I’m the CTO of Wave. We build financial infrastructure for unbanked people in sub-Saharan Africa.
Personal site (incl various non-EA-related essays): https://www.benkuhn.net/
Email: ben dot s dot kuhn at the most common email address suffix
Ben Kuhn
Karma: 3,070
I agree with most of what Lincoln said and would also plug Why and how to start a for-profit company serving emerging markets as material on this, if you haven’t read it yet :)
Can you elaborate on the “various reasons” that people argue for-profit entrepreneurship is less promising than nonprofit entrepreneurship or provide any pointers on reading material? I haven’t run across these arguments.
Great questions!
What are common failure cases/traps to avoid
I don’t know about “most common” as I think it varies by company, but the worst one for me was allowing myself to get distracted by problems that were more rewarding in the short term, but less important or leveraged. I wrote a bit about this in Attention is your scarcest resource.
How much should I be directly coding vs “architecting” vs process management
Related to the above, you should never be coding anything that’s even remotely urgent (because it’ll distract you too much from non-coding problems). For the first while, you should probably try not to code at all because learning how not to suck as a manager will be more than full-time. Later, it’s reasonable to work in “important but not urgent” stuff in your slack time, as long as you have the discipline not to get distracted by it.
Architecting vs process management depends on what your problems are, what kind of leader you want to be and what you can delegate to other people.
How do I approach hiring?
If you are hiring, hiring is your #1 priority and you should spend as much time and attention on it as is practical. Hiring better people has a magical way of solving many of your other problems.
Hiring can also be really demoralizing (because you are constantly rejecting people and/or being rejected), so it’s hard to have the conviction to put more effort into it until you’ve seen firsthand how much of a difference it makes.
For me, the biggest hiring improvement was getting our final interview to a point where I was quite confident that anyone who passed it would be a good engineer at Wave. This took many iterations, but lowering the risk of a bad hire meant that (a) I wasn’t distracted by stressing out about tricky hire/no-hire decisions, (b) we could indiscriminately put people through our hiring funnel and trust that the process would come to a reasonable verdict. After this change, our 10th-percentile hire has been about as good as our 50th-percentile hire previously, and we went from 4 engineers to 25 in a bit over a year.
I expect the exact same thing goes for investing in people once you’ve hired them, but I’m not as good at that yet so don’t have concrete advice.
Just generally, what would you have imparted on past-you?
You suck at hiring, get better.
If you’re worried that someone is sad about something (especially something you did), ask them!
Org structure matters a lot; friction, bad execution, etc. is often downstream of a bad division of responsibility between teams, teams having the wrong goals, etc. (Matters more once you are responsible for multiple teams)
Accept that you hate telling people what to do, and manage in such a way that you don’t have to. (Perhaps specific to me.)
Hiring.
We’re Lincoln Quirk & Ben Kuhn from Wave, AMA!
Sorry for the minimalist website :) A couple clarifications:
We indeed split our businesses into Sendwave (international money transfer) and Wave (mobile money). Wave.com is the website for the latter.
The latter currently operates only in Senegal and Cote d’Ivoire (stay tuned though).
In addition to charging no fees for deposits or withdrawals, we charge a flat 1% to send. All in, I believe we’re about 80% cheaper than Orange Money for typical transaction sizes.
We don’t provide services to Orange—if you saw the logo on the website it’s just because we let our customers use their Wave balance to purchase Orange airtime.
For the focus of this concept, I am more concerned with providing Mobile Money from the most relevant and fair company available (whoever that is) to areas and people that so far did not have that service, rather than promoting movements from one company to the other which might be more efficient but will have a much smaller effect in poverty reduction.
This is our goal as well; to quote myself in another comment:
Despite the fact that M-Pesa started in 2008, mobile money in most other countries in sub-Saharan Africa is kind of crap by comparison (much more expensive, worse service, smaller agent network, etc.) because most telecoms have not even been able to copycat M-Pesa effectively. By executing better, you can speed up the adoption of mobile money.
Even Orange (which is fairly widespread in Senegal) has only gotten 25% of their own userbase onto mobile money (source) because they, like most mobile money systems, are executing really badly compared to what’s possible. There is a lot of room to make mobile money more accessible even in countries with already-existing mobile money. (Which at this point is nearly all countries AFAIK—it’s easy for a telecom to buy an off the shelf mobile money service from something like Ericsson or Huawei—much harder for them to actually execute well on rolling it out.)
Hey Marc, cool that you’re thinking about this!
I work for Wave, we build mobile money systems in Senegal, Cote d’Ivoire, and hopefully soon other countries. Here are some thoughts on these interventions based on Wave’s experience:
Interventions 1-2 (creating accounts): I think for most people that don’t use mobile money, in countries where mobile money is available, “not having an account” is not the main blocker. It’s more likely to be something like
They don’t live near enough to an agent
Mobile money charges fees that is too high given the typical amounts the person wants to send
They don’t trust the service
They don’t trust the agent they live near
They can’t read, so it’s hard for them to use the app (they would have to memorize the UI)
Intervention 3 (lower restrictions): In countries that don’t have a way of using mobile money without an ID, that’s an extremely valuable thing to advocate for. Also, at least for Wave, our users constantly ask for higher transaction limits than the central bank allows us to give them. Both of these policies are probably at least somewhat based on FUD spread by established players (banks?) that don’t want mobile money to succeed. However, you’re probably right that mobile money companies already have the best incentive to accomplish this change; it’s also hard to get the ear of a central bank as a random foreigner. But there may be something interesting in this space.
Intervention 4 (accounts for ID-less people): this is interesting, although I believe that at least in WAEMU, it’s already possible to use mobile money without an ID with low transaction limits (you can receive at most ~$400/mo). Still, a lot of people want to send/receive more than that, and helping people with paperwork to get a replacement ID is likely to be very helpful in other ways too :)
Intervention 5 (starting agencies): In Wave’s experience, better access to agents is the #1 driver of mobile money growth (at least until a system is so big it hits geographic saturation here). Most mobile money systems also end up working with third-party providers of agent services because they don’t have the organizational capacity to manage a huge number of agents themselves. There’s probably room for an org that’s a third-party agent network focused on the poorest areas in a given country which would otherwise be last on the mobile money system’s priority list for expansion.
Intervention 6 (more research): We’ve found good research on other mobile money systems to be hard to come by, but incredibly useful, even just basics like “here is how M-Pesa expanded over time” or “here are some statistics on ZAAD” (these help us a lot with our own expansion strategy). Although the type of research we want is probably somewhat different from the type of research that would be most useful to other consumers of mobile money research.
I would also add another:
Intervention 7—build a better mobile money system:
Despite the fact that M-Pesa started in 2008, mobile money in most other countries in sub-Saharan Africa is kind of crap by comparison (much more expensive, worse service, smaller agent network, etc.) because most telecoms have not even been able to copycat M-Pesa effectively. By executing better, you can speed up the adoption of mobile money.
Mobile money systems have network effects, meaning that it is somewhat path-dependent which one “wins the market” in a country. Most current mobile money systems that win are the ones offered by monopoly telecoms, so they end up both charging a lot themselves, and also entrenching the telecom’s monopoly. If you were to, say, start an EA mobile money system that wasn’t telco-affiliated, and preferred to lower prices rather than raise them at scale, you could generate a lot more surplus.
If anyone is excited about that, Wave is hiring for many roles, especially engineers—you can contact me here or at ben@wave.com :)
Some of your “conservative” parameter estimates are surprising to me.
For instance, your conservative estimate of the effect of diminishing marginal returns is 2% per year or 10% over 5y. If (say) the total pool of EA-aligned funds grows by 50% over the next 5 years due to additional donors joining—which seems extremely plausible—it seems like that should make the marginal opportunity much more than 10% less good.
You also wrote
we’ll stick with 5% as a conservative estimate for real expected returns on index fund investing
but used 7% as your conservative estimate in the spreadsheet and in the bottom-line estimates you reported.
I’m looking forward to CEA having a great 2020 under hopefully much more stable and certain leadership!
I’d welcome feedback on these plans via this form or in the comments, especially if you think there’s something that we’re missing or could be doing better.
This is weakly held since I don’t have any context on what’s going on internally with CEA right now.
That said: of the items listed in your summary of goals, it looks like about 80% of them involve inward-facing initiatives (hiring, spinoffs, process improvements, strategy), and 20% (3.3, 4.1-5) involve achieving concrete outcomes that affect things outside of CEA. The report on progress from last year also emphasized internal process improvements rather than external outcomes.
Of course, it makes sense that after a period of rapid leadership churn, it’s necessary to devote some time to rebuilding and improving the organization. And if you don’t have a strategy yet, I suppose it makes sense to put “develop a strategy” as your top goal and not to have very many other concrete action items.
As a bystander, though, I’ll be way more excited to read about whatever you end up deciding your strategy is, than about the management improvements that currently seems to be absorbing the bulk of CEA’s focus.
Hmm. You’re betting based on whether the fatalities exceed the mean of Justin’s implied prior, but the prior is really heavy-tailed, so it’s not actually clear that your bet is positive EV for him. (e.g., “1:1 odds that you’re off by an order of magnitude” would be a terrible bet for Justion because he has 2⁄3 credence that there will be no pandemic at all).
Justin’s credence for P(a particular person gets it | it goes world scale pandemic) should also be heavy-tailed, since the spread of infections is a preferential attachment process. If (roughly, I think) the median of this distribution is 1⁄10 of the mean, then this bet is negative EV for Justin despite seeming generous.
In the future you could avoid this trickiness by writing a contract whose payoff is proportional to the number of deaths, rather than binary :)
Oops. I searched for the title of the link before posting, but didn’t read the titles carefully enough to find duplicates that edited the title. Should have put more weight on my prior that this would already have been posted :)
I’m guessing that they assumed we were exaggerating the numbers in order to make them more interested in working with us. The fact that you’re so ready to call anyone who lies about user numbers a “scammer” may itself be part of the cultural difference here :)
Examples (mostly from Senegal since that’s where I have the most experience, caveat that these are generalizations, all of them could be confounded by other stuff, the world is complicated, etc.):
Most Senegalese companies seem to place a much stronger emphasis on bureaucracy and paperwork.
When interacting with potential business partners in East Africa, we eventually realized that when we told them our user/transaction numbers, they often assumed that we were lying unless the claim was endorsed by someone they had a trusted connection to.
In the US, we have fully transparent salaries (everyone at the company can look up anyone else’s salary in a spreadsheet). We weren’t able to extend this norm to our Senegalese subsidiary because it caused too much interpersonal conflict. (This was at least partly the result of us not putting enough investment into making the salary scale work for everyone, but my understanding is that my Senegalese coworkers were pessimistic about bringing back salary transparency even if we fixed that.)
In Senegal people seem less comfortable by default expressing disagreement with someone above them in the hierarchy. (As a funny example, I’ve had a few colleagues who I would ask yes-or-no questions and they would answer “Yes” followed by an explanation of why the answer is no.)
Exporting different norms is quite hard at scale. You need to hire people who are the closest to the norms that you want, but they’ll still probably be fare away so you’ll also have to invest a lot in propagating the norms you want, which only really works well 1-on-1. When we needed to scale our local Senegal team quickly we ended up having to compromise on some norms to do so (e.g. salary transparency, amount of paperwork).
Broadly agree, but:
You might end up making more impact if you started a startup in your own country, and just earned-to-give your earnings to GiveWell / EA organizations. This is because I think there are very few startups that benefit the poorest of the poor, since the poorest people don’t even have access to basic needs.
Can’t you just provide people basic needs then though? Many of Wave’s clients have no smartphone and can’t read. Low-cost Android phones (e.g. Tecno Mobile) probably provided a lot of value to people who previously didn’t have smartphones. Providing people cell service is hard (if you’re not a telecom), but if an area has cell service but no internet you can still make useful information products with USSD, SMS, etc., or physical shops.
(I do think that many good startup ideas in the developing world involve providing relatively “basic” needs! But it seems to me like there’s decent opportunity there.)
Haha this is probably the first time someone said that about one of my essays—I’m flattered, and excited to potentially write follow ups!
Is there anything in particular you’re curious about? Sometimes it’s hard to be sure of what’s novel vs obvious/common knowledge.
Why and how to start a for-profit company serving emerging markets
I imagine that there a large fraction of EAs who expect to be more productive in direct work than in an ETG role. But I’m not too clear why we should believe that. The skills and manpower needed by EA organizations appear to be a small subset of the total careers that the world needs, and it would seem an odd coincidence if the comparative advantage of people who believe in EA happens to overlap heavily with the needs of EA organizations. Remember that EA principles suggest that you should donate to approximately one charity (i.e. the current best one). The same general idea applies to need for talent: there are a relatively small number of tasks that stand out as unusually in need of more talent.
The “one charity” argument is only true on the margin. It would be incorrect to conclude from this that nobody should start additional charities—for instance, even though GiveWell’s current highest-priority gap is AMF, I’m still glad that Malaria Consortium exists so that it could absorb $25m from them earlier this year. Similarly, it’s incorrect to conclude from this style of argument that the social returns to talent should be concentrated in specific fields. While there may be a small number of “most important tasks” on the margin, the EA community is now big enough that we might expect to see margins changing over time.
Also, the majority of people who are earning to give would probably be able to fund less than one person doing direct work. If your direct work would be mostly non-replaceable, then this compares unfavorably to direct work. (Seems like e.g. 80k thinks that on the current margin, people going into direct work are not too replaceable.)
If you’re really worried about value drift, you might be able to use a bank account that requires two signatures to withdraw funds, and add a second signatory whom you trust to enforce your precommitment to donate?
I haven’t actually tried to do this, but I know businesses sometimes have this type of control on their accounts, and it might be available to consumers too.
Whoops, sorry about the quotes—I was writing quickly and intended them to denote that I was using “solve” in an imprecise way, not attributing the word to you, but that is obviously not how it reads. Edited.
These theoretical claims seem quite weak/incomplete.
In practice, autocrats’ time horizons are highly finite, so I don’t think a theoretical mutual-cooperation equilibrium is very relevant. (At minimum, the autocrat will eventually die.)
All your suggestions about oligarchy improving the tyranny of the majority / collective action problems only apply to actions that are in the oligarchy’s interests. You haven’t made any case that the important instances of these problems are in an oligarchy’s interests to solve, and it doesn’t seem likely to me.
What’s the shift you think it would imply in animal advocacy?
Hmm. This argument seems like it only works if there are no market failures (i.e. ideas where it’s possible to capture a decent fraction of the value created), and it seems like most nonprofits address some sort of market failure? (e.g. “people do not understand the benefits of vitamin-fortified food,” “vaccination has strong positive externalities”...)