Do you work in Venture Capital? I need a reviewer for a long upcoming post. Email me for details.

Why does this blog take so long to write?

I write full-time. That’s not to say I’m at my desk 40 hours a week, just that I don’t have anything else going on.

In January, I published a post on average every other day, then didn’t publish for a week until today.

The latest post is good, but does it represent a week’s output? Why does everything take so long? Am I even trying?

There are a couple answers:

  • I only publish ~50% of the posts I write
  • Every post I publish has to be rewritten at least once

It doesn’t take too long to hash out a quick draft, but then I try to get feedback, make the post more compelling and easier to read, and fact check my claims. That all takes longer than the original writing process.
Not everyone is this way. Scott Alexander and Byrne Hobart (#1 and #2 in Substack’s Technology section) have claimed they write more or less stream-of-thought. Maybe it’s a magical gift, but maybe it’s because they’ve both been writing for 10 years.

Feedback is tough as well. I try to send every post to at least one person before publication to have some level of editorial accountability. Often, it’s Alexey Guzey, known for his contrarian takes and brutal criticism. This is great for readers since it improves my writing, but also means that rather than nitpicking grammar, feedback is likely to expose a foundational flaw in my reasoning, resulting in lengthy rewrites.

In other cases, feedback takes time because I want to consult the people in question. Before publishing the case against StatNews, I tried to get in contact twice. Before publishing against Lambda School, I tried to get in touch with their Chief of Staff. I also sought out feedback from Adam Marblestone and Ashish Arora before commenting on their respective publications.

Getting feedback from an actual expert is really tough. They have spent, in some cases, entire careers thinking about the topic I tried to understand in a couple days. I am often embarrassed, try really hard to not say anything wrong, and take their feedback very seriously. This all takes time.

Finally, I am not an expert in anything I write about, so there is a learning curve spanning days or weeks. Especially for posts that criticize the original source, I am very scared of making a bold condemnation of someone else’s work, and then realizing that I’m totally wrong.

On that note, I also write about a broad variety of topics, which means I’m more or less starting from scratch each time. It wouldn’t take me very long to write another post about Lambda School since I already have the required context, but I’m not that interested in writing it, and I don’t think you would want to read it. I read their recent report and have attempted to stay updated in case it turns out that I was wrong. My impression is that they are still misleading students, and I don’t have much more to say.
This blog is an attempt to learn in public in real time, which means writing about things I don’t already understand. Additionally, the deeper I go into any one vein, the more context each reader needs to understand what I’m talking about, and the less likely it is they’ll have read all relevant previous posts. Because blog readership is growing quickly, I don’t assume the median reader is familiar with my previous work.

You may worry that this means never going deep enough to get anywhere interesting. So why is this blog even worth reading?

In short, I have different incentives and opportunities. Ashish Arora is an academic, and his only way to express a professional opinion is to publish a paper. He’s not going to make the point I did about Bell Labs, even though he’s more than intellectually capable of doing so. For most of the world, blogging is still a very weird niche.

And on the other end of the spectrum, you have popular writers trying to build their following. They grow their audience by having an opinion and making bold, easy to follow proclamations of belief. Of course, there are exceptions, but you might be surprised how few. Taking blogging seriously correlates with taking Twitter seriously, which means I’m part of a vanishingly small population that does the former without the latter.

Notes on Adam Marblestone’s Focused Research Organizations

After arguing that industrial research labs won’t return, I was hopeful for a new mechanism to reignite transformative research, but had no idea what it would actually be.

A couple hours later, Nintil told me about Focused Research Organizations.

In short: FROs promise to pair government funding with startup agility, and a mandate to pursue high-impact pre-commercial research. There isn’t a lot of literature out on them yet, but it’s a compelling proposal. [0]

Going into this, it’s worth noting that Adam explicitly says FROs are not a replacement for existing institutions, but they might be good at the margin. Specifically, the proposed budget is $1 billion over 5-7 years, around 0.3% of all federal R&D funding.

As with everything, I have a lot of criticism, but let me start by saying that I’m excited! We need new ideas, and actually experimenting with funding models will help us advance much faster than musing in a vacuum. The existing systems are filled with their own flaws, and I’m not attempting a cost-benefit analysis, so nothing critical I say should be taken to mean that I am net negative.

But first, what does Adam actually envision?

Summary of the FRO Proposal

The bulk of Adam’s thinking is laid out in the FRO Whitepaper. There’s also some discussion in the Idea Machines Podcast, and a bit more in a talk he gave with Nintil a couple months ago.

The core proposal: “Startup-like organizations, but pursuing pure science outcomes with no market.” In another venue, Adam describes them as “a special purpose organization to pursue a defined problem over a finite period of time.”

Or expressed negatively: FROs target projects that cannot be addressed by any existing organization or funding mechanism. The university system is massive, receiving around $40 billion in federal funding each year. Last time, I argued that this was one of the principle reasons behind the death and continued absence of industrial research labs. Why pay to innovate in-house when there’s a $40 billion in research happening for free?

Reasoning backwards from other people’s first principles is precisely the way to get around this. Adam understands the university system deeply, knows what it’s mechanisms cannot produce, and aims to directly target the research that can’t currently happen.

You can think about this through analogy to startups. A small team of 2 founders with $125k in funding could never reasonably compete with Google head-on. The first step for many pitch decks is to explain why, if the idea is actually good, it hasn’t already been done. [1]

So where do universities and corporate labs systematically fail? Adam argues it’s projects which “require levels of coordinated engineering or system-building inaccessible to academia” and “benefit society broadly in ways that industry cannot rapidly monetize”. Stated elsewhere, he says the fundamental tension is between academic settings which incentivize individual achievement over team coordination, and industry organizations which are better at teamwork, but don’t aim to produce public goods.

It’s worth being really clear about what this last claim requires. It’s not that Adam is condemning startups or capitalism, or that he believes industry never produces public goods. The argument is merely that there are some projects, at the margin, which:

  1. Require teamwork and cross-disciplinarity
  2. Only make sense if you intrinsically value the resulting public good

In this sense, rather than the abstract basic/translational/applied trichotomy, Adam talks about projects that are “pre-commercial” or don’t have a clear path to monetization in the short-term. [2]

That’s the narrative about why FROs ought to exist in the presence of existing organizations. But how do they actually work?

The federal government (or philanthropist) commits $1 billion over 5-7 years, paid out to 16 projects, each with a focused research charter. These ought to be time-bound, and there should be a clearly defined end goal that results if the project is successful. The whitepaper also notes that each should be led top-down by a CEO in the style of startups, rather than by committee or by a decentralized collective of loosely affiliated researchers.

The initial line sums it up pretty well. An FROs is a government-funded organization, run like a startup, focused on pre-comercial science, operating over a finite time horizon.

Commentary

Startups are great, but we should understand them ecologically: the result of a precarious balance held in place by a surrounding ecosystem. Swap out one part, and you don’t get “startups but for X”, you get a hot mess. [3]

Adam proposes taking startups, and making the following modifications:

  • Instead of a profit motive, FROs follow a scientific charter
  • Instead of pivoting as they run the idea maze, FROs have a specific predetermined goal
  • Instead of market signals and user validation, work is guided top-down by a CEO
  • Instead of VCs who compete for opportunities and bet against each other, the only funding agent is the federal government

I worry that any one of these substitutions would be fatal, and it’s not clear that they collectively bring us to a new stable equilibrium.

While there are some legends of startups that worked hermetically for a year or two, it’s hard to think of tech companies that were pre-commercial for 5-7 years, and maintained an attachment to reality. The famous anecdotes all turned out to be vaporware or massively over-hyped (Theranos, Magic Leap).

Another concern is with leadership. Startups are able to move quickly by vesting their CEO with dictatorial power [4], but they’re ultimately beholden to metrics. There is centralized power and a cult of personality, but their authority still stems from each employee’s faith in growth, validated against a steady exponential growth in valuation, revenue and/or user base.

It’s possible FROs could supplant the entire process with a rigorously predefined scientific charter. In one podcast, Adam mentions literally using “characters sequenced” as a measure of progress for the human genome project. The whitepaper states that in general, “FROs should [be] driven by quantitative metrics and/or concrete design goals”.

This also addresses a key concern over any transformative research: measuring impact. If a result is novel, there’S no point of comparison by definition, and no way of justifying the costs relative to an expected baseline. Even if the work does end up being impactful, it might be 20 years down the line. Running the entire program around a focused charter and quantifiable outputs alleviates some of these concerns. We still won’t know if the chosen projects were the right one, but we’ll at least find out of the program succeeded on its own merits.

If executed correctly, this would provide accountability for the CEO as well, in the same way that growth metrics provide accountability to founders. With a sufficiently well-defined goal, there’s little ambiguity over how well the company is being run.

Finally, I worry about risk. Though the Startup Ecosystem works perfectly well, we have to distinguish between the broader trends and individual firms. At the micro level, each startup is dysfunctional and overwhelmingly likely to fail. Part of this stems from market dynamics, but it’s also the nature of a scrappy ambitious project with a centralized authority and thus a single-point of failure. The exact failure rate depends on your reference population, but a commonly cited estimate is 90%.

If this holds true for FROs, a 16 project portfolio would still have a 19% chance of total failure. Trial and error is the nature of scientific discovery, but the greater harm might be a vast chilling effect on future experimental models.

Doubling the scale of FROs to 32 would get us down to a 3% chance of total failure, and going up 10x to 160 projects would get us down to a mere 0.0000047%.

The expected value doesn’t change, but that doesn’t matter if like startups, FROs are a hits-based enterprise. In venture capital, one big win pays for the entire portfolio. In FROs, one human genome project [5] or connectome could justify the entire budget.

Even then, the whole proposal would amount to just 3% of federal R&D, and only for the brief 5-7 year trial period. [6]

In summary: FROs are promising, and the program should be 10 times bigger. [7]


Thanks to Adam Marblestone to reviewing a draft of this post.

For the original proposal, see his whitepaper with Sam Rodriques.


Footnotes
[0] Adam mentions over email that these could also be philanthropy-funded. In the Idea Machines podcast, he and Ben express some concern over salary-restrictions in government-run projects. Taking Patrick Collison’s notes on the importance of compensation, it’s worth wondering if FROs are even possible with government funding.

Having said that, ARPA-E does give grants to private companies who (I assume) can set their own salaries. I’m not sure exactly where the line is, or if the distinction is between government-funded versus government-run, or if there’s any room for exceptions.

[1] Learning where tech giants systematically fail is an underappreciated reason to get a corporate job for a few years before setting out on your own.

[2] The short-termism of Venture Capital is overstated. You can find an arbitrary number of companies passed up for investment because they lacked a path to monetization, but there are compelling counter examples that suggest VCs are willing to make long term bets so long as the payoff is sufficiently large. Consider Magic Leap, which was founded in 2010 and didn’t have a commercial product until 2018. It’s now considered a failure, but that makes an even stronger case of VC long-termism. They’re willing to fund speculative, long-term, unproven pre-commercial technologies, even when (empirically) there is significant risk of failure.

How does this happen? One answer is that VCs are not actually long-termist, they just get tricked into making long-term decisions. Perhaps Magic Leap told investors in 2010 that they would launch in 2015, then just kept moving the goalposts, and took advantage of sunk cost. Or they just raised from different investors, claiming each year to be under 5 years away from commercialization.

A priori, is there any reason to think VCs even have a short-time horizon? Of course they want returns eventually, but the short-term goal is to have a strong enough track record to raise another fund. That might mean having your portfolio companies hit commercial milestones, but it could just as easily mean that they were able to raise money from other VCs at increasingly high valuations.

[3] Despite the frequent comparisons to startups, the whitepaper makes it seem like FROs are actually much more like National Labs. In a 13 point comparison table, FROs differ substantially from everything else, but have only two points of contrast with National Labs:

  • “Exists as an autonomous organization mobilized in a rapid agile fashion”
  • “Provides strong support for post-project transition to commercialization”
  • FROs aren’t permanent, and don’t provide a clear career path

It’s worth taking a minute to understand what the National Labs are. There are 17, each administered by a different entity, some embedded in universities, others by industry. It’s all under the Department of Energy, but the majority of their funding (55%) is for weapons research, mostly around the US nuclear arsenal. Overall, it’s $12 billion total in annual budget, which is two orders of magnitude larger than the total proposed FRO budget.

It’s not really accurate to say that an FRO is a National Lab, but more agile and with support for post-project commercialization. It’s more like a centi-lab with startup characteristics.

With that in mind, it feels like an easier way to pitch this whole proposal would be: National Labs, but for the life sciences, and as a small proof of concept.

[4] Abuses exist, but are largely moderated by at-will agreements and an active market for startup employees.

[5] Adam brings up the Human Genome Project a few times as an example of a past project that could have been successful as an FRO, but the whole line of augment is a bit confusing. FROs are supposedly for funding projects that couldn’t happen otherwise. Suggesting that they might have funded something that already did historically happen seems to weaken this argument.

[6] This is factually accurate, but it’s not a great line of reasoning. Lots of things would be “only x%” of some federal budget line item. It’s easy to say “The US government could invest $20B into climate justice, for just 0.1% of it’s total budget!”

[7] To be clear: each organization should still be the size Adam proposes ($25-$75 million over 5-7 years).

Wake Up, You've Been Asleep for 50 Years

Nintil suggests: “Maybe there was a monocausal event in 1970.”

Many graphs to follow, but first:

And of course, WTF Happened in 1971.

Constitutional Amendments [1]

Energy Use

GDP Doubling Time

Peer Review

Donald Braben, author of Scientific Freedom: “‘academic research before about 1970 was essentially unmanaged”

Leaded Gas

Oil Shock

Inflation

Male Income

R&D’s Share of the Federal Budget

Senate Filibusters

See Also:
Scott Alexander: Wage Stagnation: Much More Than You Wanted To Know
Scott Alexander: 1960: The Year The Singularity Was Cancelled
Noah Smith: How the 1970s Changed the U.S. Economy

Footnotes
[1] I’m cheating a bit here. The 27th amendment was proposed in 1789, but ratified in 1992. So we have ratified something since 1971, we just haven’t ratified anything written since then. Having said that, it’s a really boring amendment.

Interpretation
Okay, the obvious objection here is that it’s easy to cherry pick examples for any 5 year period. But is it actually? Maybe you could do WWII, but that wouldn’t be weird, that would just be WWII. This is notably because the events seem largely unrelated.

But you might be right, and it’s possible this is all just noise. I’m genuinely unsure.

A compelling explanation would be that a lot of this is related. Energy use slowed becaused GDP per capital slowed. Inflation skyrocketed because we got off the gold standard. We stopped passing constitutional amendments because of the filibusters.

Compiling this post, I came across several mentions of Mike Mansfield. He’s responsible for changing the filibuster bylaws (1970), prohibiting military funding of research without a direct military application (1969) and limiting DARPA’s scope (1973). Darpa, of course, was responsible for both ARPANET and the Mother of All Demos. For more on why this matters, see Steve Blank’s Secret History of Silicon Valley, summarizing the influence of military funding on seemingly unrelated innovations.

So sure, there are some specific causes we can point to.

But just imagine being around in these years. In 1962 JFK announces we’re going to the Moon, and a mere 7 years later we’re there. That very same year, the internet comes out. 3 years later we have video games, and a year after that, cell phones.

Of course, the average American wouldn’t really have cared. The internet existed in some lab, not in your home. Maybe it’s the same situation today. We have CRISPR, but it hasn’t yet had a big impact on our lives. Google announced quantum supremacy, but I won’t have a quantum computer for a long time. GPT-3 can synthesize shockingly good music, but nothing I would actually listen to. It’s possible 50 years from now we’ll look back at 2018-2023 as an incredible period of innovation, with nearly miraculous coincidence.

Maybe.


[Edit: 2021/02/19] From Tyler Cowen:

The break point in America is exactly 1973 and we don’t know why this is the case. It’s often argued that 1973 is the breakpoint because the price of oil goes up a good deal because of OPEC and the embargo, that might be true. But since that time, the price of oil in real terms has fallen a great deal and productivity has not bounded back. But at least in the short term, that seems to be the relevant shock.