll probably have to learn both if you want to do really great things. When I'm not working hard, so this is, he's

describing his, like what happens in his own mind when he feels he's not working hard enough. I wrote this is a gift and a curse. I highly suspect, i feel like this a lot i highly suspect you do as well when i'm not working hard alarm bells go off i can't be sure i'm getting anywhere when i'm working hard but i can be sure i'm getting nowhere when i'm not and it feels awful the reason it's a gift and the curse because you have this fire in the belly this internal drive but you can't really turn it off and in some cases my own inner monologue, I've told you before, sounds a lot like David Goggins' book, You Can't Hurt Me. And I also don't think that's healthy either. I think you have to moderate it because you can be extremely, I guess there's no other word, you can just be

extremely mean to yourself. Like most little kids, I enjoyed the feeling of achievement when I learned or did something new. As I grew older, this morphed into a feeling of disgust. See, this is exactly, I know exactly what he's talking about. As I grew older, this morphed into a feeling of disgust when I wasn't achieving anything. The one precisely datable landmark I have is when I stopped watching TV at age 13. He's going to talk about, he stopped watching, he got serious about his work at 13. He's going to talk about something Patrick Collison told him, the founder of Stripe. I'm going to leave a link in the show notes.

I think you should read it. You can just Google it if you want. It's called Aliens, Jedi, and Cults. It is a way to think about people that build usually incredible companies or even incredible movements. Paul is an alien. If you read that quick post, you can read it in, I think, like five minutes. You'll understand what I mean by that. Patrick Collison is also an alien. So it says, the one precisely datable landmark I have is when I

stopped watching TV at age 13. When I asked Patrick Collison when he started to find idleness distasteful, and that's another theme. This is in the book that I'll talk about next week too. He talks a lot about like, idleness is not, you're seeking it, it's not going to make you happy. He finds it, well, distasteful is, I guess, the word he used there. He started to find idols in this distasteful. He said, this is Patrick speaking now, I think around age 13 or 14, I have a clear memory from around then of sitting in the sitting room, staring outside and wondering why I was wasting my summer holiday. Back to Paul. Strangely enough, the biggest obstacle to getting serious about work

was probably school, which made work, or what they called work, seem boring and pointless. I talked about this, really referenced, I feel, his best essay on this on last week's podcast. Obviously, this is part two. You don't really have to listen to them in order if you don't want to, but I would listen to them. I listened to all three of them. You can pick the order. Probably makes sense to go in order but anyways that that essay is how to do what you love um talks a lot about this the problem is we're teaching we're confusing kids that they automatically associate work with something oh i have to do i'm not supposed to like it and let me just get it over with and that way i can then go and do the play part of my day or do what i want to do and paul makes the point well you're never going to be great at what you do if

you have that attitude like you have to be called to do it. It's almost like it pulls you down this path where you want to do it. But as I learned the shape of real work, I found that my desire to do it slotted into it as if they'd been made for one another. And so that's what he's going to refer from here on in as a real work, a work that you actually want to do. Once you know the shape of real work, you have to learn how many hours a day to spend on it. You can't solve this problem by simply working every waking hour, because in many kinds of work,

there's a point beyond which the quality of the result will start to decline. This is very fascinating. He talks about the different limits that he's experienced in his own life. I've done several different kinds of work, and the limits were different for each. My limit for the harder types of writing or programming

is about five hours a day, whereas when I was running a startup, I could work all the time. So same different for each. My limit for the harder types of writing or programming is about five hours a day, whereas when I was running a startup, I could work all the time. So same thing for me. It's impossible. Like, when I hear Warren Buffett say he can read 500 or 600 pages a day, there's no way I could read 500 or 600 pages a day.

You know, for me, it's, you know, three to four hours at the very most of a book a day. So it's kind of very similar to what he's finding when he's programming. He says, hey, my limit for programming is about five hours a day, whereas when I was running a startup, I could work all the time. And then I like this point, the only way to find your limit for working is by crossing it. Honesty is critical here in both directions. You have to notice when

you're being lazy, but also when you're working too hard. Finding the limit of working hard is a constant ongoing process and not something you do just once. Then he gets into your motivation for wanting to work this hard to begin with. What keeps me going depends on the type of work. When I was working at VIAweb, that was the startup that he sold to Yahoo, I was driven by the fear of failure. So I want to pause right there. This is something that was fantastic. Jimmy Iovine, there's a great documentary on HBO called The Defiant Ones. And Jimmy Iovine's had a very interesting career, record producer, founder, winds up selling the company. He co-owned with Dr. Dre to Apple for billions and billions of dollars.

But at the very beginning of this Dr. Dre song called All in a Day's Work, there's a clip of Jimmy Iovine talking about how he utilized fear as a tool. And this is what he said. Fear's a powerful thing. I mean, it's got a lot of firepower. If you can figure out a way to wrestle that fear to push you from behind rather than to stand in front of you, that's very powerful. I always felt I had to work harder than the next guy just to do as well as the next guy. And to do better than the next guy, I just had to kill it. And you know, to a certain extent, that's still

with me in how I work. You know, I just go in. And so the idea that fear is a powerful force, if you can actually use it as a tool instead of a hindrance, something that Jimmy Ivey repeats over and over again in a lot of different contexts. When I was working on VIAweb, I was driven by fear of failure. I barely procrastinated at all then because there was always something I needed doing. And if I could put more distance between me and the pursuing beast by doing it then why wait whereas what drives me now writing essays is the flaws in them so he is writing I should tell you because a lot of the essays I covered last week were a lot older um I do have some that are maybe over 10 years old in in the selection today but uh the one I started with came from two that isn't written in 2020

and this one is from 2021. So let's go back to this. Whereas what drives me now writing essays is the flaws in them. Between essays, I fuss for a few days like a dog, circling while it decides exactly where to lie down. But once I get started on one, I don't have to push myself to work because there's always some error or omission that is already pushing me. And this next part is just absolutely excellence. I think that that is very common with high achievers or people that want to be high achievers. It's this weird thing where you're almost more afraid of losing than you are.

Like the pain of losing is almost greater than the thrill of winning. This part is excellent. Many problems have a hard core at the center surrounded by easier stuff at the edges. Working hard means aiming towards the center to the extent that you can. So again, many problems, hard core at the center surrounded by easier stuff at the edges. Of course, I think you know where he's going with this. Most people are just going to nibble on the easy part, right? But you only make the big jumps and the big progress by aiming towards the center.

Working hard means aiming towards the center to the extent that you can. Some days you may not be able to. Some days you only be able to work on the easier peripheral stuff. But you should always be aiming as close to the center as you can without stalling. That is an absolutely excellent couple paragraphs later. I just keep repeating. In the margins. Excellent.

The consensus about which problems are most important is often mistaken, both in general and within specific fields. The consensus about which problems are the most important is often mistaken, both in general and within specific fields. The consensus about which problems are the most important is often mistaken, both in general and within specific fields. If you disagree with it and you're right, that could represent a valuable opportunity to do something new. If you discover some ambitious type of work that's a bargain in the sense of being easier for you than other people, which we talked about echoes of this last week, and Naval ravikant um also talks about this a lot that's episode 191 and i think i went back and read my notes from the almanac nival and there's a lot of overlap between nival's perspective and paul i actually think reading these books maybe i'll reread it very soon i actually think paul graham's essays and nival and nival's thoughts go there's

a lot of overlap and they go hand in hand i I guess is what I'm saying, because this echoes a lot what Naval says. He's like, you have to find work that feels like play. And one way to do that is there's something that you do that seems easier, quote unquote, to you, but other people can't believe you can do it. So he says, if you discover some type of ambitious type of work that's a bargain in the sense of being easier for you than other people, either because of the ability you happen to have or because of some way of some new way you found to approach it or simply because you're more excited about it. By all means, work on that. Some of the best work is done by people who find an easy way to do something hard. This may be my favorite sentence in the entire. I can't like scream or jump up and down like I normally do. But this is just I love this. A deep interest in a topic makes people work harder than any amount of discipline can. So imagine if you could find a deep, like,

you feel compelled. You have to do this. A deep interest in a topic. And then you combine that with world-class discipline. A deep interest in a topic makes people work harder than any amount of discipline can. Some people figure out what to do as children and just do it, like Mozart. That's a crazy life story. Episode 240 is the Mozart documentary. I've got to go back to Mozart biography. I'm going to have to read more books on him because that's just, I think he starts doing it, what, three years old, if I remember correctly? Some people figure out what to do as children and just do it, like Mozart.

But others, like Newton, turn restlessly from one kind of work to another and so obviously I think Paul makes the point in this essay and if he doesn't I'm sure he would agree with it way more common for you to have a path like Newton than it is for people to have a path like Mozart along with measuring both how hard you're working and how well you're doing you have to think about whether you should keep working in this field or switch to another if you're working hard but not getting good enough results you should switch it sounds simple expressed that way, but in practice, it's very difficult. And unfortunately, no one can tell you other than yourself. It only works if you can trust

your own judgment, right? But how much time? And what should you do if work that was going well stops going well? How much time do you give yourself then? And what I like about Paul is he's not saying, hey, I have the answers. He's got approximations. But again, this is the reason that goes back to one of the best things and what I've been talking about in conversation since that podcast came out is just his thought. It's like how many people truly get to do like how many first of all, how many find how many people find work they truly love and then work themselves in a way in a position to actually do work they love. And he's like, it's hundreds of thousands out of billions this is so difficult the best test of whether it's worthwhile to work on something is whether you find it interesting that may sound like a dangerously subjective measure but it's probably

the most accurate one you're going to get you're the one working on the stuff who's this kind of ran over his point here right who's in a better position than you to judge whether it's important and what's a better predictor of its importance than whether it's interesting. So one line I say over and over again that I try to use as a guide, not only for myself, but also who to spend time with is the most interesting people are the most interested. So this idea is like, who knows better than you? What's a better predictor of its importance than whether it's interesting? And then this is just absolutely fantastic. Just what an ending to this essay.

Working hard is not just a dial you turn up to 11. It's a complicated dynamic system that has to be tuned just right at each point. You have to understand the shape of real work. See clearly what kind you're best suited for. Aim as close to the true core as you can. Accurately judge at each moment both what you're capable of and how you're doing and put in as many hours each day as you can without harming the quality of the result. This network is too complicated to trick, amen. But if you're consistently honest and clear-sighted,

it will automatically assume an optimal shape and you'll be productive in a way few people are. Okay, so I want to skip to the next essay. As with everything, I will link all these essays down below. They're all free to read online. Even if you don't read the ones I covered, I would just go to paulgram.com all the time and just pick an essay, random. They're all listed there. Just what headline or title sounds most interesting to you. And then I do think the benefit is rereading them intermittently.

They definitely change. I've read some of them who knows how many times. And every time I've learned something different because I've changed as a person since then. So this is how to lose time and money. It was written in 2010. And it says, when we sold our startup in 1998 I've changed as a person since then. So this is how to lose time and money. It's written in 2010. And it says, when we sold our startup in 1998, I suddenly got a lot of money. I now had to think about something I hadn't had to think about before, how not to lose it.

I knew it was possible to go from rich to poor, just as it was possible to go from poor to rich. But while I'd spent a lot of the past several years studying the paths from poor to rich, I knew practically nothing about the paths from rich to poor. Now, in order to avoid them, I had to learn where they were. So again, how to lose time and money is the name of the essay. So I started to pay attention to how fortunes are lost. I've read a bunch about this too. It's fascinating. If you'd asked me as a kid how rich people became poor, I'd have said by spending all their money. But in fact, the way most fortunes are lost is not through excessive expenditure, but through bad investments.

This is also in line with the research I've done. I was shocked by it. I think I've told you in the past, one of my oldest friends, his dad played in the NFL, but this is like years before they made a ton of money. When he retired, he started a nonprofit. And that nonprofit was the fact that, you know, 90-something percent of them wind up claiming bankruptcy. And I think now they've expanded way past, you know, just this one forum and to other sports and everything. This has been going on for quite a while, decades. But I'll never forget, and this is probably, I don't know, 10 or 15 years ago when I learned this, but they said the same thing. It's like, they don't go, you're thinking they're going poor because they're buying Ferraris. It's like, no, they gave their idiot cousin $250,000 to start a restaurant that tanked.

It's all these investments. It's like, here, I'll give you $50,000 for this, and it just goes up in smoke. So let's go back to that. In fact, the way most fortunes are lost is not through excessive expenditure, but through bad investments. It's hard to spend a fortune without noticing. Whereas if you start trading derivatives, you can lose a million dollars or as much as you want in the blink of an eye. And he makes the point why this is so difficult, because in most people's minds, if you're spending, you know, a bunch of money, there's like alarms that go off. It's like, well, I spent way too

much money on luxuries or stuff I don't actually need. Where if you say now that money, that money leaves your bank account, right? And it's going to leave your bank account for like a very fancy car or a nice person like that. Hopefully hopefully if you have some kind of you know level of intelligence like hey i should probably not do that in relation to the wealth i have but the problem what the point paul makes here is that when you reframe the money leaving your bank account as an investment it bypasses these alarms even if a lot of these investments are going to go to zero investing bypasses these alarms you're not spending the money you're just moving it from one asset to another.

And this part made me laugh. He says, which is why people trying to sell you expensive things say, quote, it's an investment. And so this part I absolutely love. A few days ago, I realized something surprising. The situation with time is much the same as with money. The most dangerous way to lose time is to not spend it having fun, but to spend it doing fake work. If I woke up one morning and sat down on a sofa and watched TV all day, I'd feel like something was terribly wrong. Just thinking about it makes me wince. And so he ties us together. But if you do fake work, kind of bypasses that alarm,

just like a fake investment, right? And yet I've definitely had days when I might as well have sat in front of the TV all day. Days at the end of which, if I asked myself what I got done that day, the answer would have been basically nothing. But the same alarms don't go off on the days when I get nothing done because I'm doing stuff that seems superficially like real work. Dealing with email, for example. You do it sitting at a desk, it's not fun, so it must be work. With time, as with money, avoiding pleasure

is no longer enough to protect you. The world has gotten more complicated. The most dangerous traps now are new behaviors that bypass our alarms about self-indulgence by mimicking more virtuous types. And the worst thing is, they're not even fun. Okay, so now I want to jump to an essay that I've read a bunch of times. It's called Schlepp Blindness and it was written in January 2012. There are great startup ideas lying around unexploited right under our noses. One reason we do not see them is a phenomenon I call Schlepp Blindness. A Schlepp, it means a tedious and unpleasant task. This is going to remind you of something you and I've talked about a bunch, that business is problems,

and that companies are just effective problem-solving machines. I 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. Remember, tedious, unpleasant tasks. And schleps should be dealt with the same way you 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. What a fantastic line. It's not that you should seek out unpleasant work, 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 is schlep blindness. And then he gives the greatest illustration of this idea and why it's so powerful and what he means by describing that Stripe built their entire business on this idea. Really think about this as like it's a problem that is so hard that most people won't even consider it. 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 a recipe site or an aggregator for local events. Why? Why work on

problems few care about, 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 he gives a fantastic metaphor to describe the value in in these really hard problems problems so hard that we're kind of ignoring their existence that scariness makes ambitious ideas doubly valuable 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 would have been frightened off by the challenges involved. This is also true of starting a startup generally.

And then this next paragraph, I'm just going to read to you what I jotted down in the margin when I got to the section. I've read several examples in these biographies that say exactly this. 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. And then he ends giving you and I excellent advice. 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?

And then I absolutely love this next essay. It's essentially Paul giving us a summary of what he's learned by building Y Combinator. It's called What I've Learned from Users. It's essentially Paul giving us a summary of what he's learned by building Y Combinator. It's called What I've Learned from Users. It was written in September 2022. And so he says, what have I learned from YC's users, which are the startups that they funded? And this just jumps out to me as well. I've shared this with you before. After reading hundreds of biographies of founders, I noticed a very similar idea as what Paul says here. The first thing that came to mind was that most startups have the same problems. No two have exactly the same problems, but it's surprising how much the problems remain the same regardless of what

they're making. Once you've advised 100 startups all doing different things, you rarely encounter problems you haven't seen before. And this happened to him recently. He tweeted out in August of 2022. He says, today I talked to a startup doing so well that they had no current problems that needed solving. They're profitable, growing revenue 20 times a year. And he said, not a typo. So it's very unusual, 20 times a year. And they're only nine employees. This is so rare that I didn't know what to do. We ended up talking about problems they might have in the future. I advise them. And then you see this theme over and over again. You want you to have control of your own destiny. And he talked about what he would do. He's like, you know, I'd keep the company as small as possible, not in revenues, but in employees.

That way you actually have more of like a maker's schedule than a manager's schedule, which is probably what most founders want to do anyways. So he says, I advise them never to raise another round. So to get equity, you're going to have to be hired there. So learn how to program. So back to the essay. The fact is one of the things that makes Y, that this fact, excuse me, is one of the things that makes YC work. But I didn't know it when we started YC. It was a surprise to me how often the same problems recur in different forms. And I love that he says this, but knowing nearly all the problems startups can encounter doesn't mean that advising them can be automated or reduced to a formula. Each startup is unique.

And this essay, I think, just should be mandatory reading for founders. I don't know why anybody wouldn't want to read it. I mean, this entire next page, I essentially highlighted the whole thing. And the reason I say that is because he's just giving us the blueprint. He's like, listen, not only do startups encounter the same problems over and over again, but founders make the same mistakes over and over again. So again, I would assume every single person making this mistake smarter than me. What's the likelihood that I would not do the exact same thing? So my goal is like, can I be one of these very rare people that actually learn from the experience of other people? It's extremely hard to do. Another surprise is how bad founders

can be at realizing what their problems are. Founders will sometimes come in to talk about some problem, and we will discover another much bigger one in the course of the conversation. For example, and this case is all too common, founders will come in to talk about the difficulties they're having raising money. And after digging into the situation, it turns out the reason is that the company is doing badly and investors can tell. Our founders will come in worried that they still haven't cracked the problem of user acquisition. And the reason turns out to be that their product isn't good enough. There have been times when I've asked, would you use this yourself if you hadn't built it? And the founders, on thinking about it, said no.

Well, there's a reason you're having trouble getting users. And so this is where we have a massive advantage. You and I have a massive advantage because we have, I mean, you get to experience this because I have this giant database of all these different highlights and notes from, you know, hundreds of biographies and some of this. So when I get to this section, he's just like, this is beautiful, what he said. Would you use this if you hadn't built it? And the founders, after thinking about it, say no. Well, there's a reason you're having trouble getting users. And I just reread this highlight two days ago.

And it's Steve Jobs talking about where he comes up with his product ideas. He's like, it's not about pop culture. It's not about you fooling people. And it's not about convincing people that they want something they don't. We figure out what we want. And once you do that, the second part, he says, I think we're pretty good at having the right discipline to think through whether a lot of people are going to want it to. Same idea. The jobs talked about he's in his own career is what Paul's advising the founders that he's talking to to do the same thing. You've made a giant mistake.

Often founders know what their problems are, but not their relative importance. They'll come in to talk about three problems they're worrying about. One is of moderate importance, one doesn't matter at all, and one will kill the company if it isn't addressed immediately. It's like watching one of those horror movies where the heroine is deeply upset that her boyfriend cheated on her and only mildly curious about the door that's mysteriously ajar. You want to say never mind about your boyfriend, think about the door. The YC partners can warn them where the murderers are, not that founders listen. That was another big surprise. See, this is why I say, like, I just think founders should be reading this essay. Not that founders listen. That was another big surprise.

So think about how much work. I mean, from Paul's perspective, he's like, that's obviously a big surprise. Like, you have to go through all these hoops. You have to put in a lot of time and effort to get accepted into YC. It's now very prestigious. I'm sure they turn away, you know away a good percentage of the people that apply. You've had to do a bunch of things to even get to this point to where you're actually talking to the partners at this organization that you applied to that you think is going to greatly improve the odds of your company's success, right? Why the hell would you not

listen to their advice? And so when I think of this, it's like, if I'm put in their shoes, I would probably make the same mistake that they're making. So how do I avoid it? And I think just being aware and constantly reminding yourself that, oh, this is kind of a mistake. Pause, step outside yourself. What's the chance, David, you're not doing the same thing? It's very, very likely that you're doing the exact same thing. So it says, not that founders listen. This was another big surprise. How often founders don't listen to us. A couple of weeks ago, I talked to a partner who had been working for YC for a couple of batches and was starting to see the pattern. They come back a year later, she said, and say, we wish we listened to you. And this is just fantastic. It took me a long time to figure

out why founders don't listen. At first, I thought it was mere stubbornness. That's part of the reason. But another and probably more important reason is that so much about startups is counterintuitive. I think I talked about this in the last podcast I did on Charlie Munger. I've done a bunch of them, but it's episode 221, Founders. It's a book called Damn Right. And in that book, Charlie Munger says if he was ever teaching like a finance course or a course on business, he was like a curriculum would just be the histories of a hundred companies that did something right or did something wrong. And it's a way to pierce like this counterintuitive nature of business building.

Right. So says another another and probably more important reason is that so much about startups is counterintuitive. And when you tell someone something counterintuitive, what it sounds to them is wrong. So the reason founders don't listen to us is that they don't believe us. At least not to experience teaches them otherwise. The reason startups are so counterintuitive is that they're so different from most people's other experiences. No one knows what it's like except those who have done it. And that is why you will know this feeling that I'm about to say if you do this. That's why when you read the autobiographies of entrepreneurs from the past, yes, they're full of good ideas, but you're going to find that experience comforting. No one knows what it's like except those who have done it. And this wound up being good for Paul and his company because he says if it weren't counterintuitive, founders wouldn't need our advice about how to do

it. And so then he gives us some advice. Focus is doubly important for early stage startups because not only do they have a hundred different problems, but they don't have anyone to work on them except the founders. Figure out which problems matter most and then cook up ideas for solving them. Try those ideas and measure how well they worked. If you correct course at a high enough frequency, you can be simultaneously decisive at a micro scale and tentative at a macro scale. This is going to be very similar to this idea you and I have talked about a bunch about Jeff Bezos. He has this idea about two way doors, like most of the decisions you're making in business are reversible. So make the decision. He's like, if it's something, if it's a decision, you cannot reverse what she calls a one way door.

And you better analyze that six ways of Sunday. But 99% of the decisions you're going to make are reversible. And so he has that great quote. I think it's from the book Amazon Unbound. Probably Founders 180, if I remember correctly, where he's like, listen, sometimes you have to aim, aim, aim, aim, and then shoot. He's talking to Amazon executives about launching a new business line in Amazon. He's like, sometimes you have to aim, aim, aim, aim, and then shoot.

He's like, this is not one of those times. I want you to shoot, shoot, shoot, shoot, shoot, and then aim. This is very similar to what he's saying. If you course correct at a high enough frequency, you can be simultaneously decisive at a micro scale and tentative at a macro scale. The result is a somewhat winding path, but executed very rapidly,

like the path of a running back takes downfield. That's one of my favorite metaphors. He uses it a few times in his essays. You know where you're going. You're going downfield, but you're very flexible in how you're going to get there. And including some cases you have to go backwards, right? And so then he goes to the value that Y Combinator gives the founders in this specific example. That's where a lot of YC's value lies in helping founders get an extra increment of focus that lets them move faster. Speed defines startups. Focus enables

speed. YC improves focus. I double underlined that sentence. Speed defines startups. Focus enables speed. One of the favorite things I've ever heard was Seth Bannon told me about the founder of Cover, Alexis Rivas, that he was intolerant of slowness. I thought about that when I was reading the biography of Alexander the Great for episode 232. And I realized, oh, it's a combination that Alexander combined an excessive tolerance of fatigue with an intolerance of slowness. Speed defines startups. Focus enables speed. Then he goes back to some more valuable ideas for founders. It can still be valuable for an experienced founder to do YC, just as it could still be valuable for an experienced athlete to have a coach. The other big thing YC gives founders

is colleagues. And this may be even more important than the advice of partners. If you look at history, great work clusters around certain places and institutions. I've noticed the same thing in the books I read. However good you are, good colleagues make you better. Indeed, very ambitious people probably need colleagues more than anyone else because they're so starved for them in everyday life. And Paul knew this for a long time. I see this when he's like in his 30s writing essays, way before he started YC. We were very aware of this historical phenomenon and deliberately designed YC to be one. By this point, it's not bragging to say that it's the biggest cluster of great startup founders.

And then he also proves that he takes his own advice. I often tell founders to make something they themselves want, and YC is certainly that. It was designed to be exactly what we wanted when we were starting a startup. And I don't think he's writing it for the following reason, but I said, this is Warren Buffett level content marketing. By this point, I'm like, how do I get in? I think by this point, the point that Paul's writing this essay, you know, the momentum behind YC is kind of unstoppable, but it just goes to the quality of his writing and the clarity of his thinking that even if he's not trying to give you a marketing pitch, he's thought about this a lot, and then therefore he can explain why it's valuable to you, and that idea immediately gets inside your mind. So he says, something magical happens when they do cluster. The energy

in the room at a YC dinner is like nothing else I've experienced. When you have a whole room full, it's another thing entirely. YC founders aren't just inspired by one another. They also help one another. Again, I see this over and over again. Why on earth? Most of the times when an entrepreneur writes an autobiography, they do it when they're very close to the end of their life and they know they're close to the end of their life. And in many cases, I'm thinking of Ingvar Kamprad, founder of IKEA is one example, but in many cases they do so. They're reluctant to do so and they usually only do so because they're like, hey, the lessons I learned can benefit future generations of entrepreneurs. I feel that

Paul's dead right about this. YC founders aren't just inspired by one another. They also help one another. That's the happiest thing I've learned about startup founders, how generous they can be in helping one another. Same thing. I've seen this exact same thing, just how generous people are with their own ideas. It's remarkable. And I try to do the exact same thing, how generous they can be in helping one another. The result is something far more intense than, say, a university. Between the partners, the alumni, their batchmates, founders are surrounded by people who want to help them and can. And that is where I'll leave it for today. I got a bunch of essays I'll cover in the future in a bonus episode. And then as soon as I can, and my voice is back,

I will record the part, Paul Graham part three, which will be the final Paul Graham for a while, which will be on his book, Hackers and Painters. That is 276 podcasts down, 1,000 to go. And I'll talk to you again soon.