Monthly Archives: March 2011

Stop writing about success and start writing about failure.

The internet, especially in the entrepreneurial blogosphere, seems to have an order of magnitude more people producing literature about success (i.e. “success crack”) than actually succeeding. Every day I see the peddlers of reckless optimism swarming Hacker News with dangerous naivete about entrepreneurial pursuits. Don’t get me wrong: startups and self-employment are great, but people should be aware of the risks and pitfalls, which too many people gloss over. This isn’t limited to startups; every sector of business has its own cottage industry of how-to manuals for breakout success, usually chock full of unrealistic promises (which, I guess, lends credence to their authors being successful in business, such promises being the currency of their world). Is this “fake it till you make it” syndrome on the part of the “crack” peddlers? I’m not so cynical as to suspect that. Blog posts and books about “success” are written by well-intended people who want to share insights they’ve had about life and about their own successes. The problem is that their insights are rarely very deep. You have to lose in order to get a sense of what’s really happening in the world.

I’ve designed games before, and when I play-test, I strongly prefer to lose. Why? No one likes losing, not even me (and I play so many board and card games that I ought to be used to it). When I lose at my own game, it’s even more harsh. But it’s the (very mild) embarrassment and emotional unpleasantness associated with losing that gives me insight into design flaws that I would overlook as a happy-go-lucky, full-of-himself winner. For a game designer, it’s a blessing to lose. If I feel like I deserved to lose, I know the rules that contributed to my loss are good. If I lose because of a bad rule, it’s a double-loss (I lost the game, and my rule sucks) but the “bug” in my design gets squashed before the next release. Every game is fun for the winning player, but if it’s not fun for the losing player– or if not “fun”, at least enticing enough to make her want to improve her skill and become better– it’s a mediocre game. Thus, losing is a boon for the insight it provides to a game’s designer. It’s the only way the designer can develop certain insights into the character of the game. The same’s true of life.

A very small set of people, just on account of the planet’s immense size, have untarnished track records of success and never develop the desire to look deeper into the processes that led to their outcomes. With six billion people in the world, the existence of champion coin-flippers is a statistical guarantee. Many people desperately want to be like those perennial winners, which is why such peoples’ optimism is so appealing, even inspiring, to others. Far more people than that (in fact, almost everyone, including most of the “success crack” vendors) get a fair mix of failures and successes. The problem is that failures are embarrassing and under-reported, while the successes are magnified to outlandish proportions. In 1999, at the height of the technology boom when “everyone” was getting rich, how many technology companies actually did IPOs? 5,000? 100,000? Two in every garage? Nope. A few hundred, with the precise number varying depending on how one defines “technology company” but uncontroversially under 1,000. Also, many recent years had less than 100.

Success crack is harmful, because it leads both to ill-considered efforts and too-early discouragement. It makes success look easy, but not in the conventional sense, because aside from Tim Ferriss, few of its peddlers actually argue that their success comes without hard work. The problem with success crack is that it seems to believe “work hard” and “work smart” are enough, as if being intelligent and putting in 10 hours a day, six days per week, suffice to lead to break-out success. That’s not true. People have to prepare for adversity, uncertainty, discouragement, and a high likelihood that, even if they do everything right, they’ll fail. These dangers are virtually guaranteed to a person undertaking anything interesting. That’s not a pleasant thing to hear, but it’s reality.

One observation I’ll make is that, when the locus of control is internal, one generally learns more from one’s successes than from one’s failures. An example is music practice: playing an instrument incorrectly is damaging to one’s long-term performance, because it reinforces bad habits. Playing it correctly, and experiencing the “click” when it sounds perfect, is when learning occurs. The same pattern I noticed in high school with contest math (e.g. AMC, USAMO): I would learn more when I solved a problem, even if I couldn’t solve it within the alloted time or made a mistake and got the wrong answer, than when I failed to solve it and had to read the solution. In these arenas, success teaches more than failure, and consequently, the best thing one can do when one wants to become better at the craft is to find the most successful people and learn from them.

When the locus of control is largely external, such as in most workplaces where one’s success or failure is largely a function of how one’s work and ability are perceived, not what they actually are, the opposite becomes true. More is learned through failure than through success, as those who succeed rarely peer into a system’s dysfunctions and discover the pitfalls. This is why, whenever I take a new job, I always make sure to quietly befriend the person at the bottom of the social hierarchy. This is only mildly motivated by an altruistic sense of wanting to help the omega pup, and there’s a purely selfish reason for my doing this: in terms of office politics, he actually knows what’s going on. And if you befriend him, he’ll tell you. His report may be biased and bitter, if not unduly negative, but it’s also the most insightful and, if not always accurate, the most precise. Apply appropriate filters, but listen to what he has to say. In any organization, the least popular person is the most knowledgeable about its character. Learn from him.

Most of the notions of achievement we develop in childhood come from a time in which success is largely objective and one’s success is derived from an internal locus of control: music practice, athletics, contest math. Even in schools, with their often-decried (and greatly exaggerated, since even high schools are utopian compared to the average corporate workplace) emphasis on obedience at the expense of creativity, a student’s success is primarily a function of intellectual talent and his or her work ethic. Deadlines are well-tested, people are working on similar projects, and people in authority (e.g. teachers) are required to grade fairly and can lose their jobs if they don’t. There are, of course, some students who get bad grades because they run afoul of professors’ idiosyncratic prejudices but, by far, the most common cause of bad grades (I say this having earned a few, and having deserved almost all of them) is mediocre work. Therefore, in childhood and adolescence, learning from the most successful is an excellent strategy in order to become better.

However, the “real world” is far more interdependent and capricious, and it’s nearly impossible to succeed without convincing others that one deserves the resources necessary to try– and competence and the ability to sell oneself to others rarely occur in the same person. This is what no one wants to tell bright-eyed college students: that they’re about to enter a world where their success is likely to depend, in a serious way, on being given resources and opportunity by others, and that working hard and being smart are only marginally important. In fact, at the overkill levels seen in the best students at elite schools, intelligence and a strong work ethic can easily become social liabilities. Because the locus of control is so often external in the “real world”, peoples’ failures have more to teach us than their successes.

The fundamental problem with success crack is that, while it makes for engaging light reading, it’s written either by those who know the least about the world, having never been down in the muck, or (more commonly) by those who have suffered, but still wish to mimic the wide-eyed optimism of those who haven’t– it’s somewhat of a status symbol to believe, as an extremely fortunate person might, the world to be better than it actually is– and therefore censor out the unpleasant but important details they know but have expelled from consideration. Thus, we have a slew of terrible advice floating about such as “Do what you love, and the money will follow” that is accepted because it seems appealing in spite of being utterly untrue. Like some charismatic religions, it sounds pretty, and half of that is because the author is trying to convince him- or herself that he or she actually believes it: that desire to believe the incredible and wrong is a powerful force capable of motivating some of the world’s beautiful, but also utterly untrue, prose.

In this light, I hope to see more attention given to pitfalls and patterns to avoid, so that true learning may occur, and far less in the way of vague, feel-good directives about “success”.

Follow-up on rich kids beating the career game.

On January 30, I wrote this essay about the advantages held by those from wealthy backgrounds in the supposedly meritocratic career game that determines who among the rising generation will lead. It was posted to Hacker News on March 7, and has attracted a great deal of attention and criticism. I wish to respond to the most thoughtful critiques.

1. Personal gripes, sour grapes, all that jazz.

First, let me handle one of the less thoughtful and interesting (but still marginally relevant) critiques: the claim that my essay is rooted in a personal gripe. To answer that: no, not really. I’m not part of the wealthiest 0.1 percent that can be considered truly elite in this country, but my background is more than comfortable, and my level of talent is sufficient that I’ll probably never be long-term unemployed, at least not in the severe and unfavorable form that unemployment takes for those who are actually poor. All I’m going to say is that I’m closer to the spoiled rich kid with the unfair advantages than the striver with six-figure student loans. To what minimal extent my dislike of American society is rooted in personal issues, it speaks more about my tendency toward anxious worry than about my actual state of affairs. Socioeconomic status is difficult to quantify, involving more than just money, but I’d estimate that I’m from a point between the 95th and 98th percentile in the United States– and, for the record, I still believe that even I would be better off in a fairer system, due to enormous cultural benefits of a more just society. That’s all I care to say about where I come from; it’s really not that relevant.

This post probably began in my mind when I read an article (ca. 2006) about the fortunes of Ph.D. students of differing backgrounds. For those who entered academia, the correlation between background and pay was minimal, but for those who went into industry, those from wealthy backgrounds invariably ended up at the top. (Since we’re talking about people with doctorate degrees, we’ve already eliminated degenerate party-animal rich kids from the discussion.) This I found perverse: one would hope that, out of the pool of people hard-working and talented enough to get quantitative doctorates, any socioeconomic influence would be eliminated. Not so. Honestly, I didn’t believe the conclusions of the article, until I observed the experiences of my friends in various corners of the working world.

In large-firm law (“biglaw”) one’s chances at partnership are determined not by the quality of one’s work, one’s law school grades, or even the prestige of one’s law school, but by the prestige of one’s undergraduate college and, far more so, the status of one’s prep school. (As “too many” smart middle-class students have been allowed into elite colleges these days, ever since that “Jewish-Marxist conspiracy” known as the SAT, the upper class is now using prep school to size people up.)

The closest I’ve been, personally, to this matter is when I observed the ignominious firing of a friend of mine. Though I didn’t work with him at the time, we share enough of a social circle to make it clear what happened. As he was from a middle-class background at a predominantly upper-middle- to upper-class hedge fund, he was placed at the bottom of the heap in terms of project allocation, getting assigned the work that no one else wanted to do, because of where he came from and the assumption that he had no better options. When this pattern reached beyond disfavor into managerial fuckup territory (a project he suggested was ignored, then given to someone less qualified a year later) he asked his boss for an explanation. At the next performance review, he was fired: people like him don’t get to speak up about project allocation.

Realizing with age that this sort of injustice is systemic, and that a number of people had experiences just like his, has led me to believe that the overthrow of the corporate system is necessary and good.

2. Anti-corporatism is not anti-capitalism

As a libertarian socialist, I believe that government should provide a basic income (of about half the per-capita GDP) and safety net in order to eliminate poverty. I would argue that the basic income should be provided to all people, so that a person’s income is a monotonic function of wages earned. (That is, there isn’t the “welfare valley” in which a person’s income drops when going from welfare to entry-level work.) In the United States, conservatives believe that poverty is a “bitter medicine” that impels people toward more moral behavior. They’re wrong. Poverty is a cancer that eats a society from the inside out. That said, I believe that once a basic income is established and being jobless is no longer the life-crushing horror is is now, government can step out of the way on many issues. There’s no need for a minimum wage, for example, when basic income is already provided. (In truth, the minimum wage is just an extremely clumsy and minimal basic income, but with the burden of payment placed on low-end employers, the result being that they’re discouraged from hiring at the low end at all, creating excess unemployment.)

In a libertarian socialist system, the right of free enterprise is recognized as long as it does not impinge on others’ rights, including a fair society and a clean environment. Now that being fired is an inconvenience but not a disaster, companies can be allowed to hire and fire at will. There’s a floor on economic well-being but no ceiling, as I honestly can’t see a good reason why the genuinely most productive people shouldn’t be given huge rewards. What I don’t like is seeing a class of generally untalented and ineffectual people given huge rewards just because of where they were born, and I especially don’t like the fact that these enormous rewards enable their arrogance and lead them to destroy everything, as we observed in the financial meltdown of 2008.

I believe in maximizing freedom, and economic freedom (the freedom from poverty and corporate authority, but also the right of free enterprise) is critically important. Work needs to get done, but peoples’ intrinsic desires to work (noting that there will still be a free labor market) will take care of that. The strongest argument against a welfare state hinges on the observation that some people (maybe 10 to 20 percent) have no drive to work, and that a welfare state establishes a permanent class of well-fed, lazy, parasitic people at the bottom of society. The obvious counterpoint is the observed and indisputable fact that corporate capitalism creates a permanent class of lazy, useless, and parasitic people at the top of society, and that’s far more unhealthy.

Corporate capitalism, which I desire to destroy, is neither capitalism nor socialism. Rather, it’s a system designed to provide the best of both systems for a small elite (about 0.5%) while leaving the worst of both worlds for the rest.

What does this have to do with rich kids in the workplace? My contention is that the advantage held by the rich is largely a consequence of their ability to live freely. They own, rather than renting, their lives. This gives them a sense of place and purpose that energizes them, enabling them to make work both a productive and fulfilling experience, rather than a burden that will sap their energy, for someone else’s benefit, until they are too old to be useful. My desire, with regard to libertarian socialism, is to make this freedom as common as water. I don’t wish to end work, but to liberate it. Imagine the world we’d have if people worked on what they wanted to work on instead of what they had to do to get by: people would have a lot more passion and creative energy. (As for the “grunt jobs”, they’d still be done as people would pay others to do them, but the conditions the workers faced would be ones of respect and appreciation for their time, rather than exploitation.)

3. Not all rich kids succeed– still not a counterexample.

A counterargument I often hear to the point I’ve made here is that a lot of rich kids are shiftless, indolent, or socially ungraceful and therefore do not succeed in any kind of workplace environment. This is, obviously, true. Dumb and lazy rich kids end up with embarrassing, depressing, and rather pointless lives just like pretty much everyone else. I’m not talking about the dumb and lazy people; I have nothing against them, but I don’t really care about them either. I’m talking about the hard-working, talented people who should be (whether they come from rich or poor backgrounds) the next generation’s leaders. If they are rich, it is impossible for them not to be drawn into the ruling class even if their work ethic is just average; if they are poor or middle-class, it’s highly unlikely.

Rich kids know that they have a near-100% chance of getting appropriate recognition. They don’t even need to play office politics; those details “work themselves out”. If they take demanding jobs, their work ethic is never questioned because it’s known that they could choose less demanding jobs. Even though the rich are almost never given higher salaries or shorter hours than their middle-class counterparts, but they almost always get the best projects . A very wealthy friend of mine who entered investment banking explained it this way: he still had to work 90-hour weeks, and wasn’t paid more than any other analyst, but the projects he got were often VP-level in quality, and Managing Directors took an active interest in whether he felt he was getting appropriate work.

4. “Just go start a business”

Paul Fussell wrote a book called Class in which he insightfully eviscerated every social class, and his finishing chapter, “The X Way Out”, described a “Category X” of people whose intelligence and culture enabled them, whether poor or rich or (as most of them were) upper-middle-class, to transcend social class and live “outside of the system”. This highly-regarded set of people was the namesake for “Generation X”. Everyone wants to believe they’re part of category X, but few people actually are. “X” is great, but until we eradicate poverty and economic exigency as if they were a plague, it won’t be the reality for most of the world.

The “start a business” advice is analogous to “become category X”. I’m not against startups. Startups are awesome. When we do implement libertarian socialism, we need to make ourselves absolutely sure that we have a society in which new businesses can flourish, because they are where innovation comes from. To argue, however, that startups are a silver bullet to the world’s class problems is painfully naive. First, only a small percentage of the population can afford to work for an extended period of time for no or low salary, with no guarantee of an eventual payoff and, in fact, a high failure rate. Second, fundraising and public relations are all about connections. It’s almost certainly easier to start a business from the grass roots in 2011 than it was in 1975, but startups remain a game that only the privileged can play. Rent and food, well-off people like myself often forget, do not magically materialize when needed.

The venture capital angle probably deserves its own post. Raising money, even for the best startups, is an execrable fucking nightmare. Often three-person startups will have one person working full-time on the fundraising game, because it really is a full-time job. It’s not something that takes care of itself like in the Hollywood portrayal of startup life. It’s rare that a startup can get decent terms from a venture capitalist without creating simultaneous interest in a large number of investors at once– call it the “herd mentality” if in a pejorative mood. Business is all about leverage, and even a great startup may face terms like participating preferred and multiple liquidation preferences (if the words “multiple liquidation preferences” didn’t evoke nausea, hatred, and a visceral desire to stab someone, they should) if a venture capitalist thinks that, despite its merits or potential, no other VC will fund it. How, exactly, is a young entrepreneur going to create simultaneous interest without deep social connections into the venture capital world? He can’t.

The best strategy for an aspiring entrepreneur would be to work as a leading venture capitalist’s protege out of school, being placed in portfolio companies (preferably in technical, rather than managerial, roles, especially early on) while maintaining the VC relationship, and then to found companies once experienced and well-connected. This career, however, is only available to the very rich.

5. Exceptions don’t prove the rule, but they are exceptions.

Exceptions to my claims exist. Mark Zuckerberg came from a “merely” upper-middle-class background, went to Harvard but did not fit in with final-club brats, and nonetheless managed to put his cool project in front of the Harvard Crimson. His luck was enormous at times, but he succeeded on his own merits and built a successful company, though not a true “rich kid”. Fair. It, of course, does happen on occasion. And knock-out successes are more likely to come from the fringes of the elite (Gates, Jobs, Zuckerberg) than the elite’s risk-averse, social-climbing, conservative core. No question there. I am not going to claim that such exceptions “prove the rule” because that would be nonsense; an exception is cause to doubt a rule, not proof of it. I will claim that they are outliers; I think this much is obvious.

People love to talk about social mobility. We have a little bit of that in the United States, but it’s more like a social Brownian motion. People drift a little bit from where they start, creating a pattern of mobility (up, down, or up-and-down) across generations that is often mostly out of their control. Once every 100,000 years or so per person– which means it’s guaranteed to happen for some, given the gigantic number of people in this society– there’s a sudden jump in the upward (or downward) direction, landing in great wealth. It doesn’t never happen. It is, however, quite rare, and I wouldn’t bet my life on it, which is what corporate denizens (sacrificing their quality of life now, for the promise of enormous wealth in the future) are literally doing.

6. Solutions to this problem exist, but only radical ones.

The injustice I have described is nowhere close to being the most severe crime of corporate capitalism. I doubt it even cracks the top 10. Compared to American health insurance, which is a 9/11 every 24 days and therefore just cause for aggressive retribution, it’s almost too minor an injustice to even mention it. The American middle class are, by world standards, privileged people and the fact that they will get less than they deserve, while still living in moderate comfort, may not garner much sympathy. Still, it’s critically important to raise this issue, because so little attention is given to it that even many intelligent people buy into the delusion that an American “meritocracy” exists.

The American middle class, despite its comfort, is bitter and anxious, yet deeply desirous of change. They will, for better or worse, play a major role in the ongoing worldwide revolution against the tyrants of the dark ages, from whose dominion we are struggling to emerge. The Great Lie that the corporate elite has put out– that corporate capitalism is a meritocracy and that it’s possible for people of talent and conscience can “work within the system”, rise to power, and rule justly– has led people to accept a morally unacceptable status quo.

There are two reforms the immediate future will require of us. The first involves energy: we’ll need to move away from fossil fuels due both to declining resources and environmental concerns. The second revolves around work. We have to fix Work. As technological advances render human labor less necessary, the age in which average people can reliably sell labor to markets at a fair price is going to end. Don’t look for it to come back. It never will. One year of unpaid education is already required to secure two years of paid work, and that ratio is only going to get steeper as technology advances and what decent work remains becomes more specialized. The bounty brought into society by the next 100 years of technical advances will be immense, but if the gains aren’t distributed fairly, a lot of people will be very miserable.

In the mid-1920s, improvements in agricultural technology, especially in the Midwestern United States, brought commodity prices to low levels and triggered a spell of rural poverty. It might have seemed like a problem “out there” to a Manhattanite in 1928, but two years later the poverty had spread far enough to tank the stock market and seep into the cities. By 1933, even many wealthy people faced utter ruin the Depression. As I’ve argued, poverty is not “moral medicine” but a cancer that destroys society. Six years of the most horrendous and idiotic activity humanity has ever conceived– war– transpired before the Depression ended.

What happened to agricultural commodities in the 1920s is about to happen to nearly all human labor. If we fail to graduate, now, to a rational society, the calamity awaiting us is far greater.

On the other hand, if we seize the opportunity to build a rational and fair society, judiciously but aggressively clearing away cruft, legacy and inheritance in favor of something better, we can eradicate many of the problems I’ve exposed in the last few thousand words.

In which I break my own reasonable policy against “meta” posts

I generally dislike “meta” posts that bloggers tend to write about their own blogs, themselves, or their writing processes, but I’m going to write a short one in the wake of the publicity this essay has received following its appearance on Hacker News. I do intend a follow-up piece to it, probably later this week, since it has sparked a lot of interesting discussion and criticism.

First blog note: I just turned off comment moderation, as I felt it was an impediment to discussion. A lot of posts sat in the dark for a few hours when they should have been out in the open, generating more discussion. My blog’s traffic level used to be low enough that the cost imposed by this delay was minimal, but I found out (around 5:30 this afternoon) that I had 40 new comments. I regret that this blocked hours of discussion and cross-pollination.

Second, I’ll use my 15 minutes of fame to plug something cool that I’ve worked on. I’ve invented two card games, Balls and Ambition. Old rules for Balls can be found here. The next release of Balls (scoring improvements, simplifications) will occur around March 20, 2011. I’d like to do a final release of Ambition this spring, but I don’t always have the time for proper playtesting, and that’s the major bottleneck to the design process.