Startups
Hiring is Obsolete
paulgraham.com
Startups
20 min read → 60 sec
Cheap Web startups shift power from employers and investors toward young founders. Early-stage acquisitions, user-focused building, and high early-career risk make starting a company a stronger path than traditional hiring.
Young founders can bypass employers and be valued directly by users
Web startups start on $10,000, so investors matter far less
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Large organizations systematically undervalue exceptional 22 year olds because they judge toward the mean
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The founders of Yahoo, Google, and Microsoft averaged age 24
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Early twenties are the best time for extreme career risk. Startup upside outweighs failure costs
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Big companies should buy very early startups. It beats separate hiring and in-house product development
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Most successful startups exit by acquisition, often mainly to acquire the team
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$2M to $3M
A startup bought after six months is mostly a hiring bonus
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Big companies are better at extracting value from existing products than creating new ones
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Internal turf blocks new products. Web apps threatened Microsoft's desktop business
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Disruptive technologies are developed by disruptive people, who rarely gain power inside big companies
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Many startups exploring one idea beat one in-house team
Riskier variation finds better products
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Startup pay is tied to success, so founders work harder than salaried product teams
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Developers in startups learn more from direct sales and support than from focus groups
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Acquirers should buy startups earlier, before VCs inflate prices into hundreds of millions
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Cheaper startups reduce investor power, so founders can resist giving control to outside CEOs
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Google's founders delayed hiring a CEO for a year and chose a PhD in computer science
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Every manager asked at Yahoo, Google, Amazon, Cisco, and Microsoft preferred the failed founder candidate
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Inexperience usually means building something users do not want, not lacking technical skill or financial discipline
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