
Hackers can be business guys, and other lessons from Paul Graham - DavidChouinard
http://sub.garrytan.com/hackers-can-be-business-guys-and-other-lessons-from-an-interview-with-paul-graham-during-the-first-yc-batch-in-2005
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jusben1369
I always thought this was PG's greatest gift to the tech world. To horribly
generalize - prior to YC "business" people had a patronizing attitude toward
developers. They were expensive assets - comparable to hw/sw and data-centers
- that were required to successfully launch and grow a startup. But they
weren't invited to the strategic table too often. They didn't get business.

I don't know this to be a fact but I always felt like PG responded with a
"I'll show you!" after one too many patronizing comments from the old boys
club of VC's or CEO's or SVP's of BD's. And show us he has. Certainly other
factors (the lower entry cost to starting a startup) contributed to the rise
of the wide spread geek business leader. But PG deserves a lot of credit.

Having said all that I almost feel like developers today are similar to women
in the 80's (stick with me I know this is getting weird) Women in the 80's
were supposed to have fulfilling careers and still be great mother's/spouses.
They could have both! They just ended up with 2x the pressure to be great at
what they did vs before. It seems today every developer is supposed to have a
real side project that could blossom into it's own business at any point. Come
to think of it; non technical startup folks are implored to "learn to code!"
So maybe it applies to both devs and non devs in startups.

It's an interesting time. I think it's great developers can now lead companies
with little or not stigma attached. In the long run though I believe in teams
and specialization vs individuals and doing it all. I think we'll return to a
more natural balance. And that tends to be that people who can build and
nurture a forest tree by tree and row by row aren't the same people who can
see the entire forest and what the seasons will bring. The forest does best
when each person is in the right role.

~~~
arjunnarayan
While I agree with you, I wouldn't attribute the entire effect to Paul Graham.
There's a steady progression: Phase 1 was Larry and Sergey: they tried their
hardest to stay in charge, but the powers that be (i.e. the money) forced a
CEO on them. The best they could do was limit the damage by making sure the
CEO had as much technical chops as possible. In retrospect, Eric Schmidt was
great: a real hacker in background who had made the transition into a business
guy at Novell/Sun. Pretty good progress to getting hackers more power: at
least when they were forced to hire above themselves, they picked one of their
own.

But the next one in the line went better - Call this Phase 2: Mark Zuckerberg
(the next big company founder) was somehow able to hold his own against the
money. I think we can credit this to Peter Thiel: since Thiel had first hand
experience at PayPal, he probably has tremendous respect for hackers (I don't
know what his personal hacking skills are, but I suspect they are good). Thiel
(as the primary money behind FB) gave the Zuck free reign to stay CEO, which
moved the needle further.

And now we're in phase 3: Zuck has shown the money guys enough contempt
(remember the articles in Businessweek or whatever where bankers were angry
that Zuck wore a hoodie and not a suit at the IPO roadshows?), as well as
established a ~50B company with hackers firmly at the helm. Now it's common
knowledge that you don't really need a "business guy". The next guys are free
from this tyranny.

I do think that PG helped though. A lot of the education has come from PGs
essays: I'd be surprised if there was anyone in the valley who hasn't read
them, or at least organically come to very similar conclusions that he has:
notice how they overlap well with Peter Thiel's class notes for CS183 (at
least in some of the assumptions they both make about how the world works).
And the part of SV that PG doesn't influence (the bigcos, I imagine. I don't
know, I'm speculating at this point...) Thiel influences. So take the lead-by-
example of Google, then Facebook. The intellectual underpinnings by Thiel and
Graham. The evangelizing of Graham and Hacker news, and that's what I would
credit for this outcome.

~~~
hkmurakami
> _I think we can credit this to Peter Thiel: since Thiel had first hand
> experience at PayPal, he probably has tremendous respect for hackers (I
> don't know what his personal hacking skills are, but I suspect they are
> good)._

Peter Thiel's educational background is in philosophy and law [1]. There's
been no public demonstration of hacking ability from him. I'd suspect that his
respect for hackers was (if it didn't exist from earlier years through his
personal relationships) grown from his partnership with Max Levichin in
founding PayPal and keeping it afloat during those tumultuous years via
multiple technical breakthroughs (including fraud detection, researched and
developed by Levichin).

[1]
[https://en.wikipedia.org/wiki/Peter_Thiel#College_and_law_sc...](https://en.wikipedia.org/wiki/Peter_Thiel#College_and_law_school)

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Shenglong
Right. Business things, like hacking is mostly experience.

But much like hacking, I would argue, there are
rockstar/ninja/superstar/10x/<insert other (deprecated?) term here> _business
people_ as well. A lot of it has to do with natural aptitude; just as how
coding doesn't simply click for everyone, business things (which is mostly
just dealing with people) simply doesn't either.

~~~
NathanKP
Personally I don't believe in natural aptitude. Most of what others tend to
see as natural aptitude is in fact just attitude. If someone really enjoys
something they put in the hours of practice and the effort to be awesome in
that field, and they can become the "rock star".

~~~
pud
The flip side is, when you're naturally good at something, it becomes fun to
do. So you do it a lot.

I tried for 2 years to get good at guitar. Never got good. But didn't practice
very often either.

Then one I sat down at a drum set and was immediately better than the drummer
in my band. I had a knack. It was so fun to play those beats that I practiced
almost every day for many years, and still do. And have gotten pretty darn
good.

Natural ability turns into learned skills.

~~~
manmal
Considering myself an above average guitar player - I'm not sure whether
guitarist vs drummer abilities carry over to hacker vs business skills. Your
problem with playing the guitar was most probably related to left-right-
coordination or some physical feature (like joint flexibility), right? Or
maybe you did not "hear" the notes?

I think that both good/x10 business people and hackers need similar
personality traits (or let's call them habits) - focus, persistence, and
willingness to learn. Concrete skills like talking to or with people you have
never seen before, or learning a framework in the matter of days, can likely
be acquired when trying long and hard enough. E.g. I learned to learn new
songs in the matter of half an hour or less; I'd never imagined I was capable
of that! But it's a skill just like any other.

But we really have to _want_ to get good at something in order to do it.
Staying with the guitar example - I can do finger exercises for months and
months, but if I don't have a lick I want to eventually be able to play, I
will not follow through, whatever focus and persistence I put in during
exercise. That's why I prefer to sketch out interfaces before implementing
them - hacking and Photoshopping is just a necessity in order to get the
product I dreamt up. I do enjoy programming, and I do it focussed and
persistent, but I have to really want the outcome (in that case a cool
interface and UX).

~~~
SatvikBeri
Based on my reading & observations, skill at the upper end of a
creative/intellectual domain seems to range from about 5-20% talent and 80-95%
practice-related factors. A lot of people don't realize how important
different types of practice are. _The Talent Code_ cites a study where
researchers found that students who believed they would practice an instrument
for all their lives learned nearly 4 times as quickly as students who thought
they'd play the instrument for a few years-with the same amount of practice!

The one consistent element of natural talent that comes up in
intellectual/creative pursuits is working memory. The average person can hold
roughly 7 "units" of information in their brain[0], which is why phone numbers
are 7 digits long. When sightreading, pianists with a high working memory
effectively have an advantage of a few extra years of practice[1]. I would
imagine that a high working memory is also helpful in programming, as it
determines how large a program you can easily hold in your head.

[0]: it's a little more complex than just 7 pieces of information, see
<http://en.wikipedia.org/wiki/Working_memory#Capacity>

[1]: <http://pss.sagepub.com/content/21/7/914.abstract>

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pshin45
I don't know if anyone here is a fan of MMA aka Mixed Martial Arts (as I am),
but I think the parallels between the startup/hacker world and MMA are
fascinating.

Not unlike startups, success in MMA requires proficiency in several very
different disciplines including wrestling, Brazilian jiu-jitsu, boxing, Thai
boxing (Muay Thai), karate, etc.

In the early days of MMA, fighters were very one-dimensional and the dominant
champions tended to be wrestlers, reason being that while a wrestler could
reasonably defend against a (kick)boxer's strikes, (kick)boxers were generally
powerless to do anything once a wrestler took them down, which they inevitably
did in the course of a fight.

I believe this is the case with hackers vs. business guys as well. Hackers can
generally become very proficient in business in 3~5 years on the job, but a
business guy would need 10+ years of focused practice in order to become
equally proficient in hacking, and until they learn will be absolutely
clueless when working with hackers.

And in the early wrestler-dominated days of MMA, people envisioned a future
where every MMA athlete would be equally well-rounded in all of the
disciplines and such distinctions would become unnecessary. But as is often
the case, the reality has turned out a bit differently.

A strong wrestling base is still a huge plus and a strong indicator of success
- There are 8 weight classes in the UFC and 5 of them are wrestlers. But in
general, what has happened is that in order to be a champion or championship
contender, one needs to be minimally (i.e. above average) well-rounded in
every discipline, but every champion is exceptional in at least one
discipline. For example, non-wrestler champions like Anderson Silva (185 lbs)
and Jose Aldo (145 lbs) are outstanding kickboxers who are competent enough in
wrestling to be able to avoid being taken down. The days of only-specialists
are gone and the days of only-generalists never came; the reality has turned
out to be a combination of the two.

I expect to see the same dynamic in the startup world. Hackers are becoming
more business-minded and business guys are (maybe less so) starting to realize
the "power" and importance of hackers, but I don't expect the two worlds to
ever completely converge. It will be important to be world-class in at least
one discipline (hacking or marketing or whatever), but everyone will need to
be at least above-average in all disciplines to expect to compete at all.

------
lifeisstillgood
I am surprised that Shenglong is down voted - it strikes me that the idea of
10x "business-people" is just as valid as 10x developers. Certainly Branson
for example seems better at it than, say, me.

@Andrew_quentin Want my take on the 5 or so business rules:

1\. Budget. Don't spend more than you plan to, plan to make a profit.

2\. Clarity. Be clear what you offer and why it benefits the target market

3\. ABS - Always Be Selling. Build a pipeline of prospects and clients and
audiences. Keep on telling them how your thing will make their lives better.
Then and only then watch GlenGary GlenRoss

4\. Service - the customer must think you love them because only people we
love do we treat so well. This is easier with few customers. They then have to
be charged more. This is a sub rule (6)

5\. Consistency - say it, do it. Hire a PA to make sure you do.

6\. Never drop your price or cut your rates

~~~
jiggy2011
Number 6 seems like the odd one out , there are plenty of businesses that were
successful because they kept figuring out how to get things done cheaper and
passing those savings on to consumers and undercutting the competition. Or
companies who ate their margins to lower prices and gain market share.

~~~
mkr-hn
Not every businessperson aims to create the next Walmart-scale business. You
can live comfortably with a few tens of thousands of repeat customers.

~~~
jiggy2011
yes, but that doesn't make competing on price an invalid strategy.

------
randomdrake
I would say smart hackers can be nearly anything they want to be. The best of
them are capable of looking at most any problem and breaking it down into
solvable chunks. Whether it's figuring out the behaviors necessary to tone
their bodies into beings capable of physical activity, or honing their skills
with machinery to rebuild an old car. Hackers can be some of the best
mechanics and are capable of knowing how to turn their bodies into incredible
machines.

Those are just a couple of examples of what hackers are capable of outside of,
well, hacking on things. If there are parts of problems or tasks hackers don't
know, they can research them and understand how to fix them. This means that
they're not afraid to jump into the deep end in other professions or tasks.

Capable of being a business person, and possessing the same drive as business
people are where the disconnect occurs, in my opinion. Could a good hacker
figure out the steps needed to create something that would be considered a
successful business? Yes, probably so. But, are smart hackers driven to
generate wealth or create large organizations of people? In my experience, the
answer is often: "not really, but I'd love to help you build it."

~~~
viame
Great answer, nothing to add, nothing to take away. =) I haven't met Paul
Graham but when I was watching this video I couldn't stop thinking that he
should be an actor. At least his voice should be used in a commercial, a
cartoon or elsewhere.

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jkuria
Since this was in 2005 I wonder what he'd say now? I believe he has since said
that initially, they thought they were looking for smart people. Over time
they found out they were looking for determined people.

[Business Writer] What do you look for in people?

[PG] Determination. When we started, we thought we were looking for smart
people, but it turned out that intelligence was not as important as we
expected. If you imagine someone with 100 percent determination and 100
percent intelligence, you can discard a lot of intelligence before they stop
succeeding. But if you start discarding determination, you very quickly get an
ineffectual and perpetual grad student."

------
ysapir
"We fire up that video the second we start reading an application, usually."

As a new applicant, it makes me curious. Does that mean that (usually) if I
haven't seen views on the video yet, the application hasn't been read yet?

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larrys
I'm going to watch this entire video but what I find interesting in the first
few minutes are Paul's facial reactions to the initial questions indicating
what appears to be no idea at all of what he is going to be asked.

In contrast to the facial reactions of people who are asked questions on
formal TV interviews who appear as if they more or less know what is going to
be asked because there isn't as much facial twitching, or thinking, it's as if
they've had time to think things through by knowing in advance the questions.
Not the case here.

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chacham15
> I'd be reluctant to invent in someone who made desktop software

I wonder if pg would revise that statement now seeing as how Dropbox is its
largest winner so far.

~~~
reledi
It's also a web app.

------
DanielRibeiro
This interview contains some pretty amazing gems. This part[1]:

 _So, really good sofware is software that embodies an idea, some fabulous
idea for some new thing that is possible that maybe only the guy writting the
software realizes is possible. And maybe people who hear about it while he's
working at it think it is the stupidiest idea_

... reminded me of Peter Thiel's famous quesetion[2]:

 _what important truth do very few people agree with you on?_

[1]
[http://www.youtube.com/watch?feature=player_embedded&v=B...](http://www.youtube.com/watch?feature=player_embedded&v=BDA0t49AaZ4#t=133s)

[2] [http://blakemasters.com/post/22866240816/peter-thiels-
cs183-...](http://blakemasters.com/post/22866240816/peter-thiels-
cs183-startup-class-11-notes-essay)

------
klrr
Even though it's true that "web based" software will be the future I
personally think it's a bit sad(unless if that term doesn't solely mean
software on a server that you connect with a bloated browser to).

Besides that, interesting and good interview.

~~~
vy8vWJlco
2005 was a long time ago, but I think that attitude (@ 17:23 "We would be
reluctant to invest in someone making desktop software", "It's ridiculous to
think that your data should be on a computer... Your data should be on the
network.") is unfortunate. The web is the best and worst part of the modern
Internet. It is easy to develop for and in the short-term can be quite
liberating, but in the long term it can do very little except make us easier
to control and less likely to revolt when the operators do anything "Evil
(TM)." I also think the web is a very weak and overrated platform - standards
have been slow, because native experimentation has stopped. To do anything
interesting, you need a native plugin. The Internet itself is ideal for
communication and message passing, but the web is just one facet that excels
at typesetting a dynamic book, but I can only look at so many banners.

Further more, the network exists to connect computers, not the other way
around. It is not a thing on its own. There's no such thing as data that
"lives" on the network. Today's cloud is just someone else's PC, somewhere
else on the globe, and much less under my control, so it's not a very
compelling alternative to running native software for me when it's available.

------
Andrew_Quentin
Right, what are these rules?

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negamax
Yes. And many top notch business guys can become great programmers if they
want to. Hard working people can shine anywhere.

------
r0s
As an aspiring business guy, my biggest problem seems to be accessing
information about different models.

Say I want to build a web community around a particular kind of video game.
Estimating the value of that market is pretty damn opaque to an outsider.

~~~
wordplay
I've been thinking about the general business plan problem for years. Not only
because it's a very real problem, but also because as I'm walking through a
swap meet or a grocery store I'm perpetually curious about margins and return
on capital for the many tiny to medium businesses for which almost no
intelligence exists. If I could figure out a way to bootstrap a crowd sourced
resource for these I'd be working on it right now...but alas.

In your case, if you haven't done so already, I'd suggest attempting to buy
advertising from a site similar to the one you'd like the build. Maybe even
invest some dollars advertising your own product (non-profits are interesting
guinea pigs too) to get some idea of the volume of traffic they enjoy and the
prevailing rate that advertisers are willing to pay for access to their
audience. Once you have data you can start building some models and
establishing ranges inside which the business makes sense to pursue. I've done
this kind of research myself and for clients on multiple occasions, it's not
bulletproof but it's a valuable start.

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d0m
What PG says resonate so much with me, it's hard to explain. People asking me
questions about my startups or hacking stuff... I wish I could just redirect
them to this video. Actually, I will!

On a side note, I didn't know PG sounded a bit british : )

------
mceoin
ob·strep·er·ous /əbˈstrepərəs/

Adjective Noisy and difficult to control: "the boy is cocky and obstreperous".

