Can “Agile” break the Iron Triangle? Can open allocation?

I’ve written a lot about the MacLeod-Gervais-Rao model of the corporate organization, which I’ve dissected at length starting here. This exploration is going to start with many of the same ideas, refined by time.

In the MacLeod model, people in a company are either sorted or self-select in to three tiers, each uncharitably named. The “Losers” at the bottom of the corporation do the grunt work; the “Sociopaths”, typically at the top or on the way up, tell people what to do and take most of the rewards; and the “Clueless” get caught in the middle, working overtime to correct the mistakes of disengaged people below them and the unapologetically self-advancing people above them.

It’s a sound model. It accurately describes many corporations. To be fair, the names are a bit negative, and possibly inaccurate. “Losers” aren’t disliked or contemptible people, but only economic losers who trade their time for a pittance, in exchange for low work demands, low or nonexistent income volatility, and infrequent changes in their job duties and geographic location. They’re selling off their risk because they prefer comfort over upside. “Sociopaths” are the risk-seekers who aren’t afraid to break rules. Organizations need such people in order to survive, but they don’t need many, due to the pyramidal shape of a corporate hierarchy. One rule-breaking maverick is an asset; ten is a problem. Those get rapidly promoted or fired, with not much middle ground. The “Clueless” in the middle are the “true believers” who think (in spite of all objective evidence) that their organizations are meritocracies. Sociopaths (even the good ones) aren’t afraid to cut deals and play politics and grease palms, but Clueless tend to believe that all problems can be solved by “working harder”. Their unconditional work ethic (as opposed to the conditional one of the Sociopath) makes them a natural match for unpleasant tasks and dead-end jobs.

Model vs. reality

Is this depiction of corporate life accurate? Can there be “Losers” in high positions and “Sociopaths” at the bottom? Of course, there are. It’s just rare that it happens, because organizations work against it. Moreover, these traits are hardly immutable. A person might be a “Clueless” in one context and a “Sociopath” in another. The MacLeod model is a generalization and an attractor state. What it describes best are the organizations that have lost most of their purpose for existing, or that never had a vision beyond self-enrichment of a few. (That’s most organizations, at least in the corporate world.) At such a point, self-interest is the dominating motivation of most players, and the idea that there’s a higher mission is just a narrative for the Clueless. Since not everyone can be a leader or be made rich, organizations adapt by evolving toward this state of affairs, which is highly stable. I’ll get to its specific flaws, and its relationship to software methodologies like “Agile” and open allocation, later on. Before doing that, it’s most useful to discuss why this tripartite sorting of people occurs.

The Iron Triangle

Organizations tend to want three things from people:

  • subordinacy (S), which pertains to “Does this person value the organization’s interest above her own?”
  • dedication (D), or “Will she work as hard as she can?”
  • strategy (T), or “Does she work on the right things?”

The most nuanced of these is the first, subordinacy. Of the three Iron Triangle traits, it’s the one that I tend to least value, but in order to discuss it properly, we have to discuss what it is.

I don’t champion the constitutionally insubordinate. In truth, I don’t have much use for such people, the ones who oppose authority simply because it is authority. Sometimes, subordinating is the right thing to do. For example, stopping and waiting at a red light is an act of subordination where the alternative, almost always, is reckless. It’s illegal, and for good reasons, to run red lights. Moreover, while I don’t value one-sided loyalty (i.e. loyalty to a group or organization that will not return it) I do value integrity. Plenty of actions that are insubordinate are also dishonest, toxic, and wrong. All of this is to say that the question of when (in)subordination is a virtue vs. vice is a deep and complicated one. At least for now, I prefer to step away from the larger moral questions and focus on the (typically, morally neutral) matter of an organization’s upkeep.

While subordination and insubordination are matters of action, subordinacy (S+) is one of attitude and personal strategy. (Unfortunately, the adjectival forms of both words, “subordinacy” and “subordination”, seem to be the same word: “subordinate”.) When an act of insubordination is ethically neutral, will the person do it? Will he use his organization’s reputation, without prior permission, to bolster his own? Will he focus most on the tasks that further his career, rather than those that are most important to the organization? Will he assist a third party in negotiation with the organization, in order to have a friend (or, at least, an ally or a favor owed) in the future? These are questions where insubordinacy is ethically neutral. It’s not the noble insubordination of the Civil Rights activists; nor is it the unethical, degenerate sort; it’s the neutral insubordinacy of a careerist who’s figured the game out. The person with subordinacy (S+) will err on the side of favoring the organization, preferring stability over the opportunity for personal gain. The person without subordinacy (S-) tends to favor the interests of people (including himself) for multiple reasons. The charitable view is that the insubordinate favor individuals over organizations because individuals are more likely to have coherent vision and the strategic insight necessary to move society forward. The less favorable view is that they favor individuals because people have a memory, and organizations don’t. If you tell a talented young engineer, while your company is courting him, that he could get $20,000 more just by asking for it, there’s a chance that, five years down the road, he’ll pull you in to his startup as a co-founder. If you favor the organization by not sharing this information, you’ll get nothing in return. In truth, as an S-, I think that both of these views are correct. We favor individual advancement (of ourselves, and of others whom we care about) over organizational upkeep because individuals are more coherent and strategically competent, but also because we won’t waste loyalty on bureaucracies that would never return the favor.

Without further exploring the rabbit hole of subordinacy, let’s return to a question that I’m sure many readers have asked. Why is this set of three traits (subordinacy, dedication, and strategy) called an Iron Triangle? The answer is that an organization gets at most two from each person. To see why that is, it’s useful to examine the eight combinations formed by the absence or presence of each trait. People with zero or one of the Iron Triangle traits tend to be organizationally inert, so I won’t focus on them. At 2 out of 3, we get the MacLeod archetypes. The strategic and dedicated, but not subordinate (or, S-D+T+) become the high-energy creative (or, in some cases, destructive) employees (Sociopaths) who’ll either be promoted quickly or fired. Their more risk-averse counterparts, on the other hand, will select subordinacy over dedication. They have a good sense of what projects are worth working on and how hard to work (or, conversely, how lazy they can be and get away with it) but, if assigned to doomed projects, they’d rather stay in place and slack than put themselves at personal risk by trying to right the ship. Those people, being subordinate and strategic but not dedicated (S+D-T+) become the MacLeod Losers. They might know how to improve things, but they know that there’s more job security in following orders. Finally, those with the unconditional work ethic, the subordinate and dedicated but not strategic (S+D+T-) tend to end up doing the jobs that no one wants. This can advance them into middle management, but they’ll rarely get a decision-making role. They tend to get the responsibility-without-power kind of “management” that is avoided by Losers (it’s too much work) and Sociopaths (it’s a dead-end job) alike. Those are the MacLeod Clueless.

Why is it rare, if not impossible, that an organization gets all three Iron Triangle traits from one individual? It’s a paradoxical arrangement. A person who is strategic will generally not be subordinate and dedicated. Subordinacy means that a person gives up opportunities for personal advancement in order to avoid conflict and appearances of impropriety, and in the interest of organizational harmony and upkeep. Dedication means that a person works much harder, and takes on more of the nasty tasks, than is needed to maintain employment and social acceptability. It’s not strategic to be both. You can earn your place with one or the other, and if you play both games you’re more likely to make mistakes, because they conflict. If you want to maximize comfort and minimize risk and pain, you prefer subordinacy. You become “a nice guy”, and promotions come slowly, if at all. That’s the MacLeod Loser route. If you want to maximize personal yield and advancement, or some higher moral objective (e.g. social justice) that might require fighting the organization, and you don’t mind pain and risk (even the risk of being expelled or fired from the organization) then you favor dedication. You become a MacLeod “Sociopath”. You shake things up, aren’t afraid to make enemies or have others question your judgment (and, even, integrity) and you work hard not because you have a (MacLeod Clueless) desire to clean up others’ messes, but because you want to prove yourself right about something. You’ll either be promoted, fired, or find external promotion inside of a couple years.

Simply put, to be subordinate and dedicated is not strategic, since there is no value in taking on two kinds of self-sacrifice when only one will suffice.

For an aside, the stereotype of the non-strategic, terminal middle manager is that he’s a milquetoast with no vision. That type of person certainly exists, but a pattern that is at least as common (and dangerous) is the non-strategic person with too many visions. He overcommits, tries to please everyone (subordinacy) and works really hard (dedication) on an array of stuff that never amounts to a coherent whole. He has “vision” but there is no coherence to it. He can’t focus. If a person is subordinate and dedicated, that person is trying to play two conflicting strategies (for an example of conflict, a person who works too hard will lose social polish and tarnish any “nice guy” gains earned in subordinacy) simultaneously and that is not strategic.

An archetype of a person who seems to have all three traits would be the Protégé. Is that a possible fourth MacLeod category? (Answer: I’d say no.) A person whose career is protected by someone powerful or influential will show all three Iron Triangle traits. The “to be subordinate and dedicated is not strategic” theorem seems broken, in that case. Is it? I would argue that it’s not. This is a case of conditional subordinacy. The protégé has a genuine personal interest in doing right by the mentor, and in keeping long-term, loyalty-based relationships (which do not exist, these days, with corporations) intact. I would argue that, while the protégé will subordinate, it isn’t subordinacy because there is a harmony of interests, and it’s conditional upon the loyalty going both ways. If the upper management’s buy-in to the protégé’s career wanes, he’ll either start to slack (MacLeod Loser) or seek his own interests (MacLeod Sociopath).

What’s wrong with the Iron Triangle?

Is the Iron Triangle a problem? After all, so long as organizations can get each of those desired traits from someone, is it a real loss that no individual will deliver all three? It’s not clear that the Iron Triangle poses a real threat to the organization; in fact, the MacLeod arrangement is highly stable. Moreover, people and organizations adapt somewhat fluidly. A strategic person can consciously choose to favor subordinacy or dedication over the other. A non-strategic person might become strategic with age and experience. No one’s a lifelong MacLeod Loser or Clueless or Sociopath; we evolve as our needs (and the needs of those around us) demand. MacLeod organizations are “iron” because they’re stable on their own terms, like white dwarfs left when a star’s best life is behind it.

So what’s wrong? Why is the MacLeod organization considered to be dysfunctional? Why do, for example, technology companies continually come out with new employee perks and development methodologies in order to create the perception that they’re not MacLeod organizations? Why have the cynical executives in technology removed themselves from official managerial roles and become “investors” at venture capital firms? Why is it desirable that a company move itself away from a MacLeod model, which seems to give most people what they want?

The MacLeod organization’s problem is that its short-term stability hides a long-term trend toward obsolescence. Each of these three archetypes has a fatal flaw. In assessing the fatal flaws of each, we’ll get an understanding of why some technology companies insist on methodologies like “Scrum”, and also on whether a different approach, like open allocation, can solve the Iron Triangle problem.

The flaw of the MacLeod Sociopaths, whom I give the more charitable name of Self-Executive, is that they’re a high-variance set of people. If you want reliable mediocrity, you won’t get it from them. In fact, expecting reliable mediocrity will alienate them. The name of “Sociopath” comes from the fact that some (and, typically, a disproportionate share of those who attain power) are unethical. I don’t actually think that Self-Executive employees are any more (or less) unethical than any other group, but when they are cheaters and liars, they do a lot of damage. The main issue that that set of people has, relative to organizations, is numerical. Organizations don’t need many creative, passionate, decision-making people. In the pyramid-shaped corporation, there are more people with the Self-Executive inclination (probably, about 10% of the population) than there are roles with executive (with “executive”, here, including non-managerial technical or creative leadership) work. Thus, some will be promoted and others will be fired. The stakes are high, so you get in-fighting, politicking, and sometimes even cheating by some highly creative people who aren’t used to being told “No”.

Integrity, in terms of which Self-Executives (or “Sociopaths”) are promoted vs. fired, actually matters. A MacLeod Loser with low integrity might steal office supplies, but a MacLeod Sociopath with low integrity can kill the company. So promoting the “good Sociopaths” (the paradoxical nature of this term is one reason why I prefer Self-Executive) and firing the bad ones is important. Unfortunately, the bad kind tend to be a lot better at office politics.

As for the MacLeod Clueless, whom I’ve renamed to Workhorses, their flaw is that they tend to generate recurring commitments: meetings and processes and rules and additional tasks that seem like good ideas individually but, en masse, make the company incoherent and slow. With that unconditional work ethic, they’re willing to throw their weight behind whatever efforts their superiors consider important. Left to their own devices, they’ll come up with something that will usually provoke a “Huh?” reaction. In the lower ranks, their work ethic endears them to their bosses and they can get promoted, but eventually, that stops. Workhorses never get themselves respected enough to be given high-end work, and their willingness to complete low-end and unimportant work means they get used as garbage disposals by the organization. This isn’t a problem, until they get promoted too high and the Peter Principle kicks in. The issue isn’t just that they generate bad ideas, because everyone who has ideas comes up with some bad ones. (Self-Executives also come up with bad ideas, and quickly abandon them.) It’s that they never flush away bad ideas, so they have a tendency to create the recurring commitments that accumulate and slow down the entire organization. The MacLeod Losers lack the initiative to generate this crap, and Sociopaths avoid it because recurring commitments are career-draining, dead-end pits of suck. It’s the well-meaning incompetents who build such messes up. Eventually, the corporation reaches a level of stagnation at which Sociopaths called “management consultants” are brought in to garbage-collect those recurring commitments.

What’s wrong with the MacLeod Losers? (I would rename them Team-Players.) It seems like a Team-Player should be a model employee. He won’t disobey a direct order. He won’t generate fruitless work. His main flaw is the lack of dedication. He wants to get along with others, not be the hardest-working. If you tell him that his work hours are 9 to 5, he’ll be out the door around 5:10. But what’s wrong with that? MacLeod Losers are actually pretty efficient and productive. That’s part of their being strategic. Efficiently doing what little work they’re directly told to do gives them more time to surf the web, play with Nerf guns, or jockey for a “cool” in-group status that, while it doesn’t correlate to the kinds of status (such as salary and title) that actually matter, gives them a sense of comfort and importance (“I’m the Halloween Party Guy”). Team-Players work efficiently and, while they lack initiative, they’re far from being slackers, since their goal is to maximize comfort. True minimum-effort playing (that is, doing just enough work not to get fired) is actually pretty uncomfortable. You’re just on the bubble, people don’t like you, and every time your manager or expectations change, you have to watch your back. So they don’t go down that far, in effort level. They modulate their work output to the Socially Accepted Mediocre Effort (SAME).

Companies tend to form effort bands based on peoples’ level of work. The negatively productive are in the FUGLY (“Fail Up or Get Lost Yesterday”) band; they’re either already on PIPs, or they have personal connections that’ll lift them no matter what they do. Next is MEME (“Minimum Exertion to Maintain Employment”) and then SAME (“Socially Acceptable Mediocre Effort”) and AWT (“Actually Works There”) followed by HSTG (“Holy Shit, This Guy/Gal”), the last of these being the overperforming level at which a person becomes more likely to be fired (because there are more opportunities for political failure or social embarrassment). In most organizations, the MEME is about 3 hours per week of actual work and SAME is around 10 to 15. The Workhorses/Clueless tend toward AWT and HSTG, and the Self-Executives/Sociopaths will play the full spectrum depending on what they are trying to do. But the Team-Players/Losers are optimizing for comfort. They want to be well-liked and not have their job duties change, and to keep management off their backs. Their avoidance of recurring commitments, over-exertion, and embarrassment to others keeps them out of the AWT/HSTG range, but their desire to be well-liked keeps them out of FUGLY/MEME territory. So they aim for the SAME. And what’s wrong with that? The problem is SAME Drift. The SAME starts out at an acceptable level, at which the company makes more off the Losers’ work than it pays them; but over time, the SAME tends to approach (and can reach) zero as the workload fluctuates. When the workload decreases, MacLeod Losers/Team-Players (being strategic) drop their output, because creating non-essential work for themselves is just a waste. When it increases, those who are willing to take additional work for self-advancement become MacLeod Sociopaths/Self-Executives, leaving the Loser tier (and the SAME) behind. Better incentives will bring people out of the Loser tier and therefore reduce the number of underperformers and their bulk effect, but it will generally not improve the SAME. That matters, because in any organization, most people will be exactly at the SAME.

Culture! (and, uh, firing people)

After all of this, we get to emergent social behavior and game theory, and when humans are involved, we tend to call it culture.

The MacLeod tiers are most pronounced in the lawful-evil rank culture that values subordinacy over the other two Iron Triangle traits. Rank culture is self-consistent and internally stable, because it gives everyone what they want (comfort to Losers/Team-players, mission to Clueless/Workhorses, self-advancement to Sociopaths/Self-Executives). Still, the organization declines over time, due to SAME Drift. If the SAME drops too far, the company will be weighed down by cynical underperformers. By that point, it usually has underperforming and incompetent managers (who protect the incapable below them) as well, and that goes many levels up the chain. It’s ugly, and the most common thing that seems to shock a company out of a low-SAME funk is a serious layoff or restructuring. (In the workplace, promotions and firings are the most important aspects of “the culture”. The rest is distraction.)

Strategically, layoffs are hard to get right. A big layoff provides a shock (that can be desirable or not) but the company can recover, if there’s a well-communicated strategic reason for the change. A series of small layoffs destroys morale; people realize that their jobs are tentative and stop caring. It’s always better to do one big one, but this requires (for the executives deciding whom to lay off) compiling a large amount of knowledge without tipping anyone off to what’s about to happen. The biggest problem with layoffs, as practiced, is that the proper way to do them is to cut complexity as well as people. If you cut people but try to perform all the same operations, you’re just going to burn out an already-shaken team. However, companies usually don’t want to cut complexity because, for every inefficient process or unnecessary recurring commitment they have, there’s usually someone who likes it being there. Also, cutting complexity often means that good people (whose work areas happen to be in unprofitable departments) are let go, and no one likes that. The intended strategy often becomes, instead, to cut people first, in one efficient hack, then move them around in a way that cuts complexity. (The latter part rarely happens, leaving a skeleton crew to do just as much work as the larger set did.) This is cut-then-shuffle is only remotely feasible if the lowest-performing people are the ones let go. However, it’s pretty much impossible, from the top, to identify low performers. Can a company reliably figure out who its low performers are without political corruption? No, not really. But it can generate a bunch of meaningless numbers (or a ranked ordering) and trick itself into believing in them.

This is where “stack ranking” (or “top grading”), originated by Jack Welch, beloved by McKinsey, and now used at most technology companies, comes into play. Stack ranking is a recurring layoff, dishonestly packaged as being performance-based. Microsoft used to give 7% of employees the dreaded “5” rating, and Google’s “2.8/2.9″ (given to 3-5 percent, depending on economic circumstances) had the same effect, but there are many more examples of this. In some regimes, the same percentage on each team gets nicked. More often, it’s based on the macroscopic performance of each division, department and team. This leads to the Welch Effect: in a discretionary termination (i.e. not one forced by business events, such as a plant closing) the people most likely to be let go are junior members of underperforming teams. This is suboptimal because those are usually the people least responsible for that team’s underperformance. I can make 20 different arguments, each in 20 different ways, but the point is that stack-ranking doesn’t actually get rid of low performers. It gets rid of people pretty randomly, pisses a lot of people off, and eventually leads to a rash of political behavior. It certainly doesn’t do the proper job of a layoff, which is to reduce complexity. (It increases complexity, because of all the political behavior and improper favor-trading that goes on.) It does achieve one thing: it shatters the SAME. The MacLeod Losers are shocked either into working harder (Clueless) or getting better at politics (Sociopaths). That sense of equilibrium is gone.

The above is something management consultants love to do, because it creates toxic (and, from above, probably humorous) drama in a company where they don’t have to work. The MacLeod rank culture, in which following orders is enough to keep a person in place, disappears. It’s replaced by the chaotic-evil tough culture (named after Jeffrey Skilling’s proud admission, “we have a tough culture at Enron”). While the rank culture valued subordinacy over the other Iron Triangle traits, the tough culture values dedication. Managers aren’t fully trusted: some percentage of them is usually also thrown out each year, as well. It doesn’t matter much what you’re doing; you just need a reputation for being a hard worker and not a “piker”. Hours get long: 10- and 12-hour days become the norm. Busywork is tolerated because the deluge of unimportant but time-consuming tasks “weeds out the weak”. When someone seems to favor family or outside hobbies over the job, and stops working long hours, the knives come out, even if that person’s more productive and efficient than anyone else.

Typically, a company will vacillate between the lawful-evil rank and chaotic-evil tough cultures. Rank culture is the internally stable but slowly-declining arrangement. When its failings attract executive or shareholder attention, it moves toward a tough culture. Over time, as some people (the new MacLeod Losers) get tired of working so hard, and others (the new MacLeod Sociopaths) figure the new system out, and they realize there is personal benefit in giving protection against it, the organization slides back into a rank culture. The ones who can win control over the harsh, high-stakes performance appraisal of the tough culture (presented as an impartial meritocracy, but as prone to manipulation as a rank culture’s system) will typically be the new holders of rank within a couple of years.

Those two cultures are the ugly cultures I’ve called “evil” because they’re unpleasant to work in, inefficient, and generally deprive shareholders (of a performant organization) as well as non-executive employees (of a decent work-life and of career support). There are two good cultures. The chaotic good culture is the self-executive culture, which favors strategy over the other two Iron Triangle traits. I’ll get back to that. The lawful good culture is the guild culture, which favors a balance in the three Iron Triangle traits. Remember how I said that there was no way a person could have all three traits? Well, I lied, sort-of. I mentioned the protégé concept in order to discuss exactly this. In the idealized guild, all of the new entrants are protégés, and a balance of the three Iron Triangle traits (subordinacy being conditioned on the promise of a great career in the future) is possible. Rather than a pyramid, the shape of the professional structure is an obelisk. The grandmasters and masters tutor the journeymen and apprentices. You don’t have “Sociopaths” and “Losers”; you just have the experienced lifting up the neophytes. Because most or all of the apprentices and journeymen will be promoted, they don’t need to play against the organization in order to have careers, as they would in a pyramidal structure. It’s a nice idea, and it actually works. The problem is that it typically can’t grow very fast. The guild culture is brittle against rapid expansion or contraction, and seems not handle change or chaos very well in general. It also devolves into mean-spirited behavior (see: “big law” and academia) when the guild system’s no longer supported by economic conditions, and when the lack of prospects for the up-and-coming leads to generational conflict. Then, it devolves into a tough culture due to internal scarcity, followed by a rank culture. I don’t think we’re going to see new guild cultures in the 21st century. In fact, we might see some more of the existing ones fall apart.

We’re left with one culture that might work: the self-executive culture. Valve’s open allocation is an example of this. Not only does it encourage (rather than punishing) self-executive behavior, but it seems to mandate it. Just taking orders isn’t a viable career strategy, because it’s not clear who has the authority to give orders. People can’t use “landed on a bad project” to justify mediocrity, because they picked their projects. I’ve written a ton about this already. It really is the only non-imbecilic way to build a software company.

Breaking the Iron Triangle?

We’re now ready to discuss software methodologies.

“Agile” is an attempt to break the “waterfall model“. While there isn’t a guaranteed equivalence, “waterfall” often accompanies a rank culture, because in a rank culture the decisions are made from on high and flow downhill, rarely being opposed or questioned. How do people develop software in a rank culture? By following orders. A few higher-ups make the important decisions, and the halfway-checked-out MacLeod Losers implement. The result is low-quality software and sluggish response to change. In many industries, the creative ossification that follows a rank culture will take decades to slow it down to an unacceptable level. In software, that happens much faster, because programmers tend either to be engaged or useless. So this tendency of rank cultures toward underperformance is more of an emergency. The wrecking ball that is often used to crack a rank culture is often given the name of “Agile”.

There’s good and bad in Agile, whose stated purpose is to remove the impediments and communication breakdowns that rank-culture/”waterfall” development creates (and that become excuses for slacking). Scrum, to take an example, actually forces the “product owner” to prioritize tasks, which does increase coherency. My problem with “Agile” is that it doesn’t go far enough. Typically, it’s still business-driven engineering, which means that the major problem (the passengers flying the plane) hasn’t been fixed. Saying, “We should still do business-driven programming, but let’s launch something every 2 weeks” is like saying “I want to get shot in the head, but by a buxom blonde who wears an eye patch.” Personally, I’d rather just not get shot in the head. If you’re doing business-driven engineering, then Scrum is very likely to be an improvement; but the most talented programmers would much rather work in an engineer-driven firm.

“Engineer-driven” doesn’t necessarily mean open allocation. Google is engineer-driven (and that explains much of its success) but uses closed allocation. It’s a step in the right direction, but not (I would argue) enough. Now, I’ll admit that it’s quite possible that many “Agile” methodologies are compatible with (a) engineer-driven development and even (b) open allocation. I just haven’t seen it play out that way. When “story points” and “iteration planning” and all that other heavyweight stuff comes out, it just becomes a new structure for routing tickets (generated by the business) to engineers who are presumed to be interchangeable. If there are malefactors in view of this, it can also be abused for performance appraisal and professional extortion. They will become the new holders of rank.

Well-intended engineers and middle managers often like Agile because it shakes up the “waterfall” model of the rank culture. At least in theory, the team “comes together” (in a military’s sense of the word) and becomes a primary driver, increasing (at least) the autonomy (self-executivity?) of the group. The problem is that malefactors (true sociopaths) also like it. They can use Agile’s machinery to create a new tough culture. That’s bad for everyone, because tough cultures settle into worse rank cultures than those they emerged out of. Of the four workplace cultures, tough cultures are the most dysfunctional, because the political behavior they incentivize creates complexity (often long-lasting) while the organization is losing (firing) people. Rank cultures generate slacking and ambivalent zombie-shuffling, but tough cultures encourage land-mine-setting and in-fighting.

I would not go so far as to say that “Agile” methodologies will create a tough culture. At least, relative to the sclerotic dysfunction that inexorably follows from business-driven engineering, there are good ideas in the “Agile” movement. My argument is that they can be used to that end. That doesn’t make Scrum and Kanban and XP necessarily bad, but I would call them dangerous. As soon as fucking “story points” pop up in a performance review, get rid of them or your organization will soon die.

Self-executivity

What makes the self-executive culture so much better than the others? After all, might its rarity suggest that it’s not sustainable? Well, I don’t know enough to vouch for open allocation outside of software. I’m obviously not an authority on how to run hospitals or overseas ink factories. I’ll stick to what I know, and that’s software engineering. Software is convex work, meaning that the difference between nonperformance and mediocrity is smaller than that between mediocrity and excellence (“10x” performance). Not all work is like that. For many tasks, mediocrity is just fine and excellence is not much better, but nonperformance is catastrophic. That’s called concave work, because the input-output curve is concave down.

Concave work is easier to manage. Why? Because a manager wants to (a) maximize average return, but (b) is subject to limits on risk. With concave work, the region of lowest risk (lowest first derivative) is at the high-performance plateau. Thus, removing risks will enhance performance. With convex work, the opposite is true. The low-risk plateau is at zero. High performance and risk are, in that case, positively correlated. You want people to take as much creative risk as they can afford. You often need it if you want to remain competitive.

In a self-executive workplace, where people are trusted (and, indeed, required) to manage their own direction in the company, is the Iron Triangle broken? Well, let’s look at each of the three Iron Triangle traits. Self-executive cultures excel at strategy because they distribute that responsibility (for deciding what is worth working on) to all workers, rather than relegating important decisions to a sheltered few (who are showered in information, almost all of it false, from the rest of the organization). They certainly inspire dedication, as people throw passion and creativity into the process of proving (or refuting) their ideas. Those two traits are covered. What of the third, subordinacy? Is open allocation, designed around the principle of eliminating needless subordination, going to succeed under that lens?

It doesn’t matter. Subordinacy is about how a person resolves conflicts of interest between herself and the company that emerge when the company plays against her personal or career needs. In a self-executive firm, that doesn’t happen. The conflict never exists.

Doing great work ought to be a “double bottom line”, multilateral victory: it helps the company and the individual to do great things. Self-executive cultures don’t quibble with the question of how some unnecessary conflict of interest is handled by a person, which is what subordinacy is about. They render it irrelevant, by trusting people to manage their own careers and creative energies. This removes the focus on subordinacy and redirects it to something far more important, and something that can only be assessed in a person who’s given some real freedom.

What is that more important “something”? Integrity.

Open allocation doesn’t really “break” the Iron Triangle. It renders it meaningless, and that’s good enough.

Cheap votes: political degradation in government, business, and venture capital.

I’ve written a lot about how people in the mainstream business culture externalize costs in order to improve their personal careers and reputations, and the natural disconnect this creates between them and technologists, who want to get rich by creating new value, and not by finding increasingly clever ways to slough costs to other people. What I haven’t written as much about is how these private-sector social climbers, who present themselves as entrepreneurs but have more in common with Soviet bureaucrats, managed to gain their power. How exactly do these characters establish themselves as leaders? The core concept one needs to understand is one that appears consistently in politics, economics, online gaming, and social relationships: cheap votes.

Why is vote-selling illegal?

First, a question: should it be illegal to buy and sell votes? Some might find it unreasonable that this transaction is illegal; others might be surprised to know that it wasn’t always against the law, even if it seems like the sort of thing that should be. Society generally allows the transfer of one kind of power into another, so why should individual electoral power be considered sacred? On theory alone, it’s hard to make the case that it should be. 

I’ll attempt to answer that. The first thing that must be noted is that vote-buying matters. It increases the statistical power of the bought votes, to the detriment of the rest of the electorate. On paper, one vote is one vote. However, the variance contribution (or proportion of effect) of a voting bloc grows with the square of its size. In that way, the power of a 100-person, perfectly correlated (i.e. no defections) voting bloc is 10,000 times that of an individual. 

Let’s give a concrete example. Let’s say that the payoff of a gamble is based on 101 coins, 100 white and one black. The payoff is based on the heads flipped, with each white coin worth $1 and the black coin worth $100. The total range of payoffs is $0 to $200, and the black coin will, obviously, contribute $100 of that. So does the black coin have “half of” the influence over the payoff? Not quite; it has more. The white coins, as a group, will almost always contribute between $30 and $70– and between $40 and $60, 95 percent of the time. It’s a bell curve. What this means is that whether a round will have a good payoff depends, in practice, almost entirely on the black coin. If it’s heads, you’ll almost never see less than $130. If it’s tails, you’ll rarely see more than $70. The white coins matter, but not nearly as much, because many of the heads and tails cancel each other out. 

Both the white and black coins have the same mean contribution to the payoff: $50. However, the variance of the single black coin is much higher: 2500 (or a standard deviation of $50). The white coins, all together, have a variance of 25, or a standard deviation of $5. Since variance is (under many types of conditions) the best measure of relative influence, one could argue that the black coin has 100 times the mathematical influence of all the white coins added together, and 10,000 times the influence of an individual white coin. 

These simplifications break down in some cases, especially around winner-take-all elections. For example, if two factions are inflexibly opposed (because the people in them benefit or suffer personally, or think they do, based on the result of the election) and each has 45% of the vote, then the people in the remaining 10% (“spoilers”) have significantly more power, especially if something can bring them to congeal into a bloc of their own. That is a commonly-cited case in which individual, generally indifferent “swing” voters gain power. Does this contradict my claim about the disproportionate power of voting blocs? Not really. In this scenario, they have disproportionate decisive effect, but their power is over a binary decision that was already set up by the movement of the other 90%. 

Moreover, it’s improbable that the people in that 10 percent would form a bloc of their own. What prevents this? Indifference. Apathy. They often don’t really care either way about the matter being voted on. They’d probably sell their votes for a hundred dollars each. 

In quite a large number of matters, specific details are too boring for most people to care, even if those issues are extremely important. They’d much rather defer to the experts, throw their power to someone else, and get back to their arguments about colors of bikesheds. Their votes are cheap and, if its legal, people will gain power or wealth by bundling those cheap votes together and selling the blocs.

So why is vote-selling illegal? It causes democracy to degenerate (enough that, as we’ll see, many organizations eschew democracy altogether). The voters who have the most interest in the outcome, and the most knowledge, will be more inclined to vote as individuals. Though they will correlate and may fall into loose clusters (e.g., “conservatives”, “liberals”) this will tend to be emergent rather by intent. On the other hand, the blunt power of an inflexible voting bloc will be attained by… the bought votes, the cheapest votes, the “fuck it, whoever pays me” set. The voting process ceases to reflect the general will (in Rousseau’s sense of the concept) of the people, as power is transferred to those who can package and sell cheap votes– and those who buy them. 

Real-life examples

Official buying and selling of votes is illegal, but indirect forms of it are both legal and not uncommon. For example, over ninety percent of voters in a typical election will give their vote, automatically, to the candidate of one of two major political parties. These candidates are usually chosen, at this point in history, through legitimate electoral means: the party’s primary. But what about the stages before that, as incumbents in other offices issue endorsements and campaign checks are cut?

Effectively, the purpose of these parties is to assume that cheap-vote congealment (and bloc formation) has already happened, tell the populace that it’s down between two remaining candidates, and make the voters feel they have a choice between two people who are often quite very similar in economic (in the U.S., right-of-center) and social (moderately authoritarian) policies while differing on superficial cultural grounds (related to religion in a way that is regional and does generalize uniformly across the whole country). The political parties, in a way, are the most legitimate cheap-vote aggregators. They know that most Americans care more about the bike-shed difference between Democratic corporate crooks and Republican corporate crooks– the spectator-sport conflict between Springfield and Shelbyville– than the nuances of political debate and the merits of the issues.

The vote-buying process is more brazen in the media. While expensive and thorough campaigns can’t turn an unlikeable person into a winner, they can have a large effect in “swing states” or close matches. There are some people who’ll be swayed by the often juvenile political commercials that pop up in the month before an election, and those are some of the cheapest voters. The electioneer need not even buy their vote directly; it has already been sold to the television station or radio show (a highly powerful cheap vote aggregator) to whom they’ve lent their agency. 

This is one of the reasons I don’t find low voter turnout to be distressing or even undesirable, at least not on first principles. If low voter turnout is an artifact of disenfranchisement, then it’s bad. If poorer people can’t get to the polls because their bosses won’t let them have the time off work (and Election Day ought to be a day off from work, but that’s another debate) then that’s quite wrong. On the other hand, if uninformed people don’t show up, that’s fine. I don’t get involved in civic activities unless I know what and who I’m voting for; otherwise, I’d be, at best, adding statistical noise and, at worse, unwittingly giving power to the cheap vote sellers and buyers who’ve put their preferred brand into my head. 

All this said, cheap-vote dynamics aren’t limited to politics. In fact, they’re much more common in economics. Just look at advertising. People vote with their dollars on what products should be made and what businesses should continue. A market, just like an election, is a preference aggregator. The problem? No one knows all of the contenders, or could possibly know. As opposed to a handful of political candidates, there might be twenty or two hundred vendors of a product. Quite a great number of them will buy not based on product quality or personal affinity but on reputation (brand) alone. Advertising has a minimal effect on the most knowledgeable (Gladwell’s “Mavens”) but it’s extremely powerful at bringing in the cheapest votes, the on-the-fence people who’ll go with what seems like the least risky choice. 

Venture capital

Maybe it’s predictable that I would relate this to technology, but it’s so applicable here that I can’t leave the obvious facts of the issue unexplored. 

Selection of organizational leadership almost always has a cheap-vote issue, because elections with large numbers of indistinguishable alternatives are where cheap votes have the most power. (A yes/no decision that affects everyone is where cheap votes will have the least power.) Most people see the contests as wholly external, because all the credible candidates are (from the individual’s point of view) just “not me”. Or, more accurately, if no one they know is in contention, they’re not going to be invested in the matter of which bozo gets the tallest stilts. As organizations get large, the effect of this apathy becomes dominant. 

Therefore, it’s rare in any case that selection of people will be uncorrupted by cheap vote dynamics, no matter how democratic the election or aggregation process may be. While some people are great leaders and others are terrible, it’s nearly impossible to reliably determine who will be which kind until after they have led (and, sometimes, it’s not clear for some time afterward). If asked to choose leaders among 20 candidates in a group of 10,000, you’ll see nuisance (by “nuisance”, I mean, uncorrelated to policy) variables like physical attractiveness, charisma, and even order of presentation (making the person who designs the ballots a potential cheap-vote vendor) take a disproportionate effect. This is an issue in the public sector, but a much more egregious one in the private sector, given the complete lack of transparency into the “leadership” class, in addition to the managerial power relationships and the general lack of concern about organizational corruption. 

Corporations (for better or worse, and I’d argue, for the worse) eliminate this effect by simply depriving employees of the ability to choose leaders at all: supervisors and middle managers and executives are chosen from the top down, based on loyalty to those above, and the workers are assumed to be voting for the pre-selected by continuing to work there. The corporation cheapens the worker’s vote, in effect, by reducing its value to zero. “You were going to sell your vote anyway, so let’s just say that the election happened this way.” Unless they can organize, the workers are complicit in the cheapening of their votes if they continue to work for such companies and, sadly, quite a large number do. 

There are people, of course, who are energetic and creative and naturally anti-authoritarian. Such people dislike an environment where their votes have already been cheapened, bought for a pittance, and sold to the one-party system that calls itself corporate management. The argument often made about them is that they should “just do a startup”, as if the one-party system of Silicon Valley’s venture capital elite would be preferable to the one-party system of a company’s management. By and large, it’s not an improvement.

In fact, the Silicon Valley system is worse in quite a large number of ways. A corporation can fire someone, but generally won’t continue to damage that person’s reputation, for fear of a lawsuit, negative publicity, and plummeting internal morale. This means that a person who rejects, or is rejected by, one company’s one-party system can, at the least, transition over to another company that might have a better one party in charge. There is, although not to the degree that there should be, some competition among corporate managers, and that generally keeps most of them from being truly awful. On the other hand, venture capitalists, with their culture of note-sharing, collusion, and market manipulation (one which if it were applied to publicly-traded stocks instead of unregulated private equities, would result in stiff prison sentences for all of them; alas, lawmakers don’t much care what happens to the careers of middle-class 22-year-old programmers) frequently do damage the careers of those who oppose the interests of the group. Most of the VC-era “innovations” in corporate structure and culture– stack-ranking, the intentional encouragement of a machismo-driven and exclusionary culture, fast firing, horrendous health benefits because “we’re a startup”– have been for the worse. The Valley hasn’t “disrupted” the corporate establishment. It’s reinvented it in a much more onerous way. 

So how do the bastards in charge get away with this? The Silicon Valley elite are, mostly, the discards of Wall Street. They weren’t successful in their original home (the corporate mainstream) and they aren’t nearly as smart as the nerds they manage, so what gives them their power? Who gives up the power that they win? Once again, it’s a cheap vote dynamic in place. 

Venture capitalists are intermediaries between passive capital seeking above-normal returns and top technical talent. There’s a lot of passive capital out there coming from people who want to participate, financially, in new technology development. Likewise, there are a lot of smart people with great ideas but no personal ownership of the resources to implement them. The passive capitalists recognize that they don’t have the ability to judge top talent from pretenders (and neither do the narcissistic careerists on Sand Hill Road to whom they trust to their assets, but that’s another discussion) and so they sell their votes. Venture capitalists are the ones who buy those votes and package them into statistically powerful blocs. Once this is done, the decision of a single venture capitalist (bolstered by others in his industry who’ll follow his lead) determines which contender in a new industry will get the most press coverage, the most expensive programming talent, and sufficient evidence of “virality” to justify the next round of funding. 

As programmers, we (sadly) can’t do much to prevent pension funds and municipalities from erroneously trusting these Bay Area investor celebrities who couldn’t tell talent from their own asshole. I’ve said enough, to this point, about that side, and the cheap-vote buying that happens between passive capitalists and the high priests who are supposed to know better. In theory, the poor returns delivered by those agents ought to result in their eventual downfall. After all, shouldn’t people lose faith in the Sand Hill Road elite after more than a decade of mediocre returns? This seems not to be happening, largely because of the long feedback cycle and high variance intrinsic to the venture capital game. Market dynamics work in a more regularized setting, but when there is that much noise and delay in the system, capable direct judgment of talent (before the results come in) is the only reliable way to get decent performance. Unfortunately, the only people with that capability are us, programmers, and we’re near the bottom of the social hierarchy. Isn’t that odd?

So let’s talk about what we can do. Preventing the flow of capital from passive investors into careerist narcissists at VC firms who fund their underqualified friends is probably not within our power at the present time. It’s nearly impossible to prevent someone with a completely different set of interests from cheapening his or her vote. Do so aggressively, and the person is likely to vote poorly (that is, against the common interest and often his own) just to spite the regulator attempting to prevent it, just as a teenage girl might date low-quality men to offend her parents. So let’s talk about our votes.

VC-funded companies (invariably calling themselves “startups”) don’t pay very well, and the equity disbursements typically range from the trivial down to the outright insulting. Yet young engineers flock to them, underestimating the social distance that a subordinate, engineer-level role will give them from the VC king-makers. They work at these companies because they think they’ll be getting personal introductions from the CEO to investors, and join that circuit as equals; in reality, that rarely happens unless contractually specified. They strengthen the feudal reputation economy that the VCs have created by giving their own power away based on brand (e.g., TechCrunch coverage, name-brand investors). 

When young people work for these VC darlings under such rotten terms, they’re devaluing their votes. When they show unreasonable (and historically refuted) trust in corporate management by refusing to organize their labor, they are (likewise) devaluing not only their political pull, but the credibility and leverage of their profession. That’s something we, as a group, can change. We probably can’t fix the way startups are financed in the next year; maybe, if we play our local politics right and enhance our own status and credibility, we’ll have that power in ten. We can start to clean up our own backyards, and we should. 

Sadly, talent does need access to capital, more than capital needs talent. The pressing needs of the day have given capital, for over a century, that basic supremacy over labor: “you need to eat, I can wait.” But does talent need access to a specific pool of capital controlled by narcissists living in a few hundred square miles of California office park? No, it doesn’t. We need money, but we don’t need them. On the other hand, if the passive investors who provide the capital that fuels their careers even begin to pay the littlest bit of attention, the VCs will need us. After all, it’s the immense productive capacity of what we do (not what VCs do) that gives venture capital the “sexiness” that excuses its decade-plus of mediocrity. Their ability to coast, and to fund suboptimal founders, rests on the fact that no one is paying attention to whether they do their jobs well, the assumption being that we (technologists) will stay on their manor, passively keeping our heads down and saying, “politics is someone else’s job; I just want to solve hard problems.” As long as we live on the VCs’ terrain, there is no way for passive investors to get to us except through Sand Hill Road. But there is no reason for that to continue. We have the power to spot, and to vote against, bad companies (and terrible products, and demoralizing corporate cultures) as and before they form. And we ought to be using it. As I’ve said before, we as software engineers and technologists have to break out of our comfort zones and (dare I say it?) get political.

Never relocate unpaid

Someone asked me, a few months ago, if he should take a Silicon Valley (actually, San Francisco) job offer where the relocation was a “generous” $4,000. I told him to negotiate for more and, if the company wouldn’t budge, to decline. For an adult, that’s not a relocation package. That’s half-assery. 

I won’t get too particular on the details, but this person lived on the East Coast and had children. For an adult of any kind facing a cross-country move, $4,000 is not a generous relocation package. It’s downright pathetic. Movers don’t work for equity. A full-service move for an adult, with a family, costs at least twice that number. When you move for a job, your employer is still going to expect you to start as soon as possible and be 100% on-the-ball in your first weeks. You can’t take on a self-move and start a new job properly. If you do have that kind of energy, it means you’re the alpha-trader type who should be on Wall Street, not taking employee positions at startups. For the 99.99% of us who are mere mortals, taking on a self-move means you’ll be slacking at your job in the first weeks and, while slacking might be OK when you’re 3 years in and just waiting for something better to come along, it’s not a way to start a job– especially not a job you moved across the country to take.

In addition to the small size of that package, I think lump-sum relocations are a bad deal in general. I think they fail for both sides. They’re bad for the employee because, in addition to losing a chunk of it to taxes, the lump-sum arrangement leaves it to the employee to make arrangements and haggle. The employer, however, risks getting the amount severely wrong, while not getting the major benefit of a relocation, which is a 100%-focused employee with high morale, because the employee still has to haggle with movers and manage minutiae. A good employer, knowing how toxic moving stress can be, will solve every niggling, stupid little problem that comes up in the process of relocation. They’ll have a trusted moving company, rather than expecting the employee to make the calls and compare costs. (If the moving company’s client is the company, rather than you, they’ll do a good job because they want repeat business– a concern that isn’t there with “man with a van” outfits.) They’ll manage the flight and, with a high-quality placement agency involved, have an interview per day lined up for the spouse until he or she gets a good job. If you’re moving internationally, you’ll get an extra week or two of vacation (and you won’t have to ask for it) each year and they’ll have tax equalization already worked out. Why? Because genuinely good employers (who are rare these days) want their best people on, 100 percent, rather than phoning it in at their jobs because they’re fighting little piss fires in their personal lives.

I know that relocation is derided as an “old-style perk” in the Valley. If you broach the subject, you risk seeming entitled, high-maintenance, and worst of all, old. Most companies in the Valley don’t fall under the “good employers” qualification. Most of these Valley “startups” are just long-shot gambles running on a shoestring budget, and their real purpose isn’t to build businesses but to try out middling product managers (called “CEOs” of semi-existent, non-autonomous companies) for promotion into the investor ranks (EIRs or associates or partners at VC firms). The reason they can’t pay or relocate properly is that, while investors are handing these half-companies pennies and saying “Humor me”, even their own backers don’t trust the companies enough to take a real risk and give them the resources that’d enable them to pay real salaries and benefits. This raises the question, for the employee: if the investors aren’t willing to bet on that business, then why should you?

Anyway, this person didn’t heed my advice, took the job anyway, left a few months later and, from the titles and prestige of the following company, the next move appears to have been a demotion. I can’t speak for what happened or whether my perception (based on LinkedIn) of a demotion is correct. I generally cut ties with people who make bad decisions, so I haven’t heard his side.

California, here we come

So, there’s an epidemic of Shitty Relo (or even nonexistent relo) in Silicon Valley and it’s California arrogance at its finest. I need to address it, for the good of society. The mythology justifying it is that California is such a wonderful place to live, with its traffic and absurd real estate prices and brogrammers, that a $2,500 relocation package for an adult (meaning, here, 25+ and no longer allowed to live without furniture, because it’s just not socially acceptable to sleep on a hand-me-down mattress with no bed) is to be taken as a perk rather than a fuck-you. 

This culture of cheapness is disgusting. One time a couple of years ago, I spoke to a startup about a supposedly “VP-level” role and, when it came time to discuss an on-site interview, they asked if I could apply to another company (that would cover travel costs) and “piggyback” their interview process on the same day– that is, go to them in the evening after an all-day interview with another company– sparing them the cost of flights and a hotel. At that point, I stopped returning their calls, because I knew that if they couldn’t spring for airfare, they wouldn’t be willing or able to do the right thing when it came to relocation, so there was no point in continuing. 

Frankly, I think that the “we don’t do relo” policy is short-sighted if not idiotic. I checked my almanac to be sure, but the world is very big. No metropolitan area has anywhere close to a dominating share of the global talent pool. The Bay Area has some impressive people (and a much larger number of not-impressive people who still command impressive salaries) but if you’re serious about competing for talent, you just can’t restrict yourself to one geographic area. Not in 2014. Either set yourself up to be distributed (which is hard to do) or man the fuck up and pay for talent and pay for it to move. Otherwise, you aren’t serious about winning and you deserve to lose.

Oh, and another thing…

Then there is the matter of relocation clawbacks. Many companies put a stipulation on a relocation package that it must be repaid if the employee leaves within a certain timeframe. On what moral grounds is this OK? Did that employee not suffer the costs of relocation, either way? Do movers reimburse a person who relocated for a job that turned out to be a stinker? Of course they don’t, because they still did the work and that would be ludicrous. Almost no one joins a job expecting to leave in a year, which means people only will do so if things get really shitty. Why make it worse, by imposing a ridiculous penalty, if things go bad? Chances are, if the employee is willing to leave a company in the first year, that the company is partially at fault. The purely opportunistic “job hopper” is a hated straw man for employers, because the reality is that at least 75 percent of employers are just shitty (and bad at hiding it, so savvy people leave quickly). I don’t know why it’s considered a virtue to waste one’s life by investing in an employer that isn’t invested in one’s own career. It’s not. 

Clawbacks aren’t usually a big deal (it’s not hard to stay at a company for a year) but they send a strong signal: we employ at least one person who enjoys shitting in places where fecal matter doesn’t belong. That clawback clause didn’t appear by accident. It’s not likely that cosmic rays hit the hard drive where the contract template was stored and just happened to put additional words there. Someone in that company, at some time, made the decision to include a clawback clause. And I’m sorry, but the people who try to earn their keep by shitting on things should be fired. Companies are complex beasts and need a wide variety of services to maintain and grow them. What they don’t need are people who indiscriminately shit on things because it amuses them to leave festering piles of dookie all over the company. If I wanted to see creatures shitting indiscriminately, I’d go to the zoo. The issue with a relocation clawback isn’t the economic risk for employee, but the fact that the company actually retains someone who took the time to put that garbage in the contract.

The bigger problem

In this essay, I’ve Solved It with regard to relocation, because it actually is a simple issue: if you’re a company, play or go home. If you’re a prospective employee and you’re offered an inadequate relocation package, turn the job down. If the company was serious about winning, they’d give you what you need to pull off the move properly. These, “oh yeah, we offer $2000″ fly-by-night startups aren’t serious about winning. They don’t need top talent. What they need are clueless, naive, true believers who’ll throw enough hours and youthful enthusiasm behind a bad idea to continue the founders’ campaign to defraud investors. It’s best if those true believers don’t have families, because their spouses might “disrupt” (I had to use that word) them with questions like, “why are you working more than 40 hours per week, at a company that only gave you 0.02% in equity?” It’s best if they’re under 27 and don’t mind taking on the insane risk of going into an extremely expensive city without an offer of temporary housing.

Of course, there’s one exception. If you will have at least 20 percent equity in the company, you might consider taking on the risk of an unpaid relocation. That’s right, 20%. You have to be partner-level for it to make sense, and prior to external investment, anything less than 20% is not partner level. (After external investment, full relocation should be a given for all key players.) Don’t take partner-level risk for an employee-level role. It doesn’t engender respect; it shows weakness. 

So what’s the bigger issue? What I’ve noticed about such a large number of startups, in the Valley and elsewhere, is that they’re disgustingly cheap. Cheap things are usually of low quality. Exceptions exist, but they’re rare and if your business strategy is based on cheapness, you’ll fail, because opportunities to buy something of high quality at a low price are usually far too intermittent to build a company on them. Also, one thing you learn in technology is that low-quality components often corrupt the whole system. If you pour a cup of wine in a barrel of sewage, you have a barrel of sewage. But if you pour a cup of sewage in a barrel of wine, you also have a barrel of sewage. Most VC-funded companies are launched with absolutely no understanding of this principle. They’re designed to be as stingy as possible in the hope that one “home run” company will emerge from the chaos and pay for the hundred failures. Occasionally, the idea is so good that even terrible health benefits and sloppy HR and closed allocation won’t block a success. These opportunities only emerge a few times in each generation, but they do exist. In general, though, a company designed poorly and with low-quality components (management, policies, mission and founding principles) will just be a loser. VCs can afford to generate hundreds of losers because they’re diversified. Rank-and-fire employees can’t. 

In reality, a company succeeds not by being as cheap as possible, but focusing on the delta. What are you paying, and what are you getting? Cost-minimization usually leads to low quality and a minuscule if not negative delta. A new Volkswagen GTI for $20,000 is a great deal. A beat-up clunker unlikely to last a year isn’t worth $1,000, and is likely to cost more in headaches and maintenance than buying a quality car. In general, both extremes of the price spectrum are where the worst deals are found. The high end is populated by Veblen goods and dominated by the winner’s curse, while the low end’s psychological and technical advantages (some purchasers will always buy the cheapest option, and sometimes this is by regulation) to the supplier render it protected, often allowing quality to fall to (or below) zero. In hiring, just as with commodity goods, this is observed. Overpaid executives are often the most damaging people in an organization, and paying them more doesn’t improve the quality of people hired; on the other hand, the desperate employees willing to take the worst deals are usually of low or negative value to the business. 

The actual “golden rule” of success at business isn’t “buy low, sell high”, because opportunities to do so are extremely rare, and “carrying costs” associated with the wait for perfect deals are unaffordable. Instead, it’s “maximize the spread between your ‘sell’ and ‘buy’ price” or, for a more practical depiction that sounds less manipulative, “sell something that is more than the sum of its parts”. With some components, the right move is to buy high and sell higher. For others, it’s to buy low and sell less-low. For example, in software, you probably want to take the “buy high and sell higher” strategy with employees. A competent software engineer is worth $1 million per year to the business, so it’s better to hire her at $150,000 (which, in current market conditions, is more than enough to attract talent, if you have interesting problems to solve) than to hire an incompetent at any salary. Talent matters, which means that to spend on salary and benefits and relocation is worth it. The way you win in software is to buy high and sell higher. That said, “buy high” also means you have to buy (in this case, to hire) selectively, because you can’t buy many things if you’re buying high. Unfortunately, people who have sufficient talent to make those calls are rare (and most of us are irrelevant bloggers, not investors). MBA-toting VCs like cheapness because, without the ability to assess talent and make those calls, the scatter-shot approach is all they have. 

I think it’s important, before I go further, to focus on the difference between genuine constraint and stupid cheapness. Before venture capital got involved in small-business formation to the extent that it has (largely because bank loans now require personal liability, making them a non-starter for anything with a non-zero chance of failure) most emerging firms were legitimately limited in their ability to hire more people. “Lean” wasn’t some excuse for being mean-spirited or miserly; it was just the reality of getting a company off the ground. If the constraints really exist, then play within them. If you can barely afford salaries for your three founders because you’re bootstrapping on scant consulting revenue, then maybe you can’t afford to pay their relocation costs. The problem with the VC-funded cheapness is that those constraints really don’t exist. “We can’t afford $X” is predicated on “We only have 100X and need to hire 100 people” which is predicated on “We’re going to hire such mediocre people that we need 100 of them to get the job done”, and that mediocrity wouldn’t be such an issue if $2X were offered instead. If $2X were offered, the job might be feasible with 15 people, but the VCs aren’t able to assess talent at that level, nor pick founders who can, so it’s easier for that class of people to just pretend that talent differentials among engineers don’t exist and implement a closed-allocation MBA culture. 

Mindless, stupid cost-cutting isn’t limited to startups. Large corporations show this behavior, as well, and it’s easy to explain why it’s there. Those who can, do. Those who can’t, evaluate and squeeze. This evaluation process can take many forms, such as micromanagement; but a complementary form is the senseless and mean-spirited penny-shaving of the modern corporate bureaucrat (“I don’t think you need that!”) It takes no vision to “cut costs” in a way that, in 99% of cases, actually externalizes costs to somewhere else (low-quality technology, morale problems, environmental impact). Penny-shaving is what stupid overpaid fuckheads do to justify their executive positions when they don’t have the vision to actually lead or innovate. They cut, and they cut, and they cut. They get good at it, too. Then they start asking questions like, “Why are we paying full relocation for these experienced programmers, when there are a bunch of starry-eyed 22-year-olds with California dreams?” Six months later, that’s answered by the cataclysmic drop in code quality, which is starting to bring major pain to the business, but the cost-cutting idiot who had the idea has already gotten his promotion and moved on to fuck something else up.

When companies balk at the concept of offering a proper relocation, the message it sends to me is that they’re in the business of squeezing zero-sum petty wins out of their employees, rather than vying for actual wins on the market. 

Conclusion

Most software engineers don’t know what they’re getting into when they enter this industry, and spend more time than is reasonable being a loser. I can’t claim innocence on this one. There were jobs where I worked for shitty companies or inept managers or on pointless projects for a variety of reasons that seemed to make sense at the time, but were almost certainly errant. Don’t make that mistake. Don’t be a loser. The good news is that that’s rather easy to control. One can’t change one’s level of talent or influence the large component that is truly luck, but avoiding loserism has some straightforward rules. Don’t work with losers. Don’t work for losers. (Don’t fight against losers either. That’s a mistake I’ve made as well, and they can be vicious and powerful when in groups.) Don’t make excuses for people who don’t seem to be able to get it together and play to win. Stick to the people who actually want to achieve something and will bet big on the things that matter, not the 95% of VC-funded founders and executives just trying to draw a salary on a venture capitalist’s dime (despite all that paper-thin bullshit rhetoric about “changing the world”) while squeezing everyone else at every opportunity. 

Unless you’re a founder and the resources simply don’t exist yet, never relocate unpaid. If the company actually sees you as a key player, and it cares about winning more than zero-sum cost-cutting, it will solve your moving problems for you, so you can get to work in earnest on your first day. 

If you’ll ever die, don’t apply

Some day, I will die. So will everyone I know, everyone who has read this post, and everyone they know. I’m probably more than a third of the way there. I’m not especially afraid of it. Actually, I’m curious. Though I don’t subscribe to any religion or believe in anything resembling an anthropomorphic god or gods, I think it’s more likely than not that something interesting will be on the other side. (If I’m wrong, I won’t know.) All that said, I’m going to die some day, and even before that I’ll experience involuntary change (aging). It’s not an easy thing to forget, and it’s not a thing that I should forget. There’s no virtue in ignorance. And, despite not having any specifically religious faith, I’m pretty sure that what a person does in this life matters. Something in me is convinced that the ultimate reality of human existence is somewhere between the dichotomous nihilisms of materialist reductionism (existence ends fully at death, so all will be erased) and mainstream religion (only the next world matters). Perhaps that is why Buddhism (and its tendency toward middle paths on such questions) appeals to me more than the mainstream interpretations of the Abrahamic faiths (in particular, Christianity). The assertion that believing in the existence of a certain being (who left no evidence of his existence) is the key variable in separating people out for eternal bliss or agony is, in truth, far more nihilistic than most atheistic beliefs.

I’m not a nihilist; whatever this life is, it’s not to be thrown away. I conceive of myself, however, as a realist. I’m not immortal, and even though I haven’t really begun to age (I’m only 30) in any painful or even inconvenient way, I’m increasingly aware of the fact that I will die. People who are young and healthy one year are dead in the next. I’ve seen it happen too many times.

I’ve written at length about Silicon Valley’s perverse bubble culture and its obsession with youth. There isn’t a meaningful physiological difference between a 22-year-old and a 35-year-old that has any business importance. I think, however, I understand what Silicon Valley’s youth obsession is actually about: not age, but immortality. No one is immortal, but some people think they are. They haven’t learned the value and price of time yet. Nothing bad has happened to them yet. They still conceive of themselves as invulnerable.

These venture capitalists don’t just want to fund 22-year-old white males. They fund a specific kind of 22-year-old, white males: people who can trick themselves into living outside of time (and, more practically, throwing their time and health away, often at a pace of 100 hours per week, for someone else’s benefit) because they haven’t been reminded yet, by life, that they very much live in time.

The difference between the 35-year-old and the 22-year-old is not personal health but experience. The 35-year-old has had parents, aunts, and uncles get old, get sick, and die. He’s seen college classmates (and more than an unlucky one or two) lose the cancer lottery and die at a ridiculously young age. He realizes that time brings involuntary, unexpected, and sometimes painful change, and that a year of life spent “paying dues” or enriching ingrates is a permanent loss. Most 22-year-olds haven’t learned those lessons yet, and those who have are unfundable in the current Valley.

The “job hopper” stigma and “team player” nonsense of Corporate America, after all, make sense for people who haven’t figured out yet that their time is finite: that the “technological singularity” might not happen in the next 100 years, that “old people” were once as young as them, that they’ll get old and die and that it will always seem too soon. Those who believe themselves to be immortal are appealing to the exploitative overseers. They value the present at zero, convinced of some superior and unending future (one that will never come, except for the politically sacrificial and lucky). They are (for the moment) timeless and therefore without much memory.

I’ve always feared that if humans became technologically immortal, but if we did not succeed in ending scarcity, the first thing that an elite would do would be to create a “zombie” class of people who (like us mortals) lose most or all memory every hundred years or so, lest they acquire the knowledge that enable them to compete with the existing elite. They would continue to die (in effect) but be biologically maintained as peak-of-their-prime adults (to perform work, for others’ behalf) and probably conceive of themselves as immortal. Obviously, that doesn’t exist yet; the technology isn’t there. But culturally, it’s already happening. Of course, indefinite life extension and memory erasure aren’t there. Instead, the old class of immortals (once they become aware of their own mortality, and seek genuine purpose and value, rather than the enrichment of an ingrate elite, out of their work) is discarded and a new one is put in place.

Silicon Valley is for the immortal. If you’ll ever die, don’t apply.

Ambition tournament (more like a large game) in San Francisco on March 23

This post pertains to the Ambition tournament planned for the eve of Clojure/West.

What?:We’ll be playing the card game, Ambition (follow link for rules) using a modified format capable of handling any number of players (from 4 to ∞).

When? Sunday, March 23. Start time will be 5:17pm (17:17) Pacific time. I’ll be going over the rules in person at 5:00pm. You should plan to show up at 5:00 if you have any questions or need clarification, since I’d like to start play on time. 

How long? About 2.5 to 3.5 hours at expected size (6-8 people). Less with fewer people, not much more with a larger group (because play can occur in parallel).

Where? At or near the Palace Hotel in San Francisco. I’ll tweet a specific location that afternoon, around and probably not later than 4:30.

Who? Based on expressed interest, I’d guess somewhere between 5 and 10 people. If only 4, we’ll play a regular game. If fewer, we may cancel and reschedule.

Is there food? We’ll break around 7:00pm and figure something out.

Do I need prior experience with Ambition? Absolutely not. There will be more new players than experienced people. Ambition is more skill than luck, but I’ve also seen brand new players win 8+ person tournaments.

Do I need to be attending Clojure/West to join? No. This isn’t officially affiliated with Clojure/West and you need not be attending the conference to play. It just happens that a lot of the people playing in this tournament will also be attending Clojure/West.

How should I RSVP? “Purchase” a free ticket on the EventBrite page.

Can I come if I don’t RSVP? Can I invite friends? Yes and yes.

Are there any prizes? Very possibly…

Will you (Michael O. Church) be playing? That depends on how many people there are (if this is a home run and gets 12+ people, I’ll be too busy with administrative stuff). I’ll probably sit in the final rounds but I won’t be eligible to win any prizes.

Here’s why Paul Graham (probably) owes me an apology.

What I am about to say here is not based on a hunch. I don’t say this kind of stuff lightly, and I will give evidence.

Additionally, I make no pretense of knowing whether Graham himself participated in the adverse action. I know that people other than him have been given editorial power, and that some have, in the past, displayed serious incompetence, especially with regard to banning of posters. Reckless silent banning (“hellbanning”) is a notorious problem on Hacker News, and the general consensus is that the problem is with Graham’s hired editors, and not the man himself.

However, I believe that I am owed an apology. (If not, I seriously misunderstand the Hacker News comment ranking algorithm, which I believe to be based on age and votes of the comment.) In September, I was tipped-off (anonymously) that my comments were being downgraded in determining their position on the board. I’d suspected this, since I went at one point from several top comments to seeing mine often at the bottom, despite several upvotes.

At first, I didn’t believe that I’d been personally targeted because, while I have been critical of the VC-funded ecosystem (“VC-istan”) I’ve always supported Paul Graham and what he’s been doing. Additionally, I’m a high-quality contributor to the board: top-100 karma, high average karma, well-written comments. However, there did seem to be a change in the ranking algorithm; something flaky was happening. The tipper gave me a way to test whether something wrong was happening: check latency times from Hacker News while logged in, and though an incognito window (“slowbanning”). Sure enough, the 3- to 5-second latencies I’d experienced under my personal account were not experienced in incognito mode. Typical latency for me, when not logged in, is 250-400 ms.

A few years ago, Hacker News made karma ratings invisible. At the time, as I recall, the justification was to prevent runaway behavior whereby popular comments got even more (less deserved) upvotes than ones with mediocre scores. I now tend to think that the change may have been made for a less noble reason: to hide that certain posters were getting (in terms of comment placement) personal penalties. If it were true (and it may not be, and if I am wrong, then I will be the one owing an apology) then it would be extremely damaging to morale, and hiding the fact would be mandatory.

If I were being personally penalized (presumably, in direct retaliation for my criticism of the VC-funded ecosystem) it would be visible by looking at older comments. Why? With HNSearch, one can find the karma rating of any comment older than about a week. (You can, if you wish, check the assertions I am making here.) Additionally, multiple sources have given me that the age penalty on comments is on the order of (2 + t)^-p, where t is the comment’s age (in hours) and p is an exponent variously given between 1.5 and 2; this means that for old threads (t >> 1000 hours) age would, assuming the comments were within days of each other, which they almost always are, be pretty well factored out.

Looking into some high-karma comments, such as 99-point comment 5 months ago, I found strong evidence of a personal penalty. That comment was placed near the bottom, while the top comments on the thread had substantially lower scores. This is not of direct concern to me (few people read 5-month-old threads) but it confirms what I had suspected.

There are 3 possibilities.

  1. (Least likely.) In retaliation for my criticism of the VC-funded ecosystem, Paul Graham has assigned a personal penalty to my comments, causing them to fall to the bottom, even when they are highly rated. If this is the case, I am owed a personal apology by Paul Graham.
  2. (Most likely.) My comments have been personally targeted, but Paul Graham is not the culprit. In this case, Paul Graham should apologize not only to me, but to Hacker News at large, for giving editorial privileges to the incompetent who pissed off a top contributor. Additionally, this person should be dismissed from the editorial role.
  3. (Other.) There’s something I am missing: perhaps an additional complexity in the ranking algorithm not related to comment success (karma) or age– I’ve tested for both. I can’t see what, but I’d be open to an explanation outside of what I’ve covered here. If I am wrong and my comments are not being penalized, then I must offer my apology for the suspicion. It is not one that I developed (much less voiced) lightly, but I cannot for certain guarantee that I am not wrong.

I look forward to learning which of these is the case. If I am not alone in suspecting chicanery, it should be discussed.

My name is cleared.

This came from a very high-ranking person at Google, earlier today. It is posted here with the author’s permission.

Dear Michael,

Your continuing outspokenness, with regard to your time at Google, has come to my attention. After reading over your record in detail, I and many others on the senior leadership team agree that you were poorly managed and inaccurately reviewed. Your performance was strong given the short time you were here, and you showed very high potential for growth.

We find it regrettable that you left Google. Having reviewed your history, we want to impress upon you that we see your experiences as unjust and certainly not reflective on you in any negative way but, additionally, extremely unusual for Google. We hope that you will also see it this way, and not continue to regard it as reflecting any underlying pattern at Google. Had you been under different supervision, we believe that you would have been very successful here. You are clearly a driven, passionate, and talented technologist.

We wish for every person we hire to have a productive and successful career here, and of all the companies where I have worked, Google does the best job of achieving this. However, perfection in management is impossible for any company, especially given our size and the fast-paced nature of technology in general.

We wish you the best of success in your career going forward.

Sincerely,

[Googler]

My name is cleared.

I’m done criticizing Google. On the whole, Google is a great technology company in many ways, and has plenty of exceptional people with whom it was a privilege to work.

It’s time to move on. Back to building.