To onlookers: There’s a often a low amount of resolution and expertise in some comments and concerns on the LW and EAF, and this creates “bycatch” and reduces clarity. With uncertainty, I’ll lay out one story that seems like it matches the concerns in the parent comment.
Strong Spending
I’m not entirely sure this is correct, but for large EA spending, I usually think of the following:
30%-70% growth in head count in established institutions, sustained for multiple years
Near six figure salaries for junior talent, and well over six figure salaries for very good talent and management who can scale and build an organization (people who can earn multiple times that in the private sector and cause an organization to exist and have impact)
Seven figure salaries for extreme talent (world’s best applied math, CS, top lawyers)
Discretionary spending
Buying operations, consulting and other services
So all the above is manageable, even sort of fundamental for a good leader or ED or CEO. This is why quality CEO or leadership is so important, to hire and integrate this talent well and manage this spending. This is OK.
This is considered “high”, but it’s not really by real world standards.
Now distinct from the above comment, there’s a whole other reference class of spending where:
People can get an amount of cash that is a large fraction of all spending in an existing EA cause area in one raise.
The internal environment is largely “deep tech” or not related to customers or operations
So I’m thinking about valuations in the 2010- tech sector for trendy companies.
I’m not sure, but my model of organizations that can raise 8 figures per person in a series B, for spending that is pretty much purely CapEx (as opposed to capital to support operations or lower margin activity, e.g. inventory, logistics) has internal activity that is really, really different than the above “high” spending in the above comment.
There’s issues here, that are hard to appreciate.
So Facebook’s raises were really hot and oversubscribed. But building the company was a drama fest for the founders, and also there was a nuclear reactor hot business with viral growth. So that’s epic fires to put out every week, customers and partners, actual scaling issues of hockey stick growth (not this meta-business advice discussion on the forum). It’s a mess. So CEO and even junior people have to deal.
But once you’re just raising that amount in deep tech mode, my guesses for how people think, feel, and behave inside of that company with valuations in the 8-9 figures per person. My guess is that the attractiveness, incentives and beliefs in that environment, are really different than even the hottest startups, even above those where junior people exit with 7 figures of income.
To be concrete, the issues on the rest of EA might be that:
Even strong EA CEOs won’t be able to hire many EA talent like software developers (but they should be worried about hiring pretty much anyone really). If they hire, they won’t be able to keep them at comfortable, above EA salaries, without worrying about attrition.
Every person who can convincingly claim interest or signal interest in a cause area is inherently going to be treated very differently in any discussion, interaction, in a deep way that I don’t EA has seen.
The dynamics emerge that good people won’t feel comfortable adding this to their cause area anymore.
Again, this is not “strong spending” but the “next level, next level” world of both funding that is hard to match in human history in any for-profit, plus the nature of work that is different than any other.
I’m not sure, but in situations where this sort of dynamic or resource gradient happens, this isn’t resolved by the high gradient stopping (people don’t stop funding or founding institutions), because the original money is driven by underlying forces that is really strong. My guess is that a lot of this would be counter productive.
Typically in those situations, I think the best path is moderation and focusing on development and culture in other cause areas.
To onlookers: There’s a often a low amount of resolution and expertise in some comments and concerns on the LW and EAF, and this creates “bycatch” and reduces clarity. With uncertainty, I’ll lay out one story that seems like it matches the concerns in the parent comment.
Strong Spending
I’m not entirely sure this is correct, but for large EA spending, I usually think of the following:
30%-70% growth in head count in established institutions, sustained for multiple years
Near six figure salaries for junior talent, and well over six figure salaries for very good talent and management who can scale and build an organization (people who can earn multiple times that in the private sector and cause an organization to exist and have impact)
Seven figure salaries for extreme talent (world’s best applied math, CS, top lawyers)
Discretionary spending
Buying operations, consulting and other services
So all the above is manageable, even sort of fundamental for a good leader or ED or CEO. This is why quality CEO or leadership is so important, to hire and integrate this talent well and manage this spending. This is OK.
This is considered “high”, but it’s not really by real world standards.
Next-level Next-level
Now distinct from the above comment, there’s a whole other reference class of spending where:
People can get an amount of cash that is a large fraction of all spending in an existing EA cause area in one raise.
The internal environment is largely “deep tech” or not related to customers or operations
So I’m thinking about valuations in the 2010- tech sector for trendy companies.
I’m not sure, but my model of organizations that can raise 8 figures per person in a series B, for spending that is pretty much purely CapEx (as opposed to capital to support operations or lower margin activity, e.g. inventory, logistics) has internal activity that is really, really different than the above “high” spending in the above comment.
There’s issues here, that are hard to appreciate.
So Facebook’s raises were really hot and oversubscribed. But building the company was a drama fest for the founders, and also there was a nuclear reactor hot business with viral growth. So that’s epic fires to put out every week, customers and partners, actual scaling issues of hockey stick growth (not this meta-business advice discussion on the forum). It’s a mess. So CEO and even junior people have to deal.
But once you’re just raising that amount in deep tech mode, my guesses for how people think, feel, and behave inside of that company with valuations in the 8-9 figures per person. My guess is that the attractiveness, incentives and beliefs in that environment, are really different than even the hottest startups, even above those where junior people exit with 7 figures of income.
To be concrete, the issues on the rest of EA might be that:
Even strong EA CEOs won’t be able to hire many EA talent like software developers (but they should be worried about hiring pretty much anyone really). If they hire, they won’t be able to keep them at comfortable, above EA salaries, without worrying about attrition.
Every person who can convincingly claim interest or signal interest in a cause area is inherently going to be treated very differently in any discussion, interaction, in a deep way that I don’t EA has seen.
The dynamics emerge that good people won’t feel comfortable adding this to their cause area anymore.
Again, this is not “strong spending” but the “next level, next level” world of both funding that is hard to match in human history in any for-profit, plus the nature of work that is different than any other.
I’m not sure, but in situations where this sort of dynamic or resource gradient happens, this isn’t resolved by the high gradient stopping (people don’t stop funding or founding institutions), because the original money is driven by underlying forces that is really strong. My guess is that a lot of this would be counter productive.
Typically in those situations, I think the best path is moderation and focusing on development and culture in other cause areas.