Startup Founders Quotes

You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible.

As a founder, your first job is to get the first things right, because you cannot build a great company on a flawed foundation.

evangelizing was what successful startup founders did in Silicon Valley. You didn’t change the world by being cynical.

Over the years, I've learned that the first idea you have is irrelevant. It's just a catalyst for you to get started. Then you figure out what's wrong with it and you go through phases of denial, panic, regret. And then you finally have a better idea and the second idea is always the important one.

Dov Frohman, the founder of Intel Israel, later said that to create a true culture of innovation, “fear of loss often proves more powerful than the hope of gain.

Any place with a founder who brings a teddy bear to meetings,” he writes, “is a step away from Jonestown.

the less energy people expend on performance, the more they expend on appearances to compensate.

The single greatest danger for a founder is to become so certain of his own myth that he loses his mind. But an equally insidious danger for every business is to lose all sense of myth and mistake disenchantment for wisdom.

I think there are very few people who have a capacity to see the future. So it can be difficult when you are talking about something where nothing about it exists yet.

Discipline is a prerequisite of greatness. Nobody becomes great by accident.

We sometimes remind early-stage founders that, in many ways, they aren’t building a product. They’re building a tool to learn what product to build.

One common mistake we see new entrepreneurs especially tech entrepreneurs making is focusing too much on product

Much better to figure out where the marketplace is going to be in a few years, focus on providing a solution to that, and let the market forces catch up to you.

life is not a portfolio: not for a startup founder, and not for any individual. An entrepreneur cannot “diversify” herself: you cannot run dozens of companies at the same time and then hope that one of them works out well. Less obvious but just as important, an individual cannot diversify his own life by keeping dozens of equally possible careers in ready reserve.

A successful startup takes a very long time—certainly much longer than most founders think at the outset. You cannot treat it as an all-nighter. You have to eat well, sleep well, and exercise. You have to spend time with your family and friends. You also need to work in an area you’re actually passionate about—nothing else will sustain you for ten years.

IT’S UNFORTUNATE BUT TRUE: IF ENTREPRENEURSHIP IS A BATTLE, most casualties stem from friendly fire or self-inflicted wounds.

A friendship built on business can be glorious, while a business built on friendship can be murder.

The clearest indication that something is not going well is when you can't say what is on your mind to your co-founder

I simply don’t have it in me to define my life’s success playing someone else’s game and following someone else’s rulebook.” --Dipa to her Grandfather

Mosley knew that evangelizing was what successful startup founders did in Silicon Valley. You didn’t change the world by being cynical.

I'd say determination is the single most important quality in a startup founder. If the founders I spoke with were superhuman in any way, it was in their perseverance.

Pretend that every single person you meet has a sign around his or her neck that says ‘Make Me Feel Important.’ Not only will you succeed in business, but you will succeed in life.” —MARY KAY ASH, FOUNDER OF MARY KAY COSMETICS

The world’s most deadly fluff is: “I would definitely buy that.” It just sounds so concrete. As a founder, you desperately want to believe it’s money in the bank. But folks are wildly optimistic about what they would do in the future. They’re always more positive, excited, and willing to pay in the imagined future than they are once it arrives.

Her emergence tapped into the public’s hunger to see a female entrepreneur break through in a technology world dominated by men. Women like Yahoo’s Marissa Mayer and Facebook’s Sheryl Sandberg had achieved a measure of renown in Silicon Valley, but they hadn’t created their own companies from scratch. In Elizabeth Holmes, the Valley had its first female billionaire tech founder.

When it first emerged, Twitter was widely derided as a frivolous distraction that was mostly good for telling your friends what you had for breakfast. Now it is being used to organize and share news about the Iranian political protests, to provide customer support for large corporations, to share interesting news items, and a thousand other applications that did not occur to the founders when they dreamed up the service in 2006. This is not just a case of cultural exaptation: people finding a new use for a tool designed to do something else. In Twitter's case, the users have been redesigning the tool itself. The convention of replying to another user with the @ symbol was spontaneously invented by the Twitter user base. Early Twitter users ported over a convention from the IRC messaging platform and began grouping a topic or event by the "hash-tag" as in "#30Rock" or "inauguration." The ability to search a live stream of tweets - which is likely to prove crucial to Twitter's ultimate business model, thanks to its advertising potential - was developed by another start-up altogether. Thanks to these innovations, following a live feed of tweets about an event - political debates or Lost episodes - has become a central part of the Twitter experience. But for the first year of Twitter's existence, that mode of interaction would have been technically impossible using Twitter. It's like inventing a toaster oven and then looking around a year later and discovering that all your customers have, on their own, figured out a way to turn it into a microwave.

I didn't really want to patent it because, for one, I don't like software patents, and, two, if you patent it, you make it public. Even if you don't know someone's infringing, they will still be getting the benefit. Instead, we just chose to keep it a trade secret and not show it to anyone.

The goal - at least the way I think about entrepreneurship - is you realize one day that you can't really work anyone else. You have to start your own thing. It almost doesn't matter what the thing is. We had six different business plan changes, and then the last one was PayPal. If that one didn't work out, if we still had the money and the people, obviously we would not have given up. We would have iterated on the business model and done something else. I don't think there was ever clarity as to who we were until we knew it was working. By then, we'd figured out our PR pitch and told everyone what we do and who we are. But between the founding and the actual PayPal, it was just like this tug-of-war where it was like, "We're trying this, this week." Every week you go to investors and say, "We're doing this, exactly this. We're really focused. We're going to be huge." The next week you're like, "That was a lie.

The founders of start-ups as varied as YouTube, Palantir Technologies, and Yelp all worked at PayPal. Another set of people—including Reid Hoffman, Thiel, and Botha—emerged as some of the technology industry’s top investors. PayPal staff pioneered techniques in fighting online fraud that have formed the basis of software used by the CIA and FBI to track terrorists and of software used by the world’s largest banks to combat crime. This collection of super-bright employees has become known as the PayPal Mafia—more or less the current ruling class of Silicon Valley—and Musk is its most famous and successful member.

Paul Buchheit: I'm suddenly reminded that, for a while, I asked people if they were playing Russian Roulette with a gun with a billion barrels (or some huge number, so in other words, some low probability that they would actually be killed), how much would they have to be paid to play one round? A lot of people were almost offended by the question and they'd say, "I wouldn't do it at any price." But, of course, we do that everyday. They drive to work in cars to earn money and they are taking risks all the time, but they don't like to acknowledge that they are taking risks. They want to pretend that everything is risk-free.

Wozniak: Well, we added up to the total everything that was needed. If there was anything that neither one of us knew how to do, Steve would do it. He'd just find a way to do it. He was just gung ho and pressing for this company to be successful. And me, I was pretty much only in my technical head with the circuits.

A lot of the machines that Google is built on—commodity is the polite word for them—they're regular PCs and so they're not always the most reliable.

Take Maya Angelou’s advice: when someone shows you who they are, believe them the first time.

Founders that are hard to talk to are almost always bad.

A sixty-year-old start-up founder has a roughly three times higher chance of creating a valuable business than a thirty-year-old start-up founder.

What they don’t teach you in business school is to make sure your life partner is in sync with what you’re doing,

..determination is the most important quality in a founder, open-mindedness and willingness to change your idea are key, and all startups face rejection at first.

Aside from the parent-child relationship, we do not expect our relatives and friends to have any more power over us than we grant them out of respect or affection.

But those start-up founders don’t hide their failures; to the contrary, they flaunt them—blogging about them, gathering to talk about them at conferences like FailCon.

In a startup, the founders define the product vision and then use customer discovery to find customers and a market for that vision.

when you build only software that you absolutely need, you don't get more software than you'll actually use.

Innovations seem inevitable in retrospect, but at the time it's an uphill battle.

Pick a big enough project, something that's really hard, something that over the years you can work on.

If you're not constantly testing, you're going to be tested constantly.

We are all vessels of profound possibilities. When we learn to accept we're not the creator, but simply a conduit of knowledge... Then we can create.

if possible, build your expertise before you build your network, and build your network before you build your company.

Great Founders Don’t Do What They Love; They Enable a Vision

A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed.

The culture that a founder creates is one of the most durable aspects of the company, outlasting the founder itself and carrying on the tradition of the firm.

Managing Is a Skill, Not a Prize

Too often entrepreneurs are reactive to the challenges inherent when building a company... the most successful founders are proactive.

The beauty of entrepreneurship lies in witnessing those determined spirits, who wake up every day to multiple rejections and yet still focus on 'failing' forward.

People like the idea of innovation in the abstract, but when you present them with any specific innovation, they tend to reject it because it doesn't fit with what they already know.

The problem with MVPs, and with the “something > nothing” model, is that if you launch to a large customer base or a broad community, you build brand association with that first version.

Google founders Larry Page and Sergey Brin didn’t set out to create one of the fastest-growing startup companies in history; they didn’t even start out seeking to revolutionize the way we search for information on the web. Their first goal, as collaborators on the Stanford Digital Library Project, was to solve a much smaller problem: how to prioritize library searches online.

Some famous person said, "Success is 50 percent luck and 50 percent preparedness for that luck." I think that's a lot of it. It's being ready to take advantage of opportunities when they arise.

Because you'll go through so many changes, I don't think it pays off to overanalyze the first business plan, for example. The first business plan is there to make sure you can use Microsoft Word.

Paul Buchheit: Then you have what we do with PCs, and that's technically pretty challenging—to take this big network of machines that are unreliable and build a big, reliable storage system out of it.

The lesson for business is that we need founders. If anything, we should be more tolerant of founders who seem strange or extreme; we need unusual individuals to lead companies beyond mere incrementalism.

Emotional comfort with one’s colleagues was a better predictor than IQ, than years of experience, than the strength of previous work, than literally any and everything else researchers had hypothesized about.

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." - Paul Graham

Venture capitalists, with the exception of people like Don Valentine, would tell you that they'd rather fund a great team than a great idea. The reason is that if they have a bad idea, great teams can figure out a better one. Mediocre people even with a great idea can screw it up in its execution. Or if they have a bad idea, then they aren't going to be in a position to think about how to change it. They're just going to pursue it blindly.

We have noticed the most successful founders are the sort of people who are low-stress to work with because you feel “he or she will get it done, no matter what it is.” Sometimes you can succeed through sheer force of will.

Of the most successful startups, nearly everyone has a clearly identifiable marketing flywheel that brought awareness and traffic from the right audiences and helped those people convert to a sale or a signup at the right time.

Zero to One is about how to build companies that create new things. It draws on everything I’ve learned directly as a co-founder of PayPal and Palantir and then an investor in hundreds of startups, including Facebook and SpaceX.

Livingston: What is the key to excellence for an engineer? Wozniak: You have to be very diligent. You have to check every little detail. You have to be so careful that you haven't left something out. You have to think harder and deeper than you normally would.

Bing’s gotten much better since then, and is now as good as or better than Google on most queries, but that MVP hangover has stuck with the brand for years and, in my opinion, continues to dampen the prospects of what should be a very decent option for web searchers.

There were the venture capitalists, who’d gotten in early, watched the tokens they bought climb to ludicrous heights, and now believed they could predict the future. There were the founders of crypto start-ups, who’d raised so many millions of dollars that they seemed to believe their own far-fetched pitches about creating the future of finance. Then there were the programmers, who were so caught up with their clever ideas about new things to do inside the crypto world that they never paused to think about whether the technology did anything useful.

Anyone who prefers owning a part of your company to being paid in cash reveals a preference for the long term and a commitment to increasing your company’s value in the future. Equity can’t create perfect incentives, but it’s the best way for a founder to keep everyone in the company broadly aligned.

You fail if you don’t try. If you try and you fail, yes, you’ll have a few articles saying you’ve failed at something. But if you look at the history of American entrepreneurs, one thing I do know about them: An awful lot of them have tried and failed in the past and gone on to great things.” —RICHARD BRANSON, FOUNDER OF THE VIRGIN GROUP

When someone tells me they have a founder they want to introduce me to but they’re worried because the person is a wild card, I set that meeting up for the next day. Angel investors are looking for wild cards, because the best founders are typically inflexible and unmanageable, pursuing their visions at the expense of other people’s feelings.

In big companies, there's always going to be more politics and less scope for individual decisions. But seeing what startups are really like will at least show other organizations what to aim for. The time may soon be coming when instead of startups trying to seem more corporate, corporations will try to seem more like startups. That would be a good thing.

Entrepreneurs who kept their day jobs had 33 percent lower odds of failure than those who quit. If you’re risk averse and have some doubts about the feasibility of your ideas, it’s likely that your business will be built to last. If you’re a freewheeling gambler, your startup is far more fragile. Like the Warby Parker crew, the entrepreneurs whose companies topped Fast Company’s recent most innovative lists typically stayed in their day jobs even after they launched. Former track star Phil Knight started selling running shoes out of the trunk of his car in 1964, yet kept working as an accountant until 1969. After inventing the original Apple I computer, Steve Wozniak started the company with Steve Jobs in 1976 but continued working full time in his engineering job at Hewlett-Packard until 1977. And although Google founders Larry Page and Sergey Brin figured out how to dramatically improve internet searches in 1996, they didn’t go on leave from their graduate studies at Stanford until 1998. “We almost didn’t start Google,” Page says, because we “were too worried about dropping out of our Ph.D. program.” In 1997, concerned that their fledgling search engine was distracting them from their research, they tried to sell Google for less than $2 million in cash and stock. Luckily for them, the potential buyer rejected the offer. This habit of keeping one’s day job isn’t limited to successful entrepreneurs. Many influential creative minds have stayed in full-time employment or education even after earning income from major projects. Selma director Ava DuVernay made her first three films while working in her day job as a publicist, only pursuing filmmaking full time after working at it for four years and winning multiple awards. Brian May was in the middle of doctoral studies in astrophysics when he started playing guitar in a new band, but he didn’t drop out until several years later to go all in with Queen. Soon thereafter he wrote “We Will Rock You.” Grammy winner John Legend released his first album in 2000 but kept working as a management consultant until 2002, preparing PowerPoint presentations by day while performing at night. Thriller master Stephen King worked as a teacher, janitor, and gas station attendant for seven years after writing his first story, only quitting a year after his first novel, Carrie, was published. Dilbert author Scott Adams worked at Pacific Bell for seven years after his first comic strip hit newspapers. Why did all these originals play it safe instead of risking it all?

Apparently sprinters reach their highest speed right out of the blocks, and spend the rest of the race slowing down. The winners slow down the least. It's that way with most startups too. The earliest phase is usually the most productive. That's when they have the really big ideas. Imagine what Apple was like when 100% of its employees were either Steve Jobs or Steve Wozniak.

A lot of these new start-up founders are somewhat unsavory people. The old tech industry was run by engineers and MBAs; the new tech industry is populated by young, amoral hustlers, the kind of young guys (and they are almost all guys) who watched The Social Network and its depiction of Mark Zuckerberg as a lying, thieving, backstabbing prick—and left the theater wanting to be just like that guy.

When I’m consulting to start-up founders, I often have to tell them that many of their people aren’t going to be competent in the new world order they’re heading into as they scale. Usually they respond, “But I like them and they work hard and they’re really great!” But the questions are: Can they do the job at scale? Are you going to need them to do tomorrow the same job they’re doing now? What’s your plan for them?

Gene Berdichevsky, one of the members of the solar-powered-car team, lit up the second he heard from Straubel. An undergraduate, Berdichevsky volunteered to quit school, work for free, and sweep the floors at Tesla if that’s what it took to get a job. The founders were impressed with his spirit and hired Berdichevsky after one meeting. This left Berdichevsky in the uncomfortable position of calling his Russian immigrant parents, a pair of nuclear submarine engineers, to tell them that he was giving up on Stanford to join an electric car start-up. As employee No. 7, he spent part of the workday in the Menlo Park office and the rest in Straubel’s living room designing three-dimensional models of the car’s powertrain on a computer and building battery pack prototypes in the garage. “Only now do I realize how insane it was,” Berdichevsky said.

A company that is not designed to create high-tech products is very unlikely to have the culture or the DNA that it takes to create high-tech products. So if you are a high-tech person in that company, then you're basically a glorified typist in some sense. It's very unlikely that the kind of people who would be successful in an entertainment company would even understand what programmers do that makes them more than typists.

in 2010, foreign students received more than 50 percent of all Ph.D.’s awarded in every subject in the United States. In the sciences, that figure is closer to 75 percent. Half of all Silicon Valley start-ups have one founder who is an immigrant or first-generation American. America’s potential new burst of productivity, its edge in nanotechnology, biotechnology, its ability to invent the future—all rest on its immigration policies.

If you make a mistake, don’t spend precious time and energy trying to deny it or point the finger at someone else. Be a leader and own it, then spend your time and energy fixing the problem. As I’ve already noted, start-ups often fail because founders want to be seen as the smartest person in the room, which means not being wrong. Making a mistake is going to happen. None of us is perfect. But the difference between success and failure is how you handle that mistake

Michael Arrington, the loudmouth founder and former editor in chief of TechCrunch, is famous for investing in the start-ups that his blogs would then cover. Although he no longer runs TechCrunch, he was a partner in two investment funds during his tenure and now manages his own, CrunchFund. In other words, even when he is not a direct investor he has connections or interests in dozens of companies on his beat, and his insider knowledge helps turn profits for the firm.

I wish I had asked myself when I was younger. My path was so tracked that in my 8th-grade yearbook, one of my friends predicted— accurately— that four years later I would enter Stanford as a sophomore. And after a conventionally successful undergraduate career, I enrolled at Stanford Law School, where I competed even harder for the standard badges of success. The highest prize in a law student’s world is unambiguous: out of tens of thousands of graduates each year, only a few dozen get a Supreme Court clerkship. After clerking on a federal appeals court for a year, I was invited to interview for clerkships with Justices Kennedy and Scalia. My meetings with the Justices went well. I was so close to winning this last competition. If only I got the clerkship, I thought, I would be set for life. But I didn’t. At the time, I was devastated. In 2004, after I had built and sold PayPal, I ran into an old friend from law school who had helped me prepare my failed clerkship applications. We hadn’t spoken in nearly a decade. His first question wasn’t “How are you doing?” or “Can you believe it’s been so long?” Instead, he grinned and asked: “So, Peter, aren’t you glad you didn’t get that clerkship?” With the benefit of hindsight, we both knew that winning that ultimate competition would have changed my life for the worse. Had I actually clerked on the Supreme Court, I probably would have spent my entire career taking depositions or drafting other people’s business deals instead of creating anything new. It’s hard to say how much would be different, but the opportunity costs were enormous. All Rhodes Scholars had a great future in their past. the best paths are new and untried. will this business still be around a decade from now? business is like chess. Grandmaster José Raúl Capablanca put it well: to succeed, “you must study the endgame before everything else. The few who knew what might be learned, Foolish enough to put their whole heart on show, And reveal their feelings to the crowd below, Mankind has always crucified and burned. Above all, don’t overestimate your own power as an individual. Founders are important not because they are the only ones whose work has value, but rather because a great founder can bring out the best work from everybody at his company. That we need individual founders in all their peculiarity does not mean that we are called to worship Ayn Randian “prime movers” who claim to be independent of everybody around them. In this respect, Rand was a merely half-great writer: her villains were real, but her heroes were fake. There is no Galt’s Gulch. There is no secession from society. To believe yourself invested with divine self-sufficiency is not the mark of a strong individual, but of a person who has mistaken the crowd’s worship—or jeering—for the truth. The single greatest danger for a founder is to become so certain of his own myth that he loses his mind. But an equally insidious danger for every business is to lose all sense of myth and mistake disenchantment for wisdom.

Starting something new in middle age might look that way too. Mark Zuckerberg famously noted that “young people are just smarter.” And yet a tech founder who is fifty years old is nearly twice as likely to start a blockbuster company as one who is thirty, and the thirty-year-old has a better shot than a twenty-year-old. Researchers at Northwestern, MIT, and the U.S. Census Bureau studied new tech companies and showed that among the fastest-growing start-ups, the average age of a founder was forty-five when the company was launched.

This was a huge red flag, because real technologists wear T-shirts and jeans. So we instituted a blanket rule: pass on any company whose founders dressed up for pitch meetings. Maybe we still would have avoided these bad investments if we had taken the time to evaluate each company’s technology in detail. But the team insight—never invest in a tech CEO that wears a suit—got us to the truth a lot faster. The best sales is hidden. There’s nothing wrong with a CEO who can sell, but if he actually looks like a salesman, he’s probably bad at sales and worse at tech.

It’s a cliché that tech workers don’t care about what they wear, but if you look closely at those T-shirts, you’ll see the logos of the wearers’ companies—and tech workers care about those very much. What makes a startup employee instantly distinguishable to outsiders is the branded T-shirt or hoodie that makes him look the same as his co-workers. The startup uniform encapsulates a simple but essential principle: everyone at your company should be different in the same way—a tribe of like-minded people fiercely devoted to the company’s mission. Max Levchin, my co-founder

People like Jimmy become so fixated on feeling good about themselves that they manage to delude themselves into believing that they are accomplishing great things even when they’re not. They believe they’re the brilliant presenter on stage when actually they’re making a fool of themselves. They believe they’re the successful start-up founder when, in fact, they’ve never had a successful venture. They call themselves life coaches and charge money to help others, even though they’re only twenty-five years old and haven’t actually accomplished anything substantial in their lives. Entitled

Tyler was to his left, and to his right were the three other witnesses who had joined them for the headlining session of the first day of testimony. Directly next to Cameron sat Fred Wilson, a seasoned venture capitalist veteran who had moved into the cyber currency space in a big way, with the countenance of someone who had seen a number of technology waves, including the first dot-com boom and bust. Next to Wilson, the up-and-comer venture capitalist Jeremy Liew, a partner at Lightspeed Venture. And at the end of the bench, Barry Silbert, the founder and CEO of the startup SecondMarket.

On the day the company starts, there is very limited customer input to a product specification. The company doesn’t know who its initial customers are (but it may think it knows) or what they will want as features. One alternative is to put Product Development on hold until the Customer Development team can find those customers. However, having a product you can demonstrate and iterate is helpful in moving the Customer Development process along. A more productive approach is to proceed with Product Development, with the feature list driven by the vision and experience of the company’s founders.

Growth hackers resist this temptation (or, more appropriate, this delusion). They opt, deliberately, to attract only the early adopters who make or break new tech services and seek to do it as cheaply as possible. In fact, part of the reason the scrappy start-ups, services, and apps in this book might not always be well-known or topics of daily conversation is because their founders have focused their energies on product development with an eye toward growth—they’re now millions of members strong without any superfluous “buzz.” They got to mass market by ignoring the urge to appeal to the mass market, at least to start with.

When a new company is formed, its founders must have a startup mentality—a beginner’s mind, open to everything because, well, what do they have to lose? (This is often something they later look back upon wistfully.) But when that company becomes successful, its leaders often cast off that startup mentality because, they tell themselves, they have figured out what to do. They don’t want to be beginners anymore. That may be human nature, but I believe it is a part of our nature that should be resisted. By resisting the beginner’s mind, you make yourself more prone to repeat yourself than to create something new. The attempt to avoid failure, in other words, makes failure more likely.

Take Evernote, a start-up that offers productivity and organization software, which made the companywide decision to delay spending even a penny on marketing for the first several years of its growth. As Evernote’s founder, Phil Libin, told a group of entrepreneurs in a now-classic talk, “People [who are] thinking about things other than making the best product, never make the best product.” So Evernote took “marketing” off the table and instead poured that budget into product development. This undoubtedly slowed brand building at first—but it paid off. Why? Because Evernote is far and away the most superior productivity and note-taking application on the planet. Today, it practically markets itself.

That we need individual founders in all their peculiarity does not mean that we are called to worship Ayn Randian “prime movers” who claim to be independent of everybody around them. In this respect Rand was a merely half-great writer: her villains were real, but her heroes were fake. There is no Galt’s Gulch. There is no secession from society. To believe yourself invested with divine self-sufficiency is not the mark of a strong individual, but of a person who has mistaken the crowd’s worship—or jeering—for the truth. The single greatest danger for a founder is to become so certain of his own myth that he loses his mind. But an equally insidious danger for every business is to lose all sense of myth and mistake disenchantment for wisdom.

Livingston: Some aspects of business turned out to be less of a mystery than you had thought. What did you find you were better at than you thought? Graham: I found I could actually sell moderately well. I could convince people of stuff. I learned a trick for doing this: to tell the truth. A lot of people think that the way to convince people of things is to be eloquent—to have some bag of tricks for sliding conclusions into their brains. But there's also a sort of hack that you can use if you are not a very good salesman, which is simply tell people the truth. Our strategy for selling our software to people was: make the best software and then tell them, truthfully, "this is the best software." And they could tell we were telling the truth. Another advantage of telling the truth is that you don't have to remember what you've said. You don't have to keep any state in your head. It's a purely functional business strategy. (Hackers will get what I mean.)

The evidence for the cognitive interpretation of the above-average effect is that when people are asked about a task they find difficult (for many of us this could be “Are you better than average in starting conversations with strangers?”), they readily rate themselves as below average. The upshot is that people tend to be overly optimistic about their relative standing on any activity in which they do moderately well. I have had several occasions to ask founders and participants in innovative start-ups a question: To what extent will the outcome of your effort depend on what you do in your firm? This is evidently an easy question; the answer comes quickly and in my small sample it has never been less than 80%. Even when they are not sure they will succeed, these bold people think their fate is almost entirely in their own hands. They are surely wrong: the outcome of a start-up depends as much on the achievements of its competitors and on changes in the market as on its own efforts. However, WYSIATI plays its part, and entrepreneurs naturally focus on what they know best—their plans and actions and the most immediate threats and opportunities, such as the availability of funding. They know less about their competitors and therefore find it natural to imagine a future in which the competition plays little part.

The VCs were prolific. They talked like nobody I knew. Sometimes they talked their own book, but most days, they talked Ideas: how to foment enlightenment, how to apply microeconomic theories to complex social problems. The future of media and the decline of higher ed; cultural stagnation and the builder’s mind-set. They talked about how to find a good heuristic for generating more ideas, presumably to have more things to talk about. Despite their feverish advocacy of open markets, deregulation, and continuous innovation, the venture class could not be relied upon for nuanced defenses of capitalism. They sniped about the structural hypocrisy of criticizing capitalism from a smartphone, as if defending capitalism from a smartphone were not grotesque. They saw the world through a kaleidoscope of startups: If you want to eliminate economic inequality, the most effective way to do it would be to outlaw starting your own company, wrote the founder of the seed accelerator. Every vocal anti-capitalist person I’ve met is a failed entrepreneur, opined an angel investor. The SF Bay Area is like Rome or Athens in antiquity, posted a VC. Send your best scholars, learn from the masters and meet the other most eminent people in your generation, and then return home with the knowledge and networks you need. Did they know people could see them?

In fact, the same basic ingredients can easily be found in numerous start-up clusters in the United States and around the world: Austin, Boston, New York, Seattle, Shanghai, Bangalore, Istanbul, Stockholm, Tel Aviv, and Dubai. To discover the secret to Silicon Valley’s success, you need to look beyond the standard origin story. When people think of Silicon Valley, the first things that spring to mind—after the HBO television show, of course—are the names of famous start-ups and their equally glamorized founders: Apple, Google, Facebook; Jobs/ Wozniak, Page/ Brin, Zuckerberg. The success narrative of these hallowed names has become so universally familiar that people from countries around the world can tell it just as well as Sand Hill Road venture capitalists. It goes something like this: A brilliant entrepreneur discovers an incredible opportunity. After dropping out of college, he or she gathers a small team who are happy to work for equity, sets up shop in a humble garage, plays foosball, raises money from sage venture capitalists, and proceeds to change the world—after which, of course, the founders and early employees live happily ever after, using the wealth they’ve amassed to fund both a new generation of entrepreneurs and a set of eponymous buildings for Stanford University’s Computer Science Department. It’s an exciting and inspiring story. We get the appeal. There’s only one problem. It’s incomplete and deceptive in several important ways. First, while “Silicon Valley” and “start-ups” are used almost synonymously these days, only a tiny fraction of the world’s start-ups actually originate in Silicon Valley, and this fraction has been getting smaller as start-up knowledge spreads around the globe. Thanks to the Internet, entrepreneurs everywhere have access to the same information. Moreover, as other markets have matured, smart founders from around the globe are electing to build companies in start-up hubs in their home countries rather than immigrating to Silicon Valley.

Found a startup society. This is simply an online community with aspirations of something greater. Anyone can found one, just like anyone can found a company or cryptocurrency.2 And the founder’s legitimacy comes from whether people opt to follow them. Organize it into a group capable of collective action. Given a sufficiently dedicated online community, the next step is to organize it into a network union. Unlike a social network, a network union has a purpose: it coordinates its members for their mutual benefit. And unlike a traditional union, a network union is not set up solely in opposition to a particular corporation, so it can take a variety of different collective actions.3 Unionization is a key step because it turns an otherwise ineffective online community into a group of people working together for a common cause. Build trust offline and a cryptoeconomy online. Begin holding in-person meetups in the physical world, of increasing scale and duration, while simultaneously building an internal economy using cryptocurrency. Crowdfund physical nodes. Once sufficient trust has been built and funds have been accumulated, start crowdfunding apartments, houses, and even towns to bring digital citizens into the physical world within real co-living communities. Digitally connect physical communities. Link these physical nodes together into a network archipelago, a set of digitally connected physical territories distributed around the world. Nodes of the network archipelago range from one-person apartments to in-person communities of arbitrary size. Physical access is granted by holding a web3 cryptopassport, and mixed reality is used to seamlessly link the online and offline worlds. Conduct an on-chain census. As the society scales, run a cryptographically auditable census to demonstrate the growing size of your population, income, and real-estate footprint. This is how a startup society proves traction in the face of skepticism. Gain diplomatic recognition. A startup society with sufficient scale should eventually be able to negotiate for diplomatic recognition from at least one pre-existing government, and from there gradually increased sovereignty, slowly becoming a true network state.

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” George Bernard Shaw On a cool fall evening in 2008, four students set out to revolutionize an industry. Buried in loans, they had lost and broken eyeglasses and were outraged at how much it cost to replace them. One of them had been wearing the same damaged pair for five years: He was using a paper clip to bind the frames together. Even after his prescription changed twice, he refused to pay for pricey new lenses. Luxottica, the 800-pound gorilla of the industry, controlled more than 80 percent of the eyewear market. To make glasses more affordable, the students would need to topple a giant. Having recently watched Zappos transform footwear by selling shoes online, they wondered if they could do the same with eyewear. When they casually mentioned their idea to friends, time and again they were blasted with scorching criticism. No one would ever buy glasses over the internet, their friends insisted. People had to try them on first. Sure, Zappos had pulled the concept off with shoes, but there was a reason it hadn’t happened with eyewear. “If this were a good idea,” they heard repeatedly, “someone would have done it already.” None of the students had a background in e-commerce and technology, let alone in retail, fashion, or apparel. Despite being told their idea was crazy, they walked away from lucrative job offers to start a company. They would sell eyeglasses that normally cost $500 in a store for $95 online, donating a pair to someone in the developing world with every purchase. The business depended on a functioning website. Without one, it would be impossible for customers to view or buy their products. After scrambling to pull a website together, they finally managed to get it online at 4 A.M. on the day before the launch in February 2010. They called the company Warby Parker, combining the names of two characters created by the novelist Jack Kerouac, who inspired them to break free from the shackles of social pressure and embark on their adventure. They admired his rebellious spirit, infusing it into their culture. And it paid off. The students expected to sell a pair or two of glasses per day. But when GQ called them “the Netflix of eyewear,” they hit their target for the entire first year in less than a month, selling out so fast that they had to put twenty thousand customers on a waiting list. It took them nine months to stock enough inventory to meet the demand. Fast forward to 2015, when Fast Company released a list of the world’s most innovative companies. Warby Parker didn’t just make the list—they came in first. The three previous winners were creative giants Google, Nike, and Apple, all with over fifty thousand employees. Warby Parker’s scrappy startup, a new kid on the block, had a staff of just five hundred. In the span of five years, the four friends built one of the most fashionable brands on the planet and donated over a million pairs of glasses to people in need. The company cleared $100 million in annual revenues and was valued at over $1 billion. Back in 2009, one of the founders pitched the company to me, offering me the chance to invest in Warby Parker. I declined. It was the worst financial decision I’ve ever made, and I needed to understand where I went wrong.

The one thing we learned over 5 years is that nothing works better than just improving your product.

In PayPal co-founder Max Levchin’s words: “The very first company I started failed with a great bang. The second one failed a little bit less, but still failed. The third one, you know, proper failed, but it was kind of okay. I recovered quickly. Number four almost didn’t fail. It still didn’t really feel great, but it did okay. Number five was PayPal.

EVERYBODY SELLS Nerds might wish that distribution could be ignored and salesmen banished to another planet. All of us want to believe that we make up our own minds, that sales doesn’t work on us. But it’s not true. Everybody has a product to sell—no matter whether you’re an employee, a founder, or an investor. It’s true even if your company consists of just you and your computer. Look around. If you don’t see any salespeople, you’re the salesperson.