
Why It's Safe for Founders to Be Nice (2015) - traviswingo
http://www.paulgraham.com/safe.html
======
BatFastard
As someone who has been screwed by "rapacity", all I can say is be very very
careful being "nice".

As Pink Floyd said in a song "You have to be trusted by the people that you
lie to, so that when they turn their backs on you. You'll get the chance to
put the knife in."

As someone who lost out on a billion dollar business, be nice, but watch out
for knives in the back. Often those knives are in the form of law firms.

~~~
jey
That sucks. Can you share more about this purported exception to the rule?

~~~
BatFastard
My experience was not with user rapacity but with partner rapacity. I have
always found good will towards users pays back 10 fold. Partners on the other
hand are much trickier.

For me it was around what I thought was a carefully crafted contract. Long
story by my partner seized all of the IP, than said "sue me". It was
specifically prohibited in the contract, but I was not in a position at the
time to spend a LOT of money fighting a team of lawyers.

Unfortunately what my team had made look easy was beyond the capabilities of
the team he hired to replace us. So the product floundered.

~~~
GunlogAlm
Off topic, but are you the BatFastard in Generals.io, by chance?

~~~
BatFastard
I am indeed. Whom are you?

~~~
GunlogAlm
Ha, small world indeed. I mostly play as an Anon, after losing my last account
(can't even recall the username).

I think you've bested me a fair few times. :)

~~~
BatFastard
It's an insanely fun, intense few minutes. Get a name! Not enough
socialization in the game.

------
cisanti
What about paying fair share of taxes that are expected to be paid by the
society?

Just like loopholes are legal, most of the time being not nice to people is
legal.

Meaning, nothing stops YC companies to sign a treaty that paying taxes is part
of being nice and decent citizens of the world. I'm talking about Dropbox, for
an example.

Very often the moral police stops when it impacts you or your wallet. It's
called a sacrifice for a reason.

~~~
philwelch
I'm not a libertarian anymore, but I still don't really buy into this
criticism, for a few reasons.

Taxes are a legal obligation. If taxes aren't high enough, it's the
government's job to fix that. Paying more taxes than you are legally obligated
to pay is a disservice to shareholders, which in the case of a YC company
includes almost all of your investors and employees.

Corporate taxes in particular are economically inefficient. Corporations are
just straw men. Any money that a corporation earns is either paid out as
dividends (at which point it's taxable as individual income) or reinvested
into growing the company (at which point it turns into things like "salary",
which is taxable as individual income).

The US in particular has exceptionally high corporate tax rates--among the
highest in the developed world. And if you're going to choose a tax to avoid
paying, US federal corporate tax is pretty much an ideal choice. Very little
of that money goes to things like schools (which are paid for on the local and
state level) or Medicare (which is paid for with payroll taxes). The biggest
chunk of it pays for the US military, and a huge chunk of US military spending
is pork for defense contractors.

In other words, US federal corporate taxes are largely a mechanism to
redistribute money from corporations like Dropbox towards corporations like
Blackwater and Lockheed Martin. And you think it's _nice_ and _decent_ of
Dropbox to play along with this scheme?

~~~
Retric
Nameplate tax rate is basically meaningless.

US effective corporate tax rate after deductions is lower than the OECD
average. Though by how much is up for debate.

PS: You can debate various points, but it's only 11% of total federal tax
revenue.

~~~
adventured
The US effective corporate tax rate is not lower than the OECD average in
fact.

The most authoritative, recent report on the matter by the CBO:

[https://www.cbo.gov/sites/default/files/115th-
congress-2017-...](https://www.cbo.gov/sites/default/files/115th-
congress-2017-2018/reports/52419-internationaltaxratecomp.pdf)

It clearly makes the case that the US is non-competitive with other G20
nations on the corporate tax rate. The US average corporate income tax rate
for 2012, was 29%. In Canada it was 16%; Brazil 22%; China 19%; UK 10%;
Germany 14.5%; Australia 17%; South Korea 20%; France 20%. How much more non-
competitive can the US get exactly?

And when it comes to the OECD, the US is once again far from competitive:

"The most recent estimate comes from the World Bank and International Finance
Commission, which put the United States’ effective rate for 2014 at 27.9
percent. That’s second-highest behind New Zealand among OECD countries and
15th-highest among the 189 countries measured."

[http://www.politifact.com/punditfact/statements/2014/sep/09/...](http://www.politifact.com/punditfact/statements/2014/sep/09/eric-
bolling/does-us-have-highest-corporate-tax-rate-free-world/)

~~~
Retric
Sanity check,

What is total US corporate profit before taxes per year? And what's 27.9
percent of that.

Or from GAO:
[http://www.gao.gov/assets/660/654957.pdf](http://www.gao.gov/assets/660/654957.pdf)

"For tax year 2010 (the most recent information available), profitable U.S.
corporations that filed a Schedule M-3 paid U.S. federal income taxes
amounting to about 13 percent of the pretax worldwide income that they
reported in their financial statements"

[https://en.wikipedia.org/wiki/Repatriation_tax_holiday](https://en.wikipedia.org/wiki/Repatriation_tax_holiday)
dropped actual tax rate to 5.25% in 2004. Companies are more than happy to
wait for the next one.

PS: Also of note a lot of overseas profit is anything as it's easy to pretend
US operations only break even by shifting around costs on paper.

------
uptownfunk
I can appreciate the article.

However, while it may be safe to be nice, I don't think being nice is
important to success in business. And I think that's what probably concerns
more people. This kind of disappoints me though. I wish it were important to
success to be nice, but my experience tells me otherwise. It's more important
to right and just nice enough to get that across and be heard.

How do you maintain your power and influence while being nice? I feel like you
could kill your self by performing really well and setting a stellar track
record and then earn the privilege of being able to be nice and still be
respected... or you just swing your proverbial dick around and slam anyone who
won't listen to you and rule by fear. The net payoff seems to suggest favoring
dickish people at the top. And sad to say it seems that way many times.

Also being nice can make people think you're weak and so it's harder to run a
team with that mindset.

I think the more definite path to success is being intelligent, shrewd and a
competitive person. If that implies being nice then so be it, otherwise it
doesn't seem so relevant.

There's also different types of nice. Like superficial nice and genuine nice.
Which are we referring to?

I do envy those charismatic leaders that are successful and earn the love of
their colleagues and employees. That's something I'd love to aspire to.

------
rdtsc
> I grew up with a cartoon idea of a very successful businessman (in the
> cartoon it was always a man): a rapacious, cigar-smoking, table-thumping guy
> in his fifties who wins by exercising power, and isn't too fussy about how.

I think when something new comes about it can't _look_ like something old if
it wants to succeed. Basically it's hard to build a successful startup by
looking like a cartoon businessman from the 80's, wearing a tie, being overtly
and openly aggressive etc.

If you're building something new and "cool" you had to be playful, dress
informally, wear hoodie or t-shirt, on the surface appear to be super nice and
friendly. Of course business is business and at the end of the day someone is
getting stabbed in the back. But before that day comes it is all hugs, smiles
and pats on the back.

Anyone remember Google, how they succeeded not just by providing a better
search experience, by also by building a "cool" company image -- playful
bright colors, the whole "don't be evil" shtick, we'll feed you with gourmet
food, etc. They were positioning themselves to be as different as possible
from a traditional company.

Now the funny thing is, the image of the startup has also become cartoonish
with the shows like the "Silicon Valley" running for a few years. So CEOs
wearing hoodies, being all informal and superficially nice, open office spaces
and so on is getting a bit stale.

I wonder what's next. Back to wearing ties and smoking cigars? Probably not.
But I have heard people say they'd rather get back to having the previously
derided and hated cubicles than doing the "cool" open office plan.

Maybe working remotely is the new thing? But some companies have been doing
that for a while as well. I hope that's the next revolution, when large giants
as Google and Facebook, who sell digital connectivity as their primary product
embrace the digital connectivity themselves and don't require workers to be in
a physical location to get work done.

------
ivv
When talking to startups as their prospective client, I feel I can often tell
which ones are from a Y-combinator batch; they are nice, responsive, and
thoughtful.

~~~
dasil003
What type of thing puts you in position to be a client of many startups?

~~~
ivv
I work in one of the data-related verticals that has a fair number of startups
selling to companies like ours.

------
geofft
Why do we believe "nice" is correlated with how much you charge for your
product instead of how aggressively you grow?

Let's take Uber as an example of a company that a lot of people would call not
nice: their prices are great (I think it's widely believed that the prices are
VC-subsidized and unsustainable in the long term), but it's their growth
strategy that a lot of people have problems with. I have never once heard
Travis Kalanick criticized because Uber charged too much.

~~~
rhizome
The essay is using a very narrow definition of "nice," which is used to
differentiate them from the greedy, and is essentially an business economics
essay. This is to say, we don't "believe" it, it's just the way the essay is
written.

Uber has gotten a lot of criticism for surge pricing.

~~~
oceanplexian
There is nothing wrong with being greedy. Greedy does not mean that you need
to take or steal from others. It means you have an excessive drive for
success. "Excessive" is usually defined by society at large, and society at
large is unquestionably a cesspit of low consciousness, and self-centered
thinking.

What I take from this article is the perception of being nice is important.
But the reality between the lines is that nobody is in business to be nice
(unless you're running a non profit). We're here to make money. If startup
founders don't realize this someone else will, and they will eat their lunch.

~~~
blackrose
Isn't greed self-centeredness?

> society at large is unquestionably a cesspit of low consciousness, and self-
> centered thinking

That's a heck of a personal projection :)

And pg disagrees with that last sentiment in the footnotes:

> Many think successful startup founders are driven by money. In fact the
> secret weapon of the most successful founders is that they aren't. If they
> were, they'd have taken one of the acquisition offers that every fast-
> growing startup gets on the way up. What drives the most successful founders
> is the same thing that drives most people who make things: the company is
> their project.

~~~
unkown-unknowns
When someone characterizes someone else as being "driven by money", I think
that in their mind they are seeing the other person as being interested in
nothing but having as much money as possible for no apparent reason.

But to me and I think probably to most people who have an interest in creating
a successful product or service, we the hackers and the makers don't want
money just because we want money. We also don't want the money just so that we
can have a private jet, ridiculously big mansion or other forms of luxury.

No doubt I would afford myself a higher living standard and some luxury on top
if I had a lot of money but it's not my primary motivation, and again I think
this is true of most of those who wish to create something.

I want my product to succeed because I believe in it. I believe that I can
bring value to my customers. I believe that my solutions have properties that
the products of my competitors don't. I believe that I can improve the lives
of others, even if not in drastically new ways.

Now since I believe this it only makes sense that I want "unlimited" funds
(i.e. there is no upper bound to the amount of money I would like for my
business to have), so that I can grow a business that can reach as many people
as possible and produce as many products as possible. I need money so that I
can hire people, good people. I need money for everything that my business
needs to do because without money I can't do it.

------
gallerdude
Yeah, I think successes of the likes of Apple and Netflix show that providing
the most benefit to the consumer is what always wins in the end.

~~~
IvyMike
Explain Comcast.

~~~
gallerdude
Right now, lack of choices. But I think when we see Musk's satellite internet
service, it'll be a completely different story.

~~~
mmirate
Bandwidth and latency aren't exactly favorable on any sort of satelite
internet connection. How will the Elon Musk brand change this?

~~~
jbooth
The idea is lots and lots of low orbit satellites with cell-phone-like
handoffs as they zip across the horizon. LEO is only 200 miles high or so,
which is ~1ms for light to travel if they can make it work.

Existing satellite internet goes out to geosynchronous orbit which is much,
much farther away.

~~~
imglorp
Notable exception being Iridium. The wiki points out interesting design goals
including coverage and doppler shifts. I do worry about 4000 new objects in
orbit. We've got tons of orbital trash already.

[https://en.wikipedia.org/wiki/Iridium_satellite_constellatio...](https://en.wikipedia.org/wiki/Iridium_satellite_constellation)

------
sametmax
I love the Muslims saying: "Trust God, but tie up your camel".

------
yegor256a
My take on this: [http://www.yegor256.com/2017/08/22/to-be-nice-or-
not.html](http://www.yegor256.com/2017/08/22/to-be-nice-or-not.html)

------
hosh
Interesting. Makes me wonder about what lead Uber to be so aggressive.

------
erikb
5-star cook says: "Cows are much more successful in life when cut in slices
and being in a pan."

The truth is that you not just need to be cunning, you need to be routine at
it, so you can act nice while doing selfish things like removing founders
without paying them out, putting competitors out of business, and telling guys
who just spent the first three years of their child in your office instead of
with their families that they need to clean out their desks. Without that
ability what you can do is to sizzle nicely while being turned around in the
pan.

~~~
Mz
It used to take around 20 farmers to support a single non farmers, such as a
noble or black smith. We now have many people supported by each farmer in the
modern world.

If people are too "nice," we can totally go back to a hunter-gatherer way of
life instead of keeping modern institutions alive. I imagine billions would
die to get there from here. But, at least we would no longer need to make hard
decisions like which poor sucker to fire.

~~~
PeanutCurry
I'm not entirely sure I understand your metaphor in this case. I appreciate
that it had something to do with efficiency but then I got lost because a 20:1
farmer-to-other feeding ratio seems incredibly unrealistic and made it hard to
understand whether the ratio was relevant to the metaphor's point or was just
an off the cuff sort of detail.

~~~
Mz
It isn't a metaphor. Without modern farming technology and techniques, the
world cannot support 7 billion people. We deal with that fact or we die in
droves. Those are our options.

