Blake Borgeson, in blog form

suspected facts. validated opinions.

Posts Tagged ‘dna

paul graham and umair haque: be good

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Being good as a company is something I think about a lot. And since I just read these two interesting perspectives, I thought it was time to pull thoughts together.

Disclaimer: I want to make the point that I don’t agree with every single argument the authors make. I think it’s understood in the blogging world that when I link to someone else’s post, I’m not saying I agree with it 100%, but I just want to make sure. I’m just pointing to something you should read and digest for yourself. Hopefully soon I’ll be comfortable leaving this disclaimer out most of the time.

First is Paul Graham‘s most recent essay, entitled ‘be good‘. I guess he likes to write long blog posts, so he calls them essays so you won’t be turned off by how long it is–except that now it’s called an essay, which is equally off-putting to the people who avoid long blog posts. Anyway, I’m not familiar enough with YCombinator to say much as to what Paul Graham’s investment record is like with YC, but this essay (calling it that at least makes it sound more serious and sophisticated I guess) is very well written.

Overall Paul’s essay captures a lot of my own opinions on how valuable it is, to both companies and individuals, to be in the business of making the world a better place for everyone.

There’s a lot of external evidence that benevolence works. But how does it work? One advantage of investing in a large number of startups is that you get a lot of data about how they work. From what we’ve seen, being good seems to help startups in three ways: it improves their morale, it makes other people want to help them, and above all, it helps them be decisive.

He comes in at the end to reiterate that he isn’t just pushing the ‘be good’ mantra because he thinks it’s morally superior, and therefore the right thing to do in and of itself.

When you write something telling people to be good, you seem to be claiming to be good yourself. So I want to say explicitly that I am not a particularly good person. When I was a kid I was firmly in the camp of bad. The way adults used the word good, it seemed to be synonymous with quiet, so I grew up very suspicious of it.

You know how there are some people whose names come up in conversation and everyone says “He’s such a great guy?” People never say that about me. The best I get is “he means well.” I am not claiming to be good. At best I speak good as a second language.

So I’m not suggesting you be good in the usual sanctimonious way. I’m suggesting it because it works. It will work not just as a statement of “values,” but as a guide to strategy, and even a design spec for software. Don’t just not be evil. Be good.

Next, I’ve been reading Umair Haque’s blogs, bubblegen and his new hbs-located blog, for some time, and he is one of the most insightful writers I’ve found. He sometimes goes way beyond what he really means with sweeping statements and broad generalizations, but you get used to that and you realize he’s usually just in a hurry, which is why he’s often the first (I hear of) to make very original observations. In his most recent post on creating real value, he states very specifically that most of the ‘revolutionary’ innovation coming out of startups and venture capital these days is still focused on adding on useless features and providing new ways for people to waste time, despite some big problems in the global ecology and the global economy. As usual, he’s got some pretty harsh criticisms for the world at large.

The self-indulgence of today’s so-called revolutionaries in a darkening economic twilight is a recipe for strategic suicide.

So here’s my challenge. If you’re a revolutionary, then be one: put your money where your mouth is, and fix a big problem that changes the world for the better – if you really have the courage, the purpose, and the vision, that is.

At the bottom of it, both of these authors are talking about generating real value. The capitalism ingrained in the anglo-american core, at least for nearly everyone in the business world, tells us that the profit you make is the real measure of the value you’re creating. If enough people are willing to pay you more for something than it costs you to provide them with it, then congratulations, that’s value right there. You earned it, and now you get to buy stuff with it.

I definitely agree with that, as stated, but it leaves out at least a couple of considerations:

  • If the rules of the game (capitalism; the market) are drawn incorrectly (e.g., apportioning the costs of pollution or other environmental damage), and in such a way that you can profit more by taking advantage of that error or omission, are you really creating as much value as your profit says?
  • If you manufacture a sub-par or overpriced product, but you’re able to convince people to buy from you versus your competitors through manipulation (not presenting the whole truth), are you really creating value?

In the first situation, people look to experts and the government to set the rules correctly and adjust them as needed to keep value creation aligned with profit creation. Ideally that’s great, but is that a reasonable expectation, especially when people are saying that the government is owned by the companies, not by its citizens? In the second, you can always argue that your customers are responsible for their own buying decisions, and that obviously they’d rather have your product than the money they gave you–that’s why they made the purchase. In a world where full and complete information on companies and their products, sources, and practices is freely available and easy to use, I’d agree.

I think my main point is that, while it’s easier, in my opinion, to use profit as the judge of value in business, it can very often lead you to the wrong decisions. I think a better compass is impact, and by that I mean the change for the better you make in the world. And since that’s very difficult to quantify in full and think about in day-to-day business decisions, I think most of it is wrapped up in doing better than anyone else can for your customers and future customers and adding to their lives in a way you feel is really meaningful.

Written by blakeweb

May 2, 2008 at 7:06 pm

Posted in startups

Tagged with , , ,