Paul Graham is a computer scientist, author, and, as the founder of Y Combinator (an early-stage startup accelerator) is arguably one of the most famous people from Silicon Valley .
Paul Graham is known for turning half-cooked business ideas into fast-growing companies in a matter of months.
ImportantWhat is even more fascinating about Paul Graham is that he is not just another investor, programmer, entrepreneur. Paul Graham is a multidimensional thought leader .
He keeps a popular blog, where he writes thought provoking pieces with candidness as well as simplicity.
Paul Graham is the author of several programming books, such as: On Lisp (1993), ANSI Common Lisp (1995), and Hackers & Painters (2004). Technology journalist Steven Levy has described Paul Graham as a ‘hacker philosopher’.
Paul Graham has to be one of the web’s most fascinating essayists.
Startups are as unnatural as learning how to ski, and there’s a list of counterintuitive things you have to remember in order to keep your startup from flying down the hill.
As the founder of a successful startup and an investor for many others, Paul Graham offers key insights and lessons on how startups can move from their beginning stages into long-term success .
Paul Graham is one of my heroes, and here are the top five lessons I’ve learned from him.
This recipe will beat all three: ship quickly, then relentlessly optimize for growth, and don't hire a lot of people till you have it.— Paul Graham (@paulg) February 28, 2019
Think about the overall goal, then start by writing the smallest subset of it that does anything useful. If it’s a subset, you’ll have to write it anyway, so in the worst case you won’t be wasting your time.
The early adopters you need to impress are fairly tolerant. They don’t expect a newly launched product to do everything; it just has to do something.
Get a version 1 out fast, then improve it based on users’ reactions . I don’t mean you should release something full of bugs, but that you should release something minimal.
Users hate bugs, but they don’t seem to mind a minimal version 1, if there’s more coming soon.
WarningThe problem is, we all tend to ship too late and too infrequently . A number of psychological factors collude to stop you from shipping: pride, perfectionism, scope creep, fear of criticism, fear of rejection.
Just consider that a new product has many unknowns.
ImportantYou do not know which features will be important, and you do not know what design or implementation is going to work. Therefore, just as shipping early is essential to finding product/market fit, releasing new features early is also essential to product/feature fit .
When you’re going through Y Combinator, one piece of advice you receive is to ship early — to launch well before you think you’re ready.
With careful design and Wizard of Oz techniques you can often disguise minimal functionality while preserving time and engineering resources, some of your most valuable assets as a startup.
The only reason people will put up with buggy MVPs is if your startup solves a real problem.
The main downside to this approach is that your product will feel less mature and polished than it could. But the feedback, data, and learning you get from releasing v0 features far outweighs the minor early reputation damage you may incur.
Give yourself 24 hours or one week. Cut every single thing that isn’t ready. Launch already.
Most people talk about launching early and lean development . But they’re still screwing around, adding features, and deciding how to align the text on their homepage.
Know Your Users
One way to tell when a design has failed is when you have to add notices telling people how to use it. Push the start button to start. Click here to adjust whatever.— Paul Graham (@paulg) May 2, 2019
When asked how to increase demand in a marketplace, the answer was simple: build a product people want . Don’t be an expert on startups, be an expert on users. You’ll only have one opportunity to ‘wow’ customers, don’t underestimate this.
The most important is to explain, as concisely as possible, what the hell your product is about.
The other lesson Paul Graham repeats is to give people everything you’ve got, right away . If you have something impressive, try to put it on the front page of your website, because that’s the only one most visitors will see.
It’s only by bouncing your idea off users that you fully understand it.
Apple’s iTunes succeeded in selling digital music to users, by creating a simple platform where users can buy music for $1. While Microsoft’s Zune opted for users to charge “cash points”. Which increased the complexity for users by adding an additional step to purchases.
Start with a small, intense fire. Don’t be embarrassed.
In other words, find a small number of people that want what you have or are making badly . Paul Graham related the example of Apple, which only produced a couple hundred units of Apple I, its first computer. However, Apple sold 175 of those 200 units within the first 10 months by finding and appealing to early computer hobbyists.
There is no secret lifehack. You just do something people want, and if you’re good — you reap the rewards.
Whether it is a blog you are writing and you are concerned that you do not have enough visitors, a tea brand you started and it is not selling enough, this advice is for you: talk to those who are using the product or service and find out how you can make what you are doing even more desirable.
This concept parallels the idea of a company finding a niche market, or a social media maven finding his “true fans.”
ImportantAvoid the temptation to appeal to everyone; you’ll do much better in the long run if you meet most of the needs of fewer followers—and better still if you’re one of a select few meeting that need.
You can’t build things users like without understanding them.
Get Ramen Profitable
For most startups right now, being ramen profitable seems a better plan than fundraising.— Paul Graham (@paulg) March 25, 2020
Paul Graham often refers to the idea of “ramen profitability,” that point at which a startup is making just enough money to pay the founders’ basic living expenses .
Be obsessively thrifty from the start and give your company as many opportunities as possible.
ImportantCharge from day one and generate revenue from the beginning even when the product isn’t there yet . Once your customers are paying, they’ll surface insights that they wouldn’t otherwise.
Charging is the only way to get a pulse on your most important metrics which should drive every decision you make.
If you can cut expenses and run on small profit margins, you can become profitable faster , and you’re in a better position for your next rounds of fundraising.
The classic way to burn through cash is by hiring a lot of people.
WarningDon’t do it if you can avoid it, pay people with equity rather than salary, not just to save money, but because you want the kind of people who are committed enough to prefer that, and only hire people who are either going to write code or go out and get users, because those are the only things you need at first.
Economically, a startup is best seen not as a way to get rich, but as a way to work faster.
You have to make a living , and a startup is a way to get that done quickly, instead of letting it drag on through your whole life.
The main significance of this type of profitability is that you’re no longer at the mercy of investors.
If you’re still losing money, then eventually you’ll either have to raise more or shut down. Once you’re ramen profitable this painful choice goes away. You can still raise money, but you don’t have to do it now.
Be The Cockroach
Being the founder of a successful startup never gets easier. Startups take over your life more than you can possibly imagine . Cockroaches are going to be the only thing on this planet that survives a worldwide disaster, thriving on garbage, in conditions no one else wants to be in.
Be a hedgehog and don’t get in your own way. Pick ONE thing and do it well.
Here is the lesson : things will always go wrong, but you really only need a few things to go right. Enjoy the process, don’t sweat the little stuff , and focus your energy on the big stuff.
Nevertheless, if you’re thinking about turning in some new direction and your users seem excited about it, it’s probably a good bet.
ImportantMost successful startups end up doing something different than they originally intended. You have to be prepared to see the better idea when it arrives . If in each new idea you’re able to re-use most of what you built for the previous ones, then you’re probably in a process that converges.
High I.Q. isn’t everything. Just because someone is intelligent, doesn’t mean they can actually run a business and go out and execute.
Paul Graham has found his successful businesses aren’t successful because the founders are geniuses compared to other founders. The successful founders are the groups that don’t die . They keep getting another deal. They get the next user. They release another feature. They’re cockroaches.
We tend to attribute success to brilliance or intelligence.
But there are other things at play too, besides IQ: Work ethics, determination and maybe even luck? And what I learned from Paul Graham is that work ethics is the most important part of becoming successful .
Commitment is a self-fulfilling prophecy.
The most important quality in a startup founder is determination . You have to be the right kind of determined, though. You have to be determined, but flexible.
Pump Out Features
Mere rate of shipping new features is a surprisingly accurate predictor of startup success.— Paul Graham (@paulg) April 14, 2020
In this domain, at least, slowness is way more likely to be due to inability than prudence. The startups that do things slowly don't do them any better. Just slower.
You should make your system better at least in some small way every day or two. Users love a product/service that’s constantly improving . They’ll like you even better when you improve in response to their comments, because customers are used to companies ignoring them.
You should always let your idea evolve (most ideas appear in implementation).
WarningOne of the most curious parts about startups is how much they are counter-intuitive. You can’t use intuition to predict the best decision . You can, according to Paul Graham, use intuition to predict the people you want to work with. But you can never predict the startup strategy and tactics behind it on the gut feeling.
The #1 mistake that any founder will make is having a ‘vision’ which will cloud him from the truth.
This works even if you know this. By having a ‘vision,’ you live in denial — and you don’t listen to users . According to Paul Graham, even a brilliant idea is not really worth all that much in the grand scheme of starting a company. The reason for this according to him is that so often in startups success requires a pivoting.
Create features. Talk to users. Don’t get scurvy.
ImportantThere are endless distractions after you start a business. People want meetings, other startup founders want to get coffee, investors want to “touch base”. But you should be vigilant about following this advice from Paul Graham: “ A startup founder should be writing code and talking to users. That’s it. ”
When you plan to build a startup, you have to keep in mind that things will always go wrong, but you really only need a few things to go right .
Don’t try to construct the future like a building, because your current blueprint is almost certainly mistaken. Start with something you know works, and when you expand, expand westward.
Don’t trust your impulses on business. Trust your instincts about people.
In fact, Paul Graham states if there is one message he wants to convey to anyone looking to build a successful startup it is this: It’s hard. But doable .
Whatever you do, be sure to enjoy it.
It is easy to get caught up with what’s cool, what’s trending, what everyone is into . The reality is, you will only make a difference when you are:
- Doing something truly unique, that solves a problem.
- Doing something that gives you meaning and fulfills your soul.
ImportantThe very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing.
Most successful startups were started on the side, or out of need.
For example, Airbnb’s founders needed to pay their rent, so they started a website to rent out their couch and air bed.
Enjoy the process, don’t sweat the little stuff, and focus your energy on the big stuff.
We could endlessly share Paul Graham’s advices, but we believe that the five tips in this article contain his most important lessons. If you too have any advice, don’t hesitate to share them in the comments section below!
Digital Dandy. Hacker From Heart. Workaholic. Coding Artist. Self-made.