There is some really good advice here. Honestly, I think this might be one of the most important takeaways you can have as a startup founder/CEO in general:

> It's exciting when you notice users "misusing" your product to do something you hadn't intended. This means there's something they want so desperately that they'll not only use any solution you offer, but even use things that aren't meant to be solutions. When you see something like that, don't be annoyed that your users are using your product wrong; listen for the message they're sending, because it could be valuable.

A lot of very specialist businesses seem to fail this test, and lose out on the potential for a huge market because of it. Like it sounds ridiculous as hell, but I remember when GoAnimate had a huge audience among kids and teens looking to make silly videos for sites like YouTube. I also remember the company feeling uncomfortable that they were getting known for that online, and trying to refocus their product/service towards business users instead.

Maybe they should have not done that, and realised that the periphery demographic was a potential customerbase that could have used a slightly different, perhaps more focused product with features relevant to their usecases.

Similarly, I remember an example of a business creating software meant for designing signs for road and metro systems being surprised that toy train and simulation game enthusiasts were using the software for other uses. Again, feels like they should have treated this as a business opportunity, not a cause for confusion or concern.

> Squeezing every last penny out of customers is a distraction. It gets you 2x returns at most. Whereas discovering some new thing you could make for them could easily get you 10x or 100x returns. They're two different ways of looking at the world, and the O'Reilly way makes more, for those who can do it. [5]

This feels like a perfect condemnation of how a lot of private equity firms manage businesses. These sorts of tactics make them money sure, but a lot of the businesses they buy up would probably do better if they held off on the whole 'squeeze resources to breaking point' philosophy in favour of a much more customer focused one.

> Being generous makes you more powerful. As Tim O'Reilly said, you should create more value than you capture. Many hard-headed business types would write this off as idealistic hippy stuff, but in fact this is the route to becoming really rich.

> Hired CEOS take the power of the companies they run for granted, whereas founders remember the days when the company was so weak that it had to delight users to survive.

I've always instinctively followed the generosity path, and have experienced that when customers are delighted and that when frictions are removed (or not added in the first place), good things will follow.

However, I have not always been able to convince others to trust in and follow this path. Can anyone offer any advice or experiences on talking people out of trying to prematurely squeeze out every last penny?

> There's a variant of going full stack where you eat your way gradually through the customer by doing all their hardest work for them.

One of my clients provisions front office applications for banks and the conversation has come up more than once regarding the client evolving into a bank themselves and building up operations around the capabilities of the product stack.

One good multi-regional partner and it could be a radically different animal. Providing software to one very big customer tends to be a lot simpler than providing it to 20+ smaller customers.

How about "making investors less powerful"?

We really need a change in mindset around what success means. Concentration of power, concentration of resources, concentration of market share are some measures of success. Out competing your rivals until you grind them into dust is some measure of success. This is the Peter Thiel and Bezos and to a large extent the ycombinator and PG philosophy of success. It's dressed up as "just innovation bro" whereas the truth is, innovation in a rapidly increasing technological society is certainly both broadly useful to everyone, but also, left unchecked, just a tool to be successful in ways that are, sometimes extremely, detrimental to society as a whole. "Disruption and Innovation" could go well past the lines that AirBnb and Uber crossed and achieve a lot more success.

Just on PG as a persona, I was never a fan or non fan I've barely read his blogposts and only know of him incidentally from knowing this forum, but on the general area of "thought leaders" and the increasingly asymmetry one-to-many relationships we have been getting used to for decades I came across this very interesting and well put together video here: https://www.youtube.com/watch?v=Dqh17U3tymU , give it 15 minutes if you do decide to watch it its a bit of a slow burn.

The comments here are taking a very uncharitable definition of “power”. If I take that definition I can see how people are being so negative. But just a slightly more positive definition and this all seems like reasonable dialogue to have with an early stage startup.

I wonder what the tipping point was where the general attitude towards PG and his essays changed. It's tempting to say AI, but I feel it was more like AirBnB era? When people saw how one of YC's golden goose affected the local communities, the rosy color on our glasses inevitably faded.

I am not surprised that Silicon Valley researchers say they cannot solve the alignment problem... Here the leading voice in the region publishes an article about how to be more powerful without any other mention of alignment but "users".

For example, I am sure facebook users (the ones buying ads) are super happy, but is the company aligned?

I feel like the basis of this post is that in the current state of software development, SaaS alone holds very limited power.

Sometimes communication from “powerful” people are often signals to others who are, or aspire to be, “powerful”.

When you are signalling to the latter, you need to be cruder with your approach or the signal may be lost. There needs not be any wisdom in it.

Is open source still viable these days for a business model that relies on a single large customer and anyone else that also happens to need that solution?

I would say, the author does have a point.

Playing for the long game is good. But that sentence is too lossy to decipher the meaning unless you know what it means.

Instead of making the company more powerful, I would recommend making the company more aligned with truth and the real world which has a nice side effect of being resilient.

Add to that, preparing for scale.

We have dedicated an entire year for nothing but architecture, correctness, distributedness and scaling.

The economic perspective of the same would be reducing the cost of software development (not in the LLM massive code generation way but the opposite with architecture).

Its been 5 years since we have been building Slyp and SlypBusiness along with the plethora of technologies around it.

I don't know whether we are powerful as per the author's definition but we are damn resilient.

Given the impact some YC startups are having on society at large I think a better question than "How" is "Why". Do we really want Flock to become even more powerful?

Even in the cases where the answer is "yes"; I believe that working backwards from the why could provide a more elegant path to accomplishing said goal.

PG hasn't been in the bay for a long time so he doesn't understand what the ecosystem is like anymore.

For example "startups make the best stuff" is just wrong these days. I almost always assume the startup's product today is going to screw you or is hacky, because they prove over and over again they cut corners for growth. Very few startups still take the mentality PG has in his era and now ship half broken hacked stuff.

> But all these strategies for making startups more powerful have one thing in common — or more precisely, have to obey one constraint. They all have to make things better for the customer.

Good thing we have venture capital to alleviate that constraint by enabling selling a dollar for 50 cents.

What are some recent powerful startups?

The only ones I've seen are AI grifters (not even useful AI) and Polymarket/Kalshi, which makes me cynical; although I've seen some decent startups that are small (i.e. non-powerful) but nonetheless profitable.

I read the article and kept wondering what the author is trying to convey. It reads like a checklist compiled into an essay with no wisdom nor rationale baked into it. mostly vague and generic -- like a human transform applied to an llm output.

For example, if you opt in, we'll tell you how you're doing compared to other users. The obvious AI variant is to let your users opt in to training your model on their interactions with it. Many will resist that, but if some don't, the model they get to use will outperform the vanilla one used by the others.

The vanilla one? Is this the pg Malcolm Gladwell arc, where he's retelling some real concept but warped by misunderstanding to the point of incoherence? Who's getting hobbled running on "vanilla models", do we have examples?

Suggesting every dark pattern for startups and then using record labels as the boogeyman like it's 2000 again is ... odd.

Why don't you let artists decide if they want record labels? They were far better off with EMI and Columbia records than with Spotify.

It is better to give $500,000 of $1,000,000 to a record label than $3 of $10 to Spotify. And record labels were pretty damn good at selecting artists, even in pop music. Does Paul Graham think music got any better after 2010?.

> Being generous makes you more powerful. As Tim O'Reilly said, you should create more value than you capture. Many hard-headed business types would write this off as idealistic hippy stuff, but in fact this is the route to becoming really rich. Squeezing every last penny out of customers is a distraction.

I sure did appreciate the generosity of paying $1,500/night for a villa where I had to pay a $250 cleaning fee and was then told to take out the trash, sweep the floors and put the bedsheets in the laundry room.

I’m glad there’s a lot of people commenting negatively below to PGs modus operandi (rationalizing maximum greed in seemingly thoughtful measured essays that make him seem like a kindly philosopher instead or digital robber barron)

Like Ayn Rand, and PT Barnum before them VCs and Tech Bros will be looked at with great hostility in next years as having destroyed society with their brand of hyper-capitalism all in the name of “disruption”

Clerky is super useful for startups