Founders at Work.pdf

Paul Graham 221
between 1995 and 1998, because at that point, I was on Mars. I was not part of
the ordinary world of humans. I was sitting glued to a computer all day long, or
asleep.
Livingston: What did you worry about the most?
Graham: Running out of money. That was the big worry. Running out of
money and having to go and get more funding. Getting funding is very painful.
It’s so much harder than actually making a successful company.
Livingston: What advice can you give about raising money?
Graham: The advice I would give is to avoid it. I would say spend as little as
you can, because every dollar of the investors’ money you get will be taken out
of your ass—literally in the sense that it will take stock away from you, but also
the process of raising money is so horrible compared to the other aspects of
business. You can’t work your way out of it like you can with other problems.
You’re at other people’s mercy.
The way not to have to raise money is not to spend money. Do everything
as cheaply as you possibly can. What you want in a startup is this feeling of
cheap and hip. Not miserly cheap, but cool, bohemian cheap. That’s what we
strove for.
Livingston: So investors were your biggest worry?
Graham: Probably, but I worried about all the different things that could kill us
and all the different ways they could kill us. People start startups to get rich, but
what keeps them going day to day is the fear of failure. You’ve said, “OK, I’m
starting this startup and I’m going to get all the users and be successful,” and
once you’ve told everybody that’s what you’re doing, if you fail you’ll look like
a fool.
So when we did sell the thing finally to Yahoo, in the eyes of the world,
because we got bought, we were a success. Arguably we were already a success,
since we had more online stores than anybody else. But getting bought kind of
locked that in. At that point you would think someone would be thinking,
“Wow, this is great. I’m rich. I can go buy everything I want.” But all I was
thinking was, “Thank God we didn’t fail.”
Livingston: You write a lot of essays with advice for startup founders. What is
the most important piece of advice?
Graham: What Y Combinator prints on our T-shirts: make something people
want. If you make something users want, they will be happy, and you can translate
that happiness into money. That is the basis of a startup. A startup is a company
that builds some kind of technology that people want. The mistake that a
lot of founders make is to build something they think users want, but that users
don’t actually want.
Livingston: Do you think having done a startup yourself makes you a better
judge of startup founders now that you are an investor?