The healthcare industry is starting to see benefits from being honest when they make mistakes. Denying that doctors and hospitals ever screw up has been the historical approach to avoiding malpractice suits; yet by being more honest, hospitals are seeing a decrease in such lawsuits.

If doctors can do it, why not software authors? Own up to your mistakes. People will trust you more in the long run.

Once or twice a week, I get an email from a recruiter looking to hire a Ruby developer. I can spot these within the first half a sentence, and delete them without reading the rest. Obviously they got my name someplace and didn't stop to notice that I'm the founder of VC-backed startup and am by no means looking for employment. I suspect that most other Rubyists get the same sort of emails, and the better know you are, the more you get.

These emails are the waste product of an inefficient recruiting system. There are tons of Rubyists out there that very much want a day job using the language they love. There are also tons of great companies, big and small, who very much need to hire said Rubyists. But there's no good mechanism for making those matches efficiently.

The first generation of web-based recruiting technology (monster.com, dice.com) tried to solve this in a straightforward way. If it's just a search problem, then throwing a bunch of job postings and resumes online with keywords and parameters like years of experience should do the trick, right? Turns out - no, not in the slightest. I used these sites a few times in hiring for the first company I founded, and they were borderline useless. Turns out that making a hacker <-> company match is way harder than just "you need code, I need a paycheck, let's connect."

This is a nearly identical problem to the one faced by dating sites. Again, you've got millions of people out there who want to make some sort of romantic connection with another person. But the parameters aren't as straightforward as it seems. Posting an ad on a dating site which states "I am a heterosexual male, seeking a heterosexual female as a mate" probably won't get you a lot of response. Even though there are in fact millions of heterosexual females out there looking for a heterosexual male mate.

You might think that this just a matter of needing more parameters. For dating, that's stuff like smoker or non, drinker or non, age, photos, hobbies, and favorite movies. For hiring, it's skills (languages and tools), years of experience, and keywords like "self-managing" or "enterprise" or "agile." This stuff certainly helps, but it's not enough - not enough by far. A dating site may make what seems like a perfect match, but more often than not, no sparks fly when the people meet face-to-face. A recruiting site can also fit based on quantitative parameters, but then the moment you sit down to start the interview, you discover something like that the energy level of the candidate's personality is a total mismatch with that of the company's engineering team.

In dating, we call this bit of magic "chemistry." If you don't have chemistry with someone, it doesn't matter how many hobbies you share. In hiring, we call this magic bit "culture." If the hacker's culture doesn't match with his employer, it doesn't matter whether the hacker's years of experience with a certain technology and desired salary are a perfect match with employer's open position.

So what is the next-generation solution? Recruiters, in my opinion, are nearly worthless. I've experienced using them on both sides and while they do occasionally make a good match, as near as I can tell that's usually blind luck. Yet they get paid a huge amount - $10k - $20k/yr for the length of the employment is common. I don't think that the value they provide is really on par with this price; and I think both employer and employee would be much happier if that money could go into the employee's salary instead of to the recruiter. This particular avenue seems like a dead-end to me.

So how about a next-generation technology solution? There's Catch the Best, which is a tool to help manage the screening process. And there are two startups in my Y Combinator session, Snaptalent and Joberator. Snaptalent seems to understand the importance of culture, and have a lot of features like embedded video to try to help convey culture - like in this job listing for Anybots. They are also not offering a generalized search solution, but instead only expose the ads on targeted sites - blogs related to the particular industry or area of interest of the available position.

This only addresses one side of the problem, though. The other problem is that top people are never actually out looking for new employment. (This insight comes by way of Joel Spolsky, in a rare recent moment of relative lucidity.) Using myself as a data point, this seems correct: I've never once been on the job market. (Although since most of my career has been as a founder, I may not be representative.) Back in my employee days, I never really went looking for a job. I'd just start to get disillusioned with, or bored of, my current job. Then a friend or former co-worker would get hired someplace else and talk me into coming with them. So it was a matter of being solicited at exactly the right time.

This is why recruiters have the traction they do: they go out and bug people who, 99% of the time, are annoyed at being bugged. But 1% of the time it spurs them into action, even though they may not have been quite at the point of wanting to go start scanning job ads yet. Surely we can come up with a recruiting process which reduces that wasteful 99%.

PG drew this on the whiteboard at the last dinner of our Y Combinator session:

So, so true.

The winter 2008 session of Y Combinator is just about wrapped up. What a great experience. If you're thinking of applying to the upcoming session but aren't sure if it's worth it, let me assure you: it is.

I could gush for hours about what the experience was like, and what it means to continue to be a part of the YC network. But I'll let you read about that elsewhere.

Instead, I'll comment on something a little more subtle: the distinct culture which seems to be emerging from YC. I see this in the current session, but even more strongly in the network of YC alumni. The three month session itself is just the beginning - a boot camp to kick your ass into gear (and maybe weed out those that aren't cut out for the high-intensity life of a startup founder). As nearly as I can tell, the ties to fellow YCers only get stronger, and the YC culture more distinct, the further out from their initial session a given YCer is.

This got me thinking about the root of this culture, and in doing so, thinking about what Y Combinator is really about.

If you're a huge geek (and I certainly hope so), you recognize the little inside joke: the y combinator is a bit of lambda calculus, a function that recursively bootstraps other functions. At first, I thought: ok, so YC is a company that recursively bootstraps other companies. Ha ha. But after experiencing the session, I see another layer to this. Although YC itself is four people (three of whom I got to work with in the session, all of whom are very smart and talented), YC's heart is really Paul Graham. So YC may be a company that makes other companies, but culturally it Paul Graham, and what it does is recursively bootstrap other Paul Grahams.

The process is like this: PG writes essays that grab the attention of smart, technical, entrepreneurially-minded people. A subset of these people apply to YC. PG interviews them to select a further subset that have the most immediate potential. Then, YC puts them all through a three month bootcamp, at the end of which they pop out thinking, talking, and building companies in a way that is remarkably similar to the way that PG would.

If you think this sounds like a criticism, then you couldn't be more wrong. To my mind, the world could use a hundred more Paul Grahams, or a thousand. And as near as I can tell, we're well on our way.

I met some YCers from past sessions prior to attending the kickoff of my session. This gave me the chance to see the developed version of YC culture right from the get-go. I then got to watch as members of my session adapted and took on that culture for themselves. It's a culture seeded by PG, but it's also developing on its own, through the influence of the growing group of people coming into it.

What are the tenets of this culture? Entrepreneurial spirit, and a belief in one's own ability to change the world. Blunt honesty and healthy criticism, both in communication with others and in personal self-analysis. Its members have a deep and natural rapport with programming, math, critical thinking, economics, and community. Perhaps most of all, we have an uncompromising desire to passionately pursue the things we believe in, and in doing so, we hope to make the world a better place.

In short: these are hackers and self-made men. I've found my people.

If you're a hacker that has thought about (but not yet attempted) creating your own startup, you might want to think about attending Startup School in April. It's in the Silicon Valley area, but even if you're not local, the list of speakers may be worth the trip. I've heard most of these guys speak at some time or another and each of them had extremely valuable wisdom to share.

Prior to the industrial revolution, status in most societies was based on one thing only: heredity. No matter how much you accomplished - or didn't - you stayed in the same station of life.

This began to change a few hundred years ago, with the rise of classical liberalism and general shifts in the organization of society. Birthright was still important, but the merit of an individual's achievement could potentially allow them to transcend the station to which they were born. America became the first large-scale experiment of a society that could be called a meritocracy. Rugged individualism became a part of our culture. The cowboy, the frontiersman, the prospector - one man against the primal forces of nature, making his way in the world with nothing but his intellect, hard work, and relentless determination.

This grew to its peak around the turn of the 20th century, with the emergence of what came to be known as the self-made man. A perfect example is Andrew Carnegie. Born into poverty in Scottland, he emigrated to America at age 13 and began working menial jobs. He used each job as an opportunity to learn new skills and accumulate meager savings, thereby springboarding into the next, and slightly less menial, position. By age 18 he had taken on management positions; by age 20 he had begun making investments; and by 25 he had begun operating his own business. Over the next twenty years he grew an empire in the steel market and became one of the richest men in America. He spent the last part of his life as a philanthropist: he eschewed excessive personal luxuries, and preferred instead to give back to the world with what he had made. The quintessential rags-to-riches story; the embodiment of the American dream.

In the meantime, new political philosophies were afoot. Marx and others proposed that individual achievement be deemphasized. Instead, the products of the labor of all members of society should be grouped together. No special reward should go to those who contribute more than others. These ideas came to America in the form of the Progressive movement, championed by Theodore Roosevelt. One of his nicknames was "the Trust Buster," because his administration used government power to break up large corporate conglomerates. This turned the tables on the founders and owners of those corporations - men like Andrew Carnegie. No longer were they the self-made man, embodiment of the American dream. They had been recast as power-hungry, cigar-chomping fat cats; men seized by uncontrollable ambition and thirst for wealth, taking advantage of the capitalism and free markets to crush the average citizen. America watched this drama play out in worker strikes and antitrust legislation and they everyone rooted for the "little guy." Nearly overnight, the self-made man had become the villain.

With the self-made man out of a fashion, a replacement arose in the middle of the century: the man in the gray suit. This is a company man: he plays by the rules, starting at a low position at a promising firm, and gradually building respect from his peers and his superiors by doing his job well, but never attempting to be outstanding in any way. He patiently climbs the corporate ladder at an average pace, for to try to do so faster would be greedy and overreaching. He builds a family, providing for his wife and children, who live in a new type residence: the tract home, which itself is in a new type of urban area, the suburbs. He is respected for fitting in, for knowing his place in the larger mechanism of society, and for not asking for more than his fair share.

Toward the end of the 20th century, the pendulum of fashion started to swing back the other way. Now the man in the gray suit is the object of scorn. He's a conformist; a cog in the machine; a mindless drone, living in the rat race, with nothing unique to offer the world.

And finally, at the very end of the 20th century and the first decade of the 21st, we've come full circle. The self-made man is back: he's now called a technology entrepreneur. Young, hip, ambitious, with just a hint of a rebellious, anti-authority, anti-conformist streak. He makes his mark on the world by dismantling tired old institutions which no longer serve the needs of society. He may have emigrated to America, and perhaps he retains just a hint of an accent from his place of birth. He's got nothing but disdain for large, bureaucratic organizations or the entrenched interests of large groups. But at the same time, he's no lone wolf. He probably teams up with a few close-knit business partners; and he's closely connected to one or more communities of like-minded people. He's loudly opinionated, saying things that upset the status quo, but his articulate honesty causes people to listen. They get the sense that this irreverent-yet-earnest young guy is smart and really tells it like it is.

He and his company might be profiled in Time Magazine or appear on the cover of Business Week. They have legions of adoring fanboys (and, to a lesser extent, fangirls), giving the whole thing an air of rockstardom. He might have a piercing, or a tattoo. Or maybe not, but he certainly never wears a suit, and probably not even "business casual." His clothes say: judge me by what I do, not how I dress.

Who are the new self-made men? Off the top of my head, I can think of quite a few: Larry Page, Sergey Brin, Jeff Bezos, David Heinemeier Hansson, Linus Torvalds, Max Levchin, Steve Jobs, Evan Williams, Joe Kraus, Paul Graham, Steve Shih Chen, Jeff Hawkins. They aren't all in software, either: Martin Eberhard and Chris Larsen are bringing the "silcion valley way" to other industries. Nor are they all men: consider Gina Bianchini, Pam Marrone, and Ryan Phelan.

Of course this is all rather good news for me. I've always fancied myself a future self-made man, and never understood how this fell out of vogue for so long. For me at least, the timing couldn't be better for it to be back - and I don't think I'm alone.

Entrepreneurship is about being able to tell when something sucks, why it sucks, and then visualizing how to make it stop sucking. When something sucks, it's an opportunity for an entrepreneur. The more it sucks, the better the opportunity.

Take cell phones. Cell phones suck. I thought this was obvious to everyone; but at some point I realized that most people don't think of it that way. The fact that they have to navigate ten difficult-to-comprehend menus to get to the most used function on their phone - well, that's just how it is.

To me, that sucked. Apple noticed this too, and had the clout to make a deal with the telcos that gave them enough control to make the iPhone, a cell phone that doesn't suck. As a result, they dominated that market practically overnight.

Paul Buchheit puts it another way: you have to be continually annoyed by things in order to spot good ideas. If you're always content with the status quo, you're unlikely to start thinking about how they could be made better. This doesn't prevent you from becoming an entrepreneur, by the way - but it does mean you need to partner with someone who does have a natural sensitivity to suckage.

This is why you often hear entrepreneurs throw around phrases like "pain point" or "looking for the market with the most pain." Pain - also known as suckage - means opportunity. This is the astonishing effect of capitalism: greed is channeled into motivation to solve other people's pain.

The following quote is often attributed to the economist Jean Baptiste Say, writing in the 19th century:

"The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield."

(I say "often attributed to" because I was unable to find the original source. I first saw it in The 80/20 Principle, and have since seen it in other works.)

I love this line, because it's a perfect definition of the word "entrepreneur," without saying anything about founding a company, running a business, or making money. Entrepreneurism is an approach to the world, not an occupation.

You can be entrepreneurial in the most mundane of situations. Let's say you're out taking a walk with your spouse. They underdressed and are shivering. You overdressed and are carrying your jacket in your hand, since you're too warm to want to wear it. If you moved the jacket (an economic resource) from an area of lower productivity (your hand) to an area of higher productivity (keeping your spouse warm), you've just acted as an entrepreneur. Both parties end up wealthier, in the broad sense of wealth == happiness.

Although entrepreneurship is usually about making trades that make all parties involved better off, charity is also a fundamentally an entrepreneurial activity. When you give $20 to a charity to help the poor, it's because you believe that that $20 will be more valuable to a poor person than to yourself. This is why there are no charities for billionaires: a billionaire will most likely value that $20 much less than you do.

Just a note on the etymology: entrepreneur comes from French, where entreprendre is the verb for "to undertake," or perhaps simply "to do." So entrepreneur means "doer." Makes perfect sense to me, even if it does make it a pain in the ass to spell.

So far, all of my posts have been about programming. But in fact, I spend almost as much time thinking about entrepreneurship. Marketing (meaning: understanding your product audience), financing, and generally running an efficient business. So I'm going to start diving into those topics a bit more here.

I'll kick things off by mentioning a podcast that all entrepreneurs should listen to: Entrepreneurial Thought Leaders, which is a recording of a weekly presentation at Stanford. Each week they bring a different speaker, all of whom are succesful entrepreneurs, and most of which have extremely compelling stories to tell. These folks have some incredible wisdom that all of us still working to make it big should soak up in full.

Although most of the speakers are founders of software businesses, there's a few biotech and other fields represented. Even though these are less relevant to me personally, I find these more interesting, because I know less about those fields. But there's plenty to be learned from those speakers all the same. Building a good product and running a business to achieve long-term success are the same no matter what field you're in.

After I had listened to a few of these, it struck me how same themes recur again and again. Build a great team. Listen to your customers. Stand out from the crowd. Stick to it, even when times get tough (and they will).

Perhaps the most repeated point is: do what you love. You have to be passionate about what you're doing. You have to believe in it, more than anyone else.

This echos Guy Kawasaki's phrase from The Art of the Start: "Make meaning, not money." Choose your business venture because you believe you can make the world a better place, not because you think it's where the most money can be made.

Depending on how you count, Heroku is about the fifth venture I've cofounded. Our vision - making it fast and easy to build, deploy, and scale web applications using the most advanced programming language in the world - is one that has deep personal significance for me. Whether or not this vision is meaningful to the wider world will be decided by the market. But I know that my own motivation will not be a constraint, because my belief in, passion for, and excitement toward the meaning we are trying to create is unbounded.