Paul Graham on Ambition, Art, and Evaluating Talent

Conversations with Tyler is produced by the Mercatus Center at George Mason University, bridging the gap between academic ideas and real-world problems. Learn more at mercatus.org. For a full transcript of every conversation enhanced with helpful links, visit conversationswithtyler.com. Hello everyone and welcome back to Conversations with Tyler. Today I'm here with Paul Graham. Paul, welcome.

Thank you.

You've written several times that your wife, Jessica Livingstone, is a better judge of character than you are. What other areas of talent judgment is she better or much better than you?

Practically everything to do with people. She's a real expert on people and like social protocol, what to wear at events, what to say to someone, anything like that.

But you have all this data, so why can't you learn from the data and from her to do as well as she can? What's the binding constraint here in limiting someone as a judge of human affairs?

Partly, I just don't have as much natural ability, and partly, I just don't care as much about these things. The conversations we have are not, "Paul, you can't wear that." They're like, "Paul, you can't wear that!" And I'm like, "Really? Why not? What's wrong with this?" I just don't care as much.

But say when you're judging talent, Sam Altman, Patrick Collison, you're judging people. Of course it's the business plan, but much of it is the talent.

Oh, it's all the people. The earlier you're judging startups, the more you're just judging the founders. So it's location for real estate, right? The founders are like that. So yeah, sure. Which is why the earlier stage you invest, the more you want to have these people who are good judges of people.

So if she's better than you at human affairs, comparing you to other people, what exactly, in the smallest number of dimensions, Are you better at than the other people?

What am I better at?

Yes, what are you better at? You can't be so terrible at this, right?

You mean to do with startups?

To do with people, how well they will do with their startups. What's the exact nature of your comparative advantage?

I can tell if people know what they're talking about. When they come and talk about some idea, especially some technical idea, I can tell if they know what— you know, if they actually understand the idea or if they just have a sort of reading the newspapers level of understanding of the thing.

And how well can you judge determination?

Determination, it's hard to judge by looking at the person. The way you would judge determination, because people act determined, people think they're supposed to act determined. No one walks into their Y Combinator interview thinking, "I need to seem diffident." Nobody thinks that. They all think they're supposed to seem tough, which is actually really painful and stressful. It would be better if they just were themselves. Because someone trying to act tough is just, ah, it's so painful to watch. But the way you tell determination is not so much from talking to them as from asking them stories about things that have happened to them. That's where you can see determination.

And it's how they tell the story, or it's what happened?

No, no, no, it's what they did in the story.

What they did in the story.

Right? That something went wrong, and instead of giving up, they persevered.

Why are there so few great founders in their 20s today? Is that true?

Is that true though? I've heard about that.

10, 15 years ago, you have a large crop of people who obviously have become massive successes. Today it's less clear. Companies seem to be smaller. The important people seem to be older. Sam Altman was important early on, but now he's very important. He's what, 37, 38?

Something like that.

Seems like more of a synthetic set of abilities we need.

It could be because— I'm not even sure this is true. It could be that it's not actually true and that there's something else going on. Like, for example, people manage— if you look at like athletes, for example, athletes learned how to stay good for longer. And so you have like people who are really international quality soccer players at age 34, right? And that didn't used to happen back in the days of Johan Cruyff smoking cigarettes between halves. They didn't last till 34. And so it might have seemed like all the good football players are 34, and it's just an artifact of them lasting longer.

But the 20-year-old stars seem to have vanished. There's not a next Patrick Collison.

Patrick Collison probably didn't seem to most people to be the big star, and you can prove this because if he had, they would have invested in early Stripe rounds, and they didn't. So anybody who claims they knew early on that Patrick Collison was going to be a big star, show me the equity.

Okay, but there was Peter Thiel, there was Sequoia, there was yourself. A bunch of people knew, in fact, or strongly suspected.

Sure. Some people did, but certainly not everyone. So I don't know if this is true. I don't know if this is true. I'll investigate this summer. We're going to go back to YC and talk to some founders, and I'll talk to the partners, and I'll see what's going on, because I had a mental note to check and see if this was actually true.

There's a Paul Graham worldview in your earlier essays where you want to look for the great hackers, and a lot of the most important companies come from intriguing side projects.

Oh, yeah.

But if we want older people who are somewhat synthetic in their abilities, are those other principles still true?

No, no, not necessarily. Not as true. Part of the reason you want to find young founders who've done stuff from side projects is that it guarantees the idea is not bullshit. Because if young founders sit down and try to think of a startup idea, it's more likely to be bullshit because they don't have any experience of the world. Older founders can do things like start supersonic aircraft companies or build something for geriatric care and actually get it right. Younger founders are likely to get things wrong if they try and do stuff like that. So it's just a heuristic. It's a heuristic for finding matches between young founders and ideas.

Why is venture capital such a small part of capital markets? So it's big in tech, it's somewhat big in biotech, but most other areas of the economy you finance with debt or retained earnings or some other method. What determines where VC works and doesn't work?

Growth. You've got to have high growth rates because VC is— it's so risky investing in startups, investing in these early-stage companies that maybe don't even have any revenues. So the only thing that can counterbalance the fact that half the companies completely fail is that the ones that don't fail sometimes have astonishing returns.

So can you imagine a future where there's a lot more tech in terms of the level,— but slower rates of growth, and VC quite dwindles because the growth rates aren't there, or VC goes to some other area.

VC has been dwindling in the sense that they have smaller and smaller percentages of companies. If you go back and look at the stories from the 1980s, they would do these rounds where they would get 50% of the company. And even when YC started, they would get 30, and now it's down to 10 in these rounds. God knows what they're called. They keep renaming the rounds. But for a given round size, the amount of equity they they get is much smaller than they used to.

It at least seems we have a new dynamic Microsoft that ships products quickly and innovates and on the surface appears to act like a startup again. How can that be true? We all know your famous essay about Microsoft culture. What has happened?

I did not say that they wouldn't make money.

But they've done more than make money. They've impressed us with their speed.

I meant something very specific in that essay. Incidentally, I talk in that essay about how I was talking to a founder and I was talking about how Microsoft was this threat and you could He was clearly puzzled, like, how could Microsoft possibly be threatening? I didn't mention who the founder was, but it was actually Zuck. It was Mark Zuckerberg who was puzzled that Microsoft could be a threat. And still to this day, if you ask founders, are you afraid that Microsoft might do what you're doing? None of them are. So it's still not a threat to startups. Yeah, it makes more money now, but it's still not a threat like it used to be. It doesn't matter in the sense of factoring into anyone's plans for the future. No startup is thinking, I better not do that because Microsoft Microsoft might enter that and destroy me.

In the early years of Sam Altman, what did you see in him other than determination? Because he's not a technical guy in the sense that he—

He is a technical guy. He was a CS major.

But you're not buying the software he programmed. There's something about what Sam Altman does.

Well, now he's become a sort of manager, but he knows how to program.

But that's not why his ventures have succeeded, right?

Oh no, he does—

There's some ability to put the pieces together.

Yeah, yeah, but he's not a non-technical guy. He's not just some business guy. He's a technical guy who also is very formidable, and that's a good combination.

There's a now famous Sam tweet where he appears to repudiate his earlier advice of finding product-market fit early and then scaling, and saying, oh, maybe I was wrong saying that. What OpenAI has done is not exactly that. Do you agree, disagree?

Maybe OpenAI is a special case because you have to have giant warehouses full of GPUs. You can't just mess around and throw something out there and see if it works. Maybe it requires some amount of advanced planning for something on that scale. I don't know. I don't know what he meant by it, or, and I also don't know what it's like inside OpenAI really. So I don't know either.

Do you still take a dim view of solo founders?

It's harder. I know I wouldn't start a startup alone because it's just so much weight to bear to do something like that.

But it's very hard to find a partner as good as you are. So it's harder and it's easier. You can just do it.

People should do some work. People should put— when I talk to people who are in their teens or early 20s about starting a startup, I tell them instead of sitting around thinking of startup ideas, you should be working with other people on projects, and then you'll get a startup idea out of it that you probably never would have thought of, and you'll get a co-founder too. Right? So I wish people would do more of that. You can get co-founders, just work with people on projects. You just can't get co-founders instantly. You got to have some patience.

Why is there not more ambition in the developed world? Say we wanted to boost ambition by 2x. What's the actual constraint? What stands in the way?

Yeah, boy, what a fabulous question. I wish you'd asked me that an hour ago so I could have had some time to think about it between—

but you're clearly good at boosting ambition, so you're You're pulling on some lever, right? What is it you do? Oh, okay.

How do I do it? People are, for various reasons, for multiple reasons, they're afraid to think really big. There are multiple reasons. One, it seems overreaching. Two, it seems like it would be an awful lot of work, right? And so as an outside person, I'm like an instructor in some fitness class. And so I can tell someone who's already working as hard as they can, all right, push harder. It doesn't cost me any effort. And surprisingly often, as in the fitness class, they are capable of pushing harder. And so a lot of my secret is just being the person who doesn't have to actually do the work that I'm suggesting they do.

How much of what you do is reshuffling their networks? So there's people with potential, they're in semi-average networks. Interesting question.

We should talk about that some more though, because that really is an interesting question.

Yes.

Imagine how amazing it would be If all the ambitious people could be more ambitious, that really is an interesting question, and there's got to be more to it than just the fact that I don't have to do the work.

I think a lot of it's reshuffling networks. So you need someone who can identify who should be in a better network. You boost the total size of all networking that goes on, and you make sure those people with potential—

by reshuffling networks, you mean introducing people to one another?

Of course. You pull them away from their old peers who are not good enough for them And you bring them into new circles which will raise their sights.

Maybe, maybe. That is true. When you read autobiographies, there's often an effect when people go to some elite university after growing up in the middle of the countryside somewhere. They suddenly become more excited because there's a critical mass of like-minded people around. But I don't think that's the main thing.

Like, think about the power of London in the 17th century. So the Industrial Revolution happens further north, but the ideas, the science, In or near London, maybe Cambridge.

And Oxford.

And those are the networks people are brought—

Near London only in the sense that everything in England is near everything else by American standards. It's not really that London was the center of ideas. There were a lot of smart people there, but things were more spread out. Be careful with English history there. Back to this idea, though, of how to get people to be more ambitious. It's not just introducing them to other ambitious people. There is a sort of skill to blowing up ideas. Blowing up, not in the sense of destroying, like making them bigger, right? There is a skill to it. There is a skill to it, to take an idea and say, okay, so here's an idea. So how could this be bigger? There is somewhat of a skill to it.

So it's helping people see their ideas are bigger than they thought.

Yes. Oh yes. We often do this in YC interviews.

And people say you're especially good at that. This is what the other people say.

That's why I'm mulling over what actually goes on. Because there is this skill there. The weird thing about YC interviews is in a sense they're a negotiation, right? And in a negotiation you're always saying, oh, I'm not going to pay a lot for that. It's terrible. It's worthless, right? And yet in YC interviews, the founders often walk out thinking, wow, our idea is a lot better than we thought. Just because what we do, you know what we do in YC interviews? We basically start YC. The first 10 minutes of YC is the interview. So you see what it's like. To work with people by working with them for 10 minutes. And that's enough, it turns out.

So you think the 11th minute of an interview has very low value?

I've thought a lot about where the cutoff is. Like, where's the point? If you made a graph, what's your probability of changing your mind, right, after minute number n?

Yeah.

And after minute number 1 or 2, the probability of changing your mind is pretty high. I would say YC interviews could actually be 7 minutes instead of 10 minutes. But 10 minutes is already almost insultingly short. And so we kept it at 10. We could have made it 7.

I think there's often a threshold of 2 and then another threshold at about 7.

Yeah.

And after that, it's very tough for it to flip. Right.

Yeah. Although that doesn't mean you're always right.

But it could just be after 3 hours, it's just not going to flip. Yeah.

Yeah. You're not going to change. I didn't say 7 minutes is enough to tell. Notice I said 7 minutes is the point where you're probably not going to change your mind.

If it's going somewhat badly and the person is flipping positive at minute 6, what is it that's happening both in the interview and in you? If it changes from 2 to 7, clearly from 0 to 1 or 2 they get over nerves or they adjust the sound volume. There's plenty of those stories.

It's probably you misunderstood what they're working on initially.

So great idea, bad at presenting it?

No, more like they're near some idea that we're familiar with and we just assume they must be doing that idea, and they say, "Oh no, we're not doing that, we're doing this." I'm like, "Oh, okay, thank goodness." And then they they get extra points because not only they're not doing the stupid thing, but they understand that the stupid thing is stupid. So now it's— they get extra credit for what we were subtracting for in the past.

Yes. Who falls through the cracks in the YC process as you've experienced it?

YC— one of the reasons I'm so contemptuous of university admissions is that I am also in the admissions business, and I am obsessed. I not only measure— we not only measure when we fail, but we're obsessed with the failure cases. YC He has a list of all the companies that we've missed, that have applied to YC and we've turned down and they've gone on to be successful. And we spend a lot of time like someone thinking about past injuries.

What's the common element though, now that you think—

When there are common elements, my God, do we act quickly to fix that. And so I remember early on there was this company doing— email. They would— if you wanted to send mass emails, I forget what their name was. And this was back when we were reading the applications. If the first reader gave it a sufficiently low grade, it would never be seen by anybody else. So the first reader, who was Robert Morris, who's extremely— he was like designated wet blanket of YC— gave this application a C and with the comment, "Spam company." That was it. Nobody ever saw it again. And they like ended up going public. And so after that, I changed that thing in the software, made it so that no one would ever see something, no second reader would see it. After that, every application had to be seen by at least 2 people.

How did you get over your fear of flying?

Oh, really? Did you— did I already talk about this? Do you know the answer to this?

There are either 2 or 3 places in your writing where you mentioned that you had a fear of flying, but you used the past tense, which implies you got over it, but you never told anyone how.

Oh, it's a bizarre strategy. I learned how to hang glide, which sounds crazy.

That will do it though, right?

If you're afraid of flying, how could you learn how to hang glide? But the answer is you learn how to hang glide gradually. You start by just running along the flat, and if there's a headwind, maybe you feel a little lift, right? And then you go 10 feet up the hill and run as fast as you can, and you reach a total altitude above ground level of a foot, right? You're not afraid when you're a foot above the ground. So you go out a little further up the hill until a month later you're like jumping off a cliff with a hang glider on your back. And so after I was good at hang gliding, I took flying lessons. So there's this intermediate point where I was comfortable, totally comfortable jumping off a cliff with a hang glider on my back, moderately comfortable flying a Cessna 172 where the instructor had just turned off the engine and said, okay, land it, because the glide ratio is actually similar to a hang glider.— and still afraid of getting on an airliner. That shows you how irrational these things are. But when I finally did get on an airliner, my God, it was like a spaceship compared to the planes I'd been flying. It was fabulous. And it totally worked. My fear of flying was completely cured.

And what did you learn about startups and talent selection from that process?

Boy, if I learned anything, I haven't considered it until this moment.

But you might have learned it quite well, just not articulated it.

I don't know. You ask me these hard questions. I don't have time to think about them. Did that have anything to do with— I don't think I've ever consciously used anything I learned there.

Do you see founders who go through a comparable process with something other than flying? Oh, I get where you're at, and here's what you need to do next.

A lot of technical-type founders hate the idea of doing sales and going and talking to people. And so you can tell them, look, just go do this. And you know, after a few months, they'll be used to it. They may never like it. I mean, I would hate doing that myself now, but they can at least do it.

Were the Medici good venture capitalists, or do you give greater credit to the Florentine guilds?

I have no idea. I have no idea. I need to learn more about the—

The guilds would run competitions. The Medici would just pick the people they liked. They both have good records in different ways, but obviously they're competing models.

You're an economist. You've read books about this stuff. I don't know. I don't know. What do I know about the Medici?

I think the Medici were overrated and the guilds were more important, but that's a debatable view. You could argue either way.

They could well be overrated. They were the ones who had all the publicity, so I have no idea.

Your time spent at RISD and in Florence, how did it alter or affect your thoughts on software design and talent selection?

Ah man, if you asked how it affected my ideas about painting—

well, we'll get to that, right? Florence was all about talent selection because how many people in quite a small area became both great and famous?

Yeah, one thing I remember, there was one moment I was sitting in Florence and I realized I had gone to the wrong place. I was studying Florentine history. All the buildings are right around you. I found myself thinking, damn, Florence was New York City in 1450.

That was 60,000 people.

Yeah, that's why it was good at art. It wasn't some weird Florentine thing about art or some special Florentine sense of aesthetics. They were just the most progressive city. It's really too bad that the far left has hijacked that word. It's such a good word. Maybe we can get it back. But I remember thinking, I've gone to the wrong place. I went to the place where the puck used to be hundreds of years ago.

But you can learn a lot from studying where the puck used to be.

Oh, not really.

Are you sure?

Like, Academia was a pretty crappy art school.

No, but being in Florence itself—

Oh, I can learn a lot from looking at the works, yes, but I don't have to go and live there.

But what is it you learned that was relevant for Y Combinator? Because you're doing something comparable to what the Florentines did, picking a pretty small area, making it the absolute center for talent selection, a magnet that drew people in, and having a lot of winners. So you copied what you were living.

I had already learned that from Harvard.

Maybe you had to learn it twice.

No, I was already very well aware of this phenomenon. To the extent YC uses anything like that, we were definitely thinking. YC was started like within the convex hull of Harvard. It's like the places Harvard spread out through Cambridge, but like YC's original office was within it. And so we've consciously tried to make YC the Harvard of startups. No question about that. We had the model right there.

Harvard's very screwed up, as you know. You look at their admissions, how much is like dean's favorites and legacies and affirmative action. It's not— yeah, it's not Y Combinator, right? They're trying to build a coalition and you're just caring about picking winners.

The thing is though, all universities have a sort of admissions process that's corrupt in that way, except possibly Caltech. Caltech might actually do undergrad admissions properly. And so since they're all messed up Harvard does still have this draw compared to the others.

Does AI make programming even more like painting?

God, what a question. How do you make these questions? Does AI make programming more like painting? I have no reason to believe that. It might be true. It might be true.

You're piecing things together more, arguably, in this new world. Post-GPT world?

What I was saying when I said programming was like painting is they're both building something, right? And you're not building something anymore with AI than when you were writing code by hand. So I would guess not. I would guess not.

How far is Midjourney from quote-unquote real art? Is it more decrepit modernism? Is it a fantastic revolution? Or as art, put aside the startup angle, how do you view I don't—

I see all these AI-generated images and I don't know which ones are from Midjourney and which ones aren't. So I can't say for sure about Midjourney, but I have definitely seen some AI-generated stuff that looks amazing, that looks truly as art.

Not just that it looks impressive, so it's amazing as graphic design, but do you think it's art in the same way that Rembrandt is art?

This whole thing about like what's art and what isn't, I think it's all a matter of degree. Like if my crap Carnation coffee mug is art. It's just not very good art. So there's not like some threshold where above this threshold it's art. Everything people make is art, just to varying degrees of goodness. But I can tell you some of the things I've seen that were AI generated, I'd be impressed if a person made them. So that probably is over your threshold.

If you're good at talent selection, who is an underrated painter and why?

Ah, wow.

Ha ha ha.

Boy, there is a topic I think about a lot. So there's a bunch of different reasons people can be underrated. Almost all good artists are underrated.

I agree.

It sounds weird, but if you look at where the money's spent at auction, it's almost all fashionable contemporary crap. Because if you think about how prices in very high-end art are set, They're auction prices. How many people does it take to generate an auction price? Two. Just two, right? And so you have boneheaded Russians who want to have a Picasso on their wall so people will think they're legit, or hedge fund managers' wives who've been told to buy impressive art to hang in their loft so when people come over they'll say, "Oh, look, they've got a Damien Hirst." The way art prices at the very high end are set is almost entirely by deeply bogus people, which is great, actually. When I was an artist, I used to be annoyed by this. Now that I buy a lot of art at auction, I'm delighted because it means there's all this money. Andy Warhol screen prints selling for $90 million, right?

Yes, and old masters can be— I wouldn't say cheap, but I would say radically underpriced.

Couple hundred thousand.

Or even less for some good ones.

Yeah, and so I know because I buy them, but I used to be annoyed by this, and now I think it's the most delightful thing in the world because there's all this loose money sloshing around, and so-called contemporary art is like this sponge that just absorbs all of it. There's none left. Some of the things I buy I'm the only bidder. I get it for the reserve price. No one else in the world wants it or even knows that it's being sold. So I am delighted about this. So the answer to your question, which artists are undervalued? Essentially all good artists. The intersection between the very, very, very famous artists, like artists famous enough for Saudis to have heard of them. Like Leonardo, I would say, is probably not undervalued except for the artists who are —like household names, every elementary school student knows their names—they're all undervalued.

If you think that something has gone wrong in the history of art and you try to explain that in as few dimensions as possible, what's your account of what went wrong?

Oh, oh, I can explain this very briefly. Brand and craft became divorced. It used to be that the best artists were the best craftspeople, and once art started to be reproduced in newspapers and magazines and things like that, you could create a brand that wasn't based on quality.

So you think it's mass media causing the divorce between brand and craft?

It certainly helps.

And then talent's responding accordingly. So you— Fundamentally what went wrong?

You invent some shtick and then, technically it's called a signature style. So you paint with this special shtick. If someone can get some sort of ball rolling, some speculative ball rolling, which dealers specialize in. Then someone buys the painting with your shtick and hangs it on the wall in their loft in Tribeca, and people come in and say, "Oh my goodness, that's a so-and-so," right? Which they recognize because they've seen the shtick.

But say if we have modernism raging in the 1920s, in the '20s mass media is radio for the most part.

No, newspapers were huge. Modernism was—

Not for showing There's no color in the papers. It was—

You have the 1920s were good enough to make painting like Cézanne fashionable. So it was just about getting going in the 1920s. Why can't we build good British country homes anymore?

Or do you think we can? There's nothing stopping you.

But it doesn't happen. I mean, except the planning people. You can't. Do you know anything about building houses in England? You just cannot build. It's impossibly difficult.

It's one of the worst countries.

It's the reason it looks like that. So nice here. Yes. If they had America's zoning rules here, the entire countryside would be plastered with houses. You wouldn't have any fields left at all because the difference in value between agricultural and building land, it's like, God, 100x or something like that. And this place is small.

Yeah, but there are new buildings, say, in Cambridge, many other parts of Britain, and the new buildings are not country homes. Yet everyone on average is wealthier. And why the change?

Wealthier than where? Oh, than the old days.

Wealthier than Britain in the old days. So even before the railway, you have large numbers of country— most country homes being built when living standards were pathetically low.

A country house has got to have a certain amount of land around it. You can't just have them plastered down a street. It would look wrong. You want a different style of architecture for something like that. There is a place where they build big houses. You know what it is? It's like when the Macintosh appeared and you could have whatever font you wanted, right? Most people have bad taste. In the old days, you had to have a classical-looking house because that was the only way to build houses. And in the Victorian period, actually, was when things went wrong. You could have an Italian villa, or wait, no, it could be a Greek temple, or something that looked like it was from the Tudor period. Take your pick, mix them together, Greek temple with Tudor bits, and it was all over from that point on, really.

Arguably. In which way?

It's not like they build good houses in America either.

No, and neighborhoods are worse yet. There are nice individual homes, but is there any truly beautiful neighborhood built after 1950? Where would it be? In any country. In Palo Alto. No, in Palo Alto, there's a neighborhood of—

there are neighborhoods of houses built by this guy called Eichler, this developer who hired some of the best mid-century architects, and arguably those neighborhoods are good. Although they messed up the trees. When were those built? '50s and '60s.

Okay, but that's 70 years ago. Now, you haven't done anything in 70 years?

I'm sure you— What's your model of that? Someone is building some good houses somewhere. The point is you don't really need to, and so it only happens by accident, right? Developers mostly are thinking, we need to just turn this land into houses as soon as possible. The buyers don't have any taste. We don't need to sweat that, so we'll just build random houses that look big and have large master bedrooms. People will buy them. Them, we'll get our capital back and go on and do the next one. They don't need to be good. Houses don't need to be good. They didn't need to be beautiful in the old days either. It was just technology was so constrained you didn't have any choice.

You get to go back in time, your health is guaranteed, and you know whichever languages you might need, and you spend 6 months somewhere safe. Your safety is guaranteed. Where do you choose? I often think about this question. You seem like someone who often thinks about this question.

Yeah, sadly. The way I think about it is I keep trying to escape from the obvious answer and I don't manage to, because the obvious answer is Athens, which is— that's where everyone would pick.

It's not what I would pick, but what's your choice number 2 then? I'll tell you mine, I think.

But there are things where I am obsessed with the mystery of what the hell was going on in Dark Age Europe. I'm deliberately using the term Dark Age because they're trying to outlaw it, but it's correct. I think if the term Dark Ages hadn't been invented already, that would be fabulous invention to describe that period. Yeah, sure, new things were getting invented, some people were doing good things, just like always happens, but it was as bad as things have been. And there's so few records, nobody knows how things happened. Like, I would be really interested to know when barbarians infilled the Roman Empire, but there were still big Roman landholders and they had to give a large percentage of their estates to these new barbarians who were, in a sense, running things. And yet They were in the cockpit, but they didn't know what the buttons did.

So you want to go to Northumbria in northern France? No, no, no, no. Dark Ages. You've picked the era, now give us the spot. Like Provence.

Provence. Provence in 600. What was going on? What was going on in Provence in 600? I would be very interested to see that, but almost like morbid curiosity. I wouldn't learn as much as I would, from going to Athens, but I just really want to know what was going on.

I'm a big fan of morbid curiosity, by the way. It's the best kind of curiosity in many cases. I can tell. I would pick the Aztec Empire before the Spanish arrived. So I feel I have vague glimpses of what ancient Athens was like. There are still Greek ruins, but the Europeans marveled at the cities they saw, and they burnt all the books. And I think I would learn more by somewhere more strange. Maybe.

The reason I'm interested in medieval Europe is it's because where our world came from, right? Yes. The clocks we use, the writing system, all the clothes eventually evolved from that. So the reason I'm interested— I long ago realized that the medieval period wasn't a dip. It wasn't like there was this high level of civilization and then it dropped down for a while and then it rose back up again. It was more like there was one civilization that was high and went down, and another civilization based in the north north that rose up. And so in a sense, it was the beginning of everything, right? That's why I want to know what the hell was going on in 600 or 700.

Did Rome have to fall, or can you imagine a path where Rome has an industrial revolution and we save ourselves 700 or however many centuries of time? Do you need the fragmentation to get the competition? Maybe. For Britain to become significant? Maybe, maybe.

I don't know. Ah, 2,000 years is a long time, or even 1,700 years.

'Cause China never falls.

Rome was at its zenith until 200, so 1,500 years, but 1,500 years, things could have changed a lot.

But did they in China? Chinese Empire never collapses. It takes many forms, many dynasties, but it ends up stalling. So maybe the collapse of the Roman Empire was one of the best things that could have happened, for Europe at least.

I'm sure people didn't think so at the time. I'm sure people were thinking at the time, it didn't have to be this bad. I don't know. Neither of us knows about this kind of thing.

Looking forward, how optimistic are you about the future of the UK? No real wage growth since 2008, no real productivity growth for as many years. What's up and what's the path out of that?

I am optimistic because they still have a gear that they haven't shifted into. I suppose I'll really have gotten native when I say "we" instead of "they." Because you grew up in Pittsburgh, right? Near Pittsburgh. Yeah, but I'm British by birth.

Does that count? Are you really British, or like your parents were diplomats here? No, yes, I'm really British.

So you're really British? Yes, yes, just ask HMRC. As far as they're concerned, I never left. HMRC is the British IRS. Okay, the reason I'm optimistic about Britain, I was just thinking about this morning, is because people here are not slack. They're not lazy and they're not stupid, and that's the most important thing. So eventually non-lazy, non-stupid people will prevail. And I funded a couple startups here. You can see, like, when you introduce these people to the idea of trying to make something grow really fast and have these really big ambitions, it's like teaching them a foreign language. But they do learn it. They do learn it. It's not like English people are somehow genetically inferior to Americans. So I think they have all that potential still to go. I'm astonished when I see statistics like— I think GDP per capita in the UK is only two-thirds of what it is in America.

It's about the same as Mississippi.

It's preposterous, I know. So imagine the potential there. Imagine the potential.

But you don't feel that way about Mississippi necessarily.

No, I think Mississippi is probably already up close to its full potential. I don't know. I've never actually been there. I shouldn't say things like that.

But why and how did so many things here end up undercapitalized? So the water utilities, the NHS, it seems to be a consistent pattern. That could make us more pessimistic because the flow numbers don't reflect the fact that capital maintenance is even worse than we had thought.

I don't know. You're an economist. I don't know what the term capital maintenance means. But you're a British person, I'm told. Undercapitalized? I don't know what these things mean. They've been— I mean, the NHS is run by the government, so things run by governments are often bad. Although the NHS seems to be pretty good, even though people attack it. It's a lot more civilized than the American system.

But how long it takes an ambulance to arrive if you— well, that's only recently got bad. That's what undercapitalization means. You keep on borrowing against the future, you don't plow resources back in, so at some point you don't have any more.

When things get bad enough, they fix things. This place is not run by the kind of Yahoos that America is. It may be a small country, but people running things, you know, they're not just like boneheaded political appointees. Like, when things are wrong, they notice they're wrong and they fix them. This is a very old country. That's another reason it's not going to tank. They've been through some bad stuff before. There have been ups and downs.

Are you an optimist about the city of San Francisco? Not the area, the city. Yes.

Tell us why. I can't tell you because there are all sorts of things happening behind the scenes to fix the problem.

In politics, you mean, or in tech startups?

No, no, no, politics, politics. The problems with San Francisco are entirely due to a small number of terrible politicians. It's all because Ed Lee died. The mayor, Ed Lee, was a reasonable person, and up till the point where Ed Lee died, San Francisco seemed like a utopia. But it was like when Gates left Microsoft and things rapidly reverted to the mean, although in San Francisco's case, way below the mean. And so it didn't take that much to ruin San Francisco. It's really— if you could, if you just replaced about 5 supervisors, San Francisco would be instantly a fabulously better city. But isn't it the voters you need to replace?

Are those people got elected, reelected?

The reason San Francisco fundamentally is so broken is that the supervisors have so much power. Supervisor elections, you can win by a couple hundred votes. So all you need to do is have this hardcore of crazy left-wing supporters who will absolutely support you no matter what and turn out to vote, and everybody else is, "Oh, local election doesn't matter. I'm not gonna bother." It's a uniquely weird situation that wasn't really visible. It was always there, but it wasn't visible until Ed Lee died. So now we've reverted to what that situation produces, which is a disaster.

Now we're in 2023, say 2 or 3 years from now, what do you think the regulation of AI will look like?

Oh, God knows. You keep asking me questions I have no idea about.

You have plenty of idea. You know as much as anyone, I suspect.

No, that's not true. That is not true. I really have no idea what AI regulation will look like or even should look like, which is an easier question.

Here's an easier question yet. So there's broadly a tech community in the Bay Area.

Like if you said I had to make up the regulations for AI this afternoon, it would be really hard. I agree. And so that's how far away I am from being able to answer that question on the spot. I couldn't even figure it out in a day.

Like when it should be modular or when there should be a regulation on AI as a thing. That itself is intractable.

I'll tell you one meta fact, though. There was a guy on Twitter, I think his name was Rob Miles, who said that trying to make safe AI will be like trying to make a secure operating system. And that is absolutely true, and therefore frightening, because the way you make a secure operating system is not by sitting down and thinking at a table with a piece of paper about the principles for making a secure operating system. More like, you try and make such principles, and then someone hacks your operating system, and then you think, "Oh, okay, sorry," and you patch it, and then they hack that. Making a secure operating system is like making a fraud-proof tax code. It's basically a series of patches that were based on hacks, successful hacks, right? Is it right? Melon— they say the US tax code is basically a series of responses to things Melon did.

Some parts of it, yes. Yeah.

So secure operating systems are like that. And so I'm worried about AI because whatever the regulations are, they'll be wrong. I'll tell you that. They'll be overregulated in some ways and miss and have huge holes in others.

There's a Bay Area tech community, at least in the not too distant past, they agreed about many things. But very recently, it seems on AI, there's quite a divergence of views. People who are very worried, "Oh, it's going to kill us all in the world." People who say, "Oh, there's problems, but this is going to be great." In as few dimensions as possible, what accounts for that difference in perspective from people with broadly similar backgrounds and who used to agree on many things? Is it temperament? Is it genes? Is it like a snake bit.

It's probably which aspect of the problem they choose to focus on, right? You could focus on either one. And so if you focus on how it could be good, there's all sorts of exciting things to discover, and you discover lots of genuine ways it could be good. And if you focus on how it could be bad, it's true there too. So it could be either. I managed to keep both thoughts in my head simultaneously. I simultaneously think there are all kinds of good things and all kinds of bad things, and that both will be They will be unimaginably good and unimaginably bad. So it sounds like that produces oscillation, doesn't it? Yes. That's worrying. That in itself is worrying, right?

Why hasn't Lisp been more successful, or do you think it has?

Clojure is a dialect of Lisp, and Clojure is very successful. So it's been successful in that respect. And there's another way it's been successful. Some languages that are not considered dialects of Lisp, like JavaScript— if you show you said JavaScript to people in 1970, they would say, this is a Lisp except for the syntax. This is a Lisp. So Clojure, it's literally successful through Clojure. It's de facto successful through JavaScript. But why doesn't everybody use Clojure or some other dialect of Lisp? Because the notation's frightening. There's an initial hump with the notation. And if you give people an initial hump, like if you put You must know about this. There must be names for this in economics. If you put some sort of obstacle, right? Sure. Like a container in front of people's front door, they'll go off to the left, and then they won't go right back in front of the container and resume their original path. No, they'll take this other path that goes like miles out of their way just because of that one block in front of their front door. And so the syntax, the reverse Polish notation puts people off.

So is AI-generated programming going to vindicate you on Lisp over time? Or cousins of Lisp? No, because the AI doesn't care about the notation.

It does. It does because it's trained based on the amount of code that's out there.

But you could train it on something more like Lisp. You can't.

You have to train on actual examples people have written.

But you have AI write some code in a kind of perpetual motion machine, train other AIs on that code, and converge to something better, better, better.

No? There was some research paper recently where they trained an AI on the output of AIs, and it converges on crap. Maybe there'll be some solution, because this is a very rapidly evolving field, but I think you have to have a large corpus initially of examples written in the language.

Other than hackers and hacking, what other human activities are what you have called high-cost interruption? That is, if you're interrupted, you lose your train of thought, have to start all over again.

Well, math, I think, must be like that. I think anything—

Painting, yes or no?

Not as much, in my experience, not as much. You don't have to think ahead as much in painting. It's annoying to be interrupted no matter what, but it doesn't absolutely destroy you like it does in the middle of writing a program or something. You don't build a big mental model of something in your head when you're painting. That's what it is. It's when you've got this giant house of cards in your head, that's when you get destroyed by an interruption.

Do you think kids today spend too much or too little time— Kids today learning high-cost interruption activities.

Do they spend too much or too little time working?

Like, are we underinvesting in high-cost interruption activities?

Well, if you think about what it's like in schools, kids are constantly being interrupted, and they always have been. So whatever the answer is, it's not going to be kids these days. It will be a statement about school for centuries. Kids have such short attention spans. One thing they can't do is things that are big and long. I think if you said, okay, you have 5 hours to sit in a quiet room and build something, I don't think they'd be up to it anyway.

Our last segment is what I call the Paul Graham production function, which is how you got to be Paul Graham. Would you major in philosophy again at what, Cornell, if you were doing it all over?

No, I would not major in philosophy.

And why not? Didn't it allow you to think at a very general level?

Well, it's hard to say. It's hard to say, right? It's good to be able to take ideas and flip them around like a Rubik's Cube and take them apart, notice that two parts are the same shape or something like that. But I don't think I actually learned that in philosophy classes. I think you would have— I would have learned that in classes about anything hard. I mistakenly thought that you could just go and learn the most abstract truths, right? It sounds great to a high school student. Why do I have to learn all this specific crap? I'll just learn the most general truths. And needless to say, that's one of those things sounds too good to be true, and it is. Because if you go and look in philosophy classes, I remember when Clinton, Bill Clinton, was saying, you know, it depends what the meaning of is is. And I'm like, hey, that's what I majored in, what the meaning of is is.

Literally. Which kinds of ideas come more naturally to you while you're walking?

Which kinds?

Yes. So maybe not painting ideas, but some kind of ideas, because you've written about how using walking to learn ideas is a good thing. But which kinds of ideas? There's cross-sectional variation, right?

Yeah. Well, ideas about whatever you're thinking about. Until a few years ago, I was working very intensely on programming. So I had the problem I was working on loaded into my head, and whenever I was doing something without any interruptions, I would start to think about that. So I think it's good for whatever you happen to be thinking about.

Like, mathematicians apparently walk a lot. I find it best for learning from what the other person knows, not so good for my own ideas. What, when you're walking with someone else? With someone else, and I'm talking with them, and I learn from them better. I don't find that I'm very generative when I'm walking.

Walking makes all kinds of thinking better. I've seen images like MRI images or something like that of brain activity. I don't know how they do MRI, just some kind of images of brain activity. And like, your brain is definitely more active when you're walking. So YC office hours, classic YC office hours, were to walk down the block and talk as you walk, which also has the side benefit that you're side by side and not looking the other person in the face, which I think may be better. It's less threatening, right?

It's like confession in the church. Yeah. You don't see the priest, or you're on a therapist's couch, probably you're not looking right at them, or vice versa. Or you're driving your kid back to boarding school. And they'll say things they would not otherwise have told you.

Or talk at all.

Yes. What are the best environments for learning while walking? Urban British countryside, or— oh my God, like, how do you optimize this dose? Okay, I actually have— I think Britain is wonderful for learning while walking because it's never too hot, so you heat up while you're walking.

It doesn't pour with rain on you like it did today. I was drenched today.

It ends in 4 minutes, right? You can bring an umbrella. You, you run to the gazebo. But there is a gazebo.

There was no gazebo where I was this morning. I think it's good to always walk in the same place. You don't want to see things that distract you, right? If you're trying to have ideas, you're not going to get ideas from things you see. Probably not. Not relevant ones. And so you want to walk in the same place, and it should be something where there's no distractions. So I would think the countryside. Where I go walk is on this common, this preserved medieval common. To an American, it would look like a large park, and it's the perfect thing. I just always take the same route. There's not much on it, so I see grass and trees. That's about it.

What's the most important thing you've learned about soundproofing?

Boy, there's a good question. I've learned a few things about soundproofing. Can I only say one thing?

One thing is fine. You said, "What's the most important thing you've learned?" Oh no, you can say more than one.

Okay. One is that sound comes through holes, and so it doesn't come through your walls, it comes through your windows, probably, in most places. And so if you fix the holes, you fix the noise problem. The other thing I've learned is that the solution to sound— the basically the solution, if it's not— it's either multiple layers in the case of windows, or simply mass. You make some big thick door and make it have hinges that make it sink down. That's what recording studios have. So when the door opens, it rises up a little bit, and when it closes, it goes right down onto the floor. So great big heavy doors, multiple-paned windows, and weirdly enough I've noticed I've managed to soundproof some places so effectively that I've noticed this phenomenon you only notice with soundproofing. All kinds of things make annoying noises you never noticed.

That's right, it's a war of attrition of sorts.

Yeah, exactly, exactly. Soundproofing is worth it though. Quiet is really good, at least for me.

There's an optimal level of fame. Do you feel you have too much or too little?

What is the optimal level of fame? I suppose it's when you can get resources you need or something like that, or if there's someone you need to talk to, they'll talk to you. So I can now talk to most people I need to talk to. If I want to talk to somebody, I can find somebody who will introduce me. So that must be enough.

But are you past the optimum?

I don't know. I don't know. That's the thing. This sounds very arrogant, but I realized this with Y Combinator. I realized that Y Combinator had become famous long after it had become famous, because as far as I was concerned, I was just doing what we'd always been doing. We would, every 6 months, we would get all these applications. We'd have to find the needle in the haystack, right? Get all these startups, help them grow, find investors for them, and then it would start again. It didn't seem like YC was any different. It was the same building, the same people. We would get more startups, right? Meanwhile, YC was like starting to be considered as this giant gatekeeper for Silicon Valley or something like that.

Jessica knew it was different, right?

I don't think— you're not aware. Famous people don't know how famous they are unless they're experts on it, like movie stars or something like that. They're always basically taken by surprise. And so we were especially taken by surprise because Because the thing is, the companies we funded would grow until they had thousands of employees. But YC itself didn't grow. Like, the value of the portfolio grew with these giant companies, but we didn't see it. We were still just a few people doing the same thing we'd always been doing. So how could we be famous? But I discovered, like, that was one of the biggest mistakes I made with YC. I didn't realize how many people were watching us. I thought we were just— we could just keep doing what we were doing and nothing really mattered.

And why was that a mistake per se? Maybe it was better being oblivious.

Oh, because everybody— when basically anybody outside Silicon Valley who wants to blame Silicon Valley for something, who do they blame? They've never heard of the people who are actually powerful in Silicon Valley. They only know a handful of people who have consumer brands, me among them. So basically the world sucks because of tech and tech sucks because of Paul Graham, because they've never heard of any of the other people. I don't seem to get quite so much of that anymore. I don't know. I'm glad about that. But with YC, definitely, I didn't know how prominent YC was becoming and how many people would be out to get us as a result.

Very last question. In my view, a life properly lived is learn, learn, learn all the time.

That's what Charlie Munger said, right? Yes.

What have you recently been learning about? Oh. Other than soundproofing. Tintoretto. And what are you learning?

Vasari had a very low opinion of him.

Vasari is unreliable on most things, right?

I don't know. I don't know. I don't—

he way overrated his patrons, the Medici.

Yeah, you have a thing about the Medici, clearly. He said that Tintoretto was too independent-minded, that Tintoretto was this sort of mad genius, and that he would have been better if he had constrained his creativity and stayed within the limits of proper art. You know what I mean? Very Florentine sort of idea. I think Tintoretto would have looked down on Vasari as a minor league artist. But that was interesting. That was interesting to learn that's how at least some of Tintoretto's contemporaries viewed him, and Vasari in particular.

And a Y Combinator co-founder is not going to buy that argument, is he? Which Y Combinator founder? Vasari. That he was too radical and too off on his own.

Oh, I thought you meant Jessica wasn't going to agree about Tintoretto.

There's two of you that neither of you would agree with Vasari. I don't know.

I'm now gonna look. I'm now gonna look. I never thought about this, but I was just looking at some Tintorettos. I was just in Venice looking at the Scuola Grande di San Marco, perhaps? Scuola Grande of something, where all those Tintorettos are. And they were so dirty, it was hard to tell what the paintings actually looked like. But I'm gonna go look. I'm gonna go look and see if they seem freakish.

Paul Graham, thank you very much.

Thank you. Boy, that was so many hard questions.

Thanks for listening to Conversations with Tyler. You can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. If you like this podcast, please consider giving us a rating and leaving a review. This helps other listeners find the show. On Twitter, I'm @TylerCowen, and the show is @CowenConvoes. Until next time, please keep listening and learning.