For me, these class notes are the most thought-provoking stuff that has surfaced HN for a while. The first few lectures took this bird-eye view to entrepreneurship, which was very refreshing. Thiel's view about competition vs monopolies, or as he puts it, globalization vs technology, was a new point of view to me. And this more practical discussion about company culture is quite spot on in my experience: argumentative culture is better than too nice culture.
It depends about what you're arguing. A "python vs. nodejs" argument carried on for days isn't valuable; other arguments w.r.t. tech/engineering might be.
Related: An advantage of a "non-diverse" engineering culture is so the arguments can focus on meaningful topics that push the company forward, and not on topics that arise from basic, core cultural differences
Yes, I agree, what I meant to express is that the discussion between Max, Peter and Thiel captures quite well that you should have arguments about important things and that too nice culture can be also toxic as it leads to these passive-aggressive expressions of frustration. It hurted to read and realize that as I've been personally guilty of latter in certain occasions.
I thought the context would make that quote sound better, but nope, it makes them sound even worse.
> PayPal once rejected a candidate who aced all the engineering tests because for fun, the guy said that he liked to play hoops. That single sentence lost him the job. No PayPal people would ever have used the world “hoops.” Probably no one even knew how to play “hoops.” Basketball would be bad enough. But “hoops?” That guy clearly wouldn’t have fit in. He’d have had to explain to the team why he was going to go play hoops on a Thursday night. And no one would have understood him.
> PayPal also had a hard time hiring women. An outsider might think that the PayPal guys bought into the stereotype that women don’t do CS. But that’s not true at all. The truth is that PayPal had trouble hiring women because PayPal was just a bunch of nerds! They never talked to women. So how were they supposed to interact with and hire them?
Surprise surprise, the next paragraph: "PayPal also had a hard time hiring women."
This kind of thinking is what Mitch Kapor calls a "Mirrortocracy". It can work, in the sense that maybe you can recruit enough people just like you, down to quirks of phrasing, and succeed in your mission. There are advantages to belonging to a cohort. It is the reason why people in the military wear uniforms and go through bootcamp.
But categorically stating that diversity is wrong is, well, typical of the provincial attitude that caused Levchin to run his companies the way he did.
But just because he's rich doesn't mean he's right.
Aside from being "provincial," is he wrong? Diversity creates communications latency. For example, on HN I can refer to "latency" in this context--it would take way more syllables to express the same thought to lots of the people I interact with every day.
Part of the problem is that "Diversity" is being misused. It's not "diversity" if a company of 100 people has exactly the same demographics as the city it's in. That's homogeneity: diversity would mean that each company's demographics are wildly skewed in unpredictable directions.
Thomas Sowell has written about how intra-company diversity has harmful economic implications. For example, factories in New York used to segregate on religious lines--because if your Catholics are all off on Sunday, and your Jewish employees are all off on Saturday, then you can only work five days per week; all-Catholic or all-Jewish factories could do six days.
That cuts at the root of the disagreement. Categorically stating that diversity is "completely wrong" for a startup ignores plenty of counterexamples, so, yes, he's wrong. Diversity creates communications latency. It creates other things like tolerance and broader understanding. It also (ahem) widens your hiring pool.
And no, I wouldn't want a company that reflects the demographics of my city. That would mean no black people and mexicans do all the cooking. :)
Levchin is free to run his companies any way he wants, inside the law, and he's done amazingly well. But rejecting people who simply use an odd phrase once is, to me, not a example to celebrate, especially in a course for students.
"I did this and succeeded" is not equal to "everyone else is wrong". Creating a mirrortocracy is equal to claiming "I am right, all the time, and I do not require outside opinions. All I require are clones." That's a pretty heavy bet to make, and its arrogance is not excused by success.
It's hard to come up with a counterexample when you're looking at outliers. A successful startup is already statistically improbable, so I don't think you can easily say that if Paypal had hired more jocks instead of nerds, it would have done even better.
So we have to look at this from first principles. When you have a less diverse team, you don't just have short-term communications latency. You also have the advantage that really similar people can push each other more, because it's easier to tell if you're doing 1% better than someone else if you're both doing the same thing.
I don't know how valuable "tolerance" is. That depends on what you're tolerating. If diversity trains your ability to "tolerate," it sounds like a bad thing, the way having a broken air conditioner teaches you to tolerate heat. The belief that it creates broader understanding is also up for debate--in my experience, people express a wider range of thoughts in a more homogeneous environment, because they're less worried about offending people.
One last thing: "its arrogance is not excused by success." That's not very Bayesian. If someone has an unusual opinion, puts it into practice, and beats the competition, shouldn't you lower your estimate of their arrogance, and raise your estimate of your own arrogance?
A good counterexample would be Lotus, and possibly Flickr. I'm not claiming PayPal would have been more successful otherwise. I don't know. Many strategies can be successful. Levchin is the one teaching kids that everyone else is "completely wrong", in the face of proof to the contrary.
And there are problems with Levchin's strategy. In the next breath he lamented that it narrowed the company's hiring pool by 50%. That should give anyone pause. His strategy had a direct, measurable cost that could turn into a strategic disadvantage.
There are also serious effects down the road, as today's engineers become tomorrow's investors. If only Brand X people get funded, and hire Brand X people, who turn around and become investors themselves, isn't that a serious problem? You can't adjust your "priors" about other kinds of people if they never get a chance in the first place. Maybe Brand X is optimal, but you don't know, and claiming to know is arrogance.
It wasn't that he didn't get the job because he played basketball. It was that Max couldn't ever imagine himself or anyone else at PayPal referring to basketball as 'hoops' - this speaks to a greater cultural difference where this candidate might not be a great fit with the nerd / D&D culture that was pervasive in the company at the time.
The bit about respecting your coworkers, rather than simply being nice, really struck a chord. When I think back, the worst working situation I had was the one where I lost respect for my coworkers. I think it's an important question to ask yourself. If the answer is no, it's time to move on.
What in the name of the thousand green hells does this have to do with computer science?
EDIT: There is of course a perfectly legitimate interest in teaching this sort of thing; it just has nothing to do with computer science. Doesn't Stanford have a faculty of, I don't know, bubble inflation or whatever?
This is a course on starting a software startups. Culture is incredibly important to be successful at that. Max and Stephen are brilliant developers. So it's probably good to take cues from them on making a culture to facilitate great creations of computer science.
Queues, hilarious. The funny thing is, even though misspelled, it could be made to work. If levchin is interpteted as a producer and anyone listening a consumer.
I suppose this class ostensibly belongs in the business school if one's foremost concern is preserving the correctness of the university academic department ontology, but as a matter of practice CS students are the best fit for this course, and Thiel probably worked with professors in the CS department, not the business school, in creating it. Does it really bother you that much? I guarantee you that this course does not take the place of any real CS class in terms of filling the requirements for a Stanford CS degree.
PayPal chose C++ early on. It’s kind of crappy language. There’s plenty to complain about. But the founding engineers never argued about it. Anyone that did want to argue about it wouldn’t have fit in. Arguing would have impeded progress.
...if there’s a strong sense of what’s right already, don’t argue about it.
I found that interesting. This suggests the team is important, but the language is not.
The only thing I'd quibble with is the claim that teams should not be diverse. I think, unless everyone is a generalist, there's no way to start a company without some diversity of skills. The other day, another mathematician told me "We should start a company together," and it sounded like a terrible idea. A mathematician needs to work with a great web developer, or a finance expert, or some other kind of complement.
