The path to success at startups is a long one and you aren’t guaranteed to succeed. But you can increase your chances massively. Programming is a critical skill; I think most new big companies have substantial programming components, though a lot of the low-hanging software-only ideas are plucked, at this point. So I wouldn’t only study programming.
Social skills are pretty damn important. Social skills I am working on for my job: body language; talking to strangers; pitching; quickly evaluating people; overcoming social anxiety & aversion; public speaking; 1-on-1s; writing in order to be understood.
To address your other bullets: Internships are great, definitely do them. I’d only train “networking” to the extent of “getting people to perceive value when they meet you”. I wouldn’t spend too much time on “networking events” because there’s a horrendous negative selection effect there. Leadership is too vague and you should define what you mean by that. Only do research if you’re interested in it, but if you are, you should do a lot of it and focus on it because you could make actual useful progress and that’s impressive. (If you’re not interested you probably won’t make progress so don’t waste your time.) Explore career development centers but mostly ignore what they say. Studying abroad is something you should do if it’ll be fun and edifying, not for any direct-to-resume purpose.
I second the advice on startups. Starting a startup has a higher expected monetary return than anything else you can do (as far as I know); and if you do want to start a startup, Stanford is the place to do it.
I think you’re right that median is negative when you consider opportunity cost, but why care about the median? “Expected monetary return” in the “expected value” sense and not “most likely thing to happen to me” sense is close to what you want for earning to give. (Because charity doesn’t have anywhere near the diminish marginal returns an individual does.)
You’re thinking about it from the point of view of the receiving charity. The charity’s payoffs have a hard floor: zero. Essentially the charity has an option (in the financial sense). And because of that it is in the charity’s best interest to drive the volatility (risk, variance, uncertainty) of the “expected monetary return” sky-high—because it is insulated from the bad consequences, remember, the worst thing that could happen to charity is to get zero dollars.
However from the point of view of the individual things look different. His payoffs do NOT have a hard floor. He is fully exposed to all the risk. For him the volatility of the expected return is a bad thing.
Donors driven by signalling, prestige, or warm fuzzies tend to be unhappy when charities they donate to don’t get results. But effective altruists know that individually, we should just be maximizing expected outcome, and if that requires a high-risk strategy, so be it. In other words, even if we’re personally risk-averse we should be altruistically risk neutral. This (hopefully) means that we can operate something like philanthropic venture capitalists—fund pie-in-the-sky ventures that are too risky for most donors, and thus collect a risk premium (paid in QALYs, not dollars, but it’s the same idea).
I’ll set up the situation with two players. We have Alice, a flesh-and-blood human who is an effective altruist (among other things—being a human she is not a paperclip maximizer). And we have Charlie the charity, an organization.
Notable differences between Alice and Charlie (besides the obvious ones) are that:
Charlie’s utility function decays (in the diminishing marginal returns sense) very slowly compared to Alice’s.
Charlie can viably be risk-neutral, while Alice is unlikely to be.
Given this I’ll posit that it’s probably fine for Charlie to maximize expected outcome and be risk-neutral. It is not fine for Alice to do this.
To formulate this in a slightly different way, it’s OK for Alice to give money to Charlie to enable it to act in the maximize-the-expected-outcome manner (e.g. as a philanthropic VC) but it’s not OK for Alice to run her entire life this way.
The OP wants to donate most of his earnings. Since charities, unlike people, don’t generally exhibit diminishing marginal utility, he should choose a career that maximizes expected earnings. So in this context mean, rather than median, returns are relevant. As Carl notes in the second post, “most venture-backed startups fail, but the average (mean) financial gain to founders is measured in millions.”
As already mentioned, don’t confuse a startup with a VC-funded startup. These are very different things with very different probabilities of success (and different expected returns).
I don’t think going purely by the expected return and ignoring the shape of the distribution is a good idea.
From this paper, the average startup exits with $10 million, lasts 4 years until exit, and has 1.4 founders. Extrapolating from this gives about $1.5 million annual income per founder. (I think it’s actually somewhat less than that because I’m not accounting for e.g. the fact that investors own a portion of the company.)
I did notice the “venture-funded” clause. I mention it at the end of my comment. Perhaps I should have specified at the beginning.
I’d be interested to know how many startups get VC funding. Of course, at that point, you have to decide what qualifies as a startup. If a couple of guys make a website in their spare time and never seriously work on it, does that count as a startup?
I’d call it a startup when you work fulltime on it, and it’s designed for fast growth (as in Paul Graham’s “Startup = Growth” essay, http://paulgraham.com/growth.html)
Venture funded is a big barrier, and filters a lot of startups. But it mostly filters them by personality type. I expect that most smart, extremely resourceful, good work ethic people could get venture funding if they wanted it. These attributes are what Y Combinator filters for. But the real correlate with success (and therefore money-making) is finding product/market fit. I think that’s a lot harder than getting venture funding, and a lot more important.
I don’t know how many startups get VC funding, I suspect the percentage is single-digit.
Off the top of my head I’d say that once you hire your first employee who is not friends-and-family you can be called a startup and not just a couple of guys futzing around.
Startups! (I do startups.)
The path to success at startups is a long one and you aren’t guaranteed to succeed. But you can increase your chances massively. Programming is a critical skill; I think most new big companies have substantial programming components, though a lot of the low-hanging software-only ideas are plucked, at this point. So I wouldn’t only study programming.
Social skills are pretty damn important. Social skills I am working on for my job: body language; talking to strangers; pitching; quickly evaluating people; overcoming social anxiety & aversion; public speaking; 1-on-1s; writing in order to be understood.
To address your other bullets: Internships are great, definitely do them. I’d only train “networking” to the extent of “getting people to perceive value when they meet you”. I wouldn’t spend too much time on “networking events” because there’s a horrendous negative selection effect there. Leadership is too vague and you should define what you mean by that. Only do research if you’re interested in it, but if you are, you should do a lot of it and focus on it because you could make actual useful progress and that’s impressive. (If you’re not interested you probably won’t make progress so don’t waste your time.) Explore career development centers but mostly ignore what they say. Studying abroad is something you should do if it’ll be fun and edifying, not for any direct-to-resume purpose.
I second the advice on startups. Starting a startup has a higher expected monetary return than anything else you can do (as far as I know); and if you do want to start a startup, Stanford is the place to do it.
80,000 Hours has a couple of posts about startups.
Do you have data?
I would expect the median monetary return from starting a start-up to be negative.
I think you’re right that median is negative when you consider opportunity cost, but why care about the median? “Expected monetary return” in the “expected value” sense and not “most likely thing to happen to me” sense is close to what you want for earning to give. (Because charity doesn’t have anywhere near the diminish marginal returns an individual does.)
You’re thinking about it from the point of view of the receiving charity. The charity’s payoffs have a hard floor: zero. Essentially the charity has an option (in the financial sense). And because of that it is in the charity’s best interest to drive the volatility (risk, variance, uncertainty) of the “expected monetary return” sky-high—because it is insulated from the bad consequences, remember, the worst thing that could happen to charity is to get zero dollars.
However from the point of view of the individual things look different. His payoffs do NOT have a hard floor. He is fully exposed to all the risk. For him the volatility of the expected return is a bad thing.
Sorry, I don’t understand your reply.
Here’s Ben Kuhn on risk neutrality:
Do you agree with this reasoning?
Well, let’s unpack.
I’ll set up the situation with two players. We have Alice, a flesh-and-blood human who is an effective altruist (among other things—being a human she is not a paperclip maximizer). And we have Charlie the charity, an organization.
Notable differences between Alice and Charlie (besides the obvious ones) are that:
Charlie’s utility function decays (in the diminishing marginal returns sense) very slowly compared to Alice’s.
Charlie can viably be risk-neutral, while Alice is unlikely to be.
Given this I’ll posit that it’s probably fine for Charlie to maximize expected outcome and be risk-neutral. It is not fine for Alice to do this.
To formulate this in a slightly different way, it’s OK for Alice to give money to Charlie to enable it to act in the maximize-the-expected-outcome manner (e.g. as a philanthropic VC) but it’s not OK for Alice to run her entire life this way.
The posts he linked to provide some data.
The OP wants to donate most of his earnings. Since charities, unlike people, don’t generally exhibit diminishing marginal utility, he should choose a career that maximizes expected earnings. So in this context mean, rather than median, returns are relevant. As Carl notes in the second post, “most venture-backed startups fail, but the average (mean) financial gain to founders is measured in millions.”
As already mentioned, don’t confuse a startup with a VC-funded startup. These are very different things with very different probabilities of success (and different expected returns).
I don’t think going purely by the expected return and ignoring the shape of the distribution is a good idea.
From this paper, the average startup exits with $10 million, lasts 4 years until exit, and has 1.4 founders. Extrapolating from this gives about $1.5 million annual income per founder. (I think it’s actually somewhat less than that because I’m not accounting for e.g. the fact that investors own a portion of the company.)
(EDIT: This 80,000 Hours post cites $1.4 million.)
I think you’re right. According to the same source, about 70% of startups that receive funding never make a profit.
Nope, you’re misreading the paper.
Average venture-funded startup exits with $10m. Getting to be VC-funded is a huge threshold that most startups do not reach.
I did notice the “venture-funded” clause. I mention it at the end of my comment. Perhaps I should have specified at the beginning.
I’d be interested to know how many startups get VC funding. Of course, at that point, you have to decide what qualifies as a startup. If a couple of guys make a website in their spare time and never seriously work on it, does that count as a startup?
I’d call it a startup when you work fulltime on it, and it’s designed for fast growth (as in Paul Graham’s “Startup = Growth” essay, http://paulgraham.com/growth.html)
Venture funded is a big barrier, and filters a lot of startups. But it mostly filters them by personality type. I expect that most smart, extremely resourceful, good work ethic people could get venture funding if they wanted it. These attributes are what Y Combinator filters for. But the real correlate with success (and therefore money-making) is finding product/market fit. I think that’s a lot harder than getting venture funding, and a lot more important.
I don’t know how many startups get VC funding, I suspect the percentage is single-digit.
Off the top of my head I’d say that once you hire your first employee who is not friends-and-family you can be called a startup and not just a couple of guys futzing around.