Announcing the effective altruism handbook

Effective Altruism HandbookA new Effective Altruism handbook has been released, which features some of 80,000 Hours’ ideas about high impact careers.

This handbook is made up of blog pieces and essays that are freely available online, and has been compiled by Ryan Carey, and released with some assistance from the Centre for Effective Altruism.

It has 24 mini-chapters altogether, split into five sections What is Effective Altruism, Charity Evaluation, Career Choice, Cause Selection and Organizations. Its foreword by Will MacAskill and Peter Singer, is new, as are concluding letters by seven effective altruist organizations. A lot of discussions have gone into deciding which writings are the best for describing the main concepts of effective altruism, so that’s another reason to check it out.

The rest of the essays are freely available online, and were compiled by Ryan Carey with the support of the Centre for Effective Altruism.

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The payoff and probability of obtaining venture capital

Venture capital has facilitated the growth of many companies including Apple, Google and Facebook. But is venture capital a key to success for most startups? In this post, we answer three component questions:

  1. What are the likely outcomes for companies backed by venture capital?

  2. What fraction of companies attract venture capital?

    a) How many startups and venture capital deals are there?

    b) What proportion of applicants to venture capitalists say they accept?

  3. How much work is it to apply for venture capital?

We found that:

  • According to the data of Professors Hall and Woodward, the average venture capital-backed founder exits with $5.8 million of equity.

  • Roughly 1% of companies that aspire to obtain venture capital obtain it.

  • Finding out whether you will receive venture capital can take months to years of work.

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Which university has better entrepreneurs?

Some of the most successful companies in recent years have been founded by students of America’s most prestigious universities. The founders of Google and Facebook, from Stanford and Harvard respectively, are prime examples. So which universities have the most successful entrepreneurs? To answer this question, we’ve assessed how many students from each top US university have obtained investment in their startup, how many are worth over $30 million, and how many are worth over $1 billion. This builds upon Jonah Sinick’s work on the wealth of Harvard alumni.

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What is the average net worth of Stanford entrepreneurs?

In this post we estimate the mean net worth of Stanford alumni who made their wealth primarily through founding startups.

Our estimate is that the mean net-worth of a Stanford alumnus who founded a corporation $10.8 million as of 2013.

The reason we are interested in making this estimate is because it fits in with a larger research project to into entrepreneurship, and within that project, into the wealth that can be gained by becoming an entrepreneur.

In this post, we estimate the total net worth of Stanford alumni who have founded corporations then we estimate the total number of Stanford alumni who have founded corporations. We then arrive at our estimate by dividing the total net worth of Stanford alumni founders by the total number of Stanford alumni founders. We close with some caveats and qualifications to our estimate.

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Increasing your earnings as a doctor

Making a difference to patient’s lives is a gratifying part of medical work. However, an investigation by Dr Gregory Lewis suggests that doctors may be able to make a greater improvement to people’s lives through their donations than through their practice. In part, this is because the potentially large impact of charitable donations. For instance, research by GiveWell has shown that it’s likely to be possible to save a life for less than $10,000. This raises the question ‘how can doctors increase their earnings?’.

In this post, we explore whether doctors can improve their earnings by:

  1. Moving to a different country.
  2. Choosing a highly-paid specialty.
  3. Pursuing locum (contract) shifts.

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Case series – why and how to learn programming

Software engineering is a lucrative career with an unusually low barrier to entry. Due to its appeal, some people in our community have switched into programming via many different routes. To help guide other individuals who are considering making this transition, we’ve gathered the five people in our community’s experiences learning to code and getting employed as a programmer.

  • Some programmers say that they enjoy their work because of the puzzles and problems involved in programming. They also say that they enjoy being drawn into a flow state.

  • One undesirable characteristic of software engineering is its white male monoculture.

  • Other common peeves are the need to understand large existing codebases and engaging in the boring aspects of fixing broken software.

  • People learn to program in a variety of ways including App Academy, computer science degrees, and teaching themselves while doing another job.

  • It’s easier to get hired if you’ve done an internship. Applying widely also helps. One App Academy graduate applied to 30-40 companies, out of which he got 5 phone screenings / code challenges, 2 in person interviews, and one offer.

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How much do Y Combinator founders earn?

Paul Graham

Introduction

We’re interested in estimating how much tech entrepreneurs earn, since it’s one of our top recommended careers, and this is in part because it seems particularly high earning (enabling high donations, and potentially indicating the creation of a lot economic value). As part of this, we wanted to find out: if you can get into Y Combinator, how much will you earn? We’re particularly interested in Y Combinator because it’s the best known seed accelerator, and the data is available. In summary, here’s what we found:

  • The total value of Y Combinator companies is $26 billion, of which the founders own $8 billion.
  • Most of the returns have gone to a tiny minority of super-successes. The founders of AirBnB, Dropbox and Stripe are worth about US$7 billion, about 80% of all founders’ equity, although they account for 0.5% of the companies.
  • Outside of the most successful companies, it was still possible to earn significant returns. 12% of companies from the first five years of Y Combinator are now worth US$40 million or more, and a further 10% have sold for US$5-40 million. The remainder probably earned little more than their (low) salaries.
  • On average, founders from the first five years of Y Combinator are now worth US$18 million after 5-9 years, giving past average earnings of US$2.5 million per year
  • When it invests in its companies, Y Combinator values them at US$1.7 million, of which each founding team owns $1.6 million. This implies that founders must earn (in cash or equity) substantially more than $100,000 per year on average.
  • We expect the average earnings going forward to be less than $2.5 million per founder per year because of competitors to Y Combinator and regression to the mean.
  • Y Combinator accept 2.5% of applications.
  • Your personal expected earnings from applying to Y Combinator depend on your chance of being accepted and your chance of creating the next AirBnB or Dropbox.

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Biographies of Top Entrepreneurs

Lots of the people we coach want to know how to become a successful technological entrepreneur. One approach to this difficult question is to assess which unusual traits are common among the most successful tech entrepreneurs. In this post, we review the biographies of the ten richest tech entrepreneurs. Here is what we found:

  • All attended American Universities, though only half graduated (3 to start companies but 2 dropped out before they started their companies), and none have postgraduate qualifications.

  • 8 of the 10 entrepreneur’s Wikipedia page had stories or achievements demonstrating exceptional tech skills or interest in technology. (Azim Premji (Wipro) and Lawrence Ellison (Oracle)) are the only two whose Wikipedia pages do not demonstrate exceptional talent/interest in tech.

  • Fewer demonstrated early interest in business – Jeff Bezos and Michael Dell being the only exceptions

  • Only three took a job after finishing university and before starting a company.

    • Jeff Bezos, worked in multiple computer science-related jobs

    • Larry Ellison, worked for a data company while developing his product

    • Paul Allen, worked in programming before starting Microsoft

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App Academy interview with Buck Shlegeris

Buck Shlegeris is a teaching assistant at App Academy in San Francisco. Buck plans to use his earnings in programming to give to charities that improve the future. We discussed whether 80,000 Hours members can start a career in programming by doing a coding bootcamp. Below are some edited notes from our conversation.

Summary of main points:

  • People can enter training at App Academy from an unrelated background such as philosophy or other humanities with a few weeks of preparation.

  • The application includes some programming challenges and takes takes 10-20 hours to complete.

  • The course requires 60+ hours of work per week for 12 weeks.

  • 90% of App Academy students make it to graduation. By asking for help if you are failing to progress, you can probably further reduce the chance of dropping out.

  • Over 95% of App Academy graduates seeking employment as programmers attain it.

  • The average income of graduates is $100k in San Francisco’s Bay Area, with 90% securing an income from $80-120k. In New York City, the average income is $84k.

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Professional philanthropy vs professional influencing

Some facts about charity are so useful that they just have to be shared. Here’s one from the website of Giving What We Can:

‘It is not even a matter of some charities being 10 or 100 times as effective: even restricted to the field of health programs in developing countries, research shows that some are up to 10,000 times as effective as others.’ [1]
By reading this, most of us will have gained some motivation to give effectively, and this will deliver years of healthy life to those in need of charity.

Just as we’re grateful to Giving What We Can for this help, it’s natural to wonder what we can do to nudge others towards cost-effective philanthropy.

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