Re: Why SIAI is a nonprofit

From: Ralph Cerchione (
Date: Sat Oct 23 2004 - 15:37:27 MDT

"J. Andrew Rogers" <> wrote...
> 80% of all new businesses fail because of 80% of all people starting
> new businesses are new TO business -- the distribution of who fails is
> far from random. For people that have been around long enough to have
> figured out how it all works in practice (i.e. been through a few
> failures or marginal businesses), it seems that they have something
> around an 80% *success* rate. There is a learning curve.
I can't speak to these exact statistics, but I think there's a great deal to
what you're saying here about novice entrepreneurs. The learning curve can
be critical, and is often helped along by painful lessons individuals may
have experienced in previous attempts. Or at least witnessed.

> This is one of the reasons that it is always a good idea to hand over
> the reins to a competent and experienced executive if you are new-ish
> to the game if possible. First-timers hate to do this because they
> feel like they are losing control of "their" business, and they usually
> learn the lesson the hard way by making all the same mistakes
> first-timers do. If you can't pull off both attracting competent
> executive talent and giving up control of the company, you probably
> shouldn't be betting the farm on a venture.
This is an interesting point, though I think you could add that with some
kinds of smaller business ventures (such as purchasing and renting out a
duplex for significantly more than the cost of taxes, upkeep, and general
property management), the learning curve isn't always so sharp. There are
definitely small start-ups that don't require you to get a seasoned, Harvard
or Yale-trained executive mastermind to run your pretzel stand, for example.

Having said that, I've noticed that the venture I'm in has benefited greatly
from having a number of experienced people around -- generally speaking, a
team where just about everyone is extremely experienced and/or talented at
some key element of the business (the law, our specific field, the
underlying technology, the needs of our primary customers, revolutionary
product development, etc). We managed to start this company with relatively
little money but with several key people willing to put in enormous sweat
equity. How?

We just handed out significant shares of the stock to our first generation
of key participants and went on from there. We've had enough stockholders
who were willing to work on this project either full-time or part-time over
the past three years to get things off the ground, and our prospects are now
looking quite bright. (Of course, business in inherently unpredictable, so
we'll just have to see.)

My point is that if someone here were interested in starting an
AI-development or related business, there are avenues for attracting talent
that don't necessarily require bucketloads of up-front money. Just a
> Most people are neither careful enough nor disciplined enough (or lucky
> enough) to be successful in business the first time around. My first
> attempts at starting companies were ridiculous failures. I haven't had
> a venture fail in many years (though some never really took off), but I
> would *still* defer to a really experienced and competent executive
> given the opportunity to do so in a business. After all this time, the
> most I can really say is that I am confident that when I start
> businesses they are unlikely to crash and burn.
Though I think you have a point about a "really experienced and competent
executive," I think you have to be careful about defining such a person. You
may have a gal/guy who's an absolutely terrific CEO of Exxon, but who is
utterly lost in trying to launch a small software company. Or you could have
someone who is great at managing a huge, status quo company but who lacks
the imagination or daring to try and disrupt existing markets with a new
innovation that renders old product lines (and the companies that produce
them) obsolete.

Again, it all depends on what you're after. How does all this apply to an AI
research institute dealing with its own personnel issues? Well, it may not,
but it's worth remembering that if you do have the money to hire whoever you
need onto your staff, some place like the Singularity Institute might find
it useful to have one very effective manager actually running the
organization (at least in terms of the distracting details) while someone
like Mr. Yudkowsky focuses on basic research and the big picture.
> j. andrew rogers

This archive was generated by hypermail 2.1.5 : Wed Jul 17 2013 - 04:00:49 MDT