January 3, 2024

January 3, 2024

2024 Anti-Letter

As I’ve read end of year memos and 2024 predictions over the last week, there is a recurring theme I think worthwhile of addressing: non-commitment. Quite paradoxical, one might note, to the concept of new year resolutions in the first place – conviction and newfound fortitude that is supposed to be applied to ideas, routines, self. To clarify what I mean by non-commitment: in an internet era where people are quick to judge, and even worse, turn against you for believing in something different than the mainstream expectation, it is easier (and much more forgiving) to default to a summary of facts and current affairs and some obvious forward looking “takes.” If things go wrong / not according to plan, having aligned with the consensus decision and following the rules according to the pack never gets you punished… but it also makes it difficult to ever actually get ahead. Committing to an idea, to a set of actions… requires a deeper type of thinking. What do you actually believe in? Are you willing to stand by this publicly? Have you done the work such that you have real information to make your case? Research and memorization is a different exercise than reflection and analysis. Related, I tend to believe the latter form of thinking creates great investors over a long time horizon (horizontal frameworks instead of domain-specific expertise).

By no means is this piece meant to serve as a criticism of anyone’s writing in particular. Some letters are well written, provide a cohesive narrative on a wide array of information, and importantly forced me to think and reflect. Perhaps this should suffice on its own. But I find myself searching for a meatier substance, a real stance. Nothing contrarian for the sake of it, or controversial seeking attention… just new, honest, brave. What matters? Things both trivial and non-trivial can be equally important. 

It should be evident, but to set an expectation – perspectives can change. Taking a stance does not mean you are beholden to that idea for eternity. Any sort of conviction means you are seeking knowledge, which is inherently good. I am in the middle of Allan Bloom’s The Closing of the American Mind, and I look back to this passage… you have to have the experience of believing (even if it’s wrong) before having the thrill of liberation: 

“Descartes had a whole wonderful world of old beliefs, of prescientific experience and articulations of the order of things, beliefs firmly and even fanatically held, before he even began his systematic and radical doubt. One has to have the experience of really believing before one can have the thrill of liberation… Error is indeed our enemy, but it alone points to the truth and therefore deserves our respectful treatment. The mind that has no prejudices at the outset is empty. It can only have been constituted by a method that is unaware of how difficult it is to recognize that a prejudice is a prejudice. Only Socrates knew, after a lifetime of unceasing labor, that he was ignorant. Now every high-school student knows that. How did it become so easy?”

It has become so easy to believe in nothing at all, disguised under the virtue of openness, probably more legitimately a missing desire to seek or know the truth (whatever you believe that is – the truth is not necessarily universal). I am struck by the difference in this mentality compared to what we often refer to as the greats from older generations – Aryeh Bourkoff writes sort of prophetic annual letters at Liontree, Howard Marks synthesizes extremely precise predictions, and even defines right vs. wrong on occasion. He also retroactively adds to / reverses his thinking. Albert Wenger has committed to some of the most non-conventional ideas around capital and privacy (technological progress and privacy are incompatible). Then there is his (insightful) post on tech tribalism that unabashedly goes after PG, pmarca, etc. 

I recently criticized Reddit for clamping down on third party clients. I pointed out that having raised a lot of money at a high valuation required the company to become more extractive in an attempt to produce a return for investors. Twitter had gone down the exact same path years earlier with bad results, where undermining the third party ecosystem ultimately resulted in lower growth and engagement for the network. This prompted an outburst from Paul Graham who called it a “diss” and adding that he “expected better from [me] in both the moral and intellectual departments.”

Comments like the one by Paul are a perfect example of a low rung tribal approach to tech. In “What’s Our ProblemTim Urban introduces the concept of a vertical axis of debate which distinguishes between high rung (intellectual) and low rung (tribal) approaches. This axis is as important, if not more important, than the horizontal left versus right axis in politics or the entrepreneurship/markets versus government/regulation axis in tech. Progress ultimately depends on actually seeking the right answers and only the high rung approach does that.

That tech tribalism is the same concept that I’m attempting to counteract by writing this post… but where I’d add some nuance is at least that tribalism stands for some set of values and beliefs… albeit occasionally shallow or even cult-like. Better this than everything and nothing all at once (“openness”). 

In this spirit, it only feels appropriate to share some concepts that I believe in, which will probably matter in the context of political / social / technological evolution in 2024. 

  • Privatization of public goods. Addresses the free rider problem and more importantly introduces competition which should incentivize higher quality, cost efficient public goods. Should result in higher overall consumer utility. This idea is materializing importantly in education with recent “universal school choice” policies – Arizona was the first state to pass this last year. School choice – enabling families to use otherwise public schooling allocated tax dollars for private or home schooling – is something I believe in, and am interested in investing behind. I do believe that over the long run, the way this will play out is a reformed / higher quality public schooling system, driven by private market entrants and enhanced competition, lower costs… and acknowledge a potentially intense inequality consequence in the short run. I am willing to accept this tradeoff as is. Same in other domains.

  • Preservation of individual freedom over the rights of a collective group. Limits excessive government control and prevents authoritarian tendencies – which only seem to grow stronger with concentrated information sources, political victimization, policy tension around new technology systems i.e. AI. Free market principles should win. Individuals feel responsible for their own actions, higher perceived (and real) agency drives innovation. Collective rights become dangerous when under the guise of individual liberty… turning into tokenization, limitation of personal control – most threatening right now around data, body, safety / defense. 

  • Undervalued correlation between labor input and output. Meritocracy matters. A growing “the world is not fair” mentality de-emphasizes the value of hard work. There is no substitute. How AI, specifically task-specific agents, augments the idea of labor input is super interesting… and it seems logical that human labor hours will reallocate elsewhere, still yielding a corresponding higher return with more hours of input invested upfront. Working harder than the rest (even if it’s an agent who is working  “harder” – however you measure that i.e. efficiency or accuracy) is some of the highest leverage.

Commit to exploring your own understanding of the truth and shift if you decide you are wrong. Do this thinking in the open, especially if your ideas don’t align with the majority sentiment (which is, a lot of the time, not to think at all…). I will continue pushing myself in this direction in the new year. Happy 2024. 

(art by Ed Ruscha)