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The Book of Graham

leveragedsellout.com

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Re: The Book of Graham

#71

Post by djyaz1200 »

I don't know to what extent this is a joke but I am not laughing. Yc is a school where they pay you, Paul Graham et al did not take over Airbnb or Dropbox... the people who founded those companies run them.

The idea that a life is worthless or wasted if you make less money is beyond flawed. It is the most american/capitalist/rewarding thing to make a go of building something of your own.

Being a wall street banker has virtually no social utility. Airbnb and Dropbox improve the collective productivity of society and make real markets in the case of Airbnb. If it takes hundreds of people and millions of dollars failing in an effort to make a few big winners so be it, and when Yc makes money in the process they deserve it. They are taking REAL risk, and it seems the people who emerge from their program are better for it even if their dreams don't all come true.

Finally, the girl next to him is an important part of this little story. Women love men who are passionate, who are alive and who take risks. If all of society fell apart I'd much rather be with a bunch of hackers than bankers, the hackers are creative, passionate, loving and ruthless when necessary. Women understand this and they they love it... because they know they are always safe with a man who can build something. They'd rather eat Mac & Cheese with a man who puts up a good fight before kneeling down THE MAN... or maybe never has to kneel at all.

https://www.youtube.com/watch?v=GuDRGuOVjvU

Re: The Book of Graham

#72

Post by sillysaurus2 »

aelaguiz wrote: post #70
ForHackernews wrote: post #53

Earlier quoted context omitted.

> secure life making a few hundred thousand dollars a year in an essentially mind-numbing profession that does little for humanity is unthinkably depressing. You realize Wall Street bankers make a few million dollars a year doing mind-numbing work that does little for humanity, right?

Yeah that doesn't matter to me. Maybe others experience wealth differently but it made substantially no difference to my day to day happiness (once the newness of the money had worn off) - but working on a project I feel strongly about makes a strong and lasting difference.

May I ask, after you were acquired, how long did you end up working for them? How did you feel about it? Was it a jarring experience trying to transition back into more of a "traditional 9-5 mindset," or were you expected to work as hard as before? I've always wondered what that type of situation is like.

Re: The Book of Graham

#73

Post by mkesper »

djyaz1200 wrote: post #71

I don't know to what extent this is a joke but I am not laughing. Yc is a school where they pay you, Paul Graham et al did not take over Airbnb or Dropbox... the people who founded those companies run them. The idea that a life is worthless or wasted if you make less money is beyond flawed. It is the most american/capitalist/rewarding thing to make a go of building something of your own. Being a wall street banker ha…

But women don't love men who care more for their Guru's messages on their iPad than themselves. :)

This article is satire...

Re: The Book of Graham

#74

Post by dbkbali »

Entertaining to read all the comments on this thread. Great article and as a former investment banker, yes so true, really no difference from, what I observe for SV startup accelerators, and an investment banking approach of hiring the best. I guess the same could be said of other elite professions such as law etc. With respect to other derogatorary comments on this thread, about bankers and MBA's. I suspect most are written by people attempting to self justify there choice of startup vs a traditional careers. Good laugh re: the comments about the social utility of startups vs banks and how unproductive to society investment bankers are. But face it without these investment banking "parasites" who add no value to society, most startups who need to raise capital wouldn't exist. Anyway back to work on my bootstrapped startup!..

Re: The Book of Graham

#76

Post by crntaylor »

kawera wrote: post #42
rdl wrote: post #36

This was surprisingly entertaining. There's some truth to it, but it essentially misses three things: 1) The intangible benefits of being at a startup (as a founder or early employee) -- working on interesting problems, with smart people, in a well funded environment. You learn things, meet people, get to use amazing tools. (Startups definitely aren't the only way to do this -- academia or, for engineering, some part…

The downside to failure is exceptionally low. It's all other people's money... Oh my!

The investment banking industry basically invented the concept of OPM (other people's money) in the 1980s (okay, I'm sure it existed before that, but the 1980s was when it became a buzzword).

A great read if you're interested in learning more about the history and operating procedures of the sales & trading side of investment banking is Traders, Guns and Money by Satyajit Das. Its sections on credit default swaps and collateralized debt obligations are particularly interesting when you consider that they were written in 2006, pre-crisis (around the same time that Leveraged Sell Out was getting started, in fact).

Re: The Book of Graham

#77

Post by crntaylor »

nl wrote: post #65
kawera wrote: post #42

Earlier quoted context omitted.

The downside to failure is exceptionally low. It's all other people's money... Oh my!

It's easy to pull a quote like that and make it sound like a moral failing. If you read the comment it's quite smart observation: 1% odds in an even game suck; 1% odds where you're given your wager by someone else and you get to keep 50% of the upside and the upside is potentially 10000:1 is pretty awesome. The fact is is someone else's money directly modifies the costs to you, and therefore changes the risk/reward c…

You might not work any less hard, but you'll certainly take more risks if you don't experience the downside.

Answer quickly - how much of your net worth would you risk on a bet with 1% chance of a 1000X payout? Now how much would you risk if you can hand off 90% of any loss you take to someone else?

The difference is what we call moral hazard: http://en.wikipedia.org/wiki/Moral_hazard

Re: The Book of Graham

#78

Post by illumen »

aelaguiz wrote: post #16
akbar501 wrote: post #15

Earlier quoted context omitted.

There are people who aim high whether they are in the 20's, 30's, 40's ... and then there are those who aim low. Age is rarely a factor for those who are shooting for the moon, but it's a great excuse for those who don't.

Yeah I didn't say people past their 20s don't aim high. I said your 20s is a great time to aim high.

Spend your youth however you want to, but there's no refunds.

Re: The Book of Graham

#79

Post by dschiptsov »

Brainwashing youths to this or that habit of thinking and then to use them for a great good is an idea as old as humanity. All sorts of religious sects, political fractions even hobbyists are doing this.

What is going on around YC is absolutely nothing special from a psychological point of view. "If you want loyal workers pay them less, so they would escape from the pain of cognitive dissonance by leveraging the big idea" a textbook says, and goes on about in-groups dynamics and notion of us versus them.

What is interesting is that all this was not created and orchestrated by the evil mind of Paul Graham, and it is not even a sect with him as a great guru. The whole thing was bootstrapped applying that very same bottom-up process he advocated in his technical books about Lisp.

Another part why the whole thing works, which was not mentioned in the pamphlet, is analogy to insider trading. PG has reputation and connections so he could sell teams and/or technologies to "friends".

So, YC is rather remarkable example that good ideas work, while banal practices of housing young naive fools are exactly the same in investment banking or politics or whatever. And it is not risk offloading, it is mere business among connected guys in a valley.

One more subtle difference. Contrary to investment products, which is a cheating by definition, teams and technologies YC selects and sells are "fair" and we could see and use them in our everyday life. We also could see CDS and HFT and mortgage and stock market scams all over the place. This is the difference between finance and tech - it is much more difficult to cheat, and hence succeeded in tech.

YC is the same kind of success based on proper ideas as viaweb was at its time, you like it or not. The analogy with banking is selling piles of java crap to ignorant fools.

Re: The Book of Graham

#80

Post by dbkbali »

Great article and as a former investment banker so true. Good laugh reading the comments, I speculate mostly from insecure startup employees, executing their "post purchase rationalization" for taking the accelerator route.

The reality is that the accelerator model has more parallels to the investment banking model than many of the commenters are recognizing. Very entertaining to see some commenters trying as well to justify that startups have more benefit to society than bankers or MBAs, in fact hilarious as the reality is that without those "dumb" MBA investment bankers who can attract IPO money to feed the VC's to fund startups, many with questionable and untested business models, accelerators and most startups wouldn't exist.

Thanks for the entertainment, better not waste too much more time and get back to trying to bootstrap my startup.

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