The camel doesn't have two humps: Programming "aptitude test" canned - <AUTHOR> http://retractionwatch.com/2014/07/18/the-camel-doesnt-have-two-humps-programming-aptitude-test-canned-for-overzealous-conclusion/ <comment><USER2> The title seems to intentionally misrepresent the retraction to push an agenda (or the author has some issues with basic logic)

The retraction is that the strong/definitive proof that "the camel has two humps" was fabricated/exaggerated.

The converse - that it has one hump hasn't been proven. From the quote, Richard Bornat doesn't say that they re-crunched the numbers and now there is proof of one hump.

The camel has gone back to having an unknown number of humps

<comment><USER3> In the absence of that paper, we had plenty of reasonable hypotheses about the ability to program. Like "Put 10,000 hours into it, and you'll master it."

Or "It follows a distribution similar to other skills involving mathematics."

The paper presented an unusual hypotheses, that there was this sharp distinction between those who can program and those who never will, and that this distinction was somewhat orthogonal to other measures of scholarship. So for example, one might be a good architect but never get good at programming no matter how much one tried.

You're right we haven't disproven this hypothesis, but given its novelty, the burden of proof is on "the camel has two humps." With the paper retracted, we do not presume it has an unknown number of humps, we presume that skill writing programs is going to be similar to other skills we observe.

As this article observes, unusual outcomes in attempting to teach programming may just as easily be explained by the fact that in a young field, we may not know how to teach programming.

If we're going to chase 'humps,' perhaps we should look for unusual distributions in the skill of teaching programming. We may be terrible at it, and perhaps the skill we are really observing is the skill of learning to program in spite of didactic and structural obstacles.

<comment><USER4> Meanwhile, it's taken for granted that not everyone can be a doctor, dentist, or lawyer. You don't see doctors telling people that anyone can "learn to med," but programmers see nothing wrong with devaluing their profession in the eyes of the masses by telling them that anyone can learn to do what they do, or worse, that it's easy, and that we shouldn't assume anything else until its proven otherwise.

Programmers are far too egalitarian for our own good and our increasing marginalization and stagnant wages are the inevitable consequences.

<comment><USER3> You are misinterpreting what the paper said and what I am saying in order to oil the axe you are grinding.

First, one can dispute "programming ability is distributed in two humps" without implying that "everyone can program."

Second, your proposition isn't even a consistent proposition. If programming talent really is rare, then being egalitarian won't have any effect on wages: Some people can, some cannot, and the free market will quickly sort out that you cannot build pyramids with thousands of unskilled programmers.

If wages are stagnant, one possible explanation is that more people can program than you would care to admit. Which explains why you are ranting about spreading the myth that programming ability makes you a special, delicate flower. If you can socially engineer people into not becoming programmers, you believe there will be more money for you.

What you fail to realize is that as an industry, "a rising tide lifts all boats." The more talented people there are, the larger the pie we get to share. More programmers equals more software, equals more tools, equals more companies, equals more hardware, equals more demand for software, and so it goes until software has finished eating the world and it becomes a mature, stagnant industry.

If you feel your wages are not rising as quickly as you like, perhaps you should look into other possible causes, such as a lack of skill in negotiation, or choosing to be an employee instead of an entrepreneur, or wage-fixing by companies with no-hire policies, or the practice of handing out paper stock options in lieu of cash for startup employees.

<comment><USER5> >First, one can dispute "programming ability is distributed in two humps" without implying that "everyone can program."

Yes, but people are disputing "programming ability is distributed in two humps" despite there being clear evidence of that being the case, and no evidence to contradict it. The distribution has not changed, or been retracted. Only the unsupported notion that the distribution is innate and unchangable.

<comment><USER3> I am not responsible for explaining to you what "people" are saying, whether they are right or wrong.

Please cite this "clear evidence" you speak of.

<comment><USER5> I did not ask you to explain anything. I said your explanation is not representative of what is happening. And the clear evidence is the paper in question. Read the "retraction". They do not suggest the bimodal distribution is incorrect, but that they should not have suggested it was inherent and unchangable, when the evidence does not support that.

<comment><USER6> _His test is not a very good predictor: most of those who appear to use a model in the pre-course test pass the end-of-course exam but so do many of those who do not. And it doesn't predict the level of performance, as we discovered when we tried some deeper statistical analysis (Bornat et al., 2008). But the phenomenon is real and the prediction it makes is reproducible, as Dehnadi showed in a meta-analysis in his thesis (Dehnadi, 2009). That meta- analysis is summarised in (Dehnadi et al., 2009).

But that's not all. It's not enough to summarise the scientific result, because I wrote and web-circulated "The camel has two humps" in 2006. That document was very misleading and, because web documents persist, it continues to mislead to this day. I need to make an explicit retraction of much of what it claimed. Dehnadi didn't discover a programming aptitude test. He didn't find a way of dividing programming sheep from non-programming goats. We hadn't shown that nature trumps nurture. He had, however, found a predictive phenomenon, though he had no explanation of it._

How do you read these paragraphs, or what part of the retraction supports the "two humps" claim and how do you understand that claim?

<comment><USER5> I don't know how I could make it any clearer than what you quoted. What do you think "But the phenomenon is real and the prediction it makes is reproducible, as Dehnadi showed in a meta-analysis in his thesis" means? Or "We hadn't shown that nature trumps nurture. He had, however, found a predictive phenomenon, though he had no explanation of it."?

</comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER7> This retraction shows we have to be extra critical of things that reinforce our beliefs. Working as a programmer, it can be easy to believe that some people just aren't cut out for it. That doesn't mean a publication written using official-sounding words and methods that happens to match this belief is true at all.

<comment><USER8> But the retraction is super terrible. Imagine someone writes an article which makes a lot of sense, now that person writes a retraction which simply says "oh I was in great mental and psychological trouble when I wrote that".

No, if you want to retract it, then make a case why this is not true. We don't believe that article because we trust the author.

<comment><USER6> Did you look at the actual retraction? It explains what the original data demonstrated and references further work by him, his student, and other researchers that helps show what the test can and can't show.

Here's the retraction: [http://www.eis.mdx.ac.uk/staffpages/r_bornat/papers/camel_hu...](http://www.eis.mdx.ac.uk/staffpages/r_bornat/papers/camel_hump_retraction.pdf)

</comment></comment></comment><comment><USER9> So, this discussion reminds me a lot of discussions in logic programmig circles about why so many programmers can't learn to program in Prolog, no matter what. There's papers dedicated to the question, people who had done research on the question back in the '90s when Prolog was still popular (yeah, it was, google it). The verdict: no verdict. Some few special and magical people seem to be able to learn to program in Prolog, but the majority can't.

Well then, why not set the bar for who can program and who can't on who can code in Prolog, rather than who can write FizzBuzz? If the point is to sort out the men from the goats, or whatever uncle Joel said we're trying to sort out, surely using Prolog as the sorting tool would leave many, many fewer "real programmers" than FizzBuzz. Hell, we could even combine the two: FizzBuzz in Prolog! See how well you can do at that, internets!

And why stop at Prolog? There's languages that are way, way harder to program in! Hey, if you're a Real Programmer you should be able to write FizzBuzz in, dunno, Ook. Brainfuck. Leboge? Mondrian? Perl, even?

Or maybe, I don't know, we can start asking people to show us what they can do instead of trying to find things they can't? Does that make sense to anyone else? I'd personally love it if people who want to hire me took the time to check out my github and the git repository I'm serving off my public server, in order to get an idea of the things I have already done (and so demonstrably can do) rather than trying to catch me with my pants down in front of a whiteboard.

Look. I write a lot of code. I go over a lot of code I've written. I'm an idiot 80% of the time, but the other 20% of the time I figure it out, fix my bugs and go to town. It works, OK? If interviews can't appreciate this balance then they 're useless.

</comment><comment><USER10> Down for me, but Google's cache caught it:

[http://webcache.googleusercontent.com/search?q=cache%3Aretra...](http://webcache.googleusercontent.com/search?q=cache%3Aretractionwatch.com%2F2014%2F07%2F18%2Fthe- camel-doesnt-have-two-humps-programming-aptitude-test-canned-for-overzealous- conclusion%2F&oq=cache%3Aretractionwatch.com%2F2014%2F07%2F18%2Fthe-camel- doesnt-have-two-humps-programming-aptitude-test-canned-for-overzealous- conclusion%2F&aqs=chrome..69i57j69i58.1622j0j4&sourceid=chrome&ie=UTF-8)

</comment><comment><USER11> 1\. Interesting.

2\. I still wonder why around 30% of people with programming experience who have applied to a job when I was recruiting couldn't solve FizzBuzz[1] or string reverse. All of them either University MSc or years of programming experience.

The article hints at using the wrong teaching methods.

[1] Given the written instructions: 'Write a program that prints the numbers from 1 to 100. But for multiples of three print "Fizz" instead of the number and for the multiples of five print "Buzz". For numbers which are multiples of both three and five print "FizzBuzz".'

<comment><USER12> The problem is that Fizzbuzz and string reversing are a kind of trick questions. Either you have already done them or not. Good people will fail at trick questions very easily in interviews. Since they don't represent real work and aren't statistically significant, why are we using them? They are merely adding random noise in the interview process.

<comment><USER13> Never had cause to reverse a string but have needed to reverse an array. Never had cause to do something like fizzbuzz but have needed modular operator (actually both in the same function) but if I had never had reason to validate barcodes of differing lengths and validate the check-bit, I would probably fail on fizzbuzz too. In fact I probably would fail today if asked, who has time to remember something that useless, and that easy to look up?

<comment><USER11> I would like to learn and understand how you think you would fail on FizzBuzz if you get these instructions [1]:

'Write a program that prints the numbers from 1 to 100. But for multiples of three print "Fizz" instead of the number and for the multiples of five print "Buzz". For numbers which are multiples of both three and five print "FizzBuzz".'

[1] if stuck on modulo I usually suggest to assume there is a function divisible

<comment><USER13> I have a terrible memory and struggle to be confident, I would probably just not manage to write anything under interview conditions. When I first learned about fizzbuzz I did it and wondered what all the fuss was about, it's not a complicated logic puzzle, just that I'm used to writing code while connected to the Internet, my brain simply doesn't try to remember things I _know_ I can look up in 1 second.

</comment></comment></comment></comment></comment><comment><USER14> I have a really good way of separating candidates into those who will be successful and those who won't - During the interview I ask how they became interested in computer science, programming, etc as well as asking them to provide information on "pet projects" or other significant work they've accomplished.

If someone describes staying up all night as a 13 year-old because they had to finish the code they were working on, that's someone who was passionate about programming before they found out it's one of the better paying professions.

If someone points to finished projects (especially side projects or OSS), then they also have the ability to focus. If someone points to a bunch of barely started projects, they might have great ideas but in a business you also need to execute.

So ... passion and focus, plus a reasonable amount of domain knowledge will make a great employee.

<comment><USER15> _If someone describes staying up all night as a 13 year-old_

So, you're explicitly selecting by class background and upbringing? This particular metric also tends to select against women, if you have any applying.

<comment><USER16> Not just class, but age. Those of us who grew up in the 70s or 80s were much less likely to have a PC in the house as a child. High-speed internet wasn't commonly available until I entered college (and even then, it wasn't something found in homes - just offices and colleges).

<comment><USER17> Plus parents occupation.

I can remember on two occasions bosses of mine who helped kids with some form of homework assignment. If your dad (or mum) isn't technical then you are less likely to get an early start.

</comment></comment></comment></comment><comment><USER18> I think that people are completely misinterpreting the article and the retraction in this thread, whether willingly or not.

I don't think anyone is seriously questioning the fact that some people have more aptitude or intelligence than others. That's pretty commonly accepted fact. However, the general belief is that intelligence follows a roughly Gaussian (bell curve) distribution, and that it's roughly continuous. Mechanistically, one can imagine that intelligence is a convolution of genetic and other factors that are so thoroughly mixed that there are no discrete steps.

The theory behind a two-humped camel model of aptitude or intelligence would then be that some magic x-factor is so significant that it splits the underlying distribution in two, into the "cans" and the "can nots".

While the existence of such an x-factor would be a really interesting finding, it wouldn't change the underlying fact that some people have more innate ability to program than others, just like some people have more innate ability to be doctors or lawyers or concert pianists than others. It would just tend to make that difference much starker.

What it also wouldn't change is the fact that innate ability doesn't always correlate to success in a given career, or in life. Many other factors other than innate ability, such as drive and ability to collaborate with others, affect whether someone is going to be successful at their job. Also, people can learn. Even someone who doesn't have innate talent can become very skilled, if they work really hard at it.

So, even if the study were valid, which it's not, the finding itself is more of an academic interest than an excuse to start treating coding job interviews as a "sword in the stone" test of whether you've got "it" or not.

</comment><comment><USER19> This is one of the few times I've seen SSRIs blamed for jackass behavior.

<comment> drunken-serval I'm going to second what possibility said. Bipolar depression is a very different animal from standard clinical depression. Mania is ugly, it turns someone you know into someone you don't.

<comment><USER19> Until recently we were living with a maniac who didn't need SSRIs to go manic. It is astonishing how ugly it gets, I've still got a broken mirror on the floor in the other room that we haven't cleaned up yet.

</comment></comment></comment><comment><USER19> Psychologists would reject any kind of test that doesn't come out as more or less normally distributed out of hand. A common complaint about oddball tests such as the Meyers-Briggs test or Hubbard's OCA is that they have not been validated to "behave well".

This may well be to due the fact that psychologists have been using parametric statistics instead of nonparametric statistics. In a lot of cases us nonparametric types have given up a little statistical power for "cheap and cheerful" methods that are harder to get wrong.

Psychs and medicals find it very expensive to treat thousands and thousands of patients correctly and carefully observe the results. This is why those Cochrane reviews for the case for almost any drug or other treatment are so depressing -- maybe they need all the statistical power they can get.

<comment><USER20> I think you have that wrong. One major criticism of Meyers-Briggs is that it measures things that _are_ normally distributed, and assigns them categories.

For an easy example of why (if true) this would be a valid criticism, consider IQ, which is normally distributed. I will give you an IQ test and assign you into one of two categories: smart or dumb. If you are below the median, you're dumb, if you're above the median, your smart.

It should be obvious why this makes little sense; the large number of people very close to the median are divided in two and put in the same category of those with either very low or very high IQs.

To assign people to one of two categories, one would want to see a distinct bimodal distribution, then there would be a small number of people for whom which distribution they belong to is ambiguous, and the majority could be confidently assigned to one or the other.

</comment></comment><comment><USER21> So, this article talks about the retraction of the 2006 paper, which the authors admitted had some failings.

However, I fail to see much discussion about the subsequent paper [1] that addressed these failings and featured improved experiments that seem to still uphold the hypothesis.

[1] [http://www.eis.mdx.ac.uk/research/PhDArea/saeed/SD_PPIG_2009...](http://www.eis.mdx.ac.uk/research/PhDArea/saeed/SD_PPIG_2009.pdf)

</comment><comment><USER20> I always thought the data from "the camel has two humps" merely demonstrated the lack of good pedagogy in the field of programming.

<comment><USER22> > _All teachers of programming find that their results display a 'double > hump'. It is as if there are two populations: those who can [program], and > those who cannot [program], each with its own independent bell curve. Almost > all research into programming teaching and learning have concentrated on > teaching: change the language, change the application area, use an IDE and > work on motivation. None of it works, and the double hump persists. We have > a test which picks out the population that can program, before the course > begins. We can pick apart the double hump. You probably don't believe this, > but you will after you hear the talk. We don't know exactly how/why it > works, but we have some good theories._

> _Despite the enormous changes which have taken place since electronic > computing was invented in the 1950s, some things remain stubbornly the same. > In particular, most people can 't learn to program: between 30% and 60% of > every university computer science department's intake fail the first > programming course. Experienced teachers are weary but never oblivious of > this fact; brighteyed beginners who believe that the old ones must have been > doing it wrong learn the truth from bitter experience; and so it has been > for almost two generations, ever since the subject began in the 1960s._

[http://blog.codinghorror.com/separating-programming-sheep- fr...](http://blog.codinghorror.com/separating-programming-sheep-from-non- programming-goats/)

emphasis: _All teachers of programming find that their results display a 'double hump'. It is as if there are two population_

emphasis: _Experienced teachers are weary but never oblivious of this fact; brighteyed beginners who believe that the old ones must have been doing it wrong learn the truth from bitter experience_

So the disparity has presented itself in all known historical forms of pedagogy. Some have learned while others haven't, some have even learned with entirely self-directed pedagogy.

When a array of teachers has been giving it their all for decades but the disparity remains, should we really blame the teachers?

<comment><USER20> Harvey Mudd has had some success in increasing reenrollment in CS classes (there is a required first-year CS class there) by changing pedagogy.

The search space of possible ways of teaching programming is so large, and the field so young, that I'm not convinced we're anywhere near optimal.

<comment><USER22> I agree, in that I think there is always room for improvement.

What I think needs to be criticized is a tendency to go on these wild goose chases searching for a magic factor that will explain everything, when there are other obvious factors nearly staring us in the face that we don't want to address.

It's the opposite of Occam's razor.

<comment><USER20> Indeed; spending your time searching for the silver bullet when you've got a full magazine of lead bullets.

</comment></comment></comment></comment></comment><comment><USER23> (2014)

<comment><USER24> And yet, people in these comments are still clinging to it. Internet memes are the new afterlife.

<comment><USER25> Perhaps the people in these comments have had many programming experiences working with people who have great trouble coding, _no matter how patiently we explain something to them_. As a result, programming workplaces are often structured so one 3x programmer looks after a group of -0.5x programmers, cleaning up after them, while another group of 2x programmers are siloed off doing some real work, unencumbered by any -0.5x programmers and not threatened by the 3x programmer. This is the double hump in action.

Despite working in these types of place, I still got a shock, though, when I started doing freebie work on open source software and worked out that such an aptitude-less programmer was managing a large open source project developing a programming language. Perhaps some people doubting the double hump are from places like Google where all engineers are vetted via Computer Sciences degrees, and they don't have repeated everyday experience of it.</comment></comment></comment>


2020 Logo Trend Report - <AUTHOR> https://www.logolounge.com/articles/2020-logo-trend-report <comment><USER2> The "Petri Dish" category is interesting - I have never seen it in the wild actually - and I would never have thought to call it "petri dish".

For me the biggest recent trend, which can be seen in a number of the examples here (see in Chexmelt, Letter Illusions), is the blue-purple gradient.

I bring this up because even I ended up using it for my business's logo. [0]

I think I came up with around 30 odd designs, each one was trying to be really smart and have a "hidden meaning". In the end I settled for a simple letter. Yes, you could say it's boring and I wouldn't blame you.

\---

[0] [https://makely.me](https://makely.me)</comment>


The Life and Death of an Amazon Warehouse Temp - <AUTHOR> http://highline.huffingtonpost.com/articles/en/life-and-death-amazon-temp/ <comment><USER2> The death was a tragedy. But not even the family blames Amazon for it. And the article does not really point to any evidence that the company was responsible. So I'm not sure why the its name is there in the headline. If Jeff had died while working at the building supply store would there have been an article about the life and time of workers at mom and pop stores?

<comment><USER3> I think the point is more that the current system of temping is being used to game employees to provide work without the company doling out any sort of benefits.

Entitlements like sick pay, holidays, health etc. things we take for granted in the West are rapidly being eroded by effective micro management of temp hours to ensure low skilled jobs can be fulfilled by a rolling pool of labour.

We're seeing it in the US, in the UK and no doubt across other nations which previously provided low skilled workers some modicum of protection in the past before effective temp management became so prevalent.

<comment><USER2> Those benefits ultimately came out of higher prices for consumers. So if the public still wants the benefits to continue, it just has to campaign for public provision for those benefits through higher taxes or contribute to private income transfer programs. That would be fairer since who gets the benefits will be decided on a democratic basis and not on who was well- connected or lucky enough to land a job in a unionized industry.

I'm not in the US, but from the news it seems that higher taxes are very unpopular there. So demonizing corporations seems to be an easy way out where you can empathize with unskilled workers while at the same time enjoying the benefits that come from the cheapening of their labour.

</comment></comment></comment><comment><USER4> Capitalism, the end game.</comment>


Ask HN: SaaS MVP – form company before or after getting paying customers? - <AUTHOR> I'm in the UK if it makes any odds.
I am about to release the MVP of my first ever Saas product which (hopefully!) will have paying customers. I know I'll need to deal with the business sides of things at some point - form a company, create a company bank account, track money in/out for tax purposes. Should I do all of this before getting a paying customer? Or afterwards..?
The MVP philosophy would surely be afterwards but perhaps for legal reasons this is undesirable. What did you guys do? <comment><USER2> I'm from the UK as well and it's _very very relevant_ that you've mentioned that.

UK is the perfect place for you in this situation. US people might give you advice based on their legislation so be careful who you listen to

1\. Set up as a sole trader with the HMRC (the equivalent of IRS for US readers that are curious) 2\. Declare your profits 3\. You'll pay taxes (and everything is legal as well) on the following brackets: [https://www.gov.uk/government/publications/income-tax- person...](https://www.gov.uk/government/publications/income-tax-personal- allowance-and-basic-rate-limit-from-2019-to-2020/income-tax-personal- allowance-and-basic-rate-limit-from-2019-20)

Scroll down to the chart to see what I'm talking about but here is the highlight:

Any profits between £0 and £12,500 are untaxed — you have to declare them though.

So I'd say yes, don't form a company yet. Godspeed

<comment><USER3> It's not more complicated or more expensive to form a company.

For a Saas trading as a sole trader does not make much sense to me, as you are personally responsible, not a company. And you'll likely want to move to a company sooner than later, anyway.

<comment><USER2> That goes without saying, yes.

Dude asked for the leanest version, that'd be it — I'd go sole trader and have it legal, all while seeing whether the SaaS lifts itself off the ground or not

<comment><USER3> >That goes without saying, yes.

It's arguably not the leanest, then.

IMHO, with payments processing to be setup and legal liabilities it is a good idea to completely separate that from your personal finances. On a more subjective note, it also projects a more profesional image.

It would be good if Jackypot would reply to comments so we could understand what is his issue with setting up a company.

Note, btw that it is not accurate to say that for a sole trader profits up to £12.5k are untaxed as this is the "personal allowance": This amount relates to your personal income as a whole.

</comment></comment></comment></comment><comment><USER4> How would they pay? your personal account. seems like a pain to change later.

</comment><comment><USER3> I'd do it right before releasing the product if you don't need to do it earlier.

You should track money in/out now, don't wait until the company it setup. You can claim expenses on the company even if those expenses were incurred before the company was formed.</comment>


Ask HN: Anyone trying to expand human consciousness with a startup? - <AUTHOR>

Just curious. Please share your project and your vision for the future.<p>I live in Atlanta and there is not many people who even think this feat is possible. I hope there is at least a handful of 'crazy people' still building things that matter. <comment><USER2> I'm sure there are lots of small businesses in New Age meccas like Sedona trying to do this. Crystal vendors. Spas. Etc.

Not really the usual HN kinds of businesses, I don't think.

</comment><comment><USER3> > not many people who even think this feat is possible

That's a big untapped market for anyone who can produce verifiable results.

</comment><comment><USER4> Does search count?

<comment><AUTHOR> it does. Search expands our mind's reach.</comment></comment>


TOOL's 5th Studio Album "Fear Inoculum" Has Been Released - <AUTHOR> https://open.spotify.com/album/7acEciVtnuTzmwKptkjth5 <comment><USER2> I just got my physical copy via UPS, I'm really curious to see a teardown of what's powering the embedded screen & video.

</comment><comment> 0-_-0 Almost 10000 days after Opiate.

Tool affected my life in more ways I thought possible...</comment>


What is an Anybot? (video) - <AUTHOR> http://grumomedia.com/new-grumo-what-is-an-anybot/ <comment><USER2> Grumo's videos are always great, that guy's voice can sell anything. He's like the Spanish James Earl Jones.

<comment><USER3> Hey what a great compliment jarin! I am so happy you like my videos and comparing my spanglish accento to Mr Earl Jones and his unforgettable Darth Vader voice is too much! Thanks man!</comment></comment>


A Plan for a Long-Term Stock Exchange - <AUTHOR> http://www.bloomberg.com/news/articles/2016-06-12/silicon-valley-s-audacious-plan-to-create-a-new-stock-exchange <comment><USER2> I like where this is going - you want to apply some pressure to organizations to set up internal incentives that push for longer-term thinking. But if the value of being on the LTSE is that it sends a signal that your org is optimized for the long term, couldn't you accomplish some of that function with a voluntary certification process, instead of a whole new stock exchange?

Like, why not just publish a version of the famous Joel Test ([http://www.joelonsoftware.com/articles/fog0000000043.html](http://www.joelonsoftware.com/articles/fog0000000043.html)), but for management incentives compatible with long-term thinking? Then companies can submit to voluntary review (maybe with a nominal fee) by your Long-Term Business Bureau, and you can issue certifications for ones that meet certain standards. Your go-to-market strategy is the same - you can target mid-sized startups that are looking to differentiate themselves and hoping one or two of them grow into norm-setting behemoths, but you don't have to ask those companies to jeopardize their (and their investors') liquidation strategies.

<comment><USER3> Nailed it. The problems they're trying to address are entirely in the realm of corporate governance. None of their stated aims require a new exchange.

<comment><USER4> I'm not sure if they're planning this or not, but one thing a new exchange could do is quantize the trading. I have seen serious suggestions that having trades execute only on the hour, or even as radically as once per day, could perhaps significantly reduce the short-term focus of the stock. The idea here is to greatly reduce the influence of the stock's price movement on its own price. Since that sentence probably looks like a typo, let me say it another way: Stock prices react to information, and one of the loudest and most continuous bits of information is the stock's own minute-by-minute motion, far dominating things like "press releases", actual news, or quarterly reports for which it is sensible to see significant motion on the stock price.

Even if people set up the inevitable backchannels or side markets, the fact that shares can only change hands once per day may still have a significant impact on the shape of the market, even if it isn't perfect.

<comment><USER5> I had the pleasure of attending a talk about "Combinatorial Auctions"[1] lately which describes some interesting market designs that might apply here. In particular, there are some designs out there for "multi-round" auctions, and some great reading on how those work out. On-the-hour trading schemes would be essentially the same.

I can't find slides for the talk (just [2]), but there's also some really interesting publications reviewing outcomes when auctions like this were used to deal out resources to big companies who really had an incentive to do their math: [http://ftp.cramton.umd.edu/papers2000-2004/cramton- schwartz-...](http://ftp.cramton.umd.edu/papers2000-2004/cramton-schwartz- collusive-bidding.pdf)

\---

[1] [http://sessions.minnestar.org/sessions/336](http://sessions.minnestar.org/sessions/336)

[2] [http://markgritter.livejournal.com/747077.html](http://markgritter.livejournal.com/747077.html)

</comment></comment></comment></comment><comment><USER6> _" Everyone's being told, 'Don't go public,'" Ries said. "The most common conventional wisdom now is that going public will mean the end of your ability to innovate."_

I thought no one went public because going public requires you to divulge revenues.

<comment><USER7> > "Everyone's being told, 'Don't go public,'" Ries said.

In my experience, If there is consensus around something, it's often a great idea to do the opposite.

I decided to take my company public last year and it has been exactly the right thing for us. As far as I can see it, there is absolutely no reason to wait if your company and your team is ready.

<comment><USER8> With a tiny chance you might answer, I'm curious.. how did Shopify come about? Did you start an eCommerce store yourself, have bad luck, but then say "hey we could take all this tech we just built and sell that instead"? Or was shopify always the goal?

<comment><USER7> Exactly as you said. I build a online store to sell Snowboards back in 2004. The business worked really well but the software was clearly even better. The snowboards ended up financing building Shopify. The first checkin into the Shopify git repository was the first checkin to the original online store (although I used Darcs as SCM back then, I converted the history over to Git ).

We actually put together a mini documentary about Shopify for our IPO Roadshow: [https://www.youtube.com/watch?v=QYl8iwD-6tk](https://www.youtube.com/watch?v=QYl8iwD-6tk) It's worth the watch if you are into this kind of thing. We decided to do this because Shopify grew out outside of the Silicon Valley sphere and wasn't that well known before our IPO. That has clearly changed since.

<comment><USER9> How did you approach getting your first customers when you had an MVP?

<comment><USER7> I developed an early (technical) following because I was one of the people behind Ruby on Rails. That lead to the first few customers because technical people are often asked for recommendations for software. Keep in mind this was in 2006, a very different time from today.

<comment><USER9> Awesome. If you had to do it all over again, do you think you could have been successful with Shopify if you'd started today?

<comment><USER7> Building companies is 90% luck (timing, competition, demand, macro trends, technology penetration, also health & passion of the team). So... I doubt it.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER10> > granting stronger voting rights to long-term shareholders would make > takeovers harder,

That sounds like a reasonable idea, but I think it fails to see how capital markets work.

The thing is, voting rights can be sold. If you create different voting rights with weights, you will just create different prices for different voting rights. It will make things unnecessarily complicated, and if you try to prohibit some kinds of voting rights to be sold, you will likely just fuel a black market.

Can a 10-year voting right be sold? In theory you can't, since as soon as the share changes hands, it would become a 0-year voting right. Except the voter can sell his right in a different way, that is by just agreeing to vote on command in exchange for money.

By making every such conceivable transaction transparent and controlled by Law, the market is supposed to avoid these kinds of shady practices.

<comment><USER11> A trust buys shares; control of that trust is then sold on secondary markets. Or a very, very long term fulfillment contract that grants rights to the contracts current owner. Which is also sold on secondary markets.

</comment></comment><comment><USER12> Voting rights tied to the length of time one has held shares? That cannot fly. It certainly sounds like a great deal for founders, who would have owned their shares longer than anyone else, but is totally unworkable for outside investors. How does one value a share that, if sold, would immediately diminish in value? How is a lender to grant credit based on such collateral? Options would be massively difficult, leading to a secondary market for shell contracts in order that shares need not officially change hands.

I see massive instability. Say everyone votes on some matter on day one. If that same vote occurs later in time the results may shift, even if nobody sells any shares. So any decision taken by shareholders is time-specific. That doesn't promote long-term thinking. Rather, it promotes gamesmanship and trickery to ensure that votes happen when most advantageous to whomever is in control of the schedule.

Markets are not some invention that can be re-invented overnight. They are the result of a thousand years of contract law, codified recently but based on long-standing principals. Altering those principals to suit the desires of founders cannot happen overnight. Don't like it? Don't take the windfall. Don't go public.

<comment><USER13> > Voting rights tied to the length of time one has held shares? That cannot > fly.

It also raises the question of how in the world they'd expect to prevent working around it by using something similar to the Depository Trust Company so that the actual shares don't change ownership.

Given that large markets _already_ have mechanisms in place where nominees/trusts/proxies are used to work around other inefficiencies in the current systems, it seems a bit naive to think this wouldn't be worked around too.

<comment><USER12> Or what about something as simple as inheritance? Does passing a stock by bequest reset the voting clock? If not, then we can rig people's wills to pass ownership, creating a perverse market for the nearly-dead to sell their services in exchange for cash up front.

</comment></comment></comment><comment><USER14> > Google's 2004 attempt during its IPO to distribute its shares more equitably > via a "Dutch" auction led to a disappointing first day of trading and never > caught on.

What's disappointing is that people see it that way, even though it worked exactly as designed. The whole point was to find a fair opening value that made a level playing field for all investors. By opening at a stable value, it did exactly that.

The experiment hasn't been repeated because the people making decisions prefer a model that gives them short-term profit, at the expense of the general public.

</comment><comment><USER15> Does anyone else find it ironic that the guy who invented The Lean Startup philosophy is trying to take a zero to one leap to start an exchange? Wouldn't it make more sense to start a crowdfunding platform or secondary market for private shares and evolve that into a public market exchange, rather than trying to start something denovo?

<comment><USER16> Perhaps discussing feasibility with the SEC and putting out feelers via a press release is the MVP.

<comment><USER15> The articles states that he's assembled a team of 20 engineers. That doesn't sound like a MVP to me.

</comment></comment></comment><comment><USER17> The idea that stock exchanges provide disincentives for long term strategic planning at public companies is not just an economic problem, but a political problem.

As an entrepreneur, I'm proud of Reese for trying to tackle a big political problem with a startup, rather than through the political process. I can't help but think a lot of big problems that interested parties try to solve with lobbying, campaigning, and legislation could instead be solved with a market- based solution that doesn't necessitate government coercion.

<comment><USER18> > The idea that stock exchanges provide disincentives for long term strategic > planning at public companies

Is this really true? Quite many public companies seem to innovate in long- term. In fact, to me it feels that private companies are often more short- term, because they don't have access to the liquidity the stock market provides, and therefore they have to generate more revenues short-term.

</comment></comment><comment><USER19> Public company management is in need of some innovation, namely when it comes to communication between companies and stockholders. I see two avenues where technology enables evolutionary leaps:

1) Accounting: Accounting, today, is mostly the same as it was a century ago. Namely, from an engineer's perspective, it does not contain the notion of error, which is obviously essential. If you go look at, say, Coca-Cola's financial statements, you'll find a value for their brand defined to the second decimal point. I know one thing about that value: it is wrong. It should be X(+/\- error at 99% confidence).

2) Governance: Communication between management and stockholders is limited to the annual meeting, complemented by the board of directors. This model is flawed, the board of directors band-aid is ineffective, and there's room for much much fine grained communication and hence better governance.

Since stock exchanges mandate over these aspects of listed organizations, there is space for innovation, hopefully attracting investors and guaranteeing the spread of the next generation of business governance.

<comment><USER20> Accounting is actually very different today than it was ten years ago. The rise of spreadsheets has made things possible that wouldn't have been when manual calculation was necessary. What is unfortunate are that estimates are required in many cases, but it is just the way it is. For example, how can you know for certain what the present value of the cost of decommissioning a nuclear power plant in fifty years? These estimates are already included in the notes of the financial statements, which in many ways are more important than the actual financial statements.

But as to your Coca-Cola example, internally generated brands are not included on the balance sheet as assets. "Coca-Cola" isn't considered an asset to the company because of how difficult it is to value it.

<comment><USER21> Just to clarify, the main reason that the "Coca-Cola" tradename is not a recognized asset is because it was generated by the Company and not purchased, not because of how difficult it is to value. I agree that accounting is very different than it was ten years ago, but I think that has more to do with SOX and the increased requirements related to financial controls. The FASB (accounting rule-making body) has tried to improve the disclosures for those items that are difficult to value, but the subjectivity of these valuations will continue to exist for the foreseeable future.

<comment><USER20> You're right. Difficult was probably the wrong word. It would open the door to too many overstatements if companies could value their own brands.

</comment></comment></comment></comment><comment><USER22> Eric Ries has noble intentions but it seems like he overestimates the power of a trading platform to dictate (for good or bad) the companies' ethos.

 _> A company that wants to list its stock on Ries's exchange will have to choose from a menu of LTSE-approved compensation plans designed to make sure executive pay is not tied to short-term stock performance. _

If a company wants to buck the trend of short-term thinking, it doesn't need a new Ries exchange to do it. Jeff Bezos's Amazon is listed on NASDAQ and he continually reported 0 profits quarter after quarter. He avoided earnings manipulation for short term gains and yet, the stock price went up anyway. Likewise, if a company wants to provide a minimum wage of $70k to all employees including the janitor, they can do so while listing on NASDAQ or NYSE. The company doesn't require a hypothetical MLWSE (Minimum Living Wage Stock Exchange.)

I can't think of any example in a hundred years of corporate history where a new company can attract a significant (and profitable!) customer base based just on "aspirations". No, you must offer concrete benefits with obvious connections to the bottom line.

As an analogy, it's like proposing a new shipping company (Patriotic Shippers Inc) as an alternative FedEx/UPS. As a rule, they won't allow you to be a customer unless you pledge that anything you ship is made in the USA instead of cheap labor in China. Why would companies care about that aspiration? Either you can ship packages for half the price of FedEx, or you can ship them faster for the same price. The aspiration is just the cherry on top and not the primary motivator.

Or you propose to create a new airline hub in Iowa. You only allow airlines that provide adequate leg room and do not charge fees for checked baggage. Why would airlines move their fleet from Chicago O'Hare to Iowa based on those rules? No, the hub in the cornfield needs better enticements than that. Maybe if your Iowa hub has new patented deep learning neural nets that predict weather patterns better than the meteorologists in Chicago, and/or your scheduling algorithm for runways can handle 3x the traffic... then maybe the airlines will look at the new location. Also, if your new Iowa airport can play the politics game and convince Iowa state legislature to provide basic income to every resident and thereby cause a massive population exodus from Chicago to Des Moines, that would be another carrot to get airlines' attention.

Ries LTSE platform must offer profitable benefits such as technology advantages, or rebates to brokers, etc.

<comment><USER23> To put it even more straightforwardly, there's no economically sound reason to believe a firm which chooses to write its corporate governance rules in a certain way wouldn't perform at least as well on the NASDAQ as on a special exchange designed for the purpose.[1]

If enough funds believe that shorter term traders are undervaluing a particular NASDAQ stock because they've become so caught up in profit warnings they've missed the long term potential of its R&D, they pile in and pump the price back up again. If there aren't enough investors that believe a particular firm's long term strategy more than justifies conservative short term forecasts and a profit warning due to unanticipated increases in the research budget on NASDAQ, they won't be found on a LTSE either. It's not like the public markets are niche arenas that contrarian investors don't get involved with

[1]There's one possible non-economic reason. If existing exchanges' [but not SEC] rules prevent firms from issuing extra information pertaining to their long term research and development or restrict executive bonuses, then there is a point to doing this; afaik they don't.

</comment></comment><comment><USER24> This strikes me as a well-intentioned dumb idea, kind of like B-Corporations [0].

The whole point of a stock exchange is to allow the market to provide nearly instant feedback on a company's reported operational/financial performance and the decisions of its leadership. I agree that there is moral hazard in companies giving executives pay packages in which most of the upside is tied to short-term market performance. It's important to note that a large portion of the professional investor community feels the same way, and a lot of short positions are born of the observation, "looks like the CEO is just trying to fluff numbers for his bonus". This is where a strong board makes a huge difference. "Corporate governance" is not just wanker-jargon, it's a real thing.

As far as public markets limiting R&D....that's a weak argument. Five of the ten biggest companies in the world by market cap are tech companies that spend billions of dollars a year on R&D, most of which has no clear path to GAAP profitability [1].

To borrow from Churchill, liquid securities markets constitute the worst system of company ownership with the exception of all the other systems available.

[0]: [https://en.wikipedia.org/wiki/Benefit_corporation](https://en.wikipedia.org/wiki/Benefit_corporation)

[1]: Apple, Alphabet, Microsoft, Amazon, Facebook

</comment><comment><USER25> I agree that this is a problem, I don't think this will solve it. Of the three reforms, the first one is basically "Force your company to be organized this way" which is not a real reform, just a filter in terms of what companies will be listed on the exchange. The 2nd reform: if companies share more information on expenditures (especially on R&D) it's just going to make public money more anxious. The third reform: Maybe, but it's hardly different than how companies like Google and FB are set up to ensure their founders never lose control so why bother?

</comment><comment><USER26> I would have thought most of the issues with publicly listing are the regulatory environment rather than the lack of a specialised listing market. Isn't this way the Nasdaq used to be?

I'm all for innovation but I can see the various levels of bureaucrats sharpening their pencils with a 'tsk tsk' noise.

Perhaps the energy could be well spent getting the wider public to accept investing and risk taking in a way that it used to. That would at least prepare the ground for tech companies to get listed again.

Maybe all the people who got burnt in 2000 have finally retired now.

</comment><comment><USER27> The number of public US companies has fallen from 7800 in the late 1990s to 3700 in 2015. These include bankruptcies, mergers, taken private, never gone public etc. In the long term this could mean difficulties for savings plans like 401K who buy lots of equity.

In a related story, the number of shareholders per company has been plummenting too. Part of this is that money funds like ETFs only count as one shareholder, but have many owners. The other is the trend towatd just one or few private equity holders.

</comment><comment><USER28> This may be a stupid question, but can't you sell long term value in current markets? Isn't that what Amazon has done successfully? The only thing that seems to differentiate long term vs. short term companies is how much they care culturally about their stock price day to day, and the kinds of investors they court. Is it impossible to go public with a longer term vision these days, or is it just harder?

</comment><comment><USER29> Is this an attempt to float and liquidate the hugely funded walking dead unicorns that have no chance of going public otherwise?

</comment><comment><USER30> It seems silly to create a new exchange when all it does is require companies to agree to specific business practices.

The list of requirements could simply be a set of rules, and a company's auditors (and CEO) could sign off that the company is in compliance. I don't see what the LTSE offers that goes beyond that.

</comment><comment><USER31> Rather than penalizing short-term trades, why not build an exchange that only allows trading once per week, or once per month?

</comment><comment><USER32> _Once companies go public, employees "are on Yahoo Finance every day, and it's palpable how much that is affecting the decision-making of ordinary managers," he says._

This is believed by most everyone I know. It makes sense to me. However, is there any hard data to support this?

<comment><USER33> > is there any hard data to support this

No, so you should drop whatever you're doing and get right on that.

Oh ... so you were expecting somebody else to service you for free?

<comment><USER32> _Oh ... so you were expecting somebody else to service you for free?_

Maybe someone would've done that study for the PhD.

Hey, you sound touchy. I guess you're letting your biases show. I think the notion is correct, but I understand the "evidence based life." To be sincere about rigorousness, you need to check the the ideas you like as much as the ideas you don't like. But anyhow thanks for letting your biases show for free.

</comment></comment></comment><comment><USER34> Matt Levine comments on this today: [http://www.bloomberg.com/view/articles/2016-06-13/long- termi...](http://www.bloomberg.com/view/articles/2016-06-13/long-termism- weather-and-risk)

</comment><comment><USER35> My favorite overheard comment about this: "...just love how minimal his MVP is. And how he's launching privately with no press coverage."

:P

</comment><comment><AUTHOR> _> ..it could be years before the LTSE gets SEC approval..._

By the time they launch, the notion of a centralised stock exchange may well be outdated.

<comment><USER36> The "stock exchange" is already decentralized [0]. It has been this way since electronic trading really took off on... i think Instinet (now NASDAQ) and Archipelago (now NYSE ARCA) in the 1990's. The National Market System [1] is a piece of legislation from 2005 that attempts to unify the markets from a customer's perspective, but it is a very leaky abstraction. That said, it is interesting to see what happens with any new exchange.

[0] [https://www.sec.gov/divisions/marketreg/mrexchanges.shtml](https://www.sec.gov/divisions/marketreg/mrexchanges.shtml) [1] [https://en.m.wikipedia.org/wiki/Regulation_NMS](https://en.m.wikipedia.org/wiki/Regulation_NMS)

</comment></comment><comment><USER37> What would the effects be if the data reported quarterly were instead reported continually?

</comment><comment><USER38> I just want to take a moment to appreciate the image at the top of the article.

</comment><comment><USER39> I'd think an easier way to tame the existing stock market would lock all trades in for 90 days. It'd basically eliminate all this short term thinking.

<comment><USER40> I've long thought that an even better way would be a strong curve in the capital gains tax structure. Currently, if held ,1yr it counts as ordinary income, >1yr gets cap gains treatment of 28%.

Better would be something like the following holding periods and tax rates (obviously a mere sketch subject to tuning):

<1 minute = 95% cap gains tax rate

<1 hour = 80%

<1 day = 70%

<1 week = 60%

<1 mth = 50%

<1 qtr = 40%

<1 year = 30%

<2 yrs = 20%

<5 yrs = 10%

<10 yrs = 5%

>10yrs = 0

The short end would eliminate the volatility, unfairness and flash-crashes created by submillisecond trading. The encouragement to the longer end would get everyone to think longer-term. The 0% for decade+ holdings would prevent a lot of silliness around inheritance (e.g., you inherit a few shares from your grandfather, and have no records or reasonable way to figure the cost basis, but are required to assert one).

Of course, I doubt it would happen because it isn't in the short-term interest of the bankers.

<comment><USER41> I like your approach but a 95% tax rate is insane and would cause the market to be incredibly illiquid. Something like 50% to 0% seems a lot more appropriate.

<comment><USER40> I see why it seems nuts, but then holding a position for less than a minute seems nuts also.

That kind of trading is not primarily providing liquidity, its primarily skimming and front-running. IMO, it should probably be banned.

However, I think that providing a 95% tax rate is a lighter touch, and allows people to do it if they can find sufficient profit.

I also mentioned being open to tuning the amounts. What rate would you think would be good for such short term trading?

</comment></comment></comment></comment><comment><USER42> Maybe this would be better done outside the US?

Since BTC etc, the fed seems more interested in interfering with financial disruption...

<comment><USER42> downvote must be the fed :-)

They're everywhere!</comment></comment>


Publishers Are Rethinking Those 'Around the Web' Ads - <AUTHOR> http://www.nytimes.com/2016/10/31/business/media/publishers-rethink-outbrain-taboola-ads.html <comment><AUTHOR> While these ads -- Taboola, Outbrain, and related article teasers -- are blocked on desktop and on Firefox/Android for me, I've been seeing them, despite a router hosts blocklist on numerous mainstream publishing sites.

My first response is a sense of horror that a mainstream publisher -- Vox, the Atlantic Monthly, Time, Forbes, etc. -- would even deign to have such low- quality advertising on their website. The impression to me is nothing less than brand-equity mining -- deliberately undermining confidence in your own product among any reader who sees the spots. So this _NY Times_ article caught my eye, and the sentiments expressed are strongly congruent with mine: "[S]ome publishers are wondering about the effect these so-called content ads may be having on their brands and readers".

A couple of related observations:

1\. Who does the _Times_ think it's helping by, so far as I can tell, disabling copy/past via javascript? The only thing this does is make my sharing its content across other sites that much more difficult, and frequently correspondingly unlikely. Eyeballs aren't quite dollars, but they're part of the path there.

2\. I've been looking at print publications and noting with an increasing level of shock the lack of advertising in them. A recent issue of _Time_ had perhaps a dozen or so ads, few of any particular significance, and the _Chicago Tribune_ , to which friends subscribe, appears to have difficulty maintaining a 50:50 advertising:content ratio (I'm more used to a 60:40 or 70:30 level).

What's most telling is what's _not_ being advertised: automobiles, alcohol, luxury items, grocery stores (in the newspaper), the type of B2B and corporate marquee advertising which used to be common in magazines. _Time_ had, if I recall, pharmaceuticals, a minor travel listing, a financial services company, a couple of snack-food adverts, and a mobile services ad so poorly designed I thought it was for the company's retail partner (whom I did recognise).

Print is being gutted.

It's not that I _like_ ads -- I don't. But recognising that they're how the industry's paid its bills, and that it's clearly not now, is another thing. At this point, newspapers and news magazines are going to have to turn to subscribers. Possibly a good thing, as the actual _content_ in both _Time_ and the Trib is abysmally poor.

As for Outbrain and Taboola, I recommend for them "This one weird trick will destroy you and your customer's trust and value!"</comment>