One fundamental difference between teachers and managers

I’ll just drop right into this with what that “fundamental difference” is.

Among teachers, the demanding ones are often the best. Among managers, the demanding ones are usually the worst.

I don’t intend to imply a strict relationship, but there’s a strong correlation in both cases. In school, most people remember that the most effective teachers were also the hard-asses. They required that you learn the material, assigned homework every night, and wouldn’t allow bullshit to get past them. They actually read the papers submitted, and had useful comments. The weaker and lazier teachers gave easy A’s (to make their students go away) and had low expectations. Sure, there were exceptions. There were good teachers who were soft graders, and bad teachers who were tough and assigned lots of homework. On the whole, though, the correlation between difficulty and effectiveness was clearly positive. That was a classic decision for a student: do you take the course with the hard, great teacher or go for the cakewalk but learn less?

The good teachers were hard because the “pain” (which is just that of extracting discipline from the natural entropy of a young mind) truly was for our benefit, and because demanding hard work from their students also requires so much of them. Many of the best teachers in high school and college worked 55 or more hours per week. Being a tough grader and demanding teacher is, itself, demanding. Without the “stick” of a bad grade, a typical 15-year-old doesn’t have the foresight to overcome his own laziness and study enough. Good teachers knew this and pushed.

In the work world, it’s the opposite. Incompetent, failing, and otherwise bad managers tend to be the most demanding ones. Good managers, if they’re demanding, are only so in a certain way. The good demanding manager (a rarity, less than 1 in 100) wants you to reach your full potential and, while asking that you do your best, manages the situation to your benefit even if you fail. Bad managers, on the other hand, are constantly fighting to save their own asses, and will throw their reports in the line of fire to buy more time for themselves, and generally turn into hard-asses not because they expect greatness but because their ineptitude creates constant peril. For them, anyone showing less than undivided loyalty becomes, if not an enemy, a scapegoat when one is needed (and that’s often, because they keep screwing up). The bad manager is demanding and difficult because he’s constantly making mistakes and his underlings, if they are to survive, must not only fix them but do so with a smile, so as not to seem disloyal.

Where this mismatch between the two styles of relationship (teacher vs. manager)  is seen most clearly is in grading. Good teachers can be harsh graders, because grades don’t matter very much except as a motivator, and because there are genuine fairness concerns around academic grades that don’t apply to workplace performance reviews (which ought to be a formality). A good teacher unapologetically gives a C for mediocre work; the message is clear, but the long-term career damage of a C is (despite what students think at the time) almost nonexistent. For a contrast, good bosses always give glowing performance reviews (to show support for the reports’ careers) and, if there are genuine performance concerns, has the discussion verbally only. I’ve known professors to give “public” (inflated) and “private” (realistic) grades, the former looking good on the transcript but the latter curved to a C for average work. This duplicitous grading system seems silly in an educational context, but it’s exactly what a good manager does: criticize and direct in private, sometimes being harsh about it, but support and praise (unconditionally) in the public.

For teachers, being demanding generally means she actually cares. She has a secure job, but still works hard in the pursuit of doing it well. That’s a really strong positive signal. On the other hand, when you face a demanding boss, you have to answer this question: is he pushing you because he genuinely wants you to become great and is showing you the way, or is it just to make you serve his own career, which may be in peril (meaning that yours is, as well)? If it’s the latter, find a way out.

Don Draper’s firing and Silicon Valley

Spoiler Warning: Stop here if you watch Mad Men and aren’t caught up.

At the end of Season 6, Don Draper is fired, a move that many found surprising. One might argue that he has been “CTD” (circling the drain) for some time by that point, as the alcoholic dull spells that punctuate his flashes of brilliance have grown longer and deeper, and his necessity to the firm has declined in the wake of the merger that he (as it were) engineered. Still, the change is surprising at first, even if analysis shows it to be inevitable. (I will write, for this essay, as if Don’s termination were a fait accompli; I do it fully knowing that Season 7 will quite likely involve Don’s return to advertising, possibly in that firm. Don is not a usual person; he will bounce back, in some way, in the next season.)

Don used to be a creative artist. Toward the end, though, he hasn’t created a new ad for years. Instead, he comes up with inventive (but often sociopathic) solutions to business problems, establishing the reputation of a loose cannon. As we see in the mutiny at the end of Season 3, the anti-tobacco letter published after Lucky Strike fires the struggling new firm, and the complicated merger between his firm and that of his rival, Ted Chaough; he shines best, of late, when he’s moving people rather than product. He’s turned from a cynical, “black hat” intellectual who justifies hawking tobacco with jaded, post-beatnik nihilism, into a highly effective and manipulative businessman.

By the time he gets fired, he’s checked out from the daily work of the firm, so many predicted his professional demise (although I didn’t). He hasn’t been earning his keep. Then again, most of the other partners haven’t been earning theirs for years, if the truth’s to be told. This is still a time when partnership is to be a member of “the club” and enjoy the fruits of others’ labor. Sterling, Cooper has been quite tolerant of low performance in its partner-level ranks in the past. One of the perks of being in that club is a long professional audit cycle (generations). You get the benefit of the doubt for as long as you need it– unless you break the rules in a major way, which Don did, in Season 6′s finale.

How did Don get himself fired? Why did it happen now? It might seem to be an consequence of his horrendous pitch in front of Hershey, but he’s performed even more awfully in other pitches (see: Life cereal) and not come even close to that. His erratic performance isn’t a new problem. There’s something different about Season 6′s meltdown. This firm, after all, has tolerated his drunkenness, womanizing, lateness and absenteeism for some time. So what is it that has changed?

For one note, I’d like to call attention to a major player who’s not in the firing meeting: Ted Chaough. Ted and Don are rivals, and Don becomes nasty when they’re too close, but they still like each other on a personal level. They both suffer the same fate, which is to be permanently a junior partner on account of what they do. Account men are revenue, creative is cost; it was as true then as it is now. Ted would not try to push Don out; in fact, earlier on he implores him to become more involved in the firm (“join this company and read a memo!”). It’s Bert, Roger, and Jim who work him out of the firm, and I would argue that it’s largely because of the revelations pertaining to his background. Poor performance was forgivable when he was part of the club, but now that he’s told the truth about himself, he no longer belongs.

They’re not disgusted because Don lost Hershey’s, because they only had (from the sounds of it) a 1-in-30 chance anyway, and they seem to be cavalier about losing clients (as with Manischewitz, a couple episodes back). That firm– hardly a paragon of professionalism or optimal behavior– has had far more severe bungles than that. The disgust is with him, this time around. It’s not that the partners, individually, care about Don’s background. Bert knew most of Don’s secrets already. In fact, what’s worth keeping in mind about Roger and Bert is their flawlessly-played double-nature; their (admittedly, severe) character flaws come entirely out of their born social class; minus that, they’re decent human beings. As humans, they respect and like Don. As guardians of an upper class, however, they can no longer participate with him in that game of relationship-trading. Now that the beans (yes, pun intended) have been spilled in front of Hershey, it’s impossible to know for sure how far Don’s disclosures will travel. The gate-crasher must be tossed out, for fear of how others in the client sphere would receive his retention.

The commonality between Don Draper and Ted Chaough– the aspiration-driven, hopeful world they inhabit– shows the class-driven subordinate role of “creative”. Creative is almost always sourced from the lower, middle-and upper-middle classes (all lumped together as “Not Our Kind, Darling” by the upper class). Even if there weren’t a class-based lack of creativity in the elite– and I’d argue that there is one, due to risk aversion, entitlement, and inbreeding of both literal and figurative sorts– those bottom classes, taken together, are just two to three orders of magnitude larger. Relationship work can be done by any idiot with the right breeding, but creative talent is distributed by nature without regard to social class, and its attendant exertion has to come from the “hungry” outsiders. This also means that when the creative executives run out of ideas– and that’s inevitable, because the executive lifestyle is even more of a creativity-killer as the upper-class one– they’re tossed back where they came from. That’s Don’s future, as made clear even as the series began.

Don himself says that people tell us what they are, and we refuse to listen; in Season 1, he predicts exactly what will happen to him as well as to Pete Campbell, even though these predictions are so negative that one wishes not to believe them. For Pete, he predicts that his lack of interpersonal charisma and character will top him out as a mid-level executive no one likes. Check. Don predicts that he’ll age and run out of ideas, and then be devoured by younger, hungrier executives. Check, sort-of. Don seems to be his own worst enemy, not done in by others. Perhaps it is his past (nostalgia) that is the hungry, young executive to slay him. Since Season 1 he has understood, intuitively, that Bert and Roger (and even Pete) are the natural inhabitants of his world, while he’s just a passer-through. Ted and Peggy, like Harry Crane, will find their ways to other pastures. He won’t. Dick Whitman might remain alive, biologically, for another thirty years, but Don Draper is that job and when it ends, so does he.

Dick Whitman knows how to kill Don Draper, and lose his toehold in the New York advertising world. He tells the truth about himself. He does it in an embarrassing and costly way, but it’s what he reveals– not the cost to the firm of the revelation– that gets him shown the door. Don could run horrible lies and get away with almost anything; but once he lets the truth out, his professional life is over.

This is where it gets personal.

I don’t post about my own life that much. I’ve mentioned negative experiences at Google, neutral-to-positive experiences in finance, and let on that I’m a damn good programmer with strong mathematical skills. That I’m 30 years old and live in New York and like functional programming is not hidden, either. Still, people probably have a sketchy view of what I’ve done professionally and where I’m trying to go. About myself, I’m less comfortable sharing than most people are on the Internet. Yet, on the deeper, society-wide issues, I’ve also spent a lot of time in 2012 and 2013 trying to do something that few people have: in the public, find the truth. That’s why I’ve gone farther into the rabbit hole of the software world’s sociology than most people have the courage to go (in the public, by their real names). Boy, has that led to some real pain. I haven’t even begun to describe some of the things that have happened to me once I started doing that: unreasonable professional losses, threats, and inexplicable behavior around me. I’ve been through hell and I’m still burning; but, from a distance, to burn is to shine.

Despite my interest in public truth, I keep it hard for the Internet to know much about me. That’s because my own personality is not what’s interesting. I’m actually a run-of-the-mill, fairly typical guy in most ways. I come from an average background, look like an average person, et cetera. As a person, I’m not that interesting, and I don’t wish to be. What is interesting is the underlying and general truth that we need to discover to move society forward, and it’s an accident of fate that has left me extremely well-equipped to do it. I wasn’t born to be the one who’d coin the term “open allocation” and thus become the savior (if I am effective, that is) of technology. There’s no prophecy behind it and certainly no genetic superiority (trust me, I have none). That was just luck. Yet, here I am with a unique array of experiences that has left me able to pose (and sometimes, to answer) some of the most important questions of the technological economy? For example, why has the formerly most creative industry out there (small-company technology) fallen so quickly into decline, and how do we fix that? Can we do it? What types of structures (financial, cultural, and technological) will we need to invent to solve the problem?

For a second, I will get into some personal stuff, even at risk of embarrassment. It doesn’t take much work to figure out that I was a gray-hat troll in the 2000s. It was a hard habit to kick, because I have intermittent hypergraphia (compulsive writing). When I was an angry, broken person, that led to some angry and broken writing. I created some bizarre, fictional internet characters, many of which (and I’m thankful for this) have never been connected to me. However, some of that stuff was easy to find, at least at one time, and trace to me. Yet it never interfered with my career, at least not to my knowledge. Gray-hat trolling is seen (correctly) as a weird often-public hobby. It has never “caught up” with me or done any professional harm, but I’m actually pretty embarrassed by it. If ultimately harmless, it’s still fundamentally dishonest to create weird fictional personalities and convince others that they’re real. Worst of all, it was a gigantic waste of time. Yet, I “got away” with it completely. It probably made me seem a little bit strange and, at the time, would have precluded leadership opportunities if found– but I was also in my mid-20s, so that wasn’t an issue– in its time.

What has hurt my career is the white-hat stuff: truthful revelations about organizational behavior, specific companies and what they did wrong, and general willingness to state obvious but undesired truths about the software career and the sociological forces preventing technological progress. We now lose hundreds of billions, if not trillions, of dollars per year to bad software management. Yet the consequences of simply revealing such things have been, in my experience, severe.

My trolling past has shown that one can be offensive and horrible and flagrant as long and get away from it as long as one lies; because lies from non-credible sources (and let’s be honest, that’s 99.9% of us) are ineffectual and harmless. They’re entertainment. Truth, on the other hand, is a deadly weapon and a feared one, because it doesn’t matter who holds it. The power of a lie is directly proportionate to the social status of the liar, and most of us have such minimal social status as to be harmless to those in charge. Truth, on the other hand, has eternal and status-independent power, which makes it dangerous.

Tell a lie as a non-credible agent, and you’ll be cancelled out by the rest of the world, as it generates a noise haze of counter-lies and oblique lies and inept supporting lies and uncomfortable humor that weaken your case and render what you said irrelevant. The people with stakes in reputations can count on the lie having no long-term net effect. Tell the truth, on the other hand, and there’s a risk (albeit a small one, moral courage often being thin on the ground) that the world will move with that revelation, as more people come out to confirm it. Truth is gunpowder (an equalizer) and the upper-caste sword-wielders (credible liars) can’t stand for anyone to have it.

Now, I’ll return to Mad Men. Don Draper’s truth isn’t just that he grew up in a coal-country whorehouse. There’s a lot more to it than that. To start, he establishes his pitch as a lie, pointing out that advertisement exploits untrue stories and what people want to believe. That’s not a truth to share with a client. Another unstated truth he brings out is that no one will accept his true upbringing, because there is supposed to be no one like him in a high position in that sort of firm. He duped the whole firm into buying his prestige. Account men come from the generational upper class, and creative comes from the Ivy upper-middle, and people like Dick Whitman shouldn’t even be on the floor, unless running the elevator. The humiliation of the firm comes from the revelation– in front of Hershey’s upper management, since the partners would probably accept the fact if known only to them– that they let him in.

Bert Cooper and Roger Sterling were duped, and they were happy to be duped when he was a brilliant creative executive. Being relatively progressive by upper class standards, they recognize prestige as an elaborate lie, so learning about Don’s charlatanry made no difference so long as he delivered. However, when he makes Hershey aware of his gate-crashing, the damage is so severe that he must be thrown out with the trash.

Finally, there’s a major truth, revealed throughout the show, about advertisement’s self-selling as a “creative” industry. Creativity (in advertising) takes a second-class standing relative to the corrosive politicking for which Pete and Bob Benson are so well-known. Peggy and Don take pride in their creative work, and Ted additionally takes pride (MacLeod Clueless?) in his leadership ability– he’s the only decent boss on the show. Yet none of the stuff matters. Not one of the creatives is present in (or even aware of) the decision to fire Don, because their opinions don’t merit concern. Creatives are just high-end light bulbs to be used, burned out, and discarded. That’s a truth that’s relevant to this day. Recall what I said about creative being cost centers and account men being revenue-producers. (Of course, creative work drives the long-term health of the firm, but that’s irrelevant to the year-by-year decisions around promotions and firings.)  The upper class naturally gravitate toward the unsexy but leverage-providing revenue-center roles, and leave creative cost centers for the marginal people who need to prove themselves to stay in the game.

Replace “Madison Avenue” with “VC-funded Silicon Valley” and “copywriters” with “software engineers”. Conclude your own about that ecosystem and its fate, noting that the glory days of Madison Avenue ended a couple years after the events of the recent series. VC-istan is the successor to the world of Mad Men, with the same soul-devouring politics, except it’s even more of a sausage fest.

Don– to exploit the metaphor, the most honest whore in the brothel– has just burned out of an industry founded upon lies. He’s brought in truth. He didn’t belong, he got in anyway; and about a decade later, he fired himself on his own terms. A few stray flames are smoldering and truth is breaking through, but the total conflagration is yet to come. (Advertising will be just fine, but its “white-shoe” reputation and cachet will fall away in less than a decade.) Don has angered Power enough for it to come in to an office at 9:00 on Thanksgiving morning. Old lies are breaking down– that process started long before Don got in– but the consequences for revealing truth, in such a time, can be severe.

So it is, too, with VC-istan. Truth is breaking through. It has had, over the past two months, some excruciating revelations, between Sean Parker’s wedding, the revelation of inappropriate data usage,, and various morale crises among software engineers that will not go away until terms improve. The exceptionalist acceptance once applied to technology’s new barons is waning. The edifice of lies is inflamed, and no one knows what will happen next. The only sure thing is that it will be fun to watch. As with Mad Men, all that most of us can do is wait, stay alive, and then enjoy the next season.

Technology: we can change our leadership, or we can quit.

Technology has lost its “golden child” image, with piñatas of Google buses being beaten to shit in San Francisco, invasions of privacy making national headlines, and an overall sense in the country that our leadership’s exceptionalist reputation as the “good” nouveau riche is not deserved and must end. To put it bluntly, the rest of the country doesn’t like us– any of us– anymore. We’ve lost that good faith, in technology, that allowed us to be rich (well, a few of us) and not hated, even in the midst of a transformational, generation-eating recession. 2013 will be remembered as the year when popular opinion of “Silicon Valley” imploded. As much as I despise VC-istan, that is not a good thing, because popular opinion will not separate VC-istan’s upper crust from Silicon Valley or technology as a whole.

After decades of the kinds of mismanagement that only prosperity can support, we’ve developed an industry that, despite having the best individual contributors in the world– has the worst leadership out there.

Additionally, even within the Valley morale is challenged. The truth about the VC-funded ecosystem is that it’s no longer an alternative to the traditional corporate ladder, but merely a shitty corporate ladder (the transitions being worker to founder to investor) in which disposable companies allow executives to do things to peoples’ careers that they’d never get away with in larger companies. There’s a satirical song called “The Dream of the ’90s” about a resurgence of unambitious immaturity in Portland’s hipster culture. VC-istan is a similarly nostalgic 1990s-derived culture, except centered around ambitious immaturity. Perhaps it was more real in the 1990s, but the venture-funded world now is a Disney-fied caricature of entrepreneurship dominated by rich kids who take no real risks because their backers have already decided on a range of outcomes, and will provide “entrepreneur-in-residence” soft landings for their well-connected proteges, no matter what happens. It’s not about building things anymore; it’s about using Daddy’s contacts to play startup for a few years and relish telling older and much more talented people what to do.

People are waking up to this. VC-istan is under attack. I just hope it doesn’t take down the rest of technology with it.

The reputation of this ecosystem is falling to pieces. As it were, individual technology companies go to great lengths to defend their reputations, and only relinquish those when there’s enormous benefit (in the billions) to be made through the compromise. As technology firms see it, and they’re not wrong, their ability to execute and to attract talent is strongly determined by the company’s reputation. Why is reputation so much more important to a software firm than to, say, a steel or oil company? A few things come to mind. Obviously, internal reputation (morale) is extremely important in software. The difference between an unmotivated versus a motivated steel worker might be a factor of 2 or 3; in software, it’s at least 10. Second, and there are a variety of reasons for this, most talented people don’t care all that much about money, at least not in the classic economic sense. They don’t want to be poor, but they’d rather have smart co-workers, interesting work, and a supportive managerial environment and be comfortable than lose those things and make 25% more. (We also believe that we’ll make more money, in the long term, if we work is quality environments where we can succeed.) Most reflective people know that “rich” is relative and economic rewards lend themselves to hedonic adaptation quickly. As Don Draper said, this form of happiness is “a moment before you need more happiness”. So you can’t court the best software engineers with a 10- or even 50-percent advantage in salary; you have to convince them that your company will give them interesting work and benefit their careers. That’s hard to do when a company has a damaged reputation. From experience, we know not to trust even most of the companies with googd reputations, much less the ones whose images have already been tarnished.

Sadly for them, it’s probably 80 percent of the Fortune 500 where the top 5% of software engineers would simply refuse to work, unless given a salary that would put them above even most executives, or in desperate need of short-term employment. These companies don’t end up with minimal engineering power; they end up with zero, because they can’t attract talent from outside, they overlook the high-potential people within, and talented people who come in never form a critical mass that might give them any political immunity to the overwhelming mediocrity (that is a threat even in the prestigious companies). On the other hand, Google and Facebook have more top-5% engineers than they know what to do with. Talent is clustering and clumping like never before, both in terms of employer selection and geography. So not only are the stakes of reputation high, but most firms end up as losers, bereft of top talent and doomed to watch their IT organizations slide into inefficiency, if not failure. Sturgeon’s Law is painfully felt everywhere in technology. If you’re a programmer looking for work, you find out quickly that most engagements are low in quality. On the other hand, if you’re a hiring manager, you find most engineering applicants to be incompetent at worst and badly-taught (i.e. betrayed, and sometimes irreparably damaged, by years of shitty work experience) at best.

Despite its problems, there’s money in technology. There’s so much fucking money in it that it has tolerated abysmal leadership for a long time. The Valley is so rich that the points don’t matter. Fired unjustly? Another job awaits you. Moron promoted (or, better yet, externally hired) above you? Job hop. Unfortunately, that won’t last forever and not everyone is positioned to benefit from this fluidity. Besides, some of the volatility injected into technology by bad management is just unnecessary and counterproductive. We’ve set patterns in place that won’t survive the future, in which traditional corporate software’s place diminishes. (Software and technology themselves will live on; that’s another discussion.) There will still be money, but the patterns that earn it will be different, and old processes won’t work. After decades of the kinds of mismanagement that only prosperity can support, we’ve developed an industry that, despite having the best individual contributors in the world– has the worst leadership out there.

Now, we’re seeing the backlash. No one gives a shit about Google Glass when the people who’ve lived in The Mission for fifty years are being pushed out by spoiled white kids who would never deign even to learn Spanish because “there’ll be an app for that in 5 years”. It’s no longer cool to have “invites” to some goofy social experiment when everyone knows that their data’s being sold to shady third parties and that full profile access is often a workplace perk. Finally, technology startups have gone full-cycle from being a risky, conventionally denigrated career move (1980s) to a really great opportunity (1990s) to “cool” (2005-12) to somewhat less cool (post-2013). This is happening because we no longer have the carte blanche abundance of opportunity that allows us to be prosperous even with horrendous leadership. There’s still a ton of opportunity out there, but the easy wins are gone, and we can’t let “the business side” run on auto-pilot because the age in which bad leadership is acceptable is ending. We can’t put our heads down and expect the men in suits  to do what’s right; they only did that when everyone could get rich because the victories were so facile, but that’s no longer true (if it ever really was) and we need to take more responsibility for our own direction and destiny. We can handle that stuff; trust me.

We’ll need to move our current executives and “hip” investors and tech press aside and let new players come in; but we can keep technology alive. And we owe it to future generations. Technology is just too important for us to let the people currently running this game continue to screw it up.

Here’s the proper way to evaluate a startup’s equity offerings

One thing that young people are very bad at– to their detriment, and VC-istan’s profit– is evaluating equity in a startup job offer. They don’t understand the numbers, what they mean, or the processes that lead to them holding certain values. Many focus unduly on percentages, which isn’t the right way to go. As is often noted and obvious, 1 percent from an established company would be amazing; 1 percent of a pre-funding startup is below consideration, except for very light contract work (a couple hours per week of advising). An alternative is to convert the equity grant into a dollar figure. The problem here is that the valuation process is essentially black magic. There is no “market” valuation for a VC-funded startup because VC collusion is so entrenched that there is no competitive market. Rather, it’s driven by processes into which a typical employee has no visibility. Even if you’re getting $50,000 per year of vesting in “equity”, you’re getting what finance calls penny stocks, and you should be aware of their attendant problems (even if you’re not in finance, the Series 7 process, although boring, teaches a lot) before you take those too seriously. Sure, penny stocks can make a person rich; they can also go to zero. Plan accordingly.

VC-istan runs, I think, on a fake generosity. A clueless 22-year-old has no idea what he’s worth on the market. Compared to a PhD student’s stipend of $1,700 per month, an “exciting” startup job that comes with a much higher salary (but still $40,000 below what he could command if he went east, for finance, and got a real job for adults) seems like a great deal. To boot, he’s getting $30,000 (vesting over four years, with a “cliff” provision applied to the first) worth of equity! How generous! That’s how companies bill their equity participation. “We’re giving you this, because we want you to feel like an owner.” (In this case, “feel like an owner” often means to work long hours, put up with drudge work, and favor what we baselessly claim to be firm-wide existential risks over your own career goals, health, and friendships.) In reality, employee equity always comes with vesting (as it should) and a typical schedule is four years, which means it’s $7,500 per year. So it’s not a gift; just regular compensation. In that particular case, it’s a $40,000 pay cut in exchange for $7,500 in penny stocks. Hardly a good deal.

Every equity offer comes with a vesting period (typically 4 years) and a “cliff” provision that no equity is earned if the employee leaves (or is terminated, and “cliffing” firings at 362-364 days are pretty common). It’s important to keep that in mind. The equity “grant” is contingent on an outcome that, in the VC-funded world, is pretty rare. At a typical startup, it probably won’t be worth it to keep coming into work every day for 4 years.  Six months from now, you might be answering to an outsider you’ve never heard of.

In fact, full vesting seems only to occur for the mediocrities. The bottom 15% (as well as an additional 15% who are capable but politically unlucky) get fired, often without severance, long before the four-year mark. The top 15% usually bounce, because waiting around to “vest” on some piddling 0.02% equity offering, when you can roll the dice again and possibly be a founder– or at least get a real title and be a founder two gigs later– is a pathetic excuse for not growing up. (This is another rant, but most VC-funded startups are halfway houses for college kids who’d rather waste their 20s than (gasp!) have to show up somewhere in the a.m. hours.) With the top and bottom of the pack getting drawn out, it’s the middling players (“chief vesting officers”) who are actually around for long enough to tap their full, four-year, grants. Keep that in mind. Your expected percentage of that four-year target is probably (including cliff) 25-50 percent, and closer to the 25% if you’re unusually good (or bad) at what you do.

All that said, I’m going to assume the reader knows this. Of course, there still are good startups out there, and I will never deny that fact. They’re uncommon, but they exist. People need to know how to evaluate their equity allotments, and that’s what I’ll focus on here. Below is a simple formula:

Person-Power = (Number of employees) * (Equity percentage)

This isn’t a meaningless statistic or even a heuristic. Companies exist to aggregate human labor, and equity represents a share in what the group produces. If you’re offered 0.02% of an 80-person company, that’s representative of the work of 80 * 0.0002 = 0.016 people. In other words, each week, your equity represents a payment (in time) of 0.016 * 40 = 0.64 hours of work. You put in an eight-hour day, and the equity is a return of seven minutes and 41 seconds of human time: a long bathroom break.

The person-power metric accounts for the meaninglessness of equity percentages (as again, 1% of Google would be fantastic) and the uncertainty surrounding valuations. It gives actual meaning to the equity. You can envision a 0.02% slice of an 80-person company as a 5.76 seconds of each person’s workday being done on your behalf, or (as above) 7.68 minutes of total human time. That’s not all that much, in contrast to the concessions that these small companies expect because “we’re a startup”. Of course, outside of the startup world most companies give zero equity, so one might argue that, “hey, it’s better than nothing”. Sure, but those zero-equity non-startups actually pay people real salaries, give annual raises, try harder than startups not to fire people unjustly, have a lot of slack in the schedule allowing for (semi-furtive, but easy to execute) personal career growth, and let people leave at 5:00.

So what’s a fair range for person-power? Well, it depends on the risk level. The average, across the whole organization, can never be more than 1.0. In fact, it will typically be less than that because investors, advisors, and board members need their cut (and the investors actually bring something to the table!) I’d say that 0.15-0.3 is more than fair for a junior-level employee, and 0.5-0.8 (except for a risk-taking founder) is quite generous. That is what real equity looks like.

Below 0.1, on the other hand, I’d say that the employee should write the equity off entirely and focus only on the salary (with an understanding that startups rarely give salary raises or annual bonuses; if the investor-determined valuation goes up, that is the raise). I also don’t see why companies offer low equity amounts in the first place; those seem to complicate the finances of the company for minimal benefit, because if these junior chumps have any talent, they’ll figure out the VC-istan game and either want ten times more, or become 10-to-4 “chief vesting officers” while they plan for their next gig. (If I were running a company, I’d be extremely liberal with profit-sharing but give almost no one equity; that’s for investors, but I’d encourage employees to diversity their finances beyond their employer.) The signal is negative. For me, equity has an uncanny valley. If I’m not going to get a real stake, then I’d rather just zero the equity in exchange for a market-level salary, sane working hours, annual raises and bonuses, and not being surrounded by 21-year-old college kids who think their token ownership ought to drive them to work till 11:30 at night (with various stories of unprofessional behavior emerging out of that coupling of the night hours with the office.)

I don’t have an overarching, sweeping conclusion or any real wisdom here, but I think that every startup employee should take the time to compute that Person-Power number. If it doesn’t match or exceed the percentage of market salary (including four years of raises, bonuses, and career support) that he or she is giving up to work there, it’s probably time to bounce.

VC-istan is dead, not “the technical interview”

Don’t declare the death of the technical interview. If you make such a declaration, then I will declare with as much confidence (and more correctness) that you don’t know what the fuck you are talking about.

The technical interview is fine, assuming you have a competent person doing it. If you don’t, then you’re already screwed.

A competent engineer can do an effective technical interview. (Of course, there are competent engineers who can’t do a good technical interview.) Those vapid brainteasers about ping-pong balls in 747s and being shrunk to the size of an ant and dropped in a blender? I never saw one. Not even in 2005. That’s not what a technical interview is. Even in the worst companies, people don’t ask those questions in 2013. Even VC-istan isn’t that behind the times.

The problem is that few companies have the people who can run a technical interview, because most of them aren’t technical themselves. Sturgeon’s Law kicks in on both sides with all things job-search related. If you’re a typical company trying to find talent, you have to sift through hundreds of depressing resumes and interviewing non-Fizzbuzzers. If you’re a software engineer, you’ll spend a lot of time searching through awful companies and gradually learn that the VC-funded stuff isn’t an alternative to Corporate America, but an even-worse caricature of it. Again, Sturgeon’s Law.

This whole ecosystem around the engineer-t0-VP-to-CTO-to-founder-to-EIR-to-angel-to-VC career ladder is dying. People are learning, through painful experience, that a 0.02% “equity” slice of a typical startup isn’t real ownership; it’s a half-hearted apology for the long hours and the 60%-of-market wages. By adulthood– an optional transition usually happening at some age between 22 and 40, seeming to come later in high-cost-of-living areas that prolong adolescence– people tend to tune out of the VC-funded world unless they can go quickly to the top– as executives, founders or investors. In fact, the best way to think about the VC-funded world’s success is that it is child labor. (Hell, most VC-funded managers are children!) Even at ages like 28 that were full adulthood at one time, there are a lot of privileged, socially awkward males who are still effectively kids, and those are the ones who’ll put up with fucking pager duty if given 0.02% “ownership” of an entity they cannot possibly valuate (because they never get within 22.3 miles of an investor meeting).

VC-istan is horrible. It deserves to die. Its increasing inability to garner talent (as good engineers leave it for hedge funds, lifestyle businesses, or exit from software altogether in adulthood) is leaving it worse at performing technical interviews (as well as mentoring high-potential juniors, planning projects, and, like, everything else that requires maturity) and therefore it is getting less signal from those, as code-sample evaluations increasingly come down to tabs/spaces rather than overall effectiveness in communication. But that’s not a problem with the concept of the technical interview itself. As a programmer who has lost years of his life to shitty code I’d like to see more technical interviews.

Long live technical interviews. Long live technology.

Gervais / MacLeod 25: State- and truth-seekers, plus the emergence of the Technocrat

I started the Gervais / MacLeod series on February 19, 2013, and there’s one miss on my part that has been bugging me. Namely, I failed to flesh out the concept of the Technocrat except in moral terms. Technocrats were the “good Sociopaths”, the people who combined strategic intelligence, dedication, and a lack of respect for authority but whose drive and talents brought them to good places, not bad. This moralistic correlation exists (as a correlation, not a universal rule) but it’s not the fundamental nature of the Technocrat to be good. There’s something that makes them tend to be good, but not all are.

Over time, I’ve found this categorization to be problematic. The lower MacLeod tiers (Losers and Clueless) don’t carry a moral weight, so who am I to split the upper one (Sociopaths) between “good” and “bad” ones? Recently, however, I think I’ve discovered the tool that separates the two sets. It isn’t about morality per se but about something that often overlaps with it: whether a person is a state-seeker or a truth-seeker.

What’s a state-seeker? And what’s a truth-seeker?

Abstractly, almost everyone sees himself as a truth-seeker. Before I’ve even defined the terms, I’m pretty sure that most people have put themselves in this category. I disagree. Most people– probably 80 percent– are state-seekers. Also, there’s nothing inherently wrong with that. As humans, we’re built to be state-seekers. When I explain what each means, that will become pretty obvious.

State-seekers use what social resources and power they have or can acquire to bring human arrangements to desirable states. Truth-seekers want to bring them to truthful ones. Obviously, most people want both; so it doesn’t get interesting until those two goals conflict. Here are a couple of examples:

  • Andrea manages a team of five workers who’ve all been with her for fifteen years. It’s a tight-knit crew. Four of her workers are great, but Bob has become ineffective and toxic to the rest of the group. Everyone agrees that they’d be better off with Bob out of the mix, but no one wants to see him, personally, fired. They’ve known him for too long, met his kids, et cetera. If Andrea’s a state-seeker, she’ll try to isolate Bob and minimize the damage, but she “can’t fire him” because he’s been with the team for too long. If she’s a truth-seeker, she’ll fire him– preferably fairly, with severance and a good reference to recognize the time when he was valuable, and to help him bounce to a better job– because Bob really isn’t part of the team anymore, and firing him is the only truthful thing to do.
  • Carol has aspirations to be a film actor. If she’s a state-seeker, her primary concern will be getting in and “becoming” a movie star. How does she get a good agent? How does she make the contacts? If she’s a truth-seeker, she’ll be more interested in whether she should be a movie star, and constantly assessing whether she has the talent (as well as whether the Hollywood game is worth playing).

Now, it might seem strange to consider how I presented truth- and state-seekers. State-seekers want desirable social arrangements, and truth-seekers want correct ones. What good, however, is an undesirable truth? The answer is not obvious. There’s a strong argument that can be made, in many circumstances, for concealing undesirable truths. That is, in fact, what most people (again, the state-seeking ~80 percent) will reflexively prefer to do. Isn’t a bit perverse to seek the truth beyond what’s socially acceptable? Well, often it’s not popular to be that way. That’s why most people aren’t truth-seekers. It’s a lonely road. State-seeking is easier, more harmonious, and less risky.

The truth-seeker’s problem is that she never fully buys into the going assumptions about what’s desirable. Can the group really evaluate what’s best for it, in the long term? Can she do that? How confident should she be in her knowledge? She might want to be a movie star, but if she lacks basic talent for it, that simply would make no sense. Truth-seekers are too skeptical of what arrangements are considered desirable (knowing such things are prone to fashion) by that group and in that time to sacrifice accuracy and honesty. On the whole, they’d rather have correctness and knowledge than comfort and harmony. The truth-seeker’s distrust for her own assumptions now about what is desirable leads her to prefer truth, so that she can make better decisions in the future, even if her presumptions about social desirability prove to be wrong.

Does this mean that truth-seekers are morally superior? No. In fact, there are plenty of honest state-seekers who dislike lying because it feels disrespectful, aggressive, or malignant. There are also dishonest truth-seekers, who are either too incompetent to crack their own self-deceptions, and there are others (although this is rare) who are masterful at creating “new truths” that serve them, and creating a “reality distortion field” in which those are now true. Mad Men‘s Don Draper (the most honest whore in the whorehouse) comes to mind. What makes him an attractive presence is that– unlike the social climbers around him, those being obvious state-seekers out for self-advancement– he is a truth-seeker. He wants to get the right answer, do the best possible work, and put all the bullshitters in their place. However, he’s not perfectly honest, given that the real Don Draper died before most of the events in the show, and also considering that he thrives in a fundamentally dishonest business (advertising, or exploiting human weaknesses for profit).

Finally, if I were to make a bet on it, I’d bet that most people consider themselves to be truth-seekers, but I don’t think they are. State-seekers, when presented with a classification of human behavior, tend often to associate themselves with what they want to be. Truth-seekers tend to know what they are. I suspect that most state-seekers would self-identify as truth-seekers; but I could be wrong.

What do state-seekers want?

I’ve discussed truth-seekers and their desire to get the right answer, egos and emotions be damned. People tend to find truth-seekers to be robotic, overly analytical, and insensitive. In fact, these accusations tend often to be true of us. We aren’t the most sensitive to others. We’d rather be right. This isn’t because we’re egotistical (some of us are; but as a group, I don’t think we’re worse than baseline) but because we consider deception and the propagation of inaccuracy to be harmful to all parties involved.

State-seekers tend to fall along a spectrum with two endpoints: altruistic and egoistic state-seekers. Altruistic state-seekers want group harmony. They want people to be happy, groups to be inclusive, and conflict to be rare and easily resolved. They’re rarely dishonest, but not because they have an intellectual commitment to the truth; rather, because they understand the damage that discovered untruths bring to the social fabric. They tend to lie only when they’re very confident that the lie will never be uncovered. Egoistic state-seekers tend to want self-advancement. These are the narcissists and psychopaths and assholes we all know and love.

Most people are state-seekers somewhere between those extremes; they tend toward moral neutrality and, as I discussed in previous posts in this series, localism. They aren’t universal altruists or degenerate egoists; they tend to operate in the interest of a small group.


With humanity divided into two sets according to a certain behavioral bias– the relative favor given to truth versus desirable social states– I am also going to address ambition, and that I’m going to split into three levels or categories.

  • Subsocial. People with subsocial levels of ambition do not threaten or upset others with their goals. In fact, most people would rather see them be more assertive. To make it clear, the “sub-” prefix does not mean that such people are “unsocial” or defective in any way. I am saying that their level of ambition is below (hence “sub”) the upper limit of social acceptability (the “at-social” threshold). They don’t make any enemies.
  • At-social. In the middle are people whose ambition levels are right at the level of social acceptability: probably somewhere around the 85th percentile for women and the 90th for men. They’re seen as “go-getters” and “team players”. They are driven enough to garner respect, but not so assertive as to draw negative stereotypes upon themselves. They live right at the socially acceptable maximum. This is rarely a pleasant place to be (hence the stigma of the MacLeod Clueless) because the at-social level of ambition has a person showing enough drive to suffer, but not enough to break ahead of the pack.
  • Aposocial. At this level, the person’s ambition has gone beyond what’s considered polite or socially acceptable. The aposocial person may work so hard that people suspect he “doesn’t have a life”. Or he may not work especially hard (MacLeod Sociopath) but will simply do things to accomplish his goals that others find objectionable. Some aposocial people are very good, morally speaking, and some are bad; but they’re rarely nice in either case.

We now have six categories of people. I’ll address how each one interacts with the MacLeod hierarchy.

  1. Subsocial state-seekers tend to be the more popular and active of the MacLeod Losers. They like the comfort of an in-crowd, and form their own clubs (e.g. Finer Things Club) and events (e.g. office parties) although those are rarely consequential. In general, they aim for group harmony, and tend to go out of their way to be accommodating and nice to people. However, they can also be parochial and vicious (see: Angela in The Office).
  2. Subsocial truth-seekers are the rationally disengaged. They do not give more to the organization than, based on how it treats them, it deserves. This means that they tend to be minimum-effort players who generally understand the organization well and what is required to succeed in it, but rarely consider it worth it to chase that carrot; it’s too small and too far away. In The Office, Creed is the ultimate subsocial truth-seeker. Subsocial truth-seekers are a different set of MacLeod Losers: they know exactly what’s going on, but lack the drive to win the game.
  3. At-social state-seekers are people who evolve into the MacLeod Clueless. Sometimes, it’s because they want to lead or hold power; other times, it’s because they’re driven to do what’s best for the group. Now, at-sociality generally isn’t very truthful because it entails having just enough ambition to suffer (in many cases, on a supervisor’s or group’s behalf) but not quite enough to get ahead. The self-deception of an at-social state-seeker tends toward contagion sometimes, which makes him a natural match for Clueless middle-management.
  4. At-social truth-seekers are incredibly rare, because the at-social level of ambition is so awkward and often unsustainable for a truth-seeker. I guess the label I would affix to them is “TED Speakers”. They are genuinely earnest in seeking the truth, but not aggressive enough about it to do anything that would compromise their popularity. They tend to have an optimistic conviction that social desirability/acceptability and truth are almost never in conflict, while I would argue that they (as a group) underestimate how often such conflict does occur. They are earnest when it comes to truth-seeking, but not as aggressively as the “ninja” aposocial truth-seekers. They’re almost never the first to uncover socially unacceptable truths; but they’re good at marketing such discoveries once a small set of “early adopters” have accepted them.
  5. Aposocial state-seekers are people whose drive to push a social state toward a desired outcome is often found unnatural or even perverse. That is, their state-seeking goes far beyond what is socially acceptable (hence “aposocial”). The altruistic ones are seen as rabble-rousers and radicals. The egoistic ones are seen as sociopathic cutthroat menaces (which most of them are). These are the classical MacLeod Sociopaths who make organizations succeed (i.e. bring them to more desired states) in spite of themselves.
  6. Aposocial truth-seekers are the ones whose desires to get to the right answer, similarly, drive them to places far away from the socially accepted comfort zone. They don’t shy away from unpopular truths; they dive right in. They’ll burn ass to get the right answer, make an organization the best it can be, and not only solve the problem but solve it well. Popularity and social harmony are often sacrificed wholesale in the quest for absolute truth and excellence.

Whither into morality?

Nothing about the six categories above is strictly moral. There’s a diversity in ambition level and favoritism of state versus truth, and none of this requires or precludes moral decency. In fact, there are good and bad people in all six categories. However, are there correlations between category and morality? In general, I’d say the answer to that is “Yes”.

On the ambition spectrum, subsocial people tend to map to the MacLeod Loser tier, regardless of whether they favor truth- or state-seeking; and at-social people tend to fall into the Clueless tier. Whether a person favors truth or state does not seem to have a major effect, for these tiers, on how people behave or where they land in a social hierarchy. When people operate within the bounds of social acceptability, it just doesn’t matter much what they favor. When people restrict themselves (as most people do) to the sandbox of social acceptability, it doesn’t matter much what they try to build, because there just isn’t much sand to work with.

Indecent people at the subsocial or at-social levels of ambition certainly do local damage. They bruise egos, cause unjust firings, and reduce operational efficiency. However, they don’t seem to have vicious macroscopic effects except in already-reeling organizations (that have been brought to that state by higher-level malignancy or negligence). They aren’t, in general, going to bring critical failures to the organization. Likewise, morally decent people at the subsocial and at-social ambition levels cannot save a company that has fallen into indecency at the aposocial level, because they will almost never shatter the distorted reality that their superiors have created.

Thus, the interesting play happens at the aposocial level. Not only history, but the more mundane ticking of organizational evolution, tend to be driven by people whose ambitions exceed the socially acceptable; those whose drive makes them inherently non-redundant.

State-seekers tend to evolve into Politicians. I choose this word in favor over “Sociopath” because I don’t think they’re all bad, and the world needs politicians. There are plenty of deeply kind, honest, and also aposocial people who tend to be state-seekers. Why? Well, truth is often unkind to peoples’ immediate sensitivities, and it’s a defensible moral stance (if very different from how I, personally, tend to operate) that it is better for people to be happy than for them to be fully informed of the truth in a situation (since many truths are painful but provide no actionable information).

It’s the aposocial truth-seekers who evolve into the Technocrats. It’s probably extremely obvious at this point that they are one and the same. Most Technocrats are good people; but it is not a hard-and-fast guarantee. Still, the odds are strong that a randomly-selected Technocrat will not only be morally decent (which most people are, except in perverse contexts) but so committed to decency as to be genuine organizational assets. You want these guys (and girls) on your team. However, it’s rare that you can get by with having only Technocrats at the aposocial level of ambition. Why? In poker terminology, they tend to play the cards extremely well but not the people. Their relentless pursuit of truth, in fact, blinds them to human irrationality and the pervasive power of ego. I’d like to think that a Technocrat-only organization could work, but I doubt that such a thing could scale (as a functioning company) into the general population.

What about the Politicians? Are they good or bad, in general, as a group? It’s hard to tell. There are good, altruistic leaders among them who manage to create order out of human disarray and thereby drive a set of people to achieve more, in coordination, than it otherwise would. There are also myriad degenerate social-climbers, dishonest deal-makers, and outright criminals in that set. What determines the type of Politicians an organization gets is what that organization stands for. That is, I would argue, the fundamental issue with corporate capitalism. These corporations, in fact, stand for nothing. Their only purpose is to grow in footprint, make more money (which is then dispensed, unevenly and according to political forces, to executives) and take over a larger segment of the economy. There are, of course, plenty of organizations not geared toward that; but the general state of a large private-sector organization is one so hogtied by sectarian in-fighting and bike-shedding that the only “common language” left is profit maximization. This creates an uninspiring place to work, but also one whose leaders reflect its own values: greed über alles.

This brings head-first into a moral debate I haven’t yet resolved: is greed good? The answer is far from simple. Aposocial ambition is often seen in the best people, but is that greed? Or does “greed” only denote material aspiration, which we tend to understand as necessary at low levels of material wealth but pathological at high levels (with no agreement whatsoever among people about where that transition lives)? I’m not going to tackle that question in its entirety. There’s good greed and bad greed, and it would take another essay to flesh that out. I will say this much. Once companies have become short-term profit-maximizers, with cultural health and employee morale downplayed, the type of ambition that tends to be rewarded in individuals is the empty kind– the unconditional work ethic, the need for “a leadership role” despite any coherent cause to lead– and that’s bad. When it’s empty ambition that gets a person promoted (and it often is, because managers prefer the unconditional work ethic that comes along with it) the company will, over time, be handed over to the worst kind of Politicians, the ones truly deserving the “Sociopath” label.

It takes aggressive truth-seekers (Technocrats) to unseat such people and reverse their damage, but those very Technocrats are often the first ones shot down in the typical fire-at-will American corporation.

Gervais / MacLeod 24: Fundamental Theorem of Employment

In analyzing the economics and sociology of office-style Work, an inefficient set of institutional patterns that affects hundreds of millions of people, I’ve often had to ask the question, “Why are so many jobs so bad?” Plenty of positions are inaccurately or dishonestly advertised, many shouldn’t exist at all, and job openings that should exist often don’t. What’s going on with all this? And how should an individual person choose jobs, in light of the inefficient market? I’ve come to a conclusion that, despite the complexity of these issues, is refreshingly simple and, while failing to capture all cases, surprisingly powerful and appropriate to the vast majority of jobs. I might call it the Fundamental Theorem of Employment (FTOE).

A person is hired to do work that the hiring person (a) cannot do for himself, or (b) does not want to do.

Corollary: It is extremely important to know which of the two is the case.

These are, in general, two different cases. A person hires a maid to do undesirable work of which most people are capable, while he hires a doctor to do work that he can’t do for himself. It’s essential for each person to know which of the two cases applies to his or her job. Most jobs can be clearly delineated as one or the other. We’ll call the first category of jobs– a person is hired to bring expertise, skill, or capacity that the hiring manager does not have– “Type 1″; and the “boss doesn’t want to do” jobs, “Type 2″.

In a Type 1 job, you have leverage and you get respect because you’re delivering labor that the manager (a) does not have the ability to render himself, and (b) much more importantly, cannot accurately evaluate. Your boss is forced to trust you. Often, he will trust you just to reduce his own cognitive dissonance. In a Type 2 job, you rarely get any respect; you’re just there to do the worst of the work. You’re not trusted very far, and your manager thinks he can do your job just as well and twice as fast. In the career game, getting stuck in the Type 2 world is a losing proposition.

That seems simple enough, and the advice derived from it is fairly traditional. Build skills. Develop expertise. Become a “unicorn” (a person whose combination of skills makes her unusually rare and confers leverage). Get Type 1 jobs. The real world, of course, isn’t quite so simple; and it might be hard for an individual to tell which of the two possibilities applies to her job. I’m here to tackle some of the more complex cases that pop up in reality, and analyze which dynamic of behavior is more accurate to each.

Below are some cases that don’t necessarily fall into a clear Type 1 vs. Type 2 delineation, and require further analysis.

Excess capacity. Most large companies don’t hire for a specific role, so much as they increase (or decrease) their total headcount based on business needs, cash flow, and economic projections. Companies”don’t hire specifically for Type 1 or Type 2 work; they’re concerned with the economics, not sociology. Most people, in truth, are hired into firms to serve as “excess capacity”; that is, hired into a general-purpose labor pool so there is some slack in the schedule and there are internal candidates for vacancies. Whether a person ends up in Type 1 or Type 2 work isn’t driven by some abstract “general will” of the firm but by the needs of specific managers where that person lands. Unfortunately, this often puts a person into Type 2 work by default.

Depending on the company, the manager of the new employee’s team might not have had any input into the hiring of that person. Sometimes, the company just says, “here are some guys”, and that tends to result in a lot of undesirable work being offloaded onto them. Or, that person may have been hired for a position that was shortly after filled internally, or made redundant, leading to a need to make work for the new hire. The point of all this is that if you can’t identify (and preferably quickly) some X for which (a) a manager needs X, (b) the managers knows he needs X, and (c) you’re very good at X; you just become a fresh hire looking for something to do.

Simply being “excess capacity” isn’t necessarily bad. If there’s honestly about the fact, then management can set an appropriate arrangement. “You can work on whatever you want most of the time, but when you’re needed, you’re expected to be available.” Then, a person has the time and allowance to seek Type 1 work where he or she will add more value. Some companies explicitly set aside time for self-directed work (e.g. 20% time) in acknowledgment of the need for slack in the schedule. Others do not, and fall into a Type-2-driven default pattern of rippling delegation.

In large companies, people are hired for macroeconomic reasons that don’t conform to the Type 1 vs. 2 delineation explicitly, leaving the question unanswered: does the employee become a respected advisor whose expertise confers a certain automatic credibility, or a grunt to which the worst work is delegated?


Especially relevant to technical work is the role of automation. If work is undesirable, someone will try to “kill” it by programming a computer to do it faster and more reliably than a human. For many business processes, this is easy. For some, it’s quite hard. For example, it took years of research into machine learning before computers could accurately read hand-written addresses. At any rate, computers turn out to be perfect repositories for the worst of the Type 2 work that no one wants to do. They do it without complaint, and much faster. They’re cheap, as well. This is winning for everyone.

Computer programming has its own weird interaction with the FTOE. Business problems were traditionally solved with lots of low-paid and ill-respected manpower, so corporate growth mostly came down to the delegation of Type-2 labor as the beast grew. However, the magic of software engineering is that a small bit of more challenging, more fun work (automating painful processes so that the task is complete forever before the novelty of the new job wears off) can replace a larger amount of bland, tedious work. Most of business growth is about Type-2 hiring: bringing in more people to do the work that the bosses don’t want to do. A competent software engineer can take on the Type-1 task of automating all that junk work– if management trusts her to do so.

Management doesn’t, in general, care how the mountain of traditionally undesirable work is done. If it’s done well by ten bored humans who occasionally quit or fail but are easy enough to replace, that’s the familiar “devil you know”. If someone else can come along and perform the much more enjoyable task of automating that work for good, that’s better because it saves a lot of money and pain. Sort-of. There’s a problem here, and it’s one that every software engineer and software manager must understand.

The relationship between software engineers and management is fraught with conflict. There are few industries where there is more tribal dislike between workers and management than in software, and the problem isn’t the people so much as the interaction of incentives and risks. Software itself (like any industry) generates a lot of undesirable (Type 2) work; but in software, there’s almost always a way of automating the bland work away– a hard, Type 1, sort of job. The danger of that is that the automation of undesirable work might take more time than simply completing it, while the engineer’s impulse (which is almost irresistible) is automate immediately and without regard to cost.

This provides two very different paths to completion: one that is low in variability but boring, the other being more fruitful but riskier. What goes wrong? Without diverging into another subtopic, management participates more fully in an employee’s downside than upside risks– if the engineer does great work, it reflects on that engineer; but if the engineer fails expensively, it reflects on the management– so managers tend to favor low-risk strategies for that reason alone. It’s not that software engineers or managers or bad people; the risks are just improperly aligned.

Solving this problem– aligning incentives and structuring companies to take advantage of opportunities for automation, which almost always improve the firm’s success in the long term– would require another essay.

Defensive rejection

Above, I’ve proposed that people hire others to do work in one of two cases: undesirable work, and work that the person doing the hiring can’t perform. There isn’t always such a clean-cut distinction. Most people don’t have the humility to recognize their limitations, and so they tend to overestimate their ability to perform work that they know little about. The extreme case of this is defensive rejection, in which a person denigrates a class of work as being menial, unimportant, or trivial to compensate for a lack of knowledge about it.

Many software engineers are going to recognize that the attitude of “the business” toward their work is often a case of defensive rejection, and that’s right. But we, as a group, are far from innocent on that front. We tend to take the same attitude toward marketing and business people. The truth is that the good ones are highly capable in ways that most of us are not; most of us just lack the basic competence to separate the good ones from the bad. When one lacks visibility into a field of work, one tends to associate all people who do it with the average competence of the group, which usually leads to an unflattering stereotype for any high position (because most people in it are, in fact, unqualified to hold it). That leads to the incorrect conclusion (also seen with politicians, of whom the average performance is poor) that “none of them are any good”. 

When defensive rejection is in play, the underlying truth is that the manager is hiring in type 1; the employee is brought on to do work that the manager can’t do for himself. Unfortunately, the manager’s insecurity and hubris generate a type-2 context of “I could do that stuff if I wanted to”. The subtext becomes that the work is bland, detail-oriented dreck that the manager is too important to learn. This is the most frustrating type of job to be in; one where the boss thinks he can do your job but actually can’t. It means you have to deal with unreasonable expectations despite low overall status and perceived value to him and to the company as a whole. That’s horrible, but it’s also freakishly common as far as scenarios go, and it leads to the engineer feeling set up to fail– asked to do impossible things, then treated poorly when inevitable failure occurs.

Apprentice systems

There’s one other scenario that doesn’t fit nicely into the Type 1 vs. 2 delineation: the apprentice (or protege) context. At first thought, apprenticeship might seem to be strictly Type 2, since most of the work that apprentices spend their time on is make-work that has ceased being interesting to superior craftsmen. However, apprentices bring a Type-1 function by being able to do one thing the master cannot: perpetuate the work (and, more importantly, the upkeep of a valued tradition or institution) through time. If you’re sixty years old, a twenty-year-old apprentice can continue the work forty years (on average) longer than you can.

Modern private-sector corporations don’t have much use for apprentice structures and guild cultures, because they no longer see that far into the future. No CEO gets job security by setting up a culture of mentorship that might yield excellence ten years down the road. In this next-quarter culture, apprentice systems have mostly been thrown overboard. Long-term vision is far out of style for most modern corporations.

That said, there’s a value in understanding this old-style system. Why? Because even managers are uncomfortable with the naked parasitism of Type-2 employment (e.g. “I’m just hiring you to do the crap I don’t want to do, while I fill my time with the career-building and fun work”) and often attempt to recast the role as an apprenticeship opportunity. That is, at least, how every subordinate job is presented; an opportunity to learn the skills necessary to get to the next step. There are varying degrees of earnestness in this– some managers truly see their reports as proteges, while others see them as mere subordinates.

In negotiation theory, this is sometimes called a standard: a promise that is understood not to be fully delivered (most people realize that most bosses just see their reports as repositories for undesirable work, and that the apprentice metaphor is mostly rhetorical) but that may still be cited in policy to get an arrangement more in accord with that standard than one might otherwise get (“appealing to the standard”). Even people in power are uncomfortable explicitly departing (“breaking the standard”) from something previously promised.

If you want to move from Type-2 to Type-1 employment (and, believe me, you should) then the first thing you have to do is get qualified for that kind of work; the best way to make sure your boss gives you appropriate work (to gain that qualification and validation) is to continually appeal to the standard of the master/apprentice relationship– and hope that your manager doesn’t have the audacity to break the standard.

Why is FTOE important?

It’s important to understand the Fundamental Theorem (and being trained as a mathematician, I know it’s not actually a theorem so much as an observation) of Employment, above, because people tend to discuss conceptions of “the job market” as if they were forces of nature. They’re not. A job exists because someone needs or wants another person to perform work, and the expensiveness of that generally means that one of two cases applies: the person doesn’t want to do that work, or the person cannot do that work. Regardless of the work itself, the social contexts that arise from those two subcategories could not be more different. It’s very important to know which one applies.

The advice that comes out of this is to find a way to qualify oneself for the Type 1 work. That’s harder than it looks. Becoming good at highly-skilled work is the first half of the battle, but there’s a social component that can’t be ignored. Software engineering is a prime example of that. The whole point of the bastardization of “object oriented programming” (which, by the way, has become the exact opposite of Alan Kay’s vision of it) that has grown up in the enterprise is to coerce software engineering into Type 2 commodity work. Having generating scads of low-quality, brittle code, it can be called a failure. Yet that mentality persists in the world of corporate software engineering, and it will be a while before the business starts to recognize software as Type 1 work.

While one is progressing through the validation process that is more drawn-out than building the skill set, I think there are two key strategic necessities. The first, again, is to appeal to the standard (as above) and re-cast any Type 2 social context in employment as a mentor/protege role. The second, and more importantly, is to always drive toward a Type 1 context. The question should be asked: “What am I here to deliver that no one else can?”