The Ronco Principle

This reminds me of <i>The Strategy and Tactics of Pricing</i>[1], in a funny way (bear with me).<p>In pricing, if you have features in common with other vendors then those features are commodities and basically valueless. But the features you have that no one else has - those make you priceless.<p>For example, S3&#x27;s uptime record makes it a different product than e.g., DreamObjects, even though they are API compatible.<p>Similarly, while VCs are all providing the ultimate commodity product (dumb money), its the features which no one else has that make investors like Ron Conway priceless. There&#x27;s plenty of other VCs, but they are not substitute products for Ronco.<p>Finally, the way to find these unique, priceless features is to look for extremes:<p><pre><code> - Cloud hosting with not just 99.99% uptime, but 100% uptime - Email inboxes with not just a lot of storage, but *unlimited* storage - Photos developed not just faster, but *instantly* - A VC with not just a great track record of doing the right thing, but a *perfect* record </code></pre> And as a consumer, these are the companies you want to do business with: the Rackspaces, the Ron Conways, and the Stripes of this world.<p>[1] If you read one business book this year, make it The Strategy and Tactics of Pricing. If you don&#x27;t think a book on pricing can change your life, you haven&#x27;t read this book. Protip: get an older edition and save a ton of dough.

&quot;And yet he&#x27;s a super nice guy. In fact, nice is not the word. Ronco is good.&quot;<p>So good he supports torture <a href="http://blog.sfgate.com/cityinsider/2014/12/09/ron-conway-blasts-sen-feinsteins-torture-report/" rel="nofollow">http:&#x2F;&#x2F;blog.sfgate.com&#x2F;cityinsider&#x2F;2014&#x2F;12&#x2F;09&#x2F;ron-conway-bla...</a>

Well that is an interesting point of view.<p>My experience so far( early 30&#x27;s) has been exactly the opposite, most people&#x2F;bosses I&#x27;ve meet that were successful in business were complete assholes, with several nice people working for them exclusively for the money.<p>That has in fact made part of my life very miserable because I really don&#x27;t expect anything from anybody anymore. If been tricked&#x2F;robbed&#x2F;scammed so many times by people I trusted that my trust is mostly gone for now, and I only expect bad things from people when I depend on them for something. (If something good happens it&#x27;s awesome, but I don&#x27;t count on it)<p>Maybe I trust people more than I should have done, maybe it&#x27;s the place I live... I don&#x27;t know.

My albeit limited experience suggests to me that there&#x27;s a U-shaped curve with super-rich &#x2F; powerful &#x2F; &quot;effective&quot; people. One end of the curve is &quot;pathological sociopath,&quot; and the other is &quot;extremely benevolent.&quot;<p>I don&#x27;t have enough experience to tell you which side is higher than the other, though the fact that we do not live in some kind of absolute hellhole suggests that the curve is tipped toward the right (benevolence). Yet I do get the impression that it&#x27;s one extreme or another.<p>The sociopaths do tend to burn themselves out eventually though. There seems to be some kind of what&#x27;s effectively karma, which probably comes from peoples&#x27; lies eventually catching up with them. It&#x27;s overall better to be benevolent.

This seems to be the follow up to <a href="http://paulgraham.com/mean.html" rel="nofollow">http:&#x2F;&#x2F;paulgraham.com&#x2F;mean.html</a> where pg refines his argument.<p>I&#x27;m glad he did, I felt that his &quot;Mean people fail&quot; essay to be one of his weaker essays, and judging by the comments it got when it was released so did pretty much everyone else on hacker news:)<p>I tend to agree with him that good people get further along in life. In my industry, finance, I tend to see that the good people do much better than the assholes, contrary to what hollywood would have you believe:)<p>I think the reason for this is similar to what pg pointed out, finance is a very information and relationship driven business, the better caliber of friendship you cultivate the more people there are who will give you the first call, or preferential treatment on new issues.

&gt; But if Ron&#x27;s angry at you, it&#x27;s because you did something wrong.<p>An example of Ron Conway being angry at someone (video at the bottom of the article): <a href="http://techcrunch.com/2014/06/09/eruption-over-sf-housing-and-google-breaks-out-at-next-big-thing-conference/" rel="nofollow">http:&#x2F;&#x2F;techcrunch.com&#x2F;2014&#x2F;06&#x2F;09&#x2F;eruption-over-sf-housing-an...</a><p>Disclaimer: I don&#x27;t know enough about the personalities, politics, finances, or economics involved to have a substantive opinion on the matter under discussion.

This felt similar to me to the academic world. I&#x27;m a lowly graduate student, but one thing I&#x27;ve been consistency surprised by is the way the most senior people in the field are often the nicest. Sure—there are assholes everywhere. But when you hear horror stories of a professor mistreating their advisees or writing horrid reviews or submitting trash papers, they are often the junior folk. Partly because this behavior doesn&#x27;t pass muster in the community, and so people who act this way don&#x27;t get tenure; partly because senior professors have tenure and thus less to lose by acting nice; and partly because, just as I think in the startup world, being nice actually carries large benefits. In fact, I might argue that recognizing the benefits of niceness—valuing future rewards, trusting other persons—requires intelligence, so that maybe nicer people are in fact more intelligent as well.<p>But maybe that is Berkson&#x27;s paradox: I&#x27;m more likely to hear about mean or successful researchers, so they appear anti-correlated even if they are in truth independent.

Anyone interested in reading more on this topic should check out Adam Grant&#x27;s Give and Take.<p>Incidentally, one of the interesting takeaways from the book is that if you look at plot of people mapped to career success, you&#x27;ll find that benevolent givers dominate -both- ends of the distribution. The theory goes that those who are in the left tail got there by being too preoccupied with others&#x27; needs, to the exclusion of their own success. Conversely those in the right tail got to where they are both by helping others and by consistently asking others to help them. In the latter scenario these folks have harnessed benevolence as a strategy for career growth, and the collective goodwill &quot;out there in the ether&quot; nets out to measurable success over the long-run.

Let me just state that like people with autism I have a mental illness that affects the social part of my brain. It makes it hard to make friends as I lack people and social skills. It gave me an advantage to make me high functioning enough to learn programming at a young age and work with math and science better than average.<p>I am not a mean person, when people get to know me I am nice. But I have few friends because I lack social and people skills. I cannot seem to emotionally connect with people and what friends I have are also with a high IQ that I connect to intellectually.<p>When I worked, I worked with some mean people. They found high functioning coworkers of mine and pretended to be their friend and then stabbed them in the back and forced them to quit because they were competition. They took credit for their work and then decided to target me next. Calling me a nerd and geek, making fun of me, bullying and harassing me even with threats of violence trying to force me to quit. I ended up stressed out and developed a mental illness and was forced on disability.<p>Based on Linkedin those mean people who did all of that still have their jobs. They have social skills and people skills and use it to manipulate people, and then black-stab them and climb the corporate ladder of success. Until they make it to management where they can bully and harass people to do their jobs. All the while keeping their dark side hidden.<p>If you ever worked for Steve Jobs, you would say he was a jerk, he was abusive to his engineers to get things done just right. He had anger problems too. But he had the social skills and people skills to be well liked. There are a lot of people like Steve Jobs out there.<p>I&#x27;ll most likely never work again due to my mental illness, but I am not a mean person, I don&#x27;t treat people with disrespect, I don&#x27;t bully and harass them. But due to lacking people and social skills, I&#x27;ll never have enough friends to become a success.

I&#x27;ve heard YC has an internal VC review database (somewhat alluded to in the 2nd footnote). I&#x27;m curious, has any consideration been given to making it public or semi-public? Or at least to publish a list of &quot;The X best-rated VCs&#x2F;seed funds&#x2F;angels&quot; every once in a while to gamify better behavior?

I thought this was going to be about Ronco, as in Ron Popeil&#x27;s infomercial products company.

&quot;Good does not mean being a pushover. I would not want to face an angry Ronco. But if Ron&#x27;s angry at you, it&#x27;s because you did something wrong. Ron is so old school he&#x27;s Old Testament. He will smite you in his just wrath, but there&#x27;s no malice in it.&quot;<p>... like when smiting everyone who doesn&#x27;t work in Tech or agree with him in SF by subverting democracy?<p>This is an example of where PG has a bias and we part ways.<p>Keep writing essays about software, and I promise I&#x27;ll try to learn LISP, PG! ;)

Silly me, I thought this essay was going to be about Ron Popeil (<a href="http://www.ronco.com" rel="nofollow">http:&#x2F;&#x2F;www.ronco.com</a>).<p>Cue the obligatory Weird Al reference:<p><a href="https://www.youtube.com/watch?v=9BX56syrmWQ" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=9BX56syrmWQ</a><p>&quot;It slices..&quot;<p>&quot;It dices...&quot;<p>&quot;LOOK AT THAT TOMATO!&quot;<p>&quot;You could even cut a tin can with it, but you wouldn&#x27;t want to!&quot;<p>Ah, good childhood memories.<p>For those who might care but don&#x27;t know, Lisa Popeil (Ron&#x27;s half sister) sang backup vocals on that song. Pretty funny.<p>With apologies to anyone too young to know about Ronco TV commercials (&quot;Now how much would you pay????&quot;)<p>:-D

It is no coincidence Ronco is the most coveted Angel in the Valley - he epitomizes integrity. This value is the most desired aspect an entrepreneur will strive for in finding early stage investors. We, especially in the early stages of building our company, need people who will do the right thing.<p>I remember one example of Ranco&#x27;s unyielding integrity: <a href="http://www.dailyfinance.com/2010/09/24/angelgate-ron-conway-rips-despicable-and-embarrassing-investo/" rel="nofollow">http:&#x2F;&#x2F;www.dailyfinance.com&#x2F;2010&#x2F;09&#x2F;24&#x2F;angelgate-ron-conway-...</a>

I wonder if pg&#x27;s view of top investors as &#x27;good&#x27; or, maybe more accurately, consistently moral has changed since he has gotten to know more of them personally? Not a charge of corruption or cronyism, but sometimes one has different standards for friends than for people one doesn&#x27;t know.

So, I&#x27;m trying to see whether this applies to us in academia, whether the &quot;nice-but-no-push-over&quot; types are more successful than the sociopaths. Unfortunately, I can&#x27;t think of one either in real life or from anecdotes shared with me.<p>I think it&#x27;s different when the system isn&#x27;t run on money, but pride.<p>EDIT: Actually, I am able to think of one. It is of worth to note that he is pretty clever and a natural born talent and was a child prodigy.

Terrifying thought: what if the causality goes the other way? What if all the bad are bad because &quot;that&#x27;s just the way the business works&quot; and &quot;hard choices&quot;?

I think working hard also helps with luck. Here&#x27;s a story. This goes back to the first ever tc discrpt Hackathon. I was a 19-year-old college student then. I used to go to this NYC resister hackerspace in brooklyn.<p>So we are doing our hack - a bunch of nyc resistor dudes - it&#x27;s about 10pm. Here comes Ron Conway with Michael Arrington - checking out the hacks. They come to our desk. See the scrapy robot with wires coming out of it. And here Ron hands over a couple of business cards to our fellow hackers.<p>I was a total noob back then. I was just like these two guys are checking some stuff out. Without knowing who they were.<p>While other investors would be out enjoying their weekend, Ron was out on a Saturday night meeting hackers. Even after so many big wins he was out in the trenches to source the next big thing.

This article is dumb because it doesn&#x27;t explain why Ron Conway is so good. Maybe this is written for a silicon valley insider audience that knows what he does that is so great. It feels like pg&#x27;s writing was more interesting when he was the outsider taking on the status quo.

&gt; If you can&#x27;t tell who to be nice to, you have to be nice to everyone.<p>This (more or less) works the opposite way, too. Taking an example I know about, in Brazil, you can&#x27;t often tell who is going to try to take advantage of you (in business) but enough people have tried in your past that you come to the conclusion that everyone will at least try in the future, and therefore you act accordingly.<p>It&#x27;s really frustrating to have to treat people with your guard up when signing a contract or talking through specifics during a deal, but you learn to recognize advantage-takers and even to pretend you are one, too. In doing so, the other person will recognize they can&#x27;t pull the wool over your eyes either, which puts you both on a &#x27;level&#x27; playing field.<p>This isn&#x27;t just something I&#x27;ve experienced but also something I&#x27;ve been told by many others in Brazil. There&#x27;s even a &#x27;law&#x27; about it, called Gérson&#x27;s Law [1], which essentially states &quot;if there&#x27;s an opportunity to take advantage, go for it&quot;.<p><a href="http://en.wikipedia.org/wiki/G%C3%A9rson%27s_law" rel="nofollow">http:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;G%C3%A9rson%27s_law</a>

I think, even though it&#x27;s a bit sad, the assumption that mean people won&#x27;t be successful, is incorrect.<p>For the assumption that success is correlated with how kind someone is, there are just too many examples of previous and current startups&#x2F;CEOs that are&#x2F;were hugely successful. Actually, my impression is that there are very few of those, who I&#x27;d consider genuinely good people that I would really trust.<p>The thing is, you can be a really good person or you can be an a-hole, you will enter an industry or create a startup that will fit your personality and then it just comes down to IQ and persistence of how successful you will become. This way, a bad&#x2F;nasty person can create a startup or make money just as much as a really kind person can. In other words, you can create a huge startup either way, the valuations would be the same, irrespective if you are a good person or not.<p>However, the startups would also be completely different in nature. The nasty startup would be always fighting, receive bad press and its employees would be led by fear. The good startup would be awesome, change an entire industry for the good and its employees don&#x27;t work for the money, but because they are inspired by its mission and by its CEO.<p>Both startups would be huge and probably end up having the same valuation, just that their nature is different.<p>For that reason, as a founder you need to ask yourself what kind of founder you want to be. You can be nasty or you can be kind and awesome. It &quot;doesn&#x27;t matter&quot; what side you choose, you will be equally successful either way.<p>However, you need to understand the implications and if you want to be a person that makes people worries or the person that inspires people and creates good in the world.<p>You can be good or bad, you&#x27;ll still be successful, however, after you have built the startup, 10 years after you have sold it even, it&#x27;s the way of how you did it that counts.

I must say, Paul Graham is a really good writer. His posts are very eloquent and convey interesting ideas without extraneous fluff. Too often people credit famous individuals with talents they don&#x27;t actually deserve, but in this case the quality stands independent of the fame.

The problem with this as a strategy, and problem is a strong word, is that it is <i>insanely</i> hard to replicate.<p>I can happily not steal money or diamonds all day long, I can always not persuade a founder to sell me his stock for pennies because deep down being dishonest is not how Mrs Brian raised her children.<p>But not dishonest is different from <i>good</i>. Good is active - not bad is passive. I know people who have righteous anger on their side - they actually find dishonesty offensive, something in need of fixing. Conway sounds like that - someone who goes past not being bad and over to trying to fix a world gone wrong.<p>Good is a hard balance - you need to know right from wrong, and believe that if you confront wrong, the world has your back.<p>Scary<p>Like I said, hard strategy to follow.

This Ronco Principal, as Paul describes it, reminds me of a vision for a world in whereby the contract of a business deal is second to the word of your partners &amp; colleagues. Where honor, trust and values trump contracts, laws and lawyers.<p>Why? Not only is this hypothetical business world a more natural and less expensive place to do business, but another advantage is that un-invited third parties can&#x27;t easily interfere with your deals.<p>Some might say that defining terms on paper creates a record that can be used against you.<p>Shaking hands and trusting in your partners that they will follow through on their word - that type of deal is more difficult for the state to compromise, exploit, or create laws against.

Interesting thoughts. The basic idea, it seems, is that people help out those who they like, and people generally like good people. So, it would seem that the amount a person benefits from being a good person is directly related to how much they depend upon relationships with other people. In the VC world, which is massively relationship driven at the moment, I could see how being a likable person would be extremely beneficial. But perhaps, then, the Ronco principle isn&#x27;t that good people succeed, but that likable people succeed.

I view this in the light of the Prisoner&#x27;s Dilemma.<p>In a one player game, it pays to be nasty. It only pays to be nice in an ongoing game.<p>Ron Conway seems to have been playing the ongoing game long before increased transparency made it fashionable, and has reaped the benefits of it. I have never met him, but he seems to be the one guy people universally acclaim for support, integrity and doing the right things. It&#x27;s easy to see why he&#x27;s Call #1 for folks seeking an angel, and he&#x27;s the call who entrepreneurs take.

<i>[1] I&#x27;m not saying that if you sort investors by benevolence you&#x27;ve also sorted them by returns, but rather that if you do a scatterplot with benevolence on the x axis and returns on the y, you&#x27;d see a clear upward trend.<p>[2] Y Combinator in particular, because it aggregates data from so many startups, has a pretty comprehensive view of investor behavior.</i><p>Why can&#x27;t YC, of all firms, publish this scatterplot? Wouldn&#x27;t it hold people accountable in a way that nothing else would?

I was really hoping this was about Ronco, Ron Popeli, or something related to that business. It&#x27;s too bad because Ronco is an interesting business story in its own right.

I am amazed it is OK to say &quot;the CIA saved American lives&quot; as opposed to &quot;the CIA saved lives&quot;. Are American lives worth more than non-US citizens&#x27; lives? Would it be permissible for 9&#x2F;11 to happen if the only people who died were undocumented immigrants? What a shitty person and what a shitty attitude! I guess Paul Graham is a shitty person if he associates with shitty people like Ronco.

&quot;I&#x27;m not saying that if you sort investors by benevolence you&#x27;ve also sorted them by returns, but rather that if you do a scatterplot with benevolence on the x axis and returns on the y, you&#x27;d see a clear upward trend.&quot; PG&#x2F;YC, have you tested this hypothesis? Precision would be difficult, but a back of the envelope attempt could be interesting and perhaps reveal unexpected correlations.

Reminds me of The Evolution of Cooperation, sounds like Ron is a nice strategy with a solid retaliation response... How is he with forgiveness?

I think the Beatles had this principle down when they sang &quot;And in the end, the love you take is equal to the love you make.&quot; Clearly, they had to make it fit a lyric, but I think the idea is very similar.<p>Sometimes when I hear stories of mean people getting ahead I wonder how accurate the sentiment could be. Its good to see a case where doing good over time results in success.

A book about the related, long-term trend of decrease violence explained with different angels:<p><a href="https://en.wikipedia.org/wiki/The_Better_Angels_of_Our_Nature" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;The_Better_Angels_of_Our_Natur...</a><p>(Religious extremists, totalitarian regimes notwithstanding.)

The world of business has a reputation for being full of assholes, yet perhaps the most successful businessman of all is Warren Buffett, who seems like a genuinely nice guy. It seems that acting with honesty and integrity pays excellent returns in the long run.

&gt; &quot;there is a clear trend among them: the most successful investors are also the most upstanding.&quot;<p>This is also true in many aspects in life. Good people are rewarded, not always, but more often than not deserving people are successful and happy.

I see transparency in markets and governments as a &quot;movement&quot; in the making. My hunch is the next 10-20 years will be very interesting in this regard.

Is being nice a choice? I don&#x27;t think so, it should be the default. But if I need money for my startup I would definitely go with the nicest investor.

More generalized, compassion and integrity seem to be in a positive feedback loop with drivers of technological and economic growth.

TLDR:<p>The Ronco Principle: In a sufficiently connected and unpredictable world, you can&#x27;t seem good without being good.

A bit surprised article with so little &quot;content&quot; gets so many upvotes.

Yes Mr Graham, many people are just &quot;nice&quot;. It is weird that you sound so surprised. Perhaps it would be worth moving out of the money circles. Unfortunately, in my experience there is a correlation between those who are genuinely nice, and the people who are wealthy. Afraid to say, the correlation is negative. Ronco must be very nice indeed.<p>&gt; <i>If you can&#x27;t tell who to be nice to, you have to be nice to everyone. And probably the only people who can manage that are the people who are genuinely good.</i><p>No, being nice to everyone is not being nice. It&#x27;s being a liar. Nobody likes everyone (though there are many kind souls - few in positions of power - who try hard). The only people who are (superficially) nice to everyone are the ones who are in it for themselves. And that&#x27;s not nice.

&gt; In a sufficiently connected and unpredictable world, you can&#x27;t seem good without being good.<p>Sometimes might be surprised on this point!<p>Some people in some relatively small, conservative, apparently highly ethical, responsible, competent, serious, and hard working communities manage totally to <i>pull the wool over the eyes</i> of just about everyone else, including the members of their own families. They can look totally like a sweet, angelic <i>church lady</i> while, actually, plotting against others and slowly but effectively sabotaging them.<p>How? One way is to be a very talented, determined, bright, mentally energetic actor&#x2F;actress. The act can take a lot of mental energy to negotiate all the daily events and situations while keeping the <i>act</i> totally believable while actually it is totally false.<p>There&#x27;s more on such things in the now famous E. Goffman, <i>The Presentation of Self in Everyday Life</i>.<p>Sorry, PG, there&#x27;s a fundamental problem here: As in some recent research (wish I&#x27;d kept the reference), already in the crib, the girls are thinking about people and the boys, things. While the boy is trying to hack the latch on the crib and install Linux in the toy firetruck on the floor, the girl is trying to elicit protection and care taking from adults, especially her father.<p>&quot;If a girl is smart, she doesn&#x27;t have to have brains.&quot; and can get others, especially Daddy, to do things for her. A boy might work and work and work, say, to get his iPhone synchronized with his MacBook while his sister can get it done with just one frown and one tear, and often don&#x27;t need the tear.<p>A girl can be really good at it, by age four have Daddy totally wrapped around her little finger and manipulated so that he can never tell her no. And, in later years, she can get much better, much, much better at it.<p>They can be highly talented and very mentally energetic and seem to be sweet, darling, adorable, precious angels while they are actually determined, selfish, even dangerous, masterly manipulators.<p>Never ask a nerd male to evaluate the real, inner thoughts or intentions of a masterly female -- he just doesn&#x27;t have the basic qualifications for the job!<p>You just learned this lesson here for $0 tuition. I paid full tuition, and you don&#x27;t want to do that; trust me this time! Uh, there are no college loans nearly big enough to cover the tuition I paid.<p>For Ron Conway, I can&#x27;t forget his short advice to entrepreneurs in the Sam Altman course at Stanford last fall -- &quot;bootstrap&quot;. Okay, message received loud and clear!<p>I do believe that PG can evaluate Ronco; good to know I can take Ronco&#x27;s advice seriously!

Love this. Viva Ron Conway!