Why Y Combinator’s Paul Graham loves ‘weird’ ideas and ‘energetic’ people

As a founder of the Silicon Valley startup accelerator Y Combinator, Paul Graham has seen his share of startups. Over the years, as he’s spent time with innumerable founders, he’s come to an important conclusion: If you want to be part of the next big thing, you can’t be stuck in your old ways.

“I spent almost a decade investing in early stage startups, and curiously enough protecting yourself against obsolete beliefs is exactly what you have to do to succeed as a startup investor,” Graham wrote in a new blog post on his personal website. “Most really good startup ideas look like bad ideas at first, and many of those look bad specifically because some change in the world just switched them from bad to good.”

Graham proceeded to expound on a few other observations that could be of use to investors and founders alike.

For one thing, he showed his enthusiasm for off-the-wall ideas, particularly when they come from people who know a particular industry well. He likes to be “aggressively open-minded,” and that means he can readily embrace something new and different.

The way to come up with new ideas is not to try explicitly to, but to try to solve problems and simply not discount weird hunches you have in the process.

The winds of change originate in the unconscious minds of domain experts. If you’re sufficiently expert in a field, any weird idea or apparently irrelevant question that occurs to you is ipso facto worth exploring. Within Y Combinator, when an idea is described as crazy, it’s a compliment — in fact, on average probably a higher compliment than when an idea is described as good.

But ideas aren’t the only thing to gauge. Graham pays attention to the people behind the startups. He’s noticed that founders with smart ideas tend to have certain personality traits.

Another trick I’ve found to protect myself against obsolete beliefs is to focus initially on people rather than ideas. Though the nature of future discoveries is hard to predict, I’ve found I can predict quite well what sort of people will make them. Good new ideas come from earnest, energetic, independent-minded people.

Betting on people over ideas saved me countless times as an investor. We thought Airbnb was a bad idea, for example. But we could tell the founders were earnest, energetic, and independent-minded. (Indeed, almost pathologically so.) So we suspended disbelief and funded them.

And look at Airbnb now; it carries a reported $10 billion valuation. So maybe Graham’s strategy of considering personality isn’t all that crazy.