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Entrepreneurship to give v.s. direct impact

Key takeaway: Entrepreneurship has a valuable role to play in EA. However, be conscious about which values you're optimizing for to get the best results! Being transparant about your trade-offs can help other's to improve their impact.

Introduction

I used to think company values were just a routine part of building a company, something you learn in business class and never think about again. I thought that actual company culture is more important than some written values. However, thinking about which trade-offs you're willing to make is important. Formal descriptions of these values can help clarify this.

Modeling actions as value vectors

There are many things that people value. You may believe in equality of opportunity, animal welfare, or plain ol' financial wealth. But values don't just relate to benefactors; ideals like transparency, honesty and courage are all things you can optimize for.

You can model your actions as N-dimensional vectors:

Values as vectors

The N axes are particular values, which are expressed by your action vector. In the example above, you expect that your action positively influences both poverty reduction and climate neutrality to a certain extent. Even though this is unlikely to ever become an exact science [1], your intuitions should be sufficient to make this a useful exercise. [2]

A vector is defined by its direction and its magnitude. Sam Altman calls this the vector theory of impact. Therefore, if you want to accomplish more of a certain value, make it point in the right direction and push that way with all of your force!

But unfortunately things may turn out harder than expected. Your non-profit work is eating away at your company. Your company is eating away at your work-life balance. And so forth. Values can have trade-offs, requiring you to choose what to optimize for. Be wary when someone does something in the name of efficiency. Efficiency of what? Which value are they optimizing and which values are they sacrificing?

If you have too many different values, they may start to constrain each other's magnitude. On the contrary, an (objectively measurable) successful startup or activist's value vectors usually heavily optimize for a particular value.

You can trade-off short-term impact for long-term impact

In the book The Founder's Dilemmas, one of the first models discussed is the "wealth versus control" framework: you can increase your wealth by relinquishing control to others. If you start a company, you can relinquish control by raising funds and handing out shares. However, if you have a strong sense of morality and therefore want to maximise, say, poverty reduction in the world, then you may want to exert a minimum level of control. On the opposite side, the typical employee has relatively little control but a guaranteed certain level of wealth.

However, assuming that you are an altruist and donate or use the wealth you amass to future altruistic projects, then the wealth v.s. control framework can be redefined as future impact v.s. current impact. Here, "impact" means "performing actions with a strong value judgement". Besides earning-to-give and investing-to-give, as an entrepreneur you can also build-a-company-to-give. In all cases, similar factors can help to determine whether you should have a direct or future impact.

If you want to increase your wealth in order to have a future impact you should heavily concentrate your efforts on making a particular set of customers happy without making any particular type of value judgements. Focus relentlessly. You may have a set of minimum standards with regards to transparency and climate, but always be aware that those can eat away at your other goals. Moreover, also be aware of Value Drift, power can corrupt so make sure to put systems in place which prevent immoral behaviour.

Recently, Coinbase and Basecamp announced that they were mission-oriented companies: political discussions and distractions impose costs and their leadership wanted to regain focus. The goal of leadership is to enforce values, and that's what they did.

If you want to have a near-term impact, concentrate your efforts on the particular value (poverty-reduction, climate change, AI risk reduction) and focus relentlessly. Just because you are sacrificing another value, this doesn't mean that you don't think it is important. You may even consider dropping the "value" of earning revenue, in order to start a charity which relentlessly focuses on optimizing for your preferred values.

Due to division of labour and comparative advantage, we can expect it to ultimately be more effective if companies and non-profits focus on the values they're best at. Whether to focus or compromise is ultimately still context dependent, but accurate information about our moral commitments can help you and those around you to choose the best commitments.

Conclusion

Whether you start a new venture to have an immediate or future impact, I think that it will help to be very clear and explicit about which values you're optimizing for and about which potential trade-offs you're making. By trying to be consistent (another costly value to optimize for!) you can make decisions on a solid moral framework.

[1] See the complexity of value thesis: "The human equivalents of a utility function, our terminal values, contain many different elements that are not strictly reducible to one another."

[2] Values might be expressed in terms of other values, akin to basis transformations, so don't worry too much about getting your categorizations exactly right.