Paul Graham. A new kind of venture capitalist. A new kind of role model.

by phil on Tuesday Jun 16, 2009 1:50 AM
general interest, mainfeed

Inc's cover story is an interesting profile of 44-year-old Paul Graham, who is creating a new breed of venture capital firm, one that gives smaller chunks of funding to more start-ups (around forty-five funded each year). What I like most about Paul Graham is his rhetoric:

"Everything is becoming software," Graham argues. "Saying there are too many software companies in 2009 would be like saying that there were too many companies related to words after Gutenberg invented the printing press."
If you've never heard of Paul Graham, here is is a mini-CV: He holds a Ph.D. in computer science and has formal training as a visual artist. Before starting Y Combinator, his new VC fund, he founded Viaweb, an e-commerce software company, which he then sold to Yahoo for $49 million. After Yahoo, Graham created a new programming language and practically invented spam filtering.

Outside of the VC-world, Paul Graham is mostly known for his essays, which read like Malcolm Gladwell's writing—i.e. they put you in a temporary reality distortion field where seemingly disparate ideas achieve a sudden gestalt of connectedness and irrefutability. He is also known for his witty catchphrases. For example, he coined the expression "ramen profitability," to describe a start-up's ability to make enough money to cover the austere lifestyle of its founders.

Paul Graham at OSCON 2004

Photo credit: D. Story/J. Blanchard/O'Reilly Media

Like Buckminster Fuller of a previous generation, Paul Graham embodies the model, modern dilettante. Two of his essays that I enjoyed, which garnered huge play in the blogosphere, are Hackers and Painters and Cities and Ambition (both of which sound like the seeds of best-selling pop-nonfiction titles, like Jared Diamond's Guns, Germs, and Steel.) In Cities and Ambition, Graham strikes a holistic pose and shows that the purpose of your city co-mingles with your own desires and either produce sterling start-ups (Silicon Valley) or brilliant literary types (Boston).

If I could sum up Graham's philosophy in two words it would be "consider everything." If you're a computer scientist, why not try painting? Why not try poetry at an open-mic? Why not work in Spain? The entrepreneur is intelligent in both breadth and depth, and his key skill is in synthesizing everything he knows to produce a product or bottom line.

But Graham is more than his accolades and words. He is a cult icon and star among young entrepreneurs. The average age of founders that Y Combinator funds is 25!

Paul Graham with some founders

The Paul Graham phenomena sheds light on the politics of programmers, and by extension portends a generational shift in political views. His essay Inequality and Risk is telling. In it Graham talks about the importance of low taxes, and how the prospect of becoming really wealthy is what motivates start-up founders to go through all the risks inherent in the field. The essay also has undertones of American exceptionalism, which is somewhat based in reality since we don't see other countries starting up Googles, Yahoos or Microsofts. Having lived in Silicon Valley myself for six years, I can tell you firsthand that there's a veritable self-important and pseudo-conservative streak to the region.

This attitude also bespeaks of a spirit of individualism that is prevalent among programmer types. For example, the prototypical nerd community slashdot has a libertarian bent (check out their poll). There's no way to know what causes this, but perhaps it has something to do with the do-it-yourself attitude of programmers (Paul Graham would prefer the term hackers). Programmers have a knack for manipulating tools to make their world more efficient. They also have a shared personal story of being outliers in academic settings.

(thanks to kottke for the profile tip)


Sarah Q Browning said on June 16, 2009 1:48 PM:

I'm glad to be introduced to his writing. I like "Cities and Amibiton!" What message does Austin send?

Philip Dhingra said on June 16, 2009 1:57 PM:

Maybe Austin's message is "intentional living."

There's a lot of people with identity careers, wherein their job is also an expression of their life-philosophy and values. For example, people working in green start-ups, or sustainable living companies, or teaching underprivileged youth. Or their work is as extension of their passions (Austin has a ton of video game designers!)

A lot of people bike, a lot of people are politically active.

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