A brief snippet of Paul Graham’s brief writing advice

His original essay is here.

A few favorites (all quoted):

  • Write a bad version 1 as fast as you can
  • Expect 80% of the ideas in an essay to happen after you start writing it, and 50% of those you start with to be wrong
  • …just say the most important sentence first
  • Read your essays out loud to see…which bits are boring (the paragraphs you dread reading)
  • Write for a reader who won’t read the essay as carefully as you do

Hi! I write about habits and spirituality and random whatevers. Click here to see the daily habits that I track. Find me on Twitter @kgao.

The Great (Tech Inequality) Debate: a review of PG, Ezra Klein and Tim O’Reilly

When my family immigrated from China we lived first in the Philly ghettos. To pursue the American dream, we started on the poor side of the inequality tracks. But with hard work and sweat and some luck, my parents eventually carried us across those tracks (eventually leaving that area of Philly), but the experience left some scars. They are scars of experience and emotion for which today, in a position of privilege and comfort, I feel nothing but gratitude. Without those marks of memory, it would be easy to forget that the life I have now is a far cry from the one we endured then. It would be easy to forget that people – no matter where they land on the lifestyle and income spectrum – are alike in infinite ways, and different in only a vanishing few.

That is why I care about the inequality problem. It is a big problem, and it is made bigger because it touches people in ways that can feel like opposites but really aren’t. The solutions are there but are stuck in a swirl of human history and personal interest and the not-useful mud of right-versus-wrong, true-or-false. But the need for solutions, however, has increased in urgency and heat with recent events like the Occupy Movement and the publication of Thomas Piketty’s Capital.

So I’m glad, very glad, to see Silicon Valley join the battle. PG fired the first volley. Then Ezra Klein replied. PG countered. And most recently Tim O’Reilly added his salvo. (am I over-, or mis-, using this metaphor?)

Below is my description of each writer’s main arguments. I share them, like I share all notes, to understand things and hope I can be helpful. Please keep in mind that the notes are skeleton and bones, not meat and muscle. For that, please read the original essays.

At the end I share some questions and comments.

PG (Paul Graham)

[link to his essay]

1. There are many ways to get rich, and we mustn’t confuse the good ways (e.g., startup founders creating wealth) with the bad ways (e.g., corrupt practices in finance and healthcare).

But while there are a lot of people who get rich through rent-seeking of various forms, and a lot who get rich by playing games that though not crooked are zero-sum, there are also a significant number who get rich by creating wealth.

2. With the bad ways, if you try to stop them, you’ll often stop the good ways too. And even if you succeed in stopping the bad ways, you may create new problems, such as the “bad way” people becoming “good way” people, thus further increasing inequality.

You can’t prevent great variations in wealth without preventing people from getting rich, and you can’t do that without preventing them from starting startups.

3. The good ways of getting rich will only increase, because productivity is growing, because technology is improving. This trend is exponential

You do not want to design your society in a way that’s incompatible with this curve. The evolution of technology is one of the most powerful forces in history.

4. Instead of focusing on the symptom (inequality), we should focus on the underlying problems (such as poverty and low social mobility).

For example, let’s attack poverty, and if necessary damage wealth in the process. That’s much more likely to work than attacking wealth in the hope that you will thereby fix poverty.

Ezra Klein

[link to his essay]

1. Empirically: startups don’t cause inequality, and the rate of startups is actually declining while inequality grows

So perhaps that falling startup rate obscures a rise in the kind of startups that interest Graham. Even if that’s true — Graham doesn’t present data to prove it, but it certainly seems correct as a description of Silicon Valley trends — it doesn’t change the fact that there is no observable relationship nationally in recent decades between the rate of startup formation and inequality.

2. Wall Street and corporate compensation are the real villains

the incomes of executives, managers, supervisors, and financial professionals can account for 60 percent of the increase in the share of national income going to the top percentile of the income distribution between 1979 and 2005.

3. The growth of technology doesn’t mean inequality must grow, too

Technology makes individuals grow more productive, in part because they stand atop the knowledge and industrial base of their societies, and societies redistribute part of that wealth, in part because that’s necessary to sustain the political stability and economic freedom required to protect those individuals.

4. A society can enjoy both low inequality and high startup rates, e.g. Sweden

PG replies to Ezra Klein. I won’t include his reply here because it is brief and is, for the most part, a re-statement of his initial arguments

Tim O’Reilly

[link to his essay]

1. Not all startups cause inequality. The most successful startups, e.g. Google and Facebook, create more value (for society) than they take (for founders and employees)

even Thomas Piketty argues that increased productivity and better diffusion of knowledge create more wealth for society and are among the forces that reduce income inequality.

2. The financial industry is a big concern because, unlike successful startups, it creates less value than it takes

Around the turn of the century, financial markets provided capital to business and consumers at a cost of about 2% of the total economy. By 2013, that cost was up to 9%! (By contrast, the entire internet sector is about 5% of GDP!)

3. Another big concern, less discussed, is the abuse of stock options. Options and the tax loopholes that accompany them have propelled executive salaries and pushed down worker compensation

the use of stock options and other financial instruments led to a widening gap between the pay of executives and ordinary workers. In the 1960s, CEO pay was 20x that of the average worker. Now, it is 300x that of the average worker.

4. The real “pie fallacy” is that, as the global economic pie gets bigger, we falsely believe that everyone is better off

It’s true that through technology, trade, and the spread of knowledge, we have made a bigger pie. But that doesn’t mean that some people aren’t getting far more of the benefit, while others are losing out.

5. PG should talk to the “users” of inequality

Paul, you’ve always encouraged the startups you’ve coached at Y-Combinator to focus on their users, to get out of the office and talk to people. Yet here in this piece, you assume that what’s true in Silicon Valley is true everywhere.

6. The startups that cause inequality, unlike Google or Facebook, do so by taking more value than they create

When a startup doesn’t have an underlying business model that will eventually produce real revenues and profits, and the only way for its founders to get rich is to sell to another company or to investors, you have to ask yourself whether that startup is really just a financial instrument, not that dissimilar to the CDOs of the 2008 financial crisis

My thoughts and questions

1. Nobody mentions the difference between income and wealth inequality. This might be a lesser point, but I worry about wealth more than income. Because even if you earned your wealth in the good ways, by the time your grandchildren and great-grandchildren inherit it, that wealth is no good by the same reasoning. Instead, it’s idle wealth. Wasted wealth. Wealth that should be given to people who can use it to improve their lives, right now. So we should reduce wealth inequality. For example, we can raise the estate tax. If the estate tax was 99%, would that stop Larry Ellison from creating Oracle or Steve Jobs from starting Apple? Here’s a hint that it probably wouldn’t: look at the Giving Pledge, a commitment by Bill Gates and Warren Buffett, among other billionaires, to give away the vast majority of their wealth. The Giving Pledge is like an estate tax whose proceeds are directed by the benefactor instead of the government

2. We shouldn’t forget that too much inequality is itself bad. How much is too much? Like Justice Stewart’s description of porn, you know it when you see it. Even if we tackle underlying problems like poverty, an entire field of psychology research (and common sense) tells us that happiness is relative. My $5K bonus makes me happy until I learn that you got $12K. Not to mention the family that carries $8K in credit card debt and never gets a bonus…

3. Piketty’s book, Capital in the 21st Century (among others), shows that inequality isn’t a relentless boulder rolling down the hill of growing technology. Throughout history, inequality has risen and fallen (often in dramatic fashion) through the actions of communities and motivated individuals. That’s why this debate is so important.

Thanks for reading. I will continue to write and wonder aloud about this problem. If you have advice or feedback or suggestions, please reach out.

Hi! I write about habits and spirituality and random whatevers. Click here to see the daily habits that I track. Find me on Twitter @kgao.

What I learned about running and maybe about life

Several months ago I decided to start running.

Several sources inspired me: Murakami’s well-known dedication to running and completing marathons (including an ultra-marathon in Hokkaido featured in his running memoir); the book SPARK which describes the many physical and emotional benefits; finally, a long-held desire to do a triathlon, of which running is probably my weakest link (really, they’re all weak links).

But the strongest explanation is a simple one. One day I decided to get off my butt and start running, and to finally turn it into a habit.

At first, it was every other day for 30 minutes. Several months have passed; I now run 4-5 times a week, for up to an hour each time. It’s been a fun and tough and sweaty journey. The best part? Running is a great metaphor for life. So I get to wax faux-philosophical on some lessons learned. Here they are:

Learning to love pain

What I mean is, I didn’t start running because somebody asked me to become a runner. Just like I didn’t become a novelist because someone asked me to. One day, out of the blue, I wanted to write a novel. And one day, out of the blue, I started to run – simply because I wanted to. I’ve always done whatever I felt like doing in life. People may try to stop me, and convince me I’m wrong, but I won’t change. – Haruki Murakami

To quote a friend, people who love running learn to love pain. I’m pain-sensitive. Yes I’m basically a wuss. That’s been a barrier, I’m sure, to building the running habit, since if I’ve learned anything it’s that running is entirely an exercise in enduring pain.

Something helped me break the barrier: I stopped comparing myself to other runners. Before, those who passed me would piss me off. Running with friends was a constant mental exercise in determining who was suffering more. These insecurities stopped me before I started. I’m not completely rid of them, but I’ve been better, much better, about just getting going and doing my own thing.

Human beings are the most adaptable species on the planet. Our bodies are ground-zero. That’s why one person can eat 12K Big Macs in 30 years, and another can take 40K ecstasy pills in nine. Over time, I’ve noticed that my body (or some combination of mind-body) learned to quiet the pain. I still feel it, from the first step to the last, but it’s weaker, quieter, like an inner beast who’s hoarse from all the roaring.

Choosing the harder choice

If you have two choices, choose the harder. If you’re trying to decide whether to go out running or sit home and watch TV, go running. Probably the reason this trick works so well is that when you have two choices and one is harder, the only reason you’re even considering the other is laziness. – Paul Graham

It’s the sort of wisdom that comes from experience, and I’m not a complete convert, yet, but running has helped. 95% of the time, I don’t want to run, but 100% of the time, I’m glad I did.

Running is the harder choice compared to just about anything else I could do. Because if there is something harder (say, making a painful phone call, or writing a long blog post), I can always take an hour to run – and feel better – before I do that harder thing. And most things (say, streaming Netflix, or microwaving a Pizza Pocket) are easier.

The hard-ness or easy-ness of doing something is tied to the pain. Just like your body learns to quiet pain over time, you learn to defeat laziness as well. Like in a role-playing game, you earn experience points and level-up and pretty soon the previously strong enemies of sloth and apathy are easily beaten.

Life is good. Because habits

Habits, habits, habits. They are everything. I can’t talk about habits without sounding…old. But there it is.

Like most life lessons, you can overdo it. A little spice is good for a dish; a little habit is great for a meaningful life.

It’s a balancing act between repetition and revision. At least once a week, I’ll run wind sprints instead of the usual jog. Sometimes I’ll drive to the beach and run along the pier. Or I’ll go to the campus stadium and run the stairs. That act never ends; we only achieve true equilibrium when we’re dead (one of the few things I remember from AP Biology).

Sacrifice leads to satisfaction

The only thing that will make you happy is to set a goal, then kill yourself to achieve it. I have a theory that the elation you feel is directly proportional to the sacrifices you make. – Dr. Nicholas of Broadcom

Most of my life’s most satisfying moments have been the cumulation of years of sacrifice (for example, getting into a good college, finding a respected job, launching a company). And most of my life’s most regrettable or disappointing moments have been periods of extended indulgence (to me, the opposite of sacrifice). Everyone needs the occasional Vegas weekend, but aside from a few photos and funny stories, that happy feeling disappears on the flight home.

For simpler, more mechanical things like running, it’s even more reliable, both in your mind (“I finished something”) and body (“These endorphins are delicious”).

These are my rambles, for now. I prefer bending the rules to serve my needs. It’s a source of regret and reckoning. But with running, I’ve had to bend myself instead. Or in Murakami’s words:

I think certain types of processes don’t allow for any variation. If you have to be part of that process, all you can do is transform – or perhaps distort – yourself through that persistent repetition, and make that process a part of your own personality. – Haruki Murakami

Hi! I write about habits and spirituality and random whatevers. Click here to see the daily habits that I track. Find me on Twitter @kgao.

A summary of Paul Graham’s 18 mistakes that kill startups

Those of you that subscribe to my startup newsletter are familiar with my habit of summarizing the best long-form startup articles.

PG has arguably the most comprehensive, well-written set of essays for inexperienced entrepreneurs. Many of his lessons will naturally be acquired when you start companies, because in starting companies you will make mistakes and from mistakes you will learn these lessons, but if you want to avoid at least some of those mistakes, or make different ones instead, you should be reading his essays.

This essay, The 18 Mistakes That Kill Startups, is one of the best and it’s included in the startup newsletter. (subscribe here)

Like most of my blog posts, I write it in part to share advice with readers and in part to remind myself of what’s important.

This sums up the essay:

In a sense there’s just one mistake that kills startups: not making something users want. If you make something users want, you’ll probably be fine, whatever else you do or don’t do. […] So really this is a list of 18 things that cause startups not to make something users want. Nearly all failure funnels through that.

Here are the 18 mistakes:

1. Single Founder – all of the great technology companies had 2 founders (Apple, Microsoft, Google). Although I would argue Mark Zuckerberg and Jeff Bezos have come closest to breaking this rule

2. Bad Location – if you’re serious, be in the Valley (this includes SF)

3. Marginal Niche – avoid small markets, and focus on big problems in big markets

4. Derivative Idea – don’t take an existing success and tweak it in a small way. I think a lot of the “Airbnb for X” or “Heroku for Y” have this problem, too

5. Obstinacy – your original business plan is probably wrong, but it’s important not to change too quickly, either

6. Hiring Bad Programmers – self-explanatory; implied: starting a company as a business founder, without a strong technical cofounder

7. Choosing the Wrong Platform – platforms include Windows, Apple’s App Store, and Facebook; choose carefully since they’re your partner, whether you like it or not

8. Slowness in Launching – get your product into users’ hands as soon as you have a “quantum of utility”, then iterate quickly

9. Launching Too Early – less important than #8, but if you launch too early, you risk hurting your reputation

10. Having No Specific User in Mind – can you envision EXACTLY what your ideal user looks like, how she behaves, and what she wears?

11. Raising Too Little Money – raise enough to get to the next step, and then 50-100% more for buffer

12. Spending Too Much – happens when you hire too many people, and/or pay too much salary (give equity instead)

13. Raising Too Much Money – when this happens, you’re expected to spend it quickly, and your company becomes less nimble

14. Poor Investor Management – ignore them, and they’ll be upset; heavily involve them, and they may wind up calling the shots

15. Sacrificing Users to (Supposed) Profit – we were guilty of this: too much emphasis on finding a business model and earning revenue, before we had a product that users wanted

16. Not Wanting to Get Your Hands Dirty – the best founders do whatever’s necessary to grow the company, in particular understanding their users and acquiring more of them

17. Fights Between Founders – most unresolvable disputes are due to differences between people, not due to the particulars of a situation, so choose your cofounder(s) carefully

18. A Half-Hearted Effort – quit your day job, and be obsessed with your startup

Hi! I write about habits and spirituality and random whatevers. Click here to see the daily habits that I track. Find me on Twitter @kgao.

Amazing Media – 10 recommended readings

Recently I’ve begun saving and annotating my favorite blog posts, articles, videos, etc. Here’s the page where I’ll add new stuff (and old stuff, re-discovered).

I’ve learned that the value of great media is not the first time you consume it, but re-absorbing and re-experiencing it over time (and doing so mindfully).

98% of what we consume is crap – shouldn’t we treasure the 2%? You don’t see tennis players practice a new forehand once and just walk away. And there’s a reason why organized religions have ONE TEXT that they read, re-read, and re-re-read.

Here are 10 of my favorites:

Disappointed bear (c/o Buzzfeed)
Disappointed bear (c/o Buzzfeed)
  1. It’s Not About You: The Truth About Social Media Marketing by Tim O’Reilly (LinkedIn) – the most effective social media marketing is creating tools and content to help communities achieve their goals. Snippet: Your job, in short, is to uncover and activate latent social networks and interest groups by helping them to reach their own goals.
  2. The Dividing Line (Max Cho) – simple yet profound. If anyone is curious what Jeff Bezos is thinking…
  3. 10 Charts About Sex (OkCupid blog) – people are fascinating. Sex is fascinating. People’s sex habits, man! Snippet: Curvy women pass skinny ones in self-confidence at age 29 and never look back. They also consistently have the highest sex drive among the groups. Curvy, as a word, has the strongest sensual overtones of all our self-descriptions. So we’re getting a little insight into the real-world implications of a label.
  4. Applied Philosophy, a.k.a. “Hacking” by Paul Buchheit (Blogspot) – great and simple explanation of a valuable outlook on life and work. Although as important is WHAT you work on – problem choice is as important as the HOW. Snippet: Sometimes we catch a glimpse of the truth, and discover the actual rules of a system. Once the actual rules are known, it may be possible to perform “miracles” — things which violate the perceived rules.
  5. The Puzzle by Christopher Michel (Explorers.com) – beautiful and profound piece by Chris Michel on travel and by extension, life. Snippet: But the answers can’t be found in accumulating more. You knew that already. Well, so did I, but I’m not sure I really believed it. I do now. Happiness is reality minus expectations. And Americans, in particular, have some pretty high expectations. You do the math.
  6. That Which Does Not Kill Me Makes Me Stranger (NYT.com) – fascinating reporting on Jure Robic, one of the world’s greatest ultra-endurance athletes. Snippet: The craziness is methodical, however, and Robic and his crew know its pattern by heart. Around Day 2 of a typical weeklong race, his speech goes staccato. By Day 3, he is belligerent and sometimes paranoid. His short-term memory vanishes, and he weeps uncontrollably. The last days are marked by hallucinations: bears, wolves and aliens prowl the roadside; asphalt cracks rearrange themselves into coded messages. Occasionally, Robic leaps from his bike to square off with shadowy figures that turn out to be mailboxes. In a 2004 race, he turned to see himself pursued by a howling band of black-bearded men on horseback.
  7. 33 Animals Who Are Extremely Disappointed In You (Buzzfeed) – hilarious photos
  8. What Is Your Biggest Secret Desire That You Are Ashamed Of Telling Anyone? Reddit – love reddit for precisely these sorts of half-crazy, half-brutally honest windows into human psychology. The top vote-getter: In the middle of the night, I would pack one bag and drive away from my life. Not look back for one second and drive clear across the country. Find a small, rural town and just rebuild where nobody has an idea of who I am.
  9. Cities and Ambition by Paul Graham (PaulGraham.com) – a personal favorite among PG’s non-startup essays. Snippet: How much does it matter what message a city sends? Empirically, the answer seems to be: a lot. […] Most people who did great things were clumped together in a few places where that sort of thing was done at the time.
  10. George Orwell: Why I Write (Orwell.ru) – Snippet: And looking back through my work, I see that it is invariably where I lacked a political purpose that I wrote lifeless books and was betrayed into purple passages, sentences without meaning, decorative adjectives and humbug generally.

Hi! I write about habits and spirituality and random whatevers. Click here to see the daily habits that I track. Find me on Twitter @kgao.