Paul Graham is probably the single most influential investor in tech. If you start a software company, especially one that might require some sort of capital investment, everyone will tell you to read his essays. He's revered like some sort of saint. It is impossible to overstate his influence among aspiring Silicon Valley entrepreneurs.
He's also the corporeal manifestation of so much that is wrong about the technology world. There's this attitude in tech that social problems are an annoyance; they shouldn't concern hackers because they're just out there making cool things. Everyone knows this attitude – Facebook will say it's not their fault that people will use Facebook to start a genocide; tech companies can't help it that there aren't more women programmers; etc. Paul Graham probably didn't invent that, but he codified and legitimized it. He has spent decades spreading it through Y-combinator, his startup incubator.
Y-combinator is like the Vatican of tech entrepreneurship. It is the single most influential organization in the startup world. Lots of the biggest tech companies, like Airbnb, Dropbox, Substack, Instacart, and Reddit, got their start at Y-combinator. Even more huge companies applied and didn't get in, but still followed its advice closely. Companies that are accepted are usually given the same advice: spend as much time with Paul Graham as humanly possible.
If Y-combinator is his church, then his "essays" are its scriptures. In them, he gives advice to aspiring Zuckerbergs. His advice is small-minded, ultra-capitalist, sexist, racist, ableist, and xenophobic. He gives "realist" advice, without the necessary self-reflection that, of all people, he is the single person most in the position to change these so-called realities.
In his various works, he advises companies to have someone who doesn't have an accent as their CEO, because that's what investors like. He reminds people that, while you can't legally discriminate when hiring employees, you can totally pick your cofounders however you want; you don't need to abide by the rules that protect the disabled, pregnant people, and so on. He talks about how there's nothing that he, or Y-combinator, could possibly do to fix their gender ratio, because the problem is "upstream" from them.
Sometimes, the nonsense he says trigger a backlash, and sometimes it doesn't. When there is a backlash, he'll publish an essay defending himself, and lots of folks will rally to him. Maybe each of the statements on their would be defensible, but taken in their totality, they reveal a rich, influential person who propagates a destructive culture while refusing to accept any responsibility associated with his position of wealth and influence.
As bad as the racist or xenophobic stuff he's said can be, I don't even think that's his worst quality. I want to end with his furthering of the cult of perpetual growth. He's a big force behind the tech obsession with "unicorns." In tech jargon, a unicorn is a company that is worth a billion dollars. Venture capital in tech exclusively cares about unicorns, because sustainable businesses are a waste of time for investors. In his words:
The total value of the companies we've funded is around 10 billion, give or take a few. But just two companies, Dropbox and Airbnb, account for about three quarters of it. [...] [I]n purely financial terms, there is probably at most one company in each YC batch that will have a significant effect on our returns, and the rest are just a cost of doing business.
[...] It's a constant battle for us. It's hard to make ourselves take enough risks. When you interview a startup and think "they seem likely to succeed," it's hard not to fund them. And yet, financially at least, there is only one kind of success: they're either going to be one of the really big winners or not, and if not it doesn't matter whether you fund them, because even if they succeed the effect on your returns will be insignificant. In the same day of interviews you might meet some smart 19 year olds who aren't even sure what they want to work on. Their chances of succeeding seem small. But again, it's not their chances of succeeding that matter but their chances of succeeding really big. The probability that any group will succeed really big is microscopically small, but the probability that those 19 year olds will might be higher than that of the other, safer group.
The probability that a startup will make it big is not simply a constant fraction of the probability that they will succeed at all. If it were, you could fund everyone who seemed likely to succeed at all, and you'd get that fraction of big hits. Unfortunately picking winners is harder than that. You have to ignore the elephant in front of you, the likelihood they'll succeed, and focus instead on the separate and almost invisibly intangible question of whether they'll succeed really big.
I think this is the single most important thing to understand about the tech scene; it's an industry that has fully internalized the values of capitalism at its most extreme. It is growth-obsessed, short-sighted, and entirely structured around the needs of investors, including even profit. You cannot be a software startup and just be a sustainable business; the ecosystem will reject you. Every single tech company has to become a unicorn or it is considered a failure. Paul Graham has turned that idea into a cult in tech, and its consequences are the technological world we are all forced to live with today.
1. Even though most tech companies require only time, computers, and a few web servers – in other words, they are not in any way capital intensive – most tech companies still "require" venture capital. The need for capital is a cultural need to move as fast as possible all the time. For more, see The Case Against Substack.