Founding a tech startups is not a good way to maximize your own wellbeing

Why do people start a business? Two reasons:

  • Meaning
  • Money

Let’s focus only on money for now.

If you start a tech startup, you should expect to fail and make no money. Even if you think you’re super special, have an amazing idea and generally have all the signs of a successful business, including funding from a major firm in your seed round, you should still assume you’ll fail. The reality is that 99%+ of tech startups fail and even for the 1% that do succeed, most value is captured by a very small proportion of firms. The distribution of income among startup founders is a fairly extreme power one.

TLDR: If you start a tech startup, you’ll probably make no money and have a tiny chance of making lots of money.

One could take the money you could make in tech startup land and do an expected value calculation at this point. That’s what some people do who then say "You’ll probably make no money but the extreme payoffs in the marginal cases still push the expected value high enough that it’s worth doing.". That’s mistaken because money does not convert to utility at a constant rate.

If you go from having $0 income to having $600, there’s a huge utility gain. You get to not starve to death. If you go from $80’000 to $100’000’000, there’s not that much of a gain in utility. You can buy nicer things. That’s about it. You can’t buy a longer life, a happy family, meaningful friends, IQ points or anything else that would make a difference once your basic needs are met.

TLDR: Money converts to utility at a steeply declining rate.

If you’re a highly paid professional, you already make a lot of money. Probably enough to save 50% of your income and still live a fairly luxurious life. Winning the startup lottery and getting rich will make your life a bit better but not much. Loosing the lottery will mean years of stress, burn-out, potentially low income and other bad stuff. The utility calculus is less one of a small chance of extreme payoffs and more one of a large chance of halving your life quality and a very small chance of increasing it by 10 – 20%.

TLDR: If you want to start a startup because you want to be rich, you’re probably making a mistake.

Cases where this doesn’t apply:

  • You want to start a startup for other, non monetary reasons. (A good litmus test for this is whether you would do it even if you had to forgo any personal profit from it.)
  • You money/utils conversion does not suffer from diminishing marginal returns. (e.g: you donate money to AMF and want to maximize lives saved. A thousand times more money = a thousand times more lives saved.)
  • Your entry/exit costs are low. (Note that this is unlikely. Starting a firm is unforgiving. It will likely require late nights and weekends for a prolonged period of time. It takes at least half a year to know if you’re on track for success of some kind or for it to be clear that your a failure. Even if you don’t loose career capital/a cush job, you will loose time and your relationships will suffer.)

Massai wife sharing

I read Barefoot over the Serengeti a while back. In it David Read writes about his childhood in africa. He was born in 1922 in Nairobi and spent his early years in Tanzania. He spent most of his time with the Massai. He spoke their language as well as english. He knew not just their customs but about how their society operated. From the inside. Much of the book is spent transmitting that knowledge. A few examples:

  • He explains how society is stratified by age groups. Massai boys are placed in a cohort based on age. Those cohorts are around 5 years wide. The age gap between the youngest and oldest members of a cohort mean that often individuals will graduate to the next stage in life at different ages. Some boys may become morans (men, warriors) at 15. Others at 20.
  • He explains the significance of circumcision and all the strange steps in the ritual that surrounds it. If a boy flinches during it, he’s disgraced. While the man rests after the circumcision any woman may come and sleep with him as a punishment for past transgressions.
  • Most ceremonies or transitions are marked with sacrifices of meat and other valuable foods. These sacrificed foods are then consumed by the elders/men.
  • Wife sharing is normal and expected. It is expected that a man should give his wife to a friend of the same age group who visits him as normal form of hospitality.

The last norm is probably the strangest. In most cultures men are fiercely possessive of their women, which makes sense from an evolutionary perspective. Letting someone else sleep with your wife means you risk spending your resources raising someone elses child. Evolution strongly selects against those who let that happen. Why then is it a thing in Massai society? My hypothesis is that it helps solve the most difficult problem any group of humans faces when trying to build functioning social organizations, in-group preference/nepotism. Naturally people form cliques based on familial relation. Brothers support brothers. Cousins support cousins. These kinds of cliques then go on to corrupt any larger organization as they divert resources (physical goods, positions of power, etc…) to their members. The massai use of wife sharing makes the father of any child uncertain, weakening male familial bonds. Their early grouping of men into age group bands which then form the primary form of social life also serve to to some extent replace normal familial bonds, especially when young men become warriors and live together in warrior camps for years.

Ignoring the crimes of the powerful/revered

I read an article on Kemal Ataturk. . It goes over his achievements. It leaves out any mention of the genocides, murders of journalists or other crimes.

This treatment isn’t specific to attaturk. It seems to be that people who have power/status are held to a different standard. Their crimes are often ignored, forgotten or not mentioned. They are welcome in polite company where an ordinary criminal who had done one thousandth of what they had would not be. It’s strange.

An old poem/song. I can’t remember if I came up with it or read it somewhere.

Kill one man a murderer,
Kill 10 a monster.
Kill 100 a hero,
Kill 10’000 a conquerer.

Violence towards children in history

Childhood for most people was brutal. The notion of children as innocent and sacred and especially valuable is recent. From Pinkers "The Better Angels of our Nature":

Biblical Judaism prohibited filicide, though it didn’t go the whole hog: killing an infant younger than a month did not count as murder, and loopholes were claimed by Abraham, King Solomon, and Yahweh himself for Plague. The prohibition became clearer in Talmudic Judaism and in Christianity, from which it was absorbed into the late Roman Empire. The prohibition came from an ideology that held that lives are owned by God, to be given and taken at his pleasure, so the lives of children no longer belonged to their parents. The upshot was a taboo in Western moral codes and legal systems on taking an identifiable human life: one could not deliberate on the value of the life of an individual in one’s midst. (Exceptions were exuberantly made, of course, for heretics, infidels, uncivilized tribes, enemy peoples, and transgressors of any of several hundred laws. And we continue to deliberate on the value of statistical lives, as opposed to identifiable lives, every time we send soldiers or police into harm’s way, or scrimp on expensive health and safety measures.)

For almost a millennium and a half the Judeo-Christian prohibition against infanticide coexisted with massive infanticide in practice. According to one historian, exposure of infants during the Middle Ages “was practiced on a gigantic scale with absolute impunity, noticed by writers with most frigid indifference.” Milner cites birth records showing an average of 5.1 births among wealthy families, among the middle class, and 1.8 among the poor, adding, “There was no evidence that the number of pregnancies followed similar lines.” In 1527 a French priest wrote that “the latrines resound with the cries of children who have been plunged into them.”

Various fig leaves were procured. The phenomenon of “overlying,” in which a mother would accidentally smother an infant by rolling over it in her sleep, at times became an epidemic. Women were invited to drop off their unwanted babies at foundling homes, some of them equipped with turntables and trapdoors to ensure anonymity. The mortality rates for the inhabitants of these homes ranged from 50 percent to more than 99 percent. Women handed over their infants to wet nurses or “baby farmers” who were known to have similar rates of success. Elixirs of opium, alcohol, and treacle were readily obtainable by mothers and wet nurses to becalm a cranky infant, and at the right dosage it could becalm them very effectively indeed. Many a child who survived infancy was sent to a workhouse, “without the inconvenience of too much food or too much clothing,” as Dickens described them in Oliver Twist, and where “it did perversely happen in eight and a half cases out of ten, either that it sickened from want and cold, or fell into the fire from neglect, or got half-smothered by accident; in any one of which cases, the miserable little being was usually summoned into another world, and there gathered to the fathers it had never known in this.” Even with these contrivances, tiny corpses were a frequent sight in parks, under bridges, and in ditches. According to a British coroner in 1862, “The police seemed to think no more of finding a dead child than they did of finding a dead cat or a dead dog.” The several-thousandfold reduction in infanticide enjoyed in the Western world today is partly a gift of affluence, which leaves fewer mothers in desperate straits, and partly a gift of technology, in the form of safe and reliable contraception and abortion that has reduced the number of unwanted newborns. But it also reflects a change in the valuation of children. Rather than leaving it a pious aspiration, societies finally made good on the doctrine that the lives of infants are sacred—regardless of who bore them, regardless of how shapeless and foul they were at birth, regardless of how noticeable a gap their loss would leave in a family circle, regardless of how expensive they were to feed and care for. In the 20th century, even before abortions were widely available, a girl who got pregnant was less likely to give birth alone and secretly kill her newborn, because other people had set up alternatives, such as homes for unwed mothers, orphanages that were not death camps, and agencies that found adoptive and foster parents for motherless children. Why did governments, charities, and religions start putting money into these lifesavers? One gets a sense that children became more highly valued, and that our collective circle of concern has widened to embrace their interests, beginning with their interest in staying alive. A look at other aspects of the treatment of children confirms that the recent changes have been sweeping.

That children with devils in them had to be beaten goes without saying. A panoply of beating instruments existed for that purpose, from cat-o’-nine tails and whips to shovels, canes, iron rods, bundles of sticks, the discipline (a whip made of small chains), the goad (shaped like a cobbler’s knife, used to prick the child on the head or hands) and special school instruments like the flapper, which had a pear-shaped end and a round hole to raise blisters. The beatings described in the sources were almost always severe, involved bruising and bloodying of the body, began in infancy, were usually erotically tinged by being inflicted on bare parts of the body near the genitals and were a regular part of the child’s daily life.

Severe corporal punishment was common for centuries. One survey found that in the second half of the 18th century, 100 percent of American children were beaten with a stick, whip, or other weapon. Children were also liable to punishment by the legal system; a recent biography of Samuel Johnson remarks in passing that a seven-year-old girl in 18th-century England was hanged for stealing a petticoat. Even at the turn of the 20th century, German children “were regularly placed on a red-hot iron stove if obstinate, tied to their bedposts for days, thrown into cold water or snow to ‘harden’ them, [and] forced to kneel for hours every day against the wall on a log while the parents ate and read.”160 During toilet training many children were tormented with enemas, and at school they were “beaten until [their] skin smoked.” The harsh treatment was not unique to Europe. The beating of children has been recorded in ancient Egypt, Sumeria, Babylonia, Persia, Greece, Rome, China, and Aztec Mexico, whose punishments included “sticking the child with thorns, having their hands tied and then being stuck with pointed agave leaves, whippings, and even being held over a fire of dried axi peppers and being made to inhale the acrid smoke.”161 DeMause notes that well into the 20th century, Japanese children were subjected to “beating and burning of incense on the skin as routine punishments, cruel bowel training with constant enemas, … kicking, hanging by the feet, giving cold showers, strangling, driving a needle into the body, cutting off a finger joint.” (A psychoanalyst as well as a historian, deMause had plenty of material with which to explain the atrocities of World War II.) Children were subjected to psychological torture as well. Much of their entertainment was filled with reminders that they might be abandoned by parents, abused by stepparents, or mutilated by ogres and wild animals. Grimm’s fairy tales were just a few of the advisories that may be found in children’s literature of the misfortunes that can befall a careless or disobedient child. English babies, for example, were soothed to sleep with a lullaby about Napoleon: Baby, baby, if he hears you, As he gallops past the house, Limb from limb at once he’ll tear you, Just as pussy tears a mouse. And he’ll beat you, beat you, beat you, And he’ll beat you all to pap, And he’ll eat you, eat you, eat you, Every morsel, snap, snap, snap.163 A recurring archetype in children’s verse is the child who commits a minor slipup or is unjustly blamed for one, whereupon his stepmother butchers him and serves him for dinner to his unwitting father. In a Yiddish version, the victim of one such injustice sings posthumously to his sister: Murdered by my mother, Eaten by my father. And Sheyndele, when they were done Sucked the marrow from my bones And threw them out the window.

Legal Disfunction: Immigration Edition

I watched a show following police enforcing immigration laws in the UK. They would find someone who was an illegal immigrant. Question them. Try to find their passport. Fail to do so and then, being unable to deport a person without a passport, release the person in question and ask them to report to a home office site once every two weeks. Unsurprisingly, most didn’t. Near the end of the episode one of the officers talked about how he felt when his team of 4 had found a single illegal immigrant, spent 8 hours with them trying to find out where their passport was and eventually had to let them go.

It’s sad that immigration enforcement is so poor. It seems to be mostly down to how bad the laws are. It’s sad generally how inefficient the british legal system is.

I recommend The Secret Barrister for more on british legal disfunction.

Against expropriating the founder of wework

The founder of wework is held to be immoral and to have exploited and mismanaged his company, costing thousands of people their jobs. Some people have called for his wealth to be confiscated and used to help the workers he’s harmed. The motivation for this seems not so much an egalitarian intuition as it is a desert based one. I think this is a bad idea.

Practically speaking, it would be a bad idea because the principle for taking away someone’s wealth would become "this person is unpopular and lot of people want to see them punished". That’s a dangerous principle. It can be weaponized by powerful individuals or factions to destroy their opponents. It will target people based on status and popularity rather than any objective standard of moral behavior. It would allow for selective enforcement where governments destroy unpopular billionaire they dislike. In short, it’s bad.

Looking at pure ethics, it’s not clear why he doesn’t deserve the billions he has.

One commonsense theory of desert is that people deserve to capture the value they create. The intuition here is that since he destroyed value by mismanaging the firm, he deserves to suffer a loss. This is one side of the equation. He also created a company from scratch which grew to span continents. It’s almost certain that without him, the firm wouldn’t exist. If he is mostly responsible for the creation of the firm and hence the value it creates, surely it’s only right that he should capture a large proportion of that value.

Another theory is that good people should be rewarded and bad people punished. Since he’s an immoral snake oil salesman, he does not deserve to be rich. The problem here is that a society that allocates wealth based on moral goodness needs to decide and enforce a singular conception of the good and then use the confiscation of wealth to punish people who deviate from that standard. This is tyranny. Punishing people for actions which we specifically vote to be illegal is one thing. Punishing them for their character or thoughts is another.

2019: Year 2 in Review


Total Posts this year: 39 (+1 vs 2018)

Decent posts this the year:

I still write far less than I would want. I should have written a review of kolyma stories, a sequence on identity and a whole host of other things that I didn’t get around to. My writing also seems to be skewing towards the topics which occupy most of my waking life, work and organizations, as opposed to ethics or the far future.


Total Books Read This Year: 24 (+1 vs 2018)

Decent Books:

I finally finished Kolyma Stories this year. It’s one of the best books I’ve read and one of the few I unconditionally recommend.

The year ahead.

I should continue to write and read. I should write more. I should try to write one long-ish sequence going in depth into a certain topic. Identity or an introduction to ethics would be good sequences to start with. I should finally get serious with that podcast and start interviewing interesting people, of whom there are many.

Minimizing slack is not a good long term strategy

TheViz has a post on slack, the concept not the app. Slack as applied to organizations and teams is interesting. In bad organizations managers act to minimize the amount of slack a given team has. If a team of engineers is delivering features comfortably, pile on more tickets or request more features. This is often wrong. It’s wrong because slack is important. Slack is important because teams who have slack have time to make improvements. To come up with better tooling. To migrate to new architectures as needs and scale changes. To improve their internal processes. Not all teams do this naturally but well-led, high performing teams do.

Optimizing for learning vs education

There are two competing objectives to education. One is to grow as a person. The other is to gain things of material value. Material value includes both pieces of paper and money making skills. The trade-off between these two values takes many forms. e.g:

  • Taking a course in an area you are good at VS taking a course in an area you are bad at. You get a better grade in the former but learn more in the latter.
  • Taking a course in a subject which is intrinsically valuable vs taking a course which will help you make money after university
  • Taking a degree in a more prestigious but worse at teaching university vs a less known but better at teaching one

It’s important to understand that this trade-off exists and to make it consciously. When I was in the education most people didn’t. Most people optimized for grades. Even those who didn’t spend a great deal of time studying spent at least 10 times more time reading and writing for their courses than for their own interest. It’s a shame.

Similar kinds of tradeoff’s exist in many domains in life. Trade-off’s between the short and long-term. It’s hard to give general advice about which side to lean towards. I’ve done both at different points in my career and I think the decision is highly context dependent. Still, I notice the short term seems to be addictive or something most people do too much. I wonder why that is. A few ideas:

  • Addictive feedback loops. You do well. You get to a good uni. You want to keep doing well. You get a good job. You want to do well in it. Your life passes you by.
  • People mostly don’t have their own goals. They adopt the goals of whatever structure they’re in.

Empirical facts can falsify moral beliefs.

I’ve usually assumed that moral beliefs cannot be disproved by empirical facts. That’s not really true. It’s true for my beiefs or those of most modern philosophers. It’s not true for belief systems which depend on empiricism. Moral beliefs with physical components. e.g: You believe that X is wrong because the world giant, who lives in a palace on the north pole, says it is wrong. You then go to the north pole and see that there is no palace. The empirical fact "the north pole is empty" changes your moral beliefs.