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

1-Page Cheatsheet: Language Intelligence by Joseph Romm

Language Intelligence by Joseph RommYou’ll get a lot from reading this one: 1-page cheatsheet to Language Intelligence by Joseph Romm [Amazon Kindle].

Why Language Intelligence

It’s well-written, reads fast, and includes famous things like the Bible, Lincoln, Shakespeare, Lady Gaga.

Unless making a conscious effort, we tend to take language for granted. I use “language” here to mean the use of words in communication.

We write, we read, we speak, we listen, and like driving a car, 80% is done in a sort of cruise control. Yet those who are GOOD at controlling words wield enormous power. Romm explains WHO those people are, HOW they do it, and WHY it works.

Read his summary if you read nothing else:

1. Use short, simple words.
2. Repeat, repeat, repeat. Repetition is the essential element of all persuasion.
3. Master irony and foreshadowing. They are central elements of popular culture, modern politics, and mass media for a reason—they help us make sense of the stories of our lives and other people’s lives.
4. Use metaphors to paint a picture, to connect what your listeners already know to what you want them to know. Metaphors may be the most important figure as well as the most underused and misused.
5. Create an extended metaphor when you have a big task at hand, like framing a picture-perfect speech or launching a major campaign.
6. If you want to avoid being seduced, learn the figures of seduction. If you want to debunk a myth, do not repeat that myth.

From Romm’s Wikipedia:

Romm is an American author, blogger, physicist and climate expert who concentrates on methods of reducing greenhouse gas emissions and global warming…Romm was elected a Fellow of the American Association for the Advancement of Science. In March 2009, Rolling Stone magazine named Romm to its list of “100 People Who Are Changing America”. In September 2009, Time magazine named him one of its “Heroes of the Environment (2009)”, calling him “The Web’s most influential climate-change blogger”.

Lessons and Highlights

Insight #1: rhetoric is used by the greatest thinkers and in the greatest works of all-time

Similarly, every great songwriter—our modern bards—inevitably masters rhetoric since rhetoric itself came from the oral tradition of the great bards like Homer.

In ancient Athens, all citizens needed to excel at public speaking because every citizen was required by Greek law to speak in his own behalf in court.

The King James Bible (KJV) is a masterpiece of rhetoric:

That the King James Bible did become a textbook of rhetoric will soon be evident: Many of the most famous examples of every figure of speech can be found in its pages. That the Bible would be a textbook of rhetoric was ordained, since the translators were every one a university-trained language scholar with a far more extensive formal education in rhetoric than Shakespeare, who, after grammar school, was purely self-taught.

Among our presidents, Lincoln was the most active student of rhetoric:

Lincoln worked hard to teach himself elocution and grammar. He studied the great speechmakers of his time, like Daniel Webster, as well the great Elizabethan speechmaker, the Bard of Avon. Lincoln continued his passion for poetry and Shakespeare throughout his entire life. He spent hours reading passages from Shakespeare to his personal secretary, John Hay, and the artist F. B. Carpenter.

Insight #2: shorter words are better

“The shorter words of a language are usually the more ancient,” as Churchill explained.

At the end of the debate, Reagan introduced a key question, a rhetorical question, that has since been repeated by countless candidates. He asked the audience to imagine itself at the polls and about to make the key decision. His words are worth repeating at length to hear just how much you can say with short words repeated often: “I think when you make that decision, it might be well if you would ask yourself, are you better off than you were four years ago”

Insight #3: repeat your words repeatedly; rhyme is sublime

The most watched YouTube video of all time is “Baby,” in which teen sensation Justin Bieber repeats the alliterative title an astounding fifty-four times.

Michael Deaver, the Karl Rove of the Reagan presidency, said in 2003 of the Bush White House: “This business of saying the same thing over and over and over again—which to a lot of Washington insiders and pundits is boring—works. That was sort of what we figured out in the Reagan White House. And I think these people do it very, very well.”

All these years after the 1995 O. J. Simpson murder case, defense attorney Johnnie Cochran’s phrase “If it doesn’t fit, you must acquit” still sticks in the mind.

It works brilliantly to rally a nation at war in Churchill’s famous 1940 speech: “We shall fight in France, we shall fight on the seas and oceans, we shall fight … in the air…. We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills….” We can hear these powerful words echo in our heads because Churchill understood that “every speech is a rhymeless, meterless verse.”

Perhaps the most elegant—and certainly one of the most popular—figures of repetition is chiasmus: words repeated in inverse order. Chiasmus is a great source of aphorisms. Mae West famously said, “It’s not the men in my life, it’s the life in my men.” Ray Bradbury advised writers, “You have to know how to accept rejection and reject acceptance.”

Insight #4: great speakers and writers use irony, from Shakespeare to Seinfeld

4 types of irony: Socratic irony, Verbal irony, Dramatic irony, Irony of Fate (poetic justice)

Socratic irony is the strategy of the master orator who denies eloquence, claiming to be an ordinary Joe, a plain-spoken man of the people.

Cleverly, Antony himself uses the word “honorable” ten times in this one speech. He repeatedly says Brutus is an honourable man and that all of the conspirators are honourable. His irony is increasingly blatant: “When that the poor have cried, Caesar hath wept; Ambition should be made of sterner stuff: Yet Brutus says he was ambitious; And Brutus is an honourable man.” With this drumbeat, Antony convinces the crowd that there was no justification for killing Caesar, which in turns means the murder was a dishonorable act.

Dramatic irony applies mainly to audiences—such as theatergoers or TV watchers—who know (or are told) the significance of words and actions when the characters do not. […] For instance, Shakespeare’s Iago tells the audience plainly in several early soliloquies that he is a dangerous liar plotting to destroy Othello and the other major characters. So we hear dramatic irony each time one of those characters calls him honest Iago or trusts him. We, the audience, know what’s going on, but Othello and the others don’t.

Poetic justice of all kinds is extremely common in popular culture. At the most basic level, in the vast majority of TV shows, movies, plays, and books, good triumphs over evil. Good is rewarded, evil is destroyed, criminals are captured, boy gets girl.

Insight #5: foreshadowing works well because…well, keep reading to find out ;)

The golden rule of speechmaking is “Tell ’em what what you’re going to tell ’em; tell’em; then tell ’em what you told ’em.”

Foreshadowing and ominatio are the foundation upon which the Bible’s scaffolding of rhetoric was built […] Jesus himself makes many prophecies.

Ultimately, the reason foreshadowing works, and the reason we can expect more of it in popular culture and political coverage is that we like to believe that people’s individual lives have a circularity, a consistency—a pattern.

Insight #6: use metaphor to enter the language Olympics

“To be a master of metaphor,” Aristotle writes in Poetics, is “a sign of genius, since a good metaphor implies intuitive perception of the similarity in dissimilars.”

Metaphors are one of the best ways to verbally connect to visual people, and those with high language intelligence are good at painting pictures with words—the green-eyed monster that is jealousy. […] Metaphors aid in memory a second way: They require the hearer or reader to think more, to light up more brain circuits, to figure out the connections and what they mean.

Elton John says in his tribute to Princess Diana (a revision of his tribute to Marilyn Monroe) that she lived her life “like a candle in the wind.” Lady Gaga’s uber-hit “Poker Face” is an extended metaphor of love as a poker game.

Insight #7: use extended metaphor to win a Gold Medal

Extended metaphor is, for me, the most important rhetorical device. This figure is at the heart of some of Lincoln’s greatest speeches. It pumps the life blood into Shakespeare’s greatest plays.

The Gettysburg Address may be the greatest extended metaphor in the English language, with Lincoln turning the bloody battle into a symbolic national crucifixion, although that facet of the speech is rarely taught.

In 2011, Lady Gaga explained her song-writing philosophy: “I just like really aggressive metaphors—harder, thicker, darker and my fans do as well.”

The power of frames and extended metaphors—the reason why smart orators use them—is that they cannot be overturned merely by presenting contrary facts. Let me repeat that: Facts cannot fight false frames. You must fight metaphorical fire with metaphorical fire. “One of the fundamental findings of cognitive science is that people think in terms of frames and metaphors,” writes linguist Lakoff.

Insight #8: rhetoric – like all tools – can be used for “good” and “bad”

The dark side of rhetoric was well-known—and well-feared—in ancient Greece. The term “Sophists” originally applied to those who taught rhetoric (and other subjects) for pay. The Sophist Protagorus boasted he could make the weaker cause appear to be the stronger. Hence sophistry, the term for disingenuous arguments.

Seduction, like persuasion, is a two-step dance for a master of rhetoric. First, a seducer must convince you that he or she is a trustworthy person, a person who shares your values and speaks your language. […] Once a would-be seducer has established he is trustworthy, that he is a plainspoken, straight-shooting person who means what he says and says what he means, then he can safely start saying what he doesn’t mean.

Rumsfeld is particularly good at asking questions that he then answers: “Is it [post-war Iraq] going to be as efficient as a dictatorship? No. Is it going to be vastly more desirable? You bet.”

The authors found that rather than deny a false claim, it is better to make a completely new assertion that makes no reference to the original myth. It takes a lot of message discipline to do this, but if you want to debunk a myth, you need to focus on stating the truth, not repeating the myth. Richard Nixon said, “I am not a crook,” and only his final word still rings in our ears.

General tips

I’ve come to realize that the single most important part of any blog post is the headline.

The second most retweeted tweet of 2010 was from the rapper Drake: “We always ignore the ones who adore us, and adore the ones who ignore us.”

We should all minimize the use of negative suggestions in everyday life. […] when you make an important phone call to someone who is busy, don’t ask, “Are you busy?” or, “Is this a bad time to talk?” as the words “busy” and “bad time” will ring in their ears. Ask, “Is this a good time to talk?”

That’s it, folks

Here’s a list of all 1-page cheatsheets, and a list of all books!

August Quotes: “It’s worth noting that you can devote your life to community service and be a total schmuck. You can spend your life on Wall Street and be a hero” – David Brooks

Homer Simpson the vegetarianSee all previous ones here. Tucker Max writes a monthly quotes post which is great.

Love the way this sounds:

Poems are made by fools like me, but only God can make a tree. – Joyce Kilmer

From a favorite Brooks article:

I saw young people with deep moral yearnings. But they tended to convert moral questions into resource allocation questions; questions about how to be into questions about what to do…It’s worth noting that you can devote your life to community service and be a total schmuck. You can spend your life on Wall Street and be a hero. – David Brooks

Even other cultures, millenia ago, were thinking about habits:

Watch your thoughts; they become words. Watch your words; they become actions. Watch your actions; they become habit. Watch your habits; they become character. Watch your character; it becomes your destiny. – Lao Tzu

Reminds me of the rage to master:

The dirty little secret of every creative workshop or motivational seminar is simply this: The person who is going to change is going to change anyway. She has no choice. She is impelled by inner necessity. – Steven Pressfield

I don’t like when people say that something is “strictly business” or that they’re “being logical”. Your emotions are to thinking like bread is to a sandwich, without which it cannot exist.

Reason is and ought to be only a slave to the passions, and can never pretend to be any other office than to serve and obey them. – David Hume

Certainly feels true, no?

Every great cause begins as a movement, becomes a business, and eventually degenerates into a racket – Eric Hoffer

Meditation is helping me with this:

Infinite patience gets you immediate results – James Altucher

I suck at this:

Love your enemies, for they tell you your faults – Ben Franklin

I agree with the below. Sometimes overly so?

The only path to amazing runs directly through not-so-amazing – Seth Godin

Like the old saw, “a fox knows many things but the hedgehog knows one big thing”…

Fanaticism is the only way to put an end to the doubts that constantly trouble the human soul – Paulo Coehlo

Haha:

If most of your courtship attempts have succeeded, you must be a very attractive and charming person who has been aiming too low – Geoffrey Miller

Why I stay away from email and social media in the evening:

Arguing with people is like reading your email at 4am in the morning. There is absolutely no good that can come of it. It’s just scratching an itch – James Altucher

This Hemingway guy, really something:

This too to remember. If a man writes clearly enough any one can see if he fakes. If he mystifies to avoid a straight statement, which is very different from breaking so-called rules of syntax or grammar to make an effect which can be obtained in no other way, the writer takes a longer time to be known as a fake and other writers who are afflicted by the same necessity will praise him in their own defense. True mysticism should not be confused with incompetence in writing which seeks to mystify where there is no mystery but is really only the necessity to fake to cover lack of knowledge or the inability to state clearly. Mysticism implies a mystery and there are many mysteries; but incompetence is not one of them; nor is overwritten journalism made literature by the injection of a false epic quality. Remember this too: all bad writers are in love with the epic.
-Ernest Hemingway

Will automation render human workers obsolete? Daniel Akst explains

Dilbert on automationY’all know I’m a big fan of reading stuff and then summarizing it. I’ve been doing CliffsNotes for books with my 1-page cheatsheets, and for startup articles with 1-read-a-day.

Wilson Quarterly is a new find. Their articles are long (3,000+ words), well-researched, and written in a “scholarly journalist” voice like The Economist.

Daniel Akst writes the weekly R&D column for WSJ. His essay, Automation Anxiety, is perfectly timed with some questions on my mind, such as:

  • As U.S. jobs are increasingly concentrated in technology and knowledge, what happens to workers who are left behind?
  • How will the U.S. maintain its global leadership, as we increasingly see signs of strain in its economy, its cultural influence, and its moral authority?
  • What will the “job of the future” look like?
  • How many of today’s jobs will be automated, and in what way?

My bias is to write down insights that are new to me, as opposed to what I think will be most interesting to the widest swath of readers. Treat it like a Costco free sample: if you enjoy it, go and read the whole thing.

CliffsNotes for Automation Anxiety by Daniel Akst

His main question:

But now, with the advent of machines that are infinitely more intelligent and powerful than most people could have imagined a century ago, has the day finally come when technology will leave millions of us permanently displaced?

A big part of his thesis:

Notice Bloom’s insights: first, that technology could obviate arduous manual labor; second, that this would cost somebody a job; and third, that it would also create a job, but for a different person altogether.

Some stats

  • US shed 6.3mm manufacturing jobs between 1990 and 2010
  • Unemployment is at 7.5%, 4 years after our “Great Recession”

Akst goes on to compare our situation today to similar automation and job market fears in the 1950s and 1960s (the Kennedy, LBJ eras). Unemployment was high (hitting 7% at one point)

The prominent economist Robert Heilbroner argued that rapid technological change had supercharged productivity in agriculture and manufacturing, and now threatened “a whole new group of skills—the sorting, filing, checking, calculating, remembering, comparing, okaying skills—that are the special preserve of the office worker.”

And here we get to the second piece of Akst’s argument:

some of its most important effects were felt not in the economic realm but in the arena of social change

In the 1950s and 60s, we mistakenly assumed that there was a ceiling to demand for goods and services (hah!):

Although the principle that human wants are insatiable is enshrined in every introductory economics course, it was somehow forgotten by intellectuals who themselves probably weren’t very materialistic, and who might only have been dimly aware of the great slouching beasts of retailing—the new shopping malls—going up on the edge of town

Interestingly, there was also concern that – with consistently shorter working days – we’d hit a point where we hardly worked at all. What would we do with the leisure time??

In the first half of the 20th century, the number of hours worked per week had shrunk by a quarter for the average worker, and in 1967 the futurist Herman Kahn declared that this trend would continue, predicting a four-day work week—and 13 weeks of vacation.

Some writers got it right:

Simon wrote, “The world’s problems in this generation and the next are problems of scarcity, not of intolerable abundance. The bogeyman of automation consumes worrying capacity that should be saved for real problems—like population, poverty, the Bomb, and our own neuroses.”

The people most affected were middle-aged, working class men (as they are today):

The economists Michael Greenstone and Adam Looney found that from 1969 to 2009, the median earnings of men ages 25 to 64 dropped by 28 percent after inflation. For those without a high school diploma, the drop was 66 percent. This is to say nothing of lost pensions and health insurance.

Why such declines? #1, entrance of women and immigrants into the workforce, #2, increased global trade, #3, rising use of technology

In fact, the proportion of men who were not in the formal labor force tripled from 1960 to 2009, to a remarkable 18 percent

Sociologist Daniel Bell was particularly prescient:

Bell acknowledged that there would be disruptions. And he was accurate about their nature, writing that “many workers, particularly older ones, may find it difficult ever again to find suitable jobs. It is also likely that small geographical pockets of the United States may find themselves becoming ‘depressed areas’ as old industries fade or are moved away.”

Bell also foretold the social impact of such changes:

“creating a new salariat instead of a proletariat, as automated processes reduce[d] the number of industrial workers required.” He accurately foresaw a world in which “muscular fatigue [would be] replaced by mental tension”

Like some thinkers in the 50s and 60s, Akst believes that the big problem is (re)distribution:

“The economy of abundance can sustain all citizens in comfort and economic security whether or not they engage in what is commonly reckoned as work,” the committee continued, arguing for “an unqualified commitment to provide every individual and every family with an adequate income as a matter of right.”

Why? Because automation presents us with a windfall, and the hard question is how it’s shared:

This doesn’t mean we must embrace the utopianism of the Triple Revolution manifesto or return to the despised system of open-ended welfare abolished during the Clinton years. But inevitably, if only to maintain social peace, it will mean a movement toward some of the universal programs—medical coverage, long-term care insurance, low-cost access to higher education—that have helped other advanced countries shelter their work forces from economic shocks better than the United States has, and control costs while they’re at it.

And a couple insightful comments:

It seems to me that unless we can invent a new kind of labour – post-physical, post-mental – we will have to come up with a new kind of wealth creation mechanism that allows for 1) the use of fewer workers and 2) a fair distribution of the wealth created. – idespair

Akst devotes an anemic, apologetic two paragraphs to the central fact of his essay – the adaptation required this time is fundamentally political rather than technological. And to most eyes that political solution can hardly be described as anything but radical. – civisisus

Thanks for reading, folks. Here’s the full article.

A collection of shiny objects

I have a problem. I collect trivia like raccoons collect shiny objects.

I store this collection in a notebook called “Random facts and learnings”.

It’s inspired by Steven Johnson’s Spark File:

I’ve been maintaining a single document where I keep all my hunches: ideas for articles, speeches, software features, startups, ways of framing a chapter I know I’m going to write, even whole books. I now keep it as a Google document so I can update it from wherever I happen to be. There’s no organizing principle to it, no taxonomy–just a chronological list of semi-random ideas that I’ve managed to capture before I forgot them. I call it the spark file.

Sometimes you start a new thing, and after awhile, you stop that new thing. A fad diet, a new friend, a Kindle book.

Sometimes you start a new thing, and you keep doing it. In fact, you find it hard to stop.

That’s the story of “Random facts and learnings”. It’s my spark file for trivia. When I read a statistic, a study, or an acronym, and think to myself, “I’d like to remember this, but probably won’t”, into the spark file it goes. My shiny collection is now ~40 pages.

Here are 5 items that I hope will catch your eye. I’ll attempt to curate and share more each month.

1. Mountain dew was originally slang for moonshine

2. Cryptophasia is the tendency for twins to communicate in their own private language. Like so.

3. Getting married causes a 2-year increase in happiness. Once a married couple has children, happiness steadily declines until the children leave the house, then marriage happiness begins to increase again

4. We have a functional and complex neural network or ‘brain’ in the gut, called the enteric brain, and fear is mediated by this brain. The # of neurons in our gut is equivalent to that of a cat’s!

5. Where does “raining cats and dogs” come from? One interpretation: in the old days, when it rained really hard, they’d find dead dogs and cats in the storm waters

Do you collect trivia, too? I’d love to hear from you. Thanks as always.