Silicon Valley’s ____ Problem

Recently, I read an article in the NYT (http://www.nytimes.com/2014/03/16/magazine/silicon-valleys-youth-problem.html) written by a graduate student at Columbia on Silicon Valley’s Youth Problem. I was very pleased to see that a person in tech was writing about problems people in tech face. Kudos to NYT to capturing this important perspective. After reading the article, I felt compelled to write a letter to the author to voice my thoughts.

You can find my letter below.

Hey Yiren,

I just read your article. Powerful stuff. Your article really hit home for me – I recently graduated from Columbia (Lions pride, no pun intended) where I studied computer science. I moved to Washington to work as a Program Manager at Microsoft last fall. Because I felt like I could relate to your narrative, there were a couple of points I wanted to voice which I feel very strongly about.

The problem with “tech” scene today is that it no longer is about technology.  It has devolved into a gold-rush of mass-hysteria led by a throng of wantrepreneurs with little to no regard for Computer Science. Sure, the majority of the miners might know about HTML5 (and that’s as far as they usually know – that it exists),  most have no clue about abstract syntax trees, finite automata, the knapsack problem, relational calculus, machine translation, multicycle MIPS processors, or pretty much anything outside of “programming.”

These are the new faces of tech, spurred on by people such as Peter Thiel who believe all that book-learnin is net detrimental. It is the overly idealistic notion that “all you need is an idea” which plagues the young tech scene.

While I was president of ACM at Columbia, a hackNY fellow and Dorm Room Fund partner during my college years, I became involved in the tech community. Quickly, I realized how one-sided the community truly was for those few who took enough initiative to learn to code. Day after day, I was bombarded with emails after emails from would-be “entrepreneurs” who cared nothing more than instrumenting me as a tool. Since, clearly, if there’s anyone who is going to hit the next jackpot, it’s a hotshot iBanker without any technical prowess and the same hackneyed ideas as the other 10 million iBankers.

Invariably, the onslaught of single-minded “business development experts” sought a technical co-founder to build their social networks for wildabeests. Because a network for wildabeests is the next big (no)thing. Without fail, they generously offered me equity in a company I would single-handedly build as their “co-founder.” They also bribed me with  business connections to this guy their friend knew from Google. Well, he used to work there at least.

While the “entrepeneur” kicked back and drank some coconut water, they expected me to do all the heavy lifting.  It is at this juncture when I ask them if they were truly invigorated by their ideas, why don’t they learn to code themselves? Otherwise, how can they deserve to be successful for something they had no part in creating?

Much like gold prospectors, these wantrepreneurs are merely dilettantes drawn to the allure of outrageous valuations. For if they were truly interested in tech and not simply to cash in on an absurdly inflated market, then they would have studied Computer Science. Because it interested them.

Furthermore, I charge these new faces of tech with not only sloth – although not for lack of ambition – but also with fetishizing the developer culture. Perhaps their most apparent crime is that they are repeat offenders in overusing the word, “hacker.” Often they deem the engineering community as whole as “hackers”, despite lacking all but the most rudimentary skills themselves. Hacker this, open-source that.

On the surface, this might seem to you as a minor offense. But in lumping themselves together with computer scientists, wantrapreneurs conflate “computer science” with fleeting, single-purpose web apps that do little more than read in a user’s input. The new faces of tech have successfully completed the illusion of convincing the general  public that “tech” is little more than an iPhone game.

To be a computer scientist is a right you have to earn, and not simply by becoming a “code ninja” because you wrote an instant-message client in NodeJS. It was only after I toiled through the 11 grad level classes while an undergrad at Columbia when I could call myself a Computer Scientist.

That is why I am personally opposed to the term “hacker.” In my mind, the new guys on the scene are nothing more than charlatans consumed by the promise of fame and fortune. After all, they often the very same people who snickered behind the backs of countless neckbeards, pointing and laughing at them for attending hackathons. Now,  I guess the tables have turned.

Just as one cannot blame a rabbit for scavenging a vegetable patch, I cannot blame the hordes of wantrepreneurs for ravaging the tech scene. The real blame lies on the VCs. In artificially creating value where there is little, VCs have created a hyper-inflated market. Much like the origin of the former financial crisis began when banks began selling portfolios of toxic assets to other banks caught in the real-estate frenzy of  2006, the same market correction is likely to occur when the true book value is uncovered.

Our expectations for “tech” companies FAR outstrip the reality. Whatsapp’s recent acquisition is absolutely LAUGHABLE. Given their current annual revenue stream of 20 million, it will take a millennium to earn their 19 billion valuation. Ultimately, what value is there in a company if not its net profit? A business cannot endure on speculation alone.

When the check books stop balancing, someone’s gotta pay the piper. Someday soon, the world is in for a rude awakening. In part, this is due to the absurd valuations that venture capital companies issue for essentially worthless companies. I hope I have made myself clear that the excessive hype induced by venture capital’s fervor has inflated the entire market and robbed tech of its dignity.

Just like the conquistadors in search of gold ruthlessly plundered the indigenous, the feverishly fanatical mentality of urgency and blind ambition is destructive, albeit in more subtle ways. Usually, the most talented students are the ones who brush aside careers in cancer research to strike it big with flappy-bird. I argue the damage to society alone for the misallocation of talent is more damaging then the loss of life due to colonization. How many more people would be alive today from new cures developed from the Ivy-League graduates that  Goldman Sachs and their Wall Street cohorts swallowed whole? Now, the same could be said for the new Snapchats of the world.

It’s pretty miraculous that the archetypal programmer has transformed from lives-with-mom to runs-a-fortune-500

Lastly, there is great personal damage to individuals caught in the startup whirlwind as well. Classmates of mine with an almost-megalomaniacal conviction for their delusions of grandeur dropped out left and right to pursue dreams little more likely than meeting the tooth fairy. Yet, when their role models such as Peter Thiel applaud their decisions, they don’t realize the incredible opportunities they forgo.

I am in direct opposition to the commonly-accepted notion that learning can only occur outside the classroom. The bar might be low now, but the real, lasting opportunities on the horizon in the world of computer science require a thorough education.

Having taken courses both in and out of the classroom, I firmly believe that online learning is NOT a substitute for an education, no matter how you slice it. Without the pressure to pull all-nighters to finish a problem set, it is nearly impossible to apply oneself to the same extent while working independently. It’s a result of simply human nature – independent learners lack the same accountability which the classroom enforces. Simply posting a few off-hand comments on Hacker News about human computer interaction does not make one an expert on User Interface Design.

That said, I’d be hard-pressed to dispute the value of outside learning outside of the classroom entirely. Outside experience on pet projects is pivotal to the growth of an engineer, and this fact has been noted by tech giants like Google and Microsoft. After all, Github has effectively replaced the resume of a software engineer. However, there are some things that can be learned far easier in class than at home.

It is for this very reason that most undergraduate CS programs completely gloss over web programming as they expect that students are better suited to acquire these skills outside of the classroom. When it comes to fully grasping the concepts of more academically-rigorous disciplines like machine learning, it is vital to be disciplined in one’s approach to learning.

Next year, I will return to the east coast to get a masters at Harvard in the new Computational Science and Engineering program. I firmly believe that Machine Learning is the next frontier and will power the next wave of actually useful software. No more sexting. Way more knowing and predicting. I’m making a $48,000 bet on this, after all.

Feel free to let me know your thoughts at your leisure,

Cole

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“How American Progressivism Overshot its Target”

Over the past several years, my Facebook feed has been increasingly bombarded with an unceasing current of self-righteous internet blog posts criticizing society for its backwardness. Despite considerable temptation, I made a mental calculation that the personal risk of alienating friends with my contrarian views and the professional risk of jeopardizing career opportunities (since Facebook doesn’t exist in a vaccum) was too high for me to stomach.

So, I kept quiet. Yet, after witnessing ignorance masquerading as progressivism time and time again, the ember of silent anger in the pit of my stomach has grown to an inferno. I have reached a tipping point, and I refuse to stay quiet any longer against the tyranny of “progressivism” in the digital age.

Can There Be Too Much of a Good Thing?

In a typical American fashion, ours is a problem of excess. We are so openminded that we have become closeminded to the closeminded. We are so equal that we have become repulsed at the very thought of inequality. After all, the experiment that was America hinged upon on the very idea of equality.

And for a while, our staunch insistence on equality seemed to work – educational reforms meant our children received free public education, universal suffrage meant that women and blacks could vote, and disability reforms meant that the handicap received equal treatment. But just like everything in this world, there is a fine-line between too much and too little – a sweet spot Aristotle called the “golden mean.” And once this threshold is crossed, that much more of a good thing becomes increasingly bad. In our overzealousness for equality, we – as Americans – have overstepped that line.

Equality in an Unequal World

It’s safe to say that the casino of life does not give everyone an equal hand. You have to play with the cards your dealt. One might say that luck is baked into the very fabric of our universe. In fact, quantum mechanics dictates that probabilities forecast the outcomes of events at the lowest level of particle interaction. Extrapolating up by induction, we can see that determinism just isn’t a characteristic of our shared reality.

The problem with luck is that some people have it while others simply don’t. It’s inherently unequal. Sadly, not everyone can win the jackpot, and analogously, the casino of life picks favorites. Be it fame, fortune or good lucks, endowments in life are not equally distributed.

The disparity in allocation is not necessarily a bad thing, either – it is merely a de facto reality. A baby born into the royal family does not deserve his good fortune any more than the baby born into a rural village of Uganda deserves his station in life. The real issue is that the axiom of equality we Americans cling to dear life to is inconsistent with the inherent inequality of our universe. Fundamentally, it simply does not jibe with reality.

The American Identity and the Inalienable Legacy of Equality

As Americans, our shared ideals are tied so closely to our identity that to renounce these cherished virtues is simply un-American. Amongst these values is the inalienable right to equality, built into the framework of our country in the Declaration of Independence. The American identity has been reinforced through patriotism, shaming those who do not espouse the American way. Thus, patriotism as a normalizing force has taken equality past the golden mean.

The Transmogrification of Equality into Entitlement

The problem with ideas taken to an extreme is that they break down at scale. Out of our desperation to cling to the idea of equality for dear life came the transmogrification of equality into entitlement. After all, equality is an inalienable right. Regardless of context, I expect equality, period. Otherwise, you must be bigoted and un-American. Thus, out of the strict dogma of equality, came entitlement.

Unfortunately, unchecked entitlement has far-reaching psychological side-effects in the collective consciousness. The most injurious of these side effects is that entitlement undermines the notion of cause and effect. People begin to think, “why should I receive less than someone who works twice as hard as I do when we are inherently equal?” It also leads to an unhealthy degree of self-acceptance since our faults are no longer our own, but yours to accommodate.

In this age of thisisthinprivilege.tumblr.com, we subscribe to an aggressive predetermination philosophy to absolve us of our shortcomings. Because I accept myself since I am perfect and equal, I have no willingness to change. I am not a bad artist, you simply do not understand my artwork. Nor am I a bad cook. We just have different tastes in cuisine. Women who have not so much as held a door for another person in their life all believe that any man less than a prince charming is not up to par. Thus, the weltanschauung of progressivism in the digital age became self-acceptance only not by the self but by others, too.

The Fatalism of Online Blogging

As modern-day Americans, we’ve become so attuned to accepting our flaws that we resign ourselves of the agency for change. Instead of accountability, we ask for accommodation.

Rooted in the rickety foundations of our own insecurities, the zeitgeist of exoneration in our society is a destructive force: since at any instant, these foundations are liable to collapse, we respond to objections to our beliefs contentiously. What we lack in self-assurance, we make up for in outward-conviction. We have honed our ability to disarm detractors so expertly that our defense mechanisms have become reflexive: without a second thought, we respond to challenges to our ideas with mantras such as “check your privilege.”

Since the slightest disturbance can shatter our delicate illusion, these fatalistic rationalizations have become obsessive. We are more keen on convincing others of the correctness of our beliefs rather than ourselves to ward off our own misgivings. In many ways, our rationalizations have become a crutch we rely upon to escape feeling shame.

The problem with emotional band-aids is that there is still a wound hidden beneath.

Instead of looking within ourselves for change, we look to others. We petition, we pout and we blog away furiously, all in a fruitless quest for self-fulfillment.

When I was in grade school, I remember the refrain my peers would always offer in order to absolve themselves of blame: “I’m just not smart enough to do this.” As I quickly realized, there was by and large no such thing as “I’m not smart enough” when it came to math. It was simply “I’m not industrious enough to do this.” When I scored a 2040 on the PSAT, I realized that it was not because I was not smart enough to earn a top score, it was because I did not prepare hard enough. So, I buckled down and studied. Three months later, I retook the exam and earned a 2360.

The Land of Opportunity

From a historical context, I find the almost Neitzschian reversal of values entirely unamerican. Born into the philosophical creed of the enlightenment era belief that “man is endowed with the faculty to better himself,” our founding fathers also envisioned a nation where a man can thrive by virtue of his own efforts. The fatalism underpinning our modern-day “internet progressivism” is exactly antithetical to the axiom underpinning America as the quintessential “land of opportunity.” Thus, the idea of unearned equality is self-contradictory.

There’s No Shame in Feeling Ashamed

In doing just about anything to escape our own feelings of inadequacy, we have all but accepted imperfection. However, in order to change ourselves for the better, we need to surmount the ubiquitous fear of failure. In inuring ourselves to the pain of unmet expectations, we take the vital first steps to recovery.

Ultimately, true self-acceptance is not asking others to accept our flaws. It’s asking ourselves to accept our capacity to fix our flaws.

Thinking Fast and Slow in Seed-Stage Funding

When it comes to seed-stage investments, we strive to make the process fair here at the Dorm Room Fund. In my short time here at the Dorm Room Fund, I have had the opportunity to step inside the shoes of a VC first-hand. The perspective has given me insight into how founders might increase their success in raising capital.

Unfortunately, there is no cut-and-dry way to fairly assess a company without enormous amounts of research and time. But with time and resources being limited, it might feel as though VC’s are taking shortcuts and relying on heuristics to guide decisions. This leaves us vulnerable to bias.

So when dealing with investor capital, at the Dorm Room Fund we are particularly conscious of cognitive bias because we believe the stakes are far higher. To learn more about cognitive bias, I consulted expert Daniel Kahneman, the father of decision theory and Nobel Prize recipient in Economics.

In his book Thinking Fast and Slow, Kahnmen states that there are two major systems that motivate our actions. The first system, which Kahneman simply refers to as System I, relies on heuristics and intuition, while the second system, System II, is more methodical and systematic. For example, System I helps us decide what outfits to wear whereas System II will be used to answer questions like 45×25. Most of the time, System I will prove extremely useful in answering questions which System II might take eons longer to resolve. Nonetheless, System I is flawed since it is prone to bias.

So, how can a founder use this understanding of cognitive bias in decision-making to better communicate with VCs and optimize their chances for success in raising capital? The answer is simple – be proactive. Through simple best practices, founders can help investors understand their startup’s value in a world of time and resource constraints.

Here are some effective behaviors I have observed:

1. Regular updates leading up to the pitch and after

2. Occasionally forwarding interesting industry articles with a note on how it relates to what they’re doing

3. Frame the pitch itself on the points they want the VC to consider and make sure to take on the challenging points

I, myself, have struggled with conveying value to prospective investors.  Having spent months and months building out my start-up, www.stakd.com, I was eager to bring Stakd to market. So there I was, a 20-year-old kid with no previous entrepreneurship experience whatsoever, ready to take on the world. But, it seemed as though VC’s did not share my vision. After all, who would trust a college-student with 50k? Even though companies like Google and Facebook were started in Dorm Rooms, I felt like no VC truly empathized with my plight and was willing to hear my vision. If only Dorm Room Fund were around at the time…

Now that I find myself at the other end of the table, I better understand the concerns VCs more readily consider, but also understand that I had not provided enough insight for them to feel as though they could allocate more time to give me feedback or actually understand my vision.

Knowing the hurdles both sides face leads to a more effective resolution on both ends.  Founders can play their part by contributing as much as possible so that VCs can more easily come to understand their business and evaluate it fairly. Essential to the service of venture capital to entrepreneurs is empathy. We at the Dorm Room Fund know we owe entrepreneurs thorough diligence and as much avoidance of cognitive bias as possible. My partners and I aim to do our best to honor the industriousness of the founder(s) by reciprocating in kind. 

 

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Web 3.0 – Banned Words and Phrases

Want to be part of the next big thing? So big that your mind will explode in its feeble attempt to contemplate its awesomeness? We are dynamic, result-driven, lean startup gurus and ex-xanga interns looking to turn our visionary idea into reality. Ly.io.er is a mobile-optimized, location-based, social network that aggregates your big data from the cloud in real-time.

Although the product is currently in stealth beta, we need a full-stack engineer to turn our business vision into reality. The cross-platform, content-management system should be mobile-first, and written in HTML5, C-, CafeScript, SpinalBone, Microsoft Word, MangoDB and Google Apps. We need a rockstar growth-hacker looking to program using the latest technology. Ideally, the candidate should work well in a fast-paced environment.

Company perks includes water and our startup culture is informal and fun: you’ll have the chance to partake in square-dance thursdays, hop-skotch fridays and sandwich saturdays (cold cuts not included)! Interested applicants must sign an NDA before proceeding to the interview round as ly.io.er utilizes proprietary algorithms that you might just develop! Although we cannot offer a salary at this time, we can throw in some equity in the company that you’ll probably have to make – from the ground-up. You’re welcome for the opportunity!

VC Jr.

After years of entrepreneurship, I have recently found myself at the other end of the table. Although I can’t help but smirk at the irony of the 180 degree pivot, I am enormously grateful for the opportunity. See, the only way to learn how to build a great company is to step into the shoes of the investor. This is exactly what Dorm Room Fund allows me to do: to learn first hand the qualities of great companies, and, more importantly, the qualities of not-so-great companies.

So yes, I cannot express how incredibly grateful and honored I am to be a part of Dorm Room Fund. Given that students are much more deeply rooted in the network of their own schools than outside investors are, First Round Capital’s Dorm Room Fund initiative

Screen Shot 2013-04-15 at 11.17.51 PM 1.50.35 AM

– to entrust 11 students with half-a-million-dollars to invest in peers’ startups – is highly auspicious. Given the success of companies like Dropbox, Facebook and Google, all fleshed-out while their respective cofounders were enrolled as students, it is really surprising that few other venture capital firms have such programs. Hats off to First Round Capital for their boldness and foresight.

And so far, the experience has been terrific. All the other investment team members are incredibly driven, well-spoken and highly experienced in the entrepreneurial realm. Working with my peers on the investment team has reminded me the importance of soft-skills. For the first 18 years of my life, I was indoctrinated into believing that numbers and test scores should be prized over socialization, but this is not the case.

At the end of the day, an unlikeable cofounder just won’t get investor capital. For this reason, I have begun to lament the exceedingly performance-driven culture in American public education. The only way to maximize the future success of our future leaders is to encourage them to progress as human beings – and to pursue their passions. Rote learning isn’t sustainable, but passion and personability are lifelong traits.

I’ve also begun to realize the indispensable importance of finance in the business sector. Although recently the Occupy Movements has given finance a bad name, debt capital markets are imperative to the economic health of America. Without the capital that startups need to succeed, America would certainly not be the economic powerhouse it is.

Our tolerance for failure and risk is our differentiating factor. Anecdotally, I have heard that in China, once your business fails, you are through. But in America, the end of your business can mean just about anything – perhaps, you will pivot and reshape the business model like Fab and then become successful. Or, perhaps you will create an entirely new company with investor money. The point is, our ability to tolerate failure and our access to debt capital markets are what makes the United States the epicenter of innovation.