"What it means for a selection process to be biased against applicants of type x is that it's harder for them to make it through. Which means applicants of type x have to be better to get selected than applicants not of type x. [1] Which means applicants of type x who do make it through the selection process will outperform other successful applicants."

There are many, many reasons that both sentences beginning "which means" are false that someone who is as smart as we're told Graham is should be able to come up with quite easily. It's astonishing that he made this tripe public.

Here's a gimme for each.

Say I'm selecting people to receive a prize; there are ten recipients and they're putatively chosen by [whatever]. But I don't like people with green eyes, so green-eyed candidates had better be pretty pleasing to me. But they can please me in any way, not necessarily in ways relevant to the metric for which the prize is awarded—maybe I also like tall people so a really tall green-eyed person averages out in terms of my predilections. They aren't relevantly better.

For the second, again, the question is "better" at what? Better at getting whatever is involved in getting selected? That doesn't necessarily correlate with outperforming anyone subsequently, especially if it's a matter of startupland. (Remember that New Yorker profile of Marc Andreessen, where Sam Altman basically admitted that he didn't know what he was doing in terms of selecting what to invest in? The flipside of that is being selected by Altman for an investment.)