You weren't meant to have a boss

My comments relate to Graham’s Cliff Notes summary of his essay, rather than his underlying essay.

Every profession has a pecking order. The fact is some people are better at doing X than other people are. There are at least four factors that could determine where one sits in the hacker pecking order:

1. How smart you are

2. What you have contributed

3. Do you have the guts to start a start-up?

4. If you do, were you successful?

On that score, Graham does very well in the pecking order. He’s clearly brilliant. He has made numerous contributions -- spam filters, author of the two leading books on LIPS, ARC, just to name a few. He had the guts to start a start-up and he was successful, having sold it to Yahoo. The only thing he is missing is being co-founder of, say, Google or Microsoft or Apple or Adobe.

Graham says people think his group are elitists, implying the opposite, that they are not. Of course they are elitists! But why is that bad? Graham does not like Java is that it was designed with training wheels, to prevent programmers from doing stupid things. That may be necessary for some programmers, but it is not necessary for Graham and his target market -- the very top programmers, who do not need training wheels, who do not need to have the language prevent them from doing stupid things. (Have you ever met a LISP programmer who was not very very smart?) His primary partner, Robert Morris, is a professor at MIT. These are two uber elitists.

Graham likes to write essays that challenge orthodoxy and he is very good at doing so. See, for example, his essay “Mind the Gap,” in which he argues that a higher rate of income inequality may be a good thing rather than a bad thing (www.paulgraham.com/gap.html). It’s hard to think of a more controversial proposition than that. So me thinks that Graham’s next challenge-conventional-thinking essay should be why elitism is good, not bad. And he does not have to start from scratch, he can read “In Defense of Elitism” by William Henry (http://www.amazon.com/Defense-Elitism-William-Henry/dp/03854...).

So why does Graham want to portray his group as non-elitists even though they clearly are? Because elitism has a bad rap. Some elitists are smug and arrogant but I do not think Graham is. I am pretty smart, or so I have been told. But I do not think I am as smart as Graham. When I read Graham’s essay, I feel, “OK, this guy is smarter than me, but he is not arrogant about it, he is laying out his arguments in a clear concise logical manner so that others, almost all of whom are not as smart as he is, can follow his logic.” That is not arrogant.

Some people criticize elitists if they do not give something back. Graham is clearly giving something back. His essays are free. If you don’t want to buy his book, you can read all of them (I think) online for free. He is giving ARC away for free. Although Ycombinator is hardly non-profit, I am still shocked at little equity they take (an average of 6 percent) in exchange for what they provide.

Graham argues that Ycombinator would not exist if all it did is fund “rare geniuses.” That is true but misleading at the same. I have been an entrepreneur all my life, so far successfully. The thought of working for the man, I would just jump off a bridge and die. But starting and running a company is a bitch, even for someone like me who is genetically programmed for it (and for nothing else). Our society glorifies entrepreneurship, which is a sign that our society is more advanced than others. In one of his State of the Union addresses, President Reagan urged every schoolchild to consider starting a business. The fact of the matter is that few people are suited to starting a company. You have to be good at a whole lot of different things; most people at best are good at one thing. You work all the time. There is currently a best selling book, The Four Hour Workweek. Yeah, right. Try the 14 hour work day.

Few people are suited for this, and that includes gifted hackers. Few people have the balls to start a company and that is a good thing -- perhaps 2 percent of the population is suited to being an entrepreneur, I doubt it is as high as 5 percent. Perhaps among hackers, or gifted hackers, the percentage is higher, but I can’t imagine it is 10 percent. Most people are better off working for someone else. That fact, by the way, creates a lot of opportunity for the few who are suited to start companies.

Ycombinator’s thesis is that there is an untapped market of young entrepreneurs who could start companies but do not and will if they are funded by Ycombinator. Yes, there is such an untapped market, but it is not as large as Graham implies. Let’s assume Ycombinator funds thirty companies a year, twice a year, and each company has three hackers. That’s 180 people. A rounding error of a rounding error, since every year more than 4 million people reach whatever age is the minimum age for starting a company.

As far as I can tell, Ycombinator has been successful. There are several reasons for this. There were the first to market, that always helps, people think of them first. Graham’s awesome reputation and his Web site are extraordinary marketing machines, so they get the pick of the litter. On the other side are several brilliant people with a variety of backgrounds who are not virgins, they actually have done it before; in short, they have the perfect background to pick the right people to back. So Ycombinator may not limit its investments to ideas proposed by “rare geniuses,” but the caliber of the people they back is so close to genius it may be hard to ascertain the difference. More than anything, Ycombinator has been successful because they are able to attract an extraordinarily talented group of applicants from which they choose a few to back. If Ycombinator started funding the “average” hacker rather than rare geniuses or close to it, I guarantee Ycombinator would be a flop. Graham’s statement that they are not limited to funding “rare geniuses” is a misleading as the Dean of Admissions of Harvard or Stanford stating that everyone and anyone should apply for admission to those universities. The fact of the matter is that it is damm hard nowadays to get admitted to Harvard and it is damm hard to get funded by Ycombinator, even if you are really really smart.

James Mitchell jmitchell@kensingtonllc.com

Nice essay, as usual. I've always found these to be a source of hope and inspiration. At the end of the month, when I close the books on my company, I like to sift through these writings for inspiration. Because he's right: there is no guarantee you will be successful. I'm the partner in a struggling chemical company. We actually make physical items, which makes us a rarity as far as start-ups go.

Not everyone is meant to be or want to be a startup founder either.

If you look at the history, most substantial technology innovations are not from startups but universities and research labs of large companies.

Startups are more about the right idea (in business sense), the right time and the right place than innovation and quality work. It's more like a monopoly game than truly substantial and creative technical challenges. It attracts more people who think they're good than they're actually good.

Been there, done that, got the t-shirts. For real hackers who're incited/excited by the article to be a "founder", here're a few notes based on real experience:

1. Many top hackers are not interested in and bored by the financial aspect of the business. But you have to learn the basics in order not to be taken advantage of. It's not that hard to crack once you decide to bite the bullet.

2. Pick your business partners carefully. Not just someone who's smart but someone you can trust. To use a cliche, it's a jungle out there, which I could only appreciate after experienced it the first-hand.

3. If you want to go through the Y route, talk to the previous founders (esp. not so successful ones). You learn the most from failures.

4. Make sure you understand and make copies of every thing you sign.

5. Beware of business people who boast photoshop chops.