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I love that this is the top story on HN. I only wish that PG got as much flack for his startup economics hype piece[1] and proposition to compress a lifetime's

I love that this is the top story on HN. I only wish that PG got as much flack for his startup economics hype piece[1] and proposition to compress a lifetime's worth of work effort into four years. [1] http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html

9oliYQjP 15y ago
I've not seen eye to eye with PG on everything he has written. But this particular essay is one of my favourites of his. PG laid out an upper bound, which he later clarifies: "If $3 million a year seems high, remember that we're talking about the limit case: the case where you not only have zero leisure time but indeed work so hard that you endanger your health." And his upper limit for hours worked was 2x that of a corporate employee. Taken literally, this could be 80 hours per week, or 16 hour days. PG is not advocating this lifestyle in his essay. He's saying that it's theoretically possible but at the cost of your good health. Arrington says to hell with your health: quit the whining and work through the pain. This is not an upper bound but in fact an average that he's trying to push. That's why I despise the Arrington article but don't take issue with PG's.
- DeAngeloLampkin 15y ago
  Overall, I loved the "Wealth" essay. I do wonder though if Paul ever considers that the same thing he says about Bill Gates' success could also be said about his own. "Bill Gates is a smart, determined, and hardworking man, but you need more than that to make as much money as he has. You also need to be very lucky." Or perhaps PG thinks his personal success is based purely off his own brilliance with no helpful outside factors needed (i.e. competitor blunders, etc)? :)
  - zck 15y ago
    One has to be a lot luckier to make fifty billion dollars than ten million dollars.
    - drumdance 15y ago
      Yes, but I doubt it's, say, 50 times luckier. I'll wager it's a lot easier to go from 10 million to a billion than from zero to 10 million.
      - _delirium 15y ago
        It's hard to come up with a good conditional probability, but just looking at the population ratios, the odds are close to the same: somewhere around 1 in 300 American households have net worth >$10m, and somewhere around 1 in 300 of those (close to 1 in 100,000 households) have net worth >$1b.
        chalst 15y ago
        Right. One has to factor into the assets that Microsoft had at the start the access to Bill Gates' dad, who was a highly successful lawyer active in technology. Where would Microsoft's shrinkwrap sales strategy have been without legal advice?
        Retric 15y ago
        His mother served on the same board of directors as the IBM CEO. Which is probably why the original licensing deal was even considered and why the they where not heavy handed in their contract negotiation. Edit: In 1980, she discussed with John Opel, a fellow committee member who was the chairman of the International Business Machines Corporation," her son's company. "Mr. Opel, by some accounts, mentioned Mrs. Gates to other I.B.M. executives. A few weeks later, I.B.M. took a chance by hiring Microsoft, then a small software firm, to develop an operating system for its first personal computer." http://en.wikipedia.org/wiki/Mary_Maxwell_Gates http://en.wikipedia.org/wiki/Mary_Maxwell_Gates
        ajays 15y ago
        Thanks for posting that. These little things are often not mentioned in the success stories we hear. Was Mrs. Gates' chat with Mr. Opel the sole cause of Microsoft's success? Of course not! But opening a few doors so early on is definitely a huge stroke of good fortune.
  - tomhoward 15y ago
    Or perhaps PG thinks his personal success is based purely off his own brilliance with no helpful outside factors needed He doesn't think that. Though he claims to have made good decisions and benefited from competitor blunders, he frequently refers to incidents that nearly sank the company, and acknowledges the good fortune that saved them and helped them to their very happy exit.
- itmag 15y ago
  I see it as an experiment in thinking about leverage. If you minimized all the corporate office bullshit, leveraged your work to the max, AND worked hard on top of that, how much could you earn? The baseline becomes your work earnings WITH corp-bullshit, poor leverage, and lackluster effort, and then he extrapolates from that. Leverage analogy: think schwerpunkt in blitzkrieg. If you amass all your tanks on one sector of the front and crush the opposing line there, then you will have more of an impact than if you spread the same force out over a wider area.
  - gizzlon 15y ago
    hm.. and I guess, if you're running in the wrong direction, you'll get there faster.. not sure if that's good or bad
    - itmag 15y ago
      Yeah if you amass your forces in the wrong place you will get slapped around like a cheap toy. Kursk salient.
    - brain5ide 15y ago
      Somewhere in here lies a differential equation that includes the probability of destination being the right one and distance to it to evaluate that.
  - kamaal 15y ago
    I am not getting. You are going to end up being average in a large corporate. Your chances of succeeding in a start up are only 10%. There doesn't seem to be an easy way out of this career problem. There seems to be a problem with whatever you will do.
    - itmag 15y ago
      Is that 10% for "anyone who starts a startup" or is that 10% for me? I imagine the success chance would go up quite a bit if one does basic things like being persistant and reading up on the wisdom of others.
- tchon 15y ago
  I think PG's background as an actual programmer and having a computational paradigm versus Arrington's sophistry is an underlying factor here too.
- biafra 15y ago
  Its only 11.43 hours a day if you work on weekends. I am not advocating this! I think if you are passionate about your work and work 8 hours a day (5 days a week) at full capacity you are productive enough. I can work more for one or two weeks if necessary (with the adrenalin boost stemming from a near by deadline) but not for much longer.
  - JGailor 15y ago
    This is a great point that is often overlooked in the startup work environment. In 8 years of working at Startups I have only ever been in one place where anyone actually worked a solid 8 hours (everyone happened to pair-program there, which was one of the biggest contributors to this IMO). In most places people spend somewhere between 25-50% of their time surfing the web, reading personal email, hanging out in IRC rooms, socializing, etc. At this particular startup we really did none of that during the day. We all just felt really strongly about what we were working on, as a team we worked with the business guys to set a strong direction for the near-short term, and for four hours in the morning and four in the afternoon we worked. That was it. At 6 pm we left basically feeling punch-drunk for the mental exhaustion, and we went and followed our respective personal pursuits. The result? The first place I'd worked where we launched on schedule with no overtime worked, with all of the features that business wanted for the big 1.0 (well, web-app 1.0... Really just a euphemism here). My point is that while Arrington goes on about working insane hours, everyone always seems to overlook how much time in the office isn't actually productive for the product. I've been at places where people "worked" 16 hour days, at least 6 of which were spent playing Starcraft LAN games.
1010100101 15y ago
Agreed. Another one who should get some flack is Thiel. He may just be the worst, suggesting kids should forgo a university education and going so far as to actually debate the "issue" whether an education is "worth it". For some of these VC to make money, they have no need to see university degrees. But they have their own interests in mind. And, lo and behold, most of them have university degrees.
- sogrady 15y ago
  I did find it ironic that one of Thiel's major complaints about education was the exclusivity of universities like Harvard given that his solution was a program that admitted a mere 20 would-be entrepreneurs. jwz is right: be alert to the agendas of those who would influence you.
  - kevinpet 15y ago
    jwz is saying "follow the money". Thiel's drop-out scholarships are offered by his non-profit foundation. There is no relation between the discord between the self interest of a VC and a startup employee on the one hand, and the possibility that Thiel is giving bad advice to people who he has no financial interest in.
  - deleted 15y ago
    [deleted]
- nostromo 15y ago
  I think you guys are being unduly cynical. Thiel recently debated this on NPR (http://intelligencesquaredus.org/index.php/past-debates/too-many-kids-go-to-college/ http://intelligencesquaredus.org/index.php/past-debates/too-...) and I found him very convincing. He repeatedly talked about the concern of young people leaving college with 200k+ in debt -- which I think is very fair.
  - _delirium 15y ago
    Thiel's also discussed elsewhere his frustration with the liberal politics of academia, which he sees as an impediment to libertarian policies gaining wider buy-in, so I think he might have motivations for attempting to undermine it besides pure concern for students' debt. (Though it's quite possible he earnestly dislikes academia for multiple, independent reasons.)
tpatke 15y ago
There is a big difference between PG and Arrington: PG states that you should be working for yourself. YC is set up to allow entrepreneurs to make money if they work hard and a big part of that is allowing a company to grow before being required to take VC money - allowing for a better valuation. Sleeping under your desk with .05% equity? Probably a bad investment. Sleeping under your desk for 45% equity? Well, roll the dice. At least you will get paid if it works.
- tchon 15y ago
  Yes, 5 basis points is complete and utter crap. If you're going to work crazy hours, you might as well benefit from it proportionally. Gone are the days in tech when early employees would be rewarded for taking pay cuts in exchange for a higher amount of equity only to be completely diluted by each round of funding and the greediness of the MBA holding business founders.
  - anothermachine 15y ago
    Sadly, those days aren't gone. But the days where those are the only option are gone.
jwr 15y ago
The difference is that PG actually did this stuff, while Arrington did not. PG is one of us, Arrington is not.
- palish 15y ago
  That's not true. Paul worked very hard to grow Viaweb for several years, and eventually guided Viaweb to a lucrative exit via Yahoo. Arrington worked very hard to grow TechCrunch for several years, and eventually guided it to a lucrative exit via AOL.
- vidarh 15y ago
  Mike (disclaimer: I know him) has done more startups than PG, and he did pretty much sleep under his desk for the first couple of years of Techcrunch (well, his desk was in his bedroom, and the Techcrunch "office" was the rest of his house) and has worked equally hard in the other startups he's done while I've known him. Including as a regular employee (that's how I met him - he worked at a startup I co-founded years ago). So he's not a programmer. There are non-programmers that also work hard, you know.
  - 1010100101 15y ago
    He can't write code. He publishes a blog to attempt to persuade an audience of those who can. Before the blog, he worked with a company selling dropping domain names. Again, he wrote no code.
    - 1010100101 15y ago
      I think jwz would agree that "hard working VC's" are not what makes a startup (nor the VC's) successful.
  - borism 15y ago
    Techcrunch "office" was the rest of his house nice definition of "under the desk"
    - 15y ago

9oliYQjP 15y ago

I've not seen eye to eye with PG on everything he has written. But this particular essay is one of my favourites of his. PG laid out an upper bound, which he later clarifies: "If $3 million a year seems high, remember that we're talking about the limit case: the case where you not only have zero leisure time but indeed work so hard that you endanger your health." And his upper limit for hours worked was 2x that of a corporate employee. Taken literally, this could be 80 hours per week, or 16 hour days. PG is not advocating this lifestyle in his essay. He's saying that it's theoretically possible but at the cost of your good health. Arrington says to hell with your health: quit the whining and work through the pain. This is not an upper bound but in fact an average that he's trying to push. That's why I despise the Arrington article but don't take issue with PG's.

DeAngeloLampkin 15y ago
Overall, I loved the "Wealth" essay. I do wonder though if Paul ever considers that the same thing he says about Bill Gates' success could also be said about his own. "Bill Gates is a smart, determined, and hardworking man, but you need more than that to make as much money as he has. You also need to be very lucky." Or perhaps PG thinks his personal success is based purely off his own brilliance with no helpful outside factors needed (i.e. competitor blunders, etc)? :)
- zck 15y ago
  One has to be a lot luckier to make fifty billion dollars than ten million dollars.
  - drumdance 15y ago
    Yes, but I doubt it's, say, 50 times luckier. I'll wager it's a lot easier to go from 10 million to a billion than from zero to 10 million.
    - _delirium 15y ago
      It's hard to come up with a good conditional probability, but just looking at the population ratios, the odds are close to the same: somewhere around 1 in 300 American households have net worth >$10m, and somewhere around 1 in 300 of those (close to 1 in 100,000 households) have net worth >$1b.
      - chalst 15y ago
        Right. One has to factor into the assets that Microsoft had at the start the access to Bill Gates' dad, who was a highly successful lawyer active in technology. Where would Microsoft's shrinkwrap sales strategy have been without legal advice?
        Retric 15y ago
        His mother served on the same board of directors as the IBM CEO. Which is probably why the original licensing deal was even considered and why the they where not heavy handed in their contract negotiation. Edit: In 1980, she discussed with John Opel, a fellow committee member who was the chairman of the International Business Machines Corporation," her son's company. "Mr. Opel, by some accounts, mentioned Mrs. Gates to other I.B.M. executives. A few weeks later, I.B.M. took a chance by hiring Microsoft, then a small software firm, to develop an operating system for its first personal computer." http://en.wikipedia.org/wiki/Mary_Maxwell_Gates http://en.wikipedia.org/wiki/Mary_Maxwell_Gates
        ajays 15y ago
        Thanks for posting that. These little things are often not mentioned in the success stories we hear. Was Mrs. Gates' chat with Mr. Opel the sole cause of Microsoft's success? Of course not! But opening a few doors so early on is definitely a huge stroke of good fortune.
- tomhoward 15y ago
  Or perhaps PG thinks his personal success is based purely off his own brilliance with no helpful outside factors needed He doesn't think that. Though he claims to have made good decisions and benefited from competitor blunders, he frequently refers to incidents that nearly sank the company, and acknowledges the good fortune that saved them and helped them to their very happy exit.
itmag 15y ago
I see it as an experiment in thinking about leverage. If you minimized all the corporate office bullshit, leveraged your work to the max, AND worked hard on top of that, how much could you earn? The baseline becomes your work earnings WITH corp-bullshit, poor leverage, and lackluster effort, and then he extrapolates from that. Leverage analogy: think schwerpunkt in blitzkrieg. If you amass all your tanks on one sector of the front and crush the opposing line there, then you will have more of an impact than if you spread the same force out over a wider area.
- gizzlon 15y ago
  hm.. and I guess, if you're running in the wrong direction, you'll get there faster.. not sure if that's good or bad
  - itmag 15y ago
    Yeah if you amass your forces in the wrong place you will get slapped around like a cheap toy. Kursk salient.
  - brain5ide 15y ago
    Somewhere in here lies a differential equation that includes the probability of destination being the right one and distance to it to evaluate that.
- kamaal 15y ago
  I am not getting. You are going to end up being average in a large corporate. Your chances of succeeding in a start up are only 10%. There doesn't seem to be an easy way out of this career problem. There seems to be a problem with whatever you will do.
  - itmag 15y ago
    Is that 10% for "anyone who starts a startup" or is that 10% for me? I imagine the success chance would go up quite a bit if one does basic things like being persistant and reading up on the wisdom of others.
tchon 15y ago
I think PG's background as an actual programmer and having a computational paradigm versus Arrington's sophistry is an underlying factor here too.
biafra 15y ago
Its only 11.43 hours a day if you work on weekends. I am not advocating this! I think if you are passionate about your work and work 8 hours a day (5 days a week) at full capacity you are productive enough. I can work more for one or two weeks if necessary (with the adrenalin boost stemming from a near by deadline) but not for much longer.
- JGailor 15y ago
  This is a great point that is often overlooked in the startup work environment. In 8 years of working at Startups I have only ever been in one place where anyone actually worked a solid 8 hours (everyone happened to pair-program there, which was one of the biggest contributors to this IMO). In most places people spend somewhere between 25-50% of their time surfing the web, reading personal email, hanging out in IRC rooms, socializing, etc. At this particular startup we really did none of that during the day. We all just felt really strongly about what we were working on, as a team we worked with the business guys to set a strong direction for the near-short term, and for four hours in the morning and four in the afternoon we worked. That was it. At 6 pm we left basically feeling punch-drunk for the mental exhaustion, and we went and followed our respective personal pursuits. The result? The first place I'd worked where we launched on schedule with no overtime worked, with all of the features that business wanted for the big 1.0 (well, web-app 1.0... Really just a euphemism here). My point is that while Arrington goes on about working insane hours, everyone always seems to overlook how much time in the office isn't actually productive for the product. I've been at places where people "worked" 16 hour days, at least 6 of which were spent playing Starcraft LAN games.

1010100101 15y ago

Agreed. Another one who should get some flack is Thiel. He may just be the worst, suggesting kids should forgo a university education and going so far as to actually debate the "issue" whether an education is "worth it". For some of these VC to make money, they have no need to see university degrees. But they have their own interests in mind. And, lo and behold, most of them have university degrees.

sogrady 15y ago
I did find it ironic that one of Thiel's major complaints about education was the exclusivity of universities like Harvard given that his solution was a program that admitted a mere 20 would-be entrepreneurs. jwz is right: be alert to the agendas of those who would influence you.
- kevinpet 15y ago
  jwz is saying "follow the money". Thiel's drop-out scholarships are offered by his non-profit foundation. There is no relation between the discord between the self interest of a VC and a startup employee on the one hand, and the possibility that Thiel is giving bad advice to people who he has no financial interest in.
- deleted 15y ago
  [deleted]
nostromo 15y ago
I think you guys are being unduly cynical. Thiel recently debated this on NPR (http://intelligencesquaredus.org/index.php/past-debates/too-many-kids-go-to-college/ http://intelligencesquaredus.org/index.php/past-debates/too-...) and I found him very convincing. He repeatedly talked about the concern of young people leaving college with 200k+ in debt -- which I think is very fair.
- _delirium 15y ago
  Thiel's also discussed elsewhere his frustration with the liberal politics of academia, which he sees as an impediment to libertarian policies gaining wider buy-in, so I think he might have motivations for attempting to undermine it besides pure concern for students' debt. (Though it's quite possible he earnestly dislikes academia for multiple, independent reasons.)

tpatke 15y ago

There is a big difference between PG and Arrington: PG states that you should be working for yourself. YC is set up to allow entrepreneurs to make money if they work hard and a big part of that is allowing a company to grow before being required to take VC money - allowing for a better valuation. Sleeping under your desk with .05% equity? Probably a bad investment. Sleeping under your desk for 45% equity? Well, roll the dice. At least you will get paid if it works.

tchon 15y ago
Yes, 5 basis points is complete and utter crap. If you're going to work crazy hours, you might as well benefit from it proportionally. Gone are the days in tech when early employees would be rewarded for taking pay cuts in exchange for a higher amount of equity only to be completely diluted by each round of funding and the greediness of the MBA holding business founders.
- anothermachine 15y ago
  Sadly, those days aren't gone. But the days where those are the only option are gone.

jwr 15y ago

The difference is that PG actually did this stuff, while Arrington did not. PG is one of us, Arrington is not.

palish 15y ago
That's not true. Paul worked very hard to grow Viaweb for several years, and eventually guided Viaweb to a lucrative exit via Yahoo. Arrington worked very hard to grow TechCrunch for several years, and eventually guided it to a lucrative exit via AOL.
vidarh 15y ago
Mike (disclaimer: I know him) has done more startups than PG, and he did pretty much sleep under his desk for the first couple of years of Techcrunch (well, his desk was in his bedroom, and the Techcrunch "office" was the rest of his house) and has worked equally hard in the other startups he's done while I've known him. Including as a regular employee (that's how I met him - he worked at a startup I co-founded years ago). So he's not a programmer. There are non-programmers that also work hard, you know.
- 1010100101 15y ago
  He can't write code. He publishes a blog to attempt to persuade an audience of those who can. Before the blog, he worked with a company selling dropping domain names. Again, he wrote no code.
  - 1010100101 15y ago
    I think jwz would agree that "hard working VC's" are not what makes a startup (nor the VC's) successful.
- borism 15y ago
  Techcrunch "office" was the rest of his house nice definition of "under the desk"
  - 15y ago