I recently interviewed Matt Clifford (left), the Co-founder & Chief Executive at Entrepreneur First, which describes itself as “Europe’s leading pre-seed investment programme for technical founders who want to work on hard problems.” You can read a summary below.
Hauke did a PhD in Neuroscience and was planning to go into academia. But after reading our research, he changed his plans and applied to jobs in German politics, consulting, tech-startups and our parent organisation, the Centre for Effective Altruism. He’s now Director of Research at Giving What We Can, where he researches which charities most effectively alleviate extreme poverty.
Learning about ‘counterfactual analysis’ threw some puts on sunglasses cold water on Lehua’s startup idea.
Lehua Gray’s story is an interesting ‘significant plan change’ because she increased her social impact simply by realising what she was doing was not accomplishing anything when the true counterfactual was taken into account.
Lehua is an entrepreneur in Texas who studied environmental sciences but afterwards taught herself coding. In late 2014, along with two co-founders she had just met at the eBay Hackathon, she founded a company that offered charities an innovative fundraising platform and took a cut of the money raised. Her role in the startup was a combination of coding, UX and sales.
The team’s hope was to make the viral nature of the ‘ice-bucket challenge’ replicable. In their platform, someone would donate money to a charity, but it would only actually be delivered if, say, 3 friends who they nominated matched their donation. They might also be offered the option to do a public challenge on social media that would spread the fundraiser instead of donating the full amount, as in the ‘ice-bucket challenge’.
Over a period of 9 months they had built this platform and were improving it while some charities tested it out.
However, in the first half of 2015 Lehua started following me on Facebook and so started regularly encountering and reading new 80,000 Hours’ blog posts about how to have more social impact.
It’s my pleasure to introduce David Goldberg to those who in the effective altruism community who don’t yet know him. He’s behind the Founders Pledge, which in just 8 months has raised $64 million in legally binding pledges of equity, is growing fast, and has got some very exciting (but currently confidential) plans in the works. I met him when I was representing 80,000 Hours at the Founders Forum conference earlier this year and introduced him in more depth to the idea of effective altruism, which he’s now built into the core of the Founders Pledge’s mission.
Tell us about your background
I did my undergraduate work at UCLA in Political Science and Public Policy and then continued with postgraduate study at the University of Cambridge focusing on International Relations. My plan was to get a PhD and then stay in academics and shape International Security policy. However a year in, I realised that the practical impact of my work would be marginal at best, so I finished with a Master’s degree and began to look for opportunities that would actually have a discernible effect on the world. I got involved with Founders Forum For Good — the precursor to what I do now with the Founders Pledge — where I focused on helping social entrepreneurs build and scale businesses. Before all that, I spent a couple years in finance in the US, started and sold a business in Europe, and ran a chain of Segway dealerships in California.
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:
- There’s two broad approaches to assessing projects – the marginal cost-effectiveness approach and the growth approach.
- The community today often wrongly applies the marginal approach to fast growing startups.
- 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.
We’ve argued against non-profit 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 non-profit opportunity that we think is very exciting: start a non-profit focused on implementing an evidence-backed intervention in international development i.e. try to make the next Against Malaria Foundation.
- 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 non-profits 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 non-profits, 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 non-profits isn’t.
GiveWell recently made a post about exactly the sorts of non-profits they’d like to fund:
- 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).
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).
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.
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:
- There are exciting areas of research that could offer enormous upside, such as anti-aging research, neural implants, gene therapy and synthetic biology.
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,
A 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,
I interviewed three journalists who have written articles that promote important causes: Dylan Matthews, Derek Thompson, and Shaun Raviv.
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.
If you’re an all-rounder who wants to make a difference, consider working as a foundation grantmaker. Grantmaking can seem like an unglamorous profession – reviewing hundreds of applications for funding isn’t the most exciting sounding role – but it has some major upsides if you want to make the world a better place.
Photo credit: Flickr – Refracted Moments
- Working to improve grants at a foundation could well be more effective in terms of the impact of the money moved than earning to give. Which is better will usually come down to how good your personal opportunities are to make money, or get a job at a large foundation working on an important cause.
- If you know of a cause area or organisation that is many times more effective than what any foundations you could work at would make grants to, then earning to give is likely to be better.
- There are other issues, like the impact on your long-term career trajectory, that you have to consider as well as the direct impact of the money you move.
As soon as we thought of the idea of earning to give, we started thinking of ways to beat it. One idea that was floated in the very early days of 80,000 Hours was working in a foundation to allocate grants to more effective causes and organisations. Since a foundations grantmaker might allocate tens of millions of funding, far more than they could earn, maybe they could have a greater impact this way?
In this post, we provide a model for comparing the impact of foundations grantmaking and earning to give, which some people may find useful for specific scenarios where they have more info on the inputs. We also provide some very tentative estimates using the model to demonstrate how it works.
Wealth inequality globally is incredibly high. Perversely, this can be an argument in favour of working in finance.
Many people are concerned that ‘earning to give’ in the financial industry is overall harmful for the world, even if you give away most of your income to outstanding charities.
To figure out if this is true, we have been researching the size of the harms, and benefits, caused by finance. (Though please note 80,000 Hours is not just about earning to give and in fact we think it’s the best path for only a small share of our readers.)
One of the concerns we’ve investigated is that certain parts of quantitative finance are a socially-useless competition between traders that only changes who gets some amount of income, not that someone gets it. I think this is the case, but the incredible amount of inequality in the world makes this argument against working in finance fairly weak.
If you are working in ‘low-latency arbitrage’, make a random clever trade on a stock exchange and beat some other trader to a profit by 1 millisecond, whose pocket is this money coming from? A poor African farmer? No, they have no wealth to take. A middle class American family? It’s possible, but most of their wealth, if they have any, is probably in their house or bank account.
We don’t have perfect figures here, but looking at reasonable estimates,
About 1 in 200 people become doctors, many of them because they want to cure the sick and generally make the world a better place. Are they making the right decision?
To help answer that question, we’ve produced an exploratory career profile on medical careers.
The conclusion of our research is that most people skilled enough to make it in a field as challenging as medicine could have a bigger social impact through an alternative career.
The best research suggests that doctors do much less to improve the health of their patients than you might naturally expect. Health is more determined by lifestyle factors, and most of the treatments that work particularly well could be delivered with a smaller number of doctors than already work in the UK or USA.
However, medicine is high earning and highly fulfilling, and we expect there are more promising opportunities to help others through biomedical research, public health, health policy and (e.g. hospital) management.
Overall, we think going to medical school would be the best way to have a social impact only if someone felt they were a significantly better fit for medicine than the other options we recommend.
Dr Greg Lewis, a practicing physician in the UK, wrote most of the career profile.
- Having more physicians in the developed world has a surprisingly small impact on the health of recipients.
I recently gave a TEDx talk at Cambridge University, where I argue that, most of the time, graduates who want to have a big social impact shouldn’t go straight to work at a charity.
Yesterday we put to rest the idea that 80,000 Hours, and effective altruists more generally, are only enthusiastic about ‘earning to give’. While some people should earn to give, we expect the right share is under 20%, and think that ‘earning to give’ is now more popular among the people who follow our advice than it ideally would be.
Today I want to put to rest another common misunderstanding about effective altruism and 80,000 Hours: that we are against systemic change.1
Despite being the most widespread critique of effective altruism, the idea is bizarre on its face. We are pragmatists at heart, and always looking for any ways to more effectively make the world a better place.
Why couldn’t pursuing broad-scale legal, cultural or political changes be the most effective approach to making the world a better place? The answer is simply that they could!
So there is nothing in principle about the idea of maximising the social impact of your work that rules out, or even discourages, seeking systemic change.
What about in practice, though? Here are some systemic changes people who identify as effective altruists are working on today:
- Most of the recent Open Philanthropy Project research and grants, on immigration reform, criminal justice reform, macroeconomics, and international development, are all clearly focussed on huge structural changes of various kinds.
- The OpenBorders.info website also researches and promotes the option of dramatic increases in migration from poor to rich countries.
- A new startup called EA Policy, recommended for support by my colleagues at EA Ventures, is trialling making submissions to open policy forums held by the US government over this summer.
- Our colleagues at the Global Priorities Project research the most important policy priorities for governments, and how they can establish better cost-benefit and decision-making processes.
- One of GiveWell’s main goals from the beginning, perhaps it’s primary goal, has been to change the cultural norms within non-profits, and the standards by which they are judged by donors. They wanted to make it necessary for charities to be transparent with donors, and run projects that actually helped recipients. They have already significantly changed the conversation around charitable giving.
- Giving What We Can representatives have met with people in the UK government about options for improving aid effectiveness. One of the first things I wrote when employed by Giving What We Can was about appropriate use of discounts rates by governments thinking about health services. Until recently one Giving What We Can member, who we know well, was working at the UK’s aid agency DfID.
- Some 80,000 Hours alumni, most of whom unfortunately would rather remain anonymous, are going into politics, think-tanks, setting up a labour mobility organisations or businesses that facilitate remittance flows.
- Several organisations focussed on existential risk (FHI, CSER and FLI jump to mind) take a big interest in government policies, especially those around the regulation of new technologies, or institutions that can improve inter-state cooperation and preclude conflict.
- 80,000 Hours alumni and effective altruist charities work on or donate to lobbying efforts on animal welfare, such as Humane Society US-FARM, or are activists working for dramatic society-wide changes in how humans view the moral importance of non-human animals.
It looks to me like it’s more accurate to say that effective altruists <3 systemic change.
We’re not done though.
Norman Borlaug didn’t make millions, his research just saved millions of lives.
One of the most common misconceptions that we’ve encountered about 80,000 Hours is that we’re exclusively or predominantly focused on earning to give. This blog post is to say definitively that this is not the case. Moreover, the proportion of people for whom we think earning to give is the best option has gone down over time.
To get a sense of this, I surveyed the 80,000 Hours team on the following question: “At this point in time, and on the margin, what portion of altruistically motivated graduates from a good university, who are open to pursuing any career path, should aim to earn to give in the long term?” (Please note that this is just a straw poll used as a way of addressing the misconception stated; it doesn’t represent a definitive answer to this question).
Instead, we think that most people should be doing things like politics, policy, high-value research, for-profit and non-profit entrepreneurship, and direct work for highly socially valuable organizations.
The misconception persists for a few reasons: when 80,000 Hours first launched, we led with the idea of earning to give very heavily as a marketing strategy; it was true that we used to believe that at least a large proportion of people should aim to earn to give long-term;
Would Angelina Jolie have been as successful if her father wasn’t Jon Voight?
In our talks we often note that in the past people typically went into the same career as their parents, but today young people are free to choose from a much wider range of options that might suit them better. That’s true, and it’s a great thing. However, there are still sometimes reasons to follow in your parents’ footsteps.
New research shows that working in the same field as a successful parent can give your odds of success a huge boost. Surely some of what’s going on here is that the child of a star parent is more likely to try to enter the same field in the first place, but part must also be that they are more likely to succeed when they do so.
Some, perhaps even most, of that effect will be due to to unfair and zero-sum nepotistic advantage, and so shouldn’t be actively exploited. But part of it must also be down to nothing immoral: you will start learning about the work incidentally from a young age, you’ll happen to make useful contacts as you grow up, and your parent may even be able to offer you personal coaching.
Unfortunately, the boost seems to be largest in fields where performance is hardest to measure (it’s smaller in sport and science) or where a brand surname matters, as in politics.
Here are the results for some of the most competitive positions in society:
I recommend reading the full article which has many more details.