Superlinear Returns(paulgraham.com)
paulgraham.com
Superlinear Returns
http://paulgraham.com/superlinear.html
167 comments
Hyper-pedantic note: I think "sigmoid" is the term that describes these curves in the full generality. https://en.wikipedia.org/wiki/Sigmoid_function
Could you please elaborate on the quadratic curves in real life?
Suppose the value of a network to an individual user is proportional to the number of users. Then the total value of the network, summed across all its users, is proportional to the square of the number of users.
See also https://en.wikipedia.org/wiki/Network_effect .
See also https://en.wikipedia.org/wiki/Network_effect .
You see it in processes where something spreads to its vicinity.
This isn't really a natural example, but if you draw a square on a sheet of graphing paper. Next iteration you fill in each adjacent square. Repeat this process until you get tired of it. The radius increases linearly at a constant rate, but the area, the number of squares, as a function of each iteration, is growing quadratically.
Take a circular forest in a place where there are no fires and no logging. Its rate of growth is proportional to its circumference, which is proportional to its radius. Its area as a function of time is a quadratic function.
This isn't really a natural example, but if you draw a square on a sheet of graphing paper. Next iteration you fill in each adjacent square. Repeat this process until you get tired of it. The radius increases linearly at a constant rate, but the area, the number of squares, as a function of each iteration, is growing quadratically.
Take a circular forest in a place where there are no fires and no logging. Its rate of growth is proportional to its circumference, which is proportional to its radius. Its area as a function of time is a quadratic function.
S-curves are basically an approximation for a step function! Interestingly it brings together the two ideas in the article
Of the two sources of superlinear returns here I find step functions the easier one to steer my life happily by. Graduating college is a step function: You go from 0 sheepskin effect to 1 sheepskin effect, and all future employment barriers are made significantly easier to scale. SOC2 compliance is a step that lets you sell 1/10 the feature set to 10 times the enterprises at 100 times the subscription price. An exponential return is the fundamental driver, for sure, but the way you get there is often by hurtling over a sequence of steps.
One huge example for me: Marriage. I went from a long time with 0 wives, and now I have 1 and everything is much much better. What a step! If this is what PG means by a superlinear return sign me up!
One huge example for me: Marriage. I went from a long time with 0 wives, and now I have 1 and everything is much much better. What a step! If this is what PG means by a superlinear return sign me up!
Just imagine how great things would be with two wives.
These returns may not be superlinear
Can you say more about the impact of SOC2 certifications? We’ve been selling to enterprises for years without any certifications, but with long and intricate security questionnaires needing to be filled out. Does that go away if you have a certification? Our sector isn’t very regulated (video games industry), but the question for SOC2 does come up regularly - however never as a blocker.
Only in general terms I'm afraid. You're right that it varies by industry: My experience is coming out of banking tech and medical software, where the industries are much more heavily regulated. At my first job out of college I had to do all of my development work 3 VMs deep on a separate laptop partly just so I could comply with all of them -- but we also made total bank because we were the only game in town.
I see, thanks!
cries in post audit
So, they will be happy you have it, but will make you do all the questionnaires anyway.
So, they will be happy you have it, but will make you do all the questionnaires anyway.
Great points. One thing that is worth underlying, as unpopular a subject as it may be with this crowd, is the impact structural disadvantages in our society have.
It comes down in many ways to, "how many turns at bat do you get?" As a parent, I think providing my kids with as many turns at bat is a better heuristic than what college they get into, etc.
To Paul's point, there are actually ways to "earn" more times at bat — learning to read, or to draw, or to code. In America, that's something that most parents can provide — but worth emphasizing that even there, structural disadvantages come into play.
This is why I support a universal basic income and disagree with the idea that everyone would become lazy and depressed. I actually think giving people more turns at bat wouldn't just set them up for potential success — it also would benefit society. As Paul points out — there are likely to be discoveries from unexpected people and places.
There are a lot of brilliant people in the world, and they don't all look the way you'd expect, or come from places you'd expect. But in a world where institutions and organizations are less predictive of success, this diversity is worth keeping in mind.
Great essay, but I'd add one thing that I think Paul has actually touched on before and is somewhat implicit here — it's often surprising just how little one needs to rise above average to hit that step function. Consistency, consistency, consistency.
It comes down in many ways to, "how many turns at bat do you get?" As a parent, I think providing my kids with as many turns at bat is a better heuristic than what college they get into, etc.
To Paul's point, there are actually ways to "earn" more times at bat — learning to read, or to draw, or to code. In America, that's something that most parents can provide — but worth emphasizing that even there, structural disadvantages come into play.
This is why I support a universal basic income and disagree with the idea that everyone would become lazy and depressed. I actually think giving people more turns at bat wouldn't just set them up for potential success — it also would benefit society. As Paul points out — there are likely to be discoveries from unexpected people and places.
There are a lot of brilliant people in the world, and they don't all look the way you'd expect, or come from places you'd expect. But in a world where institutions and organizations are less predictive of success, this diversity is worth keeping in mind.
Great essay, but I'd add one thing that I think Paul has actually touched on before and is somewhat implicit here — it's often surprising just how little one needs to rise above average to hit that step function. Consistency, consistency, consistency.
Exponential growth tends to work at the beginning of "something". Since the world is finite, at some point new somethings need to be created or discovered for an exponential growth, quite possibly eating the last thing that was exponentially growing at one point. So part of the trick is to be in on the exponential growth phase and sell off / reduce exposure to the thing when that tapers off.
Yup, and that's why I'd consider this a "101" essay. The larger exponential-growth trends (e.g. Moore's Law) practically always have a microstructure with many sigmoid curves. After you've encountered your first exponential, the "201" lesson about saturation becomes important.
And then generally all the smaller S-curves build on each other to make a curve that looks exponential for much longer, but ultimately turns out to be a sigmoid as well. One thing I muse on occasionally is whether the same will ultimately be true for technological progress as a whole.
Just like how bacteria grow exponentially (as mentioned in the article), but are constrained by their petri dish or host.
As they say... every exponential is a sigmoid in reality.
That's when you collect your check, step off the train, and start anew. Companies can do it too if they invest in new initiatives.
There are no practical physical limits to wealth creation since ideas can be monetized with only energy expenditure.
There are no practical physical limits to wealth creation since ideas can be monetized with only energy expenditure.
> There are no practical physical limits to wealth creation since ideas can be monetized with only energy expenditure.
This statement is internally inconsistent.
This statement is internally inconsistent.
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Until someone finds drastically new physics the fastest possible expansion is cubic:
Imagine a bubble expanding at the speed of light bringing everything inside it under complete optimal control.
Imagine a bubble expanding at the speed of light bringing everything inside it under complete optimal control.
> Imagine a bubble expanding at the speed of light bringing everything inside it under complete optimal control.
Here's a sci-fi plot idea: a bubble expanding at near-lightspeed is bringing everything inside it under complete optimal control. Lagging behind it a couple years is another bubble, also expanding at near-lightspeed - that of false vacuum collapse. Will the zone of optimal control find a way to stop the nothingness that comes just behind it from consuming the universe?
Here's a sci-fi plot idea: a bubble expanding at near-lightspeed is bringing everything inside it under complete optimal control. Lagging behind it a couple years is another bubble, also expanding at near-lightspeed - that of false vacuum collapse. Will the zone of optimal control find a way to stop the nothingness that comes just behind it from consuming the universe?
Yep, that's exactly the problem I have with coming up with ideas for a startup of my own:
Everything I can think of is already done better than I ever could.
Here's a universe-eating bubble for you: https://en.wikipedia.org/wiki/Schild%27s_Ladder
Here's a universe-eating bubble for you: https://en.wikipedia.org/wiki/Schild%27s_Ladder
Ouch. At least I came up with an idea worthy of Greg Egan himself, so that's some consolation.
>> Since the world is finite
Technically speaking, the world is not finite.
Technically speaking, the world is not finite.
When you have new tech that will “capture the light cone of all future value” [1] you’ll attract a herd of followers, and that’s where the outsized ROI comes from. The gain is from collecting and arbitraging disciples. The product doesn’t necessarily need to lead those disciples to a better place.
[1] sama on chatgpt https://techcrunch.com/2019/05/18/sam-altmans-leap-of-faith/...
[1] sama on chatgpt https://techcrunch.com/2019/05/18/sam-altmans-leap-of-faith/...
What exactly is a "light cone of value"? Is it money or something else?
> Is it money or something else?
Some people might argue that it is a hollow phrase to make OpenAI sound more important than it is. ;-)
On the other hand: since we are, of course, nearing the AI singularity, we are in the situation where we cannot even predict what will have value in the coming future - will it be money, or will it be some completely alien concept that no one today can even imagine? Luckily, OpenAI is already prepared for this kind of future by its capability to capture the light cone of value.
*sarc*
Some people might argue that it is a hollow phrase to make OpenAI sound more important than it is. ;-)
On the other hand: since we are, of course, nearing the AI singularity, we are in the situation where we cannot even predict what will have value in the coming future - will it be money, or will it be some completely alien concept that no one today can even imagine? Luckily, OpenAI is already prepared for this kind of future by its capability to capture the light cone of value.
*sarc*
That's actually a good explanation. Every company should make that their mission.
It's any value that's created at some point, and any value that will ever be created from that point onwards. A light cone starts at a point in space and time, and covers everything in space-time that point could causally interact with; speed of light is the speed of causality, hence "light cone".
Definition of "value" is the usual fuzzy one - both money/wealth and all kinds of things humans value that are not expressed in dollars.
Definition of "value" is the usual fuzzy one - both money/wealth and all kinds of things humans value that are not expressed in dollars.
Firefox (firefox-esr on Debian stable / Bookworm, latest package version) gives me for the first time:
Anybody else got some similar error?
Warning: Potential Security Risk Ahead
Firefox detected a potential security threat and did not continue to paulgraham.com.
Anybody else got some similar error?
The fact that this site doesn't serve HTTPS(correctly) remains a head-scratcher for me.
The certificate isn't valid for paulgraham.com, hence the error. It is valid for *.store.turbify.com, among other SANs, which seems to indicate that the site is hosted by Yahoo[0] and has HTTPS misconfigured.
[0]: https://login.yahoosmallbusiness.com
The certificate isn't valid for paulgraham.com, hence the error. It is valid for *.store.turbify.com, among other SANs, which seems to indicate that the site is hosted by Yahoo[0] and has HTTPS misconfigured.
[0]: https://login.yahoosmallbusiness.com
In the 90s Paul Graham was one of the creators of Viaweb, which Yahoo brought and became Yahoo Store. Perhaps there's a link?
The link is http. I assume there is no hsts, so i think the more interesting question is why firefox would load it over https?
Yeah it's weird: I've got my Firefox configured to never load HTTP sites but I'm too sure why it then tries to load the HTTPS one when a HTTP URL is given.
Yes, same with HTTPS Everywhere in Chrome.
Paul is "not wrong"[1], but he overlooks that all of this is only the way it is due to a variety of (well guarded) social conventions (as opposed to some immutable nature of reality, as he implies)...but most every defense has holes.
[1]https://www.urbandictionary.com/define.php?term=you%27re%20n...
[1]https://www.urbandictionary.com/define.php?term=you%27re%20n...
“overlooks” doesn't seem right to me. He states within the first few paragraphs:
> It's obviously true that the returns for performance are superlinear in business. Some think this is a flaw of capitalism, and that if we changed the rules it would stop being true. But superlinear returns for performance are a feature of the world, not an artifact of rules we've invented.
You say “conventions” rather than “capitalism” here, but without more details it seems like you're targeting substantially the same distinction re social determination. So it sounds more like you disagree with him about that statement than that he just didn't take it into account.
> It's obviously true that the returns for performance are superlinear in business. Some think this is a flaw of capitalism, and that if we changed the rules it would stop being true. But superlinear returns for performance are a feature of the world, not an artifact of rules we've invented.
You say “conventions” rather than “capitalism” here, but without more details it seems like you're targeting substantially the same distinction re social determination. So it sounds more like you disagree with him about that statement than that he just didn't take it into account.
Any claim that superlinear returns for performance are a feature of the world and not of some rule set really needs to come with some strong supporting evidence.
“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”
― Archimedes
Because everything in our history shows humans will exploit (i.e. fully utilize) leverage wherever they find it: labour, capital, technology, AI.
Because everything in our history shows humans will exploit (i.e. fully utilize) leverage wherever they find it: labour, capital, technology, AI.
I don't think history shows that at all: In ancient Greece people did not go and exploit steam power beyond toy applications, for example.
Because everything in our history shows humans will hunt or forage for food when hungry.
> I don't think history shows that at all: In ancient Greece people fasted for weeks on end, for example.
> I don't think history shows that at all: In ancient Greece people fasted for weeks on end, for example.
Those folk in Greece playing around with steam power weren't going hungry. The claim was people exploit levers when they find them, I pointed to a situation were people weren't.
So in the situation in ancient Greece, if the situation was such that superlinear returns from steam power wasn't interesting, there is already a situation where social constructs stop that "law of nature".
And even if, hypothetically, humans were always exploiting levers, still need to show that superlinear returns are a feature of nature and cannot be blocked by any social construct (as they are not the results of rules).
By the way, even your food hunting thing is incorrect as such, as humans are known to willingly starve themselves to death.
The problem with broad and sweeping claims is, that they are easily debunked unless they are very carefully researched.
So in the situation in ancient Greece, if the situation was such that superlinear returns from steam power wasn't interesting, there is already a situation where social constructs stop that "law of nature".
And even if, hypothetically, humans were always exploiting levers, still need to show that superlinear returns are a feature of nature and cannot be blocked by any social construct (as they are not the results of rules).
By the way, even your food hunting thing is incorrect as such, as humans are known to willingly starve themselves to death.
The problem with broad and sweeping claims is, that they are easily debunked unless they are very carefully researched.
If there's money to be made. If not, not so much.
That's a fantastic quote though!
That's a fantastic quote though!
Did you see the unconventional events in the Middle East in the last few weeks? That demonstrates that while Paul may be usually correct, what he's describing is not fundamental.
The people running the show are well aware of such things and have them under control though so I wouldn't expect anything to change wrt distribution of fruits of labor in our part of the world...but the potential is always there.
The people running the show are well aware of such things and have them under control though so I wouldn't expect anything to change wrt distribution of fruits of labor in our part of the world...but the potential is always there.
I can tell by the title what it's all about. Paul's essays are always like this.
Yes. All are about how smart PG is, and how you'll make a lot of money if you work as he did.
Also everything should be a startup working towards a VC exit.
Also everything should be a startup working towards a VC exit.
His advice in the last 20 years worked for plenty of us. How about your advice?
Why attack someone for an opinion? I agree that pure cynicism is toxic online, and merely pointing out flaws without solutions can be worse than useless, but that message was not this.
I read it as a warning that PG skews his arguments to prove some narrow points and you should be careful when applying them to your life, so you don't waste years chasing improbable goals. Plenty failed start-ups exemplify this.
I read it as a warning that PG skews his arguments to prove some narrow points and you should be careful when applying them to your life, so you don't waste years chasing improbable goals. Plenty failed start-ups exemplify this.
GP has a fair counterpoint. Yes, PG, like every pundit, is biased. Yes, many of us here read his essays in our younger, more naive years, and it took time to learn how they're not as seminal as we thought. But yes, pointing that out is also a meme at this point; it starts to feel like a hash-table dismissal[0], which is not very interesting or useful.
--
[0] - 'dang described it long ago as behaving as if there was a great hash table in the sky, mapping a person's name to the simplest and most well-known fault of them, and as if commenters were somehow obliged to dereference that hash table every time some person's name is mentioned.
--
[0] - 'dang described it long ago as behaving as if there was a great hash table in the sky, mapping a person's name to the simplest and most well-known fault of them, and as if commenters were somehow obliged to dereference that hash table every time some person's name is mentioned.
The hash-table response is a good one -- you're right.
But I still interpret it as debiasing tool for those that aren't very familiar to PG's writing, so it's not really useless. After all, there must still be new HN users all the time, for which some things are worth repeating (just not too often).
But I still interpret it as debiasing tool for those that aren't very familiar to PG's writing, so it's not really useless. After all, there must still be new HN users all the time, for which some things are worth repeating (just not too often).
> But yes, pointing that out is also a meme at this point; it starts to feel like a hash-table dismissal...
Eh. I think of it as a warning that younger us (or -at least- younger me) would have very, very, very much appreciated when we were first reading the essays.
Yeah, _you_ have had these realizations about how less-profound-than-they-seem the essays are, and _you_ have read the essay(s). But, like, the essays keep popping up... why not also keep mentioning that they're not as profound as they seem? There's _always_ going to be someone who's reading the essays for the first time, so why discourage folks from providing the new reader the opportunity to read valid criticism of the essays developed over the years?
Eh. I think of it as a warning that younger us (or -at least- younger me) would have very, very, very much appreciated when we were first reading the essays.
Yeah, _you_ have had these realizations about how less-profound-than-they-seem the essays are, and _you_ have read the essay(s). But, like, the essays keep popping up... why not also keep mentioning that they're not as profound as they seem? There's _always_ going to be someone who's reading the essays for the first time, so why discourage folks from providing the new reader the opportunity to read valid criticism of the essays developed over the years?
Fine, but that comment was not a proper criticism or a warning - it was a dismissal. Even having revised my opinions on pg and his writings, I find coldtea's summary to be unfair.
How about maciej's criticism, which is basically the same with more words (though also much funnier than mine)?
https://idlewords.com/2005/04/dabblers_and_blowhards.htm
https://idlewords.com/2005/04/dabblers_and_blowhards.htm
Loved that essay back in 2005, you know. PG and YC were just starting then, no? But, since then, I watched in awe what they built and how their work touches and improves my life every day.
Maciej? He's writing about how we shouldn't go to Mars these days. He's and excellent and very entertaining writer and I am sure he has plenty to teach me but I'd rather listen to PG. My focus is limited and I'd rather follow someone who already helped me get ahead and showed me what the possibilities truly are instead of pushing his limits onto me.
Maciej? He's writing about how we shouldn't go to Mars these days. He's and excellent and very entertaining writer and I am sure he has plenty to teach me but I'd rather listen to PG. My focus is limited and I'd rather follow someone who already helped me get ahead and showed me what the possibilities truly are instead of pushing his limits onto me.
>Maciej? He's writing about how we shouldn't go to Mars these days.
Which, I, for one, also find 100% on the money. A lot of snakeoil has been sold by Musk, Bezos, and co about the matter.
Which, I, for one, also find 100% on the money. A lot of snakeoil has been sold by Musk, Bezos, and co about the matter.
Of course you do.
But, please indulge me, I am curious: how is this mindset serving you? Are you a happy person? Are you a balanced person? Are you a successful person? Do you have everything you need? How long have you been thinking like that? What would it take to change your mind?
Thanks for your answers.
But, please indulge me, I am curious: how is this mindset serving you? Are you a happy person? Are you a balanced person? Are you a successful person? Do you have everything you need? How long have you been thinking like that? What would it take to change your mind?
Thanks for your answers.
How is turning an exchange about the merits of going to Mars or the quality of a VC-slash-startup-guru-blogger output into cheap psychologizing and ad hominems serving you?
Do you think you come out as balanced and happy by doing this?
Do you regularly think anybody that thinks differently than you, or doesn't gulp down whatever snake-oil the "succesful" sell, is problematic, unhappy, unsuccesful, unbalanced, and should "change their mind"?
Do you think that only business guru admirers or grind culture entrepreneurs are "happy"? Do you think only techno-optimists dreaming of strongmen like Musk and Bezos giving them Mars colonies are "balanced"? (And do you think either groups are anywhere close to a balanced person, as opposed merely naive and happy-go-lucky victims of Californian Ideology?)
How long have you been thinking like that?
Do you think you come out as balanced and happy by doing this?
Do you regularly think anybody that thinks differently than you, or doesn't gulp down whatever snake-oil the "succesful" sell, is problematic, unhappy, unsuccesful, unbalanced, and should "change their mind"?
Do you think that only business guru admirers or grind culture entrepreneurs are "happy"? Do you think only techno-optimists dreaming of strongmen like Musk and Bezos giving them Mars colonies are "balanced"? (And do you think either groups are anywhere close to a balanced person, as opposed merely naive and happy-go-lucky victims of Californian Ideology?)
How long have you been thinking like that?
Maybe you should ask the same question to SunghoYahng, the user who started this thread? That wasn’t very constructive either, and neither was coldtea’s response.
“I read it as a warning that PG skews his arguments to prove some narrow points and you should be careful when applying them to your life, so you don't waste years chasing improbable goals”
They were being just as curt as nickpp. What they wrote was not as reasonable as your lines above, hence the response. From my pov, the main reason that you’re criticizing nickpp is because his opinion doesn’t match your own.
The irony here is that I’m more sympathetic to your viewpoint, but I’ll try to be constructive beyond just calling you out:
* These essays take a lot of work to write
* These essays are not hidden behind a paywall
* The essays capture the POV of a successful startup founder and more importantly a successful startup investor
* Does the advice apply to everyone? Probably not everyone 100%. I doubt many of his essays even apply to 25% of people, or even 10% depending on the topic.
* still, many people have profited off pg’s advice in some way
* If you don’t like pg’s essays, you don’t have to read them
* pg founded HN. Don’t be surprised to see people defending pg here.
“I read it as a warning that PG skews his arguments to prove some narrow points and you should be careful when applying them to your life, so you don't waste years chasing improbable goals”
They were being just as curt as nickpp. What they wrote was not as reasonable as your lines above, hence the response. From my pov, the main reason that you’re criticizing nickpp is because his opinion doesn’t match your own.
The irony here is that I’m more sympathetic to your viewpoint, but I’ll try to be constructive beyond just calling you out:
* These essays take a lot of work to write
* These essays are not hidden behind a paywall
* The essays capture the POV of a successful startup founder and more importantly a successful startup investor
* Does the advice apply to everyone? Probably not everyone 100%. I doubt many of his essays even apply to 25% of people, or even 10% depending on the topic.
* still, many people have profited off pg’s advice in some way
* If you don’t like pg’s essays, you don’t have to read them
* pg founded HN. Don’t be surprised to see people defending pg here.
I'm not entitled to consider that my personal life or career choices should be pushed onto others as advice.
So, my ...advice is for people to follow much more timeless wisdom which has worked great for billions, and not get into the cult of some rich/succesful or into cults of personality.
So, my ...advice is for people to follow much more timeless wisdom which has worked great for billions, and not get into the cult of some rich/succesful or into cults of personality.
For all my life (and I am not spring chicken) I noticed one thing: criticism, cynicism and pessimism sell. They are attractive. They compel us, because they are easy and cheap. There is no cost attached in becoming a victim. No cost in saying "that's not for me - I can't get it".
Optimism on the other hand and especially tech optimism is almost a slur nowadays. Very few voices support them, very few cheerleaders. And that is a shame - the whole world depends on these optimists. We need them to solve the problems facing our civilization. To have successful startups we need failed ones. Advances are not easy, they are damn hard and people willing to try are few and far in between and they need our support.
And finally in the last 20 years I met and interacted with hundreds (maybe thousands) of people in our field. The ones who TRIED - few successes but zero regrets. Even failures lead to positive outcomes in the end.
The only regrets and bitterness were predictably from the ones who for some reason or another were discouraged to try. They always have an excuse, some situation to point to that made them victims. But in the end it was a preexisting belief, an idea or opinion or mind virus that did the most damage to their you world-view.
Very few will lose trying to emulate a successful person. None will gain anything trying to follow coldtea's advice.
Optimism on the other hand and especially tech optimism is almost a slur nowadays. Very few voices support them, very few cheerleaders. And that is a shame - the whole world depends on these optimists. We need them to solve the problems facing our civilization. To have successful startups we need failed ones. Advances are not easy, they are damn hard and people willing to try are few and far in between and they need our support.
And finally in the last 20 years I met and interacted with hundreds (maybe thousands) of people in our field. The ones who TRIED - few successes but zero regrets. Even failures lead to positive outcomes in the end.
The only regrets and bitterness were predictably from the ones who for some reason or another were discouraged to try. They always have an excuse, some situation to point to that made them victims. But in the end it was a preexisting belief, an idea or opinion or mind virus that did the most damage to their you world-view.
Very few will lose trying to emulate a successful person. None will gain anything trying to follow coldtea's advice.
>For all my life (and I am not spring chicken) I noticed one thing: criticism, cynicism and pessimism sell. They are attractive.
Not as much as the multi-trillion dollar industry for "how to make it big" advice, business and startup hussle culture, magic bullets and/or grind p0rn, and so on, all built on optimism, and aiming at an ever renewable supply of fresh naives.
Not as much as the multi-trillion dollar industry for "how to make it big" advice, business and startup hussle culture, magic bullets and/or grind p0rn, and so on, all built on optimism, and aiming at an ever renewable supply of fresh naives.
I've never read any essay written by Paul Graham which had a point I hadn't read before somewhere or else or otherwise encountered a thought of his which was was actually original or new. He just repackages general truisms, common-sense or someone else's thought and because he's Paul Graham it gets attention and people post his essay up on HN. That's it.
PG's been writing these essays long before HN or YC. Actually those essays in the beginning made him known and helped him attract the first batches of founders. Those founders (and subsequent ones) have done incredible things. They have created and added tremendous value to countless people's life.
So there is value in these essays. You don't have to see it or appreciate it but denigrating it just turns the question on you: who are you? what have you done? what do you have to show and teach us?
So there is value in these essays. You don't have to see it or appreciate it but denigrating it just turns the question on you: who are you? what have you done? what do you have to show and teach us?
It's possible and indeed normal to critique things even if you are not famous or notable and that's a fairly poor argument against any critic. People who never written a play or poem write critiques of Shakespeare all the time, should they be banned from doing so because they're not playwrights or poets?
Likewise, it's possible for someone to manage a sports team, successfully I might add, even if they were never a top player in that sport. My point is, I don't need to be a billionaire or found a successful company to be able to critique Paul Graham's writing. I personally find it banal and would rather seek out writers who came up with novel ideas, like for example Carl Jung or Joseph Campbell to name a couple.
Likewise, it's possible for someone to manage a sports team, successfully I might add, even if they were never a top player in that sport. My point is, I don't need to be a billionaire or found a successful company to be able to critique Paul Graham's writing. I personally find it banal and would rather seek out writers who came up with novel ideas, like for example Carl Jung or Joseph Campbell to name a couple.
His Plan For Spam was novel, original and really helped decimate email spam at the time.
I'm not religous, but I do find it amazing that this was known back in the days of the bible
'For to everyone who has, more will be given, and he will have abundance; but from him who does not have, even what he has will be taken away' - Matthew 25:29
I wonder if other religions have similar elements.
It is understandable that both the size of an army, and the wealth of a ruler would lead to this conclusion, as PG states, but it's still surprising that it has been recognized with such clarity.
'For to everyone who has, more will be given, and he will have abundance; but from him who does not have, even what he has will be taken away' - Matthew 25:29
I wonder if other religions have similar elements.
It is understandable that both the size of an army, and the wealth of a ruler would lead to this conclusion, as PG states, but it's still surprising that it has been recognized with such clarity.
I think most religions, at their core, have the element of philosophy. It’s a shame it gets bundled with institutional self preservation, growth, and belief in the supernatural. Those that can separate the less good attributes end up more like Stoicism or westernized Buddhism.
But there is something deeply wise in most religions that can have profound effects on how we live our lives.
But there is something deeply wise in most religions that can have profound effects on how we live our lives.
Religions were created by natural selection through thousands of year; and they made it through multiple empires, times and even today. This might be very important to understand and recognize why they are very powerful if you are not religious.
By New Testament the common people grokked investment to a degree, hence the Parable of the Talents you quoted. From Mathew 25:24-27, relevant bits:
"He also who had received the one talent came forward, saying, ‘(...) I went and hid your talent in the ground. Here, you have what is yours.’ But his master answered him, ‘You wicked and slothful servant! (...) you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest."
For that parable to be useful when it was written, common people must have understood the idea of lending your money with interest. From that, it's not a big step for them to have figured out what happens if do it again, and again, having the interest compound.
EDIT: Also, how old is that story about a smartass asking a king to give him a chessboard of grain, where on first field they have one single grain, and for every other field, 2x the amount on the previous one?
"He also who had received the one talent came forward, saying, ‘(...) I went and hid your talent in the ground. Here, you have what is yours.’ But his master answered him, ‘You wicked and slothful servant! (...) you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest."
For that parable to be useful when it was written, common people must have understood the idea of lending your money with interest. From that, it's not a big step for them to have figured out what happens if do it again, and again, having the interest compound.
EDIT: Also, how old is that story about a smartass asking a king to give him a chessboard of grain, where on first field they have one single grain, and for every other field, 2x the amount on the previous one?
What's even more remarkable to me is the other context where it's said, Matthew 13:11:
"To you it has been given to know the secrets of the kingdom of heaven, but to them it has not been given. For to him who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away."
This is harder to explain, but imo more relevant to TFA, since it seems to refer to knowledge and learning.
"To you it has been given to know the secrets of the kingdom of heaven, but to them it has not been given. For to him who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away."
This is harder to explain, but imo more relevant to TFA, since it seems to refer to knowledge and learning.
you just made me think of hysteresis, and then realize that's an ancient Greek word somehow descriptive
PG radically underestimates the continuing importance of institutions in the modern world, which is understandable given how and with whom he spends his days. The public sector is huge and largely old fashioned heirarchical/institutional. What is the Fortune 500, if not a big list of institutions.
Read the CV of any new-minted corporate CEO almost without fail you'll find that before leaping into the C-suite they first laboured for 15 years in one big institution, building credibility and experience.
Big law firms, big financial firms, the military, academia, on and on it goes, large institutions within which career advancement depends on finding ones way through the institutional culture and comporting oneself to it, in greater and lesser ways.
Read the CV of any new-minted corporate CEO almost without fail you'll find that before leaping into the C-suite they first laboured for 15 years in one big institution, building credibility and experience.
Big law firms, big financial firms, the military, academia, on and on it goes, large institutions within which career advancement depends on finding ones way through the institutional culture and comporting oneself to it, in greater and lesser ways.
The key irony is that the empowerment of ambitious individuals that he praises is only possible in an institutional framework that makes it possible. That just allows you to sell your homebrew computer, for example. And there are plenty of people who, once they have become powerful by climbing those ladders, would have no qualms about pulling them up. So pg's analysis works at an individual level, but it's not great guidance for what society should do.
> The key irony is that the empowerment of ambitious individuals that he praises is only possible in an institutional framework that makes it possible.
That's the pretty consistent blindspot I've found in people who strongly promote that view - they are almost always blind to the institutions that are required to support someone "being independent".
That's the pretty consistent blindspot I've found in people who strongly promote that view - they are almost always blind to the institutions that are required to support someone "being independent".
Which part of the essay suggests that he underestimates this?
Not to mention the institution of SV VC’s.
This essay seems to be more about founders, not appointed CEOs.
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And how many worked slightly less proficiently and didn’t make CEO : manager / etc?
Unfortunatly, the http era is behind, we've just entered the https one. It's risky to leave a job.
> What are fields where a few big winners outperform everyone else? Here are some obvious ones: sports, politics, art, music, acting, directing, writing, math, science, starting companies, and investing.
What’s really interesting is that out of that entire list, only math and science are publicly funded at a level such that a person can get 5 to 7 years of guaranteed job security and funding(ie a PhD), giving you plenty of shots on goal.
From this point of view the science/math path seems obvious. Even if you don’t find gold during your PhD, you still get a PhD and have access to a host of industry, startup, or postdoc positions.
The failure path for writers, painters, or jazz musicians is more risky in my opinion.
What’s really interesting is that out of that entire list, only math and science are publicly funded at a level such that a person can get 5 to 7 years of guaranteed job security and funding(ie a PhD), giving you plenty of shots on goal.
From this point of view the science/math path seems obvious. Even if you don’t find gold during your PhD, you still get a PhD and have access to a host of industry, startup, or postdoc positions.
The failure path for writers, painters, or jazz musicians is more risky in my opinion.
What if the returns are just big-theta of n*log(n)?
One way to frame this that I find fascinating is that increased equality of opportunity directly leads to decreased equality of outcomes. I think we're seeing both. While opportunity is still very unequal, it is arguably more equal than it ever has been -- both for cultural reasons, but also for technological ones, especially the internet. The combined knowledge of humanity is basically freely available to anyone with the skill to use it. Likewise it is much easier, as PG mentioned, for individuals to reach an audience, whether their field is business, art, politics, etc. As a direct result, it is easier than ever for exceptional (and/or lucky) individuals to become exponentially more successful than others, leading to an increase in inequality of outcomes. I've never thought of it in those terms before, and find it really interesting, as both forms of inequality are often lumped together as issues to be solved, whereas it now seems to me they may be in direct conflict.
>The combined knowledge of humanity is basically freely available to anyone with the skill to use it.
It's fascinating how differently people react to the knowledge of this phenomenon. When I was a kid, basically as soon as I realized this was the case I started arguing with my parents that we had to have an Internet-connected computer in the house now. As soon as we got one I basically started reading Wikipedia every non-school hour of every day for 2 years straight.
I doubt I remember more than 0.1% of everything I actually read from that period of my life, but it felt formative and healing in a way I just never expected to be the case. I have also never met anyone else who did something like this and it makes me sad!
It's fascinating how differently people react to the knowledge of this phenomenon. When I was a kid, basically as soon as I realized this was the case I started arguing with my parents that we had to have an Internet-connected computer in the house now. As soon as we got one I basically started reading Wikipedia every non-school hour of every day for 2 years straight.
I doubt I remember more than 0.1% of everything I actually read from that period of my life, but it felt formative and healing in a way I just never expected to be the case. I have also never met anyone else who did something like this and it makes me sad!
I binged on Wikipedia too. In a way, it was the OG "infinite content website" way before scoundrels perfected this and made it into a business model (notifications, infinite scroll, etc.). I would search for something I needed or was curious about, read the article, find some links expanding on adjacent topics, start reading those, and suddenly it's 2-3h hours later, I have 20+ Wikipedia tabs open, I am reading something entirely unrelated to the original topic, and I have no idea how I got there.
Rinse repeat over my high school and early university years.
Rinse repeat over my high school and early university years.
Can you please think back very hard and try to remember if it's something that you ate or drank that made you like this that I can feed to my kids :-D
Coffee! Caution: YMMV.
I have also never met anyone else who did something like this and it makes me sad!
Decades before, I did the same with Enciclopedia Larousse, an Atlas, the Historia Universal Aguilar, the Diccionario ideológico by Casares and some others. Those were made of paper, you know :)
I wasn't impressed with Wikipedia. But I enjoy IMDb very much. And many illegal/semilegal stuff online.
Decades before, I did the same with Enciclopedia Larousse, an Atlas, the Historia Universal Aguilar, the Diccionario ideológico by Casares and some others. Those were made of paper, you know :)
I wasn't impressed with Wikipedia. But I enjoy IMDb very much. And many illegal/semilegal stuff online.
I read both the complete set of the Book of Knowledge and whatever version of Britannica my parents had, cover to cover.
Then again I also printed the DooM FAQ out.
Then again I also printed the DooM FAQ out.
I read Wikipedia a lot too as a kid. I think it was because it loaded quicker than other websites while not using much of the data cap.
> increased equality of opportunity directly leads to decreased equality of outcomes
You're going to have to back this up.
Places and periods without high equality of opportunity for example appear to me to have terrible equality of outcome.
And with what I think you're referring too, which is the increase in the wealth gap between the top 10% and bottom 50%, I'd argue that's actually seen because of a decrease in equality of opportunity, because our system never resets the brackets, the only opportunities left are those not taken. It's harder than ever before to compete in existing opportunity market, since we're in an unprecedented level of market consolidation.
You're going to have to back this up.
Places and periods without high equality of opportunity for example appear to me to have terrible equality of outcome.
And with what I think you're referring too, which is the increase in the wealth gap between the top 10% and bottom 50%, I'd argue that's actually seen because of a decrease in equality of opportunity, because our system never resets the brackets, the only opportunities left are those not taken. It's harder than ever before to compete in existing opportunity market, since we're in an unprecedented level of market consolidation.
It’s also why it doesn’t make sense for employees to work 80 percent effort and expect 80 percent compensation.
The relationship is nonlinear, most of a high compensation actually happens at the margins; how much better you are compared to the state of the art.
The relationship is nonlinear, most of a high compensation actually happens at the margins; how much better you are compared to the state of the art.
I'll gladly work 20% effort and take the 80% compensation then
> The most obvious case of superlinear returns is when you're working on something that grows exponentially. For example, growing bacterial cultures. When they grow at all, they grow exponentially.
There is a very linear relationship between the maximum concentration that your bacterial culture will get to and the amount of sugar/carbon that they have to eat. Log growth is not really sustainable.
(Unless you continuously find ways to unlock new energy sources, either by luck or because you set aside resources for research/generation of diversity.)
For markets, it would be also good to mention that the price of an asset is not necessarily tied to the value of the asset, and this made worse by markets of low or unknown liquidity. And I would guess that it's also made worse when the valuation of group of assets is calculated by extrapolating from the price of a small number of units of the same kind of asset (i.e. stocks).
There is a very linear relationship between the maximum concentration that your bacterial culture will get to and the amount of sugar/carbon that they have to eat. Log growth is not really sustainable.
(Unless you continuously find ways to unlock new energy sources, either by luck or because you set aside resources for research/generation of diversity.)
For markets, it would be also good to mention that the price of an asset is not necessarily tied to the value of the asset, and this made worse by markets of low or unknown liquidity. And I would guess that it's also made worse when the valuation of group of assets is calculated by extrapolating from the price of a small number of units of the same kind of asset (i.e. stocks).
In natural systems (i.e. all real systems), it's better to think of exponential growth as just the first half of a sigmoid curve.
In that case, there's an interesting idea: trying to push things over the tipping point.
It doesn't last forever, but nothing does! Instead there's an exciting idea in place: instead of committing your entire life to trying and getting "one thing" to be as big as possible, you can kickstart many things! As someone who likes a bit of variety in my life, that sounds way more exciting to me.
It doesn't last forever, but nothing does! Instead there's an exciting idea in place: instead of committing your entire life to trying and getting "one thing" to be as big as possible, you can kickstart many things! As someone who likes a bit of variety in my life, that sounds way more exciting to me.
by splitting your resources across many projects, you run the risk of all of them not reaching a critical threshold for which they experience exponential growth.
I think some people at any given point in time (and some institutions and some governments) do a better job than others at splitting their resources because in part because they have a better framework at recognizing what may reach that critical threshold faster than others based on a given set of conditions (or have lower switching costs when it comes to deciding to not allocate resources to something after a certain point).
You don't split, but sell when successful then start other thing. That's the serial entrepeneur thing.
All bacterial growth hits "stationary phase" at some point before collapsing, and he seems to miss that most empires and companies do the same.
Because the goal of a vulture crapitalist is to sell at the exponential part of the sigmoid curve.
And of course, sell the idea that "the next big idea" is exponential at 30x..... Until you hit the top of the sigmoid.
Wash, rinse, repeat.
EDIT: Whoops, I forgot to fellate venture capital. You know, the group of companies that would rather leave smoking ruins rather than happily sustainable to 5x companies, and deign to get anything less than 20x companies... and ideally 30x companies.
This is the same group of companies that destroyed Bed Bath and Beyond, Instapot, Toys-R-Us, and loads more, all to cash out and get a jackpot than actually create sustainable and happily workable long term companies.
And of course, sell the idea that "the next big idea" is exponential at 30x..... Until you hit the top of the sigmoid.
Wash, rinse, repeat.
EDIT: Whoops, I forgot to fellate venture capital. You know, the group of companies that would rather leave smoking ruins rather than happily sustainable to 5x companies, and deign to get anything less than 20x companies... and ideally 30x companies.
This is the same group of companies that destroyed Bed Bath and Beyond, Instapot, Toys-R-Us, and loads more, all to cash out and get a jackpot than actually create sustainable and happily workable long term companies.
FYI all those examples are PE, not VC. Fairly different. Not that VC doesn’t have its own problems, but yeah.
Yes it's a nice article but it doesn't take into account situations where the Law of Diminishing Returns applies.
From a link to A Few Notes On The Culture[1] in the discussion on Iain M. Banks’ Why the Culture Wins, from a couple of days ago:
> The market is a good example of evolution in action; the try-everything-and-see-what-works approach. This might provide a perfectly morally satisfactory resource-management system so long as there was absolutely no question of any sentient creature ever being treated purely as one of those resources. The market, for all its (profoundly inelegant) complexities, remains a crude and essentially blind system, and is - without the sort of drastic amendments liable to cripple the economic efficacy which is its greatest claimed asset - intrinsically incapable of distinguishing between simple non-use of matter resulting from processal superfluity and the acute, prolonged and wide-spread suffering of conscious beings.
> It is, arguably, in the elevation of this profoundly mechanistic (and in that sense perversely innocent) system to a position above all other moral, philosophical and political values and considerations that humankind displays most convincingly both its present intellectual [immaturity and] — through grossly pursued selfishness rather than the applied hatred of others — a kind of synthetic evil.
…
> The Culture, of course, has gone beyond even that, to an economy so much a part of society it is hardly worthy of a separate definition, and which is limited only by imagination, philosophy (and manners), and the idea of minimally wasteful elegance; a kind of galactic ecological awareness allied to a desire to create beauty and goodness.
> Whatever; in the end practice (as ever) will outshine theory.
[1]: http://www.vavatch.co.uk/books/banks/cultnote.htm
> The market is a good example of evolution in action; the try-everything-and-see-what-works approach. This might provide a perfectly morally satisfactory resource-management system so long as there was absolutely no question of any sentient creature ever being treated purely as one of those resources. The market, for all its (profoundly inelegant) complexities, remains a crude and essentially blind system, and is - without the sort of drastic amendments liable to cripple the economic efficacy which is its greatest claimed asset - intrinsically incapable of distinguishing between simple non-use of matter resulting from processal superfluity and the acute, prolonged and wide-spread suffering of conscious beings.
> It is, arguably, in the elevation of this profoundly mechanistic (and in that sense perversely innocent) system to a position above all other moral, philosophical and political values and considerations that humankind displays most convincingly both its present intellectual [immaturity and] — through grossly pursued selfishness rather than the applied hatred of others — a kind of synthetic evil.
…
> The Culture, of course, has gone beyond even that, to an economy so much a part of society it is hardly worthy of a separate definition, and which is limited only by imagination, philosophy (and manners), and the idea of minimally wasteful elegance; a kind of galactic ecological awareness allied to a desire to create beauty and goodness.
> Whatever; in the end practice (as ever) will outshine theory.
[1]: http://www.vavatch.co.uk/books/banks/cultnote.htm
> the elevation of this profoundly mechanistic (and in that sense perversely innocent) system to a position above all other moral, philosophical and political values
There's no such elevation. The political process ultimately decides the law (including constitutional), and the law regulates (or frees) the market.
There's no such elevation. The political process ultimately decides the law (including constitutional), and the law regulates (or frees) the market.
To some extent? But then we have lobby groups, PACs, regulatory capture and astroturf campaigns that have proven to be quite successful techniques to subvert the political process.
I'd argue that those techniques put us back at the mechanistic system being elevated above other values.
I'd argue that those techniques put us back at the mechanistic system being elevated above other values.
You'll find a great many people on this very forum arguing that a given law is bad because it's bad for the market, dismissing the question of whether that market is actually producing good outcomes for humans as beneath consideration. So in practice a lot of people do elevate the market over more human values, and that influences the political process and the law.
Not to mention, economic factors are stronger than political or social factors. The market economy is winning for basic evolutionary reasons: those who engage in it are able to outcompete those who don't, whether it's at the "marketplace of ideas" or in the field of battle. And it doesn't even matter if, at individual level, the pro-market society is worse off. Much like with hunter-gathering vs. agriculture - the former lifestyle may be better for you, but if your group doesn't adopt the latter, it'll eventually be conquered by a group that does.
In the end, people end up elevating the market above all, whether they want it or not, because they underestimate the power of the system they're dealing with.
In the end, people end up elevating the market above all, whether they want it or not, because they underestimate the power of the system they're dealing with.
> the law regulates (or frees) the market.
and yet, black markets exists, especially in places where the law fails to provide or provision a sufficiently free market for some goods/services.
So i would argue that the law does not decide this, or you could call it law of nature that decides it.
and yet, black markets exists, especially in places where the law fails to provide or provision a sufficiently free market for some goods/services.
So i would argue that the law does not decide this, or you could call it law of nature that decides it.
Even these black markets tend to use the institutions of law and society, for example, money and they rely on the protection of law, too, i.e., law enforcement isn't typically free to do whatever to combat them. Where enforcement is strongest, black markets have a hard time forming.
There are tons of counter-examples to his argument — that successful organizations (and organisms) don't require exponentially unchecked growth. Do those mean either his argument is wrong, or those examples are outliers?
(Examples: Mailchimp, anything Pieter levels makes, etc.)
(Examples: Mailchimp, anything Pieter levels makes, etc.)
Mailchimp grew rapidly, then floundered while trying to find new growth areas, including a brief venture into "feel good" short films (coinciding with a fee increase to support this brainless idea).
Then... eventually sold to Intuit, which appears hell-bent on ruining the remaining reputation of Mailchimp.
They're rolling out a new UI, which is obviously not being tested internally. Buttons don't work or provide confusing terminology, preview runs off the screen, occasionally the CSS for their home page just breaks, etc. Employees are clueless and development appears outsourced.
Zombie walking...
Then... eventually sold to Intuit, which appears hell-bent on ruining the remaining reputation of Mailchimp.
They're rolling out a new UI, which is obviously not being tested internally. Buttons don't work or provide confusing terminology, preview runs off the screen, occasionally the CSS for their home page just breaks, etc. Employees are clueless and development appears outsourced.
Zombie walking...
> Do those mean either his argument is wrong, or those examples are outliers?
Read generously, they’re compounding something not financial. Expertise, for instance.
Read generously, they’re compounding something not financial. Expertise, for instance.
This must be the first post from paulgraham.com that I've seen that didn't get 1000 upvotes in 10 minutes
I think the penny has dropped and people have realized his essays aren't actually very original and mostly contain obvious advice or stuff copied from someone else and re-worded.
... or made up ...
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A highly regarded quant analyst once interviewed me and could not understand why I took a powered motorcycle in for my (early morning) 11-mile commute to work. "You spend 30% less time on your commute, but you increase your injury risk by 30x" he said. "It doesn't make sense - your risk/reward is illogical".
He hadn't considered the superlinear returns attributable to being "first", a point made in the article ('thresholds'). By being 20 minutes earlier into work than others on average, I was also inevitably better prepared for the high-pressure morning meeting than anyone else.
Didn't get (that) job.
He hadn't considered the superlinear returns attributable to being "first", a point made in the article ('thresholds'). By being 20 minutes earlier into work than others on average, I was also inevitably better prepared for the high-pressure morning meeting than anyone else.
Didn't get (that) job.
> But don't overoptimize what you're learning. Don't limit yourself to learning things that are already known to be valuable. You're learning; you don't know for sure yet what's going to be valuable, and if you're too strict you'll lop off the outliers.
I am genuinely curious how my learning about the constitution of the Roman Republic while procrastinating will help me.
I am genuinely curious how my learning about the constitution of the Roman Republic while procrastinating will help me.
Knowing that the author owns a famous "startup incubator" intended to discover and grow companies that will either 1) turn into a giant like Amazon or Google or 2) be sold to a giant like Amazon or Google puts a certain spin on this. In particular, this passage seems to be a pretty thinly veiled way of saying that giant corporations are a natural consequence of a healthy economy:
> It's obviously true that the returns for performance are superlinear in business. Some think this is a flaw of capitalism, and that if we changed the rules it would stop being true. But superlinear returns for performance are a feature of the world, not an artifact of rules we've invented. We see the same pattern in fame, power, military victories, knowledge, and even benefit to humanity.
It relies on a flimsy claim: this consequence is not caused by social conventions. Are not all of the examples given some manifestation of "rules we've invented"? Which of these things have any significance sans any sort of social context?
> It's obviously true that the returns for performance are superlinear in business. Some think this is a flaw of capitalism, and that if we changed the rules it would stop being true. But superlinear returns for performance are a feature of the world, not an artifact of rules we've invented. We see the same pattern in fame, power, military victories, knowledge, and even benefit to humanity.
It relies on a flimsy claim: this consequence is not caused by social conventions. Are not all of the examples given some manifestation of "rules we've invented"? Which of these things have any significance sans any sort of social context?
It’s a function of power law distribution. A lot of natural phenomena follows it.
> it’s a function of power law distribution.
People always flippantly quote this without ever looking at the distribution of the actual data.
Whenever people see an uneven distribution they cite something about power laws being that natural order of things and that ends the discussion.
It turns out in many, many cases (I'm not sure if it's particular one) the observed behavior follows nothing like a power law.
A good example of this is net-worth distributions. People often say "of course there's super rich people, that's just a power law! It's not concerning income inequality, it's nature!". But if you pull up the data and do a log-log plot you see quite clearly that it is not even close to following a power-law, and does so only at the lower 90% income quantiles. Which is funny considering the fundamental argument is that unequal distribution are natural so long as they follow a power law.
People always flippantly quote this without ever looking at the distribution of the actual data.
Whenever people see an uneven distribution they cite something about power laws being that natural order of things and that ends the discussion.
It turns out in many, many cases (I'm not sure if it's particular one) the observed behavior follows nothing like a power law.
A good example of this is net-worth distributions. People often say "of course there's super rich people, that's just a power law! It's not concerning income inequality, it's nature!". But if you pull up the data and do a log-log plot you see quite clearly that it is not even close to following a power-law, and does so only at the lower 90% income quantiles. Which is funny considering the fundamental argument is that unequal distribution are natural so long as they follow a power law.
> It relies on a flimsy claim: this consequence is not caused by social conventions
You're not saying why it's flimsy. Talking about "social conventions" is the wrong approach. It's more like "this is an outcome of dominant strategies". Be that strategy in the time of kings and queens to become a ruler, or a powerful subject, or in the age of capitalism gaining money by offering things people want to pay for, or in socialist countries gaining power and wealth through navigating the politics of the state, or whatever it is, some people outperform others significantly.
You just have to pick whether you want a mechanism that rewards creating value for others, that they will pay for, or one that rewards having the right connections, or being willing to do violence.
You're not saying why it's flimsy. Talking about "social conventions" is the wrong approach. It's more like "this is an outcome of dominant strategies". Be that strategy in the time of kings and queens to become a ruler, or a powerful subject, or in the age of capitalism gaining money by offering things people want to pay for, or in socialist countries gaining power and wealth through navigating the politics of the state, or whatever it is, some people outperform others significantly.
You just have to pick whether you want a mechanism that rewards creating value for others, that they will pay for, or one that rewards having the right connections, or being willing to do violence.
I see. My phrasing could have been better; I wasn't sure how to express this so here's another attempt.
I do understand the observation and I don't disagree, per se. It's just so very noticeable that the observation is made by a person who has greatly benefited from its effects. It's then more than a little distasteful from my perspective that this person is asserting that this is "a feature of the world, not an artifact of rules we've invented".
Again, strictly speaking the observed effect is not a construct of human society; a wild cat who steals food from another wild cat is the one who gets to survive that day. But it's hard to look past who is writing this and for what audience.
To clarify, the "It" in my sentence is referring to "a pretty thinly veiled way of saying that giant corporations are a natural consequence of a healthy economy". I won't object to "natural", as the essay makes a compelling point, but "healthy" was hardly mentioned and certainly not by name. Indeed, "healthy" was dismissed as irrelevant by the passage I quoted.
I do understand the observation and I don't disagree, per se. It's just so very noticeable that the observation is made by a person who has greatly benefited from its effects. It's then more than a little distasteful from my perspective that this person is asserting that this is "a feature of the world, not an artifact of rules we've invented".
Again, strictly speaking the observed effect is not a construct of human society; a wild cat who steals food from another wild cat is the one who gets to survive that day. But it's hard to look past who is writing this and for what audience.
To clarify, the "It" in my sentence is referring to "a pretty thinly veiled way of saying that giant corporations are a natural consequence of a healthy economy". I won't object to "natural", as the essay makes a compelling point, but "healthy" was hardly mentioned and certainly not by name. Indeed, "healthy" was dismissed as irrelevant by the passage I quoted.
> But it's hard to look past who is writing this and for what audience
Fair enough, but that's just ad hominem, right? Shouldn't we be just assessing what's said?
Fair enough, but that's just ad hominem, right? Shouldn't we be just assessing what's said?
> It's just so very noticeable that the observation is made by a person who has greatly benefited from its effects
You'll likely notice the same about most of PG's essays. Of course he's biased -- but most of the readers here already know this, and are not surprised to see a startup-favoring lens being used in much of his writings. His essays still get a lot of traction here, specifically because this started as a discussion board for his startup incubator, and because his essays about How To Startup / What Is a Startup are fairly commonly read in this space (or were what we read when we first discovered this space?).
You'll likely notice the same about most of PG's essays. Of course he's biased -- but most of the readers here already know this, and are not surprised to see a startup-favoring lens being used in much of his writings. His essays still get a lot of traction here, specifically because this started as a discussion board for his startup incubator, and because his essays about How To Startup / What Is a Startup are fairly commonly read in this space (or were what we read when we first discovered this space?).
This understates the case. PG’s essays predated the creation of YC and this “space” (as in this forum called HN) was first coded and moderated by PG.
Obviously many others played crucial roles, but literally none of this would be here without PG’s ideas. The fact that it is and we’re discussing how his ideas may describe effects he’s benefited from only makes them more compelling, IMO.
Obviously many others played crucial roles, but literally none of this would be here without PG’s ideas. The fact that it is and we’re discussing how his ideas may describe effects he’s benefited from only makes them more compelling, IMO.
I don't think you need to read between the lines.
I agree with this statement "superlinear returns for performance are a feature of the world, not an artifact of rules we've invented", but I disagree its not a problem with capitalism. Its _THE_ problem with capitalism.
The good part of capitalism is that people are rewarded for their effort, the bad part is that those rewards tend to coalesce into a very small subset of people. Winning compounds.
We impose some rules to claw back some money so we can build a safe, stable society. (tax) The problem is, if you are already winning, you are not incentivized to change the system. (pay more tax). Whats more, winners have a lot of power to control how people think and act. We have some other rules to try and limit the power of winners, but those rules are under constant attack.
I agree with this statement "superlinear returns for performance are a feature of the world, not an artifact of rules we've invented", but I disagree its not a problem with capitalism. Its _THE_ problem with capitalism.
The good part of capitalism is that people are rewarded for their effort, the bad part is that those rewards tend to coalesce into a very small subset of people. Winning compounds.
We impose some rules to claw back some money so we can build a safe, stable society. (tax) The problem is, if you are already winning, you are not incentivized to change the system. (pay more tax). Whats more, winners have a lot of power to control how people think and act. We have some other rules to try and limit the power of winners, but those rules are under constant attack.
> The good part of capitalism is that people are rewarded for their effort
Well. They're rewarded for value provided, not effort invested. I don't care if you worked really hard on it, I'm not buying your $50 fizzy drink. I want the one that took less effort (and thus cost less) but still was a good product.
> the bad part is that those rewards tend to coalesce into a very small subset of people. Winning compounds.
This isn't exactly true. Rewards work in different ways. If people want steady, mostly-guaranteed income, they (e.g. me) get a day job with a salary. If they want a shot at doing really well, they do a risky thing and, often, it doesn't work. For the few people it does for, you still wouldn't call most of them highly rewarded. A restaurant owner might well still do worse than a salaried Silicon Valley developer. But still, for the industry, you take a risk to get big payoffs.
Also, "reward" is a poor lens to look at this through, as it's slightly infantilising. It's not a pat on the head for a job well done. It's an exchange of value between adults. Steve Jobs did very well financially with the release of the iPhone. But the only reason he did so is because millions of people got value added to their lives through owning an iPhone. They got value far above what they had before, for a price they would pay.
The problem is with looking at only the successful people as examples of the overall system. The system rewards value. If you happen, through hard work, connections, innate abilities, and a bit of luck, to provide value to other people, you do well. If what you do scales to provide value to millions of people, you do really well.
> Whats more, winners have a lot of power to control how people think and act.
I don't think that's true. No one is controlling thoughts and actions. You might say that people who own news outlets have this power, although ownership conveys less control than you might think, but this is a very specific industry. And people who control vast investment sums get to set criteria for companies to fall in line with. But both of those are under fire for this reason: money shouldn't translate into power over people's thoughts or actions. However, in the normal success case, e.g. if I own a restaurant chain, I do really well, but I don't really control anything.
Well. They're rewarded for value provided, not effort invested. I don't care if you worked really hard on it, I'm not buying your $50 fizzy drink. I want the one that took less effort (and thus cost less) but still was a good product.
> the bad part is that those rewards tend to coalesce into a very small subset of people. Winning compounds.
This isn't exactly true. Rewards work in different ways. If people want steady, mostly-guaranteed income, they (e.g. me) get a day job with a salary. If they want a shot at doing really well, they do a risky thing and, often, it doesn't work. For the few people it does for, you still wouldn't call most of them highly rewarded. A restaurant owner might well still do worse than a salaried Silicon Valley developer. But still, for the industry, you take a risk to get big payoffs.
Also, "reward" is a poor lens to look at this through, as it's slightly infantilising. It's not a pat on the head for a job well done. It's an exchange of value between adults. Steve Jobs did very well financially with the release of the iPhone. But the only reason he did so is because millions of people got value added to their lives through owning an iPhone. They got value far above what they had before, for a price they would pay.
The problem is with looking at only the successful people as examples of the overall system. The system rewards value. If you happen, through hard work, connections, innate abilities, and a bit of luck, to provide value to other people, you do well. If what you do scales to provide value to millions of people, you do really well.
> Whats more, winners have a lot of power to control how people think and act.
I don't think that's true. No one is controlling thoughts and actions. You might say that people who own news outlets have this power, although ownership conveys less control than you might think, but this is a very specific industry. And people who control vast investment sums get to set criteria for companies to fall in line with. But both of those are under fire for this reason: money shouldn't translate into power over people's thoughts or actions. However, in the normal success case, e.g. if I own a restaurant chain, I do really well, but I don't really control anything.
I think he's seeing patterns where there is just variation. Some things grow faster than others. I couldn't really get the main insight of the article, is there one? Is he saying we should try to grow our businesses exponentially? Who wouldn't want that, in business? But then how can we do it? What's his advise?
power laws
RIMR(5)
Very optimistic.
Yet another rich dude blog post survivor bias protrayed as skill.... zzz
With multimodal GPT-4 I really feel like there's suddenly way more things I'm confident about attempting (e.g. anything bottlenecked by graphic design), which should in turn should lead to more things I'll be confident about in the future. Can a hyperproductive person verify if the returns here don't actually look linear, but geometric?
What makes that different from everyone else who can also use GPT-4?
If there are tens of millions who can do this, there's no way to obtain 'geometric returns'. There isn't enough money in existence.
If there are tens of millions who can do this, there's no way to obtain 'geometric returns'. There isn't enough money in existence.
Wealth isn't determined by the amount of money in existence, it's determined by the amount of goods and services in existence. If goods and service increase while the money supply stays constant, that means every dollar can buy more. In practice, that's called "deflation" and it's something that people who control the money supply try to avoid, by printing more money.
Yes I know, which is why I used that phrasing. As the production of real things made of atoms can't be ramped up arbitrarily quickly.
For example, every doubling of oil production after WW1 took more than a decade to accomplish. And oil men were pretty well known for risk taking boldness.
The physical impossibility of real resource inputs to human civilization doubling on an even faster timeline is so obvious that I skipped pointing it out, and got straight to the point.
That it's incredibly unlikely for even money to double quickly enough.
For example, every doubling of oil production after WW1 took more than a decade to accomplish. And oil men were pretty well known for risk taking boldness.
The physical impossibility of real resource inputs to human civilization doubling on an even faster timeline is so obvious that I skipped pointing it out, and got straight to the point.
That it's incredibly unlikely for even money to double quickly enough.
Big difference between "can do this" and "will do this." More than 99% of people are consumers, not creators. And the field only narrows the farther you go in a specialty.
I do agree that the comment you're replying to is asking for too much -- "verify" and "geometric" are very strong words. But I also agree with the implication that LLMs are making it a lot easier for a person with grit to get farther, which might cross that person's personal threshold (using "threshold" as used in TFA).
I do agree that the comment you're replying to is asking for too much -- "verify" and "geometric" are very strong words. But I also agree with the implication that LLMs are making it a lot easier for a person with grit to get farther, which might cross that person's personal threshold (using "threshold" as used in TFA).
Hence why I said tens of millions and not billions. But in any case as long as the number is more then a few thousand, it's practically impossible.
I'm still surprised by most of my tech/design/startup friends who don't want or like using GPT-4 to get work done or even for small stuff like cooking and planning. We'll be ok.
Not really. In the 90s a lot of people were dismissive of the web but 10 years later everyone was a convert. It's just the beginning of this next revolution.
I find it hard to understand how using a tool to do the heavy lifting actually imparts the skills onto you directly. Why should there be multiplicative returns when you haven't actually learned anything?
> I find it hard to understand how using a tool to do the heavy lifting actually imparts the skills onto you directly.
My primary skill is as a software engineer who builds complex systems that solve difficult real world problems. That overarching skill encompasses a wide body of sub skills, from UX to doing user case studies to writing blog posts about my work. The actual writing of the code is a non-trivial portion of that, but ideally the code falls out naturally from a correctly planned approach to the problem domain.
Futzing around with some broken API that has a bunch of "gotchas" that can only be gleaned from reading a dozen blog posts on the topic (because the official documentation sucks) is a huge time sink that is not related to any of my core competencies.
I've previously spent days going through annoying stupid code doing work that an AI can do in hours.
> Why should there be multiplicative returns when you haven't actually learned anything?
I do fear this for the generation of coders coming up now. The best way to learn is to build it from scratch once, which already fewer and fewer people have a chance to do, and AI is only going to make it worse.
My primary skill is as a software engineer who builds complex systems that solve difficult real world problems. That overarching skill encompasses a wide body of sub skills, from UX to doing user case studies to writing blog posts about my work. The actual writing of the code is a non-trivial portion of that, but ideally the code falls out naturally from a correctly planned approach to the problem domain.
Futzing around with some broken API that has a bunch of "gotchas" that can only be gleaned from reading a dozen blog posts on the topic (because the official documentation sucks) is a huge time sink that is not related to any of my core competencies.
I've previously spent days going through annoying stupid code doing work that an AI can do in hours.
> Why should there be multiplicative returns when you haven't actually learned anything?
I do fear this for the generation of coders coming up now. The best way to learn is to build it from scratch once, which already fewer and fewer people have a chance to do, and AI is only going to make it worse.
It's probably not about skill but productivity. Many founders have no skills apart from getting others to do the actual work (I am not being sarcastic, that is a skill too) so for them automated agents are just another road to productivity. Not everyone is driven by curiosity or wants to learn, some people only want to 'ship'. So in that sense there can be multiplicative returns without the person becoming more technically skilled.
At least for me, I've used ChatGPT for areas where I don't really have much experience doing it nor get much out of learning how to do it better, especially if 100% correctness isn't necessary - writing job reqs/descriptions has been the best use so far. I use ChatGPT as the idea mill and take the best sounding ideas out of it and manipulate it a tiny bit for my purposes. In that sense, it makes me more "productive" because I don't need to spend so much time on a task like that and I can spend more time on a task that I have more expertise in, ie, programming.
Geometric returns for the AI company of the tool you are using. As a user of the tool unless you have some other advantage or moat it’s a bit like a factory worker seeing new machines put in and wondering if that means their wages will increase with their increased productivity. Unless you own the means, as a user of AI you will always be a renter.
You’ll still be bound by being one person with limited time and energy in a day
It’s a lot easier to make decisions when you have all the knowledge than when it’s split across multiple people.
BRAVO! THIS IS A MASTERPEICE! Superintelligence is hyperintergration of the metasystem, but right now we are in a state of total hybrid network warfare, so some things must be done ina rather beast mode, given the superlog capabilitie.. :P
Many, if not most when taken to pedantic conclusions, seemingly-superlinear phenomena are logistic “s-curves”[0]. Even if you’re taking over the entire physical universe, eventually you run out of some limiting growth factor like “total addressable market” or “particles in the the reachable universe.” This isn’t a purely nitpicky point - epidemics and “viral ideas” initially have little interference like this, but when they grow enough they run into interference from immune or previously infected individuals being much harder to infect. Tiktok for example surely had an exponential growth phase among the 14-24 demographic in the US, but by now everyone in that demographic has at least heard of it, and if it did near total penetration into that demographic it’d eventually be limited by the actual number of people able to use their app.
There are also log returns, which look superlinear (not really exponential technically) but eventually taper. For example, a skilled aerospace engineer could probably make a crappy paper plane for $0.1, a really good one for $100. But for $10000 it probably wouldn’t be that much better than the $100 if at all. Plenty of things are like that, it’s called diminishing returns…
Finally, there are definitely quadratic curves in real life. If you’re looking at communications it’s everywhere, usually as an upper bound or worst case. Additional leaf connections may have their diminishing marginal utility countered by the fact that existing and new connections become incrementally more valuable as the network grows.
[0] https://en.m.wikipedia.org/wiki/Logistic_function