Billionaires Build

To be fair this is another article/essay in a very, very long string of his that can be filed under some kind of a "Fundamentals of Business" type category. If you talk to owners, they will inevitably say the same things he's saying, sometimes verbatim. But these owners wouldn't speak in direct words either, because "speaking to customers/users" is too context dependent to get into in an HN comment. There's too much nuance to bash the person over the head with it when writing this sort of an essay.

That's mostly what tipped me off to not take his words at face value but to interpret them through his lens as a VC and someone who is trying to communicate business ideas (ideals?) to people who, I would at least hope, aspire to create a business of their own. Whether it's a million or a billion, it doesn't matter. Nearly everything he talks about applies to "lifestyle businesses," which is I think partly why YC offers some small bit of money to get the ball rolling rather than go gung-ho and throw massive amounts of money at people. I don't know if this has changed, I don't think it has. Obviously it doesn't hurt to get a leg-up from the counsellors and whatnot that YC provides through their alumni program.

I am not sure if he's spoken about it but I wouldn't doubt that one of his philosophies is that a diverse number of businesses can grow to a reasonable revenue (where the founders are happy and working away at it) with a bit of money to start with, and that way YC doesn't have to spend a fortune early on and everyone walks away happy even if YC doesn't turn a sizable profit. Some kind of a threshold where YC feels anything above that means they're pissing money in the wind and their ROI isn't any better, but at the same time they're helping the founders as best as they can.

So you have to take the times he talks about being Ramen Profitable and talks about building a Billion Dollar Business and find the underlying threads tying it all together.

pg can't tell you exactly what, how, when, where, why you should be doing the thing you need to be doing to build a business. His words sound like platitudes most of the time to me personally, which is why I take the side of "the people who need this the most won't take it, and vice versa", because the person who started a business and is profitable didn't have anyone like pg telling them this sort of stuff. Would someone read his words before starting anything and be inspired to? Perhaps, but it's a long journey and counting on such flimsy motivation to keep you going is to me silly.

For some, certain things might be common sense. For others, not so much. Plenty of founders, even those with serious business experience, still have it ingrained in them that "if you build it, they will come", and they neglect every other aspect of business. Yes, I'm talking primarily about engineering types. This essay is to remind you to focus on the users, and the rest will follow.

Aside: I'm grateful for the Startup School library. I think it's a great resource. It's got a nice mix of obvious and non-obvious advice in there. When people disparage pg's writing, they should take a moment and see what his company has built for people who wish to create a business before declaring him out of touch.

pg's priors are wrong. He would be correct if all or even lots of the world's billionaires were picked by YC, but they aren't. Sure, it may be possible to become a billionaire or build a billion dollar company without exploiting others, even as those others do not become billionaires themselves.

But is it even worth parsing this out? Income inequality is real, capitalism is fundamentally exploitative at its core, end of argument. YC's interview process is... not at all relevant.

> I'll tell you how it's really done, so you can at least tell your own kids the truth. It's all about users. The most reliable way to become a billionaire is to start a company that grows fast, and the way to grow fast is to make what users want.

There's a second part, and it's "hoard the profit by under paying the workers who built your company." Sometimes there's a third part, and it's "corrupt your government and lobby against tax rates that threaten your wealth."

Billionaires build, let's stipulate. They also hoard money for themselves while others desperately need it. It's not any more complicated than that.

> That's the great thing about market economies. If other people both knew about this need and were able to satisfy it, they already would be, and there would be no room for your startup.

> Which means the conversation during your YC interview will have to be about something new: either a new need, or a new way to satisfy one.

I'm fairly sure they also look for a moat don't they?

Consider the possibility that they fucked it up.

That tweet is actually pretty amazing though: pg discovering practices 37Signals has been using for a decade.

‘Make something people want’ is hard for me to understand - is this a fair expansion?

Make something people want that can evolve into a commodity, ensure only the inventor can profit (e.g. with IP protections), and architect your business such that returns scale independently of operation costs.