Paul Graham

Quotes are word for word from the source.

• Great Ideas

  “great ideas tend to be such outliers that your conscious mind would reject them as ideas for companies.”

  Our noteTruly great startup ideas often seem so unconventional that your rational mind initially rejects them.

• Investor Commitment

  “Treat investors as saying no till they unequivocally say yes, in the form of a definite offer with no contingencies.”

  Our noteAssume investors are passing until they provide a firm and unconditional offer.

• Hindsight Bias

  “History tends to get rewritten by big successes, so that in retrospect it seems obvious they were going to make it big.”

  Our noteMassive successes rewrite history making their eventual triumph seem obvious in hindsight.

• Startup Growth

  “If you can just build something that you and your friends genuinely prefer to Google, you're already about 10% of the way to an IPO”

  Our noteBuilding a product that you and your friends genuinely prefer over existing giants is a solid first step toward a successful company.

• Software Optimization

  “Now if your software is slow you have to rewrite it to do more things in parallel, which is a lot more work than waiting.”

  Our noteRewriting software for parallel processing to improve speed is much more demanding than simply waiting for hardware upgrades.

• Strategic Adaptability

  “He's determined to get downfield, but at any given moment he may need to go sideways or even backwards to get there.”

  Our noteAchieving the ultimate goal often requires the strategic flexibility to move sideways or even backward temporarily.

• Founder Relationships

  “Startups do to the relationship between the founders what a dog does to a sock: if it can be pulled apart, it will be.”

  Our noteThe extreme stress of a startup will expose and tear apart any existing weaknesses in the founders' relationship.

• Danger of Seriousness

  “If these guys had thought they were starting companies, they might have been tempted to do something more "serious," and that would have been a mistake.”

  Our noteSetting out to build a serious company from day one often leads founders to pursue overly complex and mistaken ideas.

• Passion and Work

  “If you really love working on something, you don't need determination to drive you; it's what you'd do anyway.”

  Our noteTrue passion eliminates the need for forced determination because the work becomes natural.

• Ramen Profitability

  “Ramen profitability is the other extreme: a startup that becomes profitable after 2 months, even though its revenues are only $3000 a month”

  Our noteRamen profitability means quickly reaching just enough income to cover the founders basic living expenses.

• Growth as Decision Compass

  “Whether you succeed depends far more on you than on your competitors. So better a good idea with competitors than a bad one without.”

  Our noteAchieving growth makes everything else fall into place, allowing founders to use growth as a compass for all decisions.

• Business Models

  “The difference between Joe's idea and ramen profitability is that a ramen profitable company doesn't have to be making money the way it ultimately will.”

  Our noteThe initial revenue model for survival does not need to match the companys ultimate business model.

• Rapid Growth

  “The defining quality of startups is that they grow fast, and consulting just can't scale the way a product can.”

  Our noteThe core of a startup is rapid growth which requires scalable products rather than consulting services.

• Speculative Meetings

  “When you're operating on the manager's schedule you can do something you'd never want to do on the maker's: you can have speculative meetings.”

  Our noteA managers schedule easily accommodates speculative meetings that would otherwise ruin a makers day.

• Compromise

  “Those of us on the maker's schedule are willing to compromise. We know we have to have some number of meetings.”

  Our noteMakers understand the necessity of collaboration and are willing to compromise for essential meetings.

• Problem Solving

  “In any interesting domain, the difficulties will be novel. Which means you can't simply plow through them”

  Our noteInnovative fields present novel problems that require creative solutions rather than just brute force.

• Wealth Creation

  “There's no reason to believe there is any limit on the amount of newly created wealth consumers can absorb”

  Our noteThere is no upper limit to the amount of new value and wealth that consumers can absorb.

• Judging Potential

  “To be a good angel investor, you have to be a good judge of potential. That's what it comes down to.”

  Our noteThe essence of being a great angel investor is having a sharp eye for potential.

• Empathizing with Founders

  “If you can recognize good startup founders by empathizing with them - if you both resonate at the same frequency - then you may already be a better startup picker than the median professional VC.”

  Our noteEmpathizing with founders can make you a better judge of startups than the average professional investor.

• Decisive Investing

  “If you like a startup enough to invest in it, then invest in it. Just use the standard series AA terms and write them a check.”

  Our noteIf you find a startup worth backing, act decisively and use standard terms to invest without overcomplicating things.

• Root Cause of Failure

  “Though the immediate cause of death in a startup tends to be running out of money, the underlying cause is usually lack of focus.”

  Our noteWhile running out of money is the immediate cause of failure, the root cause is almost always a lack of focus.

• Message of Boston

  “What I like about Boston (or rather Cambridge) is that the message there is: you should be smarter.”

  Our noteBoston fosters an environment that constantly challenges its residents to become more intellectually capable.

• Importance of Environment

  “Most people who did great things were clumped together in a few places where that sort of thing was done at the time.”

  Our noteHistorically, people who achieved great things clustered in specific locations that were hubs for their fields.

• Cities and Ambition

  “Because ambitions are to some extent incompatible and admiration is a zero-sum game, each city tends to focus on one type of ambition.”

  Our noteBecause admiration is limited, different cities naturally evolve to champion and focus on specific types of ambition.

• Self-Discovery

  “You'll probably have to find the city where you feel at home to know what sort of ambition you have.”

  Our noteDiscovering the city where you truly belong is often necessary to understand the specific type of ambition you possess.

• Public Pressure

  “So if you want to get millions of dollars, put yourself in a position where failure will be public and humiliating.”

  Our noteTo achieve massive success, intentionally place yourself in situations where failure would be highly public and humiliating.

• Defining the Problem

  “The only thing worth talking about first is the problem you're trying to solve and why it's important.”

  Our noteThe most critical thing to communicate first is the specific problem you are solving and why it matters.

• Fear of Failure

  “Fear of failure is an extraordinarily powerful force. Usually it prevents people from starting things, but once you publish some definite ambition, it switches directions”

  Our notePublicly declaring your goals turns the fear of failure into a powerful motivating force.

• Value of Startups

  “Startups are fragile plants - seedlings, in fact. These seedlings are worth protecting, because they grow into the trees of the economy.”

  Our noteStartups are fragile at first but deserve protection as they eventually grow to support the broader economy.

• Growth Metrics

  “What matters is not the absolute number of new customers, but the ratio of new customers to existing ones.”

  Our noteGrowth should be measured by relative ratios rather than absolute numbers.