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The Other Money Problem (evanmiller.org)
212 points by smcgivern on Dec 11, 2014 | hide | past | favorite | 71 comments



> If he tells you not to start a start-up, his co-founder wife, and all the start-up friends he’s made over the last several years, will be mad at him.

One of his essays from a couple of months ago very clearly made the point that a certain group of people shouldn't be doing startups (college students). That certainly seemed to be a big change in attitude to the essays from 10 years ago, and exactly in the opposite direction compared to your theory.

Edit: http://paulgraham.com/before.html


Regarding college students, I think this is a matter of becoming more responsible in his advice, now that he's become so prominent.


And a parent (as the beginning of the essay mentions).


More to the point, he has more data.

The startup world is a community that only wants to hear from the successes. Those who fail are laughed off as being bitter. PG has enough insight and decency to see a larger spectrum and speak on it.


I'd think this specific remark was to discourage those who want to start a startup because it's cool. And those who really want to do it they are going to do it anyway. No matter what anyone says.

So, I guess, this advice works for everyone, in one way or another.


If I was pg, unless I was writing essays based directly on the YCombinator experience, I would write under a pseudonym. Once you achieve a certain level of fame, it is simply too dangerous and aggravating to write honestly under your own name. This has only gotten worse in the past few years with the rise of angry twitter and tumblr mobs. The world is full of people who wish to punch upwards and tear someone down of higher status. And then on the flip side you have too many groupies who will agree with you just because you are successful. Of course, maybe he already is writing and submitting essays under a pseudonym, we may never know ...


There's too much of a benefit to his brand to not write. YC gets first pick of so many startups because people say, "I want to get advice from THIS guy"

As for the overall issue of "Talking your position" - everyone does it. Left and Right leaning economists get different research conclusions. You just have to be aware that it exists. And despite this, the advice from PG, Peter Theil, Marc A and others is different, despite them all being long startups.


Your second point needs more emphasis. Everybody has their own story, and it's always biased by their personal experiences and worldview. There's no such thing as a "fair and balanced" perspective, there are just people who pretend their perspective is balanced and end up introducing another sort of bias into it.

The article and some of the comments here seem to suggest that there's something more "authentic" about a piece when it comes from a subversive, low-power position. Why? What makes the perspective of someone in a position without power more authentic than the perspective of someone with it, other than the fact that it will probably resonate more with the personal experiences of many more people since power tends to be a pyramid with a much wider base than top?

The real answer is to carefully consider where the perspective of whomever is speaking is coming from, and identify how closely it aligns with where you are and want to go. The perspective of a billionaire on how hard it is to make ends meet, if you're living at the poverty threshold? Probably not that relevant. The perspective of a billionaire who started out poor on how he got to where he is? Probably pretty relevant.


>What makes the perspective of someone in a position without power more authentic than the perspective of someone with it...

General conservatism. People who have something to lose, be it money, fame, power, prestige, credibility, etc., will always weigh the benefits of their actions against the cost of losing what they have.

And they should. People with power are taken more seriously. Guys like Buffet can move the markets just by talking. But I think sometimes people don't WANT that kind of power/leverage when they write; maybe they just want to explore ideas, write for entertainment, or something else without all the hassle and baggage that status brings.


>What makes the perspective of someone in a position without power more authentic than the perspective of someone with it...

Well someone not in a position of authority or power doesn't have to worry about losing said authority. If you tell too many uncomfortable truths or offend the wrong people, you may in certain instances loose some of your power. So it makes sense that the likely hood of getting an "authentic" story seems to get less and less as the person telling it rises in stature, power, authority.


Someone who's in a position of authority or power doesn't have to worry about gaining said authority, while someone who's not very often does. Rationally, the two situations are equivalent. (Psychologically they aren't; there's a cognitive bias that causes people to weight losses higher than gains, but there's also a cognitive bias in others that makes it easier to avoid losses than enact gains, so they roughly cancel out.) You can't draw significant conclusions either way along this dimension: the willingness to sacrifice authenticity for power is a mark of the security<=>insecurity axis, not power<=>powerlessness.


I don't know that those two axes are orthogonal. It seems like there is an asymmetry between gaining power and losing power. I think we can agree empirically (if not definitionaly) that there are fewer people with power / status. There are a lot of things besides not offending those others that keeps people in a position without power. If you know that these other factors are keeping you low status, then you have less incentive to pretend to be something you are not. But a single offensive comment can sometimes dislodge someone with power.


> What makes the perspective of someone in a position without power more authentic?

The halo effect. [0]

Or to put it another way - cynical psychology.

0: http://en.wikipedia.org/wiki/Halo_effect



Actually, left and right leaning economists are surprisingly unbiased. See the essay (based on data) "Economists Are Almost Inhumanly Impartial". It's as if the scientific method works.

http://www.motherjones.com/kevin-drum/2014/12/economists-are...


Another source that disagrees...

http://fivethirtyeight.com/features/economists-arent-as-nonp...

It is very hard to not introduce bias into social sciences. This is also why psychology and software engineering studies are hard to trust. It is more pervasive in economics when there are rewards to be linked to a given worldview. (You can make a lot of side money as an expert witness if you have written a lot of papers either solidly pro or against anti-trust legislation)


The source you're linking is mentioned in the first 3 words of the article he linked. The MotherJones.com article is a direct response to the article you linked.


I'm not sure what the units are there in that graph, but when trying to scale the vertical and horizontal of the graph to have 1 unit vs 1 unit, it seems to have a larger looking slope to me. Still smaller than one though.

I may have made mistakes in resizing it though.


The X and Y axes do not have the same units, so scaling them this way is meaningless. The key point is that while there line has slope, the spread of the data is much larger.

I.e., the ideology of the study's author gives you very little information about the numerical values in the study.


scientific method? economists? LOL


Well it depends on what pg wants doesn't it? If his priority with his writing is to continue leveraging the YC brand then he should certainly write under his own name. And there are dozens of other reasons to write under his own name such as being able to speak to people about all his work in person very easily.

On the other hand, depending on how PG views his writing oeuvre, if he wants to be taken seriously as an essayist outside of the domain of business advice I could see it being in his best interest to write under a pseudonym. For better or worse most people are going to see him as Paul Graham startup investor/former startup founder. If he wants people to take writer Paul Graham very seriously, like Paris Review seriously, it would probably help to divorce himself as an author from his business background.


You're then putting him in a situation that nobody has any reason to listen to him. Okay, sure, maybe over the years he can build another brand around his pseudonym as a domain exert in something else, but that struggle is potentially just as difficult.


While I see what you are saying, it strikes me as advice that would make him fade into, if not irrelevance, some kind of "Sages of Yesteryear" status. It's safe, but you don't generate good ideas by being safe. (I don't have anything against pseudonyms but they are hard to keep secret.)

Part of the point of writing essays is to explore ideas honestly, and honesty is often not safe. I hope he stays honest.


you don't generate good ideas by being safe

necessity as they say is the mother of invention. money is the mother of indolence and sloth. hence the essay. The issue about mixed motives is also tied in their somewhere, too. honesty comes more freely to those with nothing to lose. whilst those with everything to lose, have averything to gain from shading the truth. {etc}


A pseudonym like, say, Evan Miller?


pg has already done this in a very limited capacity. See: "Tara Ploughman"


yup ...I'm always on the lookout for TP


what makes you think he doesn't


Seems to me this weirdly presumptuous post--imagine for a second a stranger pontificating to the world on how your wife would feel about you doing some hypothetical thing--is refuted almost entirely by Graham's lecture & essay "Before the Startup". http://www.paulgraham.com/before.html

He's not telling people unconditionally not to start a startup, but he is very frank about reasons why one shouldn't.


Exposing yourself to the Internet creates a strange sort of voyeurism where you have a personal connection to someone, but that connection tends to be one-way. This creates strange dynamics for prominent bloggers and especially for people on twitch.tv or YouTube where people are giving you life advice and telling you what you should/shouldn't do, or are questioning your actions like they are your close friend, even though you have no idea who they are.


> The problem is that if he doesn’t say this, well, his essays will be lacking in their erstwhile authenticity.

That's silly. He believed in startups, that's why he started YCombinator. That he's no longer at the helm of the startup he created doesn't mean he doesn't believe in startups anymore.

It just means that he's done them and helped others do them enough to where he's ready to move on. I'm a Ruby developer right now. If I switched to Rust tomorrow, that doesn't mean that I found Ruby lacking. Just that I want to explore a new kind of programming. They both fit the bill nicely for the types of problems they were intended to solve.

Don't focus on solutions. Focus on problems. The solution will come out of the problem. The startup 'solution' solves a particular kind of social problem. It still solves that problem. PG is finding a different problem, that's all. Perhaps at the junction of the funding problem and the founding problem, if I were to make a guess.


My personal opinion is that he still believes in startups, but that the timing was right for him to get out for awhile. Regardless of what he says, what he does is far more telling. My guess is that the fever pitch of huge valuations and fund-raising rounds is getting to a point where it might just make sense to step aside and find something else to do for a few years to see what happens with the market.

The idea would be that the Paul Graham "brand" has a lot at stake among startups. If the bottom falls out of the market in the next 2 years (or whatever you want to define as "short term"), then he'll come out the other side looking that much better, that he got out in plenty of time. If everything continues on its current trend, he still sleeps perfectly well at night and his reputation hasn't taken a hit at all.

Don't misconstrue this as criticism of anyone. I have nothing whatsoever against either Paul Graham or Sam Altman. This is just my personal opinion on the matter.


My theory about PG is that he got sick of being the political animal that YC currently requires. Compare and contrast PG and Altman.

Graham wrote a "Request for Startups" that expressed an honest and tradeable opinion: "these 6 categories are likely to make me money, I want to fund them." Now compare to Sam Altman's RFS: "here are all the possible categories, don't be mad at me for forgetting yours, plus a few feel-good platitudes that will make the media like me."

YC probably needs a schmoozer/politician more than an intellectual right now. But that doesn't mean PG wants to be that person.


I can't remember if it was pg's writings that I got this from, but this week I remembered reading a few years ago that recessions are a good time to start a startup, because the established players are less likely to spend on new risky things and because skills are easier to find. Both those things are feeling quite different right now, with the increasing trouble of attracting skills and the cash piles companies are increasingly confident on spending again.


Maybe this is just the efficient market hypothesis at work - everyone has (thinks they have?) figured out the signals that lead to success?

In any case, I wonder how companies with such massive escalation in their valuation will hire and raise subsequent funding. It really makes me wonder, you look at companies like Uber with $xx billion valuations, what's left for someone who joins now as an employee or investor?


> It really makes me wonder, you look at companies like Uber with $xx billion valuations, what's left for someone who joins now as an employee or investor?

That's always been the case. The opportunity for outsized gains in any risky venture is at the beginning where the risk is the greatest. Where there's no risk, there's no opportunity.


It's also worth realizing how profound YC and pg's influence has been on early-stage tech.

Off the top of my head: startups being seen as a legitimate career path alongside BigCo/academia, greater founder control of boards (almost unheard of post-Series A a decade ago), willingness to fund people without "track records", higher relative value of ideas, etc.


The article says: "Paul Graham has been thinking about start-ups the last several years, and he is almost certainly going to write about start-ups now."

Maybe. But I've noticed many of PG's tweets lately have been more political, dealing with other problems in the world.[0] I think it would be awesome if PG started attacking these kinds of problems more. Police violence, government surveillance, stuff happening in Israel, etc. Imagine a YC for politics.

tl;dr, I think PG needs to start a new country. I'd apply.

[0] https://twitter.com/paulg


> Imagine a YC for politics.

I can: it's the rest of the web. (edit: well, HN for politics, anyway)

Of the couple hundred people I follow on Twitter, many of them I followed hoping to see insightful tech tweets, but lately the tech has been drowned out in constant twittering about politics and other activism. This is really tiring even when I agree completely with the sentiments involved; I don't want to have my blood pressure raised pointlessly every time I check my twitter feed.

I keep thinking about trimming people from my feed, but in practice I just check my twitter feed less.


>Police violence, government surveillance, stuff happening in Israel, etc.

What's this idea of waiting for a handful of people to shape our entire world for us? You want these problems attacked? Then, attack them. I mean that sincerely and without contempt.

Further, nothing uniquely (or otherwise) qualifies pg to address every issue on the planet. He's awesome at startups, is generally a smart guy, and seems to be genuinely concerned about people/the world. All great qualities, but is he, or anyone else, the guy/gal for everything? Is that even desirable?

None of this is snark, nor aimed at pg or any one person in particular. I'm just genuinely baffled that so many thinking people want a few gatekeepers to shape the entire Universe for the rest of us. How about a little diversity of ideas that don't have to be sanctioned by the same three dudes to see the light of day? Investors and other kingdom-key holders are a tiny fraction of the population, yet wield hugely disproportionate economic influence as it is. Do we really want every social problem to be addressed by only the ideas/people they bless?

So many here are libertarian or otherwise have a "thing" about centralization of power and control. Yet, they continuously advocate that certain people create their world for them. It's tempting, I suppose, to see this as acceptable when those people seem bright and benevolent. But, in reality, it is still a position that advocates for personal disempowerment and a relatively monolithic society.


Or at least a new city.


Grahamtown.


Nottingham, Tottenham, Birmingham, Buckingham.

Graham.


I don't want to speak for him, but I'm pretty sure pg is more worried about people following his advice uncritically than he is about promoting YC. Ever since HN launched he has been pretty wary of encouraging people to drop out of school or quit their jobs when they have no reasonable chance of being successful.


The thing that was so striking about Paul Graham’s original essays was that they read almost as a kind of paranoid thriller. The world was out to dupe and enslave you, but he, Paul Graham, was — disinterestedly, dispassionately — going to get you out of here alive, armed only with Lisp, random facts about medieval Florence, and deep knowledge of Business Things.

I laughed out loud at this part. Classic.


This reminds me of the trouble musicians have in creating that 2nd album after their debut was such a big hit.

It's not anybody's fault but somehow whatever the musician subsequently does, it never sounds as pure as that first album.


If I understand correctly, pg didn't quit YC completely. He only resigned as YC president and now is a normal partner. If he was making millions, now he is probably making only 3/4 millions, not in the unemployment row.

He also resigned as the main HN moredator/administrator/spokeman/programer/whatever and put a few people to cover those tasks. He didn't earn money directly from that work, it was a side project that grew out of control. (I suspect he's still watching from the shadows. Hi!)


Let's not forget that pg probably doesn't have money as driver or motivator for his next adventures given that he has plenty of it. I would trust pg to say FU to any VC in world as needed although he might do it much more elegantly. Also given that he is much less involved at YC I would think his essay topics will change sooner or later. It's like Bill Gates who now writes almost nothing about software even though that's what he did for 30 years. One thing I would however agree is that something is different in his last two essays. Especially public praise for highly subjective physicic abilities of wife kind of took me of guarded from otherwise logical pg.


The author of "The Other Money Problem," seems to assume readers are not aware of change or that Paul Graham can't continue to be honest and interesting now simply because he makes more money than he did previously. According to this theory, J.K. Rowling would be less interesting to read now that she's rich, but I would argue that her new work is better. Dave Chappelle, Chris Rock, same thing.

Each of Paul Graham's essays were written as he slowly evolved into the man he is today. He was changing the entire time. Also, he knows more now than he did before.

The thing that saddens me is not Paul Graham getting advice from friends, it's people who try to take some of the shine off.


Your comparison is invalid, e.g. JK Rowling doesn't write books about how you should become a magician


There's more to this than meets the eye.

It depends on how you perceive writing. For example, "Old Man and the Sea" might be the greatest essay about criticism ever written, despite the fact that it's not an essay. You have to see through the story to get to the essay.

I think the reason so many people enjoy Paul Graham's writing is not only due to the subject or the genre, it's that he transcends the category, much like Hemingway did when he wrote "Old Man and the Sea."


For others who might be curious about the Hemmingway connection, http://petersencj14.blog.com/2013/02/15/an-essay/ seems to explain what you're referring to


For that "paranoid thriller" sort of feeling, try reading these blog posts: http://michaelochurch.wordpress.com/


I would actually like to be retired from the public politics-of-software within 5 years, focusing instead on the constructive and technical. (I'm looking for a replacement.)

I want to be successful, and so far things are going well and I think I will be, but I also think that success will make me less perceptive on what's actually going on. Ultimately, the way to know a society is to talk to the people at its bottom. In my case, most of the things that have awakened me to the evil lurking in our community (meaning technology, not just "startups") happened 2-3 years ago. Ten years from now, I hope to be an expert on other things but my evilology will have rusted.


Just wanted to say, I'm a big fan of your essays!

Another blog I like that seems somewhat related to "evilology" is http://www.ribbonfarm.com/, especially the essays on the Gervais principle.


>I admit to feeling a twinge of excitement last summer when I read that Paul Graham was leaving his jillion-dollar job to write more essays

rather apocryphal claim. I bet PG makes just as much money now as he did when he was running Y Combinator as most of his earnings are investment earnings, not salary from being Y Combinator President.

Sam's salary doesn't come out of Paul's pocket. It comes out of the management fees, of which, Paul's only charged a small part of.


> It’s the other money problem. Just as having a lot of money drives a wedge between friends, power drives a wedge between writers and their audience. It spoils all the fun. Sure, things might look the same as before. But they just won’t feel the same. But they just won’t feel the same.

How do you know how you will feel in the future? Do you read things assuming you already know what they are trying to say?


Maybe he'll write essays on being a good parent. Sort of like a being a good startup founder, and likely just as counter-intuitive.


Surely PG doesn't have an ego big enough to allow him to write prescriptively about intractable problems in good conscience.


perhaps, but PG does tweet a lot about parenthood. mostly general observations, not directives.


You know what man, critical reading/thinking. We should read just everyone in the same manner: with an open mind, but not one that just receives everything written as the ultimate truth.


This seems gratuitously mean. Why not let pg write some essays first?


Who cares who writes the essay? If you aren't reading the content without regard to who wrote it, yes, it will be less credible. You're using a system of authority / ad hominem, and those two sides of the same coin are not a good barometer for truth.

Who cares that he made money on it? If you want to really get into this discussion, anyone who writes about startups has a vested interest in advocating them -- that way their work is relevant instead of confusing ("let me tell you about how bad this thing you weren't going to do is" doesn't make sense to write). This whole line of thinking leads no where.


Beautifully written. The other money problem is talking about money.


Oh, bull.

We all have biases. We all, if we're known to our readers, are perceived as having biases that are not a perfect match to the biases we actually have.

Being credible despite those obstacles is a skill commonly self-taught.


This is silly.


I glanced through it but nothing caught my eye that much. you should elaborate why this is silly if you're going to take the time to leave a comment here. :)


What an utterly superfluous article. Why not just wait what he will write (if anything). There is no point in speculating about it.


I thought that was too meta and strained of a piece. I suspect his goal was just to say something that could make HN front page and then get some portion of that eyeball stream siphoned through to look at his commercial software Wizard. (and here I've helped with that further perhaps, haha.) But it was a very strained, strawman-heavy piece. Though I liked the writing in terms of craft.


PG essays aren't going to change, he isn't going to write exclusively about startups and he has no conflict of interest. One of his main messages in the past was "You don't have to take a corporate job like people may have advised you to, you can start your own company". I don't think his stance on that has changed, he just doesn't have to say it as loudly. Dorm room startups have become part of the cultural zeitgeist and the word has gotten out. Oscar winning movies have been made about prototypical startup founders, everyone has become familiar with the companies, the people behind them and the amount of money that they make. If you told someone at a cocktail party that you were going to start a software company back when PG wrote some of his first essays, you would have been looked at as a crazy risk taker. Now someone will say "Going to make a billion dollars, huh?". PG hasn't changed, the culture around him has.

Any conflict of interest is marginal at best. Paul Graham is in a situation where more startups will help his business interests, but only by a little bit. He's already built a world class brand and he doesn't need to hype it up like a late night tv commercial pitch man. It wouldn't change his financial standing if he did, and that's just not his personality. He's too smart, too wise and has much more to lose from damaging his image and reputation than he does to gain by convincing yet another college kid to start yet another photo sharing site. "his co-founder wife" won't be mad at him if he tells people not to start companies, or to start companies, or to study art instead. Make no mistake: Paul and Jessica are grown and highly intelligent people. They are in a place where petty greed isn't going to influence their decisions in any way.

Paul Graham is not a perfect man, but he sure as hell isn't weak minded. He's incredibly careful and he's usually right. All of his essays may not hit the mark, but I'm always looking forward to the next one.


Human beings are affected by conflicts of interest. Not weak minded people, not immature or stupid or unwise or careless people. People. All of them. It's how the heuristics in our evolved brains work.

I agree, if you have a view of people being rational actors, then Paul Graham seems like the kind of guy who would be able to rise above this kind of thing. We now know that this model of human behaviour is a fantasy. These types of biases affect your thoughts before they rise to conscious awareness.




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