Paul Graham's Essays Part II

1. 0:00 – 3:23

   Founders Notes: A Readwise Product for Founders

   1. DSDavid Senra0:00

      All the way back in 2019, I received a message that changed the direction of this podcast forever. It was from Tristan, who is one of the co-founders of Readwise. He said, "Hey, I love the podcast," and he told me about the Readwise product. I responded, "Thanks, Tristan. Love the idea behind Readwise. I will definitely check it out." I had no idea that I would become a super user of his product. And so over the years, I've added my highlights and notes for over 300 books. I have over 20,000 highlights and notes for the books that I've read for the podcast. And because I can search every single thing I've ever done, I use Readwise every day. I never close the browser tab. The tab on Readwise is always open because as I'm reading, as I'm thinking, as I'm researching, I'm constantly going in and rereading all my notes and highlights. And you might already know this because every other podcast I go on, I talk about Readwise. I tweet about it. I post about it constantly. I've been saying for years, it is the best app that I pay for. And because I go around shouting about how great it is from the mountaintops, I get a bunch of messages. Nearly every day, people have asked me, "Hey, is there a possibility that I can actually get access to your Readwise?" And this happened so much for so long, and I thought it was like a superpower of mine. So I was like, "No, no, no, no." And then I started thinking, it's like, "Well, why, why does everybody want this? Like, why do they keep asking for this?" And I thought about it. It's like, well, if you think about this, it's like, has anybody else in the world read this many biographies of history's greatest entrepreneurs, obsessively taken notes on it, obsessively highlighted it? And I was like, "Oh, they want access because it's the world's most valuable notebook for founders." And I think people understood that instinctively. In fact, there's a line in Poor Charlie's Almanac that said that there's answers worth billions of dollars in a $30 history book. And I think that's the case for my notebook as well. So a few months ago, I went to the founders of Readwise, Tristan and Daniel, and I asked, "Hey, is there a way we can build a product together that actually mirrors what I see?" I want a way for people that want to subscribe to my notes and highlights to see exactly what I see. They can search by book. They can search by keyword. They can get access to the highlights feed, which is essentially what I call smart Twitter feed. It is a feed of short little highlights and notes from all different books on one page. And I also wanted people to see all the highlights that I've actually favorited. So, so far I've favorited 839 highlights. And so that's exactly what we built together. You can find it at foundersnotes.com. I will also leave the link down below in the show notes. And because this is brand new, it's actually half the price of what it's eventually going to be. There's not even a landing page. You just go to foundersnotes.com, sign up, and subscribe, and then you get immediate access. And it's important to note that I made this for founders already running successful companies. I think that's who's going to get the most value out of it. Those are also usually the most committed people. There is no monthly option. You can only subscribe for a year. It is only made for the already committed. And these kind of founders, and I include myself in there, they just want the f- the best way to reference the thoughts and ideas of history's greatest founders, and then they'll figure out how to apply what they're learning directly to their company. So if this is you, I encourage you to test it out for a year. You'll have access to the world's most valuable notebook for founders, and I think the value you'll receive, because the value I've gotten out of it, has been incredible. And I think that'll be the same case for you. If you wind up subscribing, make sure you keep it... Once you're in, make sure you just keep it in your browser. This is how I use it. The tab is always open on my computer. I'm referencing it dozens of times a day. It is a product I can get behind fully because I use it every day. You're literally seeing what I see. So if this sounds interesting to you and you wanna get access, go to foundersnotes.com.

2. 3:23 – 8:36

   How to Think for Yourself: Independent-mindedness and Curiosity

   1. DSDavid Senra3:23

      There are some kinds of work that you can't do well without thinking differently from your peers. Your ideas have to be both correct and novel. You see this pattern with startup founders. You don't want to start a startup to do something that everyone agrees is a good idea, or there will already be other companies doing it. You have to do something that sounds to most other people like a bad idea, but that you know isn't, like writing software for a tiny computer used by a few thousand hobbyists or starting a site to let people rent air beds on strangers' floors. He's referencing Microsoft and Airbnb there. Do you want to do the kind of work where you can only win by thinking differently from everyone else? Independent-mindedness seems to be more a matter of nature than nurture, which means if you pick the wrong type of work, you're going to be unhappy. If you're naturally independent-minded, you're going to find it frustrating to be a middle manager. And if you're naturally conventional-minded, you're going to be sailing into a headwind if you try to do original research. One difficulty here is that people are often mistaken about where they fall on the spectrum from conventional to independent-minded. Conventional-minded people don't like to think of themselves as conventional-minded. It genuinely feels to them as if they make up their own minds about everything. It's just a coincidence that their beliefs are identical to their peers. And the independent-minded, meanwhile, are often unaware how different their ideas are from conventional ones, at least till they state them publicly. Can you make yourself more independent-minded? I think so. It matters a lot who you surround yourself with. If you surround yourself with independent-minded people, hearing other people say surprising things will encourage you to, and to think of more. The independent-minded find it uncomfortable to be surrounded by conventional-minded people. A place where the independent and conventional-minded are thrown together is in successful startups. The founders and early employees are almost always independent-minded. Otherwise, the startup wouldn't be successful. But conventional-minded people greatly outnumber independent-minded ones. So as the company grows, the original spirit of independent-mindedness is inevitably diluted. This causes all kinds of problems besides the obvious one, that the company starts to suck. One of the strangest is that the founders find themselves able to speak more freely with founders of other companies than with their own employees. The importance of founders knowing other founders is repeated a lot in Paul's essays. I'm gonna read that one more time because I think it's important. One of the strangest is that the founders find themselves able to speak more freely with founders of other companies than with their own employees You don't have to spend all your time with independent-minded people. It's enough to have one or two who you can talk to regularly, and once you find them, they're usually as eager to talk as you are. They need you, too. You can expand the source of influences in time as well as space by reading history. When I read history, I do it not just to learn what happened, but to try to get inside the heads of people who lived in the past. How did things look to them? This is why I say every entrepreneur needs a library. It's a tool for entrepreneurs. Back to his idea about how to make yourself more independent-minded. More generally, your goal should be not to let anything into your head unexamined. And things don't always enter your head in the form of statements. Some of the most powerful influences are implicit. How do you even notice these? By standing back and watching how other people get their ideas. When you stand back at a sufficient distance, you can see these ideas spreading through groups of people like waves. The most obvious are in fashion. You notice a few people wearing a certain kind of shirt, and then more and more and more until half the people around you are wearing the same shirt. There are intellectual fashions, too, and you definitely don't want to participate in those. Because unfashionable ideas are disproportion-- oh my God, this is so good. Because unfashionable ideas are disproportionately likely to lead somewhere interesting. The best place to find undiscovered ideas is where no one else is looking. Novel ideas come from curiosity. Independent-mindedness and curiosity predict one another perfectly. Everyone I know who's independent-minded is deeply curious, and everyone I know who's conventional-minded isn't. The independent-minded are the gluttons of curiosity who keep eating even after they're full. And this is what I think the most important sentence in this entire essay is. How much does the work you're currently doing engage your curiosity? If the answer is not much, maybe you should change something. Curiosity is unlike most other appetites. Indulging it tends to increase rather than to satiate it. Questions lead to more questions. So perhaps curiosity is the compass. Perhaps if your goal is to discover novel ideas, your motto should not be do what you love so much as do what you're curious about. That is an excerpt from Paul Graham's excellent essay, How to Think for Yourself. And so before

3. 8:36 – 13:52

   How to Work Hard: Talent, Practice, and Effort

   1. DSDavid Senra8:36

      I jump into his next excellent essay, which is How to Work Hard, if I sound funny, what I went through this week is going to be very familiar to anybody with school-age children. My daughter brought home some kind of sickness. It was spread to my son, then spread to my wife, and then now I finally have gotten it. And so for the last few days, I've just been holed up in bed reading and reading and reading anytime I'm not asleep. So I have spent the last few weeks living inside the mind of Paul Graham, and it has been an amazing experience. So not only have I finished reading all of his essays, since I was sick in bed, I had the opportunity. I've already finished reading his book, which is a collection of essays too, called Hackers and Painters, which will be the next episode of Founders. I also have a collection of essays that I read and highlighted and made notes on that I won't get to today. I'll probably do it in maybe like a few weeks, maybe a few months. I'll just do like bonus episodes on Paul Graham's essays, you know, maybe every few months, because I do think they're extremely valuable for founders. So let's jump into, so my apologies if I sound a little funny. Let's jump into How to Work Hard. And so Paul writes, "It might not seem there's much to learn about how to work hard. Anyone who's been to school knows what it entails, even if they chose not to do it. And yet when I ask if I know more about working hard now than when I was in school, the answer is definitely yes. One thing I know is that," this is so good. I'm just going to repeat myself over and over again because I'm a huge fan of his writing. "One thing I know is that if you want to do great things, you'll have to work very hard. I wasn't sure of that as a kid. Was there perhaps," I thought about this way, and you might have as well, when I was younger. I was like, everybody told me, it's like, don't work hard, don't work harder, work smarter. And then what you realize is when you start studying people that reach the top of their profession, and if you want to be excellent at what you do and really do great work, that you do both. They all do both. They work hard and smart. And so Paul's kind of going back to his inner monologue that he was having as a kid. He's like, "Was there perhaps some way to evade hard work through sheer brilliance? Now I know the answer to that question. There isn't." In fact, Paul has this great quote where he's responding, on Twitter, he's responding back to Patrick Collison, the founder of Stripe, saying, "Hey, you know, Stripe is really hard to build. It took a lot of intensity and we had to work very hard." And he said something like, "Hey, you know, maybe better founders are able to do, build something great without working hard, but we couldn't figure out a way to do that." And Paul's response was, "That's an empty set. If Patrick and John Collison had to work both smart and hard, you're going to have to too." And so I feel that's where he's, that's very much his perspective in this essay. "The reason famous adults seem to do things effortlessly was years of practice. They made it look easy because they were practicing in private." Me and you talk about this all the time. "There are three ingredients in great work, natural ability, practice, and effort." This is really special to me because I feel in the last like six months, maybe 12 months, I feel you and I have been talking about practice just over and over and over again. I've become obsessed with the idea. "You can do pretty well with just two, but to do the best work, you need all three. Bill Gates, for example, was among the smartest people in business in his era, but he was also among the hardest working. 'I never took a day off in my 20s,' he said. 'Not one.' It was similar with Lionel Messi. When his youth coaches talk about him, what they remember is not his talent, but his dedication and his desire to win. P.G. Wodehouse would probably get my vote for the best English writer of the 20th century. No one has ever made it look easier, but no one ever worked harder. At 74, he wrote, 'With each new book of mine, I have the feeling that this time I've picked a lemon in the garden of literature. A good thing, really, I suppose. It keeps one up on one's toes.' And makes one rewrite every sentence 10 times, or in many cases, 20 times. That line reminded me, um, of something Rick Rubin said back on episode two f- 245 of Founders. And he says, "Less is more, but you have to do more to get less." And there's many examples when Rick is working with some of the best musicians that have ever lived, and they'll redo, uh, like a, a section of the guitar 30 times. If they want 10 great songs, they might have to write 100 just to be able to reduce it down to 10. So this idea, it keeps you on one's toes, makes one rewrite every sentence 10 times, or in many cases, 20 times. That is somebody that's at the top of their profession and had decades of experience at the time. He's 74 when he wrote that. It sounds a bit extreme, you think, and yet Bill Gates sounds even more extreme. Not one day off in 10 years? These two had about as much natural ability as anyone could have, and yet they also worked about as hard as anyone could work. So remember, let's go back to the title of the essay, How to Work Hard. They had as much natural ability as anyone could have, and yet they also worked about as hard as anyone could work. You need both. If great talent and great drive are both rare, then people with both are rare squared. And since you can't really change how much natural talent you have, in practice doing great work, insofar as you can, reduces to working very hard. What I've learned since I was a kid is how to work towards goals that are... This is really the description of the founder's journey, right? He's saying y- you have to work towards goals that are neither clearly defined nor externally imposed. You'll probably have to learn both if you wanna do g- really great things. When I'm not working hard, so this is-- He's describing his, like, what happens in his own mind when he feels he's not working hard enough. I wrote this is a gift and a curse. I highly suspect... I mean, I feel like this a lot. I'm- highly suspect you do as well.

4. 13:52 – 17:47

   Fire in the Belly: Discomfort with Idleness and Finding Your Limit

   1. DSDavid Senra13:52

      When I'm not working hard, alarm bells go off. I can't be sure I'm getting anywhere when I'm working hard, but I can be sure I'm getting nowhere when I'm not, and it feels awful. The reason it's a gift and a curse is 'cause you have this fire in the belly, this internal drive, but you re- can't really turn it off. And in some cases, my own inner monologue, I've told you before, sounds a lot like, uh, David Goggins' book, uh, You Can't Hurt Me. And I also don't think that's healthy either. I think you have to moderate it because you can be extremely... I, I guess there's no other word. You can just be extremely mean to yourself. Uh, like most little kids, I enjoyed the feeling of achievement when I learned or did something new. As I grew older, this morphed into a feeling of disgust. See, this exactly, I know exactly what he's talking about. As I grew older, this morphed into a feeling of disgust, disgust when I wasn't achieving anything. The, the one precisely datable landmark I have is when I stopped watching TV at age 13. He's gonna talk about he stopped watching, he got serious about his work at 13. He's gonna talk about Pat- uh, something Patrick Collison told him, the founder of Stripe. I'm gonna leave a link in the show notes. I think you should read it. You can just Google it if you want. It's called Aliens, Jedi, and Cults. It is a way to think about people that build incredible, usually incredible companies or even incredible movements. Paul is an alien. If you read that quick post, you can read it in I think like five minutes, you'll understand what I mean by that. Uh, Patrick Collison is also an alien. So it says, "The one precisely datable landmark I have is when I stopped watching TV at age 13. When I asked Patrick Collison when he started to find idleness distasteful," and that's another theme. This is in the book that I'll talk about next week too. Um, he talks a lot about, like, idleness is not... You, you're seeking it, it's not gonna make you happy. Uh, he finds it, well, distasteful is I guess the word he used there. He started to find idleness distasteful. He said, this is Patrick speaking now, "I think around age 13 or 14. I have a clear memory from around then of sitting in the sitting room, staring outside, and wondering why I was wasting my summer holiday." Back to Paul. Strangely enough, the biggest obstacle to getting serious about work was probably school, which made work, or what they called work, seem boring and por- pointless. I talked about this, uh, really, uh, referenced I feel his best essay on this, um, on last week's podcast. If you, obviously this is part two. You don't really have to listen to them in, in order if you don't want to, but I would listen to them. I'd listen to all three of them. You can pick the order. Probably makes sense to go in order. But anyways, that, that, uh, essay is How to Do What You Love, um, talks a lot about this. The, the, the problem is we're teaching, we're confusing kids that they automatically associate w- work with something, "Oh, I have to do. I'm not supposed to like it, and let me just get it over with, and that way I can then go and do the play part of my day or do what I wanna do." And Paul makes the point, well, you're never gonna be great at what you do if you have that attitude. Like, you, you have to be called to do it. You, like, it's almost like a, like it pulls you down this path where you, you want to do it. But as I learned the shape of real work, I found that my desire to do it slotted into it as if they'd been made for one another. And so that's what he's gonna refer from here on in as a real work, or work that you actually wanna do. Once you know the shape of real work, you have to learn how many hours a day to spend on it. You can't solve this problem by simply working every waking hour, because in many kinds of work, there's a point beyond which the quality of the result will start to decline. This is very fascinating. He talks about the different limits that he's experienced in his own life. I've done several different kinds of work, and the limits were different for each. My limit for the harder types of writing or programming is about five hours a day, whereas when I was running a startup, I could work all the time. So same thing for me. It's impossible. Like, when I hear Warren Buffett say he can read 500 or 600 pages a day, there's no way I could read 500 or 600 pages in a day. You know, for me it's, you know, three to four hours at the very most of a book a day. So it's kind of very similar to what he's finding when he's programming. He says, "Hey, my limit for programming is about five hours a day, whereas when I was running a startup, I could work all the time." And then I like this point. The only way to find your limit for working is by crossing it. Honesty is critical here in both directions. You have to notice when you're being lazy, but also when you're working too hard. Finding the limit of working hard is a constant ongoing process and not something you do just once.

5. 17:47 – 20:39

   Fear, Flaws, and Aiming at the Hard Core of Problems

   1. DSDavid Senra17:47

      Then he gets into your motivation for wanting to, to work this hard to begin with. What keeps me going depends on the type of work. When I was working at Viaweb, that was his startup that he sold to Yahoo, I was driven by the fear of failure. So I'm gonna pause right there. This is something that was fantastic. Uh, Jimmy Iovine, there's a, there's a great documentary on HBO called The Defiant Ones, and Jimmy Iovine's had a very interesting career. Record producer, founder, winds up selling the company he, he co-owned with, uh, Dr. Dre to, uh, Apple for billions and billions of dollars. But there's, at the very beginning of, uh, this Dre, this Dr. Dre song called All In A Day's Work, there's, there's a clip of Jimmy Iovine talking about how he utilized fear as a tool And this is what he said: "Fear is a powerful thing. I mean, it's got a lot of firepower. If you could figure out a way to wrestle that fear to push you from behind rather than to stand in front of you, that's very powerful. I always felt I had to work harder than the next guy just to do as well as the next guy. And to do better than the next guy, I just had to kill it. And, you know, to a certain extent, that's still with me in how I work. You know? I just go in." And so the idea that fear is a powerful force if you can actually use that as a tool instead of a hindrance, something that Jimmy Iovine repeats over and over again in a lot of different contexts is, "When I was working on ViaWeb, I was driven by a fear of failure. I barely procrastinated at all then because there was always something that needed doing, and if I could put more distance between me and the pursuing beast by doing it, then why wait? Whereas what drives me now, writing essays, is the flaws in them." So he is writing, I should tell you, 'cause a lot of the, um, essays I covered last week were, were a lot older. Um, I, I do have some that are maybe over 10 years old in, in the selection today. But, uh, the one I started with came from two, is in, written in 2020, and this one is from 2021. So let's go back to this. "Whereas what drives me now, writing essays, is the flaws in them. Between essays, I fuss for a few days like a dog circling whi- while it decides exactly where to lie down. But once I get started on one, I don't have to push myself to work because there's always some error or omission that is already pushing me." And then this next part is just absolutely excellence. I think that that is very common with high achievers or people that wanna be high achievers is this weird thing where you're almost more afraid of losing than you are ... Like, the, the, the pain of losing is almost greater than the, the thrill of winning. This part is excellent. "Many problems have a hard core at the center surrounded by easier stuff at the edges. Working hard means aiming towards the center to the extent that you can." So again, many problems, hard core at the center surrounded by easier stuff at the edges. Of course, I think you know where he's going with this. Most people are just gonna nibble on the easy part, right? But d- you only, you make the, the big jumps and the big progress by aiming towards the center. "Working hard means aiming towards the center to the extent that you can. Some days you may not be able to. Some days you'll only be able to work on the easier peripheral stuff. But you should always be aiming as close to the center as you can without stalling." That is an absolutely excellent couple paragraphs later. [laughs] I just keep repeating in the margins, "Excellent."

6. 20:39 – 25:16

   Interest as the Guide: Choosing What to Work On

   1. DSDavid Senra20:39

      "The consensus about which problems are most important is often mistaken, both in general and within specific fields. The consensus about which problems are the most important is often mistaken, both in general and within specific fields. If you disagree with it and you're right, that could represent a valuable opportunity to do something new. If you discover some ambitious type of work that's a bar- that's a bargain in the sense of being easier for you than other people," which we talked about echoes of this last week, and there's a, Naval Ravikant, um, also talks about this a lot. That's episode 191, and I think I went back and read my notes from the n- the Almanack Naval, and there's a lot of overlap between Naval's perspective and Paul. I actually think reading these books, maybe I'll reread it very soon. I actually think Paul Graham's essays and Naval, and Naval's thoughts go, uh, there's a lot of overlap, and they go hand-in-hand, I guess what I'm saying, because this echoes a lot what, uh, what Naval says. He's like, "You have to find work that feels like play." And one way to do that is there's something that you do that seems, seems easier, quote-unquote, to you, but other people can't believe you can do it. So it says, "If you discover some type of ambitious type of work that's a bargain in the sense of being easier for you than other people, either because of the ability to happen to have or because in s- of some way, of some new way you found to approach it, or simply because you're more excited about it, by all means work on that. Some of the best work is done by people who find an easy way to do something hard." This may be my favorite sentence in the entire wr- [laughs] I c- can't, like, scream or jump up and down like I normally do, but this is just, uh, I love this. "A deep interest in a topic makes people work harder than any amount of discipline can." So imagine if you could find a deep, like, uh, just you feel compelled. You have to do this. A deep interest in a topic, and then you combine that with world-class discipline. "A deep interest in a topic makes people work harder than any amount of discipline can. Some people figure out what to do as children and just do it, like Mozart." That's a crazy life story. Uh, episode 240 is the Mozart documentary. I gotta go back, or, uh, Mo- Mozart biography. I'm gonna have to read more books on him 'cause that's just, I think he starts doing it at, what, three years old if I remember correctly? "Some people figure out what to do as children and just do it, like Mozart. But others, like Newton, turn restlessly from one kind of work to another." And so obviously, I think Paul makes the point in this essay, and if he doesn't, I'm sure he would agree with it, way more common for you to have a path like Newton than it is for people to have a path like Mozart. "Along with measuring both how hard you're working and how well you're doing, you have to think about whether you should keep working in this field or switch to another. If you're working hard but not getting good enough results, you should switch. It sounds simple expressed that way, but in practice it's very difficult, and unfortunately no one can tell you other than yourself." This only works if you can trust your own judgment, right? But how much time? And w- and what should you do if work that was going well stops going well? How much time do you give yourself then? And what I like about Paul is he's not saying, "Hey, I have the answers." He's got approximations. But again, this is the reason that goes back to, uh, one of the, the best things and what I've been talking about in conversation since, since that podcast came out is just his, his thought. It's like, how many people truly get to do, like, how many, first of all, how many find, how many people find work they truly love and then work themselves in a way, in a position to actually do work they love? And he's like, "It's hundreds of thousands out of billions." This is so difficult. "The best test of whether it's worthwhile to work on something is whether you find it interesting. That may sound like a dangerously subjective measure, but it's probably the most accurate one you're gonna get. You're the one working on the stuff. Who's the succe-" Kind of ran over his point here, right? "Who's in a better position than you to judge whether it's important, and what's a better predictor of its importance than whether it's interesting?" So one line I, I say over and over again that I try to use as, uh, as a guide, not only for myself but also who to spend time with, is the most interesting people are the most interested. So this idea is like what, who, who knows better than you? What's a better predictor of its importance than whether it's interesting? And then this is just absolutely fantastic. Just what an ending to this essay. Working hard is not just a dial you turn up to 11. It's a complicated, dynamic system that has to be tuned just right at each point. You have to understand the shape of real work. See clearly what kind you're best suited for. Aim as close to the true core as you can. Accurately judge at each moment both what you're capable of and how you're doing, and put in as many hours each day as you can without harming the quality of the result. This network is too complicated to trick. Amen. But if you're consistently honest and clear-sighted, it will automatically assume an optimal shape, and you'll be productive in a way few people are. Okay, so I want to skip

7. 25:16 – 29:26

   How to Lose Time and Money: Fake Investments and Fake Work

   1. DSDavid Senra25:16

      to the next essay. As with everything, I will link all these essays down below. They're all free to read online. Even if you don't read the ones I covered, I would just go to paulgraham.com all the time and just pick an essay at random. They're all listed there. Just what sounds like what headline or title sounds most interesting to you. And then I do think the benefit is like rereading them, you know, intermittently. They definitely change. I've read that. I've read some of them, you know, who knows how many times. And every time I learn something different because I've changed as a person since then. So this is how to lose time and money. It's written in 2010. It says, when we sold our startup in 1998, I suddenly got a lot of money. I now had to think about something I hadn't had to think about before, how not to lose it. I knew it was possible to go from rich to poor, just as it was possible to go from poor to rich. But while I'd spent a lot of the past several years studying the paths from poor to rich, I knew practically nothing about the paths from rich to poor. Now, in order to avoid them, I had to learn where they were. So again, how to lose time and money is the name of the essay. So I started to pay attention to how fortunes are lost. I've read a bunch about this too. It's fascinating. If you'd asked me as a kid how rich people became poor, I'd have said by spending all their money. But in fact, the way most fortunes are lost is not through excessive expenditure, but through bad investments. This is also in line with the research I've done. I was shocked by it. I think I've told you in the past, one of my oldest friends, his dad played in the NFL, but this is like years before they made a ton of money. When he retired, he started a nonprofit. And that nonprofit was the fact that 90-something percent of them wind up claiming bankruptcy. And I think now they've expanded way past just this one form and to other sports and everything. This has been going on for quite a while, decades. But I'll never forget, and this is probably, I don't know, 10 or 15 years ago when I learned this, but they said the same thing. It's like, they don't go, you're thinking they're going poor because they're buying Ferraris. It's like, no, they gave their idiot cousin $250,000 to start a restaurant that tanked. It's all these investments. It's like, here, I'll give you $50,000 for this, and it just goes up in smoke. So let's go back to that. In fact, the way most fortunes are lost is not through excessive expenditure, but through bad investments. It's hard to spend a fortune without noticing. Whereas if you start trading derivatives, you can lose a million dollars or as much as you want in the blink of an eye. And he makes the point why this is so difficult because in most people's minds, if you're spending a bunch of money, there's like alarms that go off. It's like, well, I spent way too much money on luxuries or stuff I don't actually need. Where if you say now that money leaves your bank account, right? And it's going to leave your bank account for like a very fancy car or a nice purse or something like that. Hopefully, if you have some kind of level of intelligence, like, hey, I should probably not do that in relation to the wealth I have. But the point Paul makes here is that when you reframe the money leaving your bank account as an investment, it bypasses these alarms, even if a lot of these investments are going to go to zero. Investing bypasses these alarms. You're not spending the money. You're just moving it from one asset to another. And this part made me laugh. He says, which is why people trying to sell you expensive things say, quote, it's an investment. And so this part I absolutely love. A few days ago, I realized something surprising. The situation with time is much the same as with money. The most dangerous way to lose time is to not spend it having fun, but to spend it doing fake work. If I woke up one morning and sat down on a sofa and watched TV all day, I'd feel like something was terribly wrong. Just thinking about it makes me wince. And so he ties this together. But if you do fake work, kind of bypasses that alarm just like a fake investment, right? And yet I've definitely had days when I might as well have sat in front of the TV all day. Days at the end of which, if I asked myself what I got done that day, the answer would have been basically nothing. But the same alarms don't go off on the days when I get nothing done because I'm doing stuff that seems superficially like real work. Dealing with email, for example. You do it sitting at a desk. It's not fun. So it must be work. With time, as with money, avoiding pleasure is no longer enough to protect you. The world has gotten more complicated. The most dangerous traps now are new behaviors that bypass our alarms about self-indulgence by mimicking more virtuous types. And the worst thing is they're not even fun.

8. 29:26 – 32:42

   Schlepp Blindness: Why Hard Problems Are Opportunities

   1. DSDavid Senra29:26

      Okay, so now I want to jump to an essay that I've read a bunch of times. It's called Schlepp Blindness and it was written in January 2012. There are great startup ideas lying around unexploited right under our noses. One reason we do not see them is a phenomenon I call Schlepp Blindness. A Schlepp, it means a tedious and unpleasant task. This is going to remind you of something you and I have talked about a bunch, that business is problems and that companies are just effective problem-solving machines. I learned from experience that Schlepps are not merely inevitable, but pretty much what business consists of. A company is defined by the Schlepps it will undertake. Remember, tedious, unpleasant tasks. And Schlepps should be dealt with the same way you deal with a cold swimming pool. Just jump in. Which is not to say you should seek out unpleasant work per se, but that you should never shrink from it if it's on the path to something great. What a fantastic line. It's not that you should seek out unpleasant work, but that you should never shrink from it if it's on the path to something great. The most dangerous thing about our dislike of Schlepps is that much of it is unconscious. Your unconscious won't even let you see ideas that involve painful Schlepps. That is Schlepp Blindness. And then he gives the greatest illustration of this idea and why it's so powerful and what he means by describing that Stripe built their entire business on this idea. Really think about this as like it's a problem that is so hard that most people won't even consider it. The most striking example I know of schlepp blindness is Stripe, or rather Stripe's idea. For over a decade, every hacker who'd ever had to process payments online knew how painful the experience was. Thousands of people must have known about this problem, and yet when they started startups, they decided to build a recipe site or an aggregator for local events. Why? Why work on problems few care about, uh, few care much about, and no one will pay for when you could fix one of the most important components of the world's infrastructure? Because schlepp blindness prevented people from even considering the idea of fixing payments. He gives a fantastic metaphor to, to describe the value in, in these really hard problems. Problems so hard that we're kind of ignoring their existence. That scariness makes ambitious ideas doubly valuable. They're like undervalued stocks in the sense that there's less demand for them among founders. If you pick an ambitious idea, you'll have less competition because everyone else would have been frightened off by the challenges involved. This is also true of starting a startup generally. And then this next paragraph, I'm just gonna read to you what I jotted down in the margin when I got to this section. I've read several examples in these biographies that say exactly this. How do you overcome schlepp blindness? Frankly, the most valuable antidote to schlepp blindness is probably ignorance. Most successful founders would probably say that if they'd known when they were starting their company about the obstacles they'd have to overcome, they might never have started it. And then he ends giving you and I excellent advice. The trick I recommend is to take yourself out of the picture. Instead of asking, "What problem should I solve?" Ask, "What problem do I wish someone else would solve for me?"

9. 32:42 – 37:22

   What I've Learned From Users: Recurring Startup Problems

   1. DSDavid Senra32:42

      And then I absolutely love this next essay. It's essentially Paul giving us a summary of what he's learned by building Y Combinator. It's called What I've Learned From Users. It was written in September 2022. And so he says, "What have I learned from YC's users?" Which are the startups that they funded. And this just jumps out to me as well. I've shared this with you before. After reading hundreds of biographies of founders, I noticed a very similar idea as what Paul says here. The first thing that came to mind was that most startups have the same problems. No two have exactly the same problems, but it's surprising how much the problems remain the same regardless of what they're making. Once you've advised a hundred startups all doing different things, you rarely encounter problems you haven't seen before. And this happened to him recently. He tweeted out in August of 2022. He says, "Today I talked to a startup doing so well that they had no current problems that needed solving. They're profitable, growing revenue twenty times a year." And he said, "Not a typo." So it's very unusual, twenty times a year. "And they're only nine employees. This is so rare that I didn't know what to do. We ended up talking about problems they might have in the future. I advised them..." And then you see this theme over and over again. He wants you to have control of your own destiny. And he talked about what he would, what he would do. He's like, you know, "I'd keep the company as small as possible, not in revenues, but in employees. That way you actually have more of like a maker's schedule than a manager's schedule," which is probably what most founders wanna do anyways. So he says, "I advised them never to raise another round. So to get equity, you're going to have to be hired there. So learn how to program." So back to the essay. Uh, the fact is one of the things that makes Y-- that, this fact, excuse me, is one of the things that makes YC work. But I didn't know it when we started YC. It was a surprise to me how often the same problems recur in different forms. And I love that he says this, "But knowing nearly all the problems startups can encounter doesn't mean that advising them can be automated or reduced to a formula. Each startup is unique." And this essay I think just should be mandatory reading for founders. I don't know why anybody wouldn't want to read it. I mean, this entir- this entire next page, I essentially highlighted the whole thing. And the reason I say that is because he's just giving us the blueprint. He's like, "Listen, found-- not only do startups encounter the same problems over and over again, but founders make the same mistakes over and over again." So again, I would assume every single person making this mistake, smarter than me, how-- what's the likelihood that I would not do the exact same thing? So my goal is like, can I be one of these ver- very rare people that actually learn from the experience of other people? It's extremely hard to do. Another surprise is how bad founders can be at realizing what their problems are. Founders will sometimes come in to talk about s- about some problem, and we will discover another much bigger one in the course of the conversation. For example, and this case is all too common, founders will come in to talk about the difficulties they're having raising money, and after digging into the situation, it turns out the reason is that the company is doing badly and investors can tell. Or founders will come in worried that they still haven't cracked the problem of user acquisition, and the reason turns out to be that their product isn't good enough. There have been times when I've asked, "Would you use this yourself if you hadn't built it?" And the founders, on thinking about it, said, "No." Well, there's a reason you're having trouble getting users. And so this is where we have a massive advantage. You and I have a massive advantage because we have, w- I mean, you get to experience this because I have this giant database of all these different highlights and notes from, you know, hundreds of biographies and some... This... So when I get to this section, he's just like, this is beautiful what he said. "Would you use this if you hadn't built it?" And the founders, after thinking about it, say, "No." Well, there's a reason you're having trouble getting users. And I just reread this highlight two days ago, and it's Steve Jobs talking about where he comes up with his product ideas. And he's like, "It's not about pop culture, it's not about you fooling people, and it's not about convincing people that they want something they don't. We figure out what we want." And once you do that, the second part, he says, "I think we're pretty good at having the right discipline to think through whether a lot of people are going to want it too." Same idea that Jobs talked about he used in his own career is what Paul is advising the founders that he's talking to, to do the same thing. You've made a giant mistake. Often founders know what their problems are, but not their relative importance. They'll come in to talk about three problems they're worrying about. One is of moderate importance, one doesn't matter at all, and one will kill the company if it isn't addressed immediately. It's like watching one of those horror movies where the heroine, the, the heroine, uh, is deeply upset that her boyfriend cheated on her and only mildly curious about the door that's mysteriously ajar. You wanna say, "Never mind about your boyfriend. Think about the door." YC, the, the YC partners can warn them where the murderers are.

10. 37:22 – 38:33

    Why Founders Don't Listen: Counterintuitive Startups

    1. DSDavid Senra37:22

       Not that founders listen. That was another big surprise. See, this is why I say, like, we should... I just think founders should be reading this essay. Not that founders listen. That was another big surprise. So think about how much work, I mean, from, from Paul's perspective, he's like, that's a, that's obviously a big surprise. Like, you have to go through all these hoops. You have to put in a lot of time and effort to get accepted into YC. It's now very prestigious. I'm sure they, they turn away, you know, a good percentage of the people that apply. Uh, you've had to do a bunch of things to even get to this point to where you're actually talking to the partners at this organization that you applied to that you think is gonna greatly improve the odds of your company's success, right? Why the hell would you not listen to their advice? And so when I think of this, it's like, if I'm put in their shoes, I would probably make the same mistake that they're making, so how do I avoid it? And I think just being aware and constantly reminding yourself that, oh, this is a common mistake. Pause, step outside yourself. What's the chance, David, you're not doing the same thing? It's very, very likely that you're doing the exact same thing. So it says, "Not that founders listen. This was another big surprise." How often founders don't listen to us. A couple weeks ago, I talked to a partner who'd been working for YC for a couple batches and was starting to see the, the pattern. "They come back a year later," she said, "and say, 'We wish we listened to you.'"

11. 38:33 – 42:30

    Focus, Speed, and Course Correction

    1. DSDavid Senra38:33

       And then this is just fantastic. It took me a long time to figure out why founders don't listen. At first, I thought it was mere stubbornness. That's part of the reason, but another, and probably more important reason, is that so much about startups is counterintuitive. This is, um... There's a... I, I think I talked about this in the last podcast I did on Charlie Munger. I've done a bunch of them, but it's episode 221, I, uh, Founders. It's the book called Damn Right. And in that book, Charlie Munger says if he was ever teaching, like, a finance course or a course on business, he, he would... He was like, a curriculum would just be the histories of 100 companies that did something right or did something wrong. And it's a way to pierce, like, this, k- the counterintuitive nature of business building, right? So it says, uh, another, uh, another, and probably more important reason, is that so much about startups is counterintuitive. And when you tell someone something counterintuitive, what it sounds to them is wrong. So the reason founders don't listen to us is that they don't believe us, at least not till experience teaches them otherwise. The reason startups are so counterintuitive is that they're so different from most people's other experiences. No one knows what it's like except those who have done it. And that is why you will know this feeling that I'm about to say if you do this. That is why when you read the autobiographies of entrepreneurs from the past, yes, they're full of good ideas, but you're going to find that experience comforting. No one knows what it's like except those who have done it. And this wind up being good for Paul and his company because he says, "If it weren't counterintuitive, founders wouldn't need our advice about how to do it." And so then he gives us some advice. Focus is doubly important for early-stage startups because not only do they have 100 different problems, but they don't have anyone to work on them except the founders. Figure out which problems matter most and then cook up ideas for solving them. Try those ideas and measure how well they worked. If you correct course, if you, if you correct course at a high enough frequency, you can be simultaneously decisive at a micro scale and tentative at a macro scale. This is gonna be very similar to this idea you and I have talked about a bunch about Jeff Bezos. He's, he has this idea about two-way doors. Like, most of the decisions you're making in business are reversible, so make the decision. He's like, if it's something, if it's a decision you cannot reverse, which he calls a one-way door, then you better analyze that six ways to Sunday. But th- 99% of the, the decisions you're gonna make are reversible. And so he has that great quote, I think it's from the book Amazon Unbound, probably Founders 180, if I remember correctly, where he's like, "Listen, I, sometimes you have to aim, aim, aim, aim, and then shoot." He's talking to Amazon executives about launching a new business line in Amazon. He's like, "Sometimes you have to aim, aim, aim, aim, aim, and then shoot." He's like, "This is not one of those times. I want you to shoot, shoot, shoot, shoot, shoot, and then aim." [laughs] This is very similar to what he's saying. If you cor- cor- course correct at a high enough frequency, you can be sim- simultaneously decisive at a micro scale and tentative at a macro, macro scale. The result is s- is a somewhat winding path, but executed very rapidly, uh, like the path of a running back takes downfield. That's one of my favorite metaphors he uses a few times in, uh, in his essays. You know where you're going, you're going downfield, but you're very flexible on how you're gonna get there, and including some cases, you have to go backwards, right? And so then he goes to the value that Y Combinator gives to founders in, in, uh, in this specific example. That's where a lot of YC's value lies, in helping founders get an, an extra increment of focus that lets them move faster. Speed defines startups. Focus enables speed. YC improves focus. I double underlined that sentence. Speed defines startups. Focus enables speed. One of the favorite things I've ever heard was, uh, Seth Bannon told me about the founder of Cover, Alexis Rivas, that he was intolerant of slowness. I thought about that when I was reading the biography of Alexander the Great for episode 232, and I realized, oh, it's a combination, that Alexander combined an excessive tolerance of fatigue with an intolerance of slowness. Speed defines startups. Focus enables speed. Then he goes back to some more valuable ideas for founders. It can still be valuable for an experienced founder to do YC, just as it could still be valuable for an experienced athlete to have a coach.

12. 42:30 – 45:31

    Colleagues, Clusters, and Founder Generosity at YC

    1. DSDavid Senra42:30

       The other big thing YC gives founders is colleagues, and this may be even more important than the advice of partners. If you look at history, great work clusters around certain places and institutions. That I've noticed the same thing in the books that I read. However good you are, good colleagues make you better. Indeed, very ambitious people probably need colleagues more than anyone else because they're so starved for them in everyday life. And Paul knew this for a long time. He's-- I see this when he's, like, in his 30s writing essays, uh, way before he started YC. "We were very aware of this historical phenomenon and deliberately designed YC to be one. By this point, it's not bragging to say that it's the biggest cluster of great startup founders." And then he also proves that he takes his own advice. "I often tell founders to make something they themselves want, and YC is certainly that. It was designed to be exactly what we wanted when we were starting a startup." And I don't think he's writing it for the following reason, but I said this is Warren Buffett-level content marketing. By this point, I'm like, "How do I get in?" I think by this point, the point that Paul's writing this essay, you know, the momentum behind YC is kind of unstoppable. But it just goes to the quality of his writing and the clarity of his thinking that even if he's not trying to give you a marketing pitch, he's thought about this a lot, and then therefore, he can explain why it's valuable to you, and that idea immediately gets inside your mind. So he says, "Something magical happens when they do cluster. The energy in the room at a YC dinner is like nothing else I've experienced. When you have a whole room full, it's another thing entirely. YC founders aren't just inspired by one another. They also help one another." That, again, I see this over and over again. Why on earth? Most of the times when an entrepreneur writes an autobiography, they do it when they're, you know, they're, they're very close to the end of their life, and they know they're close to the end of their life. And in many cases, I'm thinking of Ingvar Kamprad, founder of IKEA, is one example, but in many cases, they do so. They're reluctant to do so, and they usually only do so because they're like, "Hey, the lessons I learned can benefit future generations of entrepreneurs." I, I feel that Paul's dead right about this. "YC founders aren't just inspired by one another. They also help one another. That's the happiest thing I've learned about startup founders, how generous they can be in helping one another." Same thing. I've seen this exact same thing, just how generous people are with their own ideas. It's remarkable, and I try to do the exact same thing. Uh, how generous they can be in helping one another. "The result is something far more intense than, say, a university. Between the partners, the alumni, and their batchmates, founders are surrounded by people who want to help them and can." And that is where I'll leave it for today. I got a bunch of essays I'll cover in the future in a bonus episode, and then as soon as I can, and my voice is back, I will record, uh, the part, Paul Graham part three, which will be the final Paul Graham, uh, for a while, uh, which will be on his book, Hackers & Painters. That is 276 podcasts down, 1,000 to go, and I'll talk to you again soon. Okay, so real quick. In case that you want to get access to my version of Readwise, which is called foundersnotes.com, you go to foundersnotes.com

13. 45:31 – 49:29

    Founders Notes Features Walkthrough

    1. DSDavid Senra45:31

       to sign up. That's founders with an S, just like the podcast, so foundersnotes.com. So when you sign up and you get access, I'm gonna tell you how, what, what are the features that I use the most. And so at the very top is the main feature, the one I use b- every day, and it says Search Highlights, and there's a search bar. And very simply, I just search by whatever keyword that I'm thinking about. So it could be about hiring, about marketing, about obsession. Uh, it could be about a specific entrepreneur like Rockefeller, whatever I happen to be thinking about or whatever problem I need to solve at the pr- at the time. So, like, the, the greatest example, and I actually made, like, a 30-minute, like, short AMA about this. It was asked, like, how do history's greatest founders think about hiring? And so if you type hiring in that box, you'll see what, what did Jeff Bezos say about it? What did Thomas Edison say about it? What did the people that founded PayPal say about it? What did Estee Lauder say about it? And on and on and on. And so I think that's pretty self-explanatory. Again, this is a product for people already running successful companies. I think I don't have to elaborate. You already know what the value of that would be. So the highlights feed is, uh, the search, excuse me, searching the highlights is what I use the most. Now, the s- the thing I use the second most is called the highlights feed. And the highlights feed, I'm loading it right now, essentially is just, like, these little almost, like, tweet-sized highlights from all different books. And so it is completely randomized, and it's almost like you have history's greatest entrepreneurs speaking to you. And then I just read through them and see what thoughts respond. So, like, the first thing that came up was actually, uh, it's actually a highlight from one of Warren Buffett's shareholder letters. He's talking about diversification and its relation to risk. The next highlight is a quote from Ed Catmull, the founder of Pixar, talking about he didn't even realize at the beginning of his company how poor the communication was and that there was things going on in his company that, that his, the people, his employees were not telling him, and his thoughts on how to fix that. Then there's a quote from a book that I read, like, six years ago, and it's actually the, the biography of Alibaba, and he's talking about the importance of listening and that poor listeners actually have second-rate negotiation skills. And so that is the second most used feature for me personally. This might be different for you. Third feature, books. You have a list of, uh, all the books that are in there. I think right now it says I have 307 books in here. I still have a bunch I need to put in. And then that, that's very simple. Like, I just went through. The reason I reposted the Mike Bloomberg episode, for example, is 'cause I've been rereading the highlights. And so I went back. If I don't have time to reread the book, which I will in the future, but I just read through. I think I have, like, 44, uh, highlights of Bloomberg's autobiography in here. And you read through them, and you, there's just so many ideas, and you, this is happening, like, 15 minutes. It's absolutely incredible. So that's self-explanatory. You can search by book. The last feature that I use the most is the favorites feature. You know, I have 20,000 highlights. It's, y- there's a ton of information in here. And so what I'll do is as I go back through the highlights, and I've done this forever, and that's why th- this number will always go up. I have 839 favorites now, but, you know, if you're listening to this months from now, it's, it's going to be higher. And, uh, whether it's through searching, whether it's through rereading the, the highlights on a specific book or through the highlights feed, which is the random, um, just showing me, like, the random highlights that I've done, if there's something that's like, "Damn, that's a good one. I really want to remember that," and so I, I highlight it, or actually, I favorite it, and then now that goes into the fav- favorites feed. So then I have an even more, like, specialized feed of ideas and highlights from different books all on one page. So again, need to reiterate, reiterate, I think if you are like me, and there's a good chance that you're, if you're listening to this, you're like me. If you're like me, you're already running su- a successful company. I think it's a, it's a no-brainer. I would at least test it out for a year. There's a chance that you don't like it. I'm not gonna share that opinion with you because like I said before, I listen to it, or I should not listen to it. I use it every day, and I think what I, what this is gonna be good for and what I hope to do is, like, man, like, for a founder to just have a browser, this, this notebook sitting in a browser that they can tap into any time, I think that's going to be very valuable. And I can say that because it's been very valuable for me. So hopefully that makes sense. If you wanna test it out, it is foundersnotes.com. Again, foundersnotes.com, and I also leave a link down in the show notes if you wanna grab the link from the podcast, the show notes on your podcast player, foundersnotes.com

Episode duration: 49:30