chance the deal’s going to fall through. At the point where people say, “We want
to buy you,” the chances of it falling through are like 80 or 90 percent. So you
can’t let yourself believe. If someone wants to make you an offer, fine, but don’t
change your plans based on that. Just keep going.
Livingston: Looking back, what surprised you most in your experience with a
startup?
Graham: One thing that was surprising was that it actually worked. There we
were, in the summer of 1995, thinking, “We don’t know anything...

Graham: Constantly. No one ever seemed to get that the software ran on the
server. Nowadays there are so many web-based applications that you take this
for granted, but this was a year before Hotmail. We would explain to people
how the thing worked and give them a demo and they would say, “Great. Where
do I go to download it?”
After we got bought by Yahoo, a reporter who had been covering us for the
past 2 years wrote an article about the Yahoo acquisition and at the end said “It
only...

Paul Graham 219
We were on the top floor; we didn’t really have a place to put a gas generator.
The first thing we tried was putting it in the office next to the server room. We
started the thing up and it sounded like the end of the world. It was the loudest
thing I have ever heard in my life. You might think the problem with starting a
gas generator inside your office would be the exhaust, but it never got to that
point. It was so terrifyingly loud. We thought, “Even...

that is, real enough that someone might actually buy us—and this made
us just pathetically eager to sell the company. We must have seemed like such
losers.
So I can understand now when founders want to sell out for a couple million.
Investors say, “No, you should wait,” but it’s easy for them to say. A million
dollars seems just overwhelmingly attractive when you have nothing. You don’t
care if it’s a good deal or not.
I also kind of regret being a zombie for several years straight. I really had no
...

locked that in. At that point you would think someone would be thinking,
“Wow, this is great. I’m rich. I can go buy everything I want.” But all I was
thinking was, “Thank God we didn’t fail.”
Livingston: You write a lot of essays with advice for startup founders. What is
the most important piece of advice?
Graham: What Y Combinator prints on our T-shirts: make something people
want. If you make something users want, they will be happy, and you can translate
that happiness into money. That is the basis of a...