Are you sure you want to start a company? (A Letter to Y Combinator Applicants)

First, let's be honest about our industry: programming is a lot of fun, but our industry kinda sucks. Most software produced is sloppy and buggy with bad APIs, most decisions are made based on economic factors, and most programmers are seriously underskilled, which wastes the time of the skilled. (I love strong static typing, though. The guy who is always breaking APIs actually has to fix his shit.) Even in startups, most of the code is hastily written by necessity. Moreover, technology is the best industry out there. Software sucks, but everything else sucks more.

I realize I'm hijacking your line of thought, but here's a problem that could be solved with enough thought put into it. Most smart people really want to work and, when they're motivated, will work very hard and very creatively. But less than 10% of people are doing what they want to do or are really motivated to do it well, so we have a shitty world where most people don't give a fuck. Most people, by age 35, are just jaded clock-punchers who just do what they're told because it's the path of least resistance. We're different; we're idealistic and trying to fight that trend, but "the enemy" (the ocean of suckitude outside our borders) is winning.

So, let's solve that problem. Let's not just fix the software industry. Let's fix work. There are millions of creative people out there with amazing ideas not getting implemented, while the very rich get to implement their shitty ideas and impose them on the rest of the world. How do we make a world that harnesses rather than suppresses this enormous amount of creative and industrious energy that is not being utilized?

If the maximum potential is $20 million, and we're talking about the VC-style go-big-or-go-home sort of business, I agree. A business that will be worth $20 million if everything goes right is likely to end up near zero. The distribution is non-normal and most companies don't reach 50 or even 25 percent of their maximum potential, but less than 1 percent. If the IPO option isn't at least open, try again.

On the other hand, I think people should be honest about all the possibilities. Choosing a path based on what happens for the winningest of the winners is a terrible idea (even though it's what a lot of people do, and why companies overpay their CEOs; overpaying executives is actually cheap when you consider how much harder the chumps work for the slim chance of reaching that level). Which is better, a 60% shot at a $20 million exit, or a 1% shot at $10 billion? Expected value (which VCs care about) says one thing and common sense says another.

Sadly, I think that there are too many people in power who want the current arrangement to persist. Allowing people to work more creatively is great for society, but it's bad for the people who currently hold power (who care more about their relative position in society than the health of society as a whole). I don't see a non-confrontational solution.

I'm half socialist. I actually think the best way out is to provide a substantial basic income. Emphasis on basic, not minimum, income. The difference is that MI means the government makes up the difference for low earners, whereas BI is an amount (of cash and services, such as healthcare and education) that everyone-- rich, poor, or middle-class-- gets. Then there's no "welfare valley" where a person becomes poorer by getting a job; one's income is a monotonically increasing function, as it should be, of what one earns. I think the BI should be about 50% of society's income, financed through flat taxation, a small wealth tax at the upper end, and very high (90+ at top) inheritance taxes. The other 50% is distributed by a free market. This actually makes most middle-class peoples' net tax (remember that they get the BI as well) lower. I would also, if you haven't guessed this, cut the military budget dramatically.

Once BI is in place, you don't need the patchwork of semi-authoritarian and conditional welfare programs that require bureaucracies to prevent abuse and fraud or determine who should get it and who not: everyone gets it. The rest of the wealth is allowed to flow on an essentially free market (so you have a capitalistic engine on top of the socialist infrastructure). It's freer than the one we have. For example, once everyone has basic income, you don't need a minimum wage (which is just a clumsy minimum-income program paid-for by low-end employers, who compensate by hiring less, creating unemployment).

No one has to work, so the least productive people probably use the option not to work, but the most productive people do a lot more: they're more creative, autonomous, and effective. Basic income wouldn't stop most people from working, but it would dramatically change how they work-- for the better. The net gain is positive. The worst thing about basic income is that it might create an underclass of entitled parasites at the bottom of society, but authoritarian corporate capitalism has a class of entitled parasites at the top of it, and that's a lot more unhealthy for society.

One partial fix might be to "fix" job searching, but internet career sites are nothing new and, while they might match talented people more efficiently with jobs, don't fix the underlying problems of corporate capitalism. Startups are great, for people privileged enough to do them and connected enough to have a shot, but in the "real world", bad people are on top and hold the cards.