Paul Graham is my hero. Yes, he is. I have admired him since i stumbled upon his essays in 2005. His essays are thought provoking and inspiring to engineers like me. My admiration only grew when he started YCombinator and turned into a powerhouse incubator/accelerator. He is an engineer, entrepreneur, thought leader, mentor, angel investor, someone who changed venture investing in a significant way. He achieved everything i aspired to achieve and his thoughts and success inspire me.
It saddens me immensely, to see the slew of articles that came out the last few days. After reading them indepth, I am convinced that Paul is deeply biased against the leadership abilities of immigrants. It is even more shocking that he bases this bias on the “accent” rather than coding ability, intelligence, ideas or ability to execute. I guess it hurts even more because not only i am one of his admirers, but also a failed immigrant entrepreneur with accent.
Perhaps, it would have been easier for me to stomach it if he said immgrant CEOs suck because they can’t code lisp. His current arguments sound perilously close to “african americans cannot be good quarterbacks ” or “women cannot be good CEOS of large companies”. His attempts at justifying those interviews and comments seem like a PR representative’s nightmare. His first reaction when someone brought this up – “this is a point that people are eager to misunderstand” – is nothing but defensive reaction. Paul – according to him – is not prejudiced and/or biased, but it is the world that is choosing to view his comments through colored lens. Om Malik, seems to be giving Paul a pass, saying it is just a fallacy. Reading how Strikinly’s Chen is treated by Paul (nytimes article), it is hard for me to be convinced that paul is just a scientist making a poor inference out of faulty data. Paul seems to have a deeply ingrained bias. Quite contrary to his backtracking tweet “It’s fine if founders merely have accents”, the NY times article details:
He spoke English fluently but struggled to pronounce words like “build,” “mobile” and, most ominously, “strikingly.” Yet Chen had clearly established himself as the fledgling company’s impresario and spokesman. While his partners spent their days writing code and fixing software bugs, Chen met with lawyers, potential investors and reporters.
The empirical data paul graham is referring to, to me, do indicate a systematic bias against immigrant entrepreneurs and not an inability of entrepreneurs to communicate.
I doubt the consequences of this slip-up are going to be consequential to Paul’s networth. Unlike a movie star or athlete or other celebrities, paul’s income/networth is not in any endorsements, tv shows or tied to public appearances. He is a “super angel” and already significantly rich. Entrepreneurs are seeking his money, connections and knowledge, and they will continue to seek those despite Paul’s personal flaws. Today, paul backtracked from his comments and posted another essay. In that essay, he says “Everyone got that? We all agree accents are fine? The problem is when people can’t understand you.”. That statement of course, proves to himself and everyone that he is not biased and prejudiced. Of course, in eyes “people” are his neighbors, friends and investors. Not immigrants with accents. Nothing is really going to change in the little bubble surrounding paul. His “people” will reaffirm to him that he is right, he is unprejudiced paragon of virtue along with being great technologist and venture investor. It is the rest of the world that has problems. His investments will make him handsome returns and NY Times will approach him couple of years later. He will point to the two eastern european and asian “founders with accent” he funded and repeat this same mantra. “I was never bigoted. The world chose to misinterpret me”.
Entrepreneurs are resourceful. They have overcome much more significant obstacles than a minor “accent bias”. They convinced all kinds of people to invest in them, crossed oceans and are planning trips to the moon. Accent is a very minor challenge. I think this event will spur startups to hire (or atleast consider) CEOs with american accents before making pitch to YC. So all those product management presenters with Boston accent, get ready. Your skills are going up in demand.
I really really wish, that entrepreneurs can ignore this drivel from Paul. I hope they can read his essays and take the good out of it and leave the crap for what it is. If you are working on a great product that your customers love and an investor chooses not to invest in the product or the company, merely because you sound different – You don’t need that investor. Focus on the customer, focus on building great products. Your accent is just fine.
I emailed my 22 year old cousin Eric, who’s graduating Summa in Economics from Harvard, to see if he needed any help getting interviews at prestigious financial institutions. I was sure there would be recruiters on campus, but I didn’t want to run the risk.
“Paul Graham says prestige is for suckers,” he emailed back within 2 minutes. “Paul Graham says I should follow my passion.”
“Who’s Paul Graham?” I asked. No response.
It turns out Paul Graham runs a “startup accelerator” located on 320 Pioneer Way in Mountain View, CA called Y-Combinator. Y-Combinator makes micro investments into very early stage companies and then helps these companies raise venture capital. Thousands apply for a few slots in two “classes” per year. AirBnB, Dropbox, and Reddit are among its alumni.
The accelerator takes small amounts of risk and offloads that aggregate risk onto a market of investors (the VC’s). Its Demo Day, which first showcases its companies, is a coming out event, like an IPO. And it attracts top young graduates, like my cousin, from across the world. I spent nearly a decade on Wall Street, and let’s be clear: that’s our model. Employing Type A personalities to shuffle around amorphous blobs of questionable value is not called a “startup accelerator”; it’s called Investment Banking.
And this guy Paul was about to steal Eric, brainwash him into thinking he was doing something else, and pay him next to nothing.
I could picture Eric at our east coast Christmas dinner in his startup T-Shirt, his sunglasses still on his head. “Every day we wake up and tell ourselves we have to just fail faster,” he’d say. My father would have a stroke. In six generations, our family had not failed once. Many Y-Combinator founders pay themselves less than $60k a year, about half of what you make your first year in finance. When I saw my cousin a few weeks later, he was flicking through his iPad. He raised his open hand in the air when I walked over to try to talk some sense into him. “Reading Paul Graham,” he said. “YC results in a week.”
I didn’t have much time.
I looked up Paul Graham’s essays. He attacks finance head on. “Prestige is like a powerful magnet that warps even your beliefs about what you enjoy,” he says. “It causes you to work not on what you like, but what you’d like to like.” Instead, he encourages: “Do what you love.”
I researched Y-Combinator companies and found ones like HomeJoy and Prim. “Eric – what do you love more, house cleaning or laundry?” I emailed.
That day, I sent Eric a business class train ticket to come down to New York. We went out to dinner and then to PH-D. Two girls joined us at our table, and Eric asked which one he should go after. “Follow your heart,” I encouraged. And when the check came, I passed it to Eric and watched his eyes widen at the total. The host came over, expecting his card. I could see Eric sweat. “Oh, this shouldn’t be a problem,” I assured him. I turned to the host: “You accept equity, right?” Her face contorted. I elbowed my cousin. “Eric – tell her about your startup.”
That night, we were out until 5am, and at 8am, I woke up and saw Eric on his knees on the floor of my living room. His “love” was asleep in a t-shirt on the sofa, and he was hunched over his iPad, rocking back and forth, mumbling to himself. As I got closer, I saw Eric flipping through and reading Paul Graham’s essays out loud.
“The danger is when money is combined with prestige,” he said. “Odds are you just think whatever you’re told.” “Hackers and Painters are both makers.” He repeated that: “Hackers and painters are both makers.”
I kicked him with the side of my foot. “What are you doing, dude?” I said. The girl on the sofa rustled, but Eric stayed in his trance. I went back to sleep, and when I woke up, I found Eric in the exact same position, still studying his iPad.
“Your cousin is really…passionate,” sofa-girl said, yanking on her boots.
It was then that I started to realize just how formidable an adversary Paul Graham was. Eric had been ensnared in Paul’s net and now, wrapped in its warmth, all he and Paul’s militia of “hackers” felt they needed to survive was an Internet connection and a cup of Four Barrel drip coffee. Paul had actually convinced my cousin that he would be more than just a cog in Paul’s low risk (but Eric’s high risk) brokerage machine. I could feel him slipping away.
I texted a friend who still had YC ’11 in her email signature even though her company failed miserably. “What the hell goes on over there?” I asked. “What doesn’t?” she replied. I learned that Y-Combinator goes beyond just being a brand. It’s a community. In finance, we had a blowout holiday party and a liberal corporate card policy. Y-Combinator hosts weekly office hours and dinners and online forums. Constantly brainstorming and discussing and ideating their never-ending list of impractical concepts, Paul’s disciples begin to feel a shared identity, like they are part of something bigger than themselves. It becomes their religion.
“Eric!” I shouted. I snapped my fingers in front his face.
I had put together my own presentation for him. I called it: “Science.” I slid my iPad in place of his and began my pitch. Slides 1-5 were dedicated to the complete failure of venture capital as an asset class over its entire history. I had charts and quotes from the world’s most famous economists. Slides 6-10 listed all the defunct Y-Combinator companies, laid out in three columns in size 6 font. Next to them, the handful of wins looked insignificant. In my last slide, I showed Eric Y-Combinator’s hypocritical homepage, where it calls itself “the most prestigious program for budding digital entrepreneurs.”
“Do you see?” I asked.
Eric looked up at me, and for a moment, I thought I saw recognition. Through his eyes, I swore I could make out the gears slowly turning into place. Finally, I thought. My body started to relax. Then Eric picked up his iPad, turned it towards me so I was staring directly at his guru’s face, and said:
“But Paul Graham says I must create.”
I grabbed Eric’s iPad from his hands, lifted it over my head, and hurled it down towards the floor as hard as I could. The screen smashed, and a piece of Gorilla Glass spun out and cut the top of my foot.
“ENOUGH!” I screamed.
The iPad was still on, and through the cracks in screen, I could see Paul staring up at me, smiling.
I went back to my room and slammed the door.
A few days later, my family received a group email with the subject line: “Changing the world!” My head sunk into my hands. Eric wouldn’t be going into finance. He and his co-founders had gotten accepted into Y-Combinator for their startup. “The pest control industry has no idea what it’s in for!!” he wrote. He quoted Paul Graham quoting Steve Jobs and assured us that everything they would do would be “insanely great.” No one responded.
The legacy infrastructure to snatch young talent was built on the basic human desire of greed. But you, you leverage a much deeper insight. In constructing your 2%-10% value capture contraption, you’ve utilized something that didn’t even cross our minds in banking. You’re able to drive people to risk their lives and work long hours on your behalf with no Seamless account, no black car, all under the guise that it’s their idea. And to achieve this, you play upon a much more powerful human emotion, one that every successful campaign to delude America’s youth and lasting institution throughout history has had at its core:
posted by a.chat | February 11, 2014
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