Silicon Valley Millionaires

There's been a lot of talk about this article in the NY Times and once again I felt compelled to join the echo chamber. The thing that struck me about this was how the NYT spun things.

On one hand, we have hard-working professionals who have made a lot of money. They made a lot of money, and yet they continue to work hard. They continue to worry about sending their kids to college. They drive modest cars and live in modest homes. In short, they made a lot of money and it didn't change them.

How is this bad? If you make a lot of money you're supposed to suddenly not want to work, not care about your kids, and live lavishly?So that would be good, and continuing to work hard and living modestly is bad?

Then the article is littered with statements like "People around here, if they have 2 or 3 million dollars, they don’t feel secure" ... Ouch. But who said that? Maybe it was an engineer at a startup? Or maybe it was a salesman at large software company? Nope. That quote (and another similar one) are from an estate planner. That's right it's a quote from a guy whose job is to tell people they need to worry about their ... financial security.

Now I can't forget another quote that's the big finale of the article: "Here, the top 1 percent chases the top one-tenth of 1 percent, and the top one-tenth of 1 percent chases the top one-one-hundredth of 1 percent." Now who said this? This time it's from a serial entrepreneur. Clearly that's a good source for a generalization about the millions of people in The Valley.

Look, I don't expect the NYT to understand The Valley. This is a very unique place. There's a lot of smarts and a lot of money. The thing is that both of those ingredients are necessary and you have to understand both to have any hope of understand The Valley. It's easy for outsiders to concentrate on the money and try to explain everything. So if rich people are working hard it must be because they feel like they aren't rich enough, right? Um, no...

The Age Question

I've avoided joining the echo chamber on the question of age and entrepreneurs, but then Marc Andressen wrote something really interesting about it. One of the important "scientific" conclusions he sites is that in some disciplines (math, physics) people peak in their late 20's to early 30's, but in others (writing, history) they peak much later, in their 40's or even 50's. So then the question becomes are entrepreneurs more like mathematicians or historians?

Of course most people would say that entrepreneurs are more like mathematicians, so the younger the better. I will argue that entrepreneurs are nothing like mathematicians and physicists, but that does not mean that they are not more like those types than they are like historians and writers.

First some disclaimers. I have a degree in mathematics, and like to humor myself by considering myself a mathematician at my core. Truth is that I am a software engineer, a very different discipline, and I cannot deny this.

Ok, first off entrepreneurs are completely full of themselves for trying to enter this kind of comparison. By even making these analogies, you are equating the creativity and skill of scientists and scholars with the ... attributes ... of entrepreneurs. This is ridiculous. It is like trying to compare the skills of a microsurgeon with the skills of a race horse. It just doesn't make any sense.

Entrepreneurs definitely have creativity, intelligence, and skill, but it is not of the same species as scientists and scholars. Entrepreneurs have any measurement of their prowess: money. If their ideas make money, they are good ideas. If they do not make money, they are not good ideas. It's painfully simple.

Scientists and scholars are held to very different standards. Now it is true that scientific endeavor is open to experimentation and verification, a kind of litmus test similar to the success or failure of an entrepreneur's business. But a lot of the really great scientists have theories that are so theoretical and advanced that they cannot just be easily verified in a lab experiment. Similarly mathematicians must write proofs of their theories. These proofs must judged both objectively and subjectively by peers. Of course scholars have no "out" in terms of being proven right or wrong. Thus they all share something similar: their success is measured in the near term by the scrutiny of the most brilliant minds in the world.

This is a kind of scrutiny that no entrepreneur can experience. If the top two dozen computer scientists all thought that Google had a great search engine eight years ago, it would not have meant anything for Google. If those same elite scientists decided Google was crap, again it meant nothing.

The other flip side to the world of science and scholarship is that the very peers who decided your success or failure, are often wrong. That's why there are numerous examples of scientists whose work is not appreciated until after their death.

I could easily make arguments about how scientists and scholars have to be so much "smarter" than entrepreneurs, but I think just looking at the criteria for success is sufficient.

Again, given my background in mathematics, I have a little insight into why mathematicians peak in their late 20's or early 30's. The obvious reason is that solving highly theoretical problems requires tremendous time and submersion into you work. This is true, but it's only part of the reason. The other reason is that to solve those kind of problems, you need to have very little else to think about. I'm not talking about things outside of your work and study, I'm talking about things inside it.

As you progress in any field, you absorb more and more knowledge. This knowledge is tapped in some way, even if subconsciously, whenever you set out to solve a new problem. Knowing less, and thus have more focussed concentration on what you do know, is exactly the kind of thing needed to solve certain kinds of problems. Those kinds of problems are much more common in mathematics and physics than in history and literature.

So even if I humor the self-loving entrepreneurs out there and compare them to scientists and scholars, I cannot really say who they are more similar to. I do think that engineers play a significant role in the kind of technological endeavors common to entrepreneurs. As an engineer who was once a mathematician, I can say with confidence that engineers are much more like writers and historians than like mathematicians and physicists. Extra knowledge and experience definitely help an engineer to be more creative and productive. Computer scientists may be more like physicists. I wouldn't know, as I am an engineer, not a computer scientist.