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Why It's Safe for Founders to Be Nice

400 points by taylorwc 11y ago

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- 811639047892938 11y ago
  The future is by definition never lateral!
minimaxir 11y ago
The logic seems chicken-and-egg to me. > because so long as he built something good enough to spread by word of mouth, he'd have a hyperlinear growth curve. Startups are not a meritocracy. The marketplace is too crowded, so any startup founder who has an edge will take it. How do you get word of mouth? By "growth hacking" and leveraging privileged personal connections, both of which I've seen happen time and time again from even YC companies.
- omginternets 11y ago
  >privileged personal connections I think the point is that this requirement usually punishes manipulative people.
- rev_bird 11y ago
  "Privileged personal connections," perhaps minus some of the negative connotations, seems to be among the chief selling points of going into an incubator like YC. I remember seeing Sam Altman tweeting something a few weeks ago about the latest batch raising $220+ MILLION dollars. Those are some hefty connections.
- nostrademons 11y ago
  > The marketplace is too crowded, so any startup founder who has an edge will take it. That also seems like a good reason to be nice. If you are nice to someone, it puts both you and that person ahead; in a crowded market, that adds up to being the leader of the pack. If you are nasty to someone, it puts both you and your target behind (there is an opportunity cost to being nasty; you're not spending that time being nice). You'll take your target down, but you'll also end up at a disadvantage relative to someone who just stayed out of it. If you've ever played multiplayer strategy games like FFA Starcraft or Civ 5, you'll notice that the optimal strategy is usually to sit back, turtle up, and work on your infrastructure while everybody else kills each other off. Then when you have an overwhelming force, crush everyone who's left. Players who come out of the gate aggressive usually get taken out or weakened enough that one of the turtles can finish them off, even if they are very skilled.
  - minimaxir 11y ago
    > You'll take your target down, but you'll also end up at a disadvantage relative to someone who just stayed out of it. This is touching more on game theory and behavioral economics. And we know how the Prisoner's Dilemma is solved. :P
    - nostrademons 11y ago
      The iterated prisoner's dilemma's optimal solution is tit-for-tat, which is a "nice" strategy in that it never defects first. In game-theory tournaments where bots play off an iterated prisoner's dilemma against multiple opponents, the "naughty" strategies get crushed because they eventually encounter a provocable strategy and get caught in a defect loop, running themselves into the ground while the "nice" strategies dominated. This is the situation closest to the startup ecosystem. See eg. The Evolution of Cooperation: https://en.wikipedia.org/wiki/The_Evolution_of_Cooperation#Axelrod.27s_tournaments https://en.wikipedia.org/wiki/The_Evolution_of_Cooperation#A...
  - TeMPOraL 11y ago
    > Players who come out of the gate aggressive usually get taken out or weakened enough that one of the turtles can finish them off, even if they are very skilled. Unless they win against other aggressive players and manage to secure additional resources. Late game often turns into logistics game, and if while turtling up you didn't pay enough attention to expand, you'll get starved out of resources and killed. But I agree with the other part of your post. Moreover, by being consistently nice to people you signal your willingness to cooperate (as in Prisoner's dilemma), which makes other more likely to cooperate with you, leading to better outcome for all parties involved (as long as you're good at avoiding defectors).
- onewaystreet 11y ago
  > By "growth hacking" and leveraging privileged personal connections, both of which I've seen happen time and time again from even YC companies. This isn't always that beneficial with the tech scene being largely an echo chamber. Compare Meerkat and Secret to Facebook and Snapchat. Meerkat and Secret got a lot of hype from the tech crowed and investors but neither achieved any real word of mouth growth. Facebook and Snapchat on the other hand both had significant traction before they were noticed by investors (Lightspeed, one of the first investors in Snapchat learned of the company through one of its partners' daughters).
  - minimaxir 11y ago
    > Compare Meerkat and Secret to Facebook and Snapchat. Fair counterpoint, although it raises the question on what is considered "word of mouth." Both Meerkat and Secret had an absurd (and unwarranted) amount of coverage on Twitter and tech blogs. In Silicon Valley, that's considered "success" for a startup.
    - onewaystreet 11y ago
      > Fair counterpoint, although it raises the question on what is considered "word of mouth." The question is whose mouth are the words coming out of and what are they actually saying. So much of the talk about Meerkat and Secret was "this is interesting" and not "I'm using this and you should too."
- ilaksh 11y ago
  Its ludicrous to say anything good enough to spread by word of mouth will have hyperlinear growth. Take any group of startups with a product. Now objectively evaluate whether they have a 'good' product. Most people can't objectively evaluate anything, they have a status quo bias. But most people will be able to think of some products that they thought were good and mentioned to their friends and then amazingly didn't get 'hyper-growth'. Sometimes the most innovative products and services are ignored or even hated just because they go against existing belief systems.
fezz 11y ago
It's all to easy for nice founders to turn into full blown sociopaths. Maintaining empathy, integrity, and balance takes alot of work once things grow (or fail).
johnrob 11y ago
I think this math also explains why equity disputes, often caused by someone wanting 10-50% more, are a waste of effort. Again, it's case of optimizing the weaker multiplier.
roneesh 11y ago
Leave it to PG to dismantle the myth of founder as psychopath with clear, succinct reasoning and basic math.
rgbrenner 11y ago
I think this depends on the industry (as PG speculated). It works in software and other industries with healthy margins. But in industries with slim margins, you see more cutthroat behavior. I don't think it's a coincidence that Amazon (for ex) has poor working conditions. Retail has always been a slim-margin business, and most of the companies in it are accused of very similar poor behavior. (I don't mean to pick on Amazon, but it's a recent example. And I know some will say AWS is ok.. but AWS likely has much higher margins than the retail side.. so it does't really change my point.) Take any industry.. and the chances are the profit margin is a good indicator of the working conditions. This isn't to mean that those who start retail (or similar low margin) business are mean people.. but I think the lack of profits necessitates cost control and a focus on efficiency... which leads to poor working conditions (since good working conditions cost money) and decisions people will interpret as mean.
- api 11y ago
  I recently read Zero to One, the Blake Masters / Peter Thiel manifesto (of sorts). One of the interesting points he makes there is to come down on the side of monopoly. I interpreted it as a one-sided position, but I think they were putting forward this one-sided position to stand in contrast to the typical one-sided view of monopoly you often hear -- namely the other side. Most people are anti-monopoly. Competition s good! But low-margin businesses are like starved animals that will eat your face off to survive. A low-margin business chases out "nice" founders and executives -- they simply don't make it in that environment. You really do have to be an asshole to extract margin from nothing, because part of the way you do that is by squeezing people including your employees. In tight low-margin industries nice people finish last. Monopolies -- or at least companies in industries with margins and pricing power like software -- can afford to be nice. They can afford to pay higher salaries, be more tolerant of mistakes, give better benefits, have looser schedules, etc. Obviously there are exceptions as people will be people, but on average these industries tend to be nicer places. Nicer founders and executives can also make it in these industries, and in fact might have an advantage. People want to work with them. Monopoly like most other things in economics and ecology is a paradox. You (economically speaking) want your employer or company to be a monopoly, but not others. That's because for others you are a customer, so you want them to be subject to brutal competition. But there's a dark side to monopolies too, namely that they get lazy. The ideal is probably to have some monopoly and pricing power around, but not too much. Like most things in living systems the optimum is somewhere in between and the edges are both pathological.
larrys 11y ago
"As I've written before, one of the things that has surprised me most about startups is how few of the most successful founders are like that. Maybe successful people in other industries are; I don't know; but not startup founders." I know that "old school" world quite well and have for a long long time. There is a big difference between being, in general, fresh out of school working with your peers of highly motivated and typically educated and skilled people (that you additionally socialize with) vs. being in an environment where you have your own money on the line, no margin for error, and people are constantly doing stupid shit that threatens your livelihood. [1] With all due respect to PG afaik he has never operated in this world. But it is a world that does exist and there is a reason for it as well. [1] Note I am not talking about the corporate world and obviously goes without saying that there are many people running entrepreneurial companies that aren't like the caricature which PG describes.
rdl 11y ago
This doesn't apply completely, IMO, to startups with early enterprise deals. If you negotiate those in ways which are "too un-rapacious", you can be starved for capital, be ignored by the customer (because it's insignificant as an expense...), and turn into a consultancy by necessity. It's not exactly being power-mad, but definitely putting the interests of your company (which, at the time, might just be you!) first in negotiations. Not being a dick, but being assertive, and having a decent BATNA in negotiations (i.e. being willing to walk away). I'd totally agree with what pg said here for consumer or low-marginal-cost products. Absolutely disagree for professional services. Disagree moderately for the somewhat-marginal-cost world of enterprise deals (or hardware). I think there's something more to this which has to do with marginal cost, not just growth curve.
- randall 11y ago
  Fwiw I was doing an enterprisish biz before and am now doing consumer. Maybe matching personality types with these is worth doing. Also I was stressing about the enterprise side of the biz when I sent this email. The enterprise biz has no chance of growing hyperlinearly because the market is too small and the customers are very hard to reach. (TV stations)
  - rdl 11y ago
    My personal sweet spot is well-resourced people with hard problems (but not unique-to-them, or self-created problems), either individuals or large organizations. "Professionals" might be better than Enterprise, since they purchase products themselves rather than through purchasing departments, at least for initial buyers as a startup. My dream business would be the software/service equivalent of Snap-On Tools. Not Craftsman (home/high-end value), shitty cheap shit from the dollar store, free stuff included with furniture, and also not NASA custom $30k screwdrivers.
    - itchyouch 11y ago
      Sounds like github/gitlab would be a close to what you are describing. Hosted quickbooks. Hosted turbotax for accountants. Payment processing like square for small businesses.
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louprado 11y ago
My company budgets a small amount for customer appeasement each month. The funds can be used toward discounts, expedited shipping, upgrades, etc. We can usually start every support response with empathy as opposed to protecting ourselves from loss. The result is a focused work environment, happy customers, no burn-out, no venting, no therapy bills, and a reminder to keep things this way by continuously improving the product(s).
- JoeAltmaier 11y ago
  This makes so much sense, especially for growing companies. You want viral growth - your next customer is massively more valuable than dollars now.
boxcardavin 11y ago
Nothing groundbreaking here, just reframing (yet again) how to think about success so that founders focus hard on growth rate. Good stuff. Sometimes I wonder if PG is targeting/excluding audiences by speaking in a mathy way. "If he was bad at extracting money from people, at worst this curve would be some constant multiple less than 1 of what it might have been. But a constant multiple of any curve is exactly the same shape." This makes perfect sense to a native math speaker but takes some effort for others to digest. I wonder if that is deliberate or just the way he talks.
- baristaGeek 11y ago
  It's a way of writing that targets rational-types, or even nerds. That's why Hacker News is so good. If you want to discuss business in a more mundane way, there are lots of other spaces for that.
aaronbrethorst 11y ago
So if you're a founder, here's a deal you can make with yourself that will both make you happy and make your company successful. Tell yourself you can be as nice as you want, so long as you work hard on your growth rate to compensate. Doesn't this imply that if you have less than a "hyperlinear growth curve" you should be a raging sociopath[1]? Fuck that. [1] Or, to be precise, "a rapacious, cigar-smoking, table-thumping guy in his fifties who wins by exercising power"
- brlewis 11y ago
  Paul's definition of a startup is centered on hyperlinear growth rate. Since his area of expertise is startups, he limited his hypothesis to this group. "Maybe" in other situations niceness doesn't work. A conversation I had with an institutional investor makes me think niceness works elsewhere too.
kylec 11y ago
It seems to be a fairly common pattern for a startup to offer a bunch of stuff for free, or to ask for very little in return. This startup then attracts a bunch of users, and for a while everything's good. Then the growth starts to slow down. The company needs to continue growing financially, to appease investors and so on, so they start to ratchet up their monetization. User experience and product quality begin to suffer. By this time the company is usually pretty entrenched, with some combination of having driven all their competitors out of business or by having a strong network effect. Users will want to leave, but they don't have any other viable options.
- minimaxir 11y ago
  > It seems to be a fairly common pattern for a startup to offer a bunch of stuff for free, or to ask for very little in return. This startup then attracts a bunch of users, and for a while everything's good. That's less about being nice and more about business development in a time where people are very hesitant to spend money. If a startup offers something for completely free, it's never out of altruism.
spitfire 11y ago
> Maybe successful people in other industries are; I don't know; but not startup founders. [1] I don't understand, "startups" are an industry in their own? Would a food delivery startup not be in the food service industry? A logistics startup not be in the logistics industry?
- malanj 11y ago
  I think it's quite reasonable to make that argument. The idea that high growth vs. low growth as an attribute matters more than the "industry" a startup operates in. So all high growth companies are more like each other, than high and low growth companies operating in the same industry. Therefore startups (i.e. high growth companies) are their own industry. Nassim Taleb makes a similar argument about size. He says that small things and big things of the same type are more different than they are the same. They should be grouped by size rather than by their nature.
- larrys 11y ago
  The startup scene has it's own definition of startup. Some, but not necessarily all of the following apply: 1) Younger people 2) Educated (can be self taught) 3) College grads or dropped out of college to do a startup 4) Have more to gain than to lose by participating in a startup. (Little assets, [1] not leaving a traditional job but perhaps going from another "startup") 5) Working primarily with other people's money 6) Has the interest and/or money of "angels" "Vc's" or "incubators". 7) Doing something that could get big and stands a high chance of failure. (In other words, not starting an Italian restaurant that's going to be a single location sauce and cheese place) 8) Located or able to travel and possibly relocate to a place that startups are typically. (Silicon Valley, NYC or the other hubs..) What am I missing? (Please fill in the other things I am almost certainly forgetting). [1] Unless they have family money or have done a previous startup where they hit the pay window.
  - onewaystreet 11y ago
    Those are aspects of startups but not a definition. The best definition I think is Paul Graham's: "Startup = Growth" [http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html]. There are many food delivery services that are just local businesses, not startups. The difference is growth, a startup looks to expand to multiple cities, states, and countries.
brianstorms 11y ago
If only most venture capitalists were nice, or were looking for nice founders. In my experience, and I've met probably 250 VCs over 20 years, it's not the case. Especially if they've had a few drinks, when the truth is revealed. There are exceptions, always. But too many are not really that nice. They'll put on an act to pretend they're nice, but they're not.
- mistermann 11y ago
  I would agree with this, people who's primary responsibility is shuffling money around, making deals, and dealing with people who actually produce something as if they are game pieces on a board tend to be a bit different. I wonder if this personality type is drawn to that role, or if it is learned.
help_everyone 11y ago
I suppose the leadership team at Uber would be the outlier (at least the media would have us believe)? But then again, perhaps most of them aren't "founders" but hired guns.
drhayes9 11y ago
I don't know, this feels like confirmation bias. When PG talks about founders being "nice", nice to whom? Their VC and advisor? Sure. Customers? Sure, hopefully. But as we go down the line I'd argue that startups demonstrably aren't "nice": what does Uber pay drivers again? In fact, what startup in the task economy is "nice" to their workers? When your startup holds meetups at bars, you're not being nice to marginalized groups that don't do well in these settings. When you haven't examined your hiring practices you're not being nice to the people you've "culture-fitted" out of your organization. I like this vision, and I like the math. I'd just hope founders cast a wider net of niceness.
- swsieber 11y ago
  I've long thought of being nicer as coming in two flavors: increasing how nice you are to those you don't like (love your enemy" and increasing, as you put, the net of niceness (classifying less people as your enemy). That of course has a very simple view of niceness: you view people in only two categories. But I think it generalizes nicely to the nuanced groups people interact with: make the core group bigger or just be nicer to everyone. Of the two, I think the second is the hardest.
- deleted 11y ago
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- XJOKOLAT 11y ago
  I don't know, I took it to be a more simpler commentary which made sense to me. It's possible to be basically nice (firm, strong in your dealings, smart, deal-making, but nice all the same). Instead of being an archetypal asshole. p.s. I recoil at the term "culture-fit", shivers down the spine. You make some valid points.
  - tbabb 11y ago
    I probably haven't had cause to encounter it for myself, but why does "culture fit" have a squicky connotation?
    - 11y ago
codingdave 11y ago
I'm glad the math works... but to me, the reasons to be a "nice" founder are not financial. Instead, I believe it to be good because it will guide your decisions in ways that build a positive work environment in which creative, intelligent people want to work. That, in turn, will support the growth that is desired for the business. Not-nice founders will likely build less friendly work environments, which will build poor performing teams, and slow down growth. Although I cannot prove this, I have to believe that the added growth from a good working environment will at least balance, if not surpass, growth forced out of non-optimal work environments.
sytelus 11y ago
I think we need to look at this from economic theory point of view. Being nice and being asshole - both have its own cost and ultimately how you should behave depends on what gives you the most gain. The general theory that being nice always works and has zero cost is probably an emotional view. Sometime back it was in believed that founders ruthless and openly asshole personality often won the business wars. Everyone wanted to be CEOs like Gates, Grove, Bozos, Ellison and Jobs. And it actually worked for them. Despite of them being assholes (as per various well documented anecdotes) they attracted great talents and they pushed people to do seemingly impossible. But surprisingly it didn't worked for vast majority of other founders. I have often thought about this and my theory is that successful "asshole" CEOs had accumulated lots of credit in fame and money. They would frequently be features on covers with giant headline praising them as super humans. This is the credit that shielded them from consequences of being an asshole. Being always nice has a price: You might end up creating environment where mediocre is perceived as being tolerated, transparency gets some hit, the cultural values you want to push doesn't get as much traction as you hoped and you must constantly find creative ways to wordsmith your statements as opposed to just be honest with plain language. As a CEO you want to reduce this price and shortest path to that is just say and do what you think is the right thing regardless of how other person will feel. Obviously doing this has its own cost. The bottom line is that you can pay the cost of being an asshole if you have accumulated tons of media credit by getting featured on cover stories and tons of PR behind you. But otherwise this can sink you.
- TheOtherHobbes 11y ago
  My understanding is that it's considered absolutely fine to be an asshole as long as you keep the money coming in. PR helps, but not as much as profitability and net worth. If you're an asshole and the wheels come off - see e.g. Ashley Madison, and arguably Jobs Mk 1 - you're shark meat.
  - itchyouch 11y ago
    There was an article back that furthher validated the asshole theory that being an asshole was okay for the greater good of the team. Be nice tobyour employees/team but mean to the enemies. The teams would rally behind the leader attacking the antagonist. Asshole managers brought on the loss of respect from the team and eventual demise.
justbrowsing01 11y ago
Human nature is selfish by default. If you want to get it right, before a startup gets successful, predetermine a fixed % of free equity pool to be shared amongst all employees,and include that as a condition when fund raising.
- tinbad 11y ago
  Isn't that how most start already? Until every investor and advisor you meet will tell you to stop being stupid and reverse that.
tokenadult 11y ago
I like to read pg's essays (they are what drew me to HN), but this one needs more examination of whether the statement "Obviously one case where it would help to be rapacious is when growth depends on that. What makes startups different is that usually it doesn't" is really true or not. Some of what I have read in news articles linked to from HN suggests that, say, Groupon or Uber or Airbnb or a variety of other startup businesses may all have done things that look rather rapacious to me to raise their growth rate. Some of those companies are still doing well, and some less so, but the companies we hear about here are all doing better than the companies started the same year that we never hear about, so we need to test pg's proposition by looking at startups that fizzle out soon after they are founded. Perhaps the highest level of niceness is found among companies that never gain high growth rate at all.
- GCA10 11y ago
  Good point. Airbnb, Uber, etc. certainly didn't go out of their way to be "nice" to taxi commissioners, hotel lobbyists, etc. The new guys felt they had a better way of doing business and rushed it into new markets as fast as they could, tolerating lawsuits and injunctions along the way.
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brudgers 11y ago
Even if PG is wrong about the effects of behavior, every startup is still likely to fail. So being mean just means odds are a mean person is likey to wind up failing and an asshole.
jallmann 11y ago
Okay, so "being nice" equates to "offer good value at a fair price", eg don't suck your customers dry. That makes perfect sense. I do think a little bit of ruthlessness is called for, especially when your most important metric (growth) is coming at the expense of your competitors. Examples abound of this -- and I think that it can be enormously beneficial to study companies that have operated in moral "gray areas", both in how it helped them establish their position in the market, and how it hurt them. (More often than not, the "damage" is a rather superficial PR dent...) Look at Microsoft crushing Netscape, Apple playing hardball with everybody (including their supply chain), AirBNB with Craigslist, then skirting hotel regs, Uber in everything they do. For all these companies, from a consumer perspective, it's hard to argue they don't provide "good value for a fair price," even though their business practices often lead to nerd outrage here on HN. That being said, a singular strategy of "being nice" (eg, offering good value at a fair price) could be enough for winning customers. Often this seems to happen if your product is so far superior that customers (or users) naturally gravitate towards you. That is how Google got big, and seems to be the modus operandi for social businesses (Facebook, Twitter, etc). In fact, I think the only place where you can get away with not "being nice" is in extremely bureaucratic customer environments where success is dictated by the skill of your sales team -- the realm of Oracle, government contractors, etc. Those are also very interesting to study, but for different reasons.
verelo 11y ago
Being nice is difficult even when you try to remind yourself every day, like i do with a post-it that has been on my desk for a year now "Be smart, honest and thoughtful". As a "startup founder" I do honestly try to be nice through considering those three items as often as possible. Having said that, there are lots of examples I can think of where I have not been nice and need to do better. Lets face it: Founders are often young, trying to move quickly, less experienced managing stress, and regularly making mistakes due to all of these things. Some of the biggest mistakes you make are under pressure, and its often as simple as saying the wrong thing. Personally don't know startups are any nicer than the rest of the world, but they are certainly smaller groups of people, which means you tend to form a tighter relationship with your co-workers / employees (like it or not). In my experienced that is what creates the accountability to be nice, provides people with context and understanding when something doesn't go to plan and ultimately gives others the ability to say things like "Yeah they're nice guys/girls, but pretty stressed out most of the time", which if you took away the "nice guys/girls" part of that sentence when referencing the founders you would just be left with someone who you would probably not describe as all that nice. Relationships can truly make up for a lot and there are benefits for everyone involved. Advice i often give to founder is: If you can, invest in becoming as real of friend to the people who you work with as you possibly can. It really does pay back, especially when things do not go as you had planned. Edit: Spelling.
GCA10 11y ago
It's a fascinating essay, but being "nice" isn't exactly the same as under-pricing your product early on to gain traction. In the enterprise space, being cheap may not win you much love at all. Being faster/better/easier is the key. Even early customers will pay more if you've got a genuinely better solution to their problem. Nice may translate into A+ customer service or features. But saying "I'm cheaper" is often seen as the hallmark of the weaker product, masking later costs and inefficiencies down the road.
martin1975 11y ago
Bezos is nice...to himself.
wkcamp 11y ago
If someone could answer, when a startup starts to exponentially gain traffic (and the server costs start going up), how does the startup maintain their servers and purchase new instances (say the startup is running EC2 ones)? Will the startup start taking on debt or will it look for funding or both?
bambang150 11y ago
Yup, we have to motivated to change the world if it is. Otherwise when we all think about the money, the driver of excellence will become less and less. Same thing happened on me when I am driven to make something to get money. I don't want money so I quit. Now I am creating something that people want, not just creating money
sjg007 11y ago
Just be nice in general as a human.
andyl 11y ago
As an venture investor, I would prefer my startup CEO's to be nice. Easier to manipulate nice. As an entrepreneur, I've seen many situations where investors dump the founder, all nice and reasonable while they stick the knife. There's room at the top they're telling you still But first you must learn how to smile as you kill If you want to be like the folks on the hill - Working Class Hero, John Lennon In my experience, most people are nice. But be on guard, and remember that execution and results trump everything.
- foobar2020 11y ago
  > As an venture investor, I would prefer my startup CEO's to be nice. Easier to manipulate nice. I doubt it. You don't think you are the only person manipulating such a CEO, do you?
paulhauggis 11y ago
Nice people give up more equity than they should and trust the people with the money. If you really want personal success, you need to show strength, not be 'nice'. Otherwise, the only person you will be making successful are the venture capitalists. I've seen this time and time again: many venture capitalists feel that new founders haven't paid their 'dues' and don't deserve to have a share larger than essentially an employee. There should be statistics on YC companies: What percentage of founders actually end up making a significant amount of any buyout. I'm guessing it's a very small percentage...
somberi 11y ago
Quoting from Hesse's Siddhartha about a merchant chiding Siddhartha for a rice-deal he did not complete. "That's all very nice," exclaimed Kamaswami indignantly, "but in fact, you are a merchant after all, one ought to think! Or might you have only travelled for your amusement?" "Surely," Siddhartha laughed, "surely I have travelled for my amusement. For what else? I have gotten to know people and places, I have received kindness and trust, I have found friendship. Look, my dear, if I had been Kamaswami, I would have travelled back, being annoyed and in a hurry, as soon as I had seen that my purchase had been rendered impossible, and time and money would indeed have been lost. But like this, I've had a few good days, I've learned, had joy, I've neither harmed myself nor others by annoyance and hastiness. And if I'll ever return there again, perhaps to buy an upcoming harvest, or for whatever purpose it might be, friendly people will receive me in a friendly and happy manner, and I will praise myself for not showing any hurry and displeasure at that time."
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rdlecler1 11y ago
This seems like an over simplification. Growth is not just the product, but the people executing. A founder who is giving away too much equity and money early may not have the equity and capital to attract all the talent she needs. Maybe she is more understanding about work life balance and doesn't push the team hard enough. But somebody else does, and this is often winner takes all.
__Joker 11y ago
Generally, people will be nice where they can afford to. I have been to cultures and regions, the developed or more well to do, or having enough resources tend to be more "nicer" toward each other. Competition seems to be get better off peoples niceness. Then seems the meta hacking, when people figure niceness can be a advantage and use it for personal, professional gains.
JDDunn9 11y ago
This formula does not take into consideration game theory. How fast you grow also depends on how fast your competitors are growing. Being #1 in an industry, ends up being a massive difference from being #2.
luckydata 11y ago
Maybe founders are nice to Paul Graham but many of them are total douches to their employees. I don't recognize the industry I work in by his description.
- gargarplex 11y ago
  ummmm basically the winners are basically amazing to their employees. non-douchey. because they're winning. leading. making their employees rich
FreeHugs 11y ago
Isn't that just "Be user centric first, be profit centric later"? I often see companies that once felt "nice" become "un-nice" later on. For example, I recently tried to use AirBnB again after some years of absence. It was horrible. In the old days, it felt like a well spirited user centric place. Now they act like a power-drunk, arrogant and dismissive bully.
treve 11y ago
It's safe to be nice if your start-up has an exponential growth rate. How many start-ups have an exponential growth rate? Considering that most start-ups are actually not successful, based on his logic it's better to not be nice.
chacham15 11y ago
Paul seems to be missing one key factor: that profit can be reinvested into the company to increase growth. The converse is also true: the lack of profit might cause the founders to slow growth because they cant pay the bills. An example of the former was a talk at startup school IIRC where a founder of Stack Overflow stated how they used a lot of money to scale out their servers into different verticals (and conquer new markets before competitors).
augustl 11y ago
Meta: Does anyone know more about the "read more" you get on mobile? http://imgur.com/ULhi9O2 http://imgur.com/ULhi9O2 It seems to be JavaScript only so the text is all there ready and downloaded, and hidden with JavaScript. Is it a page load time thing? Has testing shown that a button like this causes people to be more likely to read the article om mobile? Or something else?
adamzerner 11y ago
It's always been a pet peeve of mine that people depend on the medium of text so much. My impression is that much of this information could have been better communicated with graphs. Better yet - interactive graphs! The only real reason why someone would stick to text that I would think of is that they don't have the time, skills or resources to use something else. Maybe pg doesn't _personally_ have these things, but I'm sure that there are tons of designers who would love to help him out.
ngoel36 11y ago
But the foundation of convincing investors is to seem formidable, and since this isn't a word most people use in conversation much, I should explain what it means. A formidable person is one who seems like they'll get what they want, regardless of whatever obstacles are in the way. Formidable is close to confident, except that someone could be confident and mistaken. Formidable is roughly justifiably confident. Does Formidable = Nice? http://paulgraham.com/convince.html http://paulgraham.com/convince.html
lukego 11y ago
Is Linus Torvalds a founder who was too nice by pg's critera? He created something that people want, made it grow, etc, but he let other people capture the value and did not focus on securing a superlinear financial return for himself. Just musing that "growth" we are talking about is really the growth of the slice of the pie owned by the equity holders in the startup. Being so nice that you let your users or employees capture the value created by the product and don't get your superlinear return would seem to be too nice as a startup founder.
abbasmehdi 11y ago
"to Randall Bennett for being such a nice guy." Not surprised. The guy is a really that nice.
eddd 11y ago
As much as I enjoy reading Paul Graham's work, this post is quite derivative. This is a specific case of "karma" or general rule "what goes around come around". Not being a douchebag is a virtue in all aspects of life. As some might say, it is practically newtonian. Of course for a company which has a monopoly in the market these laws don't apply - you don't to have carry about the users nor workers because they have no other place to go.
mathattack 11y ago
The reason startup founders can safely be nice is that making great things is compounded, and rapacity isn't. So if you're a founder, here's a deal you can make with yourself that will both make you happy and make your company successful. Tell yourself you can be as nice as you want, so long as you work hard on your growth rate to compensate. Most successful startups make that tradeoff unconsciously. Maybe if you do it consciously you'll do it even better. This captures why I prefer Silicon Valley to Wall Street. In Wall Street the assumption is zero sum - one dollar either goes to me or you, but not both. In Silicon Valley there is the illusion that you, your employees and your customer can all win. Whether this is true or not, it makes for a healthier work environment, and PG helps explain why it is true for startups. (Nobody at Wall Street grows 5% a week)

400 points by taylorwc 11y ago

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811639047892938 11y ago
The future is by definition never lateral!

minimaxir 11y ago

The logic seems chicken-and-egg to me. > because so long as he built something good enough to spread by word of mouth, he'd have a hyperlinear growth curve. Startups are not a meritocracy. The marketplace is too crowded, so any startup founder who has an edge will take it. How do you get word of mouth? By "growth hacking" and leveraging privileged personal connections, both of which I've seen happen time and time again from even YC companies.

omginternets 11y ago
>privileged personal connections I think the point is that this requirement usually punishes manipulative people.
rev_bird 11y ago
"Privileged personal connections," perhaps minus some of the negative connotations, seems to be among the chief selling points of going into an incubator like YC. I remember seeing Sam Altman tweeting something a few weeks ago about the latest batch raising $220+ MILLION dollars. Those are some hefty connections.
nostrademons 11y ago
> The marketplace is too crowded, so any startup founder who has an edge will take it. That also seems like a good reason to be nice. If you are nice to someone, it puts both you and that person ahead; in a crowded market, that adds up to being the leader of the pack. If you are nasty to someone, it puts both you and your target behind (there is an opportunity cost to being nasty; you're not spending that time being nice). You'll take your target down, but you'll also end up at a disadvantage relative to someone who just stayed out of it. If you've ever played multiplayer strategy games like FFA Starcraft or Civ 5, you'll notice that the optimal strategy is usually to sit back, turtle up, and work on your infrastructure while everybody else kills each other off. Then when you have an overwhelming force, crush everyone who's left. Players who come out of the gate aggressive usually get taken out or weakened enough that one of the turtles can finish them off, even if they are very skilled.
- minimaxir 11y ago
  > You'll take your target down, but you'll also end up at a disadvantage relative to someone who just stayed out of it. This is touching more on game theory and behavioral economics. And we know how the Prisoner's Dilemma is solved. :P
  - nostrademons 11y ago
    The iterated prisoner's dilemma's optimal solution is tit-for-tat, which is a "nice" strategy in that it never defects first. In game-theory tournaments where bots play off an iterated prisoner's dilemma against multiple opponents, the "naughty" strategies get crushed because they eventually encounter a provocable strategy and get caught in a defect loop, running themselves into the ground while the "nice" strategies dominated. This is the situation closest to the startup ecosystem. See eg. The Evolution of Cooperation: https://en.wikipedia.org/wiki/The_Evolution_of_Cooperation#Axelrod.27s_tournaments https://en.wikipedia.org/wiki/The_Evolution_of_Cooperation#A...
- TeMPOraL 11y ago
  > Players who come out of the gate aggressive usually get taken out or weakened enough that one of the turtles can finish them off, even if they are very skilled. Unless they win against other aggressive players and manage to secure additional resources. Late game often turns into logistics game, and if while turtling up you didn't pay enough attention to expand, you'll get starved out of resources and killed. But I agree with the other part of your post. Moreover, by being consistently nice to people you signal your willingness to cooperate (as in Prisoner's dilemma), which makes other more likely to cooperate with you, leading to better outcome for all parties involved (as long as you're good at avoiding defectors).
onewaystreet 11y ago
> By "growth hacking" and leveraging privileged personal connections, both of which I've seen happen time and time again from even YC companies. This isn't always that beneficial with the tech scene being largely an echo chamber. Compare Meerkat and Secret to Facebook and Snapchat. Meerkat and Secret got a lot of hype from the tech crowed and investors but neither achieved any real word of mouth growth. Facebook and Snapchat on the other hand both had significant traction before they were noticed by investors (Lightspeed, one of the first investors in Snapchat learned of the company through one of its partners' daughters).
- minimaxir 11y ago
  > Compare Meerkat and Secret to Facebook and Snapchat. Fair counterpoint, although it raises the question on what is considered "word of mouth." Both Meerkat and Secret had an absurd (and unwarranted) amount of coverage on Twitter and tech blogs. In Silicon Valley, that's considered "success" for a startup.
  - onewaystreet 11y ago
    > Fair counterpoint, although it raises the question on what is considered "word of mouth." The question is whose mouth are the words coming out of and what are they actually saying. So much of the talk about Meerkat and Secret was "this is interesting" and not "I'm using this and you should too."
ilaksh 11y ago
Its ludicrous to say anything good enough to spread by word of mouth will have hyperlinear growth. Take any group of startups with a product. Now objectively evaluate whether they have a 'good' product. Most people can't objectively evaluate anything, they have a status quo bias. But most people will be able to think of some products that they thought were good and mentioned to their friends and then amazingly didn't get 'hyper-growth'. Sometimes the most innovative products and services are ignored or even hated just because they go against existing belief systems.

fezz 11y ago

It's all to easy for nice founders to turn into full blown sociopaths. Maintaining empathy, integrity, and balance takes alot of work once things grow (or fail).

johnrob 11y ago

I think this math also explains why equity disputes, often caused by someone wanting 10-50% more, are a waste of effort. Again, it's case of optimizing the weaker multiplier.

roneesh 11y ago

Leave it to PG to dismantle the myth of founder as psychopath with clear, succinct reasoning and basic math.

rgbrenner 11y ago

I think this depends on the industry (as PG speculated). It works in software and other industries with healthy margins. But in industries with slim margins, you see more cutthroat behavior. I don't think it's a coincidence that Amazon (for ex) has poor working conditions. Retail has always been a slim-margin business, and most of the companies in it are accused of very similar poor behavior. (I don't mean to pick on Amazon, but it's a recent example. And I know some will say AWS is ok.. but AWS likely has much higher margins than the retail side.. so it does't really change my point.) Take any industry.. and the chances are the profit margin is a good indicator of the working conditions. This isn't to mean that those who start retail (or similar low margin) business are mean people.. but I think the lack of profits necessitates cost control and a focus on efficiency... which leads to poor working conditions (since good working conditions cost money) and decisions people will interpret as mean.

api 11y ago
I recently read Zero to One, the Blake Masters / Peter Thiel manifesto (of sorts). One of the interesting points he makes there is to come down on the side of monopoly. I interpreted it as a one-sided position, but I think they were putting forward this one-sided position to stand in contrast to the typical one-sided view of monopoly you often hear -- namely the other side. Most people are anti-monopoly. Competition s good! But low-margin businesses are like starved animals that will eat your face off to survive. A low-margin business chases out "nice" founders and executives -- they simply don't make it in that environment. You really do have to be an asshole to extract margin from nothing, because part of the way you do that is by squeezing people including your employees. In tight low-margin industries nice people finish last. Monopolies -- or at least companies in industries with margins and pricing power like software -- can afford to be nice. They can afford to pay higher salaries, be more tolerant of mistakes, give better benefits, have looser schedules, etc. Obviously there are exceptions as people will be people, but on average these industries tend to be nicer places. Nicer founders and executives can also make it in these industries, and in fact might have an advantage. People want to work with them. Monopoly like most other things in economics and ecology is a paradox. You (economically speaking) want your employer or company to be a monopoly, but not others. That's because for others you are a customer, so you want them to be subject to brutal competition. But there's a dark side to monopolies too, namely that they get lazy. The ideal is probably to have some monopoly and pricing power around, but not too much. Like most things in living systems the optimum is somewhere in between and the edges are both pathological.

larrys 11y ago

"As I've written before, one of the things that has surprised me most about startups is how few of the most successful founders are like that. Maybe successful people in other industries are; I don't know; but not startup founders." I know that "old school" world quite well and have for a long long time. There is a big difference between being, in general, fresh out of school working with your peers of highly motivated and typically educated and skilled people (that you additionally socialize with) vs. being in an environment where you have your own money on the line, no margin for error, and people are constantly doing stupid shit that threatens your livelihood. [1] With all due respect to PG afaik he has never operated in this world. But it is a world that does exist and there is a reason for it as well. [1] Note I am not talking about the corporate world and obviously goes without saying that there are many people running entrepreneurial companies that aren't like the caricature which PG describes.

rdl 11y ago

This doesn't apply completely, IMO, to startups with early enterprise deals. If you negotiate those in ways which are "too un-rapacious", you can be starved for capital, be ignored by the customer (because it's insignificant as an expense...), and turn into a consultancy by necessity. It's not exactly being power-mad, but definitely putting the interests of your company (which, at the time, might just be you!) first in negotiations. Not being a dick, but being assertive, and having a decent BATNA in negotiations (i.e. being willing to walk away). I'd totally agree with what pg said here for consumer or low-marginal-cost products. Absolutely disagree for professional services. Disagree moderately for the somewhat-marginal-cost world of enterprise deals (or hardware). I think there's something more to this which has to do with marginal cost, not just growth curve.

randall 11y ago
Fwiw I was doing an enterprisish biz before and am now doing consumer. Maybe matching personality types with these is worth doing. Also I was stressing about the enterprise side of the biz when I sent this email. The enterprise biz has no chance of growing hyperlinearly because the market is too small and the customers are very hard to reach. (TV stations)
- rdl 11y ago
  My personal sweet spot is well-resourced people with hard problems (but not unique-to-them, or self-created problems), either individuals or large organizations. "Professionals" might be better than Enterprise, since they purchase products themselves rather than through purchasing departments, at least for initial buyers as a startup. My dream business would be the software/service equivalent of Snap-On Tools. Not Craftsman (home/high-end value), shitty cheap shit from the dollar store, free stuff included with furniture, and also not NASA custom $30k screwdrivers.
  - itchyouch 11y ago
    Sounds like github/gitlab would be a close to what you are describing. Hosted quickbooks. Hosted turbotax for accountants. Payment processing like square for small businesses.

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louprado 11y ago

My company budgets a small amount for customer appeasement each month. The funds can be used toward discounts, expedited shipping, upgrades, etc. We can usually start every support response with empathy as opposed to protecting ourselves from loss. The result is a focused work environment, happy customers, no burn-out, no venting, no therapy bills, and a reminder to keep things this way by continuously improving the product(s).

JoeAltmaier 11y ago
This makes so much sense, especially for growing companies. You want viral growth - your next customer is massively more valuable than dollars now.

boxcardavin 11y ago

Nothing groundbreaking here, just reframing (yet again) how to think about success so that founders focus hard on growth rate. Good stuff. Sometimes I wonder if PG is targeting/excluding audiences by speaking in a mathy way. "If he was bad at extracting money from people, at worst this curve would be some constant multiple less than 1 of what it might have been. But a constant multiple of any curve is exactly the same shape." This makes perfect sense to a native math speaker but takes some effort for others to digest. I wonder if that is deliberate or just the way he talks.

baristaGeek 11y ago
It's a way of writing that targets rational-types, or even nerds. That's why Hacker News is so good. If you want to discuss business in a more mundane way, there are lots of other spaces for that.

aaronbrethorst 11y ago

So if you're a founder, here's a deal you can make with yourself that will both make you happy and make your company successful. Tell yourself you can be as nice as you want, so long as you work hard on your growth rate to compensate. Doesn't this imply that if you have less than a "hyperlinear growth curve" you should be a raging sociopath[1]? Fuck that. [1] Or, to be precise, "a rapacious, cigar-smoking, table-thumping guy in his fifties who wins by exercising power"

brlewis 11y ago
Paul's definition of a startup is centered on hyperlinear growth rate. Since his area of expertise is startups, he limited his hypothesis to this group. "Maybe" in other situations niceness doesn't work. A conversation I had with an institutional investor makes me think niceness works elsewhere too.

kylec 11y ago

It seems to be a fairly common pattern for a startup to offer a bunch of stuff for free, or to ask for very little in return. This startup then attracts a bunch of users, and for a while everything's good. Then the growth starts to slow down. The company needs to continue growing financially, to appease investors and so on, so they start to ratchet up their monetization. User experience and product quality begin to suffer. By this time the company is usually pretty entrenched, with some combination of having driven all their competitors out of business or by having a strong network effect. Users will want to leave, but they don't have any other viable options.

minimaxir 11y ago
> It seems to be a fairly common pattern for a startup to offer a bunch of stuff for free, or to ask for very little in return. This startup then attracts a bunch of users, and for a while everything's good. That's less about being nice and more about business development in a time where people are very hesitant to spend money. If a startup offers something for completely free, it's never out of altruism.

spitfire 11y ago

> Maybe successful people in other industries are; I don't know; but not startup founders. [1] I don't understand, "startups" are an industry in their own? Would a food delivery startup not be in the food service industry? A logistics startup not be in the logistics industry?

malanj 11y ago
I think it's quite reasonable to make that argument. The idea that high growth vs. low growth as an attribute matters more than the "industry" a startup operates in. So all high growth companies are more like each other, than high and low growth companies operating in the same industry. Therefore startups (i.e. high growth companies) are their own industry. Nassim Taleb makes a similar argument about size. He says that small things and big things of the same type are more different than they are the same. They should be grouped by size rather than by their nature.
larrys 11y ago
The startup scene has it's own definition of startup. Some, but not necessarily all of the following apply: 1) Younger people 2) Educated (can be self taught) 3) College grads or dropped out of college to do a startup 4) Have more to gain than to lose by participating in a startup. (Little assets, [1] not leaving a traditional job but perhaps going from another "startup") 5) Working primarily with other people's money 6) Has the interest and/or money of "angels" "Vc's" or "incubators". 7) Doing something that could get big and stands a high chance of failure. (In other words, not starting an Italian restaurant that's going to be a single location sauce and cheese place) 8) Located or able to travel and possibly relocate to a place that startups are typically. (Silicon Valley, NYC or the other hubs..) What am I missing? (Please fill in the other things I am almost certainly forgetting). [1] Unless they have family money or have done a previous startup where they hit the pay window.
- onewaystreet 11y ago
  Those are aspects of startups but not a definition. The best definition I think is Paul Graham's: "Startup = Growth" [http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html]. There are many food delivery services that are just local businesses, not startups. The difference is growth, a startup looks to expand to multiple cities, states, and countries.

brianstorms 11y ago

If only most venture capitalists were nice, or were looking for nice founders. In my experience, and I've met probably 250 VCs over 20 years, it's not the case. Especially if they've had a few drinks, when the truth is revealed. There are exceptions, always. But too many are not really that nice. They'll put on an act to pretend they're nice, but they're not.

mistermann 11y ago
I would agree with this, people who's primary responsibility is shuffling money around, making deals, and dealing with people who actually produce something as if they are game pieces on a board tend to be a bit different. I wonder if this personality type is drawn to that role, or if it is learned.

help_everyone 11y ago

I suppose the leadership team at Uber would be the outlier (at least the media would have us believe)? But then again, perhaps most of them aren't "founders" but hired guns.

drhayes9 11y ago

I don't know, this feels like confirmation bias. When PG talks about founders being "nice", nice to whom? Their VC and advisor? Sure. Customers? Sure, hopefully. But as we go down the line I'd argue that startups demonstrably aren't "nice": what does Uber pay drivers again? In fact, what startup in the task economy is "nice" to their workers? When your startup holds meetups at bars, you're not being nice to marginalized groups that don't do well in these settings. When you haven't examined your hiring practices you're not being nice to the people you've "culture-fitted" out of your organization. I like this vision, and I like the math. I'd just hope founders cast a wider net of niceness.

swsieber 11y ago
I've long thought of being nicer as coming in two flavors: increasing how nice you are to those you don't like (love your enemy" and increasing, as you put, the net of niceness (classifying less people as your enemy). That of course has a very simple view of niceness: you view people in only two categories. But I think it generalizes nicely to the nuanced groups people interact with: make the core group bigger or just be nicer to everyone. Of the two, I think the second is the hardest.
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XJOKOLAT 11y ago
I don't know, I took it to be a more simpler commentary which made sense to me. It's possible to be basically nice (firm, strong in your dealings, smart, deal-making, but nice all the same). Instead of being an archetypal asshole. p.s. I recoil at the term "culture-fit", shivers down the spine. You make some valid points.
- tbabb 11y ago
  I probably haven't had cause to encounter it for myself, but why does "culture fit" have a squicky connotation?
  - 11y ago

codingdave 11y ago

I'm glad the math works... but to me, the reasons to be a "nice" founder are not financial. Instead, I believe it to be good because it will guide your decisions in ways that build a positive work environment in which creative, intelligent people want to work. That, in turn, will support the growth that is desired for the business. Not-nice founders will likely build less friendly work environments, which will build poor performing teams, and slow down growth. Although I cannot prove this, I have to believe that the added growth from a good working environment will at least balance, if not surpass, growth forced out of non-optimal work environments.

sytelus 11y ago

I think we need to look at this from economic theory point of view. Being nice and being asshole - both have its own cost and ultimately how you should behave depends on what gives you the most gain. The general theory that being nice always works and has zero cost is probably an emotional view. Sometime back it was in believed that founders ruthless and openly asshole personality often won the business wars. Everyone wanted to be CEOs like Gates, Grove, Bozos, Ellison and Jobs. And it actually worked for them. Despite of them being assholes (as per various well documented anecdotes) they attracted great talents and they pushed people to do seemingly impossible. But surprisingly it didn't worked for vast majority of other founders. I have often thought about this and my theory is that successful "asshole" CEOs had accumulated lots of credit in fame and money. They would frequently be features on covers with giant headline praising them as super humans. This is the credit that shielded them from consequences of being an asshole. Being always nice has a price: You might end up creating environment where mediocre is perceived as being tolerated, transparency gets some hit, the cultural values you want to push doesn't get as much traction as you hoped and you must constantly find creative ways to wordsmith your statements as opposed to just be honest with plain language. As a CEO you want to reduce this price and shortest path to that is just say and do what you think is the right thing regardless of how other person will feel. Obviously doing this has its own cost. The bottom line is that you can pay the cost of being an asshole if you have accumulated tons of media credit by getting featured on cover stories and tons of PR behind you. But otherwise this can sink you.

TheOtherHobbes 11y ago
My understanding is that it's considered absolutely fine to be an asshole as long as you keep the money coming in. PR helps, but not as much as profitability and net worth. If you're an asshole and the wheels come off - see e.g. Ashley Madison, and arguably Jobs Mk 1 - you're shark meat.
- itchyouch 11y ago
  There was an article back that furthher validated the asshole theory that being an asshole was okay for the greater good of the team. Be nice tobyour employees/team but mean to the enemies. The teams would rally behind the leader attacking the antagonist. Asshole managers brought on the loss of respect from the team and eventual demise.

justbrowsing01 11y ago

Human nature is selfish by default. If you want to get it right, before a startup gets successful, predetermine a fixed % of free equity pool to be shared amongst all employees,and include that as a condition when fund raising.

tinbad 11y ago
Isn't that how most start already? Until every investor and advisor you meet will tell you to stop being stupid and reverse that.

tokenadult 11y ago

I like to read pg's essays (they are what drew me to HN), but this one needs more examination of whether the statement "Obviously one case where it would help to be rapacious is when growth depends on that. What makes startups different is that usually it doesn't" is really true or not. Some of what I have read in news articles linked to from HN suggests that, say, Groupon or Uber or Airbnb or a variety of other startup businesses may all have done things that look rather rapacious to me to raise their growth rate. Some of those companies are still doing well, and some less so, but the companies we hear about here are all doing better than the companies started the same year that we never hear about, so we need to test pg's proposition by looking at startups that fizzle out soon after they are founded. Perhaps the highest level of niceness is found among companies that never gain high growth rate at all.

GCA10 11y ago
Good point. Airbnb, Uber, etc. certainly didn't go out of their way to be "nice" to taxi commissioners, hotel lobbyists, etc. The new guys felt they had a better way of doing business and rushed it into new markets as fast as they could, tolerating lawsuits and injunctions along the way.

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brudgers 11y ago

Even if PG is wrong about the effects of behavior, every startup is still likely to fail. So being mean just means odds are a mean person is likey to wind up failing and an asshole.

jallmann 11y ago

Okay, so "being nice" equates to "offer good value at a fair price", eg don't suck your customers dry. That makes perfect sense. I do think a little bit of ruthlessness is called for, especially when your most important metric (growth) is coming at the expense of your competitors. Examples abound of this -- and I think that it can be enormously beneficial to study companies that have operated in moral "gray areas", both in how it helped them establish their position in the market, and how it hurt them. (More often than not, the "damage" is a rather superficial PR dent...) Look at Microsoft crushing Netscape, Apple playing hardball with everybody (including their supply chain), AirBNB with Craigslist, then skirting hotel regs, Uber in everything they do. For all these companies, from a consumer perspective, it's hard to argue they don't provide "good value for a fair price," even though their business practices often lead to nerd outrage here on HN. That being said, a singular strategy of "being nice" (eg, offering good value at a fair price) could be enough for winning customers. Often this seems to happen if your product is so far superior that customers (or users) naturally gravitate towards you. That is how Google got big, and seems to be the modus operandi for social businesses (Facebook, Twitter, etc). In fact, I think the only place where you can get away with not "being nice" is in extremely bureaucratic customer environments where success is dictated by the skill of your sales team -- the realm of Oracle, government contractors, etc. Those are also very interesting to study, but for different reasons.

verelo 11y ago

Being nice is difficult even when you try to remind yourself every day, like i do with a post-it that has been on my desk for a year now "Be smart, honest and thoughtful". As a "startup founder" I do honestly try to be nice through considering those three items as often as possible. Having said that, there are lots of examples I can think of where I have not been nice and need to do better. Lets face it: Founders are often young, trying to move quickly, less experienced managing stress, and regularly making mistakes due to all of these things. Some of the biggest mistakes you make are under pressure, and its often as simple as saying the wrong thing. Personally don't know startups are any nicer than the rest of the world, but they are certainly smaller groups of people, which means you tend to form a tighter relationship with your co-workers / employees (like it or not). In my experienced that is what creates the accountability to be nice, provides people with context and understanding when something doesn't go to plan and ultimately gives others the ability to say things like "Yeah they're nice guys/girls, but pretty stressed out most of the time", which if you took away the "nice guys/girls" part of that sentence when referencing the founders you would just be left with someone who you would probably not describe as all that nice. Relationships can truly make up for a lot and there are benefits for everyone involved. Advice i often give to founder is: If you can, invest in becoming as real of friend to the people who you work with as you possibly can. It really does pay back, especially when things do not go as you had planned. Edit: Spelling.

GCA10 11y ago

It's a fascinating essay, but being "nice" isn't exactly the same as under-pricing your product early on to gain traction. In the enterprise space, being cheap may not win you much love at all. Being faster/better/easier is the key. Even early customers will pay more if you've got a genuinely better solution to their problem. Nice may translate into A+ customer service or features. But saying "I'm cheaper" is often seen as the hallmark of the weaker product, masking later costs and inefficiencies down the road.

martin1975 11y ago

Bezos is nice...to himself.

wkcamp 11y ago

If someone could answer, when a startup starts to exponentially gain traffic (and the server costs start going up), how does the startup maintain their servers and purchase new instances (say the startup is running EC2 ones)? Will the startup start taking on debt or will it look for funding or both?

bambang150 11y ago

Yup, we have to motivated to change the world if it is. Otherwise when we all think about the money, the driver of excellence will become less and less. Same thing happened on me when I am driven to make something to get money. I don't want money so I quit. Now I am creating something that people want, not just creating money

sjg007 11y ago

Just be nice in general as a human.

andyl 11y ago

As an venture investor, I would prefer my startup CEO's to be nice. Easier to manipulate nice. As an entrepreneur, I've seen many situations where investors dump the founder, all nice and reasonable while they stick the knife. There's room at the top they're telling you still But first you must learn how to smile as you kill If you want to be like the folks on the hill - Working Class Hero, John Lennon In my experience, most people are nice. But be on guard, and remember that execution and results trump everything.

foobar2020 11y ago
> As an venture investor, I would prefer my startup CEO's to be nice. Easier to manipulate nice. I doubt it. You don't think you are the only person manipulating such a CEO, do you?

paulhauggis 11y ago

Nice people give up more equity than they should and trust the people with the money. If you really want personal success, you need to show strength, not be 'nice'. Otherwise, the only person you will be making successful are the venture capitalists. I've seen this time and time again: many venture capitalists feel that new founders haven't paid their 'dues' and don't deserve to have a share larger than essentially an employee. There should be statistics on YC companies: What percentage of founders actually end up making a significant amount of any buyout. I'm guessing it's a very small percentage...

somberi 11y ago

Quoting from Hesse's Siddhartha about a merchant chiding Siddhartha for a rice-deal he did not complete. "That's all very nice," exclaimed Kamaswami indignantly, "but in fact, you are a merchant after all, one ought to think! Or might you have only travelled for your amusement?" "Surely," Siddhartha laughed, "surely I have travelled for my amusement. For what else? I have gotten to know people and places, I have received kindness and trust, I have found friendship. Look, my dear, if I had been Kamaswami, I would have travelled back, being annoyed and in a hurry, as soon as I had seen that my purchase had been rendered impossible, and time and money would indeed have been lost. But like this, I've had a few good days, I've learned, had joy, I've neither harmed myself nor others by annoyance and hastiness. And if I'll ever return there again, perhaps to buy an upcoming harvest, or for whatever purpose it might be, friendly people will receive me in a friendly and happy manner, and I will praise myself for not showing any hurry and displeasure at that time."

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rdlecler1 11y ago

This seems like an over simplification. Growth is not just the product, but the people executing. A founder who is giving away too much equity and money early may not have the equity and capital to attract all the talent she needs. Maybe she is more understanding about work life balance and doesn't push the team hard enough. But somebody else does, and this is often winner takes all.

__Joker 11y ago

Generally, people will be nice where they can afford to. I have been to cultures and regions, the developed or more well to do, or having enough resources tend to be more "nicer" toward each other. Competition seems to be get better off peoples niceness. Then seems the meta hacking, when people figure niceness can be a advantage and use it for personal, professional gains.

JDDunn9 11y ago

This formula does not take into consideration game theory. How fast you grow also depends on how fast your competitors are growing. Being #1 in an industry, ends up being a massive difference from being #2.

luckydata 11y ago

Maybe founders are nice to Paul Graham but many of them are total douches to their employees. I don't recognize the industry I work in by his description.

gargarplex 11y ago
ummmm basically the winners are basically amazing to their employees. non-douchey. because they're winning. leading. making their employees rich

FreeHugs 11y ago

Isn't that just "Be user centric first, be profit centric later"? I often see companies that once felt "nice" become "un-nice" later on. For example, I recently tried to use AirBnB again after some years of absence. It was horrible. In the old days, it felt like a well spirited user centric place. Now they act like a power-drunk, arrogant and dismissive bully.

treve 11y ago

It's safe to be nice if your start-up has an exponential growth rate. How many start-ups have an exponential growth rate? Considering that most start-ups are actually not successful, based on his logic it's better to not be nice.

chacham15 11y ago

Paul seems to be missing one key factor: that profit can be reinvested into the company to increase growth. The converse is also true: the lack of profit might cause the founders to slow growth because they cant pay the bills. An example of the former was a talk at startup school IIRC where a founder of Stack Overflow stated how they used a lot of money to scale out their servers into different verticals (and conquer new markets before competitors).

augustl 11y ago

Meta: Does anyone know more about the "read more" you get on mobile? http://imgur.com/ULhi9O2 http://imgur.com/ULhi9O2 It seems to be JavaScript only so the text is all there ready and downloaded, and hidden with JavaScript. Is it a page load time thing? Has testing shown that a button like this causes people to be more likely to read the article om mobile? Or something else?

adamzerner 11y ago

It's always been a pet peeve of mine that people depend on the medium of text so much. My impression is that much of this information could have been better communicated with graphs. Better yet - interactive graphs! The only real reason why someone would stick to text that I would think of is that they don't have the time, skills or resources to use something else. Maybe pg doesn't _personally_ have these things, but I'm sure that there are tons of designers who would love to help him out.

ngoel36 11y ago

But the foundation of convincing investors is to seem formidable, and since this isn't a word most people use in conversation much, I should explain what it means. A formidable person is one who seems like they'll get what they want, regardless of whatever obstacles are in the way. Formidable is close to confident, except that someone could be confident and mistaken. Formidable is roughly justifiably confident. Does Formidable = Nice? http://paulgraham.com/convince.html http://paulgraham.com/convince.html

lukego 11y ago

Is Linus Torvalds a founder who was too nice by pg's critera? He created something that people want, made it grow, etc, but he let other people capture the value and did not focus on securing a superlinear financial return for himself. Just musing that "growth" we are talking about is really the growth of the slice of the pie owned by the equity holders in the startup. Being so nice that you let your users or employees capture the value created by the product and don't get your superlinear return would seem to be too nice as a startup founder.

abbasmehdi 11y ago

"to Randall Bennett for being such a nice guy." Not surprised. The guy is a really that nice.

eddd 11y ago

As much as I enjoy reading Paul Graham's work, this post is quite derivative. This is a specific case of "karma" or general rule "what goes around come around". Not being a douchebag is a virtue in all aspects of life. As some might say, it is practically newtonian. Of course for a company which has a monopoly in the market these laws don't apply - you don't to have carry about the users nor workers because they have no other place to go.

mathattack 11y ago

The reason startup founders can safely be nice is that making great things is compounded, and rapacity isn't. So if you're a founder, here's a deal you can make with yourself that will both make you happy and make your company successful. Tell yourself you can be as nice as you want, so long as you work hard on your growth rate to compensate. Most successful startups make that tradeoff unconsciously. Maybe if you do it consciously you'll do it even better. This captures why I prefer Silicon Valley to Wall Street. In Wall Street the assumption is zero sum - one dollar either goes to me or you, but not both. In Silicon Valley there is the illusion that you, your employees and your customer can all win. Whether this is true or not, it makes for a healthier work environment, and PG helps explain why it is true for startups. (Nobody at Wall Street grows 5% a week)