10 Life-Changing Lessons I Learned From Paul Graham

#10: The way to get startup ideas is not to try to think of startup ideas.

Sergey Faldin
Feb 14 · 9 min read
Image Credits: Getty Images under a Bloomberg license.

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. His essays are read by more than 35 million people each month.

He is one of my heroes, and here are the ten lessons I’ve learned from him.


#1. Startups are doable (and so is getting rich)

According to Paul Graham, there are three essential keys to founding a successful startup:

  1. Hire good people
  2. Build something people really want
  3. Spend as little money as possible

And the great thing is that all of the points above are doable. If you do them, you’ll have a successful startup. And because success at a startup makes its founders rich, becoming rich is doable too.

“Startups are not this great mystery that people only on the inside know,” he writes in his blog, “do something people want and spend less than you make. How hard is that?”

I also really like the idea that startups don’t change the nature of wealth creation. Instead, they re-distribute it.

“Startups allow you to compress 40–50 years of mediocre, slow-paced work in 4. Economically speaking, startups are saying: ‘Hey, I want to work much faster!’ How fast? As fast as you possibly can.”

Mainly what starting a startup buys you is time. If you’re the kind of person who doesn’t want to get rich slowly, then a startup makes sense.

#2. You don’t need an MBA

My father has an MBA. I dropped out of undergraduate business school after seven months because I didn’t understand what I was doing there.

Paul Graham teaches that knowing the ‘business side’ of things is irrelevant. Focus on the product first.

The rulers of the technology business tend to come from technology, not a business.

“If you work your way down the Forbes 400 making an x next to the name of each person with an MBA, you’ll learn something important about business school. After Warren Buffet, you don’t hit another MBA until number 22, Phil Knight, the founder of Nike…If you want to invest two years in something that will help you succeed in [technological] business, the evidence suggests you’d do better to learn how to hack than get an MBA.”

But technology is not the only type of business you can build. If you don’t know how to hack, you can always write, record a podcast, or make videos — create content that scales.

And just like in the technology business, you don’t need an MBA. Focus on the product (either tech or content), and make something people want.

#3. Let growth lead you

Startups = growth. Growth = startups. These words are synonyms, according to Paul Graham.

If you are in the business of creating a startup, take a look at Y Combinator — each project in the batch grows at least 10% per week.

That’s +10% users each week.

The best founders move fast. The phony founders always find excuses.

Make growth your critical metric — whether you’re creating a tech startup or a blog. Let it be your compass: get growth ahead of everything else, and let it lead you.

Even if it contradicts your initial vision.

#4. Start a startup when you’re young

My favourite quote from Pau Graham:

“If you try to start a startup right out of college and it tanks, you’ll end up at 23 broke and a lot smarter. Which, if you think about it, is roughly what you hope to get from a graduate program.”

Apart from it being hilarious, it’s also very true.

When you’re young (under 25–30), you can afford the risk. You don’t have the obligations, family, and bills to pay. You can make the jump.

When you grow older, though, a less risky, cash-flow positive (e.g., consulting) business makes more sense.

But…

#5. Don’t optimize prematurely

Yes, I am bringing this lesson again, because just like Kevin Kelly, Paul Graham also talks about the danger of optimizing prematurely (i.e., doing things too quickly).

It’s so important; I can’t stress this enough.

YC better not be [funding high school students], because that would be an evil thing to do, there are plenty of high school students who could start successful startups but they shouldn’t . . . Because if you start a successful startup, like, the footloose and fancy-free days of your life are over. You’re working for that company

This is especially interesting, given that Y Combinator (and Silicon Valley in general) are known for funding young founders. Think about the founders of Facebook, Stripe, Dropbox, Airbnb — they were all under 25 years old.

[These kids have the risk of indulging] in premature optimization. When you’re in high school and even in college, you should be figuring out what the options are, not picking one option and running with it . . . it’s good to mess around with a whole bunch of things in your early 20s, whether this messing around takes the form of college or something else.”

The real risk of starting a startup early is not that you’ll get broke, but that it will actually work — and you’ll get rid of the precious time you can spend exploring.

“Starting a startup is like catching a dragon by the tail if it works. Be careful at what point you do that.”

In his guest lecture at Stanford, Paul compares starting a startup with having kids. And while having kids is one of the greatest joys of life, there are a lot of things you can do that are easier when you don’t have kids.

“There’s not even a tradeoff here. You’re not sacrificing anything if you forgo starting a startup at 20 because you’re more likely to succeed if you wait,” Paul writes in his blog.

#6. Make something people want

There are a lot of young founders who do everything but what they actually should in a startup. Paul and his partners at Y Combinator call it ‘playing house’ — that’s when a young founder orders business cards, rents an office, hires employees, does everything but the most important part: making something people want.

How do you make something people want? You ask them.

You don’t need an MBA, and you don’t need to know how to raise an angel round (I bet most successful entrepreneurs you know today don’t know those things). The only knowledge you need to start a successful startup is knowing what your users want.

“You don’t have to be that creative. If you care enough about users, you can just follow what will make users happy the way a scientist follows the truth.”

And you don’t need to get a job or join any kind of community after college to do that. You can be on your own and still make something people want — be it writing a book, hosting a podcast, or blogging.

In this sense, hackers, painters, and bloggers are pretty similar. They all try to make things. And of course, you cannot always just do what you want; you’ve got to pay the bills too.

In his famous essay (and book) “Hackers and Painters,” Paul describes that makers created the term ‘day job’ — which came from musicians who had to work day shifts and play music at night.

There is no secret lifehack. You just do something people want, and if you’re good — you reap the rewards.

#7. Competition is NOT the cause of failure

The most common fear of creative people (people who make things) is competition. They are afraid that somebody else is doing the same thing as they are.

But competition is overrated.

In business, competition can be useful. It’s evidence of demand in the market. And lack of competition can be a sign that what you’re doing is not actually needed.

“One in 1,900 startups is killed by competition. The rest die because of the founders’ poor execution.”

So competition — in business, life, and arts — is not something you should be afraid of. Imagine running on a track. Suddenly, you look to your right and see another person running. Would you stop? No, you would continue running. If the other person is better than you, they win.

“Dying because of competition is like crashing into another aircraft in the clouds — highly improbable — you have so much space around you,” says Paul Graham.

The lesson here is that the way you win at business and life is not by constantly checking the rearview mirror that nobody else is following you. It’s by being the best at what you and make something people want.

#8. Determination is more important than brilliance

We tend to attribute success to brilliance or intelligence. But there are other things at play too, besides IQ:

  1. Ethics
  2. Determination
  3. Luck?

And what I learned from Paul Graham is that determination (and ethics) is the most important part of becoming successful.

“If you imagine this hypothetical person who’s 100 out of 100 for smart, and 100 out of 100 for determination. And then you start taking away determination. It doesn’t take very long before you have this sort of ineffectual brilliant person.

Whereas if you take someone who’s super, super determined, and you start taking away smartness bit by bit, eventually you get to some guy who owns a lot of taxi medallions, but he’s still rich, right? Or like a trash hauling business or something like that.”

#9. The mistake you will make when building a startup

One of the most curious parts about startups (and obviously, Paul Graham can be called an expert at them) 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.

Y Combinator has an inside joke that they give founders advice, which they will ignore. (And then come back a year later saying they were right)

And 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.

But it’s listening to users (making something people want, remember?) and allowing the growth to lead you — that makes a startup successful.

#10. The way to get startup ideas is not to try to think of startup ideas.

I left this lesson for the end because it’s so important.

I used to think that in order to come up with a business idea, I need to think hard enough. I felt that founders who create successful businesses are geniuses!

Paul Graham teaches us that, “the way to get startup ideas is not to try to think of startup ideas,” because “if you make a conscious effort to think of startup ideas, the ideas you come up with will not merely be bad, but bad and plausible-sounding, meaning you’ll waste a lot of time on them before realizing they’re bad.”

The way to come up with startup ideas (and any ideas for that matter) is to take a step back. It’s to program your mind in a way that it comes up with ideas on its own, without your conscious effort — in a way that when you come up with a startup idea, you don’t even recognize it as one.

The best companies — Facebook, Google, Apple, Yahoo — they all started as side-projects, like companies (which is a lesson in itself: start projects, not companies).

To make your mind come up with ideas, you need to:

  1. Learn a lot about things that matter
  2. Work on problems that interest you
  3. Do it with people you love and respect

It’s all about trusting your own curiosity and following your inclinations. Letting your genuine interest serve as an ‘internal compass.’

If you want to start a startup after college, what you should do in college is learn powerful things. And if you have genuine intellectual curiosity, that’s what you’ll naturally tend to do if you just follow your own inclinations.

So don’t come up with ideas for ideas’ sake. Instead, be interested. And remember that even Y Combinator started out as a side project because that’s what Paul was genuinely interested in.


Thank you for reading. Let me know in the comments if you want me to write about a specific person. And join my email newsletter to stay in touch.

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Sergey Faldin

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Bilingual author and blogger from Russia. I write for crazy contrarians obsessed with big ideas (i.e. people like me) Stay in touch: www.sergeyfaldin.com

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