Possible Insight

Posts Tagged ‘Technology

Must Read Article on Farming

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Some of you may recall my post Organic Farming Harms the Environment. As I wrote, one of the things that bugs me about organic proponents is that they act as if there are no tradeoffs.  I don’t understand much about farming, but I do understand something about how economic activity works.  I presume that modern farming has responded to market pressure and evolved to optimize along many different dimensions.  I’m pretty sure you can’t magically improve along one dimension without sacrificing along another dimension.

Thus, I was not surprised to read this article (hat tip to Tyler Cowen at Marginal Revolution) on modern farming by an honest to goodness family farmer.   It is full of good examples of the tradeoffs I suspected were lurking.  For instance, by using herbicides, farmers reduce the need to till, which is a major source of soil erosion.  Hog crates and turkey cages may seem inhumane, but they prevent sows from killing piglets and turkeys dying from drowning. Crop rotations that decrease the need for synthetic fertilizer increase the amount of water needed to produce the desired crop.

Read the whole thing.  It reinforced my confidence in the general rule of trying to avoid legislating solutions.  Send pricing signals by allocating resource rights and taxing negative externalities.  Then let the market do its optimization.


Written by Kevin

August 4, 2009 at 9:16 am

You Can’t Pick Winners at the Seed Stage

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[EDITED 05/08/2009: see here] The majority of people I’ve talked to like the idea of revolutionizing angel funding. Among the skeptical minority, there are several common objections. Perhaps the weakest is that individual angels can pick winners at the seed stage.

Now, those who make this objection usually don’t state it that bluntly. They might say that investors need technical expertise to evaluate the feasibility of a technology, or industry expertise to evaluate the likelihood of demand materializing, or business expertise to evaluate the evaluate the plausibility of the revenue model. But whatever the detailed form of the assertion, it is predicated upon angels possessing specialized knowledge that allows them to reliably predict the future success of seed-stage companies in which they invest.

It should be no surprise to readers that I find this assertion hard to defend. Given the difficulty in principle of predicting the future state of a complex system given its initial state, one should produce very strong evidence to make such a claim and I haven’t seen any from proponents of angels’ abilities. Moreover, the general evidence of human’s ability to predict these sorts of outcomes makes it unlikely for a person to have a significant degree of forecasting skill in this area.

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Written by Kevin

April 27, 2009 at 9:59 am

Revolutionizing Angel Funding

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[EDITED 05/08/2009: see here] We are finally ready to go semi-public with our revolutionary new angel funding concept!  For the last year, Dave Lambert (the Tiltboy also known as Diceboy) and I have been working on an alternative mechanism for delivering seed funding to technology companies. [REDACTED 05/08/2009: see here].

Here’s the summary.  The market for seed capital is clearly broken. Most individual angels will only do about 1 deal per year, which means their portfolios lose money 40% of the time due to insufficient diversification. Even premier angel groups like the Band of Angels say they only do about 8 deals per year. Our math says you need to do 125 to achieve good diversification. On the other side of the table, only 14% of entrepreneurs who want angel funding will find it.  Those that do will spend about 6 months looking for money instead of building their businesses.

This is a sorry state of affairs for a market where the overall annual return is 25%+. Here’s a straightforward application of portfolio theory that can fix it.  Have a large enough pool of money so one entity can do 125-200 deals per year. Then use an online screening process to give founders a yes or no in two weeks. Obviously, there are a ton of details beyond this, but those are what we’ve spent the last year figuring out.  If you’re curious, let me know in a comment here and I will contact you privately.[Links to files REDACTED 05/08/2009: see here].

Written by Kevin

April 20, 2009 at 11:59 pm

Organic Farming Harms the Environment

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One of things I object to about mainstream environmentalists is that they act as if there are no tradeoffs.  For example, they simultaneously promote organic farming, argue for biodiversity , and lobby for more open space. Personally, I think the second and third are very important.  In my value system, they are are very close to terminal goals. Which is why I avoid organic foods.

Reason has a short interview with Norman Borlaug that nicely sums up the tradeoffs required by organic farming.  There is literally nobody who understands modern agriculture better. The bottom line is that if the US tried to produce today’s agriculture output with 1960s era technology, we would need on the order of 1 million square miles of additional farmland (assuming that the marginal productivity of the land decreases somewhat as you bring less productive ares into play).  That’s a swath 1000 miles by 1000 miles.  That’s about 1/3 the land area of the contiguous 48 states.

Replicate this calculation all over the world and you’d have massive deforestation and habitat destruction.  Remember the unintended slashing and burning rainforests to plant oil palms for subsidized biodiesel?  Now multiply that by 10.  No thanks.

Written by Kevin

March 26, 2009 at 10:33 am

What I’m Working On: Supercharging Innovation

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[EDITED 05/08/2009: see here] If you’ve been following my posts on the financial crisis (here, here, and here) and Singularity Summit (there, there, and there), you might wonder, “Uh, but how do we get there from here?”. It’s pretty obvious to me that the the road to economic advancement is paved with innovation. So we have to innovate our way from here to there.

I’m pretty sure I’ve figured out a way to supercharge what I call the “Innovation Economy”. My thinking was catalyzed by reading Nassim Taleb‘s The Black Swan. The basic idea is simple: if we want more groundbreaking firms like Google to come out of the Innovation Economy, we have to shove more startup feedstock into it.

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Written by Kevin

October 31, 2008 at 9:33 pm

Singularity Summit: How Will We Get There?

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Now that I’ve had a week to digest what I saw at the summit, I have some thoughts on the most likely path we’ll take to the singularity. From an absolute perspective, this path isn’t very likely because there are a lot of different ways to get there (or not get there). But given what I’ve seen so far, I assign this path the highest concentration of the admittedly diffuse conditional probability mass.

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Written by Kevin

October 31, 2008 at 8:29 pm

Singularity Summit: Thoughts on AGI

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As most of you know, one of the commonly proposed paths to The Singularity is the development of artificial general intelligence (AGI). As you can read in my rundown of the Singularity Summit, speakers showcased a lot of progress in hardware substrate and software infrastructure, but no significant conceptual advances in implementing executive function in software.

Absence of evidence isn’t necessarily evidence of absence, but I believe that if anyone were making headway on this problem, the chances that someone at the summit would have alluded to it are high. Therefore, I predict that the first being with substantially higher g than current humans is much more likely to be an augmented human than an AGI [Edit: more thoughts on electronically enhancing humans here].

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Written by Kevin

October 27, 2008 at 8:22 pm