Y Combinator co-founder Paul Graham said startup investors need to recognize when unconventional approaches can work despite established rules.
Startup Rules Have Exceptions
On Tuesday, Graham made the remarks in a series of posts on X, arguing that startups frequently succeed by operating outside conventional expectations.
"One of the most interesting things about startups is that there are exceptions to practically every rule," he wrote.
He pointed to the common advice that it is "bad to be a solution in search of a problem," but said that ".5% of the time it’s good."
"The ultimate test of an investor is to see these exceptions," Graham added.
Graham Urges Founders to Break Rules
Y Combinator co-founder said investors should not simply tolerate founders who go against conventional wisdom when they encounter such cases. Instead, he said they should actively encourage them.
"When I notice such edge cases, I don’t just agree that it’s ok for the founders to go against the conventional wisdom. I urge them to," Graham said.
He said this support is important because founders are likely to face pressure from other investors to follow established practices.
He added, "I know I need to compensate for all the pressure they’re going to get in the opposite direction from their other investors."
Startup Advice From Business Leaders
Graham has previously argued that founders can use growth as a guide for startup decisions and should launch minimal products quickly, then improve them based on user feedback.
He said growth could help startups determine which features to build, suggesting founders start with a minimal product and add features that drive growth.
In August, Investor Kevin O’Leary warned startup founders against continuing to invest in failed businesses, urging them to recognize losses, learn from mistakes and move on.
He said refusing to accept failure was "the worst mistake" an entrepreneur could make and argued that "bad ideas do not become good ideas" by receiving more funding.
Last year, Amazon.com (NASDAQ:AMZN) founder Jeff Bezos advised young entrepreneurs to gain real-world work experience before starting a company, saying it could improve their chances of success.
He described college dropouts such as Mark Zuckerberg and Bill Gates as exceptions and said his own 10 years of experience before founding Amazon had improved the company’s odds of succeeding.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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