Notes on “Do Things that Don’t Scale”

Subject:

Before you can attract lots of users, you must first seek out a handful of users. This process is often tedious but almost always necessary.

Key Takeaways:

• No matter how good your product may be, it won’t promote itself. 
• Graham likens a startup to a car, saying, “A good metaphor would be the cranks that car engines had before they got electric starters. Once the engine was going, it would keep going, but there was a separate and laborious process to get it going.”
• While it can be difficult and discouraging to recruit users one at a time, it’s almost always necessary. 
• “We encourage every startup to measure their progress by weekly growth rate. If you have 100 users, you need to get 10 more next week to grow 10% a week… if the market exists you can usually start by recruiting users manually and then gradually switch to less manual methods.”
• It’s easier to find early adopters when you’re part of your target market. If you’re not, try to understand your most enthusiastic users.
• Leverage small size by paying extra attention to each customer.
• Think about user experience holistically.
• Engaging with users can not only spur growth, but also help you refine your understanding of those users and improve your product. 
• “Sometimes the right unscalable trick is to focus on a deliberately narrow market. It’s like keeping a fire contained at first to get it really hot before adding more logs.”
• Facebook was originally only for Harvard students, and that specificity helped it attract initial users.
• Due to the high cost of manufacturing, hardware startups often build their own products manually at first. As a pleasant side effect, this approach allows founders to refine their product.
• By designing a product that’s perfect for one user, you’ll often inadvertently design a product that’s useful to a lot of people.
• Treating an early customer like a consulting client can help you improve your product, but you should never actually operate as a consultant or accept compensation for consulting services, as doing so changes your customer’s expectations.
• Functions that would normally be handled by software can be done manually at first.
• Big launches are overrated and possibly even counterproductive.
• “…the unscalable things you have to do to get started are not merely a necessary evil, but change the company permanently for the better.”

Read the original essay at PaulGraham.com

Notes on “Six Principles for Making New Things”

Subject:

Paul Graham’s design philosophy.

Key Takeaways:

• Graham recalls that, throughout his career, people have criticized his various projects for being rough, amateurish, and devoid of bells and whistles.
• “I like to find (a) simple solutions (b) to overlooked problems (c) that actually need to be solved, and (d) deliver them as informally as possible, (e) starting with a very crude version 1, then (f) iterating rapidly.”
• Projects that are simple, original, crude, and incomplete tend to be undervalued and even derided.
• Each of these advantages has an accompanying advantage, such as less competition, less investment in presentation, and early feedback from users.
• “The power of this technique extends beyond startups and programming languages and essays. It probably extends to any kind of creative work. Certainly it can be used in painting: this is exactly what Cezanne and Klee did.”

Read the original essay at PaulGraham.com

Notes on “How to Make Wealth”

Subject:

Why startups are the most reliable means of creating wealth, and their characteristics.

Key Takeaways:

• “Economically, you can think of a startup as a way to compress your whole working life into a few years… This pays especially well in technology, where you earn a premium for working fast.”
• As a startup founder, you can work more hours, get more productivity out of each hour, and be burdened with less bureaucratic nonsense than you would as an employee, thereby creating substantially more value.
• The ultimate amount of work and difficulty is roughly the same as if you pursued a more conventional career, but it’s concentrated in a few years rather than spread out over decades.
• The most famous startups are outliers whose success depended in large part on luck. Any given startup founder can’t count on being similarly lucky.
• Think in terms of wealth, not money. Wealth is a measure of value, money is just a means of transferring wealth. The emphasis people place on money, as opposed to value, muddles their thinking.
• Wealth accumulation isn’t generally a zero-sum game.
• “The people most likely to grasp that wealth can be created are the ones who are good at making things, the craftsmen.”
• Programmers vary substantially in terms of their output.
• “A job means doing something people want, averaged together with everyone else in that company.”
• The main obstacle to incentivizing performance is that performance is hard to measure. Graham cites sales and senior management roles as the major exceptions to this rule.
• People get rich by pursuing careers characterized by both “measurement” (of performance) and “leverage,” the ability to make important decisions.
• Performance is easier to measure in small groups, so startups opportunity for those who want to be paid according to their performance.
• Technology affords its creators leverage because it introduces new, scalable ways of doing things.
• Big companies can surmount high barriers to entry, but small companies are nimbler, and they can capitalize on this advantage by taking on hard problems.
• The major drawbacks of starting or joining a startup are that the rewards are highly variable, largely determined by luck, and often all-or-nothing.
• Focus on users. They’re important to potential acquirers, and user-centrism ensures that you’re solving problems people actually care about.
• The desire to create and accrue wealth is essential to technological progress, and societies should tolerate and encourage it.

Read the original essay at PaulGraham.com

Notes on “How to Make Pittsburgh a Startup Hub”

Subject:

The conditions that foster entrepreneurship, and what the City of Pittsburgh could do to create them.

Key Takeaways:

• Locations become conducive to entrepreneurship when they have a large concentration of young people. This is because the people who found new companies go where the talent is.
• When this essay was written, in April 2016, the New York Times had just reported that Pittsburgh was becoming a hot-spot for new restaurants. According to food critic Jeff Gordinier, this trend was revitalizing the city’s culture and making it an attractive destination for young professionals.
• Graham argues that the city should further incentivize this “food boom” by speeding up the permit process for new restaurants, and by implementing other changes that might fuel growth in the culinary industry.
• While Graham concedes that cheap housing is an important factor in attracting young people, he argues that cheap housing alone isn’t what makes a city a worthwhile place to live, saying, “What’s special about Pittsburgh is not that it’s cheap, but that it’s a cheap place you’d actually want to live.”
• “If a place has always been rich, it’s nice but too expensive. If a place has always been poor, it’s cheap but grim. But if a place was once rich and then got poor, you can find palaces for cheap.”
• Graham cautions against allowing developers to tear down historic buildings in favor of new developments.
• Graham suggests making Pittsburgh more bicycle-friendly.
• If Pittsburgh could cultivate the sort of cultural appeal that Portland has, it would be better positioned than Portland itself for the fact that Pittsburgh has “a first-rate research university” in Carnegie-Mellon.
• “Being that kind of talent magnet is the most important contribution universities can make toward making their city a startup hub.”
• Graham cautions against placing too much emphasis on university programs that focus explicitly on entrepreneurship. “Innovation” is a pleasant-sounding abstraction. Real innovation comes in more specific forms, such as, to use Graham’s examples, “better batteries or 3D printing.” 
• Graham recommends that universities grant their students more unstructured time, such as Harvard’s “Reading Period,” when students have no responsibilities other than studying for exams. Graham notes that both Microsoft and Facebook were founded by Harvard students during the Reading Period.
• Startup hubs have to be tolerant of “strangeness,” while remaining pragmatic
• Pittsburgh doesn’t have as large or well-funded an investor community as Silicon Valley or New York, which is a major obstacle to becoming a startup hub, but Graham points out three factors that offset this disadvantage: (1): It’s cheaper to start a startup than it used to be (2) Crowdfunding has no geographical restrictions. (3) Many startup incubators, like Graham’s own Y Combinator, allow startups to get funding quickly without committing to operating in Silicon Valley forever.

Read the original essay at PaulGraham.com

Notes on “The Risk of Discovery”

Subject:

The reasons why celebrated scientists seem more risk-averse in retrospect.

Key Takeaways:

• Biographies tend to focus on successes, not failures.
• The great scientific breakthroughs of the past are now common knowledge, so we underestimate how unorthodox they seemed at the time.
• Graham uses Newton’s experiments in alchemy as an example, arguing that Newton pursued alchemy for the same reason he pursued physics: because they were both relatively unexplored areas. Alchemy turned out to be nonsense, and studying physics turned out to be a worthwhile use of Newton’s time and genius, but he couldn’t have known that in prospect.

Read the original essay at PaulGraham.com

Notes on “Charisma and Power”

Editorial Note:

This is such a short essay that you’d probably be better off reading it in its entirety here. In fact, it isn’t clear to me that I’m adding much value by summarizing it.

Subject:

The relationship between charisma and power, and the problem of having one without the other.

Key Takeaways:

• “People who are powerful but uncharismatic will tend to be disliked. Their power makes them a target for criticism that they don’t have the charisma to disarm. “
• The best problem-solvers aren’t always the most socially adept people.
• A person’s tendency to attract criticism can be a sign of competence.

Read the original essay at PaulGraham.com

Notes on “General and Surprising”

Subject:

The nature of original ideas, and how they can be generated.

Key Takeaways:

• “The most valuable insights are both general and surprising.”
• Because these insights are so valuable, most of the low hanging fruit have already been picked.
• Graham defines gossip as a surprising observation that isn’t general, and platitudes as general observations that aren’t surprising.
• In order to produce “moderately valuable insights,” either infer some general truth from a surprising story, or say something mildly surprising about a general idea
• Graham seems to endorse the latter approach, as even minor revisions to conventional wisdom can be important if the idea is general enough.
• Repeating yourself and making similar points multiple times can actually be a fruitful exercise, as saying the same thing in different ways helps you frame ideas slightly differently, and increases the odds that you’ll find a “delta of novelty.”
• A somewhat original idea can lead to ideas that are even more original.
• “There’s a big difference between nothing [new] and almost nothing [new].”

Original Essay at PaulGraham.com