Man how insane is it that these guys and gals raised 400 millions on tech without any raw data, nothing to show for it? It was never reproduced? They just said they got it?
They have gobs and gobs of money to invest. Rich people chasing ever riskier rewards just handing money to them! They have to find something promising to throw it at. But who is it going to? Evidently, a lot of it goes to founders whose primary skill is storytelling. I used to think, no matter how handsome and smooth and persuasive you are, you at least have to have a little substance behind your enchanting narrative and ivy-league mannerisms. But here we are with failure after failure (and a once-a-decade colossal failure like Theranos) where all the warning signs were visible to someone not under the spell, and these bullshitters are still getting funding shoveled at them.
It's pretty sad that "look like you know what you are doing and convince gullible people" is probably the best future career advice I can give to my school-age daughter.
It's been my experience that you can't tell who's smarter than who by what they do for a living. On the whole, no group is actually smarter than any other group.
> It's pretty sad that "look like you know what you are doing and convince gullible people" is probably the best future career advice I can give to my school-age daughter.
I don't agree with that takeaway. I think the takeaway is that confidence is the primary thing that people take as a proxy for competence. It's not really about gullibility as much as people engaging in a heuristic. So learn to fake confidence, but have the chops to back it up.
I suppose it depends on the definition of smart which I understand as intelligent/good rational decision making but maybe you mean somthing else.
Two pianists:
Autistic savant syndrome:
https://en.wikipedia.org/wiki/Derek_Paravicini
https://www.ted.com/talks/derek_paravicini_and_adam_ockelfor...
Acquired savant syndrome:
https://www.cbsnews.com/colorado/news/derek-amato-acquired-s...
I doubt a biochemist would have savant syndrome. It's possible, maybe. It would probably look like someone who could recall all of the enzymes (and their variants) and intermediates in various biosynthetic pathways and could tell you without research which enzymes would need to be expressed together to get from one starting chemical to another.
This is the law of averages. Almost never true.
This first sentence indicates that they are writing about individuals with a vocation, not a group average. Statistically, in developed countries, any given manual laborer is likely to be less smart than any given venture capitalist, but Elon Musk, for instance, has been both. If you'd randomly picked him, in December of 1989, from the pool of manual laborers, you would have been wrong.
I assumed they meant professional investors are smarter about evaluating potential investments. Not generally smarter, just smarter about what they put their money into.
I guess when I think of professional investors picking some of these dogs, my mind imagines that scene in Moneyball[1] where the old timers are trying to pick baseball players by who "looks good," "has a good jaw," "how the ball sounds when it pops off his bat, and "what the player's girlfriend looks like."
On a practical level, there's also the matter that, even if some fund managers do beat the market, some other fund managers don't, and it's hard to tell which is which. By going with an actively managed mutual fund, you take on "how do I know my fund manager is one of the good ones?" risk, which you don't have with index funds.
There are always exceptions of course. But it is most definitely true that (for example) the average IQ of people doing high end physics is way higher than the average IQ of people laying bricks.
I would like to think that you would want your daughter to get more out of life than just raw cash.
That's really the only way you ever could do it. But the key words there are "reasonable" and "sensible". Reasonable and sensible things don't revolutionize the entire world. They're not brand new, unprecedented technologies. It's not sensible to claim you'll create a ten-billion-dollar+ market overnight. It's not reasonable to claim that a problem that 10,000 smart scientists have worked on for decades was just solved in an unexpected way by this twenty-something "wunderkind" upstart and no you can't see behind the curtain. And yet these people get hundreds of millions in investment anyway. That's the question: why the hell did that ever sound reasonable; why the hell did those numbers ever look sensible!?
https://www.lesswrong.com/posts/CKpByWmsZ8WmpHtYa/competent-...
That was not my intent. The point of the essay was exactly the opposite. Maybe I fall for the same stuff, but Eliezer is a very smart guy who was predisposed (as he makes clear in the essay) to believe that the people he met were all fluff. He was surprised that they were not just demonstrably knowledgeable, but, in addition, had other appealing characteristics.
And my threshold for having "too much" of these is pretty low...
IF the company agrees, but then shows fraudulent data, then you are fucked.
It's a greater fool shockwave, pretending to buy into something and betting that you can get someone else to buy into it before the bottom falls out. Not that you know for sure the bottom will fall out, but if you're going to buy in based on how marketable the pitch is, examining it too hard might weaken that pitch or make it fall apart. In that case you've wasted time and money and have to find something else. If you're committed, the last thing you want to do is examine the business; you're shortening your bullshit runway.
to conflate movie quotes, a fool and his money were lucky enough to get together in the first place, and we just can't help ourselves
Theranos was unreasonable on the face of it. VCs were among the conmen, rather than the marks
"you can't cheat an honest man" definitely applies.
Is there a mechanism for betting against a pre-IPO company?
That's not how I meant it. I was thinking more generally about pre-IPO companies that you think (for reasons that you can legitimately use when investing in this manner) have dim prospects.
Lack of short-sellers increases fraud, it doesn't reduce it. Nobody spreads more anti-short seller animus that people trying to commit fraud.
If it is a fraud you're rewarded, if it isn't a fraud, you're punished
The marks are screwed regardless, but they're betting against you, claiming that it isn't a fraud, against your evidence that it is
Got to stop thinking that people with money are smarter than anyone else.
Abolish Venture Capital.