Can you be a tech founder and care about humanity?
Dear diary. Today at work someone said I was not a Great Man of History, because sometimes I think about life.
I’ve lived in San Francisco for 15 years. I moved here from Minneapolis, a beautiful city with deep reservoirs of culture and decency that awoke in force when the Secret Police came to town. (So proud of you, Minnesota.)
San Francisco is another beautiful city, with a long history of culture and counterculture. It also has tech, in abundance. Coming from Minneapolis, with its tiny, tight-knit tech scene, I worried about getting lost in SF. What I found was an incredibly open and welcoming community. Founders and CEOs of larger startups would take the time to get coffee or beers with a new founder, new to town, and I learned a lot from them. They did this because when they were just getting started, someone else took the time to help them too. It’s genuinely a part of Silicon Valley tradition, and it’s a beautiful thing.
My company at the time was a cloud video startup called Zencoder. We were fifteen people with a little bit of Angel funding and a passionate customer base. Our users were engineers building things with video, from side projects to hot startups to giants. Anyone remember Posterous, the startup founded by Garry Tan and Sachin Agarwal? Literally our first customer. PBS was a customer. Amazon was a customer.
At Zencoder, we were developers building for developers. I think twelve of the fifteen of us were hands-on engineers in some capacity. There is something special about companies where the customer and the team are the same persona; it gives you deep empathy and good taste.
What pulled us to San Francisco was a program called Y Combinator, where an interesting collection of people give you a small amount of money for a decent chunk of equity, and then offer mentorship for three months.1 Y Combinator was led by Paul Graham and Jessica Livingston, and they had impeccable taste.2 This taste meant they knew how to select good founders, and that they knew how to give them good advice. Reddit, Dropbox, and Airbnb were early successes.
Before Y Combinator, the conventional wisdom was that engineers should stay in the basement and build things, while MBAs ran the show. Founders would start a company, raise venture funding, and then get pushed out by VCs to make room for a Professional CEO. Y Combinator changed this. Paul Graham realized the best tech companies were run by developer-founders, even at scale. YC paved the way for a new class of startups: startups run by hackers.
People sometimes ask me how the tech world has changed in the last 15 years. My answer is that founders used to be hackers. They were technical and creative. They loved to build things that were good, or beautiful, or impressive. In the pecking order, it was better to be the founder of an interesting company at N scale than the founder of a boring company at N+1 scale. There was absolutely a “gold rush” spirit to it too—if you built something good, you’d be rewarded—but being obsessed with money wasn’t cool, and went against the ethos.
Paul Graham has an essay called Cities and Ambition where he talks about the “message” sent by different cities. The message of New York: you should make money. The message of Boston: you should be smarter. The message of Silicon Valley: you should be powerful, impactful. Think of the creators of major open source projects: power and impact, usually without massive material success.
When you think about it, the whole phenomenon of “open source” should blow your mind. According to a 2024 study, the global value of open source software is $8.8 trillion, and by some estimations, 77% of software used today is open source. If you aren’t familiar with open source: it’s software that is both free to use and free to modify or copy. Every time you load an app or web page, you’re using open source code in the app, the operating system, and the remote server, all at the same time. From the perspective of capitalism, open source doesn’t make much sense, and yet it’s enormous.
How do you explain the success of open source? The only explanation is that some people aren’t only motivated by money; they also care about building interesting things.
I remember the people I looked up to in 2010. They weren’t the most successful founders or engineers; they were the ones doing the most interesting things. Being a core contributor to the Ruby programming language, in my little world, was way more interesting than being a founder of a boring growth-stage company.
Paul Graham has another great essay called Hackers and Painters. Actually, Paul Graham has dozens of great essays. If you haven’t already, read them online or as a book. There is a lot of wisdom to be picked up from PG; he’s a good writer and an interesting human.
In Hackers and Painters, PG says things like this:
What hackers and painters have in common is that they’re both makers. Along with composers, architects, and writers, what hackers and painters are trying to do is make good things.
…what hackers are actually trying to do: designing beautiful software
The … problem with startups is that there is not much overlap between the kind of software that makes money and the kind that’s interesting to write.3
I love this version of tech. It’s motivating and inspiring and creative.
So when people ask me what has changed in the San Francisco tech scene over the last 15 years, it’s the end of hackers. Founder-hackers were driven out by founder-tycoons. A decade or two ago, if you wanted to get rich, you entered the world of finance. Now you work in tech. There is so much money pouring into tech, and so many millionaires being minted, that it’s the rational thing to do.
Back in my day, it was about the love. Now it’s about the money. I know, I know—what a clichéd thing to say. I have enough introspection to know that I’m currently Old Man inveighing against chthe youth to Get Off My Lawn.
Of course, clichés exist because they capture a kind of wisdom. Practice makes perfect. If it sounds too good to be true, it probably is. Don’t judge a book by its cover. The problem with clichés isn’t that they’re wrong; it’s that they’re true, but lazy.
I’ll try to be less lazy.
What happened to startups is what has happened over and over in human history: money squeezes out other concerns. Something starts with a mix of motives—money and love and virtue and vice, in some combination—and ends up dominated by money alone.
Capitalism is an exceptionally powerful force, like a river cutting through rock. It’s brutally effective. Imagine you and I are both starting a tech company, and we’re competing with each other. If I care about two things—financial success, plus building something I think is beautiful—and you’re thinking about only one thing—financial success—you have the advantage over me. I’m splitting my focus, and I’ve limited the range of what I’m willing to do. As markets get more and more competitive, every competitive advantage or disadvantage gets amplified, and as tech has matured, hackers who like to build are getting squeezed out by founders whose only goal is financial return.
I really don’t like this. I like startups. I like tech. Making money is motivating, but it needs to be kept in perspective, because there is so much more to life than money. At best, money is a minor good in the pantheon of good things, squarely behind friendship, love, happiness, virtue, community, character, health, meaning, purpose, truth, art. Put money at the center of your life, or at the center of society, and things go off the rails.
Does tech have to be this way? Is selling your soul the most successful way to play the game?
I don’t know.
Over here, in the Gold corner, representing the hometown, is a fighter telling you that material success is the only thing that matters in life. That your value is what you do. That making the economy spin faster is a good thing in itself, no matter where it goes. That what makes SF good is that there isn’t much to do except code—“more dogs than kids” means more hours working. That your team should work nights and weekends; tell them “pop a Zyn and work at the factory all day.” That you shouldn’t spend time thinking about the past, and you definitely shouldn’t waste time on introspection. Just move forward. Make money first; everything else optional.4
The Gold corner gives you enough credit that they know they can’t give you orders; they have to capture your imagination. So they’re crafting a philosophy of life.5 Their literal marketing teams are literally working to sell you a worldview, an ethic, a religion. They’ve realized, quite rightly, that this is a path to maximizing returns, at least for a while.
And over there, in the Blue corner, is an aging fighter, old fashioned at this point, telling you that there is more to life than money. That technology can do good things, but what’s good or bad is its impact, not acceleration for the sake of acceleration. That it is better to build something beautiful that fails than something ugly that succeeds. That as you lie on your deathbed, you aren’t going to say “I wish I’d worked more hours.” That you should probably balance your hard work with books and art and friendships and family. That there isn’t even really a conflict here, and a balanced life is more effective than a narrow life, even if you want to be pragmatic about it. That happiness goes deeper than money, and that meaning goes deeper than fleeting feelings of happiness. That what makes humans human is asking big questions.
Who wins? I don’t know the answer for the world, but I know the answer for myself.
$20K for 6% when I first did YC in 2010. The terms have gotten better.
YC had two other founders—Trevor Blackwell and Robert Morris—but they were mostly hands-off when I joined.
Emphasis mine.
No exaggerations here; these are literally, or almost literally, quotes.
See, for example, https://a16z.com/the-techno-optimist-manifesto/. I’m neither trying to subtweet A16Z or singularly call them out, but they happen to be one of the most prominent faces of the reductionism I’m criticizing. They’re also (full disclosure) an investor in two of my companies and have been excellent to work with. I both respect and personally like many of the people I work with. They don’t need to go down these particular moral and political paths; I wish they wouldn’t.