als244.github.io/thoughts at master · als244/als244.github.io · GitHub

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              <p> My personal journal. Good chance these posts don't make sense or make me look like a fool. </p>
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              <h3> Re-Assessment (Passover Edition): Asking Myself the Right Questions </h3>

                The work environment at my last job was one of the main factors that drove me away. Why do I think this would change if I were to create my own business? <br><br>
                I think my idea over the last few months would be that if I were responsible for interacting with customers and leading employees that the environment would be sufficiently "different" enough from last experience (which I reported as poor). But now after a couple weeks of asking myself the right questions, I'm thinking that this reasoning was omitting a couple big components of "environment"...
                <br><br>
                One of the main pieces I didn't really ask myself was my personal end-goal. Why did I feel like I wanted to found a startup? Somehow my mind told me this is what I wanted without me logically asking <emph>why </emph>. <br><br>
                I think my idea for entrepreneurship was driven by wanting to create a product the world appreciated, as opposed to making $. However, this is not a feasible way to grow a successful business. In order to make an impact among many customers the business would need to grow, but in order to grow the business would need to make money. So, of course making money is a necessity and top priority. But the problem is that I do not want it to be the top priority. Thus, my personal end-goal of making an impact with this product requires a culture and mindset of profitting, which I can predict will suck me in to worrying about problems I do not want to be worrying about. I can also predict that other folks on the team (whether it be employees or investors) likely would be driven my the $ (the normal way the world works) so I would run into struggles with directions to take internally.
                <br><br>
                Moreover, I can look back on my previous experience and say there were postitive memories of the work environment when people were collaborating about technical problems. Somehow I blocked this out of my head and convinced myself that it was all bad and it was all bad because the workplace was being managed improperly and that I would do it differently. But this is simply not the reality and was something I told myself for convenience. I really did enjoy the conversations I had with intelligent collegaues about the algorithms and models. This leads me to think that going back to school for CS research could be a option.
                <br><br>
                So why did I build up in my head over the course of a couple months that I wanted to be an entrepreneur when I wasn't motivated by the usual motive (maximally profitting)? I think it could either be that when I started to think of this business idea that my motive was to maximally profit and now my views have changed, or it could be that I never really asked myself the motive and thus irrationally thought that I would be able to make it work without every having to worry about the money part. I don't know which is true, but that honestly doesn't matter anymore. At the present time I'm starting to feel like the business world might not be for me. I still might try to create the application when I get back to SLC and give the buisness world a shot if I start to feel good about the opportunity again. Luckily I bought myself some time to figure things out :)
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              <h3> Life as a Submartingale </h3>
              Imagine a person walking through life experiencing and observing. My completely untestable hypothesis is that we'd expect the next experiences to be better. Key word here is "expect" – of course there may be random bad luck or unexpected outcomes. However, if the person is learning and bettering themselves, then that enables future "opportunities" to be better in response.
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              <h3> Quant Lens on Life </h3>

              There were many aspects of my job that I loved. I learned that I love trying to create models of the market. It is a challenging game because at its core requires modelling human behavior. The step from human intuition to formulas and algorithms was fascinating.

              <br><br>

              My experience as a Quant really inspired significant, positive change in my viewpoint on life. I now walk about my life trying to "model" certain aspects. Many times I make decisions and act instinctively without full acknowledging the rhyme and reasons. I think this is a mistake, but to fix it requires having a solid mental framework of the world. Every decision could and should try to be logical.

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              <h3> A More Worldly Utility Framework </h3>

              Assume you could receive $1 from selling a product people enjoyed vs. receive $1 from taking it away from someone else. Which would you rather do? I'd rather sell a product people liked. How can we formalize this? <br><br>

              <p>I think in basic economic theory the utility funciton of gaining $1 is only dependent on the existing wealth of the individual. However, I'd argue that it is also strongly dependent on the mechanism of gaining it. <br><br>

              My utility is conditional on my own "morals". More formally: The utility function of the <em>other</em> party in the transaction is an input to <em>my</em> function. In one scenario it is a fair "trade" (both parties benefit) vs. the other (one party benefits, while the other loses). My morals (the extent to which the other parties' utility function contributes to my own utility) cause me to choose the fair "trade" activity to generate that same $1. <br><br>

              After my stint as a quant and obsessing about markets, I view many aspects of life through the lense of "trade". Every "action" can be broken down into a "trade". Know what you are trading – is it money, time, emotions, relationships, some combination, something else? Choose the trades you like!</p>

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              <h3> Truths and Business </h3>

              Pieter Thiel mentions that finding "truths" about Nature or People are the key to forming a business. I think I've stumbled across a secret "truth" about people which can serve as the core driver of success for the business.

              <br><br>

              I feel like I've pinpointed a common, innate human behavior that people don't even realize themselves. It is something that seems pretty obvious and people aren't shocked when I explain this subtle behavior. However, pretty much everyone agrees that it is a truth, but it contradicts many consumer behaviors we see.

              <br><br>

              My hypothesis is about people's innate preferences. I'm not well versed, but think it falls under the category of behavioral microeconomics. I believe that the constant bombardment of advertising has masked this truth about human nature. The goal of my business is to create incentive structures to enable people to discover it for themselves, which I hope will lead to an improvement in overall utility. If the business succeeds it is probably because my hypothesis is correct.

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              <h3> Not All Sunshine and Rainbows </h3>

              After quitting my job, I heard a lot of feedback indicating that I was being courageous for taking a risk of unstability. The reality of the situation is that at my core I am risk-seeing person and accounted for the "risk" of being on my own as positive and not a sacrifice. So if I didn't see a downside in this commonly held belief, do I see any downside?

              <br><br>

              The answer is yes. As I said before I think pretty much any decision in life can be broken down into a trade. There will always be a tradeoff between abstract resources. I personally view a volatile lifestyle as a positive, but the tradeoff comes from how this affects my relationships in life. Luckily, I feel like I've formed enough great friendships where people will understand that I'm going to behave un-predictably. However, romantically this is a bit of a issue. I'm probably not going to find a girl who is interested in an unstable fella. Not only that, but I'm not sure I feel comfortable in a relationship knowing that I can't really predict my attention capcaity... I'm OK with this tradeoff for now, but hard to predict when this opinion will change.

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              <h3> Why did I quit my job so soon? </h3>

              <p> I'm sure many people are wonding if I'm in the right state of mind after quitting a job I worked so long to get. Well the overly-simplisitic version is that my priors updated after I noticed unexpected changes in my marginal utility function (read <em>A More Worldly Utility Framework</em>) and after I saw the work environment. Also because I started to form a plan for a career replacement possibility, or time to do some learning.
              <br><br> Let's break those reasons down further...

              <ul>

              <li> <h5>Utility Changes</h5>

              I've always wanted to make money. I think the underlying cause of this is a desire for freedom. Independence of forging my own path is a core trait and I knew that money was a limiting factor for this. However, I over-estimated the amount of $ required to surpass this bar (at least for the short term...). Moreover, my "morals" changed as I grew and started to form a better understanding of the world. I saw where the money from my paycheck was coming from and felt a bit icky. A large percentage of the people we were trading against didn't understand how options work and are valued – and we knew that they didn't understand. As an option market maker (options dealer), our main role was to buy and sell from "customers" (non-market-makers). Each of these transactions is a trade. I'm morally OK with the service being provided to people who have legitmate reasons and an understanding of how options are valued. However, a large percentage of customers do not understand how options work or are valued. Some companies (such as Robinhood) even purposefully deceive uninformed market participants to make options trading seem like something it is not (the separation of Calls and Puts with their different color schemes to try and get a person to trade options based on their delta, and not understand the critical importance of volatility). Normally in business the customer knows the product they get, but in the case of trading options against retail flow / basic institutional clients the customer doesn't really know the product they get. Many people think they do, likely because of a string a luck from a latent variable. I morally felt icky with the fact that we knew we were trading against people who didn't understand the reason they were trading. <br><br>

             </li>

             <li> <h5>Workplace Environment</h5>

             Put simply: I saw bureaucracy in action and hated it. I view employees as helping to contribute to the bottom line in whatever way they can. Many instances the assignments I was given were busy work to send to my manager for my manger to send to his manager to prove that employees were "working". The heirarchy contributed to incentivizing useless (not improving bottom line) tasks. It fogged the goals of the business and funneled the decision making to leaders at the top. If the people at towards the top of this heirarchal structure don't know what they are doing, then the whole thing crumbles. <br><br>

             I saw the busy-work and stood up to it. I wanted to know why they were wasting my time. The reason "because I said so". Opposition to authority figures who rule on the basis of blind trust is another core trait of mine. I enjoy and get behind authority figures who can justify their decisions.

             <br><br> A quote from my manager that is symbolic and exposes the core attitude I disagree with. The quote comes after I was working on a modelling problem (normally reserved to the PhDs, but is a problem that has a strong impact on the bottom line)...<br><br>

             <em>"I'M your manager, SO I DEFINE what your role here is" </em>(said with smirking face and shaking confidence) - January 14th, 2022.

             <br><br>

             It totally could be that I was mistaken in my views and should have followed my manager's directives. However, many other intelligent co-workers agreed with my way of thinking and encouraged me to follow my curiousity. The funny thing is that they didn't act as they preached – they didn't question authority due to negative consequence of a smaller bonus.

             <br><br>

             I get that following the directives of managers is the typical way a business operates, but it is one I strongly oppose. What happens when managers optimize for things that don't improve the bottom of the line business? This property is an initial conditon for an emergent bureaucracy.

             <br><br>

             I just wanted to improve a model so the company could make more money. However, due to the bureaucracy and incentive structure, me working on this problem was actually bad for my manager. It made him see less useful. His main objective was to keep underlings "in line", not to make the business better.

             <br><br>

             In summary, my view is that managers should be teachers and guides, not dictators and gatekeepers. <br><br>

             </li>

             <li> <h5>Career Change</h5>

             I think I've always dreamed of being an entrepreneur, but knew that I must wait for the right idea to come along. Now I feel like I've stumbled across an opportunity and would be a good idea to chase after it. See <em> Truths and Business </em>!

             <br><br>

             I also have spent time recently looking into systems and ML research and found this to be stimulating. My nerd side comes out and I'm geniunely interested in these fields so in my off time I'll see how deep I go into exploring the frontiers of these fields.

             </li>

              </ul>

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