Thursday, December 07, 2017

Bye Bye Bitcoin Bubble

It's all about the mackerel.

In the American prison system, prisoners use packages of mackerel as a medium of exchange because 1) the supply is inherently limited because prisoners can only buy 14 "macks" per week, and 2) no one wants to eat it.

In other words, prisoners collectively decided to use a useless item as a medium of exchange and store of value because its supply was inherently limited.  Sound familiar?

In a real sense, Bitcoin is even more useless than prison mackerel because at least prison mackerel is used to process transactions.  Bitcoin is barely used as a means of settle transactions; all the action is in speculative investing.

As I write this, Bitcoin just past $16,000 in value.  I would bet any amount of money that on December 7, 2018, the price of Bitcoin will be below that value.*

Everything about the situation just screams bubble.  I'm very bullish on blockchain, but Bitcoin?

Now, just because a medium of exchange lacks any inherent value doesn't mean that it's doomed to crash.  Gold remains a valuable (though bad) investment even though its usefulness as a conductor and jewelry material doesn't justify its price.  But gold also has millenia of history as a valued medium of exchange, a luxury Bitcoin does not.

In contrast, mackerel became a prison currency because the prior currency, the cigarette pack, ended up getting banned by the prison system in 2004, which means its history is barely a decade old.  Which is why it wasn't surprising when the value of the "Mack" crashed at one prison:

"I'll never forget the day where the macks lost all their value almost overnight. Someone had a huge amount of money macks and they got confiscated and the administration left them sitting in a bucket. They essentially introduced hyperinflation. They flooded the market with money macks."

Bitcoin prices have been rising because speculators are buying Bitcoin in hopes that prices rise further--the greater fool theoryDuring my current trip to Japan, Bitcoin has risen from $10,000 to $16,000.  Not coincidentally, I was pitched two different ICOs at an event where I spoke.

Inevitably, Bitcoin is going to hit a limit as the market runs out of greater fools, a point that I think is fast approaching, and some of the big holders (the Winkelvii?) will sell, flooding the market, and setting off a downward spiral.

There's even a catalytic event--on Monday, the Cboe will start trading Bitcoin futures, meaning that people will finally have a chance to bet against the currency, once again proving that Trading Places is both one of the funniest and most educational movies of all time.

I'm off to buy some futures contracts!

* UPDATE: Someone must have posted this to Hacker News, because it went viral.  Scott Walker even offered to bet me $1,000,000.  I admire his conviction, though I disagree.  But he does make a good point that I'm not *really* willing to bet any amount of money; I just didn't think someone would offer to bet me $1,000,000.  Therefore, I'm going to cap the bets I take at $10,000 per bet.

** UPDATE: I have received legal assurance that this doesn't count as illegal gambling, provided no money is "pooled" up front, so it's game on!

*** UPDATE: It is now December 7, 2018, and the price of Bitcoin is $3,368.  Alas, none of the people who tweeted at me or offered to bet were willing to follow through by the time I got legal clearance from, I kid you not, a Las Vegas law firm with specialties in gambling law and crypto law.  I'll just have to satisfy myself with listing their Twitter handles here:

People who responded to my original tweet with skepticism:
@BitcoinBhoy @Hodlayheehoo @dbrizzy80 @georgepf84 @tracyarciaga

People who expressed interest in betting but never followed through
@qihu00 @ericsports @Bitcoin_Shill

People I DMed with about betting:
@jimmysong, who went the farthest towards making a bet with me, but ultimately didn't

@cryptocharlesh who was willing to make a bet with me (which I was unwilling to do because I wanted to make money, not donate to charity)

@haralabob, who was game, but who is really rich and wasn't interested in a mere $10,000 bet.

Same for @scottwalker99, who immediately offered to bet me $1,000,000, but wasn't interested once I capped bets at $10,000 per person.

I want to give a special final mention to @allnewsfor, who wrote: "Btw the internet will remember if you are too scared to back up your empty words with action"

I hope that applies to those who refused to bet me as well!

Wednesday, December 06, 2017

Adventures in Tokyo

I'm currently in the middle of a week-long trip to Tokyo where I'm speaking about my books and meeting with startup and finance folks on behalf of the Women's Startup Lab.  While I'd been to Tokyo once before, in 1982, I was so young then, and the city has changed so much since, that it's really been like visiting for the first time.  Here are some of the adventures and observations from my time in the land of the rising sun:

Story Time: My visit to the Tsukiji Fish Market.

One my first morning in Japan, I found myself awake at 3 AM (which is 10 AM California time) and started catching up on phone calls.  During one of those calls, I was strongly urged to go check out the Tsukiji Fish Market and its famous tuna auction, which takes place at 5:30 AM.  Fortunately, the Women's Startup Lab founder, Ari Horie, was both awake and willing to indulge my quixotic desire.  Little did I know that it would become an object lesson in entrepreneurship.

You see, what I didn't realize is that Tsukiji had just announced that it was not going to be allowing non-professionals to visit the auctions from December 1 through mid-January.  And of course, I was going there on December 4.

Tsukiji is an accidental tourist attraction; it's a commercial fish market for fisherman and wholesalers, with millions of dollars changing hands every day.  So when we arrived, there was no entrance or signs.  I believe the assumption is that anyone who has a legitimate reason to be there already knows where to go and what to do.

Were I by myself, I probably would have skulked around the perimeter, and ended up slinking back to my hotel room.  Fortunately, I was with a real (and Japanese-speaking) entrepreneur.  "Follow me, and don't make eye contact with anyone," Ari said.  She then began striding purposefully into the dark, industrial-looking complex, which, I should point out, was covered with signs that read things like, "Do not enter.  Unauthorized personnel not allowed."

We made our way without having any idea where we needed to go, dodging both security staff (each time we saw an officer, we changed direction to avoid him) and the ubiquitous electric cards that zoom everywhere at about 20 MPH, carrying boxes and whole fish.  Each cart had a semi-circular metal cow-catcher to absorb impacts, and a distressing number were dented and worn.  I suppose I should be glad they weren't blood-stained.

Eventually, we made our way to the center of the complex, where, by peering under partially raised garage doors, we could just make out the preparations underway for the tuna auction.  Whole flash-frozen tuna were being lined up for inspection by an army of Japanese men with wicked-looking fish hooks.

Again, were I by myself, I would have contented myself with saying, "Well, I guess I got to see the fish!  Pretty cool.  Now I'd better get out of here before they catch me and beat me to death with their hooks."  Ari had other ideas, walking along the building until she found a door marked, "Do Not Enter" which opened when she tried it.

Once inside, we got a much better look at the tuna, laid out like a giant set of fishy chess pieces all over the concrete, ice-strewn floor.  That's when Ari went up to a fisherman and began speaking with him in Japanese.  After about 5 minutes of conversation, the fisherman reached into his pocket and gave us two paper badges to put around our necks.  I found out later from Ari that she had told the fisherman that I was a very important visitor from Silicon Valley, who had come to Japan to observe the tuna auction.  The fisherman told her that you weren't allowed in the building without a badge, so she simply asked if he could give us some badges.  She told me that she had addressed him with the traditional rural Japanese honorific for "father," appealing to the ingrained parental instincts of any older Japanese man when addressed by a younger woman or girl.

Now armed with official badges, we got to wander the entire fish market while waiting for the auctions to start. (Ari purchased both a fresh giant scallop and a 1-pound block of fatty tuna, which I then stuffed into my jacket pockets)  It was astounding to see the variety of fish, from fugu to live octopi (I felt bad for them).  I watched blocks of tuna being trimmed to perfection, then being misted to glistening perfection via spray bottle like a Hollywood star being prepared for a close-up.  I watched eels being slaughtered, with their heads jammed on a metal pin on a cutting board so that they could be properly filleted.

Once the auction started, the sounds of ringing bells and constant sing-song auction chanting filled the air, and fishermen hurried about with hooks, loading 400-pound tuna onto wooden carts to be carried off to market stalls, high-end restaurants, or to be whisked to the US on cargo jets.  At one point, a security noticed us (which was hard not to, since Tsukiji is essentially 100% Japanese men, with no women or non-Japanese to be seen anywhere) and told us (Ari told me later) that we had to leave.  So we left the room, circled around to the other side of the auction, and re-entered.

All told, we watched the three different tuna auctions, then found the actual tourist-accessible part of the market and had a breakfast of fine sushi at 6 AM.  The fish was very fresh and very delicious.

The moral of this story is that even in Japan, the most orderly and rule-following nation I've ever seen (more on this later), an entrepreneur who won't take no for an answer can still work wonders.

Japan: Land of Detail

Japan is the cleanest, most orderly place I've ever visited, and I've visited Singapore:

  • I still haven't seen a single piece of litter on the ground.  This fact is even more astonishing because there literally are no garbage cans anywhere.  Ari told me that the lack of garbage cans reminds people that they are responsible for their own trash.  If this were America, there would be litter everywhere, as people said, "Fuck it," and chucked their trash whenever no one was looking.  In Japan, it simply means that people will carry their trash until they get home to throw it out.
  • The busy parts of Japan are as crowded as Manhattan, but the experience is totally different.  Everything is clean and polished.  The crowds of people move purposefully, obey all the traffic signs, and make barely any noise.  I eventually realized that the thing that seemed to be missing the most was the constant sound of honking and cussing that characterizes Manhattan.
Even the most minor thing is crafted with incredible care.
  • The first thing Ari and I did after getting through customs was to visit a Japanese convenience store for snacks.  I selected a tuna roll, which cost about $1.  When I opened the packaging, I was surprised to find that the rice and seaweed were carefully separated by a layer of plastic; when you want to eat a roll, you open the package, and roll the rice into the perfectly sized and aligned sheet of seaweed.  The result is a satisfying crunch when you eat the roll that would be impossible if it were presented, as it would be in the US, completely assembled, which would lead to soggy seaweed.
  • As I've already posted on Facebook, the instant coffee in my hotel room is a marvel of craft.  Rather than a cumbersome paper pouch or a sealed K-Cup, poured into a styrofoam cup, the coffee package folds out with origami-like precision to precisely fit the delicate, fine bone china cups provided in my hotel room.  It makes instant coffee somehow elegant and refined!
  • At my various meetings, my hosts presented me with coffee and tea.  Instead of the American system of a heatproof disposable cup with a cardboard sleeve to prevent burns, the Japanese way is to have disposable cups that fit into a plastic adapter that holds the cup, protects the drinker's hand, and offers a handle so that you can grasp the cup with a few of your fingers and drink your tea in a civilized and genteel manner rather than barbarically holding a cardboard cup with your whole hand.
  • After my talk, I was presented with a present--a special fruit package, which, when opened, proved to hold the most beautiful grapes I had ever seen, and a whole cantaloupe.  The grapes were all clustered perfectly on a single stem, were large and perfectly ripe, and were somehow perfectly clean and dry and ready to eat.  It wouldn't surprise me if they were hand washed and dried with tweezers.  They were delicious.  Later, I found out that the fruit package probably cost $100-200.
Here are few of the final quirks and observations that either amused, impressed, or horrified me.
  • Years of reading gave me the impression that all of Tokyo looked like a cleaner Blade Runner, with brightly colored lights illuminating a neon wonderland where all the women dressed as schoolgirls while Hello Kitty ruled from on high like a fierce overlord.  For the most part, Tokyo looks like a much cleaner, much more elegant, much more Japanese Manhattan.  Though we did visit Shibuya one night, and it did look like a neon wonderland that rivaled Times Square for garishness.  That was the night we went to a trendy "meat sushi" restaurant with pictures of horses on the menu.  I did not partake.
  • At one point, I visited a very traditional bank.  The lobby was titanic in scale, and had an army of uniformed receptionists who all looked and dressed identically.  When I went up to my appointment on a higher floor, I encountered a secondary lobby with its own army of uniformed receptionists, who would stand and bow any time any employees walked past.  I still haven't figured out when I'm supposed to bow, so I just bow anytime everyone else does and hope for the best.
  • People keep taking me to eat non-Japanese food.  I've already had Chinese food twice!  The food is excellently prepared and delicious, but I feel like I'm visiting Japan to enjoy Japanese culture, not Chinese or American culture.  That being said, not everything translates precisely; I saw New England Clam Chowder being advertised in a supermarket, complete with its traditional topping of mounds of cheddar cheese.  An Irish pub advertised its traditional beef salad.
  • Tokyo may be considered an expensive city, but restaurants are much cheaper than in the US, and tipping is not allowed.  We had a dinner in a high-end tempura restaurant at the top of a luxury office tower, complete with plenty of sake, and the total bill was about $50 per person.  I had a quick-service sashimi dinner for about $10.  On the other hand, nuts are expensive as hell (I guess they're all imported), and there is no peanut butter!
  • I feel like a hulking giant in Tokyo.  Everything, including the food, is designed for people who are much smaller.  I can only imagine what it is like for someone like Ben Casnocha, who makes me look tiny in comparison.  I found the taxis cramped, and my large American gluteus maximus spilled out of some of the chairs.  Once, I noticed that an elevator was rated for 1,000 kg/15 people.  In America, it would be 2,000 pounds/10 people, and even that might not be enough of a safety margin.
  • In the business districts, the vast majority of men wear suits and ties.  Dressed in my most formal attire, including Brooks Brothers blazer, I look like I'm wearing business casual.
  • I feel completely safe from crime wherever I go.  The contrast with San Francisco is devastating.  In comparison to Tokyo, we live in a third-world country.
  • The major auto manufacturers have many more models in Japan than in the US.  I don't even recognize most of them.  One person told me she had a Honda that was very short but very wide, and had three seats in the front, and three seats in the back.
  • Spoken Japanese is incredibly fast and very melodic and animated.  We think of the Japanese as reserved because their English is slow and formal, but their Japanese conversations make most English conversations pale in comparison.  Of course, I don't speak any Japanese, so in a number of meetings, I resorted to nodding my head when everyone else did, and trying to look sage and wise each time my name was mentioned.

Tuesday, November 21, 2017

The Hopelessness Behind Trump's Support

I get a lot of crap from people because I argue that those of us who oppose the policies and behavior of Donald Trump should try to understand and empathize with his voters.

If I were to summarize the criticisms from fellow Trump opponents, it's that Trump voters are racists and bigots who made a conscious decision to vote for a lazy, racist, bigoted blowhard, and that expressing sympathy for them or pointing to reasons for supporting Trump other than prejudice is "letting them off the hook."

I think it's hypocritical to call for compassion and understanding, except for when it comes to your political opponents.

This profile of Trump's continued support in western Pennsylvania argues that despite their increasing suspicion that Trump isn't going to help them economically, people still support Trump because they view him as "on their side" culturally.  (I would define that culture as rural, blue-collar, white Christian conservatives)

On the one hand, progressives and liberals might tear their hair out, since it indicates that Trump supporters basically support him regardless of the impact of his policies, as long as he keeps up his pugnacious, bullying style.

On the other hand, I think explains why compassion is so necessary.  When people are so desperate and angry that they'll vote for and keep supporting a politician who shares almost none of their background (I'll grant that Donald Trump is white, but he is definitely not rural, blue-collar, or Christian) simply because he expresses their anger at the establishment that presided over 30 years of their declining fortunes, while other groups, especially the hated coastal elites saw their lives improve.

If your life is so hopeless that you've given up on improving your lot, and are now focused on seeing other people feel the same hurt that you feel, you're not going to be persuaded to change your mind when your opponents shower you with further anger and contempt.

Wednesday, October 25, 2017

Balancing Kindness and Rightness

"Be kind whenever possible.  It is always possible." (The Dalai Lama)

I recently read this longform New York Times piece on Amy Cuddy and the replication controversy in social science.  The basic summary is that two big trends came together--the first was the rise of social science in popular culture (think Malcolm Gladwell and Dan Gilbert), and the second was a movement within the social sciences to recognize that many studies were not replicable, and that the results they reported were probably the result of poor data hygiene.

In the case of Amy Cuddy, the first trend made her a star, by making her "Power Poses" work a TED Talk sensation, which led to her bestselling book, Presence.  The second trend essentially destroyed her academic career, when it turned out that larger follow-up studies failed to show that power poses actually impacted people's testosterone and cortisol levels (though they confirmed Cuddy's finding that power poses made people feel more powerful).

What you conclude from the controversy probably reflects your point of view.  Was Cuddy guilty of profiteering based on poor science?  Or was she singled out for criticism because of her fame, and attacked because of her gender and appearance?

The tragedy of this episode is that it didn't have to happen.  The different parties involved had good intentions, but a simple misunderstanding--only uncovered by the Times reporter's work--let them to wrongly assume bad intent.  Here is the crucial passage:
When Simmons and I met, I asked him why he eventually wrote such a damning blog post, when his initial correspondence with Carney did not seem particularly discouraging. He and Simonsohn, he told me, had clearly explained to Cuddy and Carney that the supporting studies they cited were problematic as a body of work — and yet all the researchers did was drop the visual graph, as if deliberately sidestepping the issue. They left in the body of literature that Simmons and Simonsohn’s P-curve discredited. That apparent disregard for contrary evidence was, Simmons said, partly what prompted them to publish the harsh blog post in the first place.
But the email that Simmons and Simonsohn had sent was, in fact, ambiguous: They had explicitly told her to drop the P-curve and yet left the impression that the paper was otherwise sound. At my request, Simmons looked back at his original email. I watched as he read it over. “Oh, yeah,” he said quietly. He had a pained look on his face. “We did say to drop the graph, didn’t we?” He read it over again, then sat back. “I didn’t remember that. This may be a big misunderstanding about — that email is too polite.”
Cuddy and Carney had taken their advice literally. Simmons stood by his analysis but recognized that there was confusion at play in how they interpreted the events that transpired. Simmons says he harbored no ill will toward Cuddy before criticizing her paper; if anything, he remembered her warmly. “She was great,” he said, smiling at the memory. “We published the blog post despite my history with Amy. Because I realized that once we pulled the trigger on this. … ” He did not finish the sentence. Cuddy had, in fact, become the poster girl for this kind of work, which even he thought was not fair. “The original study wasn’t particularly egregious,” he said. “It was published in 2010 before anyone was thinking about this.”
For a moment, the scientist allowed the human element to factor into how he felt about his email response to that paper. “I wish,” he said, “I’d had the presence of mind to pick up the phone and call Amy.”
In other words, Cuddy had corresponded with her critics, had listened to their feedback, and thought that she had done what they had asked of her.  Simmons' misunderstanding of his own email, followed by his mistake of interpreting Cuddy's actions as defiance of his advice, led him to publish a piece that he knew would harm her career.

In these troubled times, it can be difficult to balance kindness and rightness.  Both are virtues that I value; I believe that we should try to treat people with kindness, and I believe that we should rely on facts and evidence.  What the Cuddy episode shows is that the two virtues can easily come into conflict.

I believe that when they do, we should err on the side of kindness.

The problem with unkindness is that it is like a genie that can't be put back in a bottle.  If you destroy someone's career because of a misunderstanding, you can't make it up to them.  I'm reminded of the Book of Job, who loses his entire family while being tested.  Sure, God gives him a new family, but I'm pretty sure he would have strongly preferred not to see his first wife and children killed as a test of his faith.

If Simmons had called Cuddy, her career might have been spared, even if they both eventually concluded that her original study was flawed.

Erring on the side of kindness means being willing to defer the savage, addictive joy of being right, with the knowledge that if your kindness proves misplaced, you can usually get the facts right later.

Even if you are convinced of your rightness, I believe you should acknowledge the possibility that you might be wrong, and consider being kind before pulling the trigger and causing irrevocable harm.

Wednesday, September 27, 2017

Donald Trump, Race, and the GOP

Ta-Nehisi Coates' cover essay for The Atlantic, "The First White President," explores the role of race and racism in Donald Trump's election as President of the United States.  Coates' essay, has been widely read, and drawn praise and criticism (a sign of success; the goal of nearly every writer is to elicit a reaction from readers).  My personal summary of its main argument is that the attempts to explain Trump's victory as the result of economic dislocation among the so-called "white working class" are glossing over the impact of race and racism, specifically white racism against African-Americans.

Here is the key paragraph that I think is the heart of Coates' piece (extra paragraph breaks added for emphasis):
"The triumph of Trump’s campaign of bigotry presented the problematic spectacle of an American president succeeding at best in spite of his racism and possibly because of it. Trump moved racism from the euphemistic and plausibly deniable to the overt and freely claimed. This presented the country’s thinking class with a dilemma. Hillary Clinton simply could not be correct when she asserted that a large group of Americans was endorsing a candidate because of bigotry. 
The implications—that systemic bigotry is still central to our politics; that the country is susceptible to such bigotry; that the salt-of-the-earth Americans whom we lionize in our culture and politics are not so different from those same Americans who grin back at us in lynching photos; that Calhoun’s aim of a pan-Caucasian embrace between workers and capitalists still endures—were just too dark. Leftists would have to cope with the failure, yet again, of class unity in the face of racism. 
Incorporating all of this into an analysis of America and the path forward proved too much to ask. Instead, the response has largely been an argument aimed at emotion—the summoning of the white working class, emblem of America’s hardscrabble roots, inheritor of its pioneer spirit, as a shield against the horrific and empirical evidence of trenchant bigotry."
To summarize:

  • Trump may have succeeded because of his racism
  • The United States is still subject to systemic bigotry
  • Rather than deal with the bigotry, liberals have focused on the ability of economic policy to win over the "white working class"

Some of the most powerful arguments in the essay point out the underlying bias in how issues are perceived in this country.  For example, why would an opioid crisis call for compassion, while a crack crisis calls for harsher prison sentences?  Why are we outraged that life expectancy has declined for less-educated whites, but accept that African-Americans still have lower life expectancies?

While I agree with Coates on his second point, I'm not going to examine it deeply in this post.  If the arguments in the paragraph above don't cause you to consider the impact of systemic bigotry, my writing more isn't likely to either.  Demonstrating to those who believe otherwise that systemic racism affects minorities in this country is a challenge I don't want to take up right now.  I will note from my personal experience that even Asian-Americans, the so-called model minority, face racial discrimination on a regular basis.  Being Asian is not the same thing as being white, regardless of how well Asian-Americans have done economically in this country.

Instead, I'm going to focus on the first and third points.  I would argue that despite the fact that Donald Trump appears to be a racist that favors white superiority, that this is not the primary factor that led to his election.  I would agree that economics alone do not explain white voting patterns, but I don't believe that convincing racists not to be racist is the optimal path to changing those voting patterns.

In his piece, Coates cites a series of statistics that illustrate that Trump won the white vote across many different demographics.  The implication is that Trump rode a wave of white racial resentment, catalyzed by Obama's presidency, into the White House.  But what he doesn't do is to compare Trump's performance to his GOP predecessors.  It's always dangerous to argue from a single data point, because you ignore the context.

Let's correct that error by looking at the vote breakdowns for a variety of Republican presidential candidates over the past 35 years.  All data comes from Cornell University's Roper Center:

First, consider the 2008, 2012, and 2016 elections.

Contrary to Coates' hypothesis, Donald Trump did not win a significantly higher proportion of the white vote than John McCain or Mitt Romney.  In fact, proportionally more whites voted for Romney.  In terms of percentages, Romney outperformed Trump across the board, with only two notable exceptions: Trump did better than Romney with men, and with African-American voters (!).  My guess is that this can be explained by the fact that Trump was running against a white woman, rather than a black man.

Nothing about Donald Trump's performance appears anomalous in comparison to traditional GOP candidates like McCain and Romney.  His weakness among women, African-Americans, Hispanics, and the young, are simply the extension of long-term trends for the GOP.

In fact, if we look further back to two GOP electoral triumphs (George W. Bush over John Kerry in 2004 and Ronald Reagan over Walter Mondale in 1984), we can see that while Reagan and Bush did better among African-Americans, the absolute numbers are minuscule.  The GOP has always been strongest with men, whites, the wealthy, and the old.  But popular GOP candidates like Reagan/84 and Bush/04 were able to perform substantially better with women, minorities, the poor, and the young.

(As a side note, the GOP should be terrified by these trends, which show the party's increasing weakness among the young and Hispanics, the two demographic groups that represent the future of this country.  George W. Bush actually managed to win 44% of the Hispanic vote in 2004, exceeding even Reagan's 84 landslide results, compared to an anemic 29% for Trump in 2016.  The GOP was correct to try to pivot on immigration to win over Hispanics, but Trump's rhetoric will likely make this more difficult in the future.)

It might be that Trump's racism was successful at turning out some white voters, but a) whites made up 70% of the vote in 2016, 2% less than in 2012, and b) he still attracted a smaller share of white voters than Romney's more traditional campaign.  Remember, Trump did more poorly than Romney with nearly every group other than men and African-Americans.

It seems far more likely to me that Trump's victory was due to his remarkable luck in running against Hillary Clinton, one of the few public figures in American more disliked than he.  Clinton combined unpopularity with a complacent and incompetently run campaign which devoted resources to trying to flip "Red" states rather than simply winning Michigan, Wisconsin, and Pennsylvania, and thus the election.

While Trump probably benefited from racism, it does not appear that he benefited any more than traditional GOP candidates like Mitt Romney, who didn't go around making racist statements.

(It's worth pointing out that appealing to white voters, in theory, is no more racist than appealing to African-American or Hispanic voters.  When white people vote for someone with the same skin tone, it's racism; when non-whites do the same, it is perfectly acceptable.  In practice, of course, I can't recall Barack Obama, Marco Rubio, or Ted Cruz attacking white people or supporting black or brown supremacists.)

In many ways, the lack of difference in Trump's poll results makes Coates' point about systemic bigotry even more relevant.  The real revelation of Trump's campaign is not that white men tend to vote Republican; it's that you can openly espouse racist and sexist beliefs, mock the disabled, lie constantly, and still win pretty much the same share of those voters.

Sunday, September 03, 2017

Lessons On Writing A Book

On Thursday, we turned in the manuscript for Blitzscaling.  While there is still a lot of work to go before the book appears on shelves (physical or virtual), I wanted to write and share some of my thoughts about the experience of being an author while they were still fresh in my mind.

The story of Blitzscaling stretches all the way back to the class that I, my co-author Reid Hoffman, and my friends John Lilly and Allen Blue, taught together at Stanford in the Fall of 2015.  Since then, Reid and I have been hard at work refining our ideas based on what we learned from teaching the class, as well as everything that's happened in the nearly two years since the class began.  After all, the world is a very different place in September 2017 than it was in September 2015, and that is probably an understatement.

Rather than talk about the content of the book (which you'll be hearing about soon anyway), I want to focus on the experience of being an writer.  In many ways, I know that I, in particular, have it very easy.  Not only do I get to work with a brilliant co-author who can seemingly produce wisdom on demand, but the regular course of his life brought us in touch with so many accomplished people that a "regular" author would have trouble even booking a call with.  Yet there is a reason that such a small percentage of those who want to write a book end up doing so--it's a lot of hard, mostly solitary work.  Here are some of the experiences I had along the way, and what I learned from them.  (I won't speak for Reid, though I suspect that he would say some of the same things.)

1. Sometimes, the only way to figure out what the book is about is to write the book.

The version of Blitzscaling that Reid and I turned in wasn't the first version we wrote.  In fact, the final manuscript has only about 10% in common with the first rough draft that we wrote.  And this was true even though we spent many hours planning out the structure of the book.  It turns out that no matter how carefully you outline your work, the process of writing generates new ideas and insights, which then require you to change the book.  We set out to write a playbook for blitzscaling, only to discover that we really needed to write the prequel to that book first, so that people who understand when and when not to blitzscale.

2. Books, especially those about recent events, benefit from a gestation period.

In my naive mind, I had planned on the writing process for the book to take less than a year.  Even though this flies in the face of most authors' experience, things had gone so smoothly when we wrote The Alliance that I figured that's how every book worked.  In the end, I think that the gestation period made Blitzscaling a richer, more interesting book.  It's like the difference between a snapshot and a movie; a moving picture provides you with a better basis for understanding trends and predicting the future.  Of course, the power of gestation has limits; as Steve Jobs said, "Real artists ship."

3. Writing, like doing your taxes or visiting your dentist, requires willpower, or better yet, good habits.

One of the biggest challenges I faced was purely internal--making the leap from not writing to writing.  As William Zinsser wrote in his classic book, On Writing Well, it's very difficult to sit down to commit an act of literature.  When the appointed time arrives, all of a sudden, your house seems like it needs a cleaning, or the dog needs walking.  Or maybe, you decide, it's not worth it to start a writing session if you only have an hour.  Better to wait until you have an uninterrupted block of two hours.  Or four.  Or eight.

All this is rot, of course.  I find that once I get started, I enjoy the writing process, and usually have to remind myself to take breaks.  Even wrestling with thorny problems like tricky transitions has its own appeal.  It's like when I'm asked a question, or presented with a problem.  I feel a compulsion to answer or provide a solution.  But that still requires that I get started.

Oddly enough, the advice I found most helpful came from Mel Robbins of CNN.  Mel, whose name brings to mind a gravelly-voiced, cigar-chomping newspaper man from the 1930s, is actually an energetic, blonde, former criminal defense attorney.  I didn't actually read her latest book, The 5 Second Rule, but she did a great job of summarizing it in 24 words:

"The moment you have an instinct to act on a goal, you must physically move within 5 seconds or your brain will stop you."

Thinking is a very important part of writing, but when it comes to buckling down and starting the writing process, I find that it's better not to think.  I just tried to minimize the friction between the moment when I think I ought to be writing, and the moment when my finger hits the first key.

Some of this friction minimization takes the form of preparation--preparing outlines, punch lists, and other supporting material that helps when I actually start typing.  But it is all too easy for preparation to become procrastination, which is why the 5 second rule helps.  Sometimes I have to invoke it multiple times to get down to work.

The 5 second rule also informed my toolset.  For the last sprint to the finish, we transferred the manuscript to a Google Doc, so that we could both work on it at the same time, and never have our versions get out of sync.  This actually helped with the 5 second rule, because I just left the Google Doc as an open tab in Chrome, so that all I had to do to start writing was sit down at my computer and click the appropriate tab.  And once the text appeared in front of me and I started reading it, I would quickly fall into a flow state and start working.

4. Context is a powerful way to invoke the power of habit.

One of the most effective things I did was to try to define a very specific context for my writing sessions.  Here's what I mean:

  • I didn't write at my desk, which I associate with doing email and reading the internet.  Instead, I either wrote in a conference room, at the library, or at my wife's seat at the kitchen table (much to her annoyance).  This allowed me to build an association between these locations and writing, which helped make following the 5 second rule that much easier.
  • I always listened to the same music while writing.  My family can be pretty loud.  So can office environments.  To prevent distractions, I'd put in my earbuds and listen to music...and I'd listen to the same music every time.  I should probably thank Pandora in the acknowledgements of the book!  Since there is evidence that suggests that listening to the music of one's youth actually makes you act younger, I'd often listen to 80s music, though I ended up relying more on Pandora's "Thumbprint Radio" feature, which plays songs you've thumbed up, and ones that are similar. (Many thanks to Kristen Robinson for teaching me about this feature!)
  • Naturally, I also tried to use the Pomodoro Technique.  By committing to work for 20 minutes without taking a break (and then committing to taking a break), I was able to work in short chunks when no more time was available, and for long stretches, when it was.
Many people ask why I don't write in coffee shops; the simple answer is that in most Palo Alto coffee shops, I'm likely to run into someone I know, and I'm too polite to tell them, "Go away!  I'm writing right now!"

Are you also a writer?  Do you have any favorite lessons or techniques you're willing to share?  Leave them in the comments below!

Saturday, August 19, 2017

Violence is (almost) never the right answer

Like Indiana Jones, when confronted by Nazis, most of us want to punch them in the face.  American white supremacists like Richard Spencer are so obviously and cartoonishly evil that the temptation is to treat them like movie villains, and dispatch them with heroic fisticuffs.  However, it's critical that we resist this temptation to go Captain America on their smug supposedly-Aryan features.

There are obvious reasons for restraint, ranging from a moral opposition to violence, to thwarting these loathsome creeps' strategy of inciting violence so that they can appear to be the aggrieved party.  But the most important reason is the fundamental corrosiveness of violence on civil society.

In his book, "The Better Angels of Our Nature," Steven Pinker uses historical evidence to argue that our modern society, news broadcasts nonwithstanding, is the least violent time in human history (based on the chance that the average individual will perish due to an act of violence).  I would argue that the force behind this decline is the fundamental bargain of modern civilization: Granting the government a monopoly on legitimate violence, in exchange for protection and the fair administration of justice.

The role of the military is to protect the residents of a nation from external violence, while the role of the police is to protect us from violence committed by other residents.  All of us effectively give out the right to mete out justice ourselves in exchange for a less-violent society.

This bargain is incredibly effective.  Imagine if our disputes, rather than being resolved by the courts, were still settled by exchanges of gunfire.  Actually, we don't have to do too much imagining; this is why life as a criminal is so dangerous.  Rather than going to the police to resolve their inter-gang disputes, rival gangs murder each other (and innocents suffer in the process).

This is why it is so dangerous to advocate violence as a solution to political problems.  While it may feel good to talk tough (just ask President Trump), legitimizing violence outside the military or the police attacks the fundamental underpinnings of civil society.

Recently, history Professor NDB Connolly of Johns Hopkins University (and the co-host of one of my favorite podcasts, Backstory) came dangerously close to doing just that (though possibly by accident) in a Washington Post editorial.  In this editorial, he used the metaphor of rock-paper-scissors as a guide to fighting white supremacy.  He argues that the "paper" of what he characterizes as "liberalism" cannot defeat the "scissors" of white supremacy:
"For a long while, we’ve been throwing a lot of “paper.” Liberalism — our paper — preserves our country’s long commitment to contracts. Under liberalism, citizens stand in contract with their government. The government’s job, in turn, has been to enforce contracts between individuals and groups. Truly, when people ask for rights, be they women’s rights, gay and transgender rights, or rights as people of color, they are asking for contract rights."
In other words, Connolly argues that the fundamental underpinnings of civil society are insufficient to defeat white supremacy, which historically has been based on denying minorities their contractual rights (either through direct means such as slavery itself, or indirect means such as unfair policing).
"Resistance, be it forceful or clandestine, threatened or explicit, stands as our “rock.” Rocks can look like armed self-defense or nonviolent direct-action campaigns. They appear, too, as blunt, bald public speech about the hatred arrayed against the dispossessed. Our rock against racism has also included the sacrifice of people like Medgar Evers, a black World War II veteran and civil rights organizer, dying in Jackson, Miss., in 1963; or Viola Liuzzo, a white Northern Unitarian Universalist, dying for the same cause in Selma, Ala., two years later.... 
...No matter its form, rock breaks scissors. A half-century ago, nothing less than radical anti-racism could reduce white supremacy to an outlaw religion. Paper could not do that. The contract logic of liberalism, on its own, was not built for that. On matters of racism and discrimination, capitalism can never serve as the great social fix, because in many instances, the very sectors of the economy that have historically been the most profitable in American history — for instance, slavery, real estate — have also been the most discriminatory..... 
...Then, in April 1968, amid a flurry of other “rocks,” riots shook American cities following the assassination of Martin Luther King Jr. It took that rolling unrest, not the promise of further economic growth, to spur President Lyndon Johnson and Congress to action. Within a week they had passed the Fair Housing Act.
Over the past century, liberalism, vexed by an ever-sharp, ever-cutting white supremacy, has needed these rocks....
Consider that the Klan and neo-Nazis are again out and about in daylight, wielding not so much torches as scissors. We can keep on throwing paper. Even after a couple of centuries of trying, we can keep hoping a commitment to commerce can still be the great fix. We would do well, however, to wise up and start throwing rock — public denunciations of white supremacy, clear anti-racist institution building, and fighting for policies that undo the money made off racism, especially with an ancient hatred now standing unhooded. 
Segregationists have again assumed their pedestals in the Justice Department, the White House and many other American temples. Paper alone won’t drive them out. Start throwing rocks."
There's a lot to unpack in these excerpts, so let's go point by point.

First, I think it is dangerous to do what Connolly does when he includes a huge continuum of actions under the "rock" of resistance.  He describes "rocks" as including everything from public speech to the riots of 1968.  To me, that sounds dangerously like saying that violence is necessary to defeat white supremacy.  Even our fundamental bargain makes some allowance for violence, since the police aren't everywhere all the time.  That's why we excuse violence committed in self-defense.

I think it is perfectly reasonable for protesters who are facing a set of armed opponents to make preparations to defend themselves.  The tricky thing is that this logic applies to both sides, which results in two heavily armed mobs that really don't like each other, and makes it far more likely that a fight will break out by accident.

But characterizing rioting as necessary is both wrong and dangerous.  At least a fight between opposing protesters is a fight between voluntary opponents.  Riots harm many innocent bystanders and cause economic harm to businesses and homeowners who have nothing to do with the conflict.

Second, Connolly seems to argue that capitalism cannot fix discrimination.  I strongly disagree.  Capitalism, with its amoral focus on returns, tends to reduce, rather than increase discrimination.  The evidence is clear that more diverse companies do better than their peers in our current capitalist system.  The discrimination that Connolly appears to be referring to, such as the abhorrent practice of redlining and discrimination against African-American home buyers, is a distortion of capitalism, caused by racist individuals who are willing to make less money for the "satisfaction" of carrying out their bigotry.

Finally, intentional or not (and given his profession, I am inclined to believe that this was his intention), using the phrase, "Paper alone won’t drive them out. Start throwing rocks," is both dangerous and inflammatory.  Certainly, Connolly's previous paragraph defines rock as "public denunciations of white supremacy, clear anti-racist institution building, and fighting for policies that undo the money made off racism," but I believe that nearly any objective reader would read "start throwing rocks" as an incitement to violence, especially considering how often throwing real (rather than metaphorical) rocks often leads to riots.  If a white supremacist had used the same metaphor, but in reverse, describing "left-wing violence" as the scissors and "heroic Aryan resistance" as the rock, we would rightly condemn him for exhorting his audience to, "Stop throwing paper, and start throwing rocks."

What is particularly disappointing about this is that Professor Connolly is a well-respected academic working at a flagship university, which means that A) his words carry considerable weight with those who are inclined to agree with him, and B) the white supremacists he opposes can use his words to accuse academia and the mainstream media of being pro-violence, "Just like President Trump said!"

Confronting evil is important, but we don't live in a Hollywood movie, where violence solves problems and leads to a happy ending.  As the late, great Martin Luther King, Jr., wrote, "The old law of an eye for an eye leaves everybody blind." (Note: This quote is often attributed to Gandhi, and Gandhi's family believes he may have spoken it, but there is no written evidence that he ever used these words.)  Meeting white supremacists' violence with violence will exacerbate the conflict.  And if you are willing to follow the advocacy of violence to its ultimate conclusion of killing all those who hold a particular belief, at least be willing to admit your purpose so that others can see you for who you really are.

If you believe in the value of peaceful civilization, don't argue for actions that attack its fundamental principles.

Tuesday, August 08, 2017

Why Diversity Increases Meritocracy

Too often, diversity and meritocracy are presented as opposites, when in fact, the two go hand in hand.

The grand irony is that many of those who use the concept of meritocracy to argue against greater diversity are in fact working against the interests of a true meritocracy.

The biggest logical fallacy that most pro-"meritocracy" advocates make is assuming that the current status quo reflects the natural/objective order of things.

If you assume that the status quo reflects the rewards of true meritocracy, by definition, any change to the status quo reflects a retreat from meritocracy.

This core assumption is fatally flawed, and it is easy to provide numerous counterexamples.

In 1946, Kenny Washington became the first African-American to sign a contract with an NFL team.  Today, nearly 70% of NFL players are African-American.

Since professional sports teams are evaluated based on wins and losses on the field of play, they are arguably the truest meritocracy in our society.  Are we to assume that before 1946, African-Americans lacked football aptitude, but developed these skills in the decades since?

Ah, the pro-"meritocracy" advocates might say, but that was due to racism!


Did the NBA become less meritocratic when its player demographics shifted from predominantly Jewish to predominantly African-American?

Did Major League baseball become less meritocratic when its player demographics shifted from 100% Caucasian to 30% Latino?

The point is that it is highly unlikely that any field of endeavor is a perfect meritocracy.  And if professional sports is any guide, increases in diversity tend to correlate with greater meritocracy and performance.

So why do the pro-"meritocracy" forces argue against diversity?  The classic argument is that encouraging diversity requires organizations to "lower their standards."

What are these much-cited standards?  Years of experience?  Demonstrated ability?  This is a classic Catch-22; how are people who have been shut out of an industry supposed to acquire the experience that would make them worthy of being hired into that industry?

Or perhaps it's about going to the right college or university?  Despite the fact that the undergraduates in Stanford's Computer Science department are 30% women, and Harvard Business School's incoming MBA class is 41.5% women, women still make up far less of the technical staff and leadership levels in corporate America.

Why do young white men have "potential," while others "lack experience"?

And of course, numerous studies based on publicly available data show that women-led companies perform better financially, and that quotas increasing the number of women politicians increase the average quality of male politicians.  Even if there are other studies that fail to show these effects, there doesn't seem to be any evidence that increasing diversity in an organization leads to poorer performance.  (And if you want to argue that university research and Google's search engine are biased sources that have a hidden agenda, feel free to provide links to other sources that are scientifically valid; I'm guessing you won't find them.)

The LSE Business Review article on the effects of gender quotas for politicians is especially revealing.  It's title is, "Gender Quotas and the Crisis of the Mediocre Man."  The paper argues that the reason increasing the number of women politicians improves the quality of male politicians (as measured by prior income level) is that these new entrants crowd out lower-quality incumbents.

This has two implications, both of which should be noted.  The first is that any losses to incumbents (generally speaking, white men) tend to be felt most by the least-capable incumbents.  If organizations hire more women and underrepresented minorities, or universities admit more women and underrepresented minorities, all other things being equal, they must be hiring or admitting fewer men (or overrepresented minorities--more on this later).  But these losses to incumbents are not evenly spread; the very best men are still hired/admitted.  It's the marginal men who suffer most.

This might lead diversity advocates to adopt a smug attitude of, "Those incumbents deserved to lose their positions," which I think is also a mistake.

The second implication of the disproportionate crowding out of lower-tier incumbents is that those men are facing very real losses.  The pain is especially great for those who are just starting out; they suffer the brunt of losses to incumbents, without having the opportunity to benefit from any previous lack of diversity.

It's not surprising, given this fact, that pro-"meritocracy" advocates from the ranks of the marginal men are opposed the notion of diversity hiring.  Supporting diversity hiring would directly harm their own interests.

Imagine if someone told you that a new policy was going to hurt your financial interests, and that if you spoke up against this policy, you would reveal yourself to be immoral and reactionary.  Would you be upset?  I know I would be.

As much as we would like to believe that every change for the better is win-win, and that life is a non-zero sum game, the fact is that even in a non-zero sum game there are usually individual winners and losers, and simply telling the losers to "suck it up" doesn't work very well.

So what can we do about these conflicting interests?  There is no magic solution, but I'd like to suggest an approach:

1) Tell the whole truth about diversity, including its downside.  Diversity improves the meritocracy because it increases the total pool of qualified candidates.  Because diverse hires haven't had the same opportunities to acquire relevant experience and prove their worth, we have to treat diversity as a positive externality, and account for it as an asset in our hiring practices, otherwise we are likely to maintain the status quo.  However, while increasing diversity is better for society/humanity as a whole, it results in poorer outcomes for some, just as globalization and free trade are better as a whole, but distribute costs and benefits unevenly.

2) Be sympathetic to people whose expectations aren't going to be met.  Acknowledge the distress felt by the marginal players who are being crowded out, rather than treating them as though they personally designed and built the system of bias that resulted in the current status quo.  But acknowledging that distress doesn't mean halting progress.  Instead, even though they are unlikely to graciously accept this explanation, explain that their pain is helping society/humanity as a whole.

3) Recognize that we are dealing in shades of grey, rather than black and white issues.  We are fortunate to be living in times where many of the worst instruments of discrimination have been eliminated.  Policies like apartheid, separate-but-equal, and the color line have been rightly dismantled and discredited.  Now we live in an era where the instruments of discrimination are subtler and nuanced.  Voter ID laws reflect a reasonable principle of making sure that only legitimate votes are counted, but tend to depress voter turnout among legitimate voters in certain demographics.  Corporate cultures may impede the progress of women and underrepresented minorities, but don't take the form of absolute barriers like, "Whites only in the executive suite."  Treating diversity as a crusade (word choice absolutely intentional on my part, with apologies to my Muslim friends) is a mistake.  Specifically, treating these issues as purely black and white, with an inhuman enemy with fewer rights, is counterproductive, not to mention pretty asshole-ish.

Before I conclude, I want to spend a little bit of time on a topic that is almost completely overlooked in all these debates, and one with which I have personal experience, which is the situation faced by Asian-Americans.  As the "model minority," Asian-Americans are wealthier and better-educated than the average American.  The explanations for these results are varied, but include a cultural emphasis on education, strong family structures, and the fact that many of the Asian-Americans who immigrated to the United States in the post-WW2 era were the highly-educated elites of their countries.  My own parents came to Los Angeles to obtain a Ph.D. in Electrical Engineering at UCLA, and a Masters in Library Science at USC, which made them fairly typical for their generation of highly-educated Chinese immigrants from Taiwan.  Imagine if the only American expatriates/immigrants in a country were graduates of Stanford and Harvard; what conclusions might the natives of that country draw about the nature of Americans?

Many of the efforts to increase diversity, such as affirmative action, have harmed the economic interests of Asian-Americans.  Within the University of California system, which is barred by law from applying affirmative action to college admissions, 32% of the undergraduates at UCLA, and 42% of the undergraduates at UC Berkeley are of Asian descent.  CalTech, which might be the most selective college in the country, comes in at 41% Asian.  In contrast, these numbers are 23% at Stanford, and 22% at Harvard.

As a result, many might expect Asian-Americans to oppose increasing diversity.  I think that, from a self-interested standpoint, Asian-Americans should be in favor of increasing diversity, but that diversity needs to be tackled at a broader level.

First, affirmative action is not a practice that harms Asian-Americans in favor of African-American/Latino minorities.  Rather, it is a practice that harms Asian-Americans in favor of marginal Caucasian students.  Let's compare UC Berkeley and Stanford, which are in the same geographic region.  At UC Berkeley, 3% of undergraduates are African-American, and 14% are Latino.  At Stanford, the equivalent numbers are 8% and 13%.  17% and 21% are pretty close; there may be some marginal impact on Asian-American admissions from affirmative action in favor of underrepresented minorities, but it seems small.  In contrast, UC Berkeley is 28% Caucasian, and Stanford is 43% Caucasian.  Conveniently enough, if you do the math, the delta between Asian-Americans at UC Berkeley and Stanford is 42% - 23%, or 19%.  The delta between Caucasians at UC Berkeley and Stanford is 43% - 28%, or 15%.  Add to that the 4% delta between African-American/Latino students between the two schools, and it appears that 15% of the 19% delta (79%) in Asian-American admissions can be attributed to affirmative action discriminating AGAINST Asian-Americans IN FAVOR OF Caucasian applicants.

Second, Asian-Americans continue to be vastly underrepresented in key areas such as elected politics, or the senior management levels of large corporations.  Quick--name the highest-ranking executive of East Asian descent at a major Silicon Valley corporation who wasn't one of the founders of that corporation!

The proponents of diversity would do well to acknowledge and support the diversity hiring of Asian-Americans, including Asian-American men, despite their "overrepresentation" in the ranks of elite universities and Silicon Valley engineering departments.  And it certainly wouldn't hurt to stop using the term "minorities" to refer to "non-white people other than Asians."

Meanwhile, Asian-Americans would do well to voice their support for diversity initiatives, rather than assuming that those initiatives would be used against them.  Increased diversity hiring will likely harm the economic interests of Asian-Americans in some areas, but those losses are likely to be offset by gains in other areas.

In summary, unless you assume that we are already living in a perfect meritocracy, which is almost certainly a false assumption, increasing diversity ought to increase "true" meritocracy by broadening the pool of qualified people, and thus improve society/humanity as a whole.  However, increasing diversity has uneven effects; some people (e.g. the marginal men) do lose out, and we should treat those people with compassion, rather than blasting them for not graciously accepting policies that act against their self-interest, but not confuse compassion with abandoning good policy.


P.S. I expect that this essay will draw the usual reaction to my political/policy writings; I will be attacked by both sides of the debate for being on the opposing side, and a few folks in the middle will criticize me for mushy indecisiveness.  To all of those people, I say that dealing with issues like this is hard, and that I'm not convinced that I'm some sort of genius that can solve all these problems with Solomon-like wisdom.  I think that everyone could do with a little more hesitancy and empathy for the other side.  And if that isn't a ringing call to action, so be it.

P.P.S. While this essay was informed by the current Google diversity memo controversy, I didn't want to focus on that controversy.  I will add the following comments:

  • The diversity memo is correct that shaming people risks creating an ideological echo chamber
  • The memo's author was very naive; he thought that if he explicitly said he was tackling the extreme position that all differences in outcome are the result of discrimination, and acknowledged that population-level differences are small and tell us little about specific individuals, he would be safe from the echo chamber.  He was wrong.  A similar mistake forced Larry Summers (Sheryl Sandberg's mentor) to resign as President of Harvard.
  • The fundamental problem with the argument against diversity advanced in the memo is that the author assumes that diversity lacks inherent value.  Otherwise, why would he argue against programs aimed at people of a specific gender or race?  This is the "begging the question" logical fallacy--and it is embarrassing that someone who prides himself on logic fell into this!  Once you make this (false) assumption, the rest of the argument against diversity follows naturally.  But that's like assuming that compassion lacks inherent value; once you make that assumption, every act of compassion makes no sense.
  • By firing the author of the memo, Google provided evidence that he was correct in his characterization of the company as an ideological echo chamber, and missed out on the opportunity to correct the obvious flaws in his argument.  Google CEO Sundar Pichai wrote, "First, let me say that we strongly support the right of Googlers to express themselves, and much of what was in that memo is fair to debate, regardless of whether a vast majority of Googlers disagree with it. However, portions of the memo violate our Code of Conduct and cross the line by advancing harmful gender stereotypes in our workplace. Our job is to build great products for users that make a difference in their lives. To suggest a group of our colleagues have traits that make them less biologically suited to that work is offensive and not OK. It is contrary to our basic values and our Code of Conduct, which expects “each Googler to do their utmost to create a workplace culture that is free of harassment, intimidation, bias and unlawful discrimination.  The memo has clearly impacted our co-workers, some of whom are hurting and feel judged based on their gender. Our co-workers shouldn’t have to worry that each time they open their mouths to speak in a meeting, they have to prove that they are not like the memo states, being “agreeable” rather than “assertive,” showing a “lower stress tolerance,” or being “neurotic.”  This strikes me as rank hypocrisy.  Firing the author of the memo would seem to indicate that Google takes a zero-tolerance approach to any discussion of gender differences, which seems to me like it is a clear example of the "intimidation" that Google claims to want to prevent.  Instead of a debate, Google's actions indicated that expressing the wrong opinions can get you fired.  Go ahead and read the memo; while the author's arguments are weak and illogical, and he comes off as tone-deaf, it hardly rises to the level of "harassment" and "intimidation" that justifies termination.  Just ask yourself the following question: If the memo hadn't been leaked, would Google have fired its author?  Yeah, I thought so.  By firing the author, rather than actually addressing his arguments by explaining why diversity is valuable, Google made itself part of the problem, rather than part of the solution.  

Tuesday, July 25, 2017

Common ground between those who favor and oppose diversity hiring

Those who favor and oppose diversity actually share very similar concerns. This thought occurred to me when I read the end of this interview with Slack developer Kaya Thomas:

The interview ends with the following exchange:

"Brown: As one of the few black women in the industry, have you ever felt tokenized?

Thomas: Yeah. It’s something I struggle with. I think it’s related to imposter syndrome. Did they pick me because of the work I did and my accomplishments, or do they want me to fill in these boxes? You can never know whether or not that’s the case, being a black woman. Most times, there isn't anyone else like me in that space. It can be detrimental to my mental well-being if I always think that I’m a token. I do know that I’ve worked hard. I've earned my spot, but even if I am [a token], at least I’m still here and providing the space for women like me to get here."

None of us want to feel like we don't deserve our success. Kaya struggles with these feelings because she worries, despite the fact that she's earned her place (as is amply apparent from the interview) that she's been picked because she fills in certain boxes.

The mirror image of this is the deep emotional reaction that some well-off Caucasian men feel in reaction to diversity and inclusion. By definition, if we say that white men are overrepresented, it means that we're also saying that some of them don't deserve their place.

It's one thing to be in favor of diversity in the abstract; it's another to support diversity to the detriment of your own career.

This is a difficult subject to grapple with, and none of us can be disinterested.

My own approach is twofold. First, it is important that we seek to eliminate false negative stereotypes and biases. We need to hire based on reality, not inaccurate perceptions. Second, we need to recognize that diversity is valuable in and of itself, not just as a remedy for past injustice. Diverse teams are more innovative and productive; we should seek diversity and inclusion for economic, as well as moral reasons.

It's important to acknowledge that these changes do impact some white men in a negative way. If one group previously held a disproportionate share of high-tech jobs, and society corrects that distortion, the overall benefits to society will be positive, but the local impact on that group would still be negative. We shouldn't expect them to be cheerful about the situation. But we also shouldn't let that stop us from doing what is right.

Tuesday, July 04, 2017

35 Words

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."

It's probably hard for us to imagine, from our modern perspective, how revolutionary these 35 words were.  When the Declaration of Independence was signed in 1776, some monarchs still ruled by the divine right of kings, millions (including many in what would become the United States) lived in the bonds of slavery, and the pursuit of survival was the best most people could hope for.

To paraphrase Hamilton, despite all the many troubles in the world, we are incredibly lucky to be alive right now, especially here in the United States.

Yet if there's one thing I'd like us to learn from the lessons of the Founding Fathers (and Mothers, Abigail Adams would point out) it's that we must continue to fight and make sacrifices for these ideals.

Our society is far from perfect.  We have institutions that continue to deny certain people equality, life, and liberty, let alone the pursuit of happiness.  To form a more perfect union, numerous individuals have to choose the hard path of standing up for these ideals, rather than the easy path of least resistance.

Here in Silicon Valley, we've seen a week that was unprecedented in my decades of experience here, where women publicly detailed the sexual harassment and inappropriate behavior of wealthy, powerful male venture capitalists.

In the past, many of the women who were subject to this kind of behavior did what must have seemed rational and kept quiet.  Just in the past half decade, women might look at the examples of Ellen Pao, Adria Richards, and Gamergate (Zoe Quinn, Anita Sarkeesian, and Brianna Wu), consider the harassment (including death threats) that women suffered after speaking up, and conclude that speaking up would bring hardship and not justice.

And yet, the women who came forward this week persisted.

Fortunately, these women got some measure of justice, as men like former Binary Capital partner Justin Caldbeck lost not just their reputations, but millions of dollars.  And that has encouraged more people to come forward.  While I am worried that this enthusiasm could go too far (calls for establishing a blacklist don't seem aware that most such blacklists have a pretty bad connotation), progress is still progress.

I saw another item today that speaks to the 35 words.  "Hawaii Five-0" actors Daniel Dae Kim and Grace Park left the show after the two Asian-American actors refused to accept contracts that paid them 10-15% less than their Caucasian co-stars, Alex O'Loughlin and Scott Caan.  It's probably worth noting that the population of Hawaii is 26.7% Caucasian, 47.2% Asian/Native Hawaiian/Pacific Islander, and 23% mixed-race.

Being a lead actor in a television series is one of the greatest jobs in the world, and Kim and Park were likely making around $100,000 per episode, which means that they walked away from roughly $2.5 million per year to stand up for the principle of equality.  I admire their willingness to put ideals ahead of paycheck; I would have a hard time making the same decision!

One of the favorite criticisms that reactionaries level against people who speak up is that, "They're doing it for the attention."  If only that were the case.  Sadly, speaking up generally costs people money, which means that it is often "unreasonable" to stick with your principles.

But as George Bernard Shaw wrote, "The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man."

On this 4th of July, we celebrate the unreasonable men who signed the Declaration of Independence, complete with those 35 amazing words.  But we should also celebrate the unreasonable men and women who continue to strive for the ideals contained in those words, despite the cost to themselves.

Friday, June 30, 2017

Silicon Valley in the Mirror (a Trump Silver Lining)

It's safe to say that Silicon Valley's reputation hasn't been having a good year.  Uber has reached the point where the number of pages that claim to be "the definitive list of Uber scandals" runs off the first page of Google results, with widespread sexual harassment and discrimination resulting in the termination of over 20 employees and the resignation of co-founder and CEO Travis Kalanick.

Personally, I'm partial to The Guardian's list:

Meanwhile, this week saw a bright light shined on a number of male venture capitalists' propensity to sexually harass female entrepreneurs and colleagues, starting with an Information story about Justin Caldbeck, formerly of Binary, sexually harassing female entrepreneurs:

The week concluded with a bombshell story in the New York Times that revealed that prominent VCs Chris Sacca and Dave McClure had admitted to inappropriate behavior (though not to the level of Caldbeck's alleged actions, which included explicit text messages, sexual propositions, and grabbing a woman's thigh):

(Full disclosure: I have previously pitched Justin Caldbeck during his days at Bain Capital.  I've known and liked Dave McClure for many years.  I never witnessed either of them behaving inappropriately towards women, and am relying on the published journalism rather than any personal knowledge.)

Many people feel rightly disgusted by these revelations, which make for an ugly contrast with Silicon Valley's self-image as a progressive industry, that is changing the world for the better.  One of the things that has often irked me is the tendency by people in Silicon Valley to look down on other industries, such as Wall Street or Madison Avenue for being knuckle-dragging Neanderthals, confident in being oh so much more evolved.

But while the temptation might be to wait for these scandals to die down, and to go back to business as usual, these revelations are in fact a good thing for Silicon Valley.  We are being forced to look in the mirror and confront issues, that, frankly, we've ignored for too long.

It was only two years ago that Kleiner Perkins defeated Ellen Pao's long-running sex discrimination lawsuit in a decidedly pyrrhic victory.  Even though Kleiner technically won, the testimony included descriptions of numerous instances of sexual harrassment perpetrated by former Kleiner partners against female staff.  Yet perhaps because Kleiner "won" the case, it didn't seem like much changed in Silicon Valley.  Nobody at Kleiner lost their job, or were punished.

So what changed?  Ironically, I think it's possible that we can thank Donald Trump for convincing women to step forward and testify.

During his campaign (and after his election), Trump repeatedly demonstrated his misogyny by denigrating women's appearance (Alicia Machado, Carly Fiorina, Heidi Cruz, and Mika Brzezinski were only the most famous recipients of this abuse; full disclosure, Heidi Cruz was an HBS classmate and friend), admitting to sexually harassing women ("grab 'em by the [vagina]"), and using insults and name-calling to attack his opponent, Hillary Clinton.  By the way, I found this website, which claims to track all of Trump's offensive sexist comments; I suspect it's incomplete:

The result was the Women's March on Washington, the largest single-day protest in US history, and what seems like an increased resolution to call out sexism and sexual harassment.  The behavior I outlined at Uber and on the part of certain venture capitalists date back years.  Heck, it's not even "he said, she said," since in nearly all of these cases, there was written evidence of the bad behavior!  We just simply ignored it until now!

One of the worries that people--including me--had about Trump's election is that it would normalize bad behavior.  This may still occur, but it seems clear that it has also sensitized people to that same behavior.  It's as if Trump were an infection that produced antibodies to the kind of sexism that comes so naturally and instinctively to him.

This is the opportunity before us.  Thanks to the bravery of the various women who are coming forward, we can work to root out and punish this kind of bad behavior.  In the case of Uber and the VCs, there have already been real consequences.  Kalanick was forced to resign by his investors.  Binary lost both its most recent $175 million fund, and the additional $75 million that it was scheduled to close, just days after the Information story came out.  At a standard 2.5% management fee over 10 years, that's a $60 million loss even before considering the lost potential carried interest.  McClure has turned the running of his firm, 500 Startups, over to new CEO Christine Tsai (his female co-founder) and is undergoing counseling.

Men also need to play a role.  For example, look at my co-author Reid Hoffman, who wrote a widely-read post condemning Caldbeck's actions and calling for the VC industry to take a "Decency Pledge" and to stop doing business with any VCs who engage in such behavior:

His willingness to step forward and condemn this behavior in no uncertain terms seems to have encouraged other male VCs to step forward, and to encourage other people who have been harassed to speak out.  By lowering the perceived risk of speaking out, we can help more people to come forward and tell their stories.

It is important to note that we have to avoid getting swept up in what Donald Trump would surely call a "witch hunt."  This is not the time for vigilante justice, or accepting claims without evidence.  There is no such need--as the Caldbeck story shows, there is plenty of evidence of wrongdoing, and there are immediate punishments available, such as LPs invoking morality clauses and pulling out their funds, and those who have been wronged seeking civil judgments.

There's an old saying about cockroaches; there's never only one.  Sure enough, Caldbeck's story has already uncovered others, and I suspect that more are soon to come.  One prominent investor estimated that around 5-10% of men are sociopathic enough to commit these kinds of acts...IF THEY THINK THEY'RE GOING TO GET AWAY WITH THEM.  Think about it--people like Caldbeck sent explicit texts and emails.  That's hard evidence.  The only reason you would do such a thing is if you thought you would get away with it, regardless of the existence of a smoking gun.

Fortunately, this belief has been proved wrong.  Unfortunately, this belief was apparently right for many years, and it is disgrace that it took so long, and the election of a harasser-in-chief in the White House to get us to actually hold these bad actors accountable.

We can't change the past.  But we can change the future.  Don't let these antibodies go to waste.  Call out bad behavior when you see it.  Make it safe for those with less power to present their evidence against powerful evildoers.  In other words, make America great again.

Wednesday, June 21, 2017

Travis/Trump: What Uber Tells Us About The White House

The fall of Uber's Travis Kalanick offers an interesting gloss on Donald Trump. If anything, Kalanick had a stronger position than Trump. Rather than narrowly winning an election in which he lost the popular vote, Kalanick had absolute control over Uber thanks to his super-voting shares. And unlike Trump, who is a mediocre real estate developer with a questionable record, Kalanick actually accomplished something by building what was once the world's most valuable startup (though admittedly, it is also the world's most unprofitable startup). Just six months ago, even though it was already apparent based on publicly available information that Kalanick had presided over a great deal of legally and morally questionable behavior, it seemed like his position as CEO of Uber was unassailable. And yet, despite his super-voting shares, Kalanick gave in to pressure from his board and resigned this week.
Let's be clear; the actions of Uber's board were not driven by moral outrage. It's not like anyone who was following the news would believe that Uber was a paragon of ethics and responsible treatment of women. Rather, Uber's board acted for what is nearly always the reason for action in the world of high finance and high politics: self-interest. Uber's investors pulled the rug out from under Kalanick when it became apparent that his leadership was reducing, rather than increasing, the value of their investment.
I often joke that if baby-eating aliens came to Silicon Valley, and built a successful, rapidly-growing startup, their investors would say, "You know, it's culturally insensitive to judge someone else's beliefs and habits. And besides, it's not like they're eating human babies." The line gets a laugh, but it is often an uncomfortable laugh, because they can picture the talking head in their mind already.
Kalanick didn't eat babies, but the people whom he brought into Uber did regularly break the law, and tolerated horrendous behavior towards their own people. In many cases, rather than feeling the proper shame for their actions, they gave off the sense that their only mistake was getting caught. And none of that mattered as long as Kalanick's people delivered their numbers. (In fact, that was the justification for ignoring sexual harassment complaints--the perpetrator was too valuable to the company to discipline!)
Over in Washington, Trump is Kalanick and the Republicans in congress are the Uber board. To date, they have largely gone along with Trump because he is more popular than they, and because they think it's in their self-interest to support him, largely because they fear the wrath of loyal Trump supporters who feel more loyal to him than to the GOP.
Each morning, Republican Congressmen/women and Senators ask themselves, "Will I be better off if I support Trump or oppose him?" The answer differs depending on their particular district or state, but by and large, what drives the answer is not whether they think Trump has behaved illegally in covering up his campaign's collusion with Russia (which he probably has) or whether they think he is a liar, bully, and sexual predator (which he definitely is). What drives the answer is mainly summed up in a single number: Trump's approval rating.
Richard Nixon held an approval rating of nearly 70% after his landslide victory over George McGovern. But the revelations of Watergate took their toll. In just a single year, his approval rating dropped to 24%, and it stayed between 20-25% until Nixon's resignation. While a core of loyal Nixon voters continued to support the embattled President, it became apparent to the leaders of the GOP that Nixon was going to turn the 1974 mid-term elections into a slaughter for the GOP. Key leaders like Barry Goldwater went to Nixon and told him that if he resigned, he would be pardoned, but that if he did not, he would be impeached and convicted. Nixon took the deal they offered and resigned.
Three months after Nixon's resignation, the Democrats gained 49 seats in the House (pushing them past a 2/3rds majority) and held a filibuster-proof 60 seats in the Senate. Of course, the results might have been even worse if impeachment proceedings were going on during the election.
Trump's power, like that of any elected politician in the United States, ultimately rests on his ability to win votes. The less popular he gets, the less power he'll have. And when he crosses some critical threshold, those Republican Congressmen/women and Senators will wake up in the morning and conclude, like the Uber board did, that while both alternatives would be bad, letting a compromised leader stay in power would be worse. At that point, just like super-voting shares didn't prevent Kalanick from being forced out, it won't matter if Trump still has a vocal core of supporters. The President cannot stand alone.