Type to search

Interviews The Politic Blog

An Interview with Paul Graham, Founder of Y Combinator

Paul Graham is the recently retired co-founder of Y Combinator. In 1995, he and Robert Morris started the first software as a service company, Viaweb, which was later acquired by Yahoo in 1998 as Yahoo Store. In 2001, Mr. Graham started publishing essays on his personal website which now get around 15 million page views per year. In 2005, he and Jessica Livingston, Robert Morris, and Trevor Blackwell started Y Combinator, the first of a new type of startup incubator. Since 2005, Y Combinator has funded over 2,000 startups, including Airbnb, Dropbox, Stripe, and Reddit, which boast a combined valuation of over $155 billion. Mr. Graham is the author of On Lisp (1993), ANSI Common Lisp (1995), Hackers & Painters (2004), and a new Lisp dialect written in itself called Bel (2019).

The Politic: Why is the Pie Fallacy so prevalent? Why do so many even well-educated people think in zero-sum terms if all they need to do is separate the idea of money from material wealth?

Paul Graham: Perhaps the reason the pie fallacy is so prevalent is that it’s in our DNA. Research shows other species have a concept of fairness. This concept of fairness must be based on an equal division of existing resources, since it has only recently become possible for even humans to create significant new wealth.

You write, “If economic inequality should be decreased, I shouldn’t be helping founders. No one should be. But that doesn’t sound right. What’s going on here?” Some might argue that you’re rationalizing the importance of startups, private property, capitalism, etc. only because it worked for you. How do you respond?

Capitalism seems to have worked better than any of the alternatives, and capitalism implies startups, in the sense that you’d have to turn it inside out to prevent them.

Which of the following statements are you most opposed to and why?

1. Warren imposing a 40% exit tax on your net worth if you renounce citizenship.
2. Warren imposing a 2% tax on wealth over $50M and 3% on wealth over $1B.
3. Warren’s consolation, “Good news–you’ll still be extraordinarily rich!”

The exit “tax” seems the most alarming to me. Though it’s called a tax, it’s really just confiscation. And if you look at the other countries in history that have confiscated the property of people who tried to leave, it’s not company you’d want to be in.

Interestingly, though, this policy shows how quickly socialism turns into authoritarianism.

In The Hacker Crackdown, Bruce Sterling refers to Robert Morris’ Internet Worm of 1988 as the “largest and best-publicized computer-intrusion scandal to date” at the time. On a scale of 1-10, how *phreaked* out were you? Any key takeaways?

I was pretty freaked out at the time. It broke the whole internet for several days. It’s true the internet was nothing like as important as it is now. It was just the playground of a few nerds at universities and research labs. But I was one of them, so it seemed momentous to me.

The key takeaway, I think, is implicit in Michael Rabin’s response at the time: “Why didn’t he try it on a simulator first?” You can’t just assume that a program to do something so complicated is correct.

You write, “Popularity is always self-perpetuating, but it’s especially so in programming languages.” How does a new market entrant overcome this barrier? What key features do you see that inspire a movement towards a new programming language or paradigm?

The way new languages get attention is usually by being better for solving some problem than existing languages. Often this solution is represented by a specific application, as in the case of Unix and C. Sometimes an application alone is enough though.  E.g. Netscape made JavaScript.

As a public figure, do you feel more or less freedom to “pick battles?” Which hill are you dying on?

I feel less freedom, but more responsibility. I know that if I say certain things I’ll probably get dragged by a mob. But on the other hand, I’m one of the few people who can say heterodox things without worrying about getting fired. So if I don’t say these things, who will?

Which hill to die on? The most important ones are boringly fundamental. Not some specific controversy, but more basic stuff like due process in government, not suppressing evidence in science, and so on.

You write, “It’s hard to do a really good job on anything you don’t think about in the shower.” What’s the top idea in your mind right now and how are you making it happen?

The top idea in my mind right now, to be honest, is Covid-19. It seems likely to become a pandemic at this point, and I’m trying to figure out the details of isolating my family. No one has talked much about this, but it’s not a binary thing. You don’t just lock yourself up in your house one day. You have to withdraw gradually. But when exactly is the point where you’d no longer go out for dinner? When do you stop having your kids’ friends over to play? There are no conventions to guide us.

Quotes – Overrated? Underrated? Why?

“No man but a blockhead ever wrote except for money.” – Samuel Johnson.

I don’t think he really meant this. He was either feeling depressed or was just saying it to get a rise out of Boswell. He must have known that he enjoyed writing. You can sense it in many of the things he wrote. He’s not grudgingly turning out just as many words as he needs to get paid.

“You know, I’ll tell you, boy. Guilt–it’s like a bag of f*ckin’ bricks. All you gotta do is set it down… Who are you carrying all those bricks for anyway? God? Is that it? God? Well, I tell ya, let me give you a little inside information about God. God likes to watch. He’s a prankster.” – John Milton, The Devil’s Advocate.

Guilt seems a reasonable thing to feel. I don’t think you need to invent a God to feel it for. Even though I don’t believe in God, I do find it useful to ask e.g. “If someone could read your mind right now, what would they think of you?” Asking that kind of question can wake you up and make you behave better.

“I have not the pleasure of understanding you.” – Jane Austen.

This is just a polite Regency way of saying “I don’t understand you.” There’s nothing more to it than that.

Final question–follow up on your response to The Devil’s Advocate quote. In Hackers and Painters, you write: “Within my head I make a point of encouraging the most outrageous thoughts I can imagine.” Turning your question back on you, if someone could read your mind right now, what would they think of you?

What they’d think of me is that I’m very unproductive. I’ve been so preoccupied with the coronavirus that it has pushed everything else out of my mind. I published a decent essay about ten days ago. Ordinarily I’d be well into thinking about some new topic by now, but this time I’m not. I have no project. That feels weird and unpleasant. Soon I’m going to have to say enough is enough, and push the coronavirus into a corner of my mind so I can have room to think about other things again.