Vaccination with the EMH

post by AllAmericanBreakfast · 2020-12-29T03:05:22.466Z · LW · GW · 17 comments

Contents

  Part 1. Is "1,000 True Fans" reasonable?
  Part 2. Why Did I Bother?
  Part 3. An attempt to vaccinate myself with the EMH
  Part 4. Mental vaccination and the Good Try Rule
None
17 comments

Part 1. Is "1,000 True Fans" reasonable?

To be a successful creator you don’t need millions. You don’t need millions of dollars or millions of customers, millions of clients or millions of fans. To make a living as a craftsperson, photographer, musician, designer, author, animator, app maker, entrepreneur, or inventor you need only thousands of true fans.

The "1,000 True Fans" concept is that a content creator can make a living of $100,000 per year if they make a profit of $100 per true fan, and have 1,000 true fans.

I notice that the concept makes my brain think "that seems do-able!" And that makes me think it sounds like a get rich quick scheme. So I want to spend some time thinking about it carefully.

We should appreciate creative thinkers. Kevin Kelly, who appears to have written the original post on the idea, is giving us a free, possibly very helpful idea. This is going to be a work of criticism, but I hope that it will be constructive. Kelly seems to be a pretty successful writer, and his idea has plenty of high-profile proponents. So I don't think I need to treat it with kid gloves.

Why does my brain think "sounds easy!" when it reads this idea? First of all, 1,000 is a much smaller number than millions and millions. I can imagine my family members and a few friends being true fans. That's, like, 10 true fans already and I haven't even started! Plus, $100 doesn't seem like very much money to ask for. That's like $8.50 per month.

Let's get some perspective on these numbers. A Netflix subscription is $9/month. So you need to be providing your true fans with the kind of value that Netflix provides to the average customer.

Although 1,000 true fans seems like a do-able number, we have to ask about the relationship between "true fans," "regular fans," and "occasional consumers." Go to any concert, and true fans most likely are only a small fraction of the total audience. Likewise for books and blogs and Youtube channels. I think I'm pretty normal in reading the complete works of a very few authors, and one or two books by a much larger number.

At one point in his post, Kevin Kelly estimates that for every 1 true fan, you should expect to have 2-3 regular fans:

... for every single true fan, you might have two or three regular fans.

And later on, he estimates a 1:7 ratio:

Yet if even only one out of million people were interested, that’s potentially 7,000 people on the planet. That means that any 1-in-a-million appeal can find 1,000 true fans.

 Is that a reasonable ratio? Based on my own music and book consumption habits, not at all. I almost always read 1-2 books from any given author; the number of authors who I've read their complete works is tiny. Likewise for music. And I virtually never buy music albums, band merch, or new books. I use Spotify and go to the library, the used book store, and borrow from friends.

Artists make a fraction of a penny per stream. I've listened to every album by the Tallest Man On Earth many times, but almost certainly not not more than 50. He's got like 5 albums on Spotify, with around 10 songs each. Kristian Matsson's probably made like $10 from my streaming his songs over the last 4-5 years, and he's one of my favorite musicians. If money is the measure of a fan, I'd have to like him 50x more to qualify as a Tallest Man On Earth super fan.

Part of the problem is that most content creators are far from unique, and the internet means that they're all competing against each other on a global scale. Kelly uses death metal bands as an example of a niche art form, but Wikipedia's list of death metal bands is so long it had to be split into two parts.

Part of Kelly's argument is that the advent of the internet makes it easier to search for and market to obscure interests. This seems obviously true to me. But that effect doesn't just increase demand. It also increases supply. That argument by itself does not justify the claim that the internet has dramatically improved the ability of niche content creators to make a living.

Later on in his post, Kelly admits how much work it would take to cultivate 1,000 true fans:

Done well (and why not do it well?) it can become another full-time job. At best it will be a consuming and challenging part-time task that requires ongoing skills.

It is trivially true that, relative to stardom, gaining 1,000 true fans is "a much saner destiny to hope for. And you are much more likely to actually arrive there." But saner and more likely is not the same as sane and likely.

It's not totally unreasonable that a smart, well-educated citizen of an industrialized nation could build a career in which they were making $100,000 per year. In the USA, they could spend a couple years earning academic prereqs, then go to P.A. school for 3 years. Some unreliable anecdotal evidence from a P.A. student forum suggests that students spend around 65 hours per week studying. When they graduated, they'd be earning roughly a $100,000 annual salary.

It's seems reasonable that a smart person who dedicated themselves to producing content with the same level of devotion that a student puts into becoming a physician's assistant could achieve the same income in 5 years or less.

But Kelly suggests that the range of effort required to achieve the same thing is far less: 20-40 hours a week, over the course of around 3 years. That's around 20-35% of the effort it takes to become a P.A, without even considering debt.

Maybe we can modify Kelly's advice to make it even more sane. Perhaps one in three people or one in five people who put in this level of effort are likely to make a good income, while the rest will not? But if this is what Kelly meant, he left this detail out. It makes all the differences.

Part 2. Why Did I Bother?

It wouldn't be fair to accuse Kelly of authoring a get rich quick scheme. "1,000 True Fans" is merely a get wealthier faster scheme. It's in that sweet spot between being so "likely and sane" that it's unexciting, and so extravagant that it seems silly from the start.

I can question its claims. But why get into the details, when I could have glanced at it, thought to myself "this looks like it violates the efficient market hypothesis," and ignored it?

I'm interested in investing in "thought capital," that would allow me to look at an article like this, know it for what it is, and dismiss it out of hand.

Arithmetic is "thought capital." That's what allowed me to calculate out how Kelly's assertions about the level of effort involved in getting 1,000 true fans compares the effort it takes to become a P.A.

Facts and knowledge about the world are another form of "thought capital." They let me remember a ballpark amount that Spotify pays its artists, the rough annual income for a P.A., and the price of a Netflix subscription.

Investing in all these forms of knowledge allowed me to construct this blog post. The ideas just naturally came to me as I went along.

But the EMH brings it all together in a much bigger way. It says:

  1. Is this author suggesting that it's much easier to do one job than another and make the same money?
  2. THEN THIS AUTHOR IS WRONG!!!!

Insert your own caveats to (1) about risk, "passion jobs," etc.

We don't have to be EMH fundamentalists to have it as an extremely strong prior. For my brain, apparently, it's not. There's a way to read "1,000 True Fans" not as a "get wealthier faster" scheme, but as a modest claim that content creators who are prepared to assume considerable risk and work very hard for years may eventually be able to make a tidy income.

I notice that my brain did not intuitively interpret it that way. I wonder whether Kelly would be shocked to hear that, or whether it's the effect he intended to produce. If he wanted to ensure readers absorbed the modest, plausible claim, he could have started it that way. It took me a fair bit of thinking to realize that my brain was interpreting Kelly's article as a "get wealthier faster" scheme, and to convince myself that this interpretation was implausible.

The reason I think this happened is that most of Kelly's individual statements are correct, and that he doesn't come right out and state his point in the most boring language possible up front. If he'd started with "It's easier to be a modestly successful content creator than a star, though it still takes years of hard work with no guarantee of success," I would have probably shrugged, maybe chuckled at the "only" in "you need only thousands of true fans," and clicked away at the end of the article.

In general, the phenomenon I'm trying to avoid is something like this:

  1. Article makes an argument for a plausible claim.
  2. Brain interprets this as evidence for a related but implausible claim.

It's definitely possible to de-confuse yourself by applying critical thinking to the specific claims of a particular misleading argument. That's what I've tried to do here.

Is it possible to vaccinate yourself more broadly against misleading arguments in a certain category, with efficacy in perhaps the 30-95% range? I'm not talking about committing to ignore them out of epistemic learned helplessness. Instead, I'm talking about absorbing a good heuristic, like the EMH, on such a deep level that it activates your mental defenses even in the face of a viral meme that looks a little different from the varieties you've seen before.

Part 3. An attempt to vaccinate myself with the EMH

What does the efficient market hypothesis imply?

I think that the key insight here, for me, is the idea that we should train ourselves to ignore rewards. My brain is always looking for easy money lying on the ground. Easy ways to make a buck. Easy ways to be more popular. Easy ways to produce good writing. Easy ways to learn more quickly. This strikes me as one of those classic cognitive biases that originally attracted me to the study of rationality.

The better thing to do, I almost always find, is to focus on working 1% harder, 1% smarter, with 1% more focus and consistency.

Part 4. Mental vaccination and the Good Try Rule

What would it mean to give this project of mental vaccination with the EMH a good try? [LW · GW]

A good try is more than the minimum effort. Writing a post about it is a good start. I could try to think about the EMH every day, and have a conversation about it with my girlfriend tonight over dinner. I could look up other writing in the corner of the blogosphere where Kevin Kelly writes and see if I can find more examples of such seductive posts, so that I'll recognize them on sight.

A good try is disruptive. Vaccinating myself with the EMH would probably entail installing some new habit, maybe a five minute meditation on the virtue of not chasing rewards and of focusing on the value that my work can provide to others.

A good try is for its own sake. Whatever concrete steps I take to vaccinate myself with the EMH, I don't want to assume I know exactly what the result will be, or the goal I'm after. "Vaccinate myself with the EMH" is a good phrase because it's powerful enough to be motivating, but doesn't actually say anything in particular about what outcome I'm looking for. It's an open-ended experiment.

A good try is respectful. This goal is something I'm exploring like a new friendship; specifically, a new friendship with a wiser, more level-headed version of myself.

A good try is committed. That's why I need to talk about the idea, develop some rituals to practice it, and put those rituals on a calendar.

I think it's important to say here that at this point, I've only really done symbolic experimentation with the idea of "vaccinating myself with the EMH." I have not yet given it a good try, I haven't really tried it. That won't be true unless my relationship with the idea continues in the form of concrete actions for at least a month or two.

17 comments

Comments sorted by top scores.

comment by ChristianKl · 2020-12-29T16:54:24.998Z · LW(p) · GW(p)

The key insight of Kevin Kelly is that if you are a metal band you don't optimize for the number of listeners on spotify. You don't try to please everyone but you can focus on providing value to a niche audience that can personally interact with you. 

It's possible to build products that aren't for a mass audience but get funded by true fans. That might be obvious today in 2020 but in 2008 when the article was written there was no patreon, kickstarter, onlyfans or substack. There a good chance that onlyfans is named the way it is because of Kevin Kelly's article. 

Replies from: AllAmericanBreakfast
comment by AllAmericanBreakfast · 2020-12-29T17:03:35.727Z · LW(p) · GW(p)

Right, and that’s a valuable point especially in historical context. If KK had written his post in a way that emphasized this business strategy while driving home that it still takes about as much work to make $X as a content creator as in anything else, I wouldn’t have had any qualms.

Replies from: ChristianKl
comment by ChristianKl · 2020-12-30T01:48:11.589Z · LW(p) · GW(p)

I don't think it's a failure of a post about cultural commentary not to be focused on self-help and trying to estimate how hard it is to make a living as a content creator. It's just not the main point.

comment by pjeby · 2021-01-02T19:20:21.581Z · LW(p) · GW(p)

It's possible for a smart adult to pretty reliably make a good living in any job as long as they're willing to put in about 65 hours a week for about 5 years building their skills/credentials/business. Making more money in less time typically requires tradeoffs in terms of intrinsic talent/assuming risk/doing unpleasant work. The idea that the average person can do more with less is less plausible the more extreme the edge is supposed to be.

I think this paragraph is contradicting itself. It begins with "possible for a smart adult" and then concludes with "the average person". The average person is not a smart adult.

The point of 1000 True Fans is not about averages, but about comparative advantage. Focusing on a niche audience that values what you produce to the point that they'll spend 1000 times or more what the average person would. (i.e. $100 year vs. a few cents for a non-fan for the same music).

Catering to a niche is not a violation of the EMH (which for some reason I always initially read as "the Emergency Medical Hologram"). Effective marketing is also not a violation of the EMH. Both are ways to increase demand, or at least shift it to a different target, for a subset of the market. (They also scale up: you can have 100 superfans who spend $1000, or 10 super-super-fans who spend $10,000 -- though probably not if what you sell is music. But for other types of product this is certainly possible.)

If someone reads this article and interprets it to mean that they should just take whatever random job making roughly the same amount of money, it could be a disaster for their utility (and maybe that of the world), depending on what they value. It is not easy to make lots of money, but there are many ways and circumstances under which "make money on the internet doing something you love" is both more easy and more rewarding than working a job would be.

I quit my last corporate gig in part because I couldn't bear sitting in another meeting arguing the same things over and over and never getting any conclusion to them... when over the weekend prior I'd made five figures by talking for around ten minutes.

I am, of course, leaving out the years of work that previously went into being able to give that talk, what I spent to be in the context where I gave the talk, etc., but all of those things were still rewarding in ways that a corporate job wasn't. In particular, a sense of personal meaning in overcoming challenges to do things I wanted done, vs. the oppressive sense of having to shovel shit to get things done for one company or another.

Can the "average" person do that sort of thing? No. Absolutely not! I have attended internet marketing courses and observed how little the "average" person comprehends or is able to reproduce what they are taught with regard to marketing. (And I'm not claiming to be particularly good at it -- I've always considered myself awful at it, only to recently realize that the vast majority of people are even worse!)

Are LWers "average" in general? Maybe. But ISTM that a lot of very non-average people congregate here. I would guess that the main ingredient a typical LWer would lack at being able to take advantage of existing market inefficiencies and civilizational inadequacies is either the ability to think like a marketer, and/or the willingness to act like one.

Replies from: ChristianKl
comment by ChristianKl · 2021-01-06T16:20:01.087Z · LW(p) · GW(p)

I would guess that the main ingredient a typical LWer would lack at being able to take advantage of existing market inefficiencies and civilizational inadequacies is either the ability to think like a marketer, and/or the willingness to act like one.

Even without that willingness I think there's a good chance that Scott Alexander could make more money as a content full-time content creator then as a psychiatrist without following the standard marketing wisdom. 

In another recent thread there's discussion about Peter Limberg from TheStoa. Within the last year he managed to build up a 2k/month income while ignoring the traditional marketing wisdom on Youtube. He doesn't tell people to subscribe at the end of his videos. He deactivated Youtube comments because he believes them to be a crappy medium. It's quite plausible that another year of doing TheStoa would bring him to 100k.

There are plenty of niches that call for people who have high standards and if there's value provided they can support a person.

comment by MichaelLowe · 2020-12-29T21:10:51.597Z · LW(p) · GW(p)

Very well written post, although I disagree with the main conclusions. But first of all, I agree that both in the original and in the updated version of the essay Kelly seems to imply that if an average artist goes for his strategy, they can expect (>= 50%) to be able to live off their work: 

I don’t know the actual true number, but I think a dedicated artist could cultivate 1,000 True Fans, and by their direct support using new technology, make an honest living. 

Having said that, I do not think your conclusions about the EMH hold here, or that they are somewhat inconsistent with your other statements. First of all you agree with the author regarding the superiority of the "1000 true fans" strategy over the broad appeal strategy.  

However, then you assert that according to the EMH it is impossible that one job is much easier than the other. But that would also mean that the "1000 true fans" path cannot be superior to the normal path, so both of your assertions are (somewhat) in conflict with each other.

But the EMH brings it all together in a much bigger way. It says:

  1. Is this author suggesting that it's much easier to do one job than another and make the same money?
  2. THEN THIS AUTHOR IS WRONG!!!! 

Personally, I both believe that the 1000 true fans strategy is indeed more superior for many/most creators and in that sense a 20 dollar bill that is lying on the ground for a long time. If one believes in the EMH here, one would also need to explain why it took >10 years for OnlyFans and Substack to emerge. 

Replies from: AllAmericanBreakfast
comment by AllAmericanBreakfast · 2020-12-29T23:11:28.784Z · LW(p) · GW(p)

Thanks for your constructive feedback. I’m not an EMH fundamentalist. It doesn’t surprise me when people find an edge, and it doesn’t surprise me when possible advancements aren’t developed the instant they are technologically feasible. I just think that if you run the numbers, KK’s post is written to suggest that it’s far easier to make a living as a content creator than as a physician’s assistant, and I think that’s unlikely.

As for the stardom vs “true fans” approach, I don’t actually think my post was saying that one’s better than the other. In fact, I was pointing out that getting 1,000 true fans likely requires getting many times that number of regular fans. I might be wrong here. Getting 1,000 true fans is definitely saner and more likely than becoming a star. But being a star comes with greater rewards. It’s a risk/reward trade off. I don’t know which has the higher expected value.

I’m not super clear on what steps you would take to pursue the “true fans” approach that you would not also take in pursuit of stardom. KK’s post seems mainly of value in reminding content creators that there are tiers of success that can provide you with a good living short of stardom.

Replies from: ChristianKl
comment by ChristianKl · 2020-12-30T01:48:28.815Z · LW(p) · GW(p)

I’m not super clear on what steps you would take to pursue the “true fans” approach that you would not also take in pursuit of stardom.

The traditional way to get stardom is not through having direct relationships with your fans but through signing up with big record labels and publishing houses. The strategy that Kevin Kelly advocates is different to the way people archieved stardom before. 

Replies from: AllAmericanBreakfast
comment by AllAmericanBreakfast · 2020-12-30T02:15:21.363Z · LW(p) · GW(p)

I always kind of assumed that content creators would typically need some kind of fan base before they’d be able to get a record or book deal. Maybe I’m wrong about that, though.

Replies from: ChristianKl
comment by ChristianKl · 2020-12-30T13:46:08.694Z · LW(p) · GW(p)

It used to be that publishing houses and record labels saw their role as discovering and building up talent. 

Now, we have a world where the power of institutions like record labels to make stars is a lot less then it used to and there are more people who have success independently of institutions. In that world success independent of institutions is a signal for the institutions that a person is more likely to have promise.

Getting a book deal reduces the amount of profit you can get per true fan. The people I know personally who make a good living as content creators on the internet likely could get a book deal, but it they make more profits in the blueprint that Kelly lays out then they would if the would go for the book deal.

Additionally, people with expertise but without an established audience can still get book deals if they have a book proposal that the people at the publishing houses find promising.

comment by arunto · 2020-12-29T07:46:46.199Z · LW(p) · GW(p)

I like this way of applying EMH to a wider spectrum of situations outside of financial markets. When I first learned about EMH in college a textbook condensed it to "There is no such thing as a free lunch!" Which has been quite helpful for me in a lot of financial situations.

So in order to vaccinate myself with the EMH an additional daily task (additional to the meditation about rewards you have mentioned) could be: Spend 5 minutes each day on identifying promises (by others, by the media, by advertising) or hopes (by me) of a free lunch. So that spotting those becomes automatic.

comment by Viliam · 2021-01-02T19:29:35.864Z · LW(p) · GW(p)

Is this author suggesting that it's much easier to do one job than another and make the same money?

What if it is much easier for you, but not for most people? For example, if there is something you love but everyone else hates... would it make sense to accept a well-paid job that requires you to do it often?

This is almost like "follow your passion" but with the important detail that it has to be a rare passion.

comment by AllAmericanBreakfast · 2021-01-01T20:37:27.161Z · LW(p) · GW(p)

I'm going to use this comment thread to keep track of some ways I try to activate my mental immune system via the EMH, to meditate on the work that must come before reward.

Replies from: AllAmericanBreakfast
comment by AllAmericanBreakfast · 2021-01-02T00:34:19.272Z · LW(p) · GW(p)

Thoughts on reading Gwern's about page on the content on his website:

"What sort of writing could you create if you worked on it (be it ever so rarely) for the next 60 years? What could you do if you started now?"

This rings my get-rich-quick alarm bell. My brain's impulsive reaction is to imagine that there's a way to "get rich," or its equivalent in terms of the impact of your writing, with minimal effort, as long as you aim to get your payoff many decades in the future. I don't think that's what Gwern meant, and I'm criticizing my own reaction, not his writing.

There are big decisions that will need to be made one, five, 10 years in the future. It makes sense to start thinking about them now. We don't want to spend so much time optimizing near-term details that we lose track of long-term enormities.

Gwern's noting that people seem to pay too little attention to the long-term. They write blogs with no attention to cohesiveness or publishability. They toss out content without doing any work to collect, update, and preserve it. They address topics they think will give them 20 rather than 10 readers next weekend, rather than building toward the capacity to write articles that are much more influential in five or ten years.

The contrary argument is that people might do this because they're much worse at long-term planning than they are at making a short-term effort. There's probably an inverted U-shaped distribution of value in planning at various time horizons. If the long-term plans can't be concrete and actionable, what are we supposed to do with them?

In any case, Gwern's not advocating a "get-influential-with-minimal-effort" scheme. It's just a call to plan for the long term in your writing habit, as we try to do in other areas of life.

What was the role of the EMH in these considerations? It was to notice my brain getting overly interested in the possibility of a reward. Then I considered Gwern's questions under the assumption that any possible reward requires some combination of hard work, skill, luck, and sacrifice in order to scrape together an investment, and that the work has to be actionable for me and provide concrete value to others. His question, I think, is best interpreted as:

Could you help other people more over the course of your lifetime if you diverted more energy to planning for the future rather than optimizing for the present? What about with your writing? If so, what kind of planning projects would be most useful?

This is a sensible question, and one that silences the "get rich quick" alarm bell.

One way to try and answer it that springs to mind is:

Make a list of concrete decisions I expect to face in the future. These should be decisions that will involve creating some sort of framework, collating data, and figuring out how to combine it to narrow options and make a choice. Furthermore, I should focus on decisions where the normal course of life is going to frequently present me with data relevant to that decision, yet which I am likely to forget because I haven't done any work to consider how to integrate it into my framework. Alternatively, I could focus on decisions where there's a deadline, and a risk that I might not start soon enough to come up with a good framework and gather the required data in time.

Let's label these two classes of decisions "long thinks" and "hard decisions."

I could then babble a list of decisions I expect to have to make over the course of my lifetime, and categorize them as "long thinks," "hard decisions," both, or neither. "Neither" doesn't mean a decision is easy or unimportant; it just means that there's no deadline and no data stream to capture by planning ahead.

Let's try to come up with ten:

  1. Which professor to do research with in an MS degree.
  2. Whether to publish a blog on my own website under my real name.
  3. What to do when my lease is up; when and whether to move for graduate school.
  4. Whether to pursue a PhD, and if so, what to study.
  5. Whether to have children.
  6. If I publish a blog on bioprinting and tissue engineering, what sorts of posts to write for it.
  7. Whether to add a focused project to argue for a wider conversation about human challenge trials and pandemic vaccine strategies.
  8. Whether to change my strategy for life improvements (i.e. better diets, exercise, etc) to focus on making much larger, more permanent changes.
  9. What clothes to buy next year.
  10. What car to buy next.

(1) is more a hard decision than a long think; all the professors are out there to be contacted, as are their grad students. That's most of the data I'd have anyway to decide whom to work for.

(2) is neither. There's no deadline, and I don't notice myself routinely having experiences that could bear on whether or not to publish a blog.

(3) is a hard decision.

(4) is a hard decision and a long think.

(5) is a hard decision and a long think.

(6) is a long think, because if I had a framework for what sorts of posts to write, I could consider my daily reading and writing in terms of that framework.

(7) is a long think, since it's a topic that keeps coming up.

(8) is a long think, since I already have conversations about and make attempts at life optimization, the data from which is often lost.

(9) is neither.

(10) is a hard decision.

comment by noggin-scratcher · 2020-12-30T02:00:01.333Z · LW(p) · GW(p)

Between

I think that the key insight here, for me, is the idea that we should train ourselves to ignore rewards.

and

"try to do good work today, and trust that a fair reward will come."

I fear there's a failure mode where you fall off the efficient frontier of (money vs effort/unpleasantness) and just do worse than the hypothetical EMH limit in every dimension (doing much better might be unlikely, but there's no barrier to doing worse)

So I would expect to need to pay some attention to rewards, if you want to ensure you land somewhere in the neighbourhood of "at least approximately as well rewarded as the best similarly difficult work".

(It feels ironically possible that I'm interpreting the article as evidence for a related but implausible claim, and you didn't mean what I'm reading into it)

Replies from: AllAmericanBreakfast
comment by AllAmericanBreakfast · 2020-12-30T02:16:37.721Z · LW(p) · GW(p)

I mean it loosely. Ignore doesn’t mean that you never pay attention to rewards, just far less attention to them than to the quality of your work.

comment by kithpendragon · 2020-12-31T00:07:56.570Z · LW(p) · GW(p)

After all this time, does anybody else still tend to read EMH = "Emergency Medical Hologram"? Made sense in the title even!