Paul Graham: Ronco's Principles

None of the venture capitalists or business angels have invested more in top startups than Ron Conway . He knows about every deal that happened in the Valley, all the more so half of them he carried out himself.

He is a great guy. In fact, “excellent” is not even the right word. Ron is the best. I do not know a single case when he would have behaved badly. It's hard to imagine.

When I first arrived in Silicon Valley, I thought: “What a blessing, that there is someone as influential as generous.” But gradually I realized that this was not a simple coincidence. Only by being generous could Ron become so powerful. All the projects he invested came to him on the recommendation of other people. The long list of such companies includes Google, Facebook and Twitter. The reason that so many people prefer to have things in common with him is that he proved himself to be a worthy guy.

But do not think that he is a wimp. I would not want to face Ron in anger. He can be angry with you only if you did something wrong. Ron Conway - an old school, the same as the Old Testament. Without any malice, he will amaze you in his righteous anger.

In almost every area there are benefits to seem worthy. This practice makes people trust you, but actually being worthy is too expensive a way to just seem like it. To an immoral person may seem too costly.

In some industries - maybe, but certainly not in the world of startups. There are many scum among investors, but there is a clear trend: the most successful investors are always worthy people.

Sorting investors by goodwill is not equivalent to sorting by profit, but if you put the investor’s positivity on the X axis and profit on the Y axis, you can see a clear upward trend.

But it was not always so. I’m not sure that twenty years ago I could have said the same thing about investors.

What changed? The world of startups has become much more transparent and unpredictable. Seeming a worthy person is much more difficult without being one.

It is clear why transparency has such an effect. Today, when an investor disgusts with entrepreneurs, it immediately becomes public. Maybe not everything gets to the press, but other entrepreneurs will still find out about it, and this leads to the fact that the investor begins to lose deals.

Y Combinator, in particular, combines data from many startups and has a fairly complete understanding of investor behavior.

The unpredictability effect is more sophisticated, enhancing the incompatibility of approaches. Hypocrisy becomes an extremely difficult thing, you should always know when to be nice, and when an unpleasant type. In the world of startups, things are changing very quickly. A random student with whom you are talking today may turn out to be the CEO of the hottest startup in the Valley in a couple of years. If you don’t know when to be nice, you should be like that all the time. Probably only sincerely good people are capable of this.

In a completely connected and unpredictable world, you cannot just seem like a worthy person.

As often happens, Ron learned how to be a good investor by coincidence. He did not foresee the future of startup investment. Just behaved in such a way that there was no shame. He felt unnatural if he had to behave differently. He already lives in the future.

Fortunately, the future is not limited to the world of startups. It is simply more transparent and unpredictable than most, but almost everywhere the trend is the same.