Skin in the Game – Nassim Taleb

Skin in the Game is congruent with Tom Ricks’ book The Generals. Almost all generals and high-ranking officers in the U.S. military are now exempt from real risk, as Ricks argues—they are exempt even the risk of being fired or reassigned for simple incompetence (or being ill-suited to a role). Almost all enlisted men and junior officers, however, are heavily exposed to real risk, like being killed. That risk asymmetry should give pause to someone contemplating joining. The risk profile for generals prior to the Korean war, while not as a great as the risk profile for regular soldiers, was more reasonable than it is today. Military contractors are arguably the greatest beneficiary of the military today. If more people knew (and acted like they knew) this, we might see changes.

In Skin in the Game Taleb has many, many unusual examples, many of them good; he reads more like an old-fashioned philosopher (that is: one who wants to be read, heard, and understood, as opposed to one who wants tenure), and I mean that as a compliment. One of his rules is, “No person in a transaction should have certainty about the outcomes while the other one has uncertainty.” I wonder how this rule could be applied to colleges, especially under a student-loan system, in which the college is certain to be paid by the student, the student’s family, or the student’s bank (which is really to say, the bank’s student), while the student may see a variable return on investment—especially if the student is ill-equipped in the first place. Colleges may be selling credentials more than skills. But almost no one thinks about those things in advance.

Skin in the Game will, like Antifragile, frustrate you if you demand that every single sentence be true and useful. Some of Taleb’s micro-examples are bad, like his thing against GMOs:

In my war with the Monsanto machine, the advocates of genetically modified organisms (transgenics) kept countering me with benefit analyses (which were often bogus and doctored up), not tail risk analyses for repeated exposures

This view is incoherent because virtually every food eaten today has been “genetically modified,” inefficiently, through selective breeding. If you wish to learn just how hard this is, see The Wizard and the Prophet by Charles Mann. Transgenics speed the process. See this sad tale, and the links, for one researcher in the field who is giving up due to widespread opposition. He points out that, over and over again, transgenic have been shown to be safe.

Taleb is right that there are tail risks to transgenics… but that’s also theoretically true of traditional cross-breeding, and it’s also true of not engaging in transgenics. The alternative to high-efficiency transgenics is environmental degradation and, in many places, starvation. That’s pretty bad, and there’s a serious, usually unstated, environmental trade-off between signaling environmental caring and opposite transgenics (nuclear energy is the same).

Despite incorrect micro-examples, Skin in the Game is great and you should read it. It is less uneven than Antifragile. It’s also an excellent book to re-read (don’t expect to get everything the first time through) because Taleb gives so many examples and is overflowing with ideas.

Like: “If your private life conflicts with your intellectual opinion, it cancels your intellectual ideas, not your private life.” Something easily and frequently forgotten, or never considered in the first place. Look at what people do, not what they say. One of the many charming parts of Alain de Botton’s The Consolations of Philosophy is the apparently wide gap between what many philosophers wrote and how they appeared to live. Maybe the truest philosophers don’t write but do.

Or consider:

the highest form of virtue is unpopular. This does not mean that virtue is inherently unpopular, or correlates with unpopularity, only that unpopular acts signal some risk taking and genuine behavior.

A very Peter Thiel point: he asks what popular view is wrong and what unpopular views a given person holds.

Or consider:

The only definition of rationality that I’ve found that is practically, empirically, and mathematically rigorous is the following: what is rational is that which allows for survival.

This may be true, but most of us in the West now survive, unless we do something truly stupid, dangerous, or brave. So our wealth and comfort may enable us to be irrational, because we’re much less likely to pay the ultimate penalty than we once were. Darwin Awards aside, we mostly make it. We can worry more about terrorism than the much more immediate and likely specter of death in the form of the car, which kills far more people every year in the United States than terrorism.

To his credit, though, Taleb does write:

The Chernoff bound can be explained as follows. The probability that the number of people who drown in their bathtubs in the United States doubles next year [. . .] is one per several trillions lifetimes of the universe. This cannot be said about the doubling of the number of people killed by terrorism over the same period.

He’s right that the number who could be killed by terrorism is massive, especially given the risk of nuclear and biological weapons. But the disproportionate focus on terrorism takes too much attention from risks that seem mundane, like getting into cars. Everyone expects to get into car crashes. Perhaps we should be thinking more seriously about that. Too bad almost no one is.

Junkyard Planet — Adam Minter

I wish I’d read Junkyard Planet: Travels in the Billion-Dollar Trash Trade when it came out: it’s both informative and, sometimes, strangely lyrical, which I wasn’t expecting in a book about the scrap metal business. You may think a book titled “Junkyard Planet” is boring, and I anticipated precisely that and was proved wrong. For Minter the scrap business is tied up with his family: he grew up in in the industry, so, like a writer from a restaurant family, he gets things most journalists don’t, or wouldn’t (“Some of my earliest and happiest memories are of wandering among the family junk inventory, often with my grandmother, finding treasures:” a sentence few of us can utter).

He’s also refreshingly direct about costs and benefits; many writers want to condemn the global recycling trade because of the obvious pollution produced in China. But Minter goes the extra step and asks: why do things exist as they do? Will exist this way in the future?

This book aims to explain why the hidden world of globalized recycling and reclamation is the most logical (and greenest) endpoint in a long chain that begins with the harvest in your home recycling bin, or down at the local junkyard. There are few moral certainties here, but there is a guarantee: if what you toss into your recycling bin can be used in some way, the international scrap recycling business will manage to deliver it to the person or company who can do so most profitably.

It turns out that “Huge, mind-bending, Silicon Valley-scale fortunes have been built by figuring out how to move the scrap newspapers in your recycling bin to the country where they’re most in demand.” Did you know that? Me neither. I learned from every page. It also turns out that for a couple decades following World War II, most dead cars were simply discarded in vast junkyards or chucked wherever they could be concealed. It took China decades in turn to go through all that American scrap (“the world’s most recycled product (by weight) isn’t a newspaper, a notebook computer, or a plastic water bottle—it’s an American automobile, most of which is metal”).

By the way, there are many important reasons to choose electric or plug-in electric cars, but one of them is the car’s valuable battery. Even in a decade or two, when the battery is likely to be too depleted for automotive use, it’s still likely to be valuable as grid storage. Seriously: “
Why Used Electric Car Batteries Could Be Crucial To A Clean Energy Future
.” Individual choices today are going to matter a decade or two from now.

For now, though, there are two major ways to get raw materials for new goods:

Digging mines was one way to obtain those raw materials; the other was to go to the United States, the place that many scrap traders call the Saudi Arabia of Scrap, the land where there’s more scrap than the people can handle on their own. It’s a funny nickname, Saudi Arabia of Scrap, but it’s not meant as a compliment. Rather, it’s an opportunity to exploit.

Think about this quote, too, every time you hear about a “shortage” of some commodity (nickel, cobalt, poorly named “rare earth” metals). A “shortage” usually means that someone doesn’t want to buy at a given price. You’ll know there’s really a shortage of something when you can sell old laptops, phones, or computers to Best Buy for a couple bucks. Right now, it’s not profitably enough to pay for out-of-date electronics. If and when it is profitable enough, you’ll be able to sell them—and profit will likely motivate more than green signaling.

By the way, what China is doing now is what the U.S. did more than a century ago; in the nineteenth century,

The U.S. was not yet scrapping its old infrastructure, [. . .] so it looked abroad to Europe [. . .] for raw materials. According to data culled by Carl Zimring, U.S. imports of scrap iron and steel grew from 38,580 tons in 1884 to 380,744 tons in 1887—a tenfold increase during, not coincidentally, a railroad building binge.

There are many more points of interest in the book. The total amount of recycling going on is much greater than I imagined, but it’s primarily happening behind the scenes and far behind the headlines.

In some ways, Junkyard Planet tells a circular story: each developing country goes from poor and a tremendous importer of “junk” (which is not actually junk), then moves up the value chain towards wealth and producing more apparent junk than it consumes. The obvious question is, “When will the world run out of poor, developing countries?” One hopes the answer is, “Soon.”

The Case Against Education — Bryan Caplan

The Case Against Education is a brilliant book that you should read, though you’ll probably reject its conclusions without really considering them. That’s because, as Caplan argues, most of us are prone to “Social Desirability Bias:” we want to say things that are popular and make people feel good, whether or not they’re true. Some true things may be socially desirable—but many false things may be too; the phrase “Don’t shoot the messenger” exists for a reason, as does the myth of Cassandra. We like to create scapegoats, and messengers are handy scapegoats. Simultaneously, we don’t like to take responsibility for our own ideas; and we like to collectively punish iconoclasts (at first, at least: later they may become idols, but first they must be castigated).

Caplan is an iconoclast but a data-driven one, and that’s part of what makes him unusual and special. And, to be sure, I myself am prone to the biases Caplan notes. Yet, as I read The Case Against Education, I couldn’t find many holes to poke in the argument. The book blends data and observation / anecdote well, and it also fits disturbingly well with my own teaching experiences. For example, Caplan notes that students find school boring and stultifying: “Despite teachers’ best efforts, most youths find high culture boring—and few change their minds in adulthood.” While “school is boring” seems obvious to most people, it’s also worth asking why. Many of the reasons Caplan gives are fine, but I’ll also add that “interesting” is often also “controversial,” and many controversial / interesting instructors will take heat, as I argue in “Ninety-five percent of people are fine — but it’s that last five percent:”

Almost no teacher gets in trouble for being boring, but a teacher can get in trouble or can get in trouble for being many values of “interesting.” Even I’ve had that problem, and I’m not sure I’m that interesting an instructor, and I teach college students.

It’s easy for outsiders to say that teachers should stand up to the vocal, unhappy minority. But it’s less easy to do that when a teacher relies on their job for rent and health insurance. It’s also less easy when the teacher worries about what administrators and principals will do and what could happen if the media gets involved or if the teacher gets demonized.

Despite the fact that no one actively wants school to be boring, the collection of forces operating on the school experience pushes it towards boredom. Many people, for example, are very interested in sex and drugs, but those topics also excite many students and parents, such that it’s difficult to say much that’s true about them in school.

As Caplan says, however, boredom is almost a feature, not a bug. Boring classes allow students to signal traits that employers value, like conscientiousness, intelligence, and conformity. Even if reading Ethan Frome is boring, being willing to tolerate Ethan Frome is important to people who would not themselves read Ethan Frome.

Caplan argues that most education is actually about signaling, not skill development. It’s notable how little we in as a society have improved education in the last two decades, when the Internet has opened up many new learning and signaling opportunities. Caplan has a theory about why: using weird counter-signaling efforts itself signals non-conformity and general weirdness (“‘alternative’ signals of conformity signal nonconformity”). So we’re stuck in a negative equilibrium.

He might be right. That said, I wonder if we’re just seeing a lag: twenty years is a long time by some standards, but in the history of education it’s a relatively short time. The problems with contemporary education also seem to argue that many employers would be well-served to ignore the signals sent by degree and search for alternate signals instead. Google claims to be doing this, but I don’t know of any researchers who’ve audited or studied Google’s internal data (if you do, please leave a pointer in the comments).

The people who most need to read this book are probably educators and high school students. The former probably won’t read it because it punctures some of the powerful myths and beliefs that keep them motivated. The latter probably won’t read it because high school students read very few books, and the ones most likely to read The Case Against Education are probably also likely to gain the most from higher education. So it’s another of these books that’s caught in a readerly catch-22.

Here is a Claudia Goldin paper, “The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890 to 2005;” as one person said on Twitter, “I agree with @bryan_caplan that the wage premium from education mainly comes from signaling, rather than learning vocational skills. But – I also believe widespread, generalist, higher ed can be a very good thing (as explained in [“The Race Between…”]).”

I also wonder about this: “employers throughout the economy defer to teachers’ opinions when they decide whom to interview, whom to hire, and how much to pay them.” Do they? Do most employers require transcripts and then actively use those transcripts? It seems that many do look for degrees but don’t look for grades.

One question, too, is why more people don’t go into various forms of consulting; smaller firms are less likely to be interested in credentials than larger ones. I do grant writing for nonprofits, public agencies, and some research-based businesses. Zero clients have asked about educational credentials (well, a few public agencies have superficial processes that ask about them, but the decision-makers don’t seem to care). Clients are much more interested in our experience and the skills demonstrated by our website and client list than they are in credentials. And when we’ve hired various people, like website programmers or graphic designers, we’ve never asked about education either, because we don’t care—we care if they can get the job done. In restaurants, I’ve never stopped a server or hostess to ask if the chef went to cooking school. So smaller firms may offer some respite from degree madness; if there is a market opportunity for avoiding expensive college and the credentials race (for individuals), it might be there.

Yet at the same time, I feel (perhaps wrongly) that school did help me become a better writer. “Feel” is a dangerous word—it’s hard to dispute feelings but easy to dispute data—yet I don’t know how else to describe it. When I read other people’s writing, especially other people’s proposals, I often think, “This helps explain why I have the job I do.” It’s possible to get through college and learn very little about writing. Occasionally managers will learn that I teach writing and say, “Why can’t college graduates write effectively?” An excellent question and one that requires 10,000 words of answer or no answer at all. But the alternative—not taking any writing classes—often seems worse.

Caplan also conducts many fascinating thought experiments, of sorts, although perhaps “contextualizes common practices and ideas” may be more accurate:

The human capital model doesn’t just imply all cheaters are wasting their time. It also implies all educators who try to prevent cheating are wasting their time. All exams might as well be take-home. No one needs to proctor tests or call time. No one needs to punish plagiarism—or Google random sentences to detect it. Learners get job skills and financial rewards. Fakers get poetic justice.

Signaling, in contrast, explains why cheating pays—and why schools are wise to combat it. In the signaling model, employers reward workers for the skills they think those workers possess. Cheating tricks employers into thinking you’re a better worker than you really are. The trick pays because unless everyone cheats all the time, students with better records are, on average, better workers.

Makes sense to me. I sometimes tell students that, if they manage to get through college without learning how to read and write effectively, no one comes back to ask me why. No college offers partial refunds to the unemployable who nonetheless graduate. The signal is the signal.

Many of you will not like The Case Against Education too because it is thorough. Caplan goes through his arguments, then many rebuttals, then rebuttals to the rebuttals. If you want a book that only goes one or two layers deep, this is the wrong book for you and you should stick to the Internet.

Many books also fail to convincingly answer the question, “What should we do about the problem identified?” Caplan doesn’t. He argues that public spending on education (or “education:” as much of what seems like education should be called signaling) should be eliminated altogether, while simultaneously acknowledging that this is only slightly more likely than someone jumping to the moon.

Caplan fulfills many of the conditions of myth, but probably not enough people will read this book to truly hate him. Which is a pity: as I said in the first line, the book is brilliant. But socially desirable persons will reject it, if they consider it at all. And the education machine will press on, a monstrous juice press squeezing every orange that enters its maw. Once I was the orange; now I am the press.

One other answer to “What education does?” may be “to keep options open” and “provide a base from which to build later.” Without some writing and numeracy skills, it’ll be hard to enter many careers; while school may do a lousy job of building them (as Caplan demonstrates), if the alternative to school nothing (i.e. Netflix, hanging out, and partying), school may be a better option than nothing.

As for optionality, I think of my friends, many artistically inclined, who got to their mid or late 20s and around that time got tired of working marginal jobs, struggling to pay rent, working in coffee shops, crashing on friends’ couches, etc. Things that seem glamorous at age 20 often seem depressing five or ten years later. Many of them have gone back to school of various kinds to get programming or healthcare jobs. In the former case, math is important, and in the latter case, biology and some other science knowledge is important. Those who blew off math or bio in high school or college struggle more in those occupations. So maybe education is about keeping at least some options open—or more options than would be open for someone who quits school or begins vocational ed in 8th grade.

Finally, education might be an elite phenomenon. We educate everyone, or, more realistically, attempt to educate everyone, in order to get a relatively small number of elite people into position to drive the entire culture forward. The people at the pinnacle of the scientific, technical, artistic, and social elites got there in part because they had access to education that was good enough to get them into the elite spheres where it’s possible to make a real difference.

I’m not sure I’m in those elite spheres, but I may be close, and at age 15 I probably didn’t look like such a good bet. Yet education continued and here I am, engaging in the kinds of conversations that could move the culture forward. If I’d been tracked differently at age 15 that might not’ve happened. Yes, the process is horrendously wasteful, but it’s useful to give many people a shot, even if most people go nowhere.

To be sure, I buy Caplan’s argument, but I’ve not seen this angle pursued by others, and it at least seems plausible. I also don’t know how one would measure the “education as elite phenomenon” argument, which is another weakness of my own point.

Still, I’ve become more of an elitist because of my involvement in the educational system, which shows that most students are in fact bored and don’t give a damn. When I started grad school I thought I could help students become more engaged by changing the nature of the short journal assignments: instead of just writing for me, students would start blogs that they would read and comment on. Education would become more peer-driven and collaborative. The material would seem relevant. Right?

After a semester or two of reactions that ranged from indifference at best to massive hostility at worst, I stopped and went back to the usual form of short written responses, printed, and handed in. That was easier on me and on the students, and it still at least exposed students to the idea of writing regularly. A few may have continued the practice. Most probably didn’t (and don’t). I learned a lot, maybe more than students, and I also learned that I’m a weirdo for my (extreme) interests in writing and language—but my own time in the education system and my own friend set had to some extent hidden that from me. Now, however, it’s so apparent that I wonder what 24-year-old me was thinking.

Caplan helps explain what I was thinking; many people who go into various kinds of teaching are probably optimists who themselves like school. They’re selected for being, in many cases, passionate weirdos. Personally, I like passionate weirdos and misfits and the people who don’t fit well into the school system (I’ve been all three). But I seem to be unusual in that respect too, though I wasn’t so weird that I couldn’t fit into the convention-making machine. A good thing, too—as Caplan notes, it’s individually rational to pursue educational credentials, even if the mass pursuit of those credentials may not be so good for society as a whole. Correlation is not causation, as you no doubt learned from your statistics classes and still understand today.

Slutever — Karley Sciortino

This passage is representative of Slutever: Dispatches from a Sexually Autonomous Woman in a Post-Shame World:

My first attempt at nonmonogamy was while I was living in London, soon after my relationship with Sam ended. I was twenty-three, and fell really hard for this beardy Scottish musician. He lived in Glasgow but came to London a couple times a month with his band. I met him while high on ecstasy at a squat rave, obviously.

“Obviously;” where else does one meet a beardy Scottish musician? I say it’s representative because of the odd, jangly alliteration, “was while I was,” which sounds not quite right, especially due to the repeat of the word “was;” the unneeded comma in the second sentence; and obviously that “obviously” at the end. But I still laughed, and laughter is probably the best test for a book like this. It’s easy to condemn the frequent use of “honestly,” “whatever,” and “obviously,” but try not to do that. Yes, you will read “shout out to Hester Prynne, OG high priestess of slut-shaming.” The jokes redeem the book and the language is part of the joke. People in coffee shops looked at me not just because of the book’s eye-catching cover but because I was laughing.

You will find paragraphs with incongruous markers stacked up against each other:

When I arrived at Colette and Dan’s beautiful hilltop home on a Saturday morning in the spring of 2016, Dan answered the door wearing silk pajama pants. “Colette’s in the orgy room, meditating,” he said with a smile. They’d hired a rent-a-shaman to come up from Mexico that afternoon, to dose a handful of their friends with a psychoactive toad venom containing the powerful hallucinogen 5-MeO-DMT, known to induce divine revelation or, in Colette’s words, “ego death.” (Think Ayahuasca but without the puking.)

Who hasn’t rented a shaman from Mexico for the afternoon? But this kind of repeated incongruity is what makes the memoir-manifesto novel—more novel than many superficially high-status novels. And despite the admiration for hallucinogens and their uses, Sciortino also makes fun of Burning Man, which is, I hear, ground zero for doing such things, or doing such things in large groups of collaborators.

Sciortino writes, “Like, my goal isn’t to be good or normal or accepted. My goal is to be free. (And maybe also to troll society a bit in the process, for good measure).” Yet I wonder what freedom is; I used to think I knew and now I’m not so sure.

Slutever is not for all of you who may be reading this, but it is for some of you, and probably for more of you than you’d admit in a public setting.

Cheap Sex: The Transformation of Men, Marriage, and Monogamy — Mark Regnerus

Cheap Sex is more useful, interesting, and informative than many books on the same or adjacent topics, and it pairs nicely with Date-onomics. The books can be read as differing reactions to similar social phenomenon on the ground, with the latter having a more left-wing tilt that nonetheless describes how people should pragmatically react to current conditions, while the former has a more right-wing tilt that nonetheless describes how these conditions came to be. We live in an age in which everyone is outraged or offended by something; when you find something that outrages or offends you, leave a note in the comments. You may find that cathartic.

Although neither book makes this point, I think they’re part of the continuing social reaction to the Industrial Revolution. “What,” you might be thinking, “does the Industrial Revolution have to do with contemporary books on love, marriage, and dating?” Prior to the Industrial Revolution, most societies were (relatively) stable most of the time, at least for the duration of a human life; the technological and social conditions one’s parents faced were likely the same an individual would face and the same that individual’s children would face. Cultural and technological change was of course real for much of human history, but it was also relatively slow, allowing people to acclimate to it over generations instead of years or decades.

Since the Industrial Revolution, though, we’ve seen technologies that radically and repeatedly reshape the technological and social worlds. This leads to periodic moral panics, especially but not exclusively around sexuality and religion, in part because we never get a chance to get used to new technologies.

(It’s hard to think of a single book that summarizes the Industrial Revolution; Joel Mokyr has some, Deidre McCloskey has others).

Today, we’re still grappling with the reshaping of society due to pretty reliable contraception. In some ways we’ve had pretty reliable contraception for a very long time (since the ’60s), but in the view of human history, or even human history since the 1750s, we’ve had it a very short time. We’ve spent pretty much the entirety of human evolution without pretty reliable contraception, and that’s shaped our minds, our bodies, our societies, and our practices. And it’s still reshaping all of those things, without most of us stopping to think about what it all means to look at these things in the course of a very wide and long history.

That’s part of what Regnerus is doing. The present moment is the product of a whole lot of past, most of which most of us don’t think about most of the time. But a lot of our current conflicts come from past conflicts that we don’t fully understand. And he’s pointing to that history, when he writes in subheaders about “The transformation of intimacy.” Or when he writes about the “obsession of romance among many, and yet stability seems increasingly elusive.” At the same time, “the ramifications of cheaper sex are just beginning to unfold on a panoramic scale.”

No wonder people are confused. For most of human history, cultural notions around sexuality have been pretty stable. Now they’re incredibly unstable and we’re all making things up as we go along and responding to technologies that have unpredictable consequences.

Regnerus may not be right about many of his conclusions, but he is thinking differently and also not stupidly, which is valuable in and of itself.

I’m also not sure how much you can trust the book’s conclusions, as many are drawn from “nationally representative survey data” as well as “in-person interviews,” the problem being that people notoriously lie in surveys, especially about sensitive subjects, and the same biases occur in in-person interviews. Those weaknesses are part of the reason why books like A Billion Wicked Thoughts, Dataclysm, and Everybody Lies are so interesting: rather than relying on the surveys in which everybody lies, they look at revealed preferences in the form of data from the Internet (and online dating itself).

Cheap Sex itself is written competently but not beautifully. You will not stop to admire individual sentences, and that’s why I’ve not quoted much from it so far. Read it for the knowledge, not the prose. Like many academic books (this one is published by Oxford) it has its share of “You don’t say?” statements, like, “When it comes to relational happiness, then, sexual frequency is neither necessary nor sufficient, but it is certainly a net positive for most.” “A net positive:” really? I’m shocked! I would never have guessed.

But it also has its moments of humor, as when an interviewee discusses at length his own romantic dilemmas and then Regnerus writes, “After we turned off the microphone at the end of the interview, Brent asked if we though the and Betsy should break up. (We declined to respond).”

There are also moments I’m still mulling and don’t yet understand:

Meant to be a “haven in a heartless world,” as the late social critic Christopher Lasch described it, marriage is fast becoming a contest, another tenuous social arena in competition with the economic marketplace (for our limited time and energy) and the remarriage market (for second chances and variety).

A “haven in a heartless world:” Regnerus implies here and elsewhere in the book that maybe there isn’t such a place. I’m not arguing that he’s right. But I don’t see a compelling reason he isn’t.

The Hard Thing About Hard Things — Ben Horowitz

The Hard Thing About Hard Things is one of the best books I’ve read recently and one of those books whose subject matter is unlikely to interest most of you, but the execution is so good that you ought to read it anyway. The best books transcend their subject; this is probably the best passage in an already great book:

Most business relationships either become too tense to tolerate or not tense enough to be productive after a while. Either people challenge each other to the point where they don’t like each other or they become complacent about each other’s feedback and no longer benefit from the relationship.

Implicitly, you could strike the adjective “business” and replace it with a lot of others… or perhaps strike it altogether and still achieve a similar effect. I’ve often felt exactly what Horowitz is describing but never conceptualized it that way. Over and over again, I found myself marking passages and putting checkmarks next to them. In most books, that practice falls off a third of the way through; in this one, I kept going to the very end.

Many sections just demonstrate that Horowitz gets things. Like:

“What would you do if capital were free?” is a dangerous question to ask an entrepreneur. It’s kind of like asking a fat person, “What would you do if ice cream had the exact same nutritional value as broccoli?” The thinking this question leads to can be extremely dangerous.

Wishful thinking can block useful thinking. Which most of us don’t think, or don’t think consciously.

He’s thinking about antifragility before Nassim Taleb wrote the eponymous book:

The close call was a sign to me that the entire operation was far too fragile. I got another sign when our largest competitor, Exodus, filed for bankruptcy on September 26. It was a truly incredible bankruptcy in that the company had been valued at $50 billion a little more than a year earlier. It was also remarkable because Exodus had raised $800 million on a “fully funded plan” just nine months earlier. An Exodus executive later joked to me: “When we drove off a cliff, we left no skid marks.” It Exodus could lose $50 billion in market capitalization and $800 million in cash that fast, I needed a backup plan.

I’m surprised there aren’t more novels set among venture capitalists or startups. The drama is all there. Maybe most writers don’t realize it, but Horowitz is good at stakes and drama. His stories are too often to quote in full, but they’re full of narrative drama and tension in a way most books aren’t. And some character descriptions are as good as anything in fiction:

Wow. I had no idea who I was dealing with until that point. Understanding how differently Frank viewed the world than the people at Opsware helped clarify my thoughts. Frank expected to get screwed by us. It’s what always happened to him in his job and presumably in his personal life. We needed something dramatic to break his psychology. We needed to be associated with the airport bar, not with his job or his family.

Horowitz had an epiphany and he acted on it. Hard Things could be seen as a series of epiphanies, and we get to follow him through.

We’re often told to attend to data, likely because most people don’t, but once you attend to data, “Sometimes only the founder has the courage to ignore the data.” Like Peter Thiel, Horowitz argues that your life is not a lottery ticket and that markets are often wrong (or at least that insiders can see things that the outsiders who create market values cannot):

If I’d learned anything it was that conventional wisdom had nothing to do with the truth and the efficient markets hypothesis was deceptive. How else could one explain Opsware trading at half of the cash we had in the bank when we had a $20 million a year contract and fifty of the smartest engineers in the world? No, markets weren’t “efficient” at finding the truth; they were just very efficient at converging on a conclusion—often the wrong conclusion.

Almost anyone trying to do anything useful should be thinking about what good ideas are not being pursued: “Wall Street does not believe Opsware is a good idea, but I do.”

“The wrong conclusion:” if markets can converge on “the wrong conclusion,” so can individuals and societies. Some of Hard Things can be read as a critique of American society: “My single biggest personal improvement as CEO occurred on the day when I stopped being too positive.” American society is regularly considered to be positive, but in a way that isn’t necessarily founded on skill or improvement. The “self-esteem” movement is part of this trend, even though moving towards self-efficacy would be an improvement. In class, when I started teaching I was often too positive. Now I’m less positive and more likely to emphasize that growth often comes from pain and struggle. The deadlift doesn’t get higher without some pain, and the best lifters learn to love the pain. Same with intellectual, psychological, or emotional growth. Yet we have a society that shies away from those truths.

I’ve heard about Hard Things many times but this recommendation tipped me into reading it, and I hope my recommendation tips you. The best books can be read many ways and applied to many situations, and this is one of the best. I didn’t expect it to be, which makes it all the more delightful.

%d bloggers like this: