
Peter Thiel’s CS183: Startup - Class 5 Notes Essay - smiler
http://blakemasters.tumblr.com/post/21437840885/peter-thiels-cs183-startup-class-5-notes-essay
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dirtyaura
For me, these class notes are the most thought-provoking stuff that has
surfaced HN for a while. The first few lectures took this bird-eye view to
entrepreneurship, which was very refreshing. Thiel's view about competition vs
monopolies, or as he puts it, globalization vs technology, was a new point of
view to me. And this more practical discussion about company culture is quite
spot on in my experience: argumentative culture is better than too nice
culture.

~~~
tonecluster
It depends about what you're arguing. A "python vs. nodejs" argument carried
on for days isn't valuable; other arguments w.r.t. tech/engineering might be.

Related: An advantage of a "non-diverse" engineering culture is so the
arguments can focus on meaningful topics that push the company forward, and
not on topics that arise from basic, core cultural differences

~~~
dirtyaura
Yes, I agree, what I meant to express is that the discussion between Max,
Peter and Thiel captures quite well that you should have arguments about
important things and that too nice culture can be also toxic as it leads to
these passive-aggressive expressions of frustration. It hurted to read and
realize that as I've been personally guilty of latter in certain occasions.

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mkeblx
From the post: "the guy said that he liked to play hoops. That single sentence
lost him the job" - Max Levchin

I know culture fit is critical but where is the line between between not a fit
and just having a hobby not shared by the rest of the team?

~~~
aristus
Surprise surprise, the next paragraph: "PayPal also had a hard time hiring
women."

This kind of thinking is what Mitch Kapor calls a "Mirrortocracy". It can
work, in the sense that maybe you can recruit enough people just like you,
down to _quirks of phrasing_ , and succeed in your mission. There are
advantages to belonging to a cohort. It is the reason why people in the
military wear uniforms and go through bootcamp.

But categorically stating that diversity is wrong is, well, typical of the
provincial attitude that caused Levchin to run his companies the way he did.

But just because he's rich doesn't mean he's right.

~~~
byrneseyeview
Aside from being "provincial," is he wrong? Diversity creates communications
latency. For example, on HN I can refer to "latency" in this context--it would
take way more syllables to express the same thought to lots of the people I
interact with every day.

Part of the problem is that "Diversity" is being misused. It's not "diversity"
if a company of 100 people has exactly the same demographics as the city it's
in. That's homogeneity: diversity would mean that each company's demographics
are wildly skewed in unpredictable directions.

Thomas Sowell has written about how intra-company diversity has harmful
economic implications. For example, factories in New York used to segregate on
religious lines--because if your Catholics are all off on Sunday, and your
Jewish employees are all off on Saturday, then you can only work five days per
week; all-Catholic or all-Jewish factories could do six days.

~~~
aristus
That cuts at the root of the disagreement. Categorically stating that
diversity is "completely wrong" for a startup ignores plenty of
counterexamples, so, yes, he's wrong. Diversity creates communications
latency. It creates other things like tolerance and broader understanding. It
also ( _ahem_ ) widens your hiring pool.

And no, I wouldn't want a company that reflects the demographics of my city.
That would mean no black people and mexicans do all the cooking. :)

Levchin is free to run his companies any way he wants, inside the law, and
he's done amazingly well. But rejecting people who _simply use an odd phrase
once_ is, to me, not a example to celebrate, especially in a course for
students.

"I did this and succeeded" is not equal to "everyone else is wrong". Creating
a mirrortocracy is equal to claiming "I am right, all the time, and I do not
require outside opinions. All I require are clones." That's a pretty heavy bet
to make, and its arrogance is not excused by success.

~~~
byrneseyeview
It's hard to come up with a counterexample when you're looking at outliers. A
successful startup is already statistically improbable, so I don't think you
can easily say that if Paypal had hired more jocks instead of nerds, it would
have done even better.

So we have to look at this from first principles. When you have a less diverse
team, you don't just have short-term communications latency. You also have the
advantage that really similar people can push each other more, because it's
easier to tell if you're doing 1% better than someone else if you're both
doing the same thing.

I don't know how valuable "tolerance" is. That depends on what you're
tolerating. If diversity trains your ability to "tolerate," it sounds like a
bad thing, the way having a broken air conditioner teaches you to tolerate
heat. The belief that it creates broader understanding is also up for debate--
in my experience, people express a wider range of thoughts in a more
homogeneous environment, because they're less worried about offending people.

One last thing: "its arrogance is not excused by success." That's not very
Bayesian. If someone has an unusual opinion, puts it into practice, and beats
the competition, shouldn't you lower your estimate of their arrogance, and
raise your estimate of your own arrogance?

~~~
aristus
A good counterexample would be Lotus, and possibly Flickr. I'm not claiming
PayPal would have been more successful otherwise. I don't know. Many
strategies can be successful. Levchin is the one teaching kids that everyone
else is "completely wrong", in the face of proof to the contrary.

And there are problems with Levchin's strategy. In the next breath he lamented
that it narrowed the company's hiring pool by 50%. That should give anyone
pause. His strategy had a direct, measurable cost that could turn into a
strategic disadvantage.

There are also serious effects down the road, as today's engineers become
tomorrow's investors. If only Brand X people get funded, and hire Brand X
people, who turn around and become investors themselves, isn't that a serious
problem? You can't adjust your "priors" about other kinds of people if they
never get a chance in the first place. Maybe Brand X is optimal, but _you
don't know_ , and claiming to know is arrogance.

Kapor has a good essay on this: [http://mkapor.posterous.com/beyond-arrington-
and-cnn-lets-lo...](http://mkapor.posterous.com/beyond-arrington-and-cnn-lets-
look-at-the-rea)

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chubot
The bit about respecting your coworkers, rather than simply being nice, really
struck a chord. When I think back, the worst working situation I had was the
one where I lost respect for my coworkers. I think it's an important question
to ask yourself. If the answer is no, it's time to move on.

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jfb
What in the name of the thousand green hells does this have to do with
computer science?

 _EDIT_ : There is of course a perfectly legitimate interest in teaching this
sort of thing; it just has nothing to do with computer science. Doesn't
Stanford have a faculty of, I don't know, bubble inflation or whatever?

~~~
cududa
This is a course on starting a software startups. Culture is incredibly
important to be successful at that. Max and Stephen are brilliant developers.
So it's probably good to take cues from them on making a culture to facilitate
great creations of computer science.

*spelling.

~~~
aswanson
Queues, hilarious. The funny thing is, even though misspelled, it could be
made to work. If levchin is interpteted as a producer and anyone listening a
consumer.

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stcredzero
_PayPal chose C++ early on. It’s kind of crappy language. There’s plenty to
complain about. But the founding engineers never argued about it. Anyone that
did want to argue about it wouldn’t have fit in. Arguing would have impeded
progress.

...if there’s a strong sense of what’s right already, don’t argue about it._

I found that interesting. This suggests the team is important, but the
language is not.

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srconstantin
This is very informative.

The only thing I'd quibble with is the claim that teams should not be diverse.
I think, unless everyone is a generalist, there's no way to start a company
without some diversity of skills. The other day, another mathematician told me
"We should start a company together," and it sounded like a terrible idea. A
mathematician needs to work with a great web developer, or a finance expert,
or some other kind of complement.

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draggnar
This series has been incredibly informative so far. Thanks for sharing.

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ivanzhao
Nothing betters a fresh and profound point of view on the things you think
about everyday.

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nycruz
Thanks for posting the notes. I really appreciate it!

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azazo
Really enjoy reading these, thanks for posting

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keeptrying
Thanks for posting! Appreciate the detail!

