New releases

Take the growth approach to evaluating startup nonprofits, not the marginal approach

Blog post by · Published November 26th, 2015

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In its first 2 years, Google made no revenue. Did this indicate it was a bad idea to invest or work there?

We spent the summer in Y Combinator, and one of the main things we learned about is how Y Combinator identifies the best startups. What we learned made me worry that many in the effective altruism community are taking the wrong approach to evaluating startup non-profits.

In summary, I’ll argue:

  1. There’s two broad approaches to assessing projects – the marginal cost-effectiveness approach and the growth approach.
  2. The community today often wrongly applies the marginal approach to fast growing startups.
  3. This means we’re supporting the wrong projects and not investing enough in growth.

At the end I’ll give some guidelines on how to use the growth approach to evaluate non-profits.

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Stop assuming ‘declining returns’ in small charities

Blog post by · Published November 24th, 2015

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Amazon is one of the world’s largest companies and is still achieving lower marginal costs as it gets larger. Organisations with just a few people will frequently do much better as they get larger.

We often hear people in our community state, as if obvious, that becoming the 5th employee of an organisation creates less impact than becoming the 4th employee. Similarly, later donations are thought to create less impact than earlier donations. This sentiment was widespread in recent discussion about whether to donate to Giving What We Can, discussions on the EA forum about where to donate, and in discussions I’ve had with people about where to work.

The reason stated is “diminishing marginal returns”. The first staff members take the best opportunities, so the extra opportunities available at the margin are worse, so each extra staff member has less impact.

The problem is, assuming diminishing returns to small organisations contradicts basic economic theory.

According to economics, as an organisation scales up, there’s two opposing forces:

  1. Economies of scale.
  2. Diminishing returns.

Economies of scale are a force for increasing returns, and they win out while still at a small scale, so the impact of the 5th staff member can easily be greater than the 4th.

Economies of scale are caused by:

  1. Gains from specialisation. In a one person organisation,

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Are our most engaged readers overweighting career capital?

Blog post by · Published November 19th, 2015

We’ve spoken a lot about the importance of building career capital. But now, it seems like some of our most engaged readers are putting more weight than we think they should career capital, and not enough on short-run impact.

A situation many people face is something like the following:

  1. The interesting project: Do something where there’s a small chance you really excel, achieve something exceptional and have a big impact.
  2. The safe project: Do something that offers a clear path to good options in the future.

The first option is usually something like doing a for-good startup, capitalising on a side project, or taking an unusual job with a mentor. The second is usually something like doing consulting, working at a prestigious large firm or doing graduate study.

The debate usually boils down to the following: the first path has a higher impact, but the second offers better career capital. Then people reason that since career capital is more important than impact early in their career, they should go with the second option.

That’s often going to be the right answer, but here’s a couple of reasons it might be a mistake.

You might be biased

There’s several biases that push in favour of the safe project.

  1. Ambiguity aversion. Usually it’s relatively clear what the safe project involves and what concrete next steps it’ll lead to (e.g.

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In case you missed it: Open Phil would like to fund a science policy think tank

Blog post by · Published November 18th, 2015

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It appears to us that the strongest scientific funders have little interest in policy analysis and advocacy, while the strongest funders of policy analysis and advocacy tend not to take interest in the scientific research issues discussed in this post. We’re interested in the idea of combining – in a dedicated organization – great scientists and great policy analysts, in order to put in the substantial amount of work needed to develop and promote the best possible proposals for improving science policy and infrastructure. It would be a high-risk, potentially very high-return project to attempt. We aren’t aware of any attempts to do something along these lines at the moment, and we think it could be a risk worth taking.

So far, we haven’t been able to find a person or organization who seems both qualified and willing to lead the creation of the sort of organization described in this post. We plan to continue looking for such a person or organization, while continuing to discuss, refine and reflect on these ideas.

If you might be able to get into a position where you’ll have the right expertise in a couple of years, that could be a good option to pursue. Check in with Open Phil to learn more about what they’re looking for.

Read more.

Read example research questions on science policy and infrastructure.

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Why and how to found a (GiveWell) nonprofit

Blog post by · Published November 13th, 2015

We’ve argued against nonprofit jobs as an early career move, because many have little impact and you often don’t get good career progression.

However, there’s a certain type of nonprofit opportunity that we think is very exciting: start a nonprofit focused on implementing an evidence-backed intervention in international development i.e. try to make the next Against Malaria Foundation.

Why?

  • There’s lots of evidence-backed interventions that don’t have a well-run, transparent organisation implementing them.
  • Scaling up many of these interventions can be expected to have a big impact.
  • There’s a huge pool of funding for nonprofits going after these opportunities, most notably from GiveWell, but also foundations like Gates and CIFF, as well as government aid agencies. These groups would like to fund more nonprofits, but can’t find enough that meet their criteria.

We’ve talked about this opportunity for years – see our exploratory career profile on it – and it has become even more pressing recently. The money flowing through GiveWell is growing rapidly, but the pipeline of nonprofits isn’t.

GiveWell recently made a post about exactly the sorts of nonprofits they’d like to fund:

  1. Charities that implement GiveWell’s priority programs: vitamin A supplementation, immunizations, conditional cash transfers, micronutrient fortification, or even bednets and deworming (since our top charities that focus on the latter two have limited room for more funding).

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The story of 80,000 Hours (podcast)

Blog post by · Published November 12th, 2015

Here’s a podcast with me by Campus Kudos on:

  • How 80,000 Hours got started.
  • How I ended up working at 80,000 Hours.
  • What it was like being in Y Combinator as a nonprofit.
  • Our plans for the next year.

I’d also recommend checking out Campus Kudos. Often the best way to learn about a career and get a job is to speak to lots of people already in that path, but when you’re at college it’s hard to get the right connections. Campus Kudos aims to solve exactly this problem. If you’re a US student, you can sign up and be introduced to people willing to answer your career questions and provide free mentoring. Check it out and let me know how you get on ([email protected]).

Listen to the podcast

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Why even our readers should save enough to live for 6-24 months

Blog post by · Published November 10th, 2015

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Your ‘personal runway’ is how many months you can easily live if you stopped working. It’s a product of the cash and sellable assets you have on hand, your living expenses, and your ability to draw on your friends and family in times of need.

For instance, if you have $10,000 of savings and live on $1,000 per month, your personal runway is 10 months. If you could quickly and comfortably move back in with your parents or stay on a friend’s couch, cutting your living expenses by $500 a month, then your personal runway is 20 months. If you have non-work income, that boosts your runway further. If you’re lucky enough to have a family who would support you indefinitely in a productive lifestyle, then your runway is indefinitely long.

I think most people we advise should aim to have at least 6 – 12 months’ personal runway, and up to 12 – 24 could be good for flexibility.

I’ve noticed some people in the community who don’t have much runway and don’t appear to be saving, because they are donating a lot of income or doing very low wage work. Unless you have family or friends who’ll support you, you should cut back on donations and save until you’ve got enough runway.

Some more detail follows.

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Our new tool can help you make the right career decision

Blog post by · Published November 4th, 2015

We’ve released a new tool to help you think through career decisions, such as which major to study, which jobs to apply for, and which of various offers to accept. We’ve tested it in one-on-one coaching over the last six months, and are now making it freely available.

These decisions can both be very important and very difficult. This tool will make these decisions easier by walking you through a step-by-step process, asking you the questions we use during coaching, and checking that you’ve applied the most important results of our research. We designed the process using the scientific literature on decision making to reduce bias and it has received positive feedback from many users:

  1. Try out the tool.
  2. Share it on Facebook or Twitter.

It won’t tell you what to do, but it will make sure you haven’t missed anything obvious, are asking the right questions, and have a clear next step. It takes about 30 min to run through.

We will continue to improve the tool in coming months based on your feedback and our experience in coaching.

If you know a friend or family member trying to make a career decision you might also like to pass it on to them!

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Common investing mistakes in the effective altruism community

Blog post by · Published October 28th, 2015

This was written in 2015 and no longer reflects all my current thinking, though I think still makes some good points.

Many in our community are investing money to donate later, as well as saving for retirement and emergencies. Here’s some mistakes I’m concerned they’re making when investing.

I’m not a qualified financial advisor, and this should not be taken as investment advice. For speed, I’m also not referencing all my claims and this piece isn’t as thoroughly researched as normal – I just want to get the ideas out there. Please do your own research before making any investments. This post is based on personal interests of mine, and was not written in work time.

This post is aimed at people who already understand the basics of personal finance and investing. Some starting points for an introduction are here and here.

In summary:

  1. Don’t expect to earn 7-10% returns from US equities. It’s more likely to be 1-7%. Adjust your assumptions about retirement savings and giving now vs. giving later calculations accordingly.
  2. The baseline portfolio is the global market portfolio, roughly 40% international stocks (half US, a quarter emerging and a quarter other developed markets), 20% corporate bonds, 30% international government bonds, and 15% real assets. If you don’t think you can beat the market, this is much closer to what you should invest in than 100% US equities.

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How to write a career plan

Blog post by · Published October 20th, 2015

We see lots of career planning mistakes.

Some people simply don’t have a plan, and hope the future will figure itself out. This leads them to take steps that seem attractive in the short-run but don’t help in the long-run e.g. we’ve met quite a few people who ended up regretting doing a philosophy PhD.

Other people try to figure out “what to do with their lives”, or make a detailed “10 year plan”. That doesn’t work either.

Instead, we recommend:

  1. Have a plan, but make it flexible – we call this flexible plan a “vision”.
  2. Review your plan at least once a year. Think like a scientist testing a hypothesis.
  3. Make sure you gain flexible career capital, that way you’ll be in a better position no matter what the future holds.

For long-term readers, what’s new?
1. New content on how to make your “vision”

We added a new step-by-step process for making your plan based on “ABZ planning”, an idea we found in Reid Hoffman’s excellent book “The Start-Up of You”.

Here’s the process we recommend:

First start by asking:

  1. What does the world most need? List the 1-3 causes that you think are most pressing. If you’re trying to make an impact, then you need to start by understanding what the world most needs.

Continue reading →

Startup employees don’t earn more

Blog post by · Published October 7th, 2015

Image by Sebastiaan ter Burg. License: CC-BY-SA 2.0

Since the average startup founder who makes it to Series A earns more than a large company employee, many believe that early-stage startup employees also earn more (albeit less than founders). Dustin Moskovitz has even claimed that startup early employees have better earnings prospects than founders.

We’ve looked at the data, and this does not seem to be true on average. There are strong reasons why people might want to work at a startup (e.g. career capital), and it’s true the employees of the most successful startups will earn more; but someone deciding between working at a startup vs. a bigger company should rarely be making the decision based on income. On average, startup early employees earn at most only a little more than developers at larger companies.

Three estimates of how much startup early employees earn, including both equity and salary

According to AngelList, early-stage backend developers, for example, generally get about $110,000 in salary and .7% equity (salary data from Riviera is similar).

While the startup salary data is fairly clear, it’s hard to know how to value the equity portion of their compensation. Below are three different methods for doing so, which all show that developers at early-stage startups at most earn only a little more than they would at a large tech company.

1) Using average exit values

Let’s assume the 0.7% equity stake will eventually get diluted down to .35% at time of exit (a typical amount of dilution from Series A to exit).

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New opportunities to work in effective altruism

Blog post by · Published October 6th, 2015

Our parent organisation, the Centre for Effective Altruism, is doing a recruitment round, and is hiring for a lot of positions. If you’d like to work at an effective altruist organisation, these are some great opportunities:

Find more details.

Please email recruitment [at] centreforeffectivealtruism [dot] org if you have any queries or would like to request any alternate arrangements to the usual application process.

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The return to coding bootcamps may not remain so high forever

Blog post by · Published September 21st, 2015

We have been positive about learning to code as a way to gain useful skills for earning to give or doing directly valuable work, and promoted software engineering as a career path.

We are not the only ones who have noticed that this is a pretty great opportunity. From the LinkedIn blog:

Technical talent is in high demand. As of publishing this post, a LinkedIn job search for “Software Engineers” in the US reveals more than 100,000 open jobs. Adding a couple more tech-related roles (“User Designer,” “Data Scientist”) increases the total to more than 200,000 job openings. Job seekers looking to meet job requirements can enroll in a Master’s degree program, but that comes with a 2-year opportunity cost. Now, a shorter path is emerging: fully immersive coding bootcamps.

Coding bootcamps typically last 6-12 weeks and require participants to show up to a class in person. Bootcamps are a relatively new model, but they’re a growing trend that could help close the skills gap. Tapping into the Economic Graph, we compiled aggregated data on over 150 bootcamp programs and more than 25,000 LinkedIn members who have indicated they are attending or have attended bootcamps to identify emerging trends.

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Join us as product engineer, build our interactive career guide, and help millions of graduates have a greater social impact. $1000 for referrals.

Blog post by · Published September 20th, 2015

Our aim is to help as many graduates as possible maximise the social impact of their careers. We’re looking for a web product engineer to lead the development of our interactive career guide.

If you’re a good fit, this job is an exceptionally high-impact opportunity.

And the role will give you fantastic self-development. You’ll be taking a major role in a Y Combinator-funded nonprofit, that’s one of the founding organisations in the effective altruism movement, affiliated with Oxford University, and has grown engagement 25-fold in the last four months.

We’re looking for a full stack web engineer with design skills, who’s really into effective altruism, and ready to take the lead on project with huge potential for impact. The position will be in Oxford initially, then we’ll likely move to the Bay Area. Some remote work is possible.

If interested, fill out our short application form and we’ll arrange a meeting to tell you more.

If you know someone else who might be a good fit, ask them to apply and tell [email protected]. If we hire them and we didn’t know them already, we’ll give you $1,000.

What’s the role?

We’ve done four years of research into how to best choose a career with social impact. Now we want to use that research to make the career guide that every socially-motivated graduate uses.

As product engineer:

  • You’d lead on building our interactive guide.

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Are too many people going into biomedical research – or too few?

Blog post by · Published September 15th, 2015

Are too many people going into biomedical research or too few? As we explore in our new review of the career there are probably too many people entering the field. Biomedical research is a very promising way to make the world a better place if you have a high chance of being a top researcher, but for most people it’s a very tough road and entering could be a costly mistake. In the rest of the post, we’ll explain why and help you figure out whether it might be for you.

Biomedical research is a good path—if you’re a good fit.

We sometimes encounter people who might be a good fit for biomedical research, but who are skeptical about its potential impact. We think this might be misguided because:

  1. There are exciting areas of research that could offer enormous upside, such as anti-aging research, neural implants, gene therapy and synthetic biology.
  2. Potentially very high returns to research with comparatively low costs. According to one estimate, the prevention and treatment of cardiovascular disease in the US in the 1970’s and 1980’s alone had $31 trillion of associated gains. This is on the order of 60 times as large as all spending on medical research over the period. Another analysis estimates that a 1% reduction in cancer mortality in the US would be worth $500 billion (in comparison,

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Will effective altruism destroy the arts? No.

Blog post by · Published September 13th, 2015

158300A recent article on the Washington Post expressed concern that the growth of effective altruism could seriously reduce funding for the arts. It even mentions that the Bonfils-Stanton Foundation recently decided to focus 100% on funding the arts and culture, in part because “philanthropy, directly or indirectly influenced by the effective altruist approach, is increasingly focused on problems perceived as more pressing”.

This was astonishing to me.

Here’s why effective altruism is not going to destroy the arts.

1) Only a couple of percent of American philanthropy is influenced by effective altruism, and it’s not taking funding from the arts.

Explicitly “effective altruist” giving is well under $100m per year, only 0.03% of the total Americans give to charity each year.

If we look more broadly to giving that has an effective altruist style, even if it doesn’t explicitly use the label, the Gates Foundation is the largest proponent. But the Gates Foundation spends about $4bn per year, only 1% of the total Americans give to charity each year.

It seems hard to claim that more than a couple of percent of American philanthropy is even remotely influenced by effective altruism. One study found that only 3% of American donors give based on the relative performance of the nonprofits they donate to. Only 4% of total American giving even goes to international causes,

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What do leaders of effective nonprofits say about working in nonprofits?

Blog post by · Published September 1st, 2015

Rob Mather – founder and CEO of GiveWell’s top rated charity, Against Malaria Foundation. Photo credit:
Andrew Testa.

I reached out to leaders at GiveDirectly, Against Malaria Foundation, Deworm the World Initiative (part of Evidence Action), Schistosomiasis Control Initiative and Development Media International to ask for their views. Here are their responses.

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How can doctors do the most good? An interview with Dr Gregory Lewis

Blog post by · Published August 28th, 2015

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Gregory Lewis is public health doctor training in the east of England. He studied medicine at Cambridge, where he volunteered for Giving What We Can and 80,000 Hours. He blogs at The Polemical Medic. This interview was conducted as part of the research I did for Will MacAskill’s book, Doing Good Better: How Effective Altruism Can Help You Make a Difference. Greg’s story is discussed in the fourth and fifth chapters of that book.

Pablo Stafforini: To get us started, can you tell us a bit about your background, and in particular about your reasons for deciding to become a doctor?

Gregory Lewis: Sure. I guess I found myself at the age of 14 or so being fairly good at science and not really having any idea of what to do with myself. I had some sort of vague idea of wanting to try to make the world a better place, in some slightly naive way. So I sort of thought, “What am I going to do with myself?” And my thoughts were pretty much verbatim, “Well, I’m good at science and want to do good. Doctors are good at science and they want to do good. Therefore, I want to be a doctor.” So based on that simple argument, I applied to medical school, got in, spent the following six years of my life in medical school qualifying as a doctor,

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How to explore in your career

Blog post by · Published August 19th, 2015

Tony Blair tried to make it in rock n roll before going into politics.

We often talk about the benefits of trying out several different paths, especially early in your career. But changing job too often has costs. How can you explore effectively?

Here’s a couple of ideas from our recently updated page on why and how to explore.

Tips for exploring
1. Use your natural exploration opportunities

There are times when, money permitting, society gives you a free pass to do something random:

  • In a “gap year” between school and university, or just after you graduate.
  • In your high school and university summer holidays.
  • In university courses that aren’t your major.

Take advantage of these opportunities as much as you can.

2. Use the “graduate school reset”

After you graduate from university, you can do something unusual and risky for a few years, then go to graduate school, then begin a regular professional career as if not much happened. More specifically:

  • You can take one to two years out before doing a PhD, and by the time you graduate, it probably won’t matter.
  • Sometimes you can use a Masters degree to transition into a new field.
  • You can do a law degree and become a lawyer or go into policy.

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