I think this is an important point and there’s some truth to it: EA ‘startups’ are different from venture-backed startups. When you say ‘targeting’, what do you mean here exactly, and do you have any ideas on how to do this without increasing time costs a lot? An advantage of our proposed approach is that it’s time-cheap because it’s systematic (with some caveats, we offer investment if and only if someone else has). But if there were a cheap way to make this better at finding the people most helpful for EA projects, that would be great.
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If the claim is that, as a result of the differences between EA and venture-backed ‘startups’, it’s not worth doing something like this to attract entrepreneurs to EA, I’m not sure I agree:
1. There are some common skills to building both types of startup—you’re creating a new org to do something untested with a small number of people and often not much money, so there are at least some similarities. Maybe the overlapping skillset is quite small. Do you think you had already built that skillset before leaving your startup, such that any extra skill-building in that overlapping core wouldn’t be helpful for your work now? I’m unsure about this because I haven’t really built a startup of either type.
2. It’s not just reality but also the EA community. a. Not everything can or should be tested by building a minimum viable product and seeing what reality throws at it, but for some types of problems this is useful. And, even for these types of problems, I think the default approach most EAs have is usually that problems are best solved by doing research and analytical thought instead. I think this probably leads to a bias against trying things. (We think hard when it’s appropriate, but also often when it would be better to just try it and see.) b. I know of at least one example of bias against action in the community—someone applied for funding to distribute EA books at UPenn and said it was initially declined because CEA was concerned about possible downside risks. Both they and I thought this seemed crazy. c. Technical skills are required for many of the types of startups that VCs fund, but there are few technically-skilled entrepreneurs in the EA community. This suggests EA is pushing away even entrepreneurs who could contribute to technically demanding projects.
3. Earning to give can still be high impact, especially if you’re right and a traditional entrepreneur wouldn’t be well-placed to start an EA (mega)project. If it works, Snowball Fund could either beat market returns (increasing the money in EA) or pay a small price (difference between market returns and its returns) per entrepreneur. If this means a higher number of EA-aligned entrepreneurs earning-to-give, or more giving from each, it may still be very cost-effective.
Hmmm, reading your question, I think our disagreement might not actually be about entrepreneurs’ fit in EA, but rather about how much labor your plan requires. I think (correct me if I’m wrong) you and I both believe something like:
If Snowball would require large amounts of labor to get close to market returns or to get impactful people involved in EA, then it might not be worth doing.
Let me briefly explain why I think the antecedent holds:
Market returns: Many (maybe most) VCs follow your strategy of being a follow-on investor, for the reasons you describe. Despite this, they still have to do a fair amount of labor and struggle to make market returns (e.g. because the most lucrative deals are only available to top VC firms).
Getting people involved: EA’s have a number of connections to talented entrepreneurs: several EA organizations have gone through YCombinator, many impressive entrepreneurs have signed with Founders Pledge, etc. I’m struggling to think of instances where these networks resulted in recruiting someone to start an EA project. No doubt more could be done, and perhaps your team is more talented than the people who have tried this before, but I still doubt it will be easy.
Do you think you had already built that skillset before leaving your startup, such that any extra skill-building in that overlapping core wouldn’t be helpful for your work now?
To be clear: it’s good to be better at more things, and of course I would be more impactful if I was better at start up stuff. But it just doesn’t seem like the biggest thing holding me, or the people I know, back.
On point #1, there’s a critical distinction in the type of “follow-on” strategy we’re employing, which is a standard template $100K into a large number of companies (generally known as the “spray and pray” model). This is characterized by low diligence per deal as opposed to most VC’s who do still put in a decent amount of effort. Spray and pray of course has it’s drawbacks in terms of validating the quality of the deal flow, but that’s the crux we’re exploring here regarding EA-aligned founders being potentially higher quality than average.
On point #2 not to be autobiographical but I personally am an example of an individual who would not have started an EA project without the onramp from Founders Pledge to actually introduce me to the community networks to get Snowball Fund up and running.
I think this is an important point and there’s some truth to it: EA ‘startups’ are different from venture-backed startups. When you say ‘targeting’, what do you mean here exactly, and do you have any ideas on how to do this without increasing time costs a lot? An advantage of our proposed approach is that it’s time-cheap because it’s systematic (with some caveats, we offer investment if and only if someone else has). But if there were a cheap way to make this better at finding the people most helpful for EA projects, that would be great.
---
If the claim is that, as a result of the differences between EA and venture-backed ‘startups’, it’s not worth doing something like this to attract entrepreneurs to EA, I’m not sure I agree:
1. There are some common skills to building both types of startup—you’re creating a new org to do something untested with a small number of people and often not much money, so there are at least some similarities. Maybe the overlapping skillset is quite small. Do you think you had already built that skillset before leaving your startup, such that any extra skill-building in that overlapping core wouldn’t be helpful for your work now? I’m unsure about this because I haven’t really built a startup of either type.
2. It’s not just reality but also the EA community.
a. Not everything can or should be tested by building a minimum viable product and seeing what reality throws at it, but for some types of problems this is useful. And, even for these types of problems, I think the default approach most EAs have is usually that problems are best solved by doing research and analytical thought instead. I think this probably leads to a bias against trying things. (We think hard when it’s appropriate, but also often when it would be better to just try it and see.)
b. I know of at least one example of bias against action in the community—someone applied for funding to distribute EA books at UPenn and said it was initially declined because CEA was concerned about possible downside risks. Both they and I thought this seemed crazy.
c. Technical skills are required for many of the types of startups that VCs fund, but there are few technically-skilled entrepreneurs in the EA community. This suggests EA is pushing away even entrepreneurs who could contribute to technically demanding projects.
3. Earning to give can still be high impact, especially if you’re right and a traditional entrepreneur wouldn’t be well-placed to start an EA (mega)project. If it works, Snowball Fund could either beat market returns (increasing the money in EA) or pay a small price (difference between market returns and its returns) per entrepreneur. If this means a higher number of EA-aligned entrepreneurs earning-to-give, or more giving from each, it may still be very cost-effective.
Hmmm, reading your question, I think our disagreement might not actually be about entrepreneurs’ fit in EA, but rather about how much labor your plan requires. I think (correct me if I’m wrong) you and I both believe something like:
Let me briefly explain why I think the antecedent holds:
Market returns: Many (maybe most) VCs follow your strategy of being a follow-on investor, for the reasons you describe. Despite this, they still have to do a fair amount of labor and struggle to make market returns (e.g. because the most lucrative deals are only available to top VC firms).
Getting people involved: EA’s have a number of connections to talented entrepreneurs: several EA organizations have gone through YCombinator, many impressive entrepreneurs have signed with Founders Pledge, etc. I’m struggling to think of instances where these networks resulted in recruiting someone to start an EA project. No doubt more could be done, and perhaps your team is more talented than the people who have tried this before, but I still doubt it will be easy.
To be clear: it’s good to be better at more things, and of course I would be more impactful if I was better at start up stuff. But it just doesn’t seem like the biggest thing holding me, or the people I know, back.
Daniel’s comments:
On point #1, there’s a critical distinction in the type of “follow-on” strategy we’re employing, which is a standard template $100K into a large number of companies (generally known as the “spray and pray” model). This is characterized by low diligence per deal as opposed to most VC’s who do still put in a decent amount of effort. Spray and pray of course has it’s drawbacks in terms of validating the quality of the deal flow, but that’s the crux we’re exploring here regarding EA-aligned founders being potentially higher quality than average.
On point #2 not to be autobiographical but I personally am an example of an individual who would not have started an EA project without the onramp from Founders Pledge to actually introduce me to the community networks to get Snowball Fund up and running.
Thanks for the data point about you coming from FP! That’s helpful.