I do agree that it increases the variance of outcomes. I think it decreases the mean, but I’m less sure about that. Here’s one way I think it could work, if it does work: If some people are generally pessimistic about their chances of success, and this causes them to update their beliefs closer to reality, then Altman’s advice would help. That is, if some people give up too easily, it will help them, while the outside world (investors, the market, etc) will put a check on those who are overly optimistic. However, I think it’s still important to note that “not giving up” can lead not just to lack of success, but also to value destruction (Pets.com; Theranos; WeWork).
Thanks for the “Young Rationalists” link, I hadn’t read that before. I think there are a fair number of successful rationalists, but they mostly focus on doing their work rather than engaging with the rationalist community. One example of this is Cliff Asness—here’s a essay by him that takes a strongly rationalist view.
I’ve seen this quote (and similar ones) before. I believe that this approach is extremely flawed, to the point of being anti-rationalist. In no particular order, my objections are:
It is necessarily restricted to the people Altman knows. As a member of the social, technological, and financial elite, Altman associates with people who have an extremely high base rate for being successful relative to the general population (even relative to the general American population).
The “and mean it” opens to the door to a No True Scotsman fallacy. The person didn’t succeed even though they said they wouldn’t give up? They must have not really meant it.
It gives zero weight to the expected value of the work. There are lots of people whose implicit strategy is “No matter my financial challenges, I am never going to give up playing the lottery every week until I get rich. If I run out of money I am going to figure out how to overcome that challenge so I can continue to buy lottery tickets.” More seriously, there are lots of important unsolved problems that humanity has been working on for multiple lifetimes without success. I am literally willing to bet against the success of anyone who believes in Altman’s quote and works on deciding if P=NP, finding a polynomial time algorithm for integer factorization, or similar problems.
It gives zero weight to opportunity cost. If the person wasn’t banging their head against whatever they were working on, they could probably switch to a better problem. Recognizing this, Silicon Valley simultaneously glorifies “Not Giving Up”, and “The Pivot”. One explanation for this apparent contradiction is that the true work that SV wants people to not give up on is “generating returns for investors.”
In general, it is suspicious that Altman’s advice aligns so perfectly with the behavior you would want if you were an angel or VC. That is, you would want the team to work as hard as possible to generate a return without giving up, ignoring opportunity costs, while the investor maintains the option to continue to invest or not. Note that no investor would say, “I will invest as much money as necessary into this startup until it works, and no matter what the challenges are we will figure out how to raise more money for them.”
A rationalist approach would evaluate the likelihood of overcoming known challenges, the likelihood that an unknown challenge would cause a failure, the expected value of the venture, and the opportunity costs, and then periodically re-evaluate to decide whether to give up or not. Altman’s advice to explicitly not do this is self-deceptive, magical thinking.