Highlights from the Emails on Golden Handcuffs

Previously: The Golden Handcuffs Were Insite of You the Whole Time and Empirical Estimates of Golden Handcuffs.

Leopold Aschenbrenner

My intuitive answer: stability? That sort of dependable income and status you can rely on to start and support a family. Second intuition: people are bad at saving—or by the time they have enough saved, they have dependents.

The dependents thing is a good point, but San Francisco also has some of the oldest parents. Related statistic from Twitter. This data is city wide, and I would guess that tech workers skew older than average.

Based on the math I did last time, you can quit a corporate tech job after a year with considerable savings, or after 5 years with around $713,000.

If you graduate at 22, work for 5 years, and have kids at 32, you still have another 5 years to do whatever you want.

Andy Matuschak

I worked at Apple for five years and met many people who felt stricken by golden handcuffs. The most common “trap” that people seemed to fall into was the classic one: jogging ever faster and faster on the hedonic treadmill.

Common vices included multiple vintage sports cars, buying wine at auction, multi-year construction and renovation projects, airplanes, etc. More mundane vices were also common: marrying and having several children, which often leads to a $3M+ home and a wife who no longer works. It’s easy in that situation to find oneself expenses to the tune of $300k/year if one’s not actively trying to reign things in.

The vices sound silly typed out like this, but as a 21 year old entering this scene, it was quite an intense thing having all my role models and more senior peers engaging in this kind of thing. In some sense, it was necessary to spend time with them: if I wanted to socialize (perhaps necessary for advancement), I’d need to go to dinner at fancy restaurants, share the wine, etc. Now, perhaps fancy meals and drinks amount to “only” $2k/mo, but it’s easy to develop a taste for such things, and then to notice the merits of your older colleagues’ interior decor…

It was easier for me to leave (I went to a non-profit) because what lifestyle changes I’d adopted were flexible: I could simply choose to stop going to fancy meals. Others have somewhat more disruptive stakes: selling the cars, moving to a different home, etc. I notice that when I talk to them about leaving, there’s a kind of distant wistfulness: “ah, if only…”—as if they’re imagining another life, another person, impossible for them to be. It’s a kind of complacency, I guess. [emphasis mine]

Engineers might be particularly prone to this trap because their identity is wrapped up in their job. As Ben Kuhn writes in What happened to all the non-programmers?, it’s shockingly easy to find yourself only hanging out with other engineers who have similar interests.

Seth Green (excerpt)

…two general thoughts:

1. From a longer thread about how YC has lost its soul: “RPM at Facebook is the new IB @ goldman (and actually pays more)” (HN discussion: https://news.ycombinator.com/item?id=23916314). If this is true, then we should expect people who take these roles to be excellent and risk-averse, which is what it takes to get into Yale or Stanford and then BCG, Goldman, YLS, HBS, Apple, etc. The funnel selects for lack of courage (also high IQ & ability to grind).

2. How many people do you know who are just stuck in ruts, period? Perhaps they make a lot of money, feel like they’ll never ever be fired, and when they go home, they get high and play videogames every day. I know a lot more people like this than I did ten years ago (Erik Hurst attributes some of the declining work share among young men to video games’ getting better over time). Perhaps people are just much less (consciously) bored at home anymore, which leaves less time for ruminating on things they want to maximize.

So perhaps it’s less of a handcuffs situation, golden or otherwise, and more of a selection for people who have optimized and been optimized for staying the current course, and look, now, rather than go down this other dark road, you can watch Tiger King or play Red Dead Redemption 2, doesn’t that sound more fun?

As I wrote in the other post, selection effects are indeed a substantial part of this. But I am confused why there aren’t more opportunistic idealists who work in tech for a few years and then self-fund a career in the arts or independent research.

Even among people who regularly play video games, the US average is just 7.6 hours a week, which doesn’t seem incredibly disruptive to ambition. In contrast, Wikipedia has Americans watching TV 4 hours a day, equivalent to 28 hours a week. So maybe the problem is TV, video games, social media and every other distraction combined?

Even then, it’s not like we’re talking about dysfunctionally unemployed people. Google engineers are (presumably) doing some work, I’m asking why they don’t spend that time on work they care about instead.

Anonymous

gr8nola is really good…

…why should i apply such aggressive temporal discounting to following my dreams right now? isn’t it almost surely the case that working my day job, collecting my paycheck is the pathway to both 1) a more successful shot at $the_dream in the future AND an even longer runway perhaps one that lasts until I die?

why should i be so naive to think that at ~25yo i have a finely tuned nose for great opportunities and the skillset to execute on them?

why can’t i directly apply the secretary problem solution and work 1/e of my 40 working years (14.7y), evaluating but passing up on potential opportunities during that time, then, after that window, take a stab at the next good one i see?

I agree that some jobs provide capital that is useful to future work.

The secretary problem is a useful framing, but has several key disanalogies. Unlike real life, the problem assumes:

1. Decisions are totally irrevocable (you can never pursue an opportunity you turned down earlier in life)
2. You’re maximizing the probability of selecting the single best opportunity, rather than expected value
3. The judgement and decision happens instantaneously, with no cost of “wasted years” on evaluation
4. You have no sense of absolute rankings, and can only compare opportunities relative to each other. In other words, if a mind blowing good opportunity presents itself tomorrow, the most you could say is “this is the best I’ve seen so far”. In real life, you at least have some useful priors over how good an opportunity is in absolute terms.

I’m not sure how this changes the optimal stopping point, but that might be a good topic for another post.

Anonymous (excerpt)

I’m a FAANG engineer, although since I work in a European office I probably make 50% less than your typical SV FAANG-adjacent engineer.

I’ve been doing this for a little over half a decade. So why don’t I, or most of the other folks around me, quit and follow our passions like you suggest?

Well some of us do quit to follow our passions. I know a handful of people who quit to join startups. I’ve heard anecdotes of a few other people moving back to their hometowns and taking on lower paid, less stressful remote work. While I don’t have startup ambitions as of now, I do plan to take a year off, explore the world the bit, learn scuba diving, etc.

But 90% of people end up staying at their jobs, year after year. I suspect there are a couple of factors making them do this:

1. Lifestyle inflation. I think you touch on this in your post, but consider things like expensive cars, expensive houses (most tech offices are in high cost of living areas), sending kids to prep schools, etc.

2. Social validation. People get attached to the social environment at work and see themselves defined by it. It’s scary to move onto something else. There’s also some social status associated with being a FAANG employee. You’re also competing with the Joneses now; your colleagues at work and other FAANG types around you.

I think 2 is probably a big factor for a lot of folks, probably a little for me as well, although I’m naive enough to think that I’m above such things :) I suspect it’s the same reason traders keep trading even after they’ve made millions.

Let’s see how the sabbatical goes. If I’m lucky I’ll be brave enough to cast off the golden handcuffs, at least for a year.

Competing with the Joneses is compelling to me. If you start working at Google out of college, you’re on the lowest rung of the corporate ladder. It’s easy to say “I’ll quit once I get promoted and really prove myself, if I quit now it’ll just look like I couldn’t cut it.” But of course, once you get promoted your reference class shifts, and it’s now other senior engineers or engineering managers you have to prove yourself against.

Anonymous (excerpt)

I’m convinced that the only thing that really motivates 80% of people to change is pain. If you’re working at Google, between the perks and the salary, you have no pain financially speaking. It’s pretty rare IMO for someone to make the jump from being motivated by pain to being self motivated by their goals. Google gives you a little bit of prestige, a lot of money, probably good coworkers, a path for advancement, and a minor feeling of achievement. It’s like being stuck at a local maximum and not noticing it’s not the global maximum.

Another reason may be that people are averse to open ended tasks. I would guess that the proportion of people is much less than 80%, although a sizable minority. For them Google would be the global maximum.

Anonymous (excerpt)

Most of the senior (above L6) FAANG employee comp (at least according to levels.fyi) consists of vested RSUs, with cash pay pretty much fixed. Not only do stocks appreciate over time but the amount gained per unit time increases with seniority, thus it appears as though sunk cost — finally — begins to repay itself.

74% of tech/math workers in Silicon Valley are foreign-born¹. Let’s discount that by some who got their Green Cards or became naturalized. Then some two thirds of them are probably on H1B and are legally obligated to leave the country if they lose a job.

…FAANG employees do a lot of open-source, many are literally paid to do it. When there’s a steady stream of income and no pressure to productize your creations, albeit useful to you, they’re simply left as half-baked margin notes on their GitHub. Thus product-gap-fullfillment urge is complete and you even got paid! Unlike randomly sampled YC applicant…

¹ https://www.washingtonexaminer.com/37-percent-of-silicon-valley-foreign-born
[emphasis mine]

The immigration thing is super compelling to me. Even if it’s only 66% of workers, that could be enough to set the culture. If you don’t need a visa, but most of your coworkers do, maybe you just adopt that mindset and stay put.

For what it’s worth, I consider this among the US’s greatest policy disasters. We’re ostensibly involved in some kind of Sputnik-style scientific competition with China, but instead of trying to recruit the best scientists, we’re actively turning away people who want to immigrate here.

It seems like if you’re going to offer someone a place in your best universities, you should be excited to then benefit from that person’s labor. But instead we have this insane system where we’re happy to educate the smartest people from any country, but unwilling to let them work for us.

I understand that O-1 visas exist, but unless you have a great lawyer or are actually a genius, this is still a huge and completely unnecessary hurdle.

Anonymous (excerpt)

I think both of these claims (“Presumably, you have some values” and “Everyone knows this”) are pretty strong and perhaps not entirely justifiable. One might be a hedonist in a practical sense, but still not have an explicit goal of “maximizing enjoyment” - or an altruist lacking imagination (it would be nice if people were better off… without the thought continuing further). I think some fraction of people (I’ll make up a number, 20%) just don’t set these sort of explicit values / goals for themselves, but instead sort of run on autopilot (I used to do this, which is how I know it’s possible, and still do when I’m not careful). My basic point is these people just don’t apply as much thought to the question of “what should you be doing” as you do, and so their continued employment at google is not a mystery.

Let me call them “reactively-minded” people, for lack of a better phrase. If you’re reactively minded and working at google, and you don’t hate it, you regard things as going pretty well. You have friends who you see everyday - that makes you genuinely happy - and the work is sufficiently interesting. You don’t have monetary troubles, so your mind has a chance to unspool and think about things other than competition / work. This is a totally pleasant state of affairs, and if you’re not explicitly contrasting it with a vision of a different and more interesting occupation, as a reactively minded person it doesn’t occur to you to ask “how could I be doing things better?” Your thoughts do not extend for years into the future, your joy is associative, readily available, and presents itself without delay.

In particular, joy is not produced by optimization of some well-defined reward function, or the completion of explicitly-defined tasks.

If you accept the existence of a reactive mind, I think you needn’t question why it doesn’t quit and do its own thing. The necessary dissatisfaction, ambition, and imagination are not present. And without holding explicit values, at least not ones viewed as relevant to daily life, there’s no conflict.

This is a good point, but doesn’t answer how people become reactively-minded in the first place. I don’t have the answer either, but here’s a speculative guess.

As a child, your life is heavily constrained exogenously. If you can’t do something, it’s probably because your parent or teacher isn’t letting you.

In college, you have a brief period of incredible freedom paid with low disenchantment. For many people, this is where incredible work happens. Of course, there are new distractions as well. Unless you’re really good at avoiding social pressure, it’s easy to spend all 4 years either drunk or cramming for tests, depending on your inclination. Either way, you’re probably not doing the thing you love the most.

And if you don’t hit that tiny window, you’re now in the workforce,

Once you work at Google, you look around, see thousands of genuinely brilliant programmers who aren’t successful, and you get totally trapped. All of a sudden, you go from “I’m incredibly gifted and would do great things if only society wasn’t holding me back” to “there are literally 100 people within eyesight more gifted than me, and they’ve all settled for mediocre jobs, so I guess that’s the most I can hope for”.

You can think of this as weaponzied Imposter Syndrome. If you already feel like you don’t deserve your job, you’ll be too grateful for the oppportunity to quit.

Earlier, I wrote that founding a startup is not necessarily irrational, it just depends on your reference group. Since the odds are really bad for a randomly sampled founder, the trick is in convincing yourself that you aren’t randomly sampled.

This is easy in high school, since if you spend any time programming for fun, you’re probably the best engineer around. It gets a bit harder in college, but the real nerds are mostly heads down and easy to ignore, so you can still convince yourself you’re among the best if you just squint a little.

But once you’re in Silicon Valley and surrounded by brilliant people with mediocre careers, they becomes your relevant sample population. Working at a prestigious company should convince you that you’re special, but instead it exposes you to an arbitrary number of counter examples.

Conclusion
If the effect exists at all (which I’m not 100% convinced of), it is largely explained by visa issues and sampling bias. There are many other psychological explanations, but I’m not sure they’re necessary.