work

Scarcities and the music, movie, and publishing businesses

art, business, on writing / /

In Clay Shirky’s response to R.U. Sirius’ “Is The Net Good For Writers?” (10 Zen Monkeys: 5 October 2007), he takes on the persona of someone talking about what new changes are coming with the Gutenberg movable type press. At one point, he says, “Such a change would also create enormous economic hardship for anyone whose living was tied to earlier scarcities.”

It’s not just writing and writers and publishers that now face that change. Scarcities drove the music and movie businesses, and those scarcities are disappearing. When music is no longer tightly controlled in terms of creation, availability, manufacture, and distribution, when it’s possible to download or listen to anything at any time, those businesses face rapid, discombobulating change.

Is it the government’s – or society’s – duty, however, to put those scarcities back into place, either through technologies or law?

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Like music, authors will make more money from personal appearances

art, business, on writing / /

From Douglas Rushkoff’s response to R.U. Sirius’ “Is The Net Good For Writers?” (10 Zen Monkeys: 5 October 2007):

But I think many writers – even good ones – will have to accept the fact that books can be loss-leaders or break-even propositions in a highly mediated world where showing up in person generates the most income.

Like music, authors will make more money from personal appearances Read More »

The Internet makes (sloppy) writers of nearly everyone

art, on writing, technology / /

From Adam Parfrey’s response to R.U. Sirius’ “Is The Net Good For Writers?” (10 Zen Monkeys: 5 October 2007):

I like the internet and computers for their ability to make writers of nearly everyone. I don’t like the internet and computers for their ability to make sloppy and thoughtless writers of nearly everyone.

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The shift from interior to exterior lives

art, on writing, technology / /

From Mark Dery’s response to R.U. Sirius’ “Is The Net Good For Writers?” (10 Zen Monkeys: 5 October 2007):

But we live in times of chaos and complexity, and the future of writing and reading is deeply uncertain. Reading and writing are solitary activities. The web enables us to write in public and, maybe one day, strike off the shackles of cubicle hell and get rich living by our wits. Sometimes I think we’re just about to turn that cultural corner. Then I step onto the New York subway, where most of the car is talking nonstop on cellphones. Time was when people would have occupied their idle hours between the covers of a book. No more. We’ve turned the psyche inside out, exteriorizing our egos, extruding our selves into public space and filling our inner vacuums with white noise.

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Out now: Microsoft Vista for IT Security Professionals

business, personal, security, technology / /

Microsoft Vista for IT Security Professionals is designed for the professional system administrators who need to securely deploy Microsoft Vista in their networks. Readers will not only learn about the new security features of Vista, but they will learn how to safely integrate Vista with their existing wired and wireless network infrastructure and safely deploy with their existing applications and databases. The book begins with a discussion of Microsoft’s Trustworthy Computing Initiative and Vista’s development cycle, which was like none other in Microsoft’s history. Expert authors will separate the hype from the reality of Vista’s preparedness to withstand the 24 x 7 attacks it will face from malicious attackers as the world’s #1 desktop operating system. The book has a companion CD which contains hundreds of working scripts and utilities to help administrators secure their environments.

This book is written for intermediate to advanced System administrators managing Microsoft networks who are deploying Microsoft’s new flagship desktop operating system: Vista. This book is appropriate for system administrators managing small networks of fewer than 10 machines up to enterprise-class networks with tens of thousands of systems. This book is also appropriate for readers preparing for the Microsoft exam MCDST 70-620.

I contributed two appendices to this book:

  • Appendix A: Microsoft Vista: The International Community
  • Appendix B: Changes to the Vista EULA

Appendix A, “Microsoft Vista: The International Community”, was about Microsoft’s legal troubles in Europe and Asia, and the changes the company had to make to Vista to accommodate those governments. Appendix B, “Changes to the Vista EULA”, explained that the EULA in Vista is even worse than that found in XP, which was worse than any previous EULA. In other words, Vista has a problematic EULA that users need to know about before they buy the OS.

Read excerpts: Front Matter (350 KB PDF) and Chapter 1: Microsoft Vista: An Overview (760 KB PDF). You can flip through the entire book, although you’re limited to the total number of pages you can view (but it’s a pretty high number, like 50 or so).

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The date Silicon Valley (& Intel) was born

business, history, tech in changing society, technology / /

From Adam Goodheart’s “10 Days That Changed History” (The New York Times: 2 July 2006):

SEPT. 18, 1957: Revolt of the Nerds

Fed up with their boss, eight lab workers walked off the job on this day in Mountain View, Calif. Their employer, William Shockley, had decided not to continue research into silicon-based semiconductors; frustrated, they decided to undertake the work on their own. The researchers — who would become known as “the traitorous eight” — went on to invent the microprocessor (and to found Intel, among other companies). “Sept. 18 was the birth date of Silicon Valley, of the electronics industry and of the entire digital age,” says Mr. Shockley’s biographer, Joel Shurkin.

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Business, work, and good ideas

business / /

From Paul Graham’s “Why Smart People Have Bad Ideas” (April 2005):

This summer, as an experiment, some friends and I are giving seed funding to a bunch of new startups. It’s an experiment because we’re prepared to fund younger founders than most investors would. That’s why we’re doing it during the summer– so even college students can participate. …

The deadline has now passed, and we’re sifting through 227 applications. We expected to divide them into two categories, promising and unpromising. But we soon saw we needed a third: promising people with unpromising ideas. …

One of the most valuable things my father taught me is an old Yorkshire saying: where there’s muck, there’s brass. Meaning that unpleasant work pays. And more to the point here, vice versa. Work people like doesn’t pay well, for reasons of supply and demand. The most extreme case is developing programming languages, which doesn’t pay at all, because people like it so much they do it for free. …

So why were we afraid? We felt we were good at programming, but we lacked confidence in our ability to do a mysterious, undifferentiated thing we called “business.” In fact there is no such thing as “business.” There’s selling, promotion, figuring out what people want, deciding how much to charge, customer support, paying your bills, getting customers to pay you, getting incorporated, raising money, and so on. And the combination is not as hard as it seems, because some tasks (like raising money and getting incorporated) are an O(1) pain in the ass, whether you’re big or small, and others (like selling and promotion) depend more on energy and imagination than any kind of special training.

Business, work, and good ideas Read More »

Spy on no-good boss and lose your job

business, security, tech in changing society, technology / /

From Melissa Meagher’s “State Worker Spies on Boss, Loses His Job“:

For 22 years, [Vernon] Blake was a System Administrator for the Alabama Department of Transportation. It was a job he loved, with the exception of his supervisor. …

The running joke around the office? The boss blew off meetings and projects to play games on his computer. Cartoons secretly circled The Right of Way Bureau, jabbing at George Dobbs’ Solitaire habit. Dobbs is a 24-year veteran with the DOT and rakes in $67,000 a year. …

Without proof, Blake felt his accusations would get him nowhere. That’s when he turned to Win-Spy, a free version of spy ware, to tap his boss’s computer.

“My motive was to document well known behavior that already existed.”

For seven months, at random times of the day, the software captured pictures of Dobbs’ computer screen. …

Here’s what he found. Blake says less than 10% of his boss’s computer time, documented by Win-Spy, was spent working. Twenty-percent was spent checking the stock market. And 70% of what the spy ware recorded was the game of Solitaire. …

But DOT didn’t see it that way. When Blake showed them what he found, he was fired. His supervisor got a letter of reprimand, stating “It was brought to the Department’s attention you spent a significant amount of time playing video games… but your work ethic and production are above reproach.” …

It’s worth noting after Blake lost his job, DOT had all computer games, including Solitaire, removed from its system.

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Jobs are unnecessary – just build something valuable

business, history, tech in changing society / /

From Paul Graham’s “Hiring is Obsolete” (May 2005):

I think most undergrads don’t realize yet that the economic cage is open. A lot have been told by their parents that the route to success is to get a good job. This was true when their parents were in college, but it’s less true now. The route to success is to build something valuable, and you don’t have to be working for an existing company to do that. Indeed, you can often do it better if you’re not.

Jobs are unnecessary – just build something valuable Read More »

It’s hard to judge the young, but the market can

business, tech in changing society, technology / /

From Paul Graham’s “Hiring is Obsolete” (May 2005):

It’s hard to judge the young because (a) they change rapidly, (b) there is great variation between them, and (c) they’re individually inconsistent. That last one is a big problem. When you’re young, you occasionally say and do stupid things even when you’re smart. So if the algorithm is to filter out people who say stupid things, as many investors and employers unconsciously do, you’re going to get a lot of false positives. …

The market is a lot more discerning than any employer. And it is completely non-discriminatory. On the Internet, nobody knows you’re a dog. And more to the point, nobody knows you’re 22. All users care about is whether your site or software gives them what they want. They don’t care if the person behind it is a high school kid.

It’s hard to judge the young, but the market can Read More »

Employees willingly installed CDs handed to them by strangers

security, tech in changing society, technology / /

From Will Sturgeon’s “Proof: Employees don’t care about security” (silicon.com: 16 February 2006):

CDs were handed out to commuters as they entered the City by employees of IT skills specialist The Training Camp and recipients were told the disks contained a special Valentine’s Day promotion.

However, the CDs contained nothing more than code which informed The Training Camp how many of the recipients had tried to open the CD. Among those who were duped were employees of a major retail bank and two global insurers.

The CD packaging even contained a clear warning about installing third-party software and acting in breach of company acceptable-use policies — but that didn’t deter many individuals who showed little regard for the security of their PC and their company.

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A profile of phishers & their jobs

business, law, security, tech in changing society, technology / /

From Lee Gomes’s Phisher Tales: How Webs of Scammers Pull Off Internet Fraud (The Wall Street Journal: 20 June 2005):

The typical phisher, he discovered, isn’t a movie-style villain but a Romanian teenager, albeit one who belongs to a social and economic infrastructure that is both remarkably sophisticated and utterly ragtag.

If, in the early days, phishing scams were one-person operations, they have since become so complicated that, just as with medicine or law, the labor has become specialized.

Phishers with different skills will trade with each other in IRC chat rooms, says Mr. Abad. Some might have access to computers around the world that have been hijacked, and can thus be used in connection with a phishing attack. Others might design realistic “scam pages,” which are the actual emails that phishers send. …

But even if a phisher has a “full,” the real work has yet to begin. The goal of most phishers is to use the information they glean to withdraw money from your bank account. Western Union is one way. Another is making a fake ATM card using a blank credit card and a special magnetic stripe reader/writer, which is easy to purchase online.

A phisher, though, may not have the wherewithal to do either of those. He might, for instance, be stuck in a small town where the Internet is his only connection to the outside world. In that case, he’ll go into an IRC chat room and look for a “casher,” someone who can do the dirty work of actually walking up to an ATM. Cashers, says Mr. Abad, usually take a cut of the proceeds and then wire the rest back to the phisher.

Certain chat rooms are thus full of cashers looking for work. “I cash out,” advertised “CCPower” last week on an IRC channel that had 80 other people logged onto it. “Msg me for deal. 65% your share.”

The average nonphisher might wonder what would prevent a casher from simply taking the money and running. It turns out, says Mr. Abad, that phishers have a reputation-monitoring system much like eBay’s. If you rip someone off, your rating goes down. Not only that, phishers post nasty notices about you on IRC. “Sox and Bagzy are rippers,” warned a message posted last week.

Phishers, not surprisingly, are savvy about their targets. For instance, it wasn’t just a coincidence that Washington Mutual was a phisher favorite. Mr. Abad says it was widely known in the phishing underground that a flaw in the communications between the bank’s ATM machines and its mainframe computers made it especially easy to manufacture fake Washington Mutual ATM cards. The bank fixed the problem a few months ago, Mr. Abad says, and the incidence of Washington Mutual-related phishing quickly plummeted. …

Mr. Abad himself is just 23 years old, but he has spent much of the past 10 years hanging out in IRC chat rooms, encountering all manner of hackers and other colorful characters. One thing that’s different about phishers, he says, is how little they like to gab.

“Real hackers will engage in conversation,” he says. “With phishers, it’s a job.”

A profile of phishers & their jobs Read More »

Offshoring danger: identity theft

business, law, security, tech in changing society, technology / /

From Indian call centre ‘fraud’ probe (BBC News: 23 June 2005):

Police are investigating reports that the bank account details of 1,000 UK customers, held by Indian call centres, were sold to an undercover reporter.

The Sun claims one of its journalists bought personal details including passwords, addresses and passport data from a Delhi IT worker for £4.25 each. …

The Sun alleged the computer expert told the reporter he could sell up to 200,000 account details, obtained from fraudulent call centre workers, each month.

Details handed to the reporter had been examined by a security expert who had indicated they were genuine, the paper said.

Offshoring danger: identity theft Read More »

Identity theft method: file false unemployment claims

business, law, security, tech in changing society, technology / /

From Michael Alter’s States fiddle while defrauders steal (CNET News.com: 21 June 2005):

More than 9 million American consumers fall victim to identity theft each year. But the most underpublicized identity theft crime is one in which thieves defraud state governments of payroll taxes by filing fraudulent unemployment claims.

It can be a fairly lucrative scheme, too. File a false unemployment claim and you can receive $400 per week for 26 weeks. Do it for 100 Social Security numbers and you’ve made a quick $1.04 million. It’s tough to make crime pay much better than that.

The victims in this crime–the state work force agencies that tirelessly oversee our unemployment insurance programs and the U.S. Department of Labor–are reluctant to discuss this topic for obvious reasons. …

The slow response of state and federal agencies is quickly threatening the integrity of the unemployment insurance system. It turns out that crime is a very efficient market and word spreads quickly. Got a stolen Social Security number? You can more easily turn it into money by defrauding the government than by defrauding the credit card companies.

The net result of this fraud is that unemployment taxes are going up, and that makes it that much harder for small businesses and big businesses to do business. Even more, higher payroll taxes slow down economic growth because they make it more expensive to hire new employees.

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Wynton Marsalis on recognizing your place

business, commonplace book / /

From Sam Dillon’s “Graduates Get an Earful, From Left, Right and Center” (The New York Times: 11 June 2006):

Wynton Marsalis

Musician

[Delivering commencement to] The Juilliard School

Realize that integrity is real, and so is starvation. Never let pay and the talk of pay occupy more time and space than the talk of your art. If you find that it is, go into banking or start a hedge fund or something.

Also, about pay, understand where you are. When I was 19, I was on a tour with Herbie Hancock and I started complaining to him before we walked onstage about what I was being paid. I said, “When am I being paid?”

He said: “Come here, man. Look out into the audience.” He said, “Now, do you see those people?”

I said, “Yes sir.”

He said: “They paid for these tickets. If you don’t walk out of here, how many of them are going to leave? Now, if I don’t walk out, how many will leave? That’s why you’re being paid what you’re being paid.”

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Your job? Waiting in line for others.

business, law, politics, weird, writing ideas / /

From Brian Montopoli’s “The Queue Crew: Waiting in line for a living” (Legal Affairs: January/February 2004):

ON CAPITOL HILL, a placeholder is someone paid by the hour to wait in line. When legislative committees hold hearings, they reserve seats for Congressional staffers, for the press, and for the general public. The general-public seats are the only ones available to the so-called influence peddlers, the Washington lawyers and lobbyists whose livelihood depends on their ability to influence legislation. These seats are first come, first served, which is where the placeholders (also called “stand-ins” or “linestanders”) come in. Since most lobbyists and lawyers seeking to rub shoulders with lawmakers don’t have time to wait in line themselves, they pay others to do it for them.

Rather than use an independent contractor, most influence peddlers secure placeholders through one of the two companies that control about 80 percent of the market: Congressional Services Company and the CVK Group, both of which have rosters of on-call placeholders at the ready. Most of the time, placeholders are asked to wait for just a few hours, often arriving around 5 a.m. to wait for hearings scheduled for 10 a.m. If seats are in great demand, however, placeholders can be asked to get in line several days in advance. Congressional Services charges its clients $32 to $40 per hour for each placeholder, and the placeholders themselves make $10 to $15 an hour. …

For the sake of logistics and appearances, the lines usually form outdoors and stay there until a few hours before a hearing. …

Today, however, most placeholders are not nimble students out to earn a little spending money but older men and women trying to make ends meet. Jim Keegan is one of the “Van Gogh veterans,” a group of placeholders discovered by Congressional Services in 1998 when they were standing in line to get coveted free tickets to the Van Gogh exhibit at the National Gallery of Art. …

Now he said he has time to pursue his interests and get paid. “I’ll probably make $2,000 to $3,000 in a good month,” he said. “That’s more than I made at my old job.”

There is a collegial atmosphere among the placeholders – if you leave to go get something to eat, you aren’t going to lose your spot – but simple tasks like going to the bathroom present challenges. During the day, placeholders can go into the Rayburn Building, but after hours they have to make their way over to the public bathrooms at Union Station. Getting sleep is also a problem. Since the lines form on public sidewalks, placeholders are technically not allowed to sit down, and though the Capitol Hill police often ignore them, there are evenings when an overzealous officer will repeatedly wake them up and tell them to stand. …

Once, a group upset over banking regulations brought busloads of protesters to a hearing, only to discover that they wouldn’t be able to get in, thanks to the placeholders. A scuffle ensued, but the placeholders held their ground.

In general, however, most staffers and politicians don’t even notice the placeholders they pass on their way to work. …

Since hearings can be rescheduled or closed to the public at the last minute, the placeholding services insist on getting paid regardless of whether their clients succeed in getting in. Keegan and Herzog’s long wait, for example, ended before they could pass along their spots to their clients: The housing hearing was cancelled because of partisan infighting, and after two days and 20 hours of waiting, the placeholders were sent home on Tuesday at 6:30 p.m.

The next morning, however, after showers and a change of clothes, many of them were back, this time to wait for a healthcare hearing before the Commerce Committee. When I arrived at the Rayburn Building at 9 a.m., over 70 people were waiting to get into the hearing, and by 10, when it was scheduled to start, there were more than 200. The line began around the corner from the hearing room and snaked past elevator banks and Congressional offices. At the front were mostly placeholders, among them a bored-looking young man with red sneakers and a hat worn sideways and a woman in her late 30s wearing a frayed sweatshirt that read “OJ SIMPSON: JUICE ON THE LOOSE.” …

Thirty minutes before the hearing began, the clients started showing up. The placeholders were identified by placards or by assistant managers who worked the line. A bald white man in his 40s with a yellow tie and an expensive suit took his spot and thanked his placeholder. (Congressional rules prohibit tipping.)

Your job? Waiting in line for others. Read More »

Failure every 30 years produces better design

art, business, history, science / /

From The New York Times‘ “Form Follows Function. Now Go Out and Cut the Grass.“:

Failure, [Henry] Petroski shows, works. Or rather, engineers only learn from things that fail: bridges that collapse, software that crashes, spacecraft that explode. Everything that is designed fails, and everything that fails leads to better design. Next time at least that mistake won’t be made: Aleve won’t be packed in child-proof bottles so difficult to open that they stymie the arthritic patients seeking the pills inside; narrow suspension bridges won’t be built without “stay cables” like the ill-fated Tacoma Narrows Bridge, which was twisted to its destruction by strong winds in 1940.

Successes have fewer lessons to teach. This is one reason, Mr. Petroski points out, that there has been a major bridge disaster every 30 years. Gradually the techniques and knowledge of one generation become taken for granted; premises are no longer scrutinized. So they are re-applied in ambitious projects by creators who no longer recognize these hidden flaws and assumptions.

Mr. Petroski suggests that 30 years – an implicit marker of generational time – is the period between disasters in many specialized human enterprises, the period between, say, the beginning of manned space travel and the Challenger disaster, or the beginnings of nuclear energy and the 1979 accident at Three Mile Island. …

Mr. Petroski cites an epigram of Epictetus: “Everything has two handles – by one of which it ought to be carried and by the other not.”

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Paul Graham’s lessons for startups

business, technology / /

From Paul Graham’s “The Hardest Lessons for Startups to Learn“:

1. Release Early.

The thing I probably repeat most is this recipe for a startup: get a version 1 out fast, then improve it based on users’ reactions.

By “release early” I don’t mean you should release something full of bugs, but that you should release something minimal. Users hate bugs, but they don’t seem to mind a minimal version 1, if there’s more coming soon. …

I’ve seen a lot of startups die because they were too slow to release stuff, and none because they were too quick. …

Even if you had no users, it would still be important to release quickly, because for a startup the initial release acts as a shakedown cruise. If anything major is broken– if the idea’s no good, for example, or the founders hate one another– the stress of getting that first version out will expose it. And if you have such problems you want to find them early.

Perhaps the most important reason to release early, though, is that it makes you work harder. When you’re working on something that isn’t released, problems are intriguing. In something that’s out there, problems are alarming. There is a lot more urgency once you release. And I think that’s precisely why people put it off. They know they’ll have to work a lot harder once they do.

2. Keep Pumping Out Features.

Of course, “release early” has a second component, without which it would be bad advice. If you’re going to start with something that doesn’t do much, you better improve it fast. …

By “feature” I mean one unit of hacking — one quantum of making users’ lives better.

As with exercise, improvements beget improvements. … You should make your system better at least in some small way every day or two.

… Users love a site that’s constantly improving. In fact, users expect a site to improve. …

They’ll like you even better when you improve in response to their comments, because customers are used to companies ignoring them. If you’re the rare exception — a company that actually listens — you’ll generate fanatical loyalty. You won’t need to advertise, because your users will do it for you. …

If your product seems finished, there are two possible explanations: (a) it is finished, or (b) you lack imagination. Experience suggests (b) is a thousand times more likely.

3. Make Users Happy.

Improving constantly is an instance of a more general rule: make users happy. One thing all startups have in common is that they can’t force anyone to do anything. They can’t force anyone to use their software, and they can’t force anyone to do deals with them. A startup has to sing for its supper. That’s why the successful ones make great things. They have to, or die.

When you’re running a startup you feel like a little bit of debris blown about by powerful winds. The most powerful wind is users. They can either catch you and loft you up into the sky, as they did with Google, or leave you flat on the pavement, as they do with most startups. Users are a fickle wind, but more powerful than any other. If they take you up, no competitor can keep you down. …

The median visitor will arrive with their finger poised on the Back button. …

There are two things you have to do to make people pause. The most important is to explain, as concisely as possible, what the hell your site is about. … A startup should be able to explain in one or two sentences exactly what it does. … You probably shouldn’t even start a company to do something that can’t be described compellingly in one or two sentences.

The other thing I repeat is to give people everything you’ve got, right away. If you have something impressive, try to put it on the front page, because that’s the only one most visitors will see. Though indeed there’s a paradox here: the more you push the good stuff toward the front, the more likely visitors are to explore further. …

The industry term here is “conversion.” The job of your site is to convert casual visitors into users …

4. Fear the Right Things.

Another thing I find myself saying a lot is “don’t worry.” Actually, it’s more often “don’t worry about this; worry about that instead.” Startups are right to be paranoid, but they sometimes fear the wrong things. …

What you should fear, as a startup, is not the established players, but other startups you don’t know exist yet. They’re way more dangerous than Google because, like you, they’re cornered animals.

Looking just at existing competitors can give you a false sense of security. You should compete against what someone else could be doing, not just what you can see people doing. A corollary is that you shouldn’t relax just because you have no visible competitors yet. No matter what your idea, there’s someone else out there working on the same thing. …

And in any case, competitors are not the biggest threat. Way more startups hose themselves than get crushed by competitors. There are a lot of ways to do it, but the three main ones are internal disputes, inertia, and ignoring users. Each is, by itself, enough to kill you. But if I had to pick the worst, it would be ignoring users. If you want a recipe for a startup that’s going to die, here it is: a couple of founders who have some great idea they know everyone is going to love, and that’s what they’re going to build, no matter what.

Almost everyone’s initial plan is broken. If companies stuck to their initial plans, Microsoft would be selling programming languages, and Apple would be selling printed circuit boards. In both cases their customers told them what their business should be — and they were smart enough to listen. …

5. Commitment Is a Self-Fulfilling Prophecy.

I now have enough experience with startups to be able to say what the most important quality is in a startup founder, and it’s not what you might think. The most important quality in a startup founder is determination. Not intelligence — determination. …

Time after time VCs invest in startups founded by eminent professors. This may work in biotech, where a lot of startups simply commercialize existing research, but in software you want to invest in students, not professors. Microsoft, Yahoo, and Google were all founded by people who dropped out of school to do it. What students lack in experience they more than make up in dedication. …

In a startup, there’s always some disaster happening. So if you’re the least bit inclined to find an excuse to quit, there’s always one right there. …

You have to be the right kind of determined, though. I carefully chose the word determined rather than stubborn, because stubbornness is a disastrous quality in a startup. You have to be determined, but flexible …

6. There Is Always Room.

… There is always room for new stuff. At every point in history, even the darkest bits of the dark ages, people were discovering things that made everyone say “why didn’t anyone think of that before?” …

The reason we don’t see the opportunities all around us is that we adjust to however things are, and assume that’s how things have to be. …

So for all practical purposes, there is no limit to the number of startups. Startups make wealth, which means they make things people want, and if there’s a limit on the number of things people want, we are nowhere near it. …

7. Don’t Get Your Hopes Up.

Startup founders are naturally optimistic. They wouldn’t do it otherwise. But you should treat your optimism the way you’d treat the core of a nuclear reactor: as a source of power that’s also very dangerous. You have to build a shield around it, or it will fry you.

The shielding of a reactor is not uniform; the reactor would be useless if it were. It’s pierced in a few places to let pipes in. An optimism shield has to be pierced too. I think the place to draw the line is between what you expect of yourself, and what you expect of other people. It’s ok to be optimistic about what you can do, but assume the worst about machines and other people. …

Shielding your optimism is nowhere more important than with deals. If your startup is doing a deal, just assume it’s not going to happen. The VCs who say they’re going to invest in you aren’t. The company that says they’re going to buy you isn’t. The big customer who wants to use your system in their whole company won’t. Then if things work out you can be pleasantly surprised.

The reason I warn startups not to get their hopes up is not to save them from being disappointed when things fall through. It’s for a more practical reason: to prevent them from leaning their company against something that’s going to fall over, taking them with it.

For example, if someone says they want to invest in you, there’s a natural tendency to stop looking for other investors. That’s why people proposing deals seem so positive: they want you to stop looking. And you want to stop too, because doing deals is a pain. Raising money, in particular, is a huge time sink. So you have to consciously force yourself to keep looking. …

VCs and corp dev guys are professional negotiators. They’re trained to take advantage of weakness. [8] So while they’re often nice guys, they just can’t help it. And as pros they do this more than you. So don’t even try to bluff them. The only way a startup can have any leverage in a deal is genuinely not to need it. And if you don’t believe in a deal, you’ll be less likely to depend on it. …

The way to succeed in a startup is to focus on the goal of getting lots of users, and keep walking swiftly toward it while investors and acquirers scurry alongside trying to wave money in your face. …

Paul Graham’s lessons for startups Read More »