Blake Masters

Leap forward

Tue, 21 May 2013 15:15:00 -0400

In 1811, when Cornelius Vanderbilt was 17, he borrowed $100 from his mom to buy a small sailboat. He figured he could make some money by ferrying goods and people around New York Harbor. He was right.

When the War of 1812 broke out, Vanderbilt’s competition nearly vanished (presumably, few American transporters were keen on operating in British-infested waters). The demand for effective transport, though—particularly military transport—increased dramatically. Vanderbilt, who quickly acquired the nickname “Commodore” for his prowess on the water, was all too happy to service the need and profit handsomely therefrom.

Vanderbilt, of course, was the sort of guy who thought seriously about the future, and the future, he thought, was steam power. So in 1818 he sold his fleet, leased a steamship called Bellona from a guy named Thomas Gibbons, and began to operate his ferry business 2.0.

But there was trouble on the water. The New York legislature had seen fit to grant a monopoly on steamboat service to a couple of guys named Fulton and Livingston. Some operators, like Gibbons, respected the edict and stayed out of the water. Others, like Aaron Ogden, cowed and paid the Fulton-Livingston partnership for an operating license. But Vanderbilt was made of different stuff. He just wanted to build a great business. What good are rules when they stand in the way of building great businesses?

Unsurprisingly, suits were filed. (Ogden was the plaintiff in the one you’ve probably heard of.) Interestingly, though, this didn’t seem to matter very much. Initially, Vanderbilt paid the litigation no mind; he continued to provide excellent service and ruthlessly undercut his competition on price. Equal parts sword and shield—he employed a “crew of shoulder-hitters, ready for battle” to ensure orderly moorings at competitor’s docks,¹ while also deflecting criticism and developing a Robin Hood-ish mythology—Vanderbilt insisted on forging his own future. You might be aware that Jay-Z just executive produced Baz Luhrmann’s Gatsby; so long as we’re anachronistically weaving Hova lyrics into montages of the long-dead nouveau riche, take a moment to imagine Vanderbilt, as his marine hoplites take control of a pier, blasting:

> And government, fuck government, niggas politic themselves.²

The end of the legal battle came in 1824, when the Supreme Court heard the case and ruled for Vanderbilt’s side. (Vanderbilt, as merciless in court as he was in business, had helped his cause by hiring Daniel Webster—think Ted Olson and David Boies rolled into one—to represent Gibbons.) Doctrinally, the case was quite important, but that is the stuff of AP US History and 1L year of law school. What matters here is that Vanderbilt was venerated:

> “We owe to him,” said a prominent citizen, “the freedom of the seas as applied to us locally.”³

I think this story is pretty cool in its own right. It’s even cooler, though, to the extent it can help us understand the present. Does the Vanderbilt steamship ordeal remind you of anything more… familiar? Say, much of Silicon Valley right now? I’ll let someone else write the manifesto about how technology is and will likely continue to outpace physical-world regulators and solve problems the government can’t. But cf. Uber/Airbnb/Taskrabbit/Exec/Crowdflower/Turk/3D Printing. It’s hard not to notice that CS can be a powerful mechanism to route around inefficiency and unlock a lot of value.

Of course, disruption is risky. People don’t like to be disrupted. Aaron Ogden certainly didn’t. Neither, apparently, do the bureaucrats in DC who are coming after Defense Distributed, ostensibly because they feel weak and techno-libertarianism scored too many points over the weekend, or something. The best path is usually one that avoids head-on confrontation. But still—very often, it’s messy and complicated where the rubber hits the road. So what should we do then this happens? Play by all the rules? Ask for permission? Or just build something great? To ask the question, hopefully, is to answer it. WWVanderbiltD?

Over the last year or so, I’ve had the pleasure of watching my good friends Kyle and Dan build Leap, which, as they bill it, is “a better bus service for San Francisco.” The idea is simple: the city’s MUNI bus system ($2/ride) is slow, overcrowded, and leaves much to be desired.⁴ But biking (free) isn’t for everyone, and cabs ($20) are expensive. What if we could relieve the MUNI’s load by bringing the private shuttle service that Google and Twitter employees enjoy to… everyone? What if anyone with a smartphone could instantly buy a pass and streamline their commute on a bus with wi-fi, air conditioning, and a comfortable seat? Well, please meet Leap ($6), which launched this week with a line from the Marina to Downtown SF.

It’s always fun to watch your friends start new ventures. It’s also fun to see really good products get built. Throw in the delightful parallels to the Bellona line and it’s not hard to imagine Kyle and Dan and company as a couple of proto-Vanderbilts, just trying to get people from point A to point B in a better way.

May the streets of San Francisco be their New York Harbor.

Stewart H. Holbrook, The Age of the Moguls, 13 (1953). ↩
Jay-Z, Decoded, 214 (2011). Note the esoteric use of “politic,” glossed in p. 215 n20: “I wrote this at a time when I felt the government was irrelevant to the ways we organized, resolved conflict, and took care of ourselves. “Politic” is slang for the kind of talk that works things out.” ↩
Holbrook, supra, at 13. ↩
“With a fleet average speed of 8.1 mph, [the SF Muni] is also the slowest major transit system in America.” See wikipedia. ↩

You already know one side of the lottery ticket debate. Now, here’s the other side, brought...

Mon, 06 May 2013 16:27:35 -0400

You already know one side of the lottery ticket debate.

Now, here’s the other side, brought to you by the State of California:

Weapons of Mass Dilution

Tue, 23 Apr 2013 01:52:00 -0400

Others have written—some quite critically—about the government’s decision to charge Dzhokhar Tsarnaev with “unlawfully using and conspiring to use a weapon of mass destruction.” Colloquially, most people have come to associate WMDs with nuclear, biological, or chemical weapons.¹ But 18 USC § 2332a(c)(2)(A) says that “any destructive device as defined in 18 USC § 921” is a “weapon of mass destruction.” Section 921(a)(4)(A) in turn, says that bombs, grenades, and rockets, among other things, are “destructive devices.”²

Since the IEDs used in the Boston attacks are clearly “bombs,” the § 2332(a) charge is pretty straightforward. People can argue about whether that statute is too broad, and whether other laws against, say, murder, would suffice. But what caught my eye in § 921(a) was the grenade and rocket stuff.

It turns out that another way to say “grenade launcher” or “rocket launcher” is “flare gun.” The government knows this and doesn’t really care about your flares, so there is an exception in 18 USC § 921(a)(4) (and in 26 USC 845(f)(3), an identical provision in the NFA) that says that a “signaling, pyrotechnic, line throwing, safety, or similar device” is not a destructive device. (Presumably, the ATF would say that a signaling device that is used to launch grenades is no longer a signaling device.)

Whether certain kinds of launchers are WMDs thus depends on what sort of ammunition you use or plan to use.³ Firing unregistered grenades or rockets obviously triggers § 921(a)(4)(A) and an avalanche of criminal liability. That makes sense.

So what’s between a grenade and a flare? Well, according to the ATF, “cartridges containing wood pellets, rubber pellets or balls, or bean bags” are “‘anti-personnel’ ammunition,” so 37/38mm launchers containing such loads are d̶e̶s̶t̶r̶u̶c̶t̶i̶v̶e̶ ̶d̶e̶v̶i̶c̶e̶s̶ WMDs. That’s right: launcher + bean bag round = WMD.

DYODD and check your state laws, but it appears that in some jurisdictions one can order a pretty serious launcher and have it shipped right to his doorstep; absent “anti-personnel” ammo, the federal government doesn’t even consider it a gun. Just stick to fireworks and take care not to possess (let alone fire) any bean bag rounds if you don’t want to spend “a term of years, up to life” in Leavenworth.

After all, when the government says WMDs, it usually means NBCs. ↩
By this definition, of course, there were tons of WMDs in Iraq. Not that definitions must be consistent across domestic/international or colloquial/technical contexts, but that’s at least worth thinking about. ↩
Under federal law, 40mm launchers are always destructive devices, and thus must be registered to be lawfully possessed. Launchers < 40mm, as far as I can tell, are different. ↩

I affirm.

Thu, 21 Mar 2013 12:31:00 -0400

Well, I am officially a lawyer! Yesterday the Judicata team went over to the James R. Browning Courthouse, where Alex Kozinski, the Chief Judge of the U.S. Court of Appeals for the Ninth Circuit, swore me in to the California Bar. (Or did he? Technically, I affirmed an affirmation instead of swearing an oath. More on that in a bit.)

First, we got a private tour from Kathleen Butterfield, one of the Court’s staff attorneys. The Courthouse is, in a word, incredible. I think that most of what we saw is open to the public during the Court’s bimonthly public tours; if you’re near San Francisco, please, take my advice and attend one. (You might ask if or when Kathleen is leading a tour—she is terrific.)

Some highlights:

(1) So much Italian marble it makes the Hearst Castle look budget:

(2) The bar—literally. Before law schools existed, would-be lawyers would study the law under another lawyer’s supervision. Getting admitted to the Bar involved standing behind the bar with your sponsor and fielding a bunch of questions from the judges. Get enough right and you’d be permitted to—wait for it—literally pass the bar.

(3) The bullet hole from the Hindu-German Conspiracy Trial. In 1918, not five feet from where we held our ceremony, a defendant shot and killed his co-defendant and was then promptly shot to death by a U.S. Marshal. (Amazingly, no mistrial occurred; everybody was found guilty the next week.) You can still see the damage caused by one of the bullets when it hit the judges’ bench—check out the aberration in the tilework, just to the right of the seam in the marble:

After the tour, we hung out in Courtroom One until Judge Kozinski freed up.

After the Judge came in and met the rest of the team, I asked if he’d mind if I chose to affirm rather than to swear. Legally, there’s no difference. Swearing is traditionally perceived to have a religious component to it, whereas affirming is completely secular. This is a pretty mainstream option—the U.S. Constitution explicitly follows every “Oath” with “or Affirmation,” and the official California Bar incantation reads “swear (or affirm)”—but I’d bet that it’s seldom exercised. (Of all my lawyer friends, I know just one who affirmed, and we had discussed it beforehand.)

Why would anyone be so fussy? Naturally, atheists or radically liberal First Amendment zealots tend to be quite interested in keeping things as secular as possible. But even theists have their reasons:

> But I say unto you, swear not at all: neither by Heaven, for it is God’s throne;¹

> But let your communication be ‘yea, yea’ or ‘nay, nay’; for whatsoever is more than these cometh of evil.²

Personally, I chose to affirm because (a) I could, and (b) it seems cooler. Presumably, some of our forefathers argued long and hard to win for us the right to affirm. Why not throw them a cosmic wink? Plus, if it was good enough for Franklin Pierce, it’s good enough for me.

Of course, the Judge was cool with it, and we got it done:

Afterwards, we sat down at the Appellant’s table to chat about Judicata and legal technology. For those of you who don’t know, Judge Kozinski is a pretty tech-savvy guy. After we discussed Judicata’s version of man-machine symbiosis, he dialed back the clock and dazzled us with stories about when he used to program in Fortran on IBM punch cards.

The night ended with dinner at a nearby restaurant. Naturally, the Judge and the whip-smart Ninth Circuit clerks that joined us were delightful company.

I’d like to thank Judge Kozinski and everybody at the Court who made our visit especially memorable yesterday!

Matthew 5:34. ↩
Matthew 5:37. ↩

I am so lucky. with Catherine – View on Path.

Thu, 14 Feb 2013 12:19:00 -0500

I am so lucky. with Catherine – View on Path.

kbspvc: Last week, kbs+ Ventures launched “Creative...

Wed, 06 Feb 2013 01:11:35 -0500

kbspvc:

Last week, kbs+ Ventures launched “Creative Entrepreneurshp”, a curated informational and inspirational aid for entrepreneurs. The book brings together 25 contributors from the world of venture capital and entrepreneurship around the topics of how to build a business, how to fundraise, how to hire, and a number of other strategic and tactical topics for entrepreneurs.

Download “Creative Entrepreneurship” to read for free.

More photos here; photo credit Kyle Dean Reinford.

Drop out or not is the wrong question

Wed, 30 Jan 2013 23:43:00 -0500

I did a keynote interview last night at kbs+ ventures for their new book’s launch event. Since I talked a bit about CS183 and the Thiel Fellowship program, a few people came up to me afterwards and asked different versions of the same question: if I wanted to be an entrepreneur, why did I get several degrees from Stanford instead of dropping out?

My quick answer was that it’s important to avoid blanket statements about education and entrepreneurship. Certainly many successful entrepreneurs have name brand college degrees. But many don’t.

Last I looked, Wikipedia’s list of college dropout billionaires is 31 people and counting (and only one of them is a drug lord). I thought that was a shockingly high number, as most of us only know the most famous three or four. If we wanted to talk about dropout millionaires, there are so many that we’d probably need scientific notation.

One of the reasons for this is that the market doesn’t necessarily wait 4 years for you to get your BS or 6 or 7 years for your PhD. In 2003 and 2004, Mark Zuckerberg had a huge advantage in that he was working furiously toward something he sensed was important while his peers were still locked into school. Starting Facebook in 2007 would not have worked.

One key distinction is between businesses that require a lot of specialized domain knowledge and businesses that don’t. Often, this tracks the distinction between enterprise/B2B and consumer models. Bright, well-adjusted 18- or 19-year-olds can develop the kind of social insight that’s at the core of many great products, maybe even better than older folks can. If their engineering skills are adequate, they can build the vision and more or less take over the world. This isn’t to say this is easy, of course—only that it’s very possible.

Facebook was one example. Another may be Gumroad, a novel e-commerce company run by 20-year-old Sahil Lavingia. If you aren’t already familiar with it, Gumroad enables anyone to sell something online in a matter of seconds. If you want to sell an e-book, for example, you create a product listing and get a unique link that you can share throughout the web. If, as Sahil says, Gumroad “becomes a thing,” he will have succeeded in turning all of Facebook and Twitter into a global online marketplace, i.e. in building a billion dollar company.

Other businesses require a great deal of domain-specific knowledge, which often entails specialized education. For example, my company, Judicata, builds radically better legal search and analytics software for lawyers. This requires great engineers, but it also requires great lawyers who deeply understand how the law works. For better or worse—and I actually suspect for worse—one almost invariably needs to go to college and then law school to become a lawyer. At the very least, being in law school affords one a structured opportunity to learn how to think about the law.

For some ventures, getting a technical or professional education is unquestionably the right move. For others, college is absolutely the wrong move. More interesting than the drop out vs. not question, I think, is the set of questions that aims at unpacking what a college education really is. To really understand the nexus between education and entrepreneurship, we’d be better off starting there.

The horrendous prose of Carmen Ortiz

Thu, 17 Jan 2013 16:17:00 -0500

In most respects, U.S. Attorney Carmen Ortiz’s statement about the Aaron Swartz prosecution is unremarkable. It’s more or less the standard fare that one expects from government officials who unexpectedly find themselves on their heels.

The most striking thing about the statement is the writing itself, which is terrible. Ortiz begins:

As a parent and a sister, I can only imagine the pain felt by the family and friends of Aaron Swartz, and I want to extend my heartfelt sympathy to everyone who knew and loved this young man.

What is the first clause doing here? Presumably it is either intended to establish empathy or sympathy. Empathy seems odd because Ortiz extends “sympathy” two sentences later. But sympathy doesn’t require mentioning Ortiz’s own family, unless she means to syllogize: “I would be upset if one of my family members killed himself. Aaron killed himself. Therefore I imagine that Aaron’s family is upset.” Much better is to avoid the token contrivance and say something like:

I want to extend my heartfelt sympathy to everyone who knew and loved Aaron Swartz. All of us at the U.S. Attorney’s Office deeply regret that Aaron chose to take his own life.

Ortiz continues:

I know that there is little I can say to abate the anger felt by those who believe that this office’s prosecution of Mr. Swartz was unwarranted and somehow led to the tragic result of him taking his own life.

This isn’t that bad. It sort of feels like it’s missing a sentence at the end. The bigger problem is that “somehow led” is too snarky. Ortiz is basically saying that anyone who believes that Aaron’s suicide was related to his prosecution is an idiot. The problem is that most people do believe that these events are related, which seems quite reasonable absent evidence to the contrary. Ortiz is pushing back on causation where she should be pushing back elsewhere instead. The weak line is “We didn’t do anything that caused Aaron to kill himself.” The strong line is “We did everything right. It sucks that Aaron killed himself. Not our fault.”

Ortiz’s second paragraph begins as haphazardly as the first one ended:

I must, however, make clear that this office’s conduct was appropriate in bringing and handling this case.

This sounds weak and defensive in the worst way. If you didn’t do anything wrong, why not take ownership and avoid the passive voice? She continues to wax Rumsfeldian:

The career prosecutors handling this matter took on the difficult task of enforcing a law they had taken an oath to uphold, and did so reasonably.

At one level, she is defending her prosecutors. On another level, it seems like she is throwing them under the bus. Also, no one wants to hear how hard your job is when you mess up (or if you are perceived to have messed up).

Ortiz then spends the rest of the paragraph aimlessly listing off some facts that she hopes readers will find mitigating. Why she doesn’t use an unordered list is beyond me. (The federal government, after all, knows how to use bullet points.) Before we get there, though, consider whether something like the following would make a better second paragraph:

I have been involved with this case since its inception. I have reviewed the record at length over the past few days. My conclusion is clear: I am absolutely certain that our conduct was appropriate in bringing and handling this case. Prosecutors make odd scapegoats in situations such as these. Our job is to enforce valid laws fairly and effectively. In this case, that meant bringing charges against Aaron. We do not pass judgment on the wisdom of laws that Congress chooses to enact. And, unfortunately, we cannot prevent the small percentage of criminal defendants who elect to commit suicide from doing so.

Ortiz’s fact section is her worst writing of all. Consider the following excerpt:

That is why in the discussions with his counsel about a resolution of the case this office sought an appropriate sentence that matched the alleged conduct – a sentence that we would recommend to the judge of six months in a low security setting. While at the same time, his defense counsel would have been free to recommend a sentence of probation. Ultimately, any sentence imposed would have been up to the judge.

That is atrocious. I don’t think it needs any more explanation than that. If you disagree, you are wrong. If you think that this horror show is necessary legalese, you are wrong. This is not a real estate contract. It does not need to read this way. Whether it’s bad enough to do any damage is unclear, but it is certainly not persuasive writing. AUSAs are typically pretty good lawyers who write well. I seriously question whether Ortiz had any of her people read her statement before releasing it. (Another possibility, as @DanGoldin suggests, is that too many people worked on it. Either Ortiz has zero proofreaders or an army of them.)

In any case, here is how one might retool the facts section:

We recognized that there was no evidence that indicated that Aaron acted for personal financial gain.
We recognized that Aaron’s crimes did not warrant the maximum punishments authorized by Congress.
We never sought—or told Aaron or his attorney that we intended to seek—the maximum penalties in this case.
When we discussed settlement options with Aaron and his lawyer, we told them that we would recommend a sentence of six months in a low security facility if Aaron agreed to plead guilty. Aaron declined.
Judges, not prosecutors, decide sentences. All prosecutors can do is recommend a particular sentence. Note that even under a plea bargain, Aaron’s counsel would have been free to recommend and advocate for an even lesser sentence than six months.

The statement ends with:

As federal prosecutors, our mission includes protecting the use of computers and the Internet by enforcing the law as fairly and responsibly as possible. We strive to do our best to fulfill this mission every day.

That’s not so bad. But could she have ended stronger?

While anger is understandable in the wake of tragedy, anger at prosecutors, at least in this case, is misplaced. If people believe that the law should be changed, certainly they should contact their representatives in Congress. In the meantime, as federal prosecutors, our mission is to enforce the law as fairly and responsibly as possible. That is what we did in this case, and we will continue to do just that.

I don’t mean to suggest that my edits make the statement appropriate. I did them in 20 minutes on the Caltrain this morning. What I do mean to suggest is that there is lots of room for improvement. Since this was surely a statement worth getting right, I can’t help but wonder what went wrong.

Resolve to Plan

Thu, 03 Jan 2013 20:04:00 -0500

New Year’s resolutions don’t work. Discipline is hard. People yield to temptations. Resolving in abstractions—get fit, watch less TV, be a better person, etc.—is a terrible idea.

Changing specific habits, by contrast, can work. (Interestingly, evidence of habit or routine practice is usually admissible in courts to prove that a person has acted in conformity therewith.¹ This is not true of character evidence and traits.² There’s always a sense in which habit is more concrete than character.)

But even that is tricky. Most of us are aware of our shortcomings and flaws before we decide to change them. Where did they come from? Why did they persist for so long?

This is why I make plans instead of resolutions. My flaws are probably with me for good. I’m too argumentative. I’m horrible at staying in touch with old friends. There are plenty more. For the most part, though, I already behave like I want to. Being fit is important to me, so I’m fit. Eating clean is important to me, so I do. Work-family harmony is important to me, so I try to attain it. But I haven’t yet achieved much of what I want to achieve… not even close.

Whether one should publicly share his plans is an open question. Patri suggests this can be counterproductive. Others agree. Then again, Wiseman found that public accountability helps, which is the standard intuition. We’ll call it a wash. Since my bias is to share, here are some of my plans for 2013:

Keep working on my startup and do what I can to make it a great business.
Take a certain side project of mine from concept to fruition. Details forthcoming. But it will basically consume all free time until sometime in Q2.
Follow Balaji’s CS184: Startup Engineering MOOC and learn some of these engineering skills. (Judicata is sponsoring a prize for best law app.)
Run a sub 5-minute mile. (I’d guess that I’m around 5:30 right now.)
Do a sub 4-minute Fran. (My PR is 4:30. Here is what Fran looks like in 2:29).

I hope everybody reading has a great year. Go and do awesome things!

See, e.g., Fed. R. Evid. 406. ↩
See, e.g., Fed. R. Evid. 404. ↩

Judicata: The Path of the Law

Tue, 11 Dec 2012 11:31:00 -0500

I’m delighted to announce that my startup, Judicata, has raised $2 million from Peter Thiel, David Lee of SV Angel, Keith Rabois, and Box founders Aaron Levie and Dylan Smith.¹ Our mission is clear: to build legal research and analytics products that dramatically advance what lawyers can do.

Legal technology is at something of a crossroads. On one hand, it is notoriously inefficient and outdated, and has been for quite some time. On the other hand—to use Marc Andreessen’s parlance—software is eating the world.² We can imagine a few different futures unfolding. One would entail the continued stagnation of the status quo. Another would involve minor, halting changes that never quite deliver on their promises. A third would see truly innovative technology that empowers lawyers to argue better and do more than ever before.

The latter is clearly ideal. So why hasn’t it happened yet? Why hasn’t software eaten the law?

Our thesis is that it’s actually quite hard. Lots of people have tried. Some are still trying. But most are hacking at the branches. Incremental change is not without value. But software can’t actually improve legal decision making unless we aim higher. Harder, but more promising, is to strike at the root of the problem. The law is information. The future of legal technology involves organizing and understanding that information. All of it.

This is why Judicata is mapping the legal genome—i.e. using highly specialized case law parsing and algorithmically assisted human review to turn unstructured court opinions into structured data. We can leverage that data to build legal research and analytics tools that are an order of magnitude better than existing offerings. The Palantir model is a rough analogue. Palantir’s software can’t tell a CIA analyst who is a terrorist. But it can identify patterns and make sense of massive amounts of information to help the analyst make that call. Great legal technology will do the same—assist lawyers in exercising their skilled, human judgment.

We believe this is possible, and that we can do it. The fusion of legal domain expertise and engineering talent is key; our founding team of three (Adam, Itai and myself) consists of two engineers and two JDs. Chris and Itai built some of the most advanced features in Google Scholar’s legal index. Patrick worked with Adam at Adap.tv. David, Beth, Adam and I were Stanford c/o ’08 together; two of us became engineers, and two went the law route. This team understands not only how law works, but also how to extract, organize, and analyze the underlying information. We revel in this stuff. (Let us know if you do too.)

Justice Holmes once wrote that understanding law is an exercise in prediction: given a dispute, and given all that have come before it, what is the court likely to do? How can lawyering impact legal outcomes? In 1897, he took a guess about what was to come:

“For the rational study of the law the black-letter man may be the man of the present, but the man of the future is the man of statistics and the master of economics.”³

Substitute “computer science” for “economics,” and we aim to prove him right.

We’re thrilled to be working with this group of investors. Peter, David, and Keith—formerly lawyers before their careers in entrepreneurship and venture—deeply understand how technology can augment legal practice. Aaron and Dylan are captaining one of the Valley’s most successful enterprise software companies. The collective wisdom of this bunch is astounding. Their belief in our vision is, to say the least, inspiring. ↩
Marc Andreessen, Why Software Is Eating The World, Wall St. J., Aug. 20, 2011. ↩
Oliver Wendell Holmes, Jr., The Path of the Law, 10 Harv. L. Rev. 457, 469 (1897). ↩

Peter Thiel on The Future of Legal Technology - Notes Essay

Fri, 07 Dec 2012 12:36:00 -0500

Here is an essay version of my notes from Peter Thiel’s recent guest lecture in Stanford Law’s Legal Technology course. As usual, this is not a verbatim transcript. Errors and omissions are my own. Credit for good stuff is Peter’s.

When thinking about the future of the computer age, we can think of many distant futures where computers do vastly more than humans can do. Whether there will eventually be some sort of superhuman-capable AI remains an open question. Generally speaking, people are probably too skeptical about advances in this area. There’s probably much more potential here than people assume.

It’s worth distinguishing thinking about the distant future—that is, what could happen in, say, 1,000 years—from thinking about the near future of the next 20 to 50 years. When talking about legal technology, it may be useful to talk first about the distant future, and then rewind to evaluate how our legal system is working and whether there are any changes on the horizon.

I. The Distant Future

The one thing that seems safe to say about the very distant future is that people are pretty limited in their thinking about it. There are all sorts of literary references, of course, ranging from 2001: A Space Odyssey to Futurama. But in truth, all the familiar sci-fi probably has much too narrow an intuition about what advanced AI would actually look like.

This follows directly from how we think about computers and people. We tend to think of all computers as more or less identical. Maybe some features are different, but the systems are mostly homogeneous. People, by contrast, are very different from one another. We look at the wide range of human characteristics—from empathy to cruelty, kindness to sociopathy—and perceive people to be quite diverse. Since people run our legal system, this heterogeneity translates into a wide range of outcomes in disputes. After all, if people are all different, it may matter a great deal who is the judge, jury, or prosecutor in your case. The converse of this super naive intuition is that, since all computers are the same, an automized legal system would be one in which you get the same answer in all sorts of different contexts.

This is probably backwards. Suppose you draw 3 concentric circles on a whiteboard: one dot, a ring around that dot, and a larger circle around that ring. The range of all possible humans best corresponds with the dot. The ring around the dot corresponds to all intelligent life forms; it’s a bigger range comprised of the superset of all humans, plus Martians, Alpha Centaurians, Andromedans, and so on. But the diversity of intelligent life is still constrained by evolution, chemistry, and biology. Computers aren’t. So the set of all intelligent machines would be the superset of all aliens. The range and diversity of possible computers is actually much bigger than the range of possible life forms under known rules.

What Hal will be like is thus a much harder question than knowing what would happen if Martians took control of the legal system.

The point is simply this: we have all sorts of these intuitions about computers and the future, and they are very incomplete at best. Implementation of all these diverse machines and AIs might produce better, worse, or totally incomprehensible systems. Certainly we hope for the former as we work toward building this technology. But the tremendous range these systems could occupy is always worth underscoring.

II. The Near Future

Let’s telescope this back to the narrower question of the near future. Forget about 1,000 years from now. Think instead what the world will look like 20 to 50 years from now. It’s conceivable, if not probable, that large parts of the legal system will be automated. Today we have automatic cameras that give speeding tickets if you drive too fast. Maybe in 20 years there will be a similarly automated determination of whether you’re paying your taxes or not. There are many interesting, unanswered questions about what these systems would be like. But our standard intuition is that it’s all pretty scary.

This bias is worth thinking really hard about. Why do we think that a more automated legal future is scary? Of course there may be problems with it. Those merit discussion. But the baseline fear of computers in the near term may actually tells us quite a bit about our current system.

A. Status Quo Bias

Let’s look at our current legal system de novo. Arguably, it’s actually quite scary itself. There are lots of crimes and laws on the books—so many, in fact, that it’s pretty obvious that the system simply wouldn’t work if everybody were actually held accountable for every technical violation. You can guess the thesis of Silverglate’s book Three Felonies A Day. Is that exaggerated? Maybe. But one suspects there’s a lot to it.

The drive for regulation and enforcement by inspection isn’t new or unique to America, of course. In 1945, the English playwright J.B. Priestley wrote a play called An Inspector Calls. The plot involves the mysterious death of a nanny who was working for an upper middle class family. The family insists it was just suicide, but an inspector investigates and finds that the family actually did all these bad things to drive the girl to suicide. The subtext is all of society is like this. The play opened in 1945 at the Bolshevik Theatre in Stalinist Russia. The last line was: “We must have more inspectors!” And the curtains closed to thunderous applause.

B. Fear of the Unknown

Despite firsthand knowledge of what bureaucracy can do, we tend to think that it is a computerized legal system that would be incredibly draconian and totalitarian. For some reason, there is a big fear of automatic implementation and it gets amplified as people extrapolate into the future.

The main pushback to this view is that it ignores the fact that the status quo is actually quite bad. Very often, justice isn’t done. Too often, things are largely arbitrary. Incredibly random events shape legal outcomes. Do people get caught? Given wide discretion, what do prosecutors decide to do? What goes on during jury selection? It seems inarguable that, to a large extent, random and uncertain processes determine guilt or liability. This version isn’t totalitarian, but it’s arbitrary all the same. We just tend not to notice because most of the time we get off the hook for stuff we do. So it sort of works.

C. Deviation from Certainty

But what is the nature of the randomness? That our legal system deviates from algorithmic determinism isn’t necessarily bad. The question is whether the deviation is subrational or superrational. Subrational deviation involves things that don’t make sense, but rather just happen for no reason at all. Maybe a cop is upset about something from earlier in the day and he takes it out on you. Or maybe the people on the jury don’t like how you look. People don’t like to focus on these subrational elements. Instead they prefer to talk as if all deviation were superrational: what’s arbitrary is not in fact arbitrary, but rather is perfect justice. Things are infinitely complex and nuanced. And our current system—but not predictable computers—appropriately factors all that in.

That narrative sounds good, but it probably isn’t true. Most deviation from predictability in our legal system is probably subrational deviation. In many contexts, this doesn’t matter all that much. Take speeding tickets, for example. Everyone gets caught occasionally, with roughly the same frequency. Maybe a system with better enforcement and lesser penalties would be slightly better, but one gets the sense that this isn’t such a big deal.

But there are more serious cases where the sub- vs. superrational nature of the deviation matters more. Drug laws are one example. This past election, Colorado voters just voted to legalize marijuana there. California has done something functionally similar by declaring that simple possession is not an enforcement priority. But that’s only at the state level; possession remains illegal and enforced under federal law. Violation of the federal statute can and does mean big jail time for people who get caught. But the flipside is that there aren’t many federal enforcers, and these states aren’t inclined to enforce the federal law themselves. So people wind up having to do a bunch of probabilistic math. Maybe a regime in which you have a 1 in 1,000 chance of going to jail for a term of 1,000 days works reasonably well. But arguably it’s quite arbitrary; getting caught can feel like getting hit with a lightening bolt. Much better would be to have 1,000 offenders each go to jail for a day.

III. A (More) Transparent Future

It may be that the usual intuition is precisely backwards. Computerizing the legal system could make it much less arbitrary while still avoiding totalitarianism. There is no reason to think that automization is inherently draconian.

Of course, automating systems has consequences. Perhaps the biggest impact that computer tech and the information revolution have had over last few decades has been increased transparency. More things today are brought to the surface than ever before in history. A fully transparent world is one where everyone gets arrested for the same crimes. As a purely descriptive matter, our trajectory certainly points in that direction. Normatively, there’s always the question of whether this trajectory is good or bad.

It’s hard to get a handle on the normative aspect. What does it mean to say that “transparency is good”? One might say that transparency is good because its opposite is criminality, which we know is bad. If people are illegally hiding money in Swiss bank accounts, maybe we should make all that transparent. But it’s just as easy to claim that opposite transparency is privacy, which we also tend to believe is good. Few would argue that the right to privacy is the same thing as the right to commit crimes in total secrecy.

One way to these questions is to first distinguish the descriptive and the normative and then hedge. Yes, the shift toward transparency has its problems. But it’s probably not reversible. Given that it’s happening, and given that it can be good or bad depending on how we adjust, we should probably focus on adjusting well. We’ll have to rethink these systems.

A. Transparency and Procedure

In some sense, Computers are inherently transparent. Almost invariably, codifying and automating things makes them more transparent. From the computer revolution perspective, transparency involves more than simply making people aware of more information. Things become more transparent in a deeper, structural sense if and when code determines how they must happen.

One considerable benefit of this kind of transparency is that it can bring to light the injustices of existing legal or quasi-legal systems. Consider the torture scandals of the last decade. This got a lot of attention when information about what kinds of abuse were going on was published. This, in turn, led to a lot of changes in process, with the end result being a rather creepy formalization under which you can sort of dunk prisoners in water… but don’t you dare shock them.

Why the drive toward transparency? One theory is that lower level people were getting pretty nervous. They understandably wanted the protection of clear guidelines to follow. They didn’t have those guidelines because the higher ups in the Bush administration didn’t really understand how the world was changing around them. So it all came to a head. In an increasingly transparent world, torture gets bureaucratized. And once you formalize and codify something, you can bring it to the surface and have a discussion about whatever injustice you may see.

If you’re skeptical, ask yourself which is safer: being a prisoner at Guantanamo or being a suspected cop killer in New York City. Authorities in the latter case are pretty careful not to formalize rules of procedure. It seems reasonable to assume that’s intentional.

B. Would Transparency Break The Law?

The overarching, more philosophical question is how well a more transparent legal system would work. Transparency makes some systems work better, but it can also make some systems worse.

So which kind of system is the legal system? Maybe it’s like the stock market, which automation generally makes more efficient. Instead of only being able to trade to an eighth of a share, you can now trade to the penny. Traders now have access to all sorts of metrics like bidder volume. Things have become less arbitrary, more precise, and more efficient. If the law is mostly rational, and just slightly off, it may be the case that you can tweak things and make it right with a little automation.

Other systems aren’t like this at all. Many things only work when they are done in the dark, when no one knows exactly what’s going on. The phenomenon of scapegoating is a good example. It only works when people aren’t aware of it. If you were to say “We have a serious problem in the community. No one is happy. We need psychosocial process whereby we can designate someone as a witch and then burn them in order to resolve all this tension,” the idea would be ruined. The whole thing only works if people remain ignorant about it.

The question can thus be reduced to this: is the legal system pretty just already, and perfectible like a market? Or is it more arbitrary and unjust, like a psychosocial phenomenon that breaks down when illuminated?

The standard view is the former, but the better view is the latter. Our legal system is probably more parts crazed psychosocial phenomenon. The naïve rationalistic view of transparency is the market view; small changes move things toward perfectibility. But transparency can be stronger and more destructive than that. Consider the tendency to want to become vegan if you watch a bunch of foie gras videos on YouTube. Afterwards, you’re not terribly concerned about small differences in production techniques or the particulars of the sourcing of the geese. Rather, you have seen the light, and have a big shift in perspective. Truly understanding our legal system probably has this same effect; once you throw more light on it, you’re able to fully appreciate just how bad things are underneath the surface.

C. Law and Order

Once you start to suspect that the status quo is quite bad, you can ask all sorts of interesting questions. Are judges and juries rational deliberating bodies? Are they weighing things in a careful, nuanced way? Or are they behaving irrationally, issuing judgments and verdicts that are more or less random? Are judges supernaturally smart people? The voice of the people? The voice of God? Exemplars of perfect justice? Or is the legal system really just a set of crazy processes?

A good rule of thumb in business is to never get entangled in the legal system in any way whatsoever. Invariably it’s an arbitrary and expensive distraction from what you’re actually trying to do. People underestimate the costs of engaging with plaintiff’s lawyers. It’s very easy to think: “Well, they’re just bringing a case. It will cost a little bit, but ultimately we will figure out the truth.” But that’s pretty idealized. If you’re dealing with a crazy arbitrary system and you never actually know what could happen to you, you end up negotiating with plaintiff’s lawyers just like the government negotiates with terrorists: not at all, except in every specific instance. When the machinery is too many parts random and insane, you always find a way to pay people off.

Looking forward, we can speculate about how things will turn out. The trend is toward automization, and things will probably look very different 20, 50, and 1000 years from now. We could end up with a much better or much worse system. But realizing that our baseline may not be as good as we tend to assume it is opens up new avenues for progress. For example, if uniformly enforcing current laws would land everyone in jail, and transparency is only increasing, we’ll pretty much have to become a more tolerant society. By placing the status quo in proper context, we will get better at adjusting to a changing world.

Questions from the Audience:

Question from the audience: Judge Posner recently opined in a blog post that humans don’t have free will. He argued that it is not objectionable to heavily tax wealthy people because, things being thoroughly deterministic, they made their fortunes through random chance and luck. If the free will point is true, there are also implications for criminal law, since there’s no point punishing people who are not morally culpable. How do you see technological advance interacting with the questions of free will, determinism, and predicting people’s behavior?

Peter Thiel: There are many different takes on this. For starters, it’s worth noting that any one big movement on this question might not shake things up too much. Maybe you don’t aim for retribution on people who aren’t morally culpable. But there are other arguments for jail even if you don’t believe in free will. Since there are several competing rationales for the criminal justice system, practically speaking it may not matter.

More abstractly, it seems clear that we are headed towards a more transparent system. But there are layers and layers of nuance on what that means and how that happens. There is no one day where some switch will be flipped and everything is illuminated. Theoretically, if you could flip that switch and determine all the precise causal connections between things, you would know how everything worked and could create that perfectly just system. But philosophically and neurobiologically, that is probably very far away. Much more likely is a rolling wave of transparency. More things are transparent today than in the past. But there’s a lot that is still hidden.

The order of operations—that is, the specific path the transparency wave takes—matters a great deal too. Take something like WikiLeaks. The basic idea was to make transparent the doings of various government agencies. One of the critical political/legal/social questions there was what became transparent first: all the bad things the US government was doing? Or the fact that Assange was assaulting various Swedish groupies? The sequence in which things become transparent is very important. Some version of this probably applies in all cases.

I agree with Posner that transparency often has a corrosive undermining effect. Existing institutions aren’t geared for it. I do suspect that people’s behavior still responds to incentives in some ways, even if there is no free will in the philosophical, counterfactual sense of the word. But I am sympathetic to part of the free will argument because, if you say that free will exists, you’re essentially saying two things:

the cause of your behavior came from within you, i.e. you were an unmoved mover, and;
that you could have done otherwise, in a counterfactual world.

But if you combine those two claims, the resulting world seems strange and implausible.

Practically, free will arguments are worth scrutiny. Ask yourself: in criminal law, which side makes arguments about free will? Invariably the answer is the prosecution. The line goes: “You killed this person. It was your decision to do that. You’re not even deformed; that’s an extrinsic factor. Rather, you are intrinsically evil.” Anyone who is skeptical about excessive prosecution should probably be skeptical about free will in law. But it makes sense to be less skeptical about it as a philosophical matter.

Question from the audience: There’s the AI joke that says that cars aren’t really autonomous until you order them to go to work and they go to the beach instead. What do you think about the future of encoding free will into computers? Can we imagine mens rea in a machine.

Peter Thiel: In practice it’s most useful to think of questions about free will as political questions. People bring up free will when they want to blame other people.

Theoretically, the nexus between free will and AI does raise interesting questions. If you turn the computer off, are you killing it? There are many different versions of this. My intuition is that we’re really bad at answering these questions. Common sense doesn’t really work; it’s likely to be so off that it’s just not helpful at all. This stuff may just be too weird to figure out in advance. Maybe the biggest lesson is that we should just be skeptical of our intuitions. So I’ll be skeptical of my intuitions, and will not answer your question.

Besides, the easier things are the near term things. Short of full-blown AI, we can automate certain processes and reap large efficiency gains while also avoiding qualms about about turning the computers off at night. We should not conflate super intelligent computers with very good, but still dumber-than-human computers that do things for us. In the near term, we should welcome transparency and automation in our political and legal structures because this will force us to confront present injustices. The fear that all this leads to a Kafkaesque future isn’t illegitimate, but it’s still very speculative.

Question from the audience: How could you ever design a system that responds unpredictably? A cat or gorilla responds to stimulus unpredictably. But computers respond predictably.

Peter Thiel: There are a lot of ways in which computers already respond unpredictably. Microsoft Windows crashes unpredictably. Chess computers make unpredictable moves. These systems are deterministic, of course, in that they’ve been programed. But often it’s not at all clear to their users what they’ll actually do. What move will Deep Blue make next? Practically speaking, we don know. What we do know is that the computer will play chess.

It’s harder if you have a computer that is smarter than humans. This becomes almost a theological question. If God always answers your prayers when you pray, maybe it’s not really God; maybe it’s a super intelligent computer that is working in a completely determinate way.

Question from the audience: One problem with transparency is that it can delegitimize otherwise legitimate authority. For instance, anyone can blog and post inaccurate or harmful information, and the noise drowns out more legitimate information. Couldn’t more transparency in the legal system actually be harmful because it would empower incorrect or illegitimate arguments?

Peter Thiel: This question gets at why it’s important to have an incremental process towards full transparency instead a radical shift. There are certainly various countercurrents that could emerge.

But generally speaking the information age has tended to result in more homogenization of thought, not less. It just doesn’t seem true that transparency has enabled more isolated communities of belief to disingenuously tap into various shreds of data and thereby maintain edifice where they couldn’t have before. It’s probably harder to start a cult today than it was in the ‘60s or ‘70s. Even though you have more data to piece together, your theory would get undermined and attacked from all angles. People wouldn’t buy it. So the big risk isn’t that excessively weird beliefs are sustained, but rather that we end up with one homogenized belief structure under which people mistakenly assume that all truth is known and there’s nothing left to figure out. This is hard to prove, of course. It’s perhaps the classic Internet debate. But generally the Internet probably makes people more alike than different. Think about the self-censorship angle. If everything you say is permanently archived forever, you’re likely to be more careful with your speech. My biggest worry about transparency is that it narrows the range of acceptable debate.

Question from the audience: How important is empathy in law? Human Rights Watch just released a report about fully autonomous robot military drones that actually make all the targeting decisions that humans are currently making. This seems like a pretty ominous development.

Peter Thiel: Briefly recapping my thesis here should help us approach this question. My general bias is pro-computer, pro-AI, and pro-transparency, with reservations here and there. In the main, our legal system deviates from a rational system not in a superrational way—i.e. empathy leading to otherwise unobtainable truth—but rather in subrational way, where people are angry and act unjustly.

If you could have a system with zero empathy but also zero hate, that would probably be a large improvement over the status quo.

Regarding your example of automated killing in war contexts—that’s certainly very jarring. One can see a lot of problems with it. But the fundamental problem is not the machines are killing people without feeling bad about it. The problem is simply that they’re killing people.

Question from the audience: But Human Rights Watch says that the more automated machines will kill more people, because human soldiers and operates sometimes hold back because of emotion and empathy.

Peter Thiel: This sort of opens up a counterfactual debate. Theory would seem to go the other way: more precision in war, such that you kill only actual combatants, results in fewer deaths because there is less collateral damage. Think of the carnage on the front in World War I. Suppose you have 1,000 people getting killed each day, and this continues for 3-4 years straight. Shouldn’t somebody have figured out that this was a bad idea? Why didn’t the people running things put an end to this? These questions suggest that our normal intuitions about war are completely wrong. If you heard that a child was being killed in an adjacent room, your instinct would be to run over and try to stop it. But in war, when many thousands are being killed… well, one sort of wonders how this is even possible. Clearly the normal intuitions don’t work.

One theory is that the politicians and generals who are running things are actually sociopaths who don’t care about the human costs. As we understand more neurobiology, it may come to light that we have a political system in which the people who want and manage to get power are, in fact, sociopaths. You can also get here with a simple syllogism: There’s not much empathy in war. That’s strange because most people have empathy. So it’s very possible that the people making war do not.

So, while it’s obvious that drones killing people in war is very disturbing, it may just be the war that is disturbing, and our intuitions are throwing us off.

Question from the audience: What is your take on building machines that work just like the human brain?

Peter Thiel: If you could model the human brain perfectly, you can probably build a machine version of it. There are all sorts of questions about whether this is possible.

The alternative path, especially in the short term, is smart but not AI-smart computers, like chess computers. We didn’t model the human brain to create these systems. They crunch moves. They play differently and better than humans. But they use the same processes. So most AI that we’ll see, at least first, is likely to be soft AI that’s decidedly non-human.

Question from the audience: But chess computers aren’t even soft AI, right? They are all programmed. If we could just have enough time to crunch the moves and look at the code, we’d know what/s going on, right? So their moves are perfectly predictable.

Peter Thiel: Theoretically, chess computers are predictable. In practice, they aren’t. Arguably it’s the same with humans. We’re all made of atoms. Per quantum mechanics and physics, all our behavior is theoretically predictable. That doesn’t mean you could ever really do it.

Comment from the audience: There’s the anecdote of Kasparov resigning when Deep Blue made a bizarre move that he fatalistically interpreted as a sign that the computer had worked dozens of moves ahead. In reality the move was caused by a bug.

Peter Thiel: Well… I know Kasparov pretty well. There are a lot of things that he’d say happened there…

Question from the audience: I’m concerned about increased transparency not leaving room for tolerable behavior that’s not illegal. What’s your take on that?

Peter Thiel: That we are generally heading toward more transparency on a somewhat unpredictable path is a descriptive claim, not a normative one. This probably can’t be reversed; it’s hard to stop the arc of history. So we have to manage as best we can.

Certain things become harder to do in a more transparent world. Government, for example, might generally work best behind closed doors. Consider the fiscal cliff negotiations. If you said that they had to take place in front of C-SPAN cameras, things might work less well. Of course, it’s possible that they’d work better. But the baseline question is how good or bad the current system is. My view is that it’s actually quite bad, which is why greater transparency is more likely to be good for it.

I spoke with high-ranking official fairly recently about how Facebook is making things more transparent. This person believed that government only works when it’s secret—a “conspiracy against the people, for the people”sort of narrative. His very sincerely held view was that our government essentially stopped working during the Nixon administration, and we haven’t had a functioning government in this country for 40 years. No one can have a strategy. No one can write notes. Everything is recorded and everything becomes a part of history. We can sympathize with this, in that it’s probably very frustrating for officials who are trying to govern. But normatively, perhaps it’s a good thing if we no longer have a functioning government. All it ever really did well was kill people.

If you believe the stories that most people tell—the government is doing public good, and there’s a sense of superhuman rationality to it—transparency will shatter your view. But if you think that our system is incredibly broken and dysfunctional in many ways, transparency forces discussion and retooling. It affords us a chance to end up with a much more tolerant, if very different, world.

Question from the audience: Can you explain what bringing more transparency to government or the legal system would look like? How, specifically, does automating legal system lead to transparency?

Peter Thiel: Transparency can mean lots of things. We must be careful how we use the term. But take the simple example of people taking cell phone pictures of cops arresting people. That would make police-civilian interactions more transparent, in the thinnest sense. Maybe you find out that there are shockingly few procedural violations and that police are really well behaved. If so, this will increase confidence and make a good system even better. Of course, the reality may be that this transparency will expose the violations and arbitrariness in a bad system.

Capital punishment is another example. DNA testing can be seen as adding another layer of transparency to the system. It turns out that something like 20% of people accused of committing a capital crime are wrongly accused. That figure seems extraordinarily high; you’d think that with capital crimes, investigations would be much more serious and thorough and consequently there would be a very low rate of nabbing the wrong person. Today we’re increasingly skeptical of the justice of capital punishment, and for good reason. If the DNA tests had shown that we’ve never ever made an ID mistake in a capital case, we’d probably think very differently about our system.

The general insight is that as you codify things, you tend to bring to the surface what’s actually going on. One of the virtues of a more automated system is that it’s easier to describe accurately. You can actually understand how it works. At least in theory, you bring injustice to light. In practice, you’d then have to change the injustice. And you can’t do that if you don’t know about it.

Question from the audience: Doesn’t transparency to whom matter more than just transparency? Transparency to the programmer re witch-hunting doesn’t expose the existence of witch-hunting to society, right? Should government software be open sourced?

Peter Thiel: I’ll push back on that question a little bit. Just because you have an algorithm doesn’t mean people will always know what it will do—this is the chess computer example again. It’s very possible that people wouldn’t understand some things even with transparency. We have transparency on the U.S. budget, but no one in Congress can actually read or understand it all.

It’s a big mistake to think that one system can be completely transparent to everybody. It’s better to think in terms of many hidden layers that only gradually get uncovered.

Question from the audience: Since there are different countries, there are obviously multiple legal systems that interact, not just one legal system. Is it problematic that we won’t see the same transparency in some systems that we will in others?

Peter Thiel: Again, the push back is that transparency isn’t a unitary concept. The sequencing path is really important. Does the government get more transparency into the people? The people into the government? Government into itself, and the machine just works more efficiently? Depending on just how you sequence it, you can end up with radically different versions.

Look at Twitter and Facebook as they related to the Arab Spring. Which way do these technologies cut in terms of transparency? In 2009, the Iranian government hacked Twitter and used it to identify and locate dissidents. But in Tunisia and Egypt, the numerous protest posts and tweets helped people realize that they weren’t the only ones who were unhappy. The exact same software plays out in extremely different ways depending on the sequencing.

Question from the audience: Is there a point in time where we just shift from current computers to future computers? Or does technological advance follow a gradual spectrum?

Peter Thiel: Maybe there’s a categorical difference at some point. Or maybe it’s just quantitative. It’s conceivable that as some point things are just really, really different. The 20-year story about greater transparency is one where you can make reasonable predictions as to what computers will likely do and what they’re likely to automate, even though the computers themselves will be a little different. But 1,000 years out is much more opaque. Will the computers be just or unjust? We have no good intuition about that. Maybe they’ll be more like God, or we’ll be dealing with something beyond good and evil.

Question from the audience: Traffic cameras are egalitarian. But cops might be racist. Do you think we run the risk of someday having racist or malicious computers?

Peter Thiel: In practice, we can still generally understand computers somewhat better than we can understand people. In the near term at least, more computer automation would produce systems that are more predictable and less arbitrary. There would be less empathy but also less hate.

In the longer term, of course, it could be just the opposite. There may be real problems there. But key to understand is that we’re experiencing an irreversible shift toward greater transparency. This is true whether your time horizon is long-term, where things are mysterious and opaque, or short-term, where things become automized and predictable. Naturally, you have to get to the short-term first. So we should first realize the gains there, and we can figure out any long-term problems later.

Pass the CA Bar Exam in 100 Hours

Mon, 03 Dec 2012 10:03:00 -0500

I passed the July 2012 California Bar Exam by studying for 100 hours—no more than 5 hours per day between July 1^st and July 24^th. My approach may not be appropriate for everybody. But here are some details nonetheless; hopefully they will help some future examinee.

I. Bar Contrarianism

I suspect two things about the Bar Exam.

First, it’s probably easier than is commonly thought. The received wisdom is that the exam is quite difficult. Naturally, people who fail believe this because it softens the blow. People who pass tend to believe it because they usually grossly overstudied, and are biased to think that all their preparation was important. (If you pass, the State Bar doesn’t tell you by how much.) Test prep companies do their part to terrify law students into enrollment. Everyone’s incentivized to exaggerate.

This is somewhat bizarre, since there’s really not much reason for fear: in California, first-time takers from ABA-approved law schools have a pass rate of about 75%. Scarier, lower figures in the 50% range are commonly cited, but those are misleading because they include repeat-takers, people from unaccredited schools, foreign-educated students, etc. (The pass rates for those groups all hover around 25%. And things are really bleak for people in two of those groups; unaccredited or foreign-educated repeaters pass just 7-10% of the time.) So, if you speak English fluently, haven’t failed the exam before, and you went to a real law school, you’re very likely to pass. If you went to a good law school, you’re looking at more like 90 to 95% odds.

My second suspicion is that managing one’s psychology about the exam is probably as important as anything else. I don’t think most examinees realize this. People tend to become incredibly stressed before the exam. Certainly some small amount of stress can be motivational. But I’d guess that unchecked stress and fear cause more people to fail than insufficient studying does.

II. Plan

Given all this, I figured I could probably pass by studying much less than conventional wisdom instructs, so long as I avoided panicking or feeling guilty about that and instead re-framed it as optimal.

This framing was easy enough because I didn’t have much of a choice. I could not study full-time since I had other priorities and commitments; over the summer, we at Judicata were raising a round of venture capital, hiring people, building a product, etc. So I had to be relatively cavalier in my preparation and relatively carefree about the results.

I think this approach would probably work for most law students who are capable of passing the Bar. Of course, this doesn’t mean it’s a good approach for most people, or that it’s not risky. Because I work at a legal tech startup, not a law firm, passing the Bar was professionally important but not quite professionally crucial. (In the unlikely event that I’d fail and have to re-take the exam, most of my startup work would continue unchanged in the interim.) It’s hard to know how much of a difference this makes. But it’s worth noting.

III. Prep Course vs. Self Study

Most examinees take expensive Bar prep courses, which strike me as psychic insurance policies as much as anything else. I suppose I would have taken one if they were free. But I didn’t want to pay out-of-pocket for discipline I could impose on myself. So I just used the BARBRI books from 2010. (These are reasonably cheap on eBay. More on materials in a bit.) If you think you can successfully self-study for the Bar, you probably can. If you think you can’t, my guess is you’re probably wrong about that, but you should definitely take a review course anyway because you will psych yourself out if you don’t and that probably won’t end well.

BARBRI assigns a heavy load—something like 300 to 400 hours of preparation over the course of several months. That seemed excessive. At the other extreme, I had read that someone passed in 2010 with just 90 hours of prep. So I figured that 100 hours would put me in range. This seemed aggressive, but perhaps not insane. Also worth considering is that the Bar Exam itself is 18 hours of testing spread over 3 days. Spending just 2x or 3x testing time on preparation seemed too haughty. There are 17 subjects tested on the exam, and I would probably have been doomed if I tried to learn and retain the basics of, e.g., California law on wills and succession in just 2 or 3 hours. 5 to 6 hours of study per subject and a rough 5:1 prep time to testing time, by contrast, seemed reasonable. Since time was scarce, I knew I had to be efficient. Hence my strict policy of 5 hours of studying per day maximum.

IV. Details

The California Bar Exam can be divided into two parts. There is the Multistate Bar Exam (MBE), which is a bunch of multiple-choice questions that cover the basic law school subjects (Constitutional law, contracts, property, torts, criminal law and procedure, and evidence). And then there’s everything else.

“Everything else” means two things:

Essays, which can cover any of the 7 MBE subjects plus a bunch more (Federal civil procedure and CA-specific civil procedure, evidence, professional responsibility, business associations, trusts, wills and succession, community property, and remedies); and
Written performance tests, which don’t involve substantive law and are all about reasoning and writing ability.

Here is what my general plan looked like:

(multi-tab xlsx version here.)

A. Focus on MBE First

Though the MBE accounts for 35% of the total Bar Exam score and 33% of testing time, I spent most of my prep time—at least 50 or 60 hours—focused on it. (Specifically, I spent 22 hours taking practice MBE questions, probably another 15 hours recording and studying all 298 of my errors, and at least 20 hours reading and reviewing the MBE subject outlines.) I highly recommend prioritizing the MBE in this fashion.

Prioritizing the MBE makes sense because it’s basically just a review of the first year of law school. This is classic 80-20 rule stuff. By the end of my first week of study, I’d read the Conviser Mini Review outline of each of the 7 MBE subjects and had done about 186 “easy” practice questions. Of these I got 135, or 72%, correct. This kind of early confidence is key if you believe, as I do, that half the battle is managing psychology. The MBE stuff is probably the easiest to get a handle on. So why not get an early handle on it?

Because multiple-choice is very objective, you can rack up a ton of points by doing well on the MBE. It is much harder to gain ground elsewhere. For example, though the essays are each graded on a 100-point scale, really good answers routinely get 70 or 75 points, while poor answers get 50 or 55. That’s not a whole lot of variance. Much better to excel on the MBE and write average essays than to write great essays but do average on the MBE. I aimed to get through 1,000 practice questions—5x more than the amount on the actual exam—and came pretty close by doing 966 questions in 1,331 minutes. Shooting for 1,000 or 1,500 practice MBE questions is probably a good idea. Nothing is more important than studying your errors!

A note on materials. You need just 2 things to rock the MBE: BARBRI’s Conviser Mini Review, which usually goes for $75-100 on eBay, and a book of practice questions. Memorize everything in Conviser and you will be able to get maybe 90% of practice MBE questions right. No one actually gets 90% of practice or real MBE questions right, of course. (Usually 60-70% on practice questions is a good score, if “hard” question sets are mixed in. And 75-80% on the somewhat easier actual MBE questions is a damn good score.) But this goes to show that knowing Conviser is all you need. It’s thick enough to be hard to memorize but thin enough to be possible. Cracking open the big BARBRI books, or anything more dense or detailed than the Conviser, is entirely unnecessary. Perfect really is the enemy of the good here.

B. Learn the CA Essay Subjects

Essays account for 39% of the Exam score and take up 33% of testing time. The examiners can ask for an essay on any, or any combination, of the 17 subjects. Learning the non-MBE subjects is basically same drill as learning the MBE subjects: read and re-read the Conviser for each subject until you memorize it.

Unfortunately, this is harder than the MBE subjects for two reasons. First, there are no multiple-choice questions to test your knowledge on the non-MBE subjects. (I made flashcards for this purpose.) Second, depending on what you took in law school, these subjects may be completely new to you. Most were new to me.

These elements—subject newness and uncertainty as to progress—may tempt you to go too deep. Resist that temptation. People dedicate entire careers to learning the minutiae of any one of these subjects. That is not your task. If you study business associations for 100 hours, you’ll fail the Bar Exam and still not be an expert on business associations. So spend a few hours with each subject and know most of what’s in the Conviser. That is a recipe for competent essay writing.

I didn’t write any practice essays. This is generally perceived to be suicidal. Practice essays are usually regarded as crucially important. I tend to disagree, since I think that one is in a great deal of trouble if studying for the Bar also entails learning how to write well. I’m just not sure how much practice can help at the margin. Regardless, probably the biggest thing to watch out for is time management. If you’re confident in your writing and that you won’t blow the time management aspect, maybe skip writing practice essays. If you’re nervous about time management or essays generally, practice away. I don’t want to assume away some people’s needs or concerns here—I suppose this is just an area that requires frank self-assessment. But to the extent that time is scarce, it’s much more important to learn the substantive law cold so that what you do write is generally correct. In any case, I’d recommend spending some time looking over some sample essay answers to get a feel for what you have to produce on the exam.

C. Learn a bit about the performance tests, then ignore them

I also didn’t write any practice performance tests (PTs). I spent probably 3-4 hours total reading about the various formats and talking to past exam-takers about them, and that’s it.

Though PTs are important—they count for 26% of the exam score and constitute 33% of total testing time—I found it worthwhile to largely ignore them. The ugly truth is that PTs test skills that can’t be learned or improved quickly. The examiners are trying to see how well examinees can read, organize, reason, and compose a legal document under time pressure. These are general skills that law students have hopefully been developing for a long time by the time they sit for the Bar. If you’re really worried about PTs, by all means practice some. But if you’re pretty comfortable with the basic law school exam format, just take a close look at all the possible PT formats, and then get back to studying the law.

V. Conclusion

You can absolutely pass the California Bar by studying for 100 hours or less, and not getting freaked out is a key component of that.

The obvious pushback is that neither my advice nor my approach is applicable to people whose careers are on the line when they sit for the exam. There’s obviously limited utility in a “How To Pass The Bar in 100 Hours When You Did Well At An Elite Law School And The Stakes Are Low” sort of post.

I guess I’d counter by suggesting that people might learn from my approach even if copying it doesn’t make sense for them. Just knowing that it’s possible for one to comfortably pass with 100 hours of prep may make a freaking-out BARBRI student with 300 hours under his belt feel bit less stressed. One could still give the MBE the relative weight I suggested, but go on to do 3x more practice questions than I did. The insight that anyone who did reasonably well in his legal writing class should be very confident about taking PTs without practicing at all may be useful to someone who is worried about only having practiced 5 of them. Or at least I hope so.

So how out of touch can this be, really? If the default position is that studying for the Bar is a terrible experience and the whole ordeal is massively stressful, it’s probably worthwhile to be somewhat contrarian and try to avoid that. I doubt I’ve been insensitive to those who, because of differing circumstances, aren’t inclined or able to ratchet up the Bar contrarianism quite as high as I did.

Ultimately I believe what the data suggests. Most smart people from good law schools can and will pass the Bar, and many probably need only minimal studying to do so. Many not-as-smart or otherwise disadvantaged people from poor law schools will fail, even with intense studying and multiple retakes. The 15-20% (yes, I believe it is that small) of people who are somewhere in the middle will pass or fail depending on their study habits.

Fair or not, the Bar Exam rewards a certain brain type. People who can memorize stuff well can do well on the MBE. People who write clearly under time pressure can handle the written parts. Anyone who can’t do one or the other, unfortunately, will fail. It’s not just about hours logged. A solid minority of BARBRI takers routinely fail. Stress or bad luck or inability can be merciless. That is a real shame. Arguably the Bar Exam should be done away with entirely (old version here, modern version here). Meantime, though, one has to pass it to lawyer. Hopefully this post has provided some insight and will help someone do just that.

My thanksgiving is perpetual

Thu, 22 Nov 2012 15:55:34 -0500

I am grateful for what I am & have. My thanksgiving is perpetual. It is surprising how contented one can be with nothing definite — only a sense of existence….O how I laugh when I think of my vague indefinite riches. No run on my bank can drain it, for my wealth is not possession but enjoyment.

-Henry David Thoreau, letter to Harrison Gray Blake, 1856.

Also worth a glance: the WSJ’s annual chronicle of the Pilgrims’ arrival at Plymouth, as recorded by Nathaniel Morton.

Liberalize the law

Fri, 16 Nov 2012 22:27:00 -0500

Nonmembers often complain about state-granted professional licensure, only to shift to defend it should they succeed in acquiring its protection. Like many of my friends, I received the good news today that I’ve passed the California Bar Exam. I’d like to celebrate by sharing some words that Lysander Spooner wrote in 1835 while advocating the disestablishment of weighty restrictions on admission to the Bar.

[T]he ability [or] learning… of an individual, for the practice of law, cannot, with justice, be made a matter of inquire by the Courts or the Legislature… [those matters] concern solely the lawyer himself and his clients. Any man…has the right to decide for himself whom he will employ as counsel…[I]t is the right of the person so employed to have the same facilities afforded to him for discharging his service as counsel, that are afforded to others, whom the public may think much better or abler lawyers….[T]he professional man, who, from want of intellect or capacity for his profession, is unable to sustain himself against the free competition of his neighbors without the aid of a protective system, has mistaken his calling…

[Moreover,] the present rules operate as a protective system in favor of the rich… against the competition of the poor….Take [the] case…of a poor young man,… fortunate enough to obtain credit and assistance, while getting his education, on the condition that he shall repay after he shall have engaged in his profession—so long is the term of study required, and such is the prohibition upon his attempts to earn any thing in the mean time for his support, that he must then come into practice with such an accumulation of debt upon him as the professional prospects of few or none can justify…. [Yet] no one has ever yet dared to advocate, in direct terms, so monstrous a principle as that the rich ought to be protected by law from the competition of the poor.

I’ve slightly edited this except for the sake of brevity. If you enjoy Spooner’s language or his argument, you should read the whole letter, simply titled To the Members of the Legislature of Massachusetts.

Would that my classmates and I are among the last to be required to do what we had to do in order to do what we wanted to do.

Hawthorne, Perennial on Parties

Thu, 13 Sep 2012 00:33:00 -0400

The following statement stood out to me as I was reading Nathaniel Hawthorne’s The Life of Franklin Pierce the other day:

The two great parties of the nation appear—at least to an observer somewhat removed from both—to have nearly merged into one another; for they preserve the attitude of political antagonism rather through the effect of their old organizations, than because any great and radical principles are at present in dispute between them.

Of course, this isn’t a new idea. Indeed, what’s remarkable is just how old it is; Hawthorne wrote this in 1852, and there’s no reason to think that it was all that novel even then.

It’s easy to take this quotation out of context. Hawthorne was Pierce’s friendly campaign biographer. He was basically arguing that his guy was different; voters, he hoped, would “put their trust in a new man, whom a life of energy and various activity has tested, but not worn out….”

That wrinkle notwithstanding, the main insight here—and its enduring nature—is perhaps worth remembering as Election Day nears.

Why I Turned Down $160,000

Wed, 01 Aug 2012 19:34:00 -0400

Back in January, I declined my offer to work at a prominent law firm that pays first-year associates $160,000 per year. Instead, I decided to co-found a legal technology company called Amicus Labs.

There are 3 primary reasons why choosing a startup over law firm was the right choice (and, frankly, a pretty easy choice) for me:

Practicing law is safe and probably fairly lucrative. But my team and I expect our venture to prove even more lucrative.
I can more efficiently and enjoyably spend my time outside of BigLaw.
Someday I will be old. I want to look back and know that I did really big things.

In this post I will briefly expand a bit on each of these points. If nothing else, hopefully this will be of interest to law students or prospective law students who are interested in entrepreneurship.

1. Expected Futures versus Chosen Futures

A. BigLaw and Predictable Riches

Students at elite law schools tend to be very risk averse. After graduation, almost everybody follows the BigLaw path—i.e., they go work for large law firms that pay really well. As Nassim Taleb would say, this path is expectation rich. The expected variance is pretty low. If all goes perfectly, you will become a partner at a prestigious firm and make one or two million dollars per year. Maybe a select few will even become Senators or judges.

The problem with BigLaw associates counting on such a rosy future is that it probably won’t happen. Not everyone can make partner. Attrition is fierce. People often find it draining, and escape as soon as their law school debt is paid off. Those who do want to stay around for the big money are often forced out regardless. But, financially at least, the worst outcome is still pretty good. Maybe you don’t make partner anywhere and maybe your work sucks. But you’ll be well trained, and as a Yale/Harvard/Stanford-educated lawyer, you’ll have an easy enough time making a good living.

B. Non BigLaw Lawyering – Higher Highs, Lower Lows

The range of possible outcomes is a bit higher for the minority of students that goes into public interest lawyering. In economic terms, the worst outcome (forever making $40,000 while trying to “fight the good fight” while trying to stay on top any of various loan forgiveness programs) can be pretty brutal. Then again, top law students who choose low-paid PI work rarely do so out of necessity. Maybe once we factor in the nonmonetary motivations that are clearly at play, the opportunity cost isn’t as high as it first appears.

At the other extreme, it’s easy to forget that the best-paid lawyers are plaintiff’s lawyers, not BigLaw partners. Americans aren’t fond of lawyers generally. But plaintiff’s lawyers are probably the most disliked of all. They are perceived as making lots of money without creating much value (“Why should a lawyer make millions of dollars because some company spilled some oil?”). People argue on and on about this. But what’s inarguable is that the potential upside for plaintiff’s lawyers—we’re talking $10 million to $40 million per year—is enormous. While you probably won’t become the next Joe Jamail, you can potentially earn much more by suing big corporations than you ever could by defending them.

C. (Legal) Entrepreneurship and Extreme Variance

The variance in potential outcomes for entrepreneurs is even greater. You might become the next Mark Zuckerberg or Kevin Systrom. Or—and more probably—your venture might fail completely. Startup outcomes, as we know, aren’t normally distributed. They follow a power law. Entrepreneurs’ success probably follows a power law too (though probably to a lesser extent, since talented people can and do repeat play).

Generally speaking, legal practice is fairly inefficient and anti-technological. My cofounders and I are not the first to notice; there is a veritable graveyard of failed legal technology companies. When an entire industry is stagnant for so long, there are probably good reasons why—even if, normatively speaking, those reasons are terrible. There is no particular reason to think that succeeding in legal tech is easier than succeeding in any other vertical. Sure, you might be the next LegalZoom. But chances are you’ll end up like PreCYdent. Averaged out, legal tech entrepreneurs—like entrepreneurs generally—are relatively expectation poor.

D. Determinism: Fight or Yield?

Statistically speaking, I made a bad choice. BigLaw, remember, is an expectation rich world, while entrepreneurship is expectation poor. Behind a veil of ignorance, giving up a guaranteed $160,000 plus bonus for startup equity is pure folly.

But people do not operate from behind a veil of ignorance. We operate in the real world, with lots of real world data all around us. My analysis of the data I’ve been able to process leads to two conclusions: first, BigLaw is probably not as expectation rich as is commonly thought. (More on that later.) Second, while most startups do not succeed, I have reason to believe that this one—Amicus Labs—will succeed. Taken together, these factors change my expected value calculus. Simply stated, I expect that working at Amicus will be more lucrative—financially and otherwise—than working in BigLaw.

E. Expected Value

The insight here is that while the realities of the power law humble entrepreneurs generally, this isn’t always the case. It is rational to pursue a venture if you reasonably believe that you can and will end up on the right side of the power law distribution.

The keyword there is “reasonably.” This is tricky stuff. People are biased to be overconfident in their ability to succeed. Just as associates probably overestimate their likelihood of making partner, entrepreneurs probably overestimate their likelihood of success. Nobody starts a startup and expects it to fail—even if they know that most startups suffer that fate.

There is no universal right answer here. All entrepreneurs can’t be right. But they can’t all be wrong, either. As Peter Thiel said in his startup class last spring, whenever you try to do something new, you always have to wonder whether you are crazy and wrong or visionary and right. There’s no escaping that tension. If you find that you are crazy and wrong on something—a hard admission for human rationality to achieve—it’s best to shelve that idea and do something else. But if you are visionary and right, then you should probably eschew the safe route and make that vision happen.

Having weighed all this out as carefully as possible, we believe that we are neither crazy nor wrong. We’ve got a secret. And we believe that we can leverage it to build a really valuable company. Chances of failure aren’t zero, of course. They never go to zero. But we are taking the calculated bet that we can succeed. Amicus Labs is probably the most expectation rich thing that I could be doing.

2. A Life in BigLaw

It seems probable to me that BigLaw is truly expectation rich only in the thinnest, pecuniary sense (and maybe not even then.) It is probably harder to make partner than people initially expect. And it is not clear that making partner will make one happy. If anything, it may often actually cut the other way. Broadly speaking, BigLaw may actually be pretty expectation poor.

A. Timing

I will be lucky if I live to be 100 years old. I turn 26 next week. So unless we see some serious medical breakthroughs this century (it’s fair to be optimistic about that, but let’s not speculate right now) my life is probably more than one-quarter over.

That’s a scary realization. It makes me want to spend the next quarter-century as productively as possible. For me at least, that probably rules out BigLaw.

I still think that being a great trial lawyer could be really fun. I think I could be pretty good at it. The problem is that, to be the kind of litigator that I’d want to be, I would essentially have to spend the better part of a decade not being a trial lawyer at all. That doesn’t sound good at all.

Maybe that sounds trite. I don’t mean to sound entitled, or like I’m averse to hard work or professional development. Consider a different example. Say your goal is to become an NBA basketball player. You might vow to put up 500 shots per day under game-like conditions. That seems like a reasonably good part of a training regimen. It certainly doesn’t seem inefficient or unfair that you’d have to do that. You put in the work, get better, and, when the time comes, you see if you’re good enough to make the league.

Lawyering isn’t so straightforward. Early on, you’re not putting up 3’s in game-like conditions. At best, you went from an elite law school to a good practice in a high-end firm, where you’ll get decent substantive training for several years before you get much serious autonomy. At worst, you didn’t, and you’ll be doing doc review on dozens of banker’s boxes full of files all through Thanksgiving weekend.

Maybe this isn’t a curable problem. Maybe it really does have to take a decade or two to become an excellent BigLaw lawyer. I doubt that the status quo is that efficient. Many people who have been through it readily doubt that too. I suspect those who do not are biased to find it all completely worthwhile.

Regardless, it takes a lot of time. Given available alternatives, that’s a deal-breaker for me. I want to be really good at what I do before 2020. I want to be working, succeeding, and learning from mistakes in real-time. I prefer the meritocratic pace of training for the NBA over a labyrinth of lock-step compensation and training-by-osmosis. Instead of trudging for decades through an inefficient industry, I’d rather work feverishly to make that industry modern and efficient from without.

B. Family

My wife and I want to have kids (and probably sooner rather than later). Whether startup or BigLaw, there is no near-term scenario in which I will be able to (and, indeed, in which I want to) stop working and spend all of my time with children. Nevertheless, I think the startup route is more conducive to the kind of family life that Cat and I envision.

It’s dangerous to generalize too much here. It is tempting to just assume that startups and tech companies are flexible while BigLaw firms are terrible for families. But that’s not necessarily the case. Insofar as outsiders can opine, it seems like Steve Jobs was a terrible dad. By contrast, plenty of BigLaw partners leave work at 3 or 4pm to coach their kids’ sports teams. Some law firms diligently avoid events after 7pm. Startups, by contrast, often run all-night hackathons that pose obvious difficulties for new parents. Clearly, anecdotes both ways abound. Wachtell or Cravath in New York City are going to be much more brutal than most any startup. But many law firms are taking work-life balance increasingly seriously and are actually pretty accommodating.

Still, the fact that law firms stress their “work-life balance” so much is a red flag to me. True balance is probably likelier in environments that don’t obsess about it. BigLaw pays so well because clients pay exorbitant fees. They pay those high fees for a reason. When you bill in 6 minute increments and you represent a large international bank that is “always on,” there is a sense in which your time is never really your own. That might not bother some people; they can handle it and still be awesome parents. But I suspect it would bother me.

Startups, of course, can be brutal too. People work hard. They work a lot. Having kids and working at a startup can’t be easy, or even ideal. But startups seem to see less need to hard dichotomize between “work” and “life.” There may be more flexibility to craft effective, personal solutions when problems arise. And in startups, you tend to really like what you are doing. That makes a huge difference. I don’t anticipate working less or less hard at Amicus than I would have at a law firm. But I do anticipate less overall tension between family and the construct that is “work.” And that means more opportunity to be the parent I want to be.

3. Looking Back on Big Things

This last point is pretty simple. We all get one shot in life. It seems to me that I should use my shot to do the coolest, most exciting work that I can find. I want to look back when I am old and be satisfied with what I did. I need to know that I took big swings at hard problems. It was not at all clear to me that I would likely get that kind of satisfaction after a career in BigLaw.

This isn’t a criticism of the legal profession generally. Most of the time, lawyers do important and valuable work. Practicing law is an honorable profession. Indeed, I think it’s probably one of the more interesting professions there is.

I simply recognize that, personally, I am probably not a great fit for BigLaw. This conclusion is based on facts, but it’s ultimately subjective. It does not mean that BigLaw is wrong for everybody. Some people love it. That’s great. But many people do it and don’t love it. Many affirmatively regret it. Everybody knows this going in. Lots of people ignore it and focus on the salary. I’ve tried to do just the opposite. And my conclusion is simply that I’d rather do something else—something related, but also something quite different.

There is no shortage of capable lawyers out there. Clients are in good hands. But, technologically speaking, lawyers aren’t. I think someone should change that. Current offerings are so limited in what they do that very few people even have a sense of what is even possible. We at Amicus Labs think we’re up to the challenge. And I couldn’t be more excited to take it on.

More Oprah, Please: Some Critical Thoughts on Cory Booker's Stanford Graduation Speech

Thu, 21 Jun 2012 16:31:00 -0400

In 2008, Oprah was Stanford’s commencement speaker. People were very excited about that. I was less enthusiastic. I expected a disappointing, “Don’t you dare think about your own success. You must save starving orphans” kind of speech. But Oprah surprised us all. She basically reminded us that making money is good, as it is usually correlated with producing value for others. The message was simple: be productive and be happy. I loved it. But most of my friends were very disappointed.

Fast-forward 4 years and it’s Cory Booker speaking to the crowd of 30,000 in Stanford stadium. Booker seemed like a fine choice to me. Though I disagree with him about many things, I admire him quite a bit. I liked Street Fight. I enjoyed his “Finding Your Roots” interview with Henry Louis Gates Jr. Like most everyone else, I’ve been impressed with what’s been going on in Newark. But I thought that Booker’s speech on Sunday was a letdown. This time, I was the one who came away disappointed.

Motivational speeches are strange. At some level, their task is usually to persuade the listener to suspend rational self-interest and ignore (or, more euphemistically, transcend) reality. After all, people are innately reasonably good at acting in their own self-interest. We need fairly little external motivation to do what makes us happy. Motivational speeches tend to be more necessary to convince us to do things that we ordinarily wouldn’t do, such as charging an enemy bunker in wartime or performing some comparable civic sacrifice during peacetime.

This isn’t always bad. Motivation can be a very good thing. Tightly knit groups working really hard together can be very productive. But this isn’t always the case—writ large, it’s also the recipe for nationalism, militarism, and all sorts of associated maladies. Certainly the tension between American individualism and a motivated collectivism has been and will continue to be a key theme in our society. I’m not sure there’s any reason to prefer either extreme. But as a general rule, it’s probably good to be more skeptical of the collectivist side of things.

To the extent Cory Booker’s remarks this past Sunday can serve as a barometer for this discourse, the trend is towards collectivism. I use that word not as some libertarian bogeyman, but rather to describe a real, important alternative to a more individualistic paradigm. Framing his speech around the notion of a “conspiracy of love,” Booker encouraged his audience at Stanford to think about the problems of the future in a very particular way. To the extent that this approach is right, it seems quite banal. And to the extent that it is wrong—or, more probably, seriously incomplete—it may be affirmatively harmful. Perhaps most problematic of all is that all this is too easily concealed by powerful rhetoric.

I. Ethos and Pathos

The first problem is simply this: Booker speaks well. Really well. He hits every emotion. There’s self-effacement and humblebrags. Jokes and heartwrenching anecdotes. Ethos and pathos do the driving. Booker is even better at this than President Obama. Booker doesn’t usually do calm confidence. He does passion. Every sentence intones upward at its end; Booker actually pleas with us to see, accept, and promulgate his zeal. However true or persuasive Booker’s ideas about “love” may be in isolation—and more on that in a moment—it’s his incredible mix of charisma and emotional appeal that makes things truly compelling. One gets the sense that, with enough time, Booker could take an audience pretty far along any direction he liked.

Of course, being good at speaking is hardly discrediting. Oratory is distinguishable from substance. But the point is worth flagging; charismatic politicians—even the “good ones”—are problematic. They can get people to do things that they wouldn’t ordinarily do. Maybe that isn’t always bad. But it certainly can be. Power made efficacious through oratory and charisma is something worth keeping an eye on.

II. In Search of Logos

There are a couple of ways to interpret Booker’s message. (Transcript here. Video here. Or just scroll to the bottom of the post.)

A. Dispersed Wisdom

One surface interpretation would view it as a collection of lessons and maxims, woven together through stories from Booker’s family, which we’d do well to keep in mind as we work and live. These lessons include:

What you see is what you become. If you see only problems, that’s all there are. If you see potential, potential exists.
Don’t get sedentary or comfortable. Embrace challenges.
We all face a fundamental choice in everything we do: accept things as they are, or change them.
Remembering and respecting all the people and effort that has come before us is important and worth doing.

There were probably several more, but these illustrate the point. With the possible exception of (1), I think that these lessons are true and valuable. But it seemed to me that Booker was trying to do more than just offer up these aphorisms. If not, fair enough—we’re left with relatively standard commencement fare rendered “extraordinary” by pathos and charisma.

B. Love as an End

Another interpretation reads more into Booker’s notion of “conspiracies of love.”

I suspect that Booker’s remarks are best interpreted as trying to express a coherent creed. In the abstract, this is good; a coherently argumentative speech has much greater potential than a jumbled stack of adages. But any creed that fell out of Booker’s speech on Sunday struck me as problematic.

The general idea behind the “conspiracy of love” bit is that love is really important. We should all love each other, work hard for a better future because we love each other, and always remember that we love each other. Conspirators getting together and working with love is good.

Perhaps Booker was just telling us to be nicer to each other. Maybe he was simply reminding people that there is value in loving each other as an end in itself. This is the “love as an end” interpretation. The goal isn’t to be nice so that you maximize value or achieve some financial or political end. The idea is that loving each other is its own reward, whose value outweighs any inherent financial, physical, and political risks. It is explicitly not a recipe for maximizing value or efficiency.

That isn’t necessarily wrong. But it isn’t necessarily right, either. Mainly it’s just unhelpful. Virtually everybody understands the idea that there is more to life than money and productivity. Granted, some people seem to ignore this wisdom. But that’s probably not because they’ve never heard it before; rather, it’s because ambitious people tend to get sucked into their work and, despite knowing better, neglect important relationships. Soberly reminding Stanford graduates of that dangerous likelihood—as Professor Rob Daines did in his excellent speech at the Law School’s graduation ceremony on Saturday—is valuable. But simply insisting that people get high on love doesn’t communicate that clearly. If this was all that was meant, it is uncontroversial at best, trite at worst.

Because no one is anti-love, coming out for love doesn’t do much. That we’re all made of stardust and descend from a single Mitochondrial Eve is pretty cool. But divorced from any utilitarian claim, a jejune “love is important” is as hard to draw value from as it is to criticize or refute.

C. Love as Means to a Better Future

A third alternative is that Booker sought to push the idea that love is an effective means of achieving and producing things. There seemed to be equal amounts of love-as-means and love-as-end theorizing going on. It wasn’t always easy to separate them out. But the love-as-means piece, I think, is the most problematic.

Focusing on love as the engine of future growth is the wrong thing to do. The harm goes beyond mere opportunity cost of a missed chance to talk about more substantive things. This misplaced focus is costly for 2 reasons. First, it ignores love’s ineffectuality in solving pressing national problems. Second, it obfuscates the question of what is valuable, which makes it much harder for even the best intentioned of people to contribute toward a better future.

A. Love Doesn’t Cut It

It is hardly cynical to point out that love cannot, in fact, solve all our problems. Humans are actually pretty good at love. We love ourselves, our families, and our communities, warts and all. Most of us probably have some abstract love of existence and humankind in general. But all this love hasn’t saved us from the myriad troubles that we’ve created for ourselves. However powerful love may be, it can be stamped out by even the noblest of intentions behind every bomb, tax, or piece of legislation. In some sense, these things exist—and should exist—in very different domains.

The counterexample, I suppose, is Newark. By almost all accounts, things have been going considerably better since Booker became Mayor in 2006. I do not discount the fact that Booker seems to have inspired people in that city to lead better lives. That is great. All I mean to suggest—and I’d bet Booker would agree with me here—is that a lot more than love goes into turning a city around. It’s not clear to me that getting more people engaged in political processes, or infusing those processes with love (whatever that means) is necessarily good. Maybe changing or ending some of those processes and doing the right things would be better.

But suppose I’m entirely wrong on this point as it relates to Newark. That seems plausible. Booker is a successful mayor who probably deserves the lion’s share of credit for Newark’s impressive pivot. Even granting that, it still does not follow that love is the solution to the really big problems. Motivating a relatively small community with notions of reciprocal love may be very different than motivating an entire nation. The former is probably much easier, and, more importantly, much less dangerous. Slashing a city’s crime rate by showing inhabitants the promise of peaceful non-criminal life may be entirely different than fixing healthcare from the goodness of our hearts. Ending local corruption by fostering collaborative processes may be entirely different than solving runaway national spending. Democrats and Republicans rolling up their sleeves of compromise and “working together as Americans” may not be good after all. Collaborative, loving governance may actually produce worse outcomes. America is not “great because it is united,” as Booker insisted. To the extent it’s great, it’s great because of deep-rooted commitment to freedom and the rule of law. Stressing the importance of “love” and “unity” has the effect (if not the design) of consolidating support and stifling debate. Who wants to be anti-love or anti-unity?

The claim that love drives good political outcomes is an interesting one. I think that it’s probably wrong. If the problem with the world is that there isn’t enough love in it—something I very much doubt—it is probably an insurmountable problem; we’ve failed to solve it in several millennia, and there’s no reason to think it will become any easier as the world becomes more populous and complex. In any event, Booker didn’t make the case on Sunday. And I suspect that massive confirmation bias ensured that this went largely unnoticed.

B. Value vs. Love

Just because something is done with love doesn’t make it valuable.

That’s worth repeating: just because something is done with love doesn’t make it valuable. Very often, it’s not the thought that counts.

The sterilized free-market narrative is that love is completely unimportant. Markets work because people can trade to mutual advantage without giving a damn about each other. As Adam Smith noted, it’s not the benevolence of the butcher that is responsible for your ability to buy a decent roast. Traders at a swap meet shuffle goods around to their highest social value. Profit matters more than love—if anything, the bargaining process is on the antagonistic side of things. Competition makes for a rising tide that lifts all boats.

That, of course, isn’t quite right. Love and passion do matter in markets. But it’s less the “purpose of life is to join your spirit with others” kind of love that Booker described, and more a relentless, entrepreneurial love of progress. What is important is that people love what they do, not that they love and sacrifice themselves for the people they do it for.

Silicon Valley understands this. The least exciting thing in the world is a suit with an idea about how to make money. The best companies—and this is probably generalizable to the best projects—are fueled by a very distinct kind of love and passion. Maybe making money is some key component. But Steve Jobs was in it for the love of technology and design. Elon Musk clearly relishes the opportunity to create a new era of space flight. Isaac Newton simply loved knowing how things worked.

Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.
-Steve Jobs, Stanford Commencement Speech, 2005

This works on the “public interest” side too. Many of my friends at Stanford Law School were involved with things like the Stanford Three Strikes Project, which represents individuals serving life sentences after being charged for minor felonies under California’s Three Strikes law. The passion and energy that these people devote to this and similar projects are astounding. Undoubtedly it makes for more successful work. But key to remember is that work is not valuable because people are passionate about it. It isn’t just some notion of love that makes the Three Strikes Project valuable (if you think it is). It wasn’t just love that drove Apple’s comeback or that makes SpaceX’s rockets fly. If love plays a role here, I think it’s quite different from Booker’s notion of conspiracy. Eclipsed by very lofty rhetoric last Sunday was a conception of love that is just too narrow. Probably the worst thing that Isaac Newton could have done was spend his time thinking about how he could help other people and embrace the frustration of service.

That love fixes everything is an attractive concept. Booker presents it even more attractively. But, as H.L. Mencken said, “For every complex problem there is a solution that is clear, simple, and wrong.” Stanford graduates do not need to be reminded to love each other. They need to be reminded to be productive—a value that higher education seems to be increasingly bad at instilling. Actual productivity is a better terminal metric than love. Love—broadly defined as something very different from Booker’s conspiracy angle—should matter to the extent that it makes people productive. But when loving each other is the first-order priority, things are backwards. Caring matters more than results. Interdependence matters more than individual fortitude. And my suspicion is that we end up with much less value as a result.

Love, at least Booker presents it, is not the building block of the future. The future will be built on AutoCAD and Scala, not on reciprocal notions of love. The engine of the future will be the proven combination of passion plus the profit motive, not the grinding gears of participatory democracy. Democracy and collective notions of love and service may continue to be important. But they should not take center stage. Being productive and seeking one’s own happiness should not be relegated to footnotes in life. And that’s why the Jobs of 2005 and the Oprah of 2008 trumped Booker in 2012.

Peter Thiel’s CS183: Startup - Class 19 Notes Essay

Fri, 15 Jun 2012 04:09:00 -0400

Here is an essay version of my class notes from the last class of CS183: Startup, class 19. Errors and omissions are mine.

The following three guests joined the class for a discussion:

Sonia Arrison, tech analyst, author of 100 Plus: How the Coming Age of Longevity will Change Everything, and Associate Founder of Singularity University
Michael Vassar, futurist and past President of the Singularity Institute for the study of Artificial Intelligence (SIAI)
Dr. Aubrey de Grey, gerontology expert and Chief Science Officer at the SENS Foundation.

Credit for good stuff goes to them and Peter, who gave the closing remarks. I have tried to be accurate. But note that this is not an exact transcript.

Class 19 Notes Essay—Stagnation or Singularity?

I. Perspectives

Peter Thiel: Let’s start by having each of you outline your vision of what kinds of technological change we might see over the next 30 or 40 years.

Michael Vassar: It’s lot easier to talk about what the world will look like 30 years from now than 40 years from now. Thirty seems tractable. Today, we’ve gone from knowing how to sequence a gene or two to thousand-dollar whole genome sequencing. Paul Allen is running a $500 million experiment that seems to be going very well. This technological trajectory is both exciting and terrifying at the same time. Suppose, after 30 years, we have a million times today’s computing power and achieve a hundred times today’s algorithmic efficiency. At that point we’d be in a place to simulate brains and such. And after that, anything goes.

But this kind of progress over the next 30 years is by no means something we can take for granted. Getting around bottlenecks—energy constraints, for example—is going to be hard. If we can do it, we’re at the very end. But I expect that there will be a lot of turmoil along the way.

Aubrey de Grey: We have a fair idea of what technology might be developed, but a much weaker idea of the timeline for development. It is possible that we are about 25 years away from escape velocity. But there are two caveats to this supposition: first, it is obviously subject to sufficient resources being deployed toward the technological development, and second, even then, it’s 50-50; we probably have a 50% chance of getting there. But there would seem to be at least a 10% chance of not getting there for another 100 years or so.

In a sense, none of this matters. The uncertainty of the timeline should not affect prioritization. We should be doing the same things regardless.

If you look at certain AI approaches, you conclude that you need both a great understanding of how the world works and a lot more computing power to pull them off. But they are worth pursuing even at a 10% chance of success in the next 30 years. We should be sympathetic toward giving very difficult approaches the time of day. Orchestrating the development of technology is not easy. It’s a process of sidestepping ignorance and planning to manipulating nature based on an incomplete picture of nature to begin with. Achieving full-blown uploading—and when—is so speculative that it’s probably not worth talking about in real probabilistic terms. But our priorities should be the same: develop radical technology in biotech, computation, hardware, etc.

Sonia Arrison: I spend most of my time looking at biotech, so I’ll talk about the biotech slice first. It is clear that biology is quickly becoming an engineering problem. I got interested in biotech several years ago when my CS friends started picking up biology books. They thought, probably accurately, that the next big thing in coding would be bio, not computers. This is now a mainstream view. Bill Gates has said something like this, along with several others. Great hackers go into biotech. In 30 or 40 years, the bio-as-engineering paradigm could make the world look radically different. There is a sense in which genomics is moving faster than Moore’s law. Prices are falling; the first human genome sequencing was around $3 billion. Now it can be done for around $1,000. There is work being done on a genomic compiler, which would make it easier to hack all sorts of organisms’ genomes, which would in turn open up all kinds of possibilities.

The big complaint right now is that, despite the fact that the first draft of the human genome was sequenced in 2000, twelve years later not that much has actually happened in terms of new treatments or cures based on the technology. . This criticism is weak because it misses an important point: for most of those 12 years genomic sequencing was so expensive that very few scientists could do the work they wanted to do using genomes. Of course, now that prices have fallen substantially, barriers are falling in a serious way. Things will happen—people are working on radical new things. Gene therapy promises to cure diseases. It’s possible that we can develop new kinds of fuels. There is a Kickstarter project that involves taking an oak tree and splicing firefly genes into it. The end result would be trees that glow. More than just cool in it’s own right, maybe you could use those firefly trees to illuminate roads instead of streetlamps. That’s awesome. And there is so much more that we can’t even fathom right now. A lot can, and will happen at the nexus of bio and engineering.

In the short run and outside of biotech, the shift to online education seems like it will dramatically change how people learn. Things like the Stanford AI class, Udacity, the Kahn Academy—we don’t know exactly how it will all play out, but it’s safe to say that there are a lot of things to look forward to on this front.

Peter Thiel: Let’s engage on the culture question: why do most people think you’re crazy?

Michael Vassar: For whatever reason, having opinions about the future is seen as strange. Only a small minority of people forms opinions about the future—even the near future. Perhaps this is because thinking about the future is uncomfortable and kind of difficult. People prefer to work with models that involve one variable changes in linear trajectories, while everything else stays the same. We know that that’s nonsense, of course; the world doesn’t work like that. But it makes for easy conversation. Keeping the discourse at that simplistic level allows us to focus on one thing and work together today. Factoring in 100 variables would in some sense break that dynamic. But thinking about the future is very important, and right now that can be isolating. Diverging from people means that there are fewer people you can talk to. There are fewer connotations; people tend not to understand where you’re coming from.

But this is not to say that people just have different beliefs than we do. Usually, they don’t. You don’t usually encounter anti-singularity views. Maybe some global warming people or apocalypse people are affirmatively anti-singularity. But most people aren’t substantively engaging. What is perceived as crazy isn’t the substance of the belief itself, but rather having the belief in the first place.

Aubrey de Grey: I disagree a bit. People do tend have some view of the future. They usually project relative stagnation. People tend to believe that, not only will most things not change, but what will change won’t change very quickly. People who criticize my views on biotech and aging, for instance, do not identify bad logical steps or seize on anything substantive. Rather, they choose not to believe what I’m saying because it conflicts with their bias toward stagnation. They walk away quite sure that the rate of progress in anti-aging and longevity technology will never accelerate. That is pretty striking.

I try and dispose of this by pointing out that if you were to ask someone in 1900 how long it would to cross the Atlantic in 1950, they would make a prediction drawing from ocean liner speed trajectories up to that point. They wouldn’t be able to foresee the airplane. And so their calculation would be off by orders of magnitude.

Of course, everyone knows how much technological change has happened in the past few centuries and decades. Everyone knows what the Internet did in recent years. But there is a huge reluctance to apply any of this as precedent for what might or is likely to happen in the future.

There’s also a desirability aspect to it. Fear of the unknown is such a deep-seated emotion. When people encounter a radical new proposition, they are biased to think that things will go way wrong. It is very hard for people to consider the reasonable likelihood of those scenarios unfolding, so they exaggerate risks. More rational aspects to the conversation go out the window.

Sonia Arrison: For the record, no one thinks that I’m crazy.

Peter Thiel: You’re the best disguised…

Sonia Arrison: Well, “crazy” is a hard claim to make since I focus on actual technology that is grounded in reality. I write about tissue engineering, regenerative medicine, and biohacking, for instance. That exists now. And it’s going to continue to develop and, I think, really change the world. There are three reasons that people sometimes have a problem with this stuff. First, they don’t understand it. Second, they don’t believe it. Third, they fear it.

Think about the firefly/oak tree street lamps for a second. Just the idea of that terrifies some people. It’s completely different from how things are now. Some people respond with knee-jerk reactions: “Don’t mess with nature!” “Don’t play God!” This reaction is understandable, but it stands in the way of progress. It’s not the best reaction. In a lot of ways it doesn’t really make sense.

Peter Thiel: Is the best approach to ignore those people, then?

Sonia Arrison: Better than ignoring them is trying to educate them. It is important to explain things clearly. Technology that people do not understand looks a lot like magic sometimes. And Magic is scary. But if you distill and explain—“this is x, this is what it does”—you can sell them on it. It’s just a matter of clearly communicating the benefits vs. the costs. “This will drive out dirty fossil fuels,” for example, might be one persuasive line of argument in favor of the firefly/tree hybrid street lamps.

Peter Thiel: There’s a compelling case that we’ll very likely see extraordinary or accelerated progress in the decades ahead. So why not just sit back, grab some popcorn, and enjoy the show?

Another cut at the question is this: In Kurzweil’s The Singularity is Near, progress follows an exponential growth curve. It’s a law of nature. In a sense, the singularity is happening regardless of what individual people actually do to make it happen. The assumption was that there will always be enough people who try things, so you, as an individual, don’t actually have to do anything and you can just wait for things to happen. Is there anything wrong with that argument?

Aubrey de Grey: Yes, there is. It doesn’t only matter that these technologies are developed. When they are developed is hugely important as well. Take anti-aging science, for instance. Very close to 150,000 people die everyday. About 100,000 of these daily deaths are aging-related. (Probably about 90% of deaths in Western countries are aging-related). So each day that you don’t delay saves 100,000 lives. From this perspective, it doesn’t matter how inevitable the singularity is. Inevitable is cold comfort to the people losing their lives or loved ones now. We want the defeat of aging by medicine as soon as possible, for the simple reason that more suffering is alleviated the sooner we achieve it.

Michael Vassar: I strongly agree. It is important to work toward making good effects happen, and avoiding bad things. Inevitability can cut both ways; sometimes you want it to happen, if the effects are good, but sometimes you don’t want certain things to happen. Focusing just on inevitability misses other important pieces. If death is or seems inevitable and we are basically dead in the long run, there is still some chance at survival, and we should give it a damn good fight.

Besides, popcorn is bad for you. Though I guess Aubrey might figure out a way to make it not so bad for you…

Sonia Arrison: Focusing on inevitability alone is dangerous because it allows people to get complacent about bad systems in place. People might ignore the many perverse incentives that often thwart or frustrate the many scientists working on radical technologies. Too few people are thinking about how the FDA might be blocking very important developments. If it’s all going to happen anyway, there’s less of a sense that it is important to reform what we have now so we can better realize our goals. But of course that kind of reform is terribly important, and it won’t happen if we don’t work towards it.

Peter Thiel: So who do you think is going to do this? Who is going to forge the technological future?

Michael Vassar: You. [laughter…]

Peter Thiel: [pause] Michael… you’re supposed to be motivating the people in this class…

Michael Vassar: But I’m serious. It’s a short list of people. You, Elon, Sean…

Sonia Arrison: My take is that innovation comes from two places: top-down and bottom-up. There’s a huge DIY community in biology. These hobbyists are working in labs they set up in their kitchens and basements. On the other end of the spectrum you have DARPA spending tons of money trying to engineer new organisms. Scientists are talking to each other from different countries, collaborating on synthetic bio projects. All this interconnectedness matters. All these interactions in the aggregate will bring the change.

Aubrey de Grey: I disagree. My answer is Oprah Winfrey.

Yes, there are a few people like Peter. There are a very few visionary people who can make a real difference at the formative early stage. But there are also many people with Peter’s net worth who aren’t doing this. It’s not that these people don’t understand the issues or the value of technology. They understand these things very well. But they are held back by social opinion. They probably can’t articulate this well to themselves, let alone to others. But they face viscerally emotional blockades that the people around them erect. Just because you’re rich doesn’t mean you don’t fear people laughing at you. Many potential visionaries are held back by little more than social pressure to conform.

This is why mainstream opinion formers are absolutely pivotal. Perhaps no other subset of people could do more to further radical technology. By overpowering public reluctance and influencing the discourse, these people can enable everyone else to build the technology. If we change public thinking, the big benefactors can drive the gears.

Michael Vassar: I do not think that progress will come from the top-down or from the bottom-up, really. Individual benefactors who focus on one thing, like Paul Allen, are certainly doing good. But they’re not really pushing on future; they’re more pushing on individual thread in homes that it will make the future come faster. The sense is that these people are not really coordinating with each other. Historically, the big top-down approaches haven’t worked. And the bottom-up approach doesn’t usually work either. It’s the middle that makes change—tribes like the Quakers, the Founding Fathers, or the Royal Society. These effective groups were dozens or small hundreds in size. It’s almost never lone geniuses working solo. And it’s almost never defense departments or big institutions. You need dependency and trust. Those traits cannot exist in one person or amongst thousands.

Peter Thiel: That’s three different opinions on who makes the future: a top-down bottom-up combo, social opinion molders, and tribes. Let’s run with some version of Michael’s tribe theory. Suppose it’s just a small cabal of tech people that drives it.

Aubrey de Grey: I think the tribe argument is right. Michael is right that single people don’t make the difference. There is too much infrastructure. Working in biology costs a fair bit of money. Developing algorithms can be quite costly too. Individuals have to fit themselves into the network of money flow, whether that network is entrepreneurial, philanthropic, or public funding. But the truly radical technology discussed in this class is so early that philanthropic support will probably play the largest role for awhile longer. That can change fast as these technologies advance and more people start to see the commercial viability. When public opinion changes, the people who want to get elected will fund the things that people want, and we’ll start to see more funding for these things.

Sonia Arrison: In some sense asking for a single source of progress is the wrong question. It can come, and almost always does come, from lots of places. Things are interconnected. Ideas build on top of each other, and often ideas that once seemed unrelated can come together later on.

Question from the audience: We know that progress has happened in the past. But fairly rarely did that progress look like what people were expecting beforehand. So how do you know that your claims as to how progress is going to happen in the future are right? What do you make of the line that “most discussion about the future is either fantasy or bullshit”?

Michael Vassar: People used to predict the future in a pretty determinate way. Suppose you’re looking for oil. That involves making fairly concrete predictions: there is x amount of oil at y place, and it will last z number of years.

People have largely stopped doing that. Recent science fiction is a bit more on point than the science fiction of old. It used to be hard to predict the distant future. It may be that it’s actually quite easy to predict what the late 2020s look like, relative to what it used to be. But it is unusually hard to make any statement about 2040.

People were much better at predicting the future before movies and mass media. The tools were logic and trend analysis, not what looked cool on the big screen. Modern forecasts of the future are often more about looking credible than about making reasonably accurate predictions.

Consider things like Neal Stephenson’s Snow Crash—some very good abstraction there, somewhat satirical. There are lots of details that probably aren’t going to play out like that in the actual 2020’s. But we can think of them as being about as reasonable as Kurzweil’s descriptions of possible future technology.

Sonia Arrison: The question basically says, “Well, a lot of people were wrong about the future in the past, so we shouldn’t talk about it now.” That’s nonsense. Yes, people will be wrong. But we’re not talking pie-in-the-sky guesses about the future. We’re talking about what is here now, and reasonably extrapolating from that. This isn’t science fiction. Gene splicing and gene therapy exist. We can create living code, as Craig Venter demonstrated. The questions are how long will this take and how fast can we go. These are difficult questions to answer. But that doesn’t mean we can’t think about them. We should think about them. That people have various perspectives doesn’t invalidate the project.

Question from the audience: Will the future be a science problem or engineering problem?

Aubrey de Grey: We are right in the middle at this point. In medicine and computation, for instance, we are seeing a shift from inherently exploration-based, science-based perspectives to engineering perspectives.

Michael Vassar: Science matters much more than engineering does. But it’s easier to talk about engineering. So one should use engineering to discard the 99.9% of people who have no clue what’s going on. But then one should get into the science with the remnant. That is where the upside will come from.

Sonia Arrison: There is also a knowledge aggregation problem. It is hard or impossible for one human brain to know everything. So people don’t know what other people are doing, and they sometimes work on overlapping or redundant things. To the extent computers can better organize knowledge, people’s efforts will be further streamlined, whether they are scientific or engineering-focused.

Question from the audience: On the hardware side, Moore’s Law seems like it’s going to continue to hold. But on the software side, the process of software engineering and collaboration seems to be improving only linearly. Is there a leveragability problem or some hidden limit there?

Michael Vassar: Linear growth in capabilities can get you over key hurdles. There is a feedback loop. Linear growth can be enough for you you to nail down a process, leverage it, and get positive feedback to face transitions that then have the exponential growth arcs. And then you’re back to growing linearly.

This is true for probably all of psychology and for AI (which is essentially psychology-as-engineering).

Peter Thiel: We know that, in practice, timing is very important. So while we don’t know exactly when radical technology of the future will come to be, the timing does make a great deal of difference. If it’s all crazy science fiction that’s barely plausible, it might not make sense to work on it now. That would be like the Chinese man who tried to launch a rocket into space in the 11^th century. No one was or should have been working on supersonic flight in the Middle Ages. That would be paddling way to far in advance of the wave.

Aubrey de Grey: I’m not sure the timing question is so critical. There must always be stepping-stones to an eventual goal. In the 11^th century, the goal may have been to travel to the moon. But the technology then only permitted, say, a prospective space traveler to get one foot off the ground. So at that time, you’d get the equivalent of your PhD if you could make a system that got you 10 feet off the ground.

The question is thus which trajectories will lead toward the ultimate goal and which ones will fail. We must identify the good trajectories and prioritize them. But without the long-term goal, you can’t organize competing trajectories, and you’ll never get there.

Peter Thiel: So perhaps a 20-year goal with lot of milestones along the way would be a good approach. The problem there is that too many milestones make the achievability of the end goal rather speculative.

Aubrey de Grey: You have to see that coming, and avoid the wrong turns.

There are also humanitarian reasons to set the sights large. We must remember that 100,000 lives are saved each day that the solution to aging comes quicker. In that light, 20 years is dramatically better than 21.

Sonia Arrison: People usually become deterred if a goal seems too hard or impossible. We can’t expect everyone to be a tireless visionary. So showing traction is key. We can grow blood vessels and tracheas and bladders in the lab. So maybe we can get to hearts. The stepping-stones are key, since without them, fewer people will be as excited about the prospects of engineering new hearts.

Michael Vassar: The Apollo project was a tremendous 10-year project with lots of technological convergence. That was more than 40 years ago. At this point we probably can’t even go to the moon anymore.

Framing the U.S. Constitution was an incredible accomplishment. The Founders had the knowledge to do that. They wrote for a particular socioeconomic and technological context. They didn’t intend to write the end-all governing document for the entire world for all eternity. And yet, when we take over a Middle Eastern country today, we basically copy our Constitution. We have no idea how to do what our Framers did some 200 years ago. We’ve lost the ability to make such a culturally nuanced system. Applied history is underrated.

Question from the audience: No trend can run without running into limits. Where is the future asymptotic? When do we reach the limits of physical world? How long does the exponential part go, and when does it stop?

Michael Vassar: It’s hard to say where it stops. Probably not for a good while; there’s much more to be done. If something happens x times in a row, and no other variable is at play, one way to think about the chance of it happening again is to estimate it at (x+1)/(x+2). It’s a really crude technique, but can be quite useful too.

Aubrey de Grey: Kurzweil acknowledges that you get S-curves. But those curves tend to be replaced by new S-curves with each paradigm shift. Merge all those curves into one and you get a mega S-curve. Obviously there’s only so far you can go within physical laws. But we’re not hitting those problems yet.

Sonia Arrison: At some point, things decelerate. But that’s okay. Necessity is mother of all invention. There will be other things to tackle. There will always be a new exponential curve.

Question from the audience: We at the Stanford Transhumanist Association are interested in open dialogue about the consequences of technological change, so we do a lot of research on how core emotions like fear or empathy come into play when people evaluate technology.

What do you think are the most effective ways to get people interested in and comfortable with transhumanist ideas?

Sonia Arrison: Sometimes it’s possible to just appeal to the humanistic side. Certain aspects of transhumanism would, fully realized, alleviate lots of suffering. Some issues fit in that category pretty well. So if you frame it right, the conclusion becomes a no-brainer. No one wants net suffering.

Other things don’t fit in that category as well. These are the things that just look radically different from the status quo—we might think they’re cool, but that’s not others’ default. The emotional argument on these things is that people should be free to be individuals. But there can be a serious fear factor on freedom. Some people are generally scared of it. So the problem is much harder.

Michael Vassar: You could appeal to people’s sense of wonder. If you’ve ever interacted with an Alzheimer’s sufferer or someone who has a mental disability, you might have gotten a sense that they were missing something. Well, so are we. The gap between them and us is practically adjacency in the space of possibilities. We’re probably missing out on a great many things. Shouldn’t we try and fix things so we’re missing less?

II. Closing Thoughts (from Peter Thiel)

This course has largely been about going from 0 to 1. We’ve talked a lot about how to create new technology, and how radically better technology may build toward singularity. But we can apply the 0 to 1 framework more broadly than that. There is something importantly singular about each new thing in the world. There is a mini singularity whenever you start a company or make a key life decision. In a very real sense, the life of every person is a singularity.

The obvious question is what you should do with your singularity. The obvious answer, unfortunately, has been to follow the well-trodden path. You are constantly encouraged to play it safe and be conventional. The future, we are told, is just probabilities and statistics. You are a statistic.

But the obvious answer is wrong. That is selling yourself short. Statistical processes, the law of large numbers, and globalization—these things are timeless, probabilistic, and maybe random. But, like technology, your life is a story of one-time events.

By their nature, singular events are hard to teach or generalize about. But the big secret is that there are many secrets left to uncover. There are still many large white spaces on the map of human knowledge. You can go discover them. So do it. Get out there and fill in the blank spaces. Every single moment is a possibility to go to these new places and explore them.

There is perhaps no specific time that is necessarily right to start your company or start your life. But some times and some moments seem more auspicious than others. Now is such a moment. If we don’t take charge and usher in the future—if you don’t take charge of your life—there is the sense that no one else will.

So go find a frontier and go for it. Choose to do something important and different. Don’t be deterred by notions of luck, impossibility, or futility. Use your power to shape your own life and go and do new things.

Some graphics credit for CS183

Mon, 11 Jun 2012 01:36:15 -0400

As I finish up the 19th and final set of CS183 notes, I’d like to take a moment and thank the people who have worked on putting the course together.

I’d also like to thank Founders Fund’s Scott Nolan and Michael Solana in particular. They have been working behind the scenes and were responsible for most of the visuals used in the course slides. I’ve borrowed heavily from those visuals in recent posts. It’s fair to assume that Scott and Michael are responsible for any and every nice graphic you might have seen on this blog. In my opinion their work has been no small contribution to the success of the course itself. So thanks, guys, both for doing the work and for letting me use it.

Peter Thiel’s CS183: Startup - Class 18 Notes Essay

Wed, 06 Jun 2012 21:28:00 -0400

Here is an essay version of my class notes. Errors and omissions are mine. Credit for good stuff is Peter’s. Thanks to Joel Cazares for helping proof this.

I. Traits of the Founder

Founders are important. People recognize this. Founders are often discussed. Many companies end up looking like founder’s cults. Let’s talk a bit about the anthropology and psychology of founders. Who are they, and why do they do what they do?

A. The PayPal Origin

PayPal’s founding team was six people. Four of them were born outside of the United States. Five of them were 23 or younger. Four of them built bombs when they were in high school. (Your lecturer was not among them.) Two of these bombmakers did so in communist countries: Max in the Soviet Union, Yu Pan in China. This was not what people normally did in those countries at that time.

The eccentricity didn’t stop there. Russ grew up in a trailer park and managed to escape to the one math and science magnet school in Illinois. Luke and Max had started crazy ventures at Illinois Urbana-Champaign. Max liked to talk about his crazy attributes (he claimed/claims to have 3 kidneys), perhaps even a little too much. His came to the U.S. as sort of a refugee weeks after the Soviet Union collapsed but before other countries were formed. So he liked to say that he was a citizen of no country. It made for incredibly complicated travel issues. Everybody decided that he couldn’t leave the country, since it wasn’t clear that he could get back in if he did.

Ken was somewhat more on the rational side of things. But then again, he took a 66% pay cut to come do PayPal instead of going into investment banking after graduating from Stanford. So there’s that.

One could go on and on with this. The main question is whether there is a connection—and if so what kind—between being a founder and having extreme traits.

B. Distributions

Many traits are normally distributed throughout the population. Suppose that all traits are aggregated on a normal distribution chart. On the left tail you’d have a list of negatively perceived traits, such as weakness, disagreeability, and poverty. On the right tail, you’d have traditionally positive traits such as strength, charisma, and wealth.

Where do founders fall? Certainly they seem to be a bit less average and a bit more extreme than normal. So maybe the founder distribution is a fat-tailed one:

But that radically understates things. We can push it further. Perhaps the founder distribution is, however strangely, an inverted normal distribution. Both tails are extremely fat. Perhaps founders are complex combinations of, e.g., extreme insiders and extreme outsiders at the same time. Our ideological narratives tend to isolate and reinforce just one side. But maybe those narratives don’t work for founders. Maybe the truth about founders comes from both sides.

C. Is Inverted Normal Distribution Possible?

There are four basic explanations for such a strange, inverted distribution. The first two reflect the familiar nature vs. nurture debate:

1. It is natural. Founders really are different. Max Levchin really has 3 kidneys.

2. It is developed, or nurtured. Cultural feedback makes founders different.

But the nature vs. nurture paradigm assumes that the distribution is real. It may, in fact, be mythology. To the extent that it’s fictional, there are two explanations:

3. It is self-created (exaggerated by the founders).

4. It is other-created (exaggerated by everyone else).

Thinking about founders involves thinking about which of these explanations fit and which do not. The complicated answer is that generally all four apply to some extent. It is very hard to disaggregate them. In practice, they tend to all feed into each other in important but complicated ways.

The dynamic might work like this. People start out being different. They are nurtured to develop their already somewhat extreme traits. Those traits become more important, and they learn to exaggerate them. Others perceive that inflated importance and exaggerate in turn. The founders thus end up being even more different than they were before. And we cycle and repeat.

In practice, the arrows could be reversed. Or the interactions might not make a clean circle, and the feedback loop would be much more complicated. The point is that some interactive combination, and not just one static piece, is driving the process.

D. Applied

Anecdotally, we can apply this framework to any founder figure.

Take Sir Richard Branson, for instance. The big question is whether Branson should be king. He has been called:

Let’s start with the haircut. He sort of looks like a lion. In fact, in the picture above he is actually dressed up as a lion. It seems kind of redundant. Anyway, one suspects that Branson wasn’t actually born with that exact hairstyle. There is probably some degree to which he cultivated and nurtured his traits over time. Reconstructing the truth is tricky. It is very hard to actually know the precise dynamic—nature, nurture, or some kind of fiction—because stories about heroic founder figures get told in very exaggerated, morphed forms.

Jack Dorsey is another figure we can pick on. He’s hit all of the extremes and very little of the average. At the outset he donned a nose ring and unkempt hair. He got a nerdy tattoo. Then he transformed to the other extreme side of the inverse distribution. Now he wears Prada suits and fashionable shirts. His branding went from extreme outsider to extreme insider. And this is all going off nothing but totally superficial appearances.

Sean Parker might be the paradigmatic example of the extreme founder figure. There was a rise, fall, rise, fall, and then a rise again. His experience in founding multiple things has been a pastiche of extremes. He didn’t go to college. Maybe he didn’t even finish high school. He was involved in various underground hacking circles in ‘90s. He did Napster as teenager. That had a crazy up-down arc to it. Criminal, of course, is the ultimate outsider category. There were all sorts of questions on whether Napster was really a criminal undertaking. Per the Digital Millennium Copyright Act, companies had to list a phone number for people to call for support inquires. At Napster, that number was Sean’s cell phone. He spent a lot of time in the early 2000s assuring concerned Midwestern mothers that their children weren’t going to get locked up for having downloaded a Metallica album.

And then there are the wacky drug allegations and the crazy celebrity part. Sean made the cover of the Forbes 400 issue; he found a way to be distinctive even amongst the set of the richest people in the world. Justin Timberlake, of course, played Sean in the Facebook movie. There is a person at Clarium who looks pretty similar to these guys. When he travels outside of Silicon Valley, people ask him if he’s Justin Timberlake. But in Silicon Valley, people ask him if he’s Sean Parker.

Sean seems as exciting to people as he does dangerous. One random anecdote involves the Founders Fund surfing trip to Nicaragua over New Year’s 2007. We took the jet down to Managua. We were probably the only people in the country with a private jet. We drove to a remote town on the coast. Everything started off great. We threw a terrific New Year’s party. Except it kept getting crazier and crazier. Our professional security guard had to displace some people when various drug dealers and other sketchy types started showing up. In Sean’s mind at least, things got weirder from there. 36 hours later, by the morning of Jan 2^nd, Sean was all but convinced that our security guard was plotting against him and he was about to be kidnapped. He went from extreme insider to extreme outsider very quickly. He and his girlfriend ditched their luggage and fled to Managua international airport in a cab. The rest of us thought that this was exaggerated paranoia, so we stayed as planned. Sure enough, the security guard became visibly distressed when he noticed Sean was no longer there. We nervously told him that Sean had mentioned that he’d be leaving tomorrow—that way he’d already be gone when they tried to nab him at the airport. Ultimately there was a happy ending and no one got kidnapped. But there will probably not be any more Founders Fund trips to Nicaragua.

This segues to the pure celebrity version, best epitomized by Lady Gaga. Born This Way is her recent hit album and song. On one level, the whole thing is obviously completely fictional. It’s probably safe to say that she was not, in fact, born like this. The big piece must be nurture. But on another level, maybe it is nature. What sort of people would actually do this to themselves? Maybe one actually does have to be born that way in order to do these things. Who really knows for sure? Is Gaga self-created myth? A myth created by other people? Everything all pulled together at once?

II. Mythology

Oddly enough, classical mythology overlaps with the inverted bell curve distribution. There are monsters and there are gods. And very often they are one and the same.

In what sense are founders like mythical heroes? Myths about the founding of things are very common. Are mythical heroes actually any different? Did they have extreme traits? Develop them? Did they exaggerate themselves? Did others exaggerate their stories?

Consider Oedipus. He was both an extreme insider and an extreme outsider. He was the king. He was so brilliant that he was able solve the riddle of the sphinx. But he was abandoned to die on a hill as an infant. He was a foreigner from a different place. And then he had the incest accusations and ensuing downfall.

Achilles is another mythological hero who was active at the extremes. He was incredibly strong and perfect, except where he was weak and flawed.

Perhaps the most classic founding of all is the founding of Rome. Romulus and Remus were disadvantaged, common orphans who were raised by wolves. They were outsiders. But then they became founders and lawmakers. Romulus killed his brother and became a lawbreaker and king. If there is a hierarchy to it—if killing your brother is worse than killing a random person and killing your twin brother is even worse than that—then Romulus was an unusually bad criminal.

Legend has it that what prompted the murder is Remus’ leaping over the imaginary boundary line that Romulus had established as the edge of Rome. The rule was codified with blood: anyone who jumps over the walls of Rome will be destroyed. Does this make Romulus a criminal outlaw? Or does it make him the king who defined Rome? It depends. Maybe he was both.

Remus obviously had a bad ending. Romulus’ ending is more ambiguous. In Livy’s account, there was a huge storm that terrified the people. When the storm cleared up, Romulus had disappeared. It was announced that he had become a god. But Livy also notes an alternate account; a group of conspiratorial senators caught up with Romulus and used the chaos of the storm as cover to kill him and dispose of the body.

One other mythical element was the 12 eagles that Romulus saw from Palatine Hill. They stood for the 12 centuries that Rome would endure, after which point the debt of the founding crime would have to be repaid. Approximately 12 centuries later, Attila the Hun apparently thought it would be a good idea to copy Romulus, and killed his brother Bleda. Incidentally, fratricide is probably no longer best practice for founding things.

III. Archaic Cultures

A. The Sacrificial Cycle

The founder/extremeness/infamous dynamic, or something very much like it, was an incredibly important part of ancient cultures. The fundamental problem in these cultures was that there were all sorts of conflicts everywhere. People didn’t know what to do. There were no rules—a striking parallel to the tech startup context. Amidst all the chaos there was war of all against all.

Various enlightenment theorists have insisted that, to escape this warring state of nature, people got together, had a good chat, and drew up a social contract. But nothing of the sort ever happened. Where warring civilizations didn’t just collapse entirely, the most common resolution involved polarizing and channeling all the hostility into one particular person. Depending on the culture, witches were burned or people had their hearts cut out. The details differed. But the dynamic—a crazed community rallying around the sacrificial scapegoat—was the same.

In cultures that had some degree of permanence, this became a cyclical process. Absent strong institutions, peace never lasted. Things would go wrong. Maybe disease struck. Or maybe there was some other kind of internal (and less often, external) conflict that led to complete chaos. And then people would gang up, unite against a scapegoat, and perform the sacrifice. Peace was restored. And the cycle repeated ad infinitum.

It’s clear that the scapegoat is extremely powerful. Scapegoats can turn conflict into peace. This makes the scapegoat omnimalevolent; if peace follows his killing, he must have been very bad indeed. Or maybe it’s omnibenevolent, since it trades its life so that others may live in peace. Probably the right answer is that it’s some of both.

We can speculate that in many cultures, this process became ritualized. People realized the power of the scapegoat and abstracted it away from localized contexts. Instead of waiting for random uncontrolled chaos, sacrifice became planned. Of course, there were probably cultures that never figured this out. They couldn’t systematize the isolation of the scapegoat. So everyone just killed everyone and the culture blew up. One suspects that the cultures that managed to ritualize and repeat the cycle were the ones who lasted for awhile.

B. Finding the Victim

There are all sorts of questions on how to go about finding the scapegoat. Sometimes the processes are random. In Gaelic Scotland, people would bake a cake over the fires of Beltane and cut it into pieces. One piece would be marked with charcoal. Men would choose a piece from a bonnet. Whoever got the black piece was the devoted, and was sacrificed to Baal. Residual forms of this persisted up through the 18^th century, where the devoted would have to just jump through the fire instead of perish in it.

The ancient Gauls took a more objective approach. Someone would have to be sacrificed on the eve of battle to win the gods’ favor. But which person would that be? Rather than complicate things, the Gauls just held a footrace to the battlefield. Naturally, the slowest person was the one who got sacrificed.

C. Anatomy of the Scapegoat

The perfect scapegoat is someone at both extremes. He must be both an extreme outsider and an extreme insider. It can’t be a completely random person drawn from a homogeneous lot. It must be some sort of outsider, lest the people in the crowd get introspective and realize that the sacrificed was essentially just like them (and, next time, may well be them). But neither can the scapegoat be entirely different from the crowd; he must be an insider, since the pretext behind the ritual is that he is responsible for the internal community strife.

D. The Roots of Monarchy

Not all scapegoats were hated all the time. Very often, they would be worshipped before they were sacrificed. People would give the scapegoat a certain amount of power before tearing him apart. That scapegoats were either worshipped or demonized follows from their being all-powerful.

One working theory is that monarchy originated this way. The Aztecs, for instance, would basically crown someone a quasi-god king for a period of time, after which point he would be sacrificed. Kings became scapegoats who had not yet been killed. Every king was a living god. Every god was a murdered king.

Arguably Egyptian pharaohs started off as scapegoats. Perhaps the first pyramids were the piles of stones that entombed people who were stoned to death. Later, when Pharaohs became powerful kings and it was unthinkable to kill them during their lifetimes, people kept putting increasingly large piles stones on top of them after they died.

Given this dynamic, we can imagine how monarchy came into being. The scapegoat simply figured out how to maintain his power and indefinitely delay his execution.

The Zulu Kingdom was a warlike African monarchy in the 19^th century. The Zulu king had to be strong and powerful. He could have hundreds of wives and do pretty much whatever else that we wanted. But once he started to get white hair and wrinkles, his power faded. He would be deemed unfit to be king, deposed, and killed. It’s hardly a surprise, then, that upon first contact with the British, the Zulu kings were more interested in hair coloring lotion than in anything else. Whether phenomena like this continue to exist in our society today is a question well worth asking.

E. The Politics of Sacrifice

According to Aristotle, tragedy functioned so as to reduce common peoples’ anger toward successful people. The lesson in all tragedy is that even the greatest people have tragic flaws. Everybody falls. It was thus cathartic for ordinary people to see terrible things happen to extraordinary people, if only on stage. Tragedies were political tools that transformed envy and anger into pity. Commoners would retreat contentedly to their small houses instead of plotting against the upper class.

Julius Caesar was a classic insider/outsider. Eventually, of course, he was assassinated. Every subsequent Roman emperor pretty much had to be a Caesar. And the sacrificial cycle repeated an infinitum for centuries thereafter.

Being an extreme insider is great, until it all goes very wrong. Marie Antoinette was such an insider. But people turned on her. She was an Austrian, i.e. a foreigner. She faced accusations strikingly similar to those from the Oedipus mythology. It’s not clear whether the “let them eat cake” line was fictitious or not. But all great revolutions could be described as the rapid shift from insider to outsider. During the French Revolution, there was an interesting legal debate on whether the king should get a trial. Robespierre and the revolutionaries vehemently argued against a trial. The king, they should, should be slaughtered like a wild beast. Having a trial meant that the king might be innocent, which, in turn, meant that the people might be guilty. But it was unthinkable that the people might be guilty. So the solution was to just kill the king.

IV. Sacrifice Endures

A. In Culture

A modern version of this is the 12-person jury in the criminal context. The unlucky 13^th person is the criminal who gets punished or killed. It is the classic scapegoating-type mechanism. The 13^th person is assumed to be—and probably is—different. It’s never really a jury of your peers. If you’re a murderer, you aren’t judged by 12 murderers. If you’re rich, they don’t find 12 rich people to decide your fate. It is very much unclear whether a jury trial works well for its stated goals at all. It seems to work in contexts where people perceive things as they are. But other contexts, it is just scapegoating gone crazy.

Another modern version has to do with celebrities, and resurrects the monarchical dynamic that people assume has long since died. We literally anoint our stars as kings. Elvis was the King of Rock. Michael Jackson was the King of Pop. Brittney Spears was the Princess of Pop—I guess Madonna was the Queen. You start to run out of titles pretty quickly.

Then, at some point, things go wrong. The anointed are put on pedestals only to be torn down. Elvis self-destructed in the ‘70s. Michael Jackson obviously went downhill. The picture below depicts Brittney Spears at height of the paparazzi insanity. A few years ago, the paparazzi industry was a $400 million/year industry. Brittney Spears drove $100 million of that. There were between 1,000 and 2,000 people who made their living doing nothing but chasing her around and taking pictures of her. What went wrong? Was Brittney naturally crazy? Did she become crazy after having been isolated as a child superstar? Maybe the crowd got to her. Or maybe she intentionally acted in weird ways for the publicity.

Regardless, these kind of stars all enjoy a very strange afterlife. In life, they are torn down from pedestals. But after they die, they are resurrected as god-kings. Things come full circle.

Another example of this is the Forever 27 club, whose members include Janice Joplin, Jimi Hendrix, Jim Morrison, Kurt Cobain, Amy Winehouse, etc. This is the set of famous musicians who all died at age 27. “They tried to make me go to rehab, I said, ‘No, no, no.’” There are all sorts of questions one could ask. But there is a sense in which these people will live on as iconic cultural figures.

The “from destructive to immortalized” dynamic goes way back to mythology. Alexander the Great was 32 when he died. He would frequently engage in hardcore quasi-religious drinking marathons. Apparently the game was to consume alcohol until someone died, and Alexander felt that he had to prove that that someone would not be him. It was a strategic error. But he will forever be known as a great conqueror.

B. In Politics

The political version involves certain ideological distortions. People on the left and the right tend to focus and even obsess on people from the other side. Everybody from the other column becomes the crazy person and the legitimate scapegoat. In reality, the truth is that it tends to involve some strange combination of both.

Two of our greatest presidents had this sort of strange heroic arc to their story. Abraham Lincoln was an extreme outsider turned insider. He was born in an isolated log cabin. He was probably our poorest President. He was very smart and also very ugly. And he, probably intentionally, uglified himself even further with his strange beard. Lincoln was always on both extremes. His end involves a very strange return to the Cesar question. John Wilkes Booth, believing that he was reenacting Cesar assassination, shouted “Sic semper tyrannis” as he shot Lincoln—which is, of course, what Brutus is reputed to have said as he stabbed Caesar.

A strange counterpoint point to this comes from one of Lincoln’s first public speeches ever. The future president delivered what is now called the Lyceum Address to a small crowd in Springfield Illinois in 1837, when he was 28 years old. It is worth reading in its entirety. It opens:

As a subject for the remarks of the evening, “The perpetuation of our political institutions” is selected.

Lincoln spoke about how there could not be any more founding moments in the United States. The founding had been done, in the 18^th century. It was over. At this point all that one could do was preserve and maintain things. There was nothing truly new that anyone could ever hope to do in our government.

About halfway through the speech, things get really interesting. Lincoln asks whether ambitious people would ever try to be founders anyways, or whether they would be fully satisfied with existing institutions. He answers yes and no, respectively:

The question then is, Can that gratification be found in supporting and maintaining an edifice that has been erected by others? Most certainly it cannot. Many great and good men, sufficiently qualified for any task they should undertake, may ever be found whose ambition would aspire to nothing beyond a seat in Congress, a gubernatorial or a presidential chair; but such belong not to the family of the lion or the tribe of the eagle. What! think you these places would satisfy an Alexander, a Caesar, or a Napoleon? Never! Towering genius disdains a beaten path. It seeks regions hitherto unexplored. It sees no distinction in adding story to story upon the monuments of fame erected to the memory of others. It denies that it is glory enough to serve under any chief. It scorns to tread in the footsteps of any predecessor, however illustrious. It thirsts and burns for distinction; and if possible, it will have it, whether at the expense of emancipating slaves or enslaving freemen. Is it unreasonable, then, to expect that some man possessed of the loftiest genius, coupled with ambition sufficient to push it to its utmost stretch, will at some time spring up among us?

The takeaway is that we have to be really careful because such people might exist.

Kennedy’s story was different but the underlying dynamic was the same. He was one of richest people—worth about $1 billion in today’s money—to become president. His father was criminal bootlegger. He was on amphetamines most of the time. He stopped being a rich insider when he found himself an outsider to whatever plot or conspiracy it was that led to his assassination.

C. In Tech Companies

This dynamic recurs over and over again in the tech company founder context. Let’s focus on 3 instances: Bill Gates, Howard Hughes, and Steve Jobs.

Those old enough to remember will remember the “Bill Gates is god” phase in the ‘90s. The president of the U.S. always has a quasi-divine status. So when you get compared to the sitting president, it’s pretty extreme. All the same questions apply to Gates. Was it nature or nurture? He was a Harvard insider but a dropout outsider. He wore big glasses. Did he become a nerd unwillingly? Did he prosper by accentuating his nerdiness? It’s hard to tell.

What is clear, however, is that the good times didn’t last:

One (admittedly unconventional) theory is that Bill Gates is still being tortured and punished for his fall. He has to go to all sorts of boring charity events, pretend that the people there are saying interesting things, and then give them his money to boot. And adding insult to injury is the fact that these are the same people who ganged up on him in the late ‘90s.

Howard Hughes was one of the greatest founders in the 20^th century. His life had a very extraordinary arc to it from about 1930 to 1945. He started off as reasonably successful. He went on to have incredible parallel careers in movies and aviation, which, in retrospect, were the two booming tech sectors of the 1930s. He became the wealthiest person in the U.S. by age 45. If Hughes had died in the plane crash that he had in 1946, he would have gone down as greatest entrepreneur of 20^th century.

One of Hughes’ favorite tricks was to pretend to be crazy on the theory that no one would take the time and energy to try to stop or compete with a crazy person. A large part of his mythology was fictionally constructed; he claimed, for instance, to have been born on December 25^th, 1905. One has to wonder if he was really born on the same day of the year as Christ, or whether that was an intentional ploy.

Hughes’ fall from grace began after the’46 crash, when he became addicted to painkillers. He more or less holed up in various penthouse lofts for 30 years, hooked up to IV machines and refusing to eat. Looking back the story has a pretty crazy color to it. The craziness continued even after Hughes died; as there was no authoritative will, all sorts of distant descendants and questionable figures began a long and vicious fight to inherit the estate.

And then there’s the Steve Jobs version. You could probably tell a few different versions of the Jobs version. Let’s focus on the one from the ‘70s and ‘80s. He had all the classic extreme outsider and extreme insider traits. He dropped out of college. He was eccentric and had all these crazy diets. He started out phreaking phones with Steve Wozniak. He took LSD.

Ultimately he was kicked out of apple and was replaced John Sculley, who was seen as the much more normal, adult-type person that should be in charge.

Circling back to the bit about archaic cultures. Isn’t this dynamic roughly the same now as it was then? We tend to think of monarchy as a dead and defunct institution. But is it really? Time magazine put Marc Andreessen on the cover in February 1996—sitting on a throne-like chair! He was later vilified quite a bit when things went bad at Netscape. Now he seems to have recovered quite nicely.

Mary Meeker had a similar rise and fall and then rise again. Dubbed the “Queen of the Net,” Meeker was an influential stock market analyst who was probably the most bullish person on net in the ‘90s. If she wrote about your company, your stock would go up. She received a much more negative reassessment from the public after the ‘90s tech bubble exploded. She was torn down from the pedestal. But she stuck through it at Morgan Stanley and has come back to being very successful, now as a venture capitalist.

D. Can It Be Escaped?

How much of this can be avoided? How do you avoid becoming a sacrificial victim? The simple answer, of course, is that if you really don’t want to get killed, you shouldn’t sit on the throne. But this seems suboptimal. Wearing the crown is obviously an attractive thing. The question is whether you can decouple it with getting executed.

That is the danger with being an extreme insider. Push too hard and the poles reverse; you end up as an extreme outsider and it all goes to pot. There have been 44 American presidents. Four of them—9% of presidents—were assassinated while in office. Four more were almost killed. Your odds of not dying a violent death are dramatically lower if you’re not the president. That’s at least worth thinking about if being president is your goal.

This is not to say that people can or should escape by abdicating the throne. Sometimes the risk is worth it. And maybe you can reduce the risk. There have to be CEOs and founders. Those people are expected to wear the crown. That necessarily involves a certain amount of playing with fire. The tricky part is that, while mistakes get made, they are incredibly hard to spot at the time. They are more easily analyzed in retrospect. Bill Gates was incredible through the 1990s, until Larry Ellison and Scott McNealy and a bunch of CEOs from other tech companies effectively started a “We Hate Gates” club, stirred up attention at the DOJ, etc. From Gates’ perspective, he was on perpetual winning arc of never-ending progress. Everything was perfect, and the haters were just envious and pathetic. But once it turns it can turn pretty quickly. The falls are so big that it’s hard to fully recover.

V. Extending the Founding

A. Forms and Theory

One strategy to avoiding becoming a scapegoat is to extend the founding moment. With the big caveat that there is probably no single silver bullet solution—the founder turned god turned victim dynamic is probably inescapable to some extent—let’s work through some ideas on how to negotiate this dangerous ground.

You can plot out the various forms of government on 1-dimentional axis:

A startup is basically structured as a monarchy. We don’t call it that, of course. That would seem weirdly outdated, and anything that’s not democracy makes people uncomfortable. But look at the org chart:

It is certainly not representative governance. People don’t vote on things. Once a startup becomes a mature company, it may gravitate toward being more of a constitutional republic. There is a board that theoretically votes on behalf of all the shareholders. But in practice, even in those cases it ends up somewhere between constitutional republic and monarchy. Early on, it’s straight monarchy. Importantly, it isn’t an absolute dictatorship. No founder or CEO has absolute power. It’s more like the archaic feudal structure. People vest the top person with all sorts of power and ability, and then blame them if and when things go wrong.

We are biased toward the democratic/republican side of the spectrum. That’s what we’re used to from civics classes. But the truth is that startups and founders lean toward the dictatorial side because that structure works better for startups. It is more tyrant than mob because it should be. In some sense, startups can’t be democracies because none are. None are because it doesn’t work. If you try to submit everything to voting processes when you’re trying to do something new, you end up with bad, lowest common denominator type results.

But pure dictatorship is unideal because you can’t attract anyone to come work for you. Other people want some power and control too. So the best arrangement is a quasi-mythological structure where you have a king-like founder who can do more than in a democratic ruler but who remains far from all-powerful.

B. Occupy

We can reimagine our old 0 to 1 (technology) and 1 to n (globalization) paradigm by putting a monarchy/democracy overlay on it. Monarchy involves going from 0 to 1. Democracy involves going from 1 to 99.

The 99% vs. the 1% is the modern articulation of this classic scapegoating mechanism. It is all minus one versus the one. And it has to just be the one. 99.99 people or percent is too granular. Scapegoating 0.1 doesn’t really work. You need a whole person to play the victim. Similarly, 98-2 doesn’t quite have the same ring to it either.

C. Extending the Moment, Escaping the Trial

The normal company arc involves an initial monarchical founding period and then a normal period where founders are gone and more conventional people come in and run things. In the U.S., there were the founding fathers. And then there have been everybody else. Perhaps some figures like Lincoln or FDR were exceptions to this. But the two phases are generally clear and distinct.

If you want to be a founder and stay a founder, can you extend the founding period? In tech companies, foundings last as long as technological innovation continues. The question is thus how long it takes for the substantive technology focus to yield to process. Once you shift toward ossified, process-based normality, much less gets done. Every founder would thus to do well to never stop wondering whether there are strategies to extend the founding in one form or another.

This probably requires a healthy amount of paranoia. You might conceive of every board meeting as a trial. At best, the board is jury (though probably not of your peers). At worst, it is a mob and is looking to make you the sacrificial victim. Your job as founder is to survive the trial. You must make sure that you do not get executed. The boardroom is not the only place where things can go wrong, of course. But it is typically where things go wrong internally, and most fatal wounds come from internal, not external conflict.

Even something as seemingly innocuous as holding the title of CEO may actually be quite dangerous. Maybe you can figure out ways to minimize it. Augustus never said he was king. It was dangerous to be a king after Brutus killed Caesar. So Augustus was just the “first among equals.” Whether that equality was anything more than pure fiction, of course, is very questionable.

In October of 2000, things were pretty crazy at PayPal. The burn rate was $10 million/month. There were about 4.5 months of runway left. When I returned as CEO, it wasn’t all of a sudden. I was the Chairman and came back as the interim CEO. We went through a 6-7 month process of trying to find a permanent one. The one decent candidate that we found sort of didn’t work out. Things were going well, so the board agreed to have me be CEO. But the company was about to go public, so the board insisted that there be a Chief Operating Officer (COO) too. COO, of course, is code for the #1 replacement candidate for CEO—it’s like the Vice President in U.S. politics, only more adversarial. I was able to convince the board to make David Sacks COO, which was probably a good, safe move since David was perceived to be crazier than I was. Thinking carefully about these things can lead to powerful insurance policies against getting deposed or executed at trials board meetings.

The dual founder thing is worth mentioning. Co-founders seem to get in a lot less trouble than more unbalanced single founders. Think Hewlett and Packard, Moore and Noyce, and Page and Brin. There are all sorts of theoretical benefits to having multiple founders such as more brainstorming power, collaboration, etc. But the really decisive difference between one founder and more is that with multiple founders, it’s much harder to isolate a scapegoat. Is it Larry Page? Or is it Sergey Brin? It is very hard for a mob-like board to unite against multiple people—and remember, the scapegoat must be singular. The more singular and isolated the founder, the more dangerous the scapegoating phenomenon. For the skeptic who is inclined to spot fiction masquerading as truth, this raises some interesting questions. Are Page and Brin, for instance, really as equal as advertised? Or was it a strategy for safety? We’ll leave those questions unanswered and hardly asked.

D. Return of the King

The return of the founder is not to be underestimated. Apple is the paradigmatic example. There were 12 crazy years from 1985 to ’97. There were very conventional CEOs. They couldn’t figure out anything new to build. Obviously there was something very powerful in bringing the founder back; from 1997-2011 Apple changed course entirely and had an incredibly powerful arc.

The options backdating scandal has been relegated to a minor footnote in the Apple mythology. Apple stock kept going up, and the board kept backdating options grants, giving Steve Jobs a fairly big windfall.

It probably wasn’t just building great products or being a good insider that saved Steve Jobs. His being terminally ill part was probably a very important variable. There is much less power in scapegoating someone who’s power—indeed, whose life—is waning anyways.

I met Steve Jobs once, at Marc Andreessen’s wedding in 2006. He was already very frail then. At 9 pm, he got up from the table and announced that he had to get back to the office to work. One couldn’t help but wonder: Was this real? Was Jobs really working this hard? Or was it an excuse? Maybe he was just bored talking to me.

Resurrections are possible. But you can only be resurrected after you die. Founders should think carefully about how to preserve the original founding moment for as long as possible. The key is to encourage and achieve perpetual innovation. It is very important to avoid, or at least delay, the shift to a horrible bureaucracy where no one can do anything and everyone is circumscribed.

The usual narrative is that society should be organized to cater to and reward the people who play by the rules. Things should be as easy as possible for them. But perhaps we should focus more on the people who don’t play by the rules. Maybe they are, in some key way, the most important. Maybe we should let them off the hook.

Many readers will recognize the influence of René Girard in this material. To learn more about Girard’s thinking and mimetic theory, visit www.imitatio.org.