Paul Graham and the Opportunity Costs of Startups

Anyone who hasn’t read them should have a look at Paul Graham’s collection of essays:

They’re not all winners, but there’s a lot of good stuff there, especially where he talks about things he knows intimately: startups and “hackers” (in the sense of programmers). I’m not sure if he actually ever comes out and says that startups are the way to go for enterprising hackers (he may not, infact), but his enthusiasm for that route is infectious. It’s a route that was fantastically successful for him, and so it’s natural that he thinks highly of it.

However, the “opportunity costs” are also important to consider. In other words, what else could you do with that time, as a young and bright coder? I think the world, and possibly Linus Torvalds himself, would have been worse off had he dedicated himself to creating a company. He’s a bright guy, and might not have done too badly with a startup, but Linux is really one of a kind in the success that it’s had. Same thing goes for other bright people who have dedicated themselves to technology in some way (Guido van Rossum, Ruby’s ‘Matz’, Andrew Tridgell come to mind), in the process creating something very cool that has come back to reward them, in the end. On the other hand, while the idea of Arc is interesting, my guess is that the world is better off with Y Combinator, and Mr. Graham certainly seems to have done well by himself with the company he founded and sold to Yahoo.

The question is: what kind of person should do what? Some of the personality traits are doubtless similar between the two categories. Or perhaps there isn’t much difference at all, and it’s motivation that counts. Perhaps the most important thing is the people you know. Apple’s two founding Steves might not have did what they did without one another, whereas Linus was able to capitalize on the internet to leverage his own creation, without having to work closely with a business partner.

I don’t have the answers, nor do I think they are clear or easy, although I’m sure that motivation does count for a lot in terms of overcoming what people don’t expect you to be able to do.

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