
Be Good - vsingh
http://paulgraham.com/good.html
======
aaronsw
_When I was a kid I was firmly in the camp of bad. The way adults used the
word good, it seemed to be synonymous with quiet, so I grew up very suspicious
of it. You know how there are some people whose names come up in conversation
and everyone says "He's such a great guy?" People never say that about me. The
best I get is "he means well." I am not claiming to be good. At best I speak
good as a second language._

There are a lot of people out there who spend an enormous amount of time
coming up with rationalizations to justify doing bad things. What I realized
after spending a lot of time around Paul Graham is that he's actually the
opposite: He spends an enormous amount of time coming up with rationalizations
to justify doing good things. However bad he may want to be, his fundamental
good nature always seems to win out in the end.

~~~
andreyf
aaronsw. you're one person I'd have expected to be mentioned in this essay.
:-P

------
nostrademons
Peter Drucker said much the same thing: profit is the _cost_ of doing
business, not the _purpose_. The true purpose of a business is to provide
goods & services to its customers. The "profit motive" is essentially a check
on the resources consumed by the business, to ensure that it's not spending
resources inefficiently, much as PG mentions in the 2nd footnote.

Up until the 1970s, it was common for corporations to be managed "to balance
the interests of all stakeholders - employees, customers, shareholders, and
the community." You can blame Milton Friedman for changing that: he
popularized the notion of a corporation existing purely to maximize
shareholder value, enshrining it so deeply in American culture that it's
become law, and corporate directors can now be sued if they consider anything
other than the interests of shareholders. It _is_ important that companies pay
attention to shareholder value, but it was a huge mistake to make that the
_only_ mission of a corporation. Score one for market fundamentalism...

~~~
jimbokun
Recommendations for good Drucker books, particularly those with appeal for the
Startup and/or Hacker mentality?

~~~
nostrademons
Start with "The Essential Drucker" - it's a collection of chapters from all
his books, and then you can pick out what seems most interesting from that.
I'm currently reading "The Post-capitalistic society", which is fascinating,
and I recall really enjoying "Innovation and Entrepreneurship" as well. I
don't remember where the bit about profits came from - I think it was in The
Essential Drucker.

(To be honest, all the business books I read kinda run together in my head,
and I'm lucky if I can even remember who said what, let alone where they said
it.)

~~~
jmzachary
"The Essential Drucker" has the best excerpts form "Innovation and
Entrepreneurship" in a tidy 3-4 chapters. It's highly recommended if you like
reading "The Art of the Start" and those types of books.

------
mhb
I have no idea how Digi-Key is interacting with Octopart, but I have been
buying parts from them for a long time and have nothing but good things to say
about them. I like the company so much that I called to see if they were
public so that I could buy stock; they're not.

Although Octopart and its investors may be frustrated, it does Digi-Key a
disservice to characterize it as "evil", not "good" or a company that isn't
concerned with its customers - it is extremely concerned with customer
satisfaction and I have been very pleased with every interaction I have had
with it.

Sure it would be great if Digi-Key facilitated Octopart's objective, but that
doesn't justify conflating it with the all-star "evil" hall-of-famers.

~~~
pg
It seems to me there is more to being good than having good customer service,
which is the only evidence you mention here.

~~~
mhb
It didn't seem like all that much more evidence was required to refute your
one piece of evidence that Digi-Key is evil because they don't want Octopart
to list their prices.

Even if I had no evidence, my default assumption would be that they were good
until confronted with significant evidence that they were evil. And between
good and evil there's a nice-sized neutral middle area which it appears you
have transited in one fell swoop based on your sole piece of evidence.

I'm not sure what other evidence of goodness you seek than customers'
experiences with them. I have found their prices competitive - as another
poster said - lower on some items and higher on others. They have treated me
fairly. I don't believe that they are engaged in any immoral enterprises. I
agree it would be nice if they cooperated with Octopart but to say that makes
them evil is absurdly hyperbolic.

I can immediately think of some (non-evil) reasons for Digi-Key to prefer not
to have Octopart include its pricing. It has invested in a web site which
provides an excellent user experience and they would prefer not to make it
easier for customers to use Digi-Key's web site as a reference manual for
lower cost competitors (whether or not you believe this is inevitable). They
would like to avoid doing business with customers who are concerned solely
about price. They would like customers to purchase their higher-margin items
based on past experience purchasing lower-margin items even though the higher-
margin items might be cheaper elsewhere.

~~~
pg
The problem was not so much how little evidence you supplied as how irrelevant
it was. I expect Philip Morris has good customer service too. When convenience
stores order cigarettes from them, they probably deliver reliably. Would you
argue that that makes Philip Morris a good company, ethically?

Your theories about why Digi-Key wouldn't want their prices to be publicly
known are very inventive, but Occam's razor suggests the explanation is what
is usually is in such situations: They are trying to suppress competition.

~~~
menloparkbum
I really don't want to make any more comments, because I'm sure they are
equally irrelevant. However, since I grew up in the town where Digi-Key is
located and once dated the daughter of a bodega owner, I must proceed.

First, bodega and convenience store owners don't order smokes from Philip
Morris, they get all their stuff from various distributors. The stores
themselves are usually locked into one distributor for junk food/smokes and
another for liquor. Depending on how low you go on the convenience store food
chain, often times the "distributor" is just a guy with a truck. Thus I'm not
sure a good online business could be made aggregating the various prices of
cigarette distributors. A useful startup idea would be a location-based mobile
app that would tell you which bodega nearest you carries the cheapest
cigarettes. You could make it non-evil by selling ads for nicotine replacement
therapy that you would have to click through before getting the price for a
hardpack.

As far as Digi-Key goes, they aren't the biggest distributor of electronic
components... maybe in the top 20, or maybe top 10. However,they probably ARE
the biggest distributor that will sell small lots to hobbyists. They are also
one of the major employers in a small town in a rural area that has had a flat
economy for decades. The only other employer of note is the snowmobile
factory. Most of the money in the area is made by landowners who are paid your
tax dollars to not farm their land, or else grow sugarbeets, one of the least
efficient ways of obtaining sugar. Since they would have had to pay the most,
those same farmers voted against school improvement bonds every year I lived
there...so I'm going to have to go with "evil" on stupid farm subsidies but
now I'm really digressing...

I'm going to have to vote "not evil" for Digi-Key. They know they are
competing on price and are doing what they can to avoid losing business. If
sales go south, they have to lay people off. Most of the employees don't have
anywhere else to go find work. From my limited personal experience, there
isn't a CEO caste at Digi-Key with golden parachutes who all stay rich whether
or not the company does well. If they lose business, everyone gets fucked. I'm
guessing they are cockblocking Octopart out of fear. This sucks for Octopart
and is inconvenient for people prototyping electronics, but is it evil?

EDIT: what's really evil is that unknown or expired link error!

~~~
andres
Digi-Key is the largest small-volume distributor of electronic parts in the
US. They do $1.2Bn per year in revenue of which $700M is done online. Their
gross margins are about 50% and their business is growing at 20% per year.

When Microsoft accused Linux of violating 50 software patents, most people
thought they were pretty evil. The claims were frivolous and their aim was to
preserve their market share at the expense of consumers. Likewise, Digi-Key
makes the frivolous claim that by displaying their public information and
linking to their webpage, Octopart is acting illegally.

This is not a debate about whether Digi-Key is good for the town of Thief
River Falls or if Digi-Key should be making money. They have as much right to
make money and keep their employees happy as Microsoft does, but when they use
their muscle to wrongfully stifle innovation at the expense of consumers, it
shouldn't be surprising that some people would call them 'evil'.

~~~
wensing
_by displaying their public information_

What is public about it?

~~~
smock
This information is freely available on their website (not to mention their
widely distributed paper catalogs). Google has crawled much of Digi-Key's
website and has this information on their servers. However, Digi-Key is
specifically targeting Octopart (actually, I'm not sure if they're threatening
Google, my uninformed guess is no though). The only thing we're doing
differently than Google is distilling the information in a way that allows
part buyers to compare prices readily. There are other part information
websites also crawling Digi-Key, but Octopart is one of the only ones doing
price comparison - again, I'm just guessing, but I doubt Digi-Key is
threatening any of these other websites.

~~~
webmaven
Also note that courts have generally held that pricing information is not
protectable by copyright (prior to publication it might be a trade secret, but
once you publish it, it essentially becomes a fact in the public domain). This
has not stopped large retailers from using novel legal theories (or carefully
timed DMCA takedown requests) to stop or chill 'Black Friday' websites, of
course, but the law is actually reasonably clear in this area.

------
webwright
Regarding Microsoft... it really struck me when I watched Steve Ballmer talk
with Guy Kawasaki ( [http://visitmix.com/blogs/News/Watch-Steve-Ballmer-and-
Guy-K...](http://visitmix.com/blogs/News/Watch-Steve-Ballmer-and-Guy-Kawasaki-
Live/) ) that Steve over and over again touted that it was important for them
to get big into online advertising. Not once did he frame a single Microsoft
goal in the form of how it was going to help a customer.

~~~
wanorris
Certainly a valid point. And PG's criticisms were deserved as well.

At the same time, I can't help but think some of this is an overreaction.
Microsoft beat _Apple_ as well as IBM in the market the first time by letting
users pick their hardware vendor. And, even today, they still do that, and
that's still Apple's achilles heel in gaining market share -- if someone wants
more choice than a half a dozen or so models, they're going to have to buy a
system running a different OS.

Yes, Vista sucks. Microsoft has come out with a completely crappy version of
it's most important product. But other companies have released crappy products
before and have lived on past their mistakes. Intel has released some horrible
products before -- i860, Itanium, and the P4 all come to mind -- and pretty
much all of them happened because they thought it was more important to keep
their profits skyrocketing by controlling the market than it was to give
customers what they wanted. But Intel has recovered from all of those debacles
and once again makes the best CPUs around -- Core 2 Duo is great.

The fact that people are clinging to XP says that people at least _perceive_
Microsoft operating systems to have value. The real test for Microsoft is
whether they can learn from the Vista debacle and focus on making a better
product the next time out with Windows 7. Having one failed product cycle
isn't likely to sink them, but a second one could.

I run Ubuntu and I don't regret it for a second. It's a great system, and I
like it better than Windows (or OS X, for that matter). But I think it's silly
to say that Microsoft should just pack up and surrender because they shipped
something that sucked.

~~~
allenbrunson
i think microsoft beat apple because apple was busy beating itself. apple had
about a ten-year lead in gui operating systems, but couldn't keep up. steve
jobs was immature, and engineered things such that he was made irrelevant in
his own company. the dude's firing on all cylinders now, and is virtually
unstoppable.

it's very painful to switch operating systems, due to network effects. all
your friends use windows, you've spent a lot of money on windows software,
people you know pass around windows-centric .xls and .doc files, you've been
using windows long enough to have become familiar with it, etc. if it wasn't
for all that, i think apple would have already eaten about half of microsoft's
lunch.

~~~
wanorris
"i think microsoft beat apple because apple was busy beating itself. apple had
about a ten-year lead in gui operating systems, but couldn't keep up"

Microsoft gave people a clear transition to a windowing environment -- back
when people weren't even sure they wanted one -- that allowed them to run
hardware from any vendor they wanted, with software from the vendors they were
used to using, and allowed them to load a windowing environment only when they
wanted to. It was a nice, safe, incremental step. Going to Mac meant throwing
everything away and starting over.

"it's very painful to switch operating systems, due to network effects."

Agreed. And don't forget: when you get there, you have a limited selection of
hardware (and none at the entry level), you can't play most computer games
even if you were willing to buy them all over again, and if your company has
custom apps, they probably only run if you load up Parallels, which is a
daunting prospect for most people.

There's no question that network effects drive Microsoft adoption. But Apple
also isn't behaving like a company that wants to attract all of Microsoft's
customers. It's behaving like a company that's perfectly happy skimming off
the most profitable customers and collecting a premium for it.

Actually, if you want to take a look at someone that fits Paul's criteria for
a company that tries to grow by acting like a nonprofit and going out of it's
way to look for ways to benefit its customers, you could do worse than to look
at Ubuntu. Ubuntu looks like a company that could start eating Microsoft's
lunch at some point.

~~~
allenbrunson
i think you're making too big of a deal out of hardware choice. you're talking
about people who don't know if they want a gui or not, yet you think those
same people will want to choose what type of computer to run it on? as if.
people like that want to AVOID having to make choices like that, as often as
possible.

i'm up at the other end of the spectrum: i know all the tradeoffs, i'm as
technically savvy as computer buyers get ... yet i don't want to make that
choice, either. i haven't had to worry about what type of hard disk controller
i've got for ten years or more, and i'm glad to be rid of dealing with piddly
issues like that.

the only people who care about the low-level hardware they're using are
gamers, tinkerers, and cheapskates. probably a tiny percentage of the total
computer-using population.

well, i guess i _do_ care about what hardware i'm using -- to the extent that
i want it to be pleasant to use. once again, apple's interests are exactly
aligned with my own.

~~~
wanorris
> i think you're making too big of a deal out of hardware choice. you're
> talking about people who don't know if they want a gui or not, yet you think
> those same people will want to choose what type of computer to run it on? as
> if.

For casual consumers, hardware choice mostly only matters in that you can go
buy a variety of Windows computers at Best Buy for under $500 bundled with a
monitor and a printer. There are also laptops in that range, as well.

This is important for two reasons. First, because some people just don't have
a lot of money. If you are living in poverty, all the nifty extra features a
Mac might have don't really matter. Second, because there are more multiple-PC
homes. If you're buying a second computer for the kids or checking email or
whatever, a simple, cheap system may do everything you want.

For less casual users, there are HTPCs, tablet PCs, sub-$500 ultralight
notebooks like the Eee, gaming notebooks, and other segments that Apple
doesn't compete in.

------
guyk
Oh man does this ring some bells for me.

I started bugmenot.com years ago to help people. And then I started
retailmenot.com with much the same end in mind.

Because people dug bugmenot I got the critical mass I needed for retailmenot
to work. Then it turns out you can make money off online shopping stuff.

Fast forward to now, we've got 5 staff still building cool stuff (that helps
people), having fun and making money.

And curiously enough the business is called StatelessSystems.com

:)

~~~
kleevr
Thanks for building bugmenot btw. I've used that site on and off for the last
2 years or so, I always look before I start a bullshit account.

What kind of conversion do you get when a person looks up a site, doesn't find
a working account, leading to a new user submission for the site in question?

~~~
guyk
Thanks for the props and a good question on conversion but one I don't think I
have numbers to answer.

Numbers I do know: * around 100k visitors per day * 1,021,791 logins * 187,047
sites

A certain percentage of those logins will be invalid though.

------
hollerith
pg writes that "starting an organic farm, though it's at least
straightforwardly benevolent, doesn't help people on the scale that Google
does".

Although I agree with pg's main point about scale and about trustafarians, an
organic farmer seems to resemble a founder of a tech company more than he or
she resembles a founder of an ineffectual or parasitic charity, foundation or
NGO: a friend of mine knows countercultural types who dropped out of the rat
race in the 1970s to start organic farms in Mendocino[1] for reasons other
than financial, and she says they all seem to have become millionaires. (If
there is interest I could ask this friend exactly how many people she knows
who started organic farms.)

[1]: Mendocino County is the closest place to San Francisco that in the 1970s
had aesthetically pleasing terrain and cheap farm land.

------
ken
I've heard something similar before:

"Why did Greg and I do something so ludicrous as sneaking into an eight-
billion-dollar corporation to do volunteer work? Apple was having financial
troubles then, so we joked that we were volunteering for a nonprofit
organization." -- <http://www.pacifict.com/Story/>

~~~
andreyf
Amazing story. Please post it?

~~~
ken
Sorry, can't; jwecker beat me to it:
<http://news.ycombinator.com/item?id=1741>

~~~
rms
This is something that really needed a ? resubmit

------
ctkrohn
This isn't a new idea at all; in fact it's as old as capitalism itself. Adam
Smith was one of the first to recognize that capitalism helps align the self-
interest of the entrepreneur (selfishness) with the general interest of others
(charity): "It is not from the benevolence of the butcher, the brewer, or the
baker, that we expect our dinner, but from their regard to their own interest.
We address ourselves, not to their humanity but to their self-love, and never
talk to them of our necessities but of their advantages."

~~~
tlb
Smith is is saying that customers can depend on businesses providing value out
of their own self interest (in order to make money.)

Graham is saying that as a business, you'll be most successful if you spend
your energy trying to be good to your customers, rather than, say, trying to
squeeze a little more money from them.

Smith: greed => good service => profit & happy customers

Graham: benevolence => wonderful service => happy customers & happy
entrepreneurs & profit

Very different ideas.

~~~
yters
It really depends on your definition of self interest too.

Benevolent people either think their benevolence benefits them materially, or
gain satisfaction from altruism. Both are forms of self interest.

~~~
kleevr
I personally think altruism is born the murkiest waters of self-interest. But
discriptive psychalogical egoism skirts the the issue a bit and forks us into
a long examination of the nature of the "soul". But, whether altruism is some
measure "divine" (or symbolically derived), or born completely out of self-
interest, there is a wide consensus on what it ought to look like.

(egoism is an easy card play, we could pull the appartus down and have a look
at it though, but we might not get much farther than those that have gone
before us.)

~~~
yters
I dunno. I think ideals exist, and that's what altruism is based on, at least
the genuine kind. And I do think genuine altruism exists. However, I also
agree that Nietszche's notion ressentiment also gets called altruism.

~~~
kleevr
I always like the calculus on Aristotle's virtue ethics...

------
bdr
Paul's thesis here seems to be a confused grasp at what others have described,
more simply, as the benefits of capitalism: "A good company is honest. In a
world of complete information, two parties will transact iff they both
benefit. This positive-sum interaction creates wealth."

What am I missing?

~~~
phr
Agreed. If you buy my house, that means I wanted your money more than I wanted
to keep my house. So I've gained from the transaction. Likewise, you must have
wanted the house more than the money. So you also gained. Barring fraud, we've
each done the other a service.

The problem is that people either never learn this, or they forget it
somewhere along the line.

~~~
bdr
One way to summarize that is to say that a moral* and successful business is
necessarily helping people. However, there are other benefits (to your
business) of acting morally: see the "Morale", "Help", and "Compass" sections
of the essay. ;)

* "moral" may be too broad here, but "honest" is too narrow

------
breck
I agree that being benevolent and not focusing on profits in the early days is
a good strategy for Internet businesses. Success on the Internet is all about
scale. Growing faster than your competitors is key because your product can
iterate faster and achieve a dominant position. Giving it away for free and
being benevolent helps spur growth and is thus a very important strategy.

But I'm not sure that this holds outside the Internet realm. In other
industries, you cannot be too benevolent and non-profit-like. I can't think of
many examples that have succeeded via this route. I'm not sure I agree with
your idea that Microsoft started out as benevolent. I think the profit motive
was there from day one. To back this up, look at this letter written in 1976
by BillG:

"As the majority of hobbyists must be aware, most of you steal your
software...The fact is, no one besides us has invested a lot of money in hobby
software...Most directly, the thing you do is theft...I would appreciate
letters from any one who wants to pay up."

(<http://www.blinkenlights.com/classiccmp/gateswhine.html>)

So acting like a non-profit is important in the Internet world where scale is
key, but I think in other industries the non-profit strategies should be left
to the non-profits.

~~~
anewaccountname
"People of the same trade seldom meet together, even for merriment and
diversion, but the conversation ends in a conspiracy against the public, or in
some contrivance to raise prices. It is impossible indeed to prevent such
meetings, by any law which either could be executed, or would be consistent
with liberty and justice. But though the law cannot hinder people of the same
trade from sometimes assembling together, it ought to do nothing to facilitate
such assemblies; much less to render them necessary."

------
SwellJoe
I find it somewhat amusing that pg suggests in the footnote that Microsoft
ought to recommend their customers switch to Mac OS X.

The problem with that is that there is one supplier of hardware for Mac OS X:
Apple. And they charge a significant premium for that hardware. Kinda like IBM
back before Microsoft pulled a fast one and licensed their OS to all comers
and (benevolently) changed the face of personal computing. pg recognized the
evil that was IBM, but fails to recognize the same evil in Apple, because the
facade is so much nicer to look at.

~~~
pg
Not all computers are bought new. There are very inexpensive Apple machines:
used ones.

A Powerbook G4 like the one I use for everything seems to cost around $500 on
eBay, and I suspect that offers a net better experience than the average Vista
user gets.

~~~
SwellJoe
There were used IBMs on the market, as well. Does that invalidate your
argument about IBM? One of your premises is incorrect. Which one is it?

~~~
pg
What I said was that if Microsoft cared about users, they'd recommend they
switch to OSX. You replied that Apple hardware comes at a premium. I replied
that this premium is less than the difference between new and used hardware,
and that using OSX only costs about $500. Could you find a laptop capable of
running Vista for significantly less than that? If not, how am I mistaken?

~~~
SwellJoe
As plinkplonk pointed out, you're suggesting it is good for consumers to
choose a single supplier solution for both hardware and software. Not just any
single supplier, but very nearly the highest cost supplier (you can spend
more, but you get better quality hardware if you do). I just think there is a
very clear comparison to be made between IBM in 1983 and Apple today, and it
seems that your enjoyment of Apple products (and/or dislike of Microsoft
products) has blinded you to that very clear comparison.

Apple isn't quite in the position of dangerous strength that IBM almost had,
but IBM also had competitors (Commodore, Apple, Atari). I merely think that a
Mac system (even a three year old one) is not the ideal computing option for
the average consumer. Additionally, I think an Apple monopoly would be every
bit as dangerous as a Microsoft monopoly. Apple has a long history of taking
advantage of the dedication of their users.

I come down on the side of Open Source solutions to this problem, though Linux
also has problems of its own, it does solve the problem of having a single
supplier for any element of the system. With things like the Asus eee lowering
the price of a laptop dramatically, while avoiding reliance on Microsoft (
_or_ Apple), I think things are looking up.

In short, I think your IBM vs. Microsoft as Robin Hood analogy should be
applied equally to Apple, though Apple has managed to hold tight the reigns
such that no Robin Hood can spring into existence to bust up the control Apple
has over the Mac market. Note that I don't have a problem, in particular, with
Apple or Mac machines or Apple making money...just like I didn't have
particular problems with IBM back in the day. I just think it's amusing that
Apple gets a pass, while Microsoft is Robin Hood for cleverly thwarting the
IBM monopoly on the PC. Pot, kettle, yada yada yada.

~~~
pg
_I just think there is a very clear comparison to be made between IBM in 1983
and Apple today_

The comparison is clearer between Apple in 1983 and Apple today. Not
surprisingly.

I never said that it was better for consumers to have a single supplier of
hardware and software. All I said was that users would be better off running
OSX than Vista. It happens that OSX is made by a company that also makes the
hardware, but that wasn't the _reason_ I was saying people would be better off
using it. I wasn't saying that Apple won't, if they get dominant market share,
turn into an evil monopoly, or that a company who broke said monopoly wouldn't
be Robin Hood. All I was saying was what I actually _said._

~~~
SwellJoe
My understanding of what you considered the benevolence of Microsoft was that
they allowed a low-cost IBM PC compatible computer market to develop, which
allowed people who wouldn't have been able to afford a PC to do so. Apple has
never been accused of being a low-cost, or even affordable, computer supplier
(and the existence of a used market doesn't invalidate that--a used PC running
Windows XP or, better in my opinion, Linux is going to be even cheaper and
within reach of more people). If the dramatically lowered price point for a
personal computer was not the benevolence of Microsoft, according to your
argument, and the price of a personal computer doesn't matter to your
argument, then I will humbly stand corrected. Though I think I'll need some
clarification about what the benevolence of Microsoft was, if not that, as I'm
drawing a blank on anything else good that came out of Redmond.

But, all that I actually _said_ to start with was that I was amused that you
praised Apple...the earlier criticism of IBMs abuse of power and the
benevolence of Microsoft in breaking down the IBM monopoly made for an amusing
contrast to me, an outsider who generally uses neither Apple nor Microsoft
products and doesn't really consider Mac OS X a significantly superior OS to
Windows Vista or XP. I don't really care which is "better" in this discussion,
as "better" wasn't a qualification for Microsoft's benevolence.

I found it amusing, that's all. I really didn't mean to stir up so much
argument about it. If I were the type that used smileys, I would have included
one in my first post...but I figured "amusing" would cover it. ;-)

~~~
euccastro
_But, all that I actually_ said _to start with was that I was amused that you
praised Apple..._

He didn't praise, or otherwise judge, Apple.

He made a passing remark on the _utility_ of two particular _products_. He
didn't compare companies, and he didn't compare goodnesses.

------
towny777
There must be something in the air right now. I published an article about
this very issue on March 27th (you can view it at
[http://uberdigi.blogspot.com/2008/03/secret-of-life-in-
parti...](http://uberdigi.blogspot.com/2008/03/secret-of-life-in-
participation-age.html)). My main point is that being useful is the most
important value in the participation age. If an individual or business makes
usefulness their number one priority they increase their chance for success.
In this case I think goodness and usefulness are synonymous.

I got this idea from Buckminster Fuller. He failed miserably until he had an
epiphany that he would not concentrate on success, but rather on making
himself a servant to the universe. Ultimately this meant that he would just
start working on good and useful things. As a result, he became a
controversial figure but also pretty successful.

------
gruseom
The business literature of previous generations often talked about "service to
mankind" as an ingredient of success. This essay sheds some light on what they
might have meant by that.

~~~
ecommercematt
Do you have any links or even just names of source material? I'm curious.

~~~
gruseom
I wish I could answer this because I know I've run across it many times.
Unfortunately, it's all blended into a vague impression. The "power of
thought" authors of whom Napoleon Hill is the most famous certainly wrote
about this, but so did more conventional writers. Anyway, the only specific
thing that comes to mind is this useless, but hilarious example of an old IBM
company song:

    
    
      OUR I. B. M. SALESMEN
      Tune: "Jingle Bells"
    
      I. B. M., Happy men, smiling all the way.
      Oh what fun it is to sell our products night and day.
      I. B. M., Watson men, partners of T. J.
      In his service to mankind-that’s why we are so gay.
    

It happened to be fresh in my memory because I submitted a link about it the
other day. Lots of jaw-dropping stuff from a bygone era:
[http://www.digibarn.com/collections/songs/ibm-
songs/index.ht...](http://www.digibarn.com/collections/songs/ibm-
songs/index.html)

------
alextp
It's scary how good the prose of some lispers is. I wonder what made Peter
Norvig and Paul Graham write this well. "I am not claiming to be good. At best
I speak good as a second language." is just brilliant.

~~~
DaniFong
Lisp speaks active voice.

------
flipbrad
"Fifty years ago it would have seemed shocking for a public company not to pay
dividends. Now many tech companies don't. The markets seem to have figured out
how to value potential dividends. Maybe that isn't the last step in this
evolution. Maybe markets will eventually get comfortable with potential
earnings. (VCs already are, and at least some of them consistently make
money.)"

Does this not worry anyone? It's basically a statement justifying investment
based on confidence, not that an investor is able to reliably guess whether a
company will be able to generate PROFIT or not, but that it will be able to
generate EARNINGS at all!

this is not investing in two birds in a bush (likely to be profitable). It's
investing on the basis of four in the nest (potentially earning money at
all!).

that's astoundingly risky. Now, either you believe investors are stupid and
risk-insensitive (or risk-blind! not uncommon in a bubble) and will keep
investing the same sums of money as they ever have, or you believe they are
clever, credit strapped and most certainly not risk insensitive. Option A
means a world of pain up ahead for investors and their backers, because we're
in a mighty bubble. Option B means PG is wrong (though doubtless he'd like to
be right, because it makes flipping seedstage companies from the YC stable a
hell of a lot easier)

Based on the total inability of even the biggest players on the scene -
e.g.YouTube, Facebook and Bebo - to monetise, I really don't see how the
confidence to move to an earning-optimistic (from profit-optimistic) investing
mode is at all justified. If anything, earnings are less certain than they
ever have been, the slide should be the other way.

~~~
jmzachary
All I have to add to this excellent post is "a fool and his/her money are soon
parted". It wasn't different back in the 1990's and it's not different now.

~~~
flipbrad
have i not fucked up that comment - mistaking earnings and profits as two
separate things?

------
zkinion
This article is nice, and I agree with the part about momentum gained by
holding to greater values than simply building a successful company.

However, PG doesn't mention the incredibly successful startups that _start out
with evil/crime and then later go good:_ ones that start with spammy &
unethical means to get initial users and pirated content startups.

I think most people strive to do good, but the world itself is a very evil
place that sometimes needs adapting to.

~~~
eb
Can you provide some examples?

~~~
steveblgh
I think even YouTube/FaceBook/Flickr started along those lines. Hell, even
Jimmy Wales was running a porn website ring before focusing on Wikipedia full
time.

~~~
eb
I don't think that's true. Those sites grew mostly through word of mouth. I
don't consider that to be devious.

What's wrong with Jimmy Wales operating a porn site? I don't see how that's
related to Wikipedia.

~~~
steveblgh
Nothing wrong at all. I think he used it to finance wikipedia/nupedia in the
early stages though. I just tried to give examples of things that started not
necessarily with the thought of making the world a better place.

------
Kbaxter
Mr. Graham,

Thanks for this piece. It's something that's been kicking around in my head
since Nov. '06 or so when I discovered Newsvine. I found a community and
community genuinely interested in promoting quality news discussion and
content, AND in making money. There's something powerful happening now, with
the profit-motive acting in a socially-beneficial way.

Your blurb about the malaria company inspired me to do a little thought
exercise about whether it'd be possible for a for-profit company to
successfully help pull people out of poverty, and what that company would look
like. If you're interested in reading it, here is a link:
[http://www.tightwind.net/2008/04/mesh-networks-
relationships...](http://www.tightwind.net/2008/04/mesh-networks-
relationships-and-poverty-non-profit-becomes-for-profit/) .

Thanks again for your great piece.

------
aswanson
_I didn't want to start another company, so I didn't do it. But if someone
had, they'd probably be quite rich now..._

You would be correct:

[http://www.news.com/Symantec-snaps-up-antispam-
firm/2100-735...](http://www.news.com/Symantec-snaps-up-antispam-
firm/2100-7355_3-5266548.html)

~~~
epi0Bauqu
I just want to point out that TurnTide was a Philly area company. Now that I
live here, I have to plug it!

~~~
aswanson
Hey, that's how I knew about it. I'm a PA area guy too.

~~~
epi0Bauqu
Well, then join our hackathon group (if you haven't already):
<http://startups.philadelphia.groupomatic.com/>

~~~
aswanson
Thanks, just applied.

~~~
epi0Bauqu
Approved! The next hackathon is Thursday at the Bear Rock Cafe in KOP from
10am to about 3pm.

~~~
aswanson
Great! I plan on attending.

------
dusklight
One thing I've realized personally about why good works: when you are evil,
you can only fool those people who are less intelligent than you. You can
bully only those people who are weaker than you. If you are very smart or very
strong, that could be a lot of people, and you can benefit a lot, and you are
necessarily setting a hard limit on the number of people who are willing to
help you. When you are good, when you give more than you receive, the opposite
is true. You gain the aid of those who are smarter and stronger than you,
others who "get it" and who have chosen to commit to the "cooperate" branch of
the Prisoner's Dilemma.

------
bokonist
A lot of people do startups to get rich, so that they can then use that money
or free time to do good. I've wondered though, if doing the startup is
actually the most benevolent thing they will ever do. In a startup your
survival is dependent on helping other people. Without that focus, it's easy
to do something that appears good, but isn't really helping that much.

The only difference between a non-profit and a company is that a non-profit
cannot have equity investors. If a non-profit figures out a model to help
people, there is no way to scale it. Thus, non-profits are the last entities
that a country wants to subsidize through the tax code.

------
ph0rque
I admit that I haven't really explored this vein of thought, but what are the
reasons that "good" startups (in the sense of good used in this essay) don't
usually make their apps open-source?

~~~
eru
Nice argument.

If we swallow Pauls line of reasoning that constitutes an oppurtunity: They
could get even 'better' (i.e. profitable) by open-sourcing.

------
atduskgreg
Have you followed the rise of social entrepreneurship at all? Under its banner
there are quite a lot of startups taking on problems exactly like the malaria
dilemma you describe in the piece. They come at the issue from the opposite
side of the spectrum: they're reacting to all of the waste and inefficiency in
the old fashioned non-profit world, where something gets done because a
millionaire's brother's wife is interested in it and done badly because she's
not very good at solving the problem. So, they're trying to harness the power
of market forces and the attendant efficiencies and motivations that go with
them in order to solve these big intractable social problems. The social
entrepreneurship movement encompasses everything from micro-finance -- which
was pioneered by Mohammed Yunnus at Gramin Bank (for which Yunnus just won the
nobel prize) -- to a revolution in funder logic and an increased focus on
effectiveness metrics.

I'd be curious to read your thoughts on social entrepreneurship from a startup
point of view.

------
zach
Brings new meaning to "software as a service."

------
Readmore
This sounds a lot like my startup Embought (www.embought.com). After making
the decision to donate 50% of all profits to charity it gives me another
reason to 'not die'. There are people out there other than myself that can
benefit from me making this project work, and that's a powerful motivator.

------
aarondc
I have a real concerns with "Don't be evil" - 1\. subvocalising "Don't" 2\.
focusing on the action "be evil"

As a cyclist, I often tell new cyclists: "if you see a rock in the middle of
the road, focus on the clear road either side of the rock, focus where you
_want_ to go. If all you think is 'don't hit that rock' 'don't hit that rock'
'don't hit that rock' guess where your focus is? Guess what you will likely
end up doing?"

I see Google's mantra in the same light. It is far better to focus on DOING
something than NOT DOING something. "Be good" is a far better mantra to have,
and that's before all the good reasons you cited, Paul.

Thanks for the essay, have been looking for some inspiration lately and had
forgotten about YC and your essays.

------
goodsamaritan
I understand the concept of being good and benevolent, but not thinking about
making money is the hardest part. It is really tough to ditch your job, and
keep doing good for people whose psychology (at least on the Web) has become
to expect everything for free. You can survive your own goodness for 6 months,
1 year but after that you surely expect something in return. And then, if you
do not have or want VC funding but just want to run your startup based on the
good old way of 'revenues' how long can your goodness keep you going? Even
Jesus 'sold' his woodwork to feed himself, isn't it? :) People throwing money
at you for the good you do to them is living on a charity. Whatever happened
to the good old way of selling something in return for money?

------
dood
Video of the talk here:
[[http://www.justin.tv/hackertv/98110/Paul_Graham_Partner_Y_Co...](http://www.justin.tv/hackertv/98110/Paul_Graham_Partner_Y_Combinator_Founde)]

I enjoyed the essay, but found the video communicated the idea much better
somehow.

------
cowsandmilk
related to malaria, maybe you want to look at Amyris Biotechnologies as a
living example of similar ideas to what you describe. They started with Bill
and Melinda Gates money to produce artemisinin, which the grant stipulated had
to be produced without a profit, but have taken that technology and have used
it to grow an amazing Biotech startup that most PhDs in the field would die to
work for. The Bill and Melinda Gates Foundation isn't usually thought of as a
startup incubator, but this is one example of a company that started from the
idea of treating malaria, and continues with that idea as they apply the same
technologies to solve the other needs they see in the world.

------
cjwang
I was unaware of Octopart but after checking it out, it seems like an
excellent service. I posted it on my blog so that others can check it out too.

I also agree with the concept of being good and idealistic programmers. My
blog is basically a development journal to record my progress and thinking as
I write an open source wireless (Zigbee) protocol stack. Many companies charge
large amounts for these embedded stacks, but I figure that hobbyists should
have access to the same things that large companies do. Only good ideas can
come out of it.

If anyone is interested, you can check out my dev journal and blog here:
<http://www.freaklabs.org>

------
austinchu
Great article. I work for a startup company and these are exactly the issues
that we go through. We're in the second phase of funding and it's always a
tough time. Will we have enough money? Is there money? How will be get it?
Where will we get it? How much do we need? All these question about money.
What I got from the post is that we are here for a purpose. I totally agree
with nostrademons post. Provide a great service and product, let the people be
the judge. Let's get to work. We're not going down quietly.

------
drernie
Hi Paul, Great essay. The idea of a purpose to business transcending mere
"stockholder value" is a powerful new meme, which I believe Forbes has labeled
"Capitalism 2.0":

<http://www.forbes.com/columnists/forbes/2008/0310/030.html>

Here's hoping the idea takes off -- and not just for startups! Sincerely, Dr.
Ernie <http://ihack.us/2005/10/07/capitalism-20/>

------
abless
While I am sure that there is a lot of truth in that post, I'd say that
selling "sins" is much more profitable: sex, drugs, alcohol, tobacco - lots of
money involved.

~~~
gregwebs
These are your definitions of sin. Tobacco companies have been bad in the past
for lying to their users. However, you could argue that many of these
companies are being good to their users.

~~~
abless
Good point. However, if "being good to your users" is the meaning of "good" in
the article, then using the word "good" (with all its connotations) might be
misleading. "Good" basically reduces to "do what your users want".

~~~
jcl
_"Good" basically reduces to "do what your users want"._

To be fair, PG makes the same connection in the essay, albeit in the opposite
direction: "Make something people want. Don't worry too much about making
money. What you've got is a description of a charity." And charity = good.

Arguably, tobacco companies make something people really, really want, but
they do not fit the definition of charity or good, probably because while
people really want tobacco, it's not in their long-term interests. In other
words, there's a gap between what people want and what they _should_ want, and
the tobacco companies exploit this gap. So PG's description fits more things
than just charities -- and he really doesn't argue otherwise; he simply
chooses not to consider it in the essay.

There have been plenty of successful startups that similarly satisfy "Make
something people want" but are of questionable benefit to their users' long-
term interests: gambling, adult sites, online games, etc. Whether or not these
endeavors constitute "evil" is, of course, a value judgment and depends on
what you consider a long-term benefit. (The very idea that "good" and "evil"
could be phrased in terms of short- and long-term benefits is interesting...)

------
mcarlin
Paul, I've been reading your stuff for six years, and that's the first one
that made me cry.

It's the last step on a good path, and I was worried you would never take it.
I'd been quite enamored of YC for a while, but I had my doubts about its
ability to do good things.

It's also something I never thought of. I just always mentally separated
"good, charitable" and "successful company" in much the same way as people
generally separate "work" and "what you love".

------
kcmarshall
Since Malaria was a specific example, this headline caught my eye yesterday:

Web guru targets malaria with social network site
[http://news.yahoo.com/s/nm/20080420/tc_nm/britain_malaria_dc...](http://news.yahoo.com/s/nm/20080420/tc_nm/britain_malaria_dc_1)

I admit some skepticism but haven't read beyond the article. Maybe it is
possible to "Facebook" malaria out of existence...

------
ricky
It struck me that this essay shares many things in common with the last
chapter of Guy Kawasaki's book, "The Art of the Start". That chapter is called
"The Art of Being a Mensch", and argues that to build a lasting organization,
you need to help lots of people, do what's right and pay back society. Sounds
about right to me.

------
todds
You made me think of the power and success of the Obama campaign. Lots of
people donating $5 or $10 to his website was a lot like a charitable
fundraising campaign. A unqiue, personal approach that focused on conecting
with his 'users' and giving them what they wanted.

------
mikhailian
>The trouble with lying is that you have to >remember everything you've said
in the >past to make sure you don't contradict yourself.

Il faut bonne mémoire après qu'on a menti (A good memory is needed after one
has lied). [ Le Menteur, IV, 5, Cliton ] Pierre Corneille

------
jfrumar
Here's the deep-link to the part of Paul's speech where he discussed
Octopart's battle of good vs evil:

[http://omnisio.com/startupschool08/paul-graham-at-startup-
sc...](http://omnisio.com/startupschool08/paul-graham-at-startup-
school-08/14:50)

------
ryan
The talk on which the essay is based:
[http://omnisio.com/startupschool08/paul-graham-at-startup-
sc...](http://omnisio.com/startupschool08/paul-graham-at-startup-school-08)

------
Kaizyn
Paul Graham revisits Adam Smith on economics?

~~~
tungstenfurnace
Adam Smith said something about trusting the selfish motives of the businesses
he bought stuff from.

Many bad deeds are done with good intentions (by charities and NGOs), and many
profit-seeking deeds are done competently (by corporations), bringing wider
benefits

But start-ups can fall into the rare category of performing good deeds with
good intentions. The founders genuinely want to make the world a better place,
and they're prepared to take risks in order to bring it about.

------
jimjim
Thanks for a great read, I was recommended this essay by a good friend of
mine, and it was time well spent!

------
colortone
Hey PG, I bought www.benevolentcorporation.com a few months ago while thinking
about these memes.

I'll sell it to you for $5M ;-)

~~~
jcl
Looks like someone beat you to goodcompany.com -- a more clever name. :)

------
r7000
The last thing I ever thought to see in a PG essay was a P. O'Brian reference!
That was a nice surprise.

------
Emmjaykay
Asking a corporation to be "good" or moral is like asking a car to be good or
moral.

------
stener
When people see some things as good, other things become bad.

Hold on to the center. -- Lao-tzu

------
anguriam
thios document is promagnificient and we are al;so poor youth from
uganda,looking for financial aid fior our project so help us get new donors.
thaks anguriamichael 2562854991 mkanguria@yahoo.com

------
jgrnwld
Paul Graham for President!

------
andr
The contrast between this and DHH's talk is worth mentioning.

~~~
pius
So mention it. :D

------
vesterr
"And the very best hackers tend to be idealistic. They're not desperate for a
job. They can work wherever they want."

I've heard PG repeat this but I think it's fallacious. A lot of up-and-coming
hackers can't pick and choose where to work except in the sense that any
person can quit one job and apply for another one. They can't unilaterally get
themselves into Google, for example.

Established hackers also may have constraints, such as time and family
commitments, that keep them working a stable job instead of a startup, or keep
them where they are rather than uprooting to go work at e.g. Google for a
lower standard of living (possibly less salary and almost certainly higher
cost-of-living, if you work at the HQ) even if they'd prefer to work there.

Or your company may fold and you may have trouble finding an awesome job right
away and have to settle for a tolerable one instead. Considering that so many
start-up founders live hand to mouth, they are _quite_ likely to be "desperate
for a job" at various points, or at _least_ unable to work "wherever they
want".

They might also find that the startup they _want_ to do is just not as
profitable or likely to succeed as some other one, and end up working on the
other one instead. Scratching your own itch does not necessarily coincide with
"making something people want" on a commercial scale.

~~~
9oliYQjP
I think PG's qualification of "very best" is important here. While he has
restricted his assessment to programmers, that need not be the case. This is
applicable to the very best in any profession.

I don't consider myself to be in the category of very best hackers, but I am
pretty good, and I have never worried about money. If you have a decent
reputation there will always be somebody practically begging for you to take
their money to do some work for them.

While you're probably correct that no one person can just unilaterally walk
into Google and give themselves a job, the very best hackers can get pretty
close to that. I'm sure they're probably an email or a phone call away from
getting an interview. If you haven't tried to find good programmers, it'll be
difficult to grasp just how very difficult it is to find good programmers. I
have interviewed programmers for a number of positions and, quite frankly, it
is a bit disconcerting what I have seen. In the past 2 years I have
interviewed about 20 programmers and only 1 blew me away. He was just
brilliant. Roughly 4 were good. And the other 15 were kind of crappy. We were
forced to hire more than 4...

~~~
eb
Absolutely. I think the meaning of "hacker" is being diluted, I'm seeing
people use it interchangeably with "programmer" on this site.

When I think of great hackers, guys like Richard Stallman, Justin Frankel, or
DHH come to mind. They're most certainly idealistic and only a couple of
emails away from getting hired at Google.

~~~
vesterr
Google is large enough it can take on people with almost any expertise.

But what if DHH wanted to get a job hacking the Linux kernel? Or Frankel
wanted to get re-hired to AOL to work on the stuff they didn't like? And RMS
doesn't even program anymore from what I understand.

What you're looking at is freedom due to financial independence. If you're
financially independent, you don't have to work someplace you don't want to.
It does not, however, mean you get to work wherever you DO want to.

~~~
nostrademons
I'd imagine that if DHH _really, truly_ wanted to work on the Linux kernel,
he'd have no trouble getting hired to do so. Or if Frankel really wanted to
work at AOL. The objection to hiring them is that given their past programming
projects, it's pretty obvious they _wouldn't_ want to work on that. Nobody
wants to hire someone who doesn't want to do the job that has to be done.

~~~
vesterr
"I'd imagine that if DHH really, truly wanted to work on the Linux kernel,
he'd have no trouble getting hired to do so."

That's pretty silly. Just because someone is famous for a Ruby project doesn't
mean they'd know they first thing about low-level kernel code.

"it's pretty obvious they wouldn't want to work on that"

I'm not talking about working on something they DON'T want to work on.
Obviously! I'm talking about working on something that is outside what they
are known for, but which is an interest of theirs (hypothetical in this case).

~~~
nostrademons
People (usually) don't hire based on specific skillsets. They hire for talent
and passion, and figure that if someone really wants to be working on that
problem, they'll find a way to teach themselves what the need to know.

My last job had two main projects - a Netbeans plugin and a JSF webapp. I had
no JSF and no Netbeans experience, though I'd done Java Swing development
before and written several PHP or Perl webapps. My coworker on the JSF project
was a former COM and .NET developer who didn't know Java.

~~~
vesterr
"They hire for talent and passion"

Microsoft used to say something very much like that.

But at the top of the application: "State your skillset".

...You use PHP, Perl, and Java? Not by choice, right?

------
kingkongrevenge
> The markets seem to have figured out how to value potential dividends.

Over the last eight years a dividend focused investor kicked the ass of an
appreciation focused investor. Those who picked dividend paying stocks in non
USD denominations are even farther ahead.

------
logjam
Excellent stuff. A manifesto for change.

