Cowen and Gross ask questions, 5/22
Tyler Cowen and Daniel Gross ask questions, and I'll give my answers
In a Conversation with Tyler, Daniel Gross throws out,
Another interesting one that I learned from a friend of mine is, do you have any good conspiracy theories that you’re liking lately? Which is interesting because it’s unusual, and I find a lot of really good, really productive people are constantly exploring on the fringe and frontiers of all ideas, so you end up with people that have odd theories.
My reaction would be: I’m not sure what constitutes a conspiracy. You know there is the saying that you should not assume a conspiracy when it could just be incompetence. And does it have to be my conspiracy theory? Or can it be someone else’s conspiracy theory that I buy into?
So I’d be one of those people who basically stonewall the question instead of answering it. I have unusual ideas; they’re just not conspiracy theories.
Later, Gross says,
If you were to try to really explain to a five-year-old at a very basic level, why aren’t there more SpaceX’s, I think it comes down to the right people don’t have the right jobs for human progress. Once you start viewing the world through this lens, it’s really hard to unsee it, at least for me.
Something to ponder. In some sense, the whole point of the Fantasy Intellectual Teams project was to develop a system to upgrade the status of better thinkers and downgrade the status of tribal thinkers. That is not the realm of business and engineering, but maybe we are seeing those realms adversely affected by the ruin taking place in the worlds of journalism, politics, and academia.
Another question, from Tyler:
It comes from Peter Thiel, I believe. It’s simply to ask the person, “How ambitious are you?”
My response is that I doubt that I am ambitious enough. When I was in high school, I had friends who liked to play poker. I ended up not liking it and after a few months I stopped playing. I didn’t enjoy it when I lost, of course. But I didn’t get that much enjoyment out of winning, either. I felt sorry for taking other’s money, and it was not such a thrill to win. To me, being ambitious is like playing poker. I don’t imagine getting enough psychological upside from winning. But then I look at famous successful people and feel a pang of regret, “Hey, maybe I could have done that if I had pushed harder.”
Another one from Tyler:
I like to talk to people about drama. If they’ve read Shakespeare, you can say, “Well, my hypothesis is that in Romeo and Juliet, Romeo and Juliet don’t actually love each other at all. Does the play still make sense?”
If anyone other than Tyler asked me that in an interview, my reaction would be “WTF?” But here I would say that the play still could make sense. They could be angry with their parents, and they use suicide to get back that them. Or in love with the idea of love. But most likely, they are teenage drama queens, who crave attention and significance. Maybe you could write a play in which Juliet scorns Romeo, and he becomes a mass killer.
And one from Gross:
I love asking people sometimes, “Out of what I see on your LinkedIn or your résumé, what are things you are trying to hide? And what do you wish you could feature more?”
I hate the whole concept of a “profile.” I’m glad I got married before the emergence of dating sites, so I never had to fill out a profile on one of those.
On my own web site, I really feature my Israeli dancing hobby. I am not trying to hide it on LinkedIn, but you sure won’t see it featured there.
I think that if you were to engage me about dancing, you might learn more about me than if you engaged me about economics or business or social theory. So you don’t really know about me by reading my profile.
Dancing has changed a lot over the years. In the late 1970s, the dances were really easy and for me it was mostly a way to meet girls. Over time, the dances have become much more challenging, and I have come to relish the challenge. Most people don’t, and so it has become narrower, deeper, older.
When COVID came, dancing went online. Dancers from different parts of the world bonded together. But a lot of casual dancers didn’t take to following dancing online, so many of them have dropped out. Now we’re left with the obsessive dancers. I look around and see a larger proportion of dancers who are much younger than I am, and much better.
Attendance at weekly sessions is way down. But attendance at three-day workshops is actually up. I think that what has happened is that dedicated dancers in out-of-the-way places have been able to get much better, thanks to the online dancing that has sprung up with COVID. So they are now good enough to attend the workshops, which tend to be too challenging for the casual dancer. The workshops also put you together for meals, so that there is more time to get to know one another.
This may have subtly influenced my Network-based University idea. Ordinary college is like the weekly dance sessions that are losing participants. The conferences that I propose instead are like the three-day workshops. And the intellectually curious students I envision are like the dedicated dancers, including those from out-of-the-way places.
I question the whole Cowen/Gross premise.
I think the Null Hypothesis for interviewing is as strong as it is for educational interventions.
When I was in graduate school in the early 90s, my Organizational Behavior course (taught by Bob Sutton of "No Asshole Rule" fame) covered the research on interviewing in great depth. After grinding through all the studies showing that unstructured interviews don't work very well in terms of predicting job performance, Sutton asked, "How many of you would hire or be hired without such an interview?" All the hands stayed down except mine and two others (in a class of roughly 50).
So I learned _two_ lessons: (1) unstructured interviews don't work and (2) people have trouble accepting that. I was also taking a class from Amos Tversky at the time and had internalized his famous saying that, "The human mind is a machine for jumping to conclusions." So I was pretty convinced that people are just built to fool themselves into thinking that interviews work. Also, as Robin Hanson might say, "Interviews aren't actually about evaluation, they're about status."
Then, when I started my existing company, we faced the problem of evaluating a lot of people in a short period of time. I revisited the literature. The definitive paper seemed to be:
The Validity and Utility of Selection Methods in Personnel Psychology: Practical and Theoretical Implications of 85 Years of Research Findings”
Adding an unstructured interview to a measure of general mental ability increased validity by 0.04. Simply counting the number of years of work experience increased it by 0.03. Reference checks by 0.06. All of these from a base of 0.51 for the GMA measure alone. From a time efficiency perspective, interviews seem pretty useless.
Now, you may be thinking, "But what if super smart guys like Tyler ask really special questions?" Well, Google used to ask really special interview questions and people seem to think that Googlers are super smart. In fact, I live a few miles from Google's headquarters and occasionally get invited to interesting statistics or machine learning talks. Twice, I've met PhDs who work in the HR department and study various aspects of personnel performance. They take this topic very seriously and scientifically.
So what did Google learn from trying to ask really special questions? They reported several years ago that the approach didn't work. They now ask much more typical procedural questions:
But you might think the type of talent Cowen and Gross are looking for are different. Well, sure. This time is always different. Perhaps they have a well designed study showing their techniques work? I haven't actually read their book... yet. But given the excerpts that Tyler is promoting, my prior is very low. I expect a lot of anecdotes about successful examples of talent they picked and how they did it. However, if they have well designed studies on their particular approach, I'd love the pointer so I can check them out now rather than whenever I get to the book.
As it happens, I'm actually in the same business as Gross. I have almost certainly made at least as many investments as he. Very likely more. My firm has made 1400 since I co founded it in 2012, about 2/3 of those with me as the primary contact (meaning that I'm the one primarily evaluating the company). This year alone, I'll be the primary contact on perhaps 150. YC is one of the few organizations in the world that has done more investments than my firm, but Gross was only there a few years and they have waaay more people than we do.
We spend essentially zero time trying to learn about founder talent through interviews. I mean, we know when they founded the company, so we just look at how much demonstrable progress they've made since then. That tells us far more about their true capability to make more progress in the near term than any of the techniques Tyler has promoted from his book so far. And if you think people can systematically predict anything performance-related about startups farther out than the near term, I'd refer you to Taleb. I'm having trouble thinking of a better example of "Extremistan" than startups!
I like Tyler. I've been reading MR since reading blogs became a thing. I've read most, if not all of his general audience books so far. I think Fast Grants is great and, in fact, our investment process has a lot of similarities. But I am very skeptical of this approach to screening for talent. It seems like exactly the type of thing your brain would think it was good at when in fact it wasn't. And the smarter you are, the better your brain would be at producing justifications.
I'd like to push back on "being ambitious is like playing poker" and how linking business success to poker. Poker is a zero-sum game. If you win, someone else loses. Business success doesn't have to be that way. An entrepreneur can succeed without someone else being a loser. For example, Edison's success benefited many but were there any proportionate losers?