Paul Graham on trends for the future

Paul Graham's talk at the Business of Software, 2009:

Here are some rough notes I took:

Bet On:


People just don't build shiny metal things anymore.


``Yes you can still bet on software.'' Biotech too, suspicious of cleantech, government may stop funding.

Efficient Markets

``This is a big one.'' (Example: Airbnb, efficient market for accommodation.)


``You make what you measure.'' (HP)

United States

Only three risks: Bandits. Government. Invaders. ``Unless somebody is stealing the money, people will build new stuff and make money.''

Silicon Valley

``The Californian budget crisis is just two sets of politicians playing chicken.''

Small Companies

``We're getting this world that's higher resolution. Instead of bosses you have customers. More efficient. Small companies live from making money, big companies live from economies of scale.''

Economic Inequality

Moore's Law, Sort of

``Multi-core. Weird shit you'll have to do. There's a gap to be spanned, and somebody will make a lot of money spanning it.''

Things on Screens

``After dinner, there's 4 or 5 people typing into their laptops. People are not gonna start going out to local theater. Right now I have a suntan from my monitor.''

Server-based Apps

``It's gonna be complicated. Does an iPhone app count as a server-based app? Things will live on servers by default. It's not necessarily simply a web app.''

Super-good Customer Service

``It's gonna be easier for customers to switch. It's gonna be easier for people to find out if you have good service. Err on the side of super-good customer service. Your customers will increasingly design your product. The reason to do good service is selfish.''

Apparently Frivolous Stuff

``Bet on it. Facebook seems like the ultimate frivolous app.''

``Twitter is a new protocol: a nondeterministic messaging protocol. You send a message and don't know who receives it.''

Programming Languages

``Whatever the next popular language is, I would advise on using it.''

``Write your apps in lots of different languages.''

``Don't look down on scripting languages.''

Open Source

``Definitely worth betting on.''

``How many examples of companies can you find that have gone too far in the direction of open source.''

``Open source [your products] to the point where it seems you're going too far.''

``The limiting edge of open source is design. It's great for implementation, but you can't get design done that way. Software has given us a lot more scope for design. Now when I go up to my oven, it has instructions. Somebody has given those idiots designing ovens microprocessors. I would give a buy recommendation on AAPL.''

``Apple cares about the iPhone the way Google cares about search. Android is a hedge, originally against Microsoft. Who else is there? Palm? RIM? No. Mobile devices will win, and Apple will win in mobile devices.''


``It's why the iPhone wins.''

``When I was young it said "made in", today it says "designed in"''.


``It's not bogus in the way Web 2.0 was. Web 2.0 meant whatever was happening at the time. It's the computing equivalent of the switch from dial-up to always-on connection. All the existing protocols are based on this early [dial-up] model.''

``Wave is important, basically because it's the equivalent of Etherpad. If you make the convex hull around Twitter and Wave, and can think of something in there, go for it.''

Venture Funding

``They need you.''


``Founders will more and more have the upper hand. More and more founders will program. Programmers can learn to do business. You just make something people want, and charge them for it. They should have an O'Reilly book for business. It would be really short.''

Don't Bet On:

Credentials Granted by Institutions

``Admissions offices are bad. They don't check later how people they accepted or rejected did. Yet another artefact of an illiquid market.''

Business School

``Unsuited to the way things are done now. Business schools are the West Point of industrial capitalism. They trained the officer corps of that, not entrepreneurs. Great if you want to work for Procter & Gamble in 1965.''


``Elected president with middle name Hussein. I'm impressed. But the guys in the engine room are the same people.''


``With the copyright holders, it's gonna be an unbelievable fight, but they will ultimately lose. It will be so bloody, like the civil war.''

Restricted Flow of Information

``Everything's getting more liquid. Like hyperdrive.''


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