It may could encourage people to contact him more by giving them a form of permission:
> To come to our surprising conclusion, Uri ran an experiment: Out of 10 daycare centers across Haifa, they randomly chose six and introduced a small fine for parents who showed up more than 10 minutes late in each of them. In day cares where the fine was introduced, parents immediately started showing up late, with tardiness levels eventually leveling out at about twice the pre-fine level. That is, introducing a fine caused twice as many parents to show up late. What about the remaining four day care centers that remained fine-free? Tardiness didn’t change at all
We've seen this come up a lot recently with Tesla's move to fine drivers who "park" at charging stations. Many see this as actually worsening the problem as people are happier to pay the (relatively small) fine.
I'd read both this article as well as the one about Tesla, but it never would have occurred to me to connect the two! So many aspects of behavioral economics seem counterintuitive at first (introducing penalties increases rule-breaking) but are obvious in hindsight (monetary penalties appear to reframe a calculation away from social decision-making toward economic decision-making, which can change the participants' conclusions toward the penalty)!
If the problem is people leaving their car there for hours, is a $24/hr fine really that small? Yea, it might increase the number of people who leave their car there for 10 extra minutes, but it seems highly likely to address the real problem, which is low turnover at the Superchargers.
Even then, Tesla can very easily just increase the fine (or do something like a steadily increasing fine) to address this concern. They could also charge additional fees to anyone who leaves their car at a supercharger for too long serially (and my guess is that these are the real problem).
Maybe they should setup an overage amount - e.g. 1 hour / month that you're allowed to park for free. After that every hour that you charge results in warning letters etc. eventually you aren't allowed to charge at any of the stations. Probably a little extreme but might work.
Yea, if, as seems to be the crux of one criticism of the policy, is that it allows bad actors to simply pay for the privilege of their bad actions, penalties that scale to extreme quickly is probably the best method. It's unfortunate, since the (very large majority) of good actors are also at risk of punishment.
I can recommend the book 'What money can'take buy' by Micheal Sandel. He has many more examples where using a fee actually resulted in an increase in the undesired behaviour.
Incentives for behavior modification is always a fascinating area.
In this case, the daycare was incentivized to track people being late more closely since they had a financial interest in doing so. I suspect the outcome was somewhere in the middle of more accurate record keeping and introducing the ability for the parents to pay off their guilt.
It presents a choice where there wasn't one before. Without the fine, most people wouldn't even consider choosing to be late. In general, people tend to choose from the options in front of them, so paying attention to the options you provide is very important.
But also, you'd feel guilty for making people wait for you, but with this you'd just think "Oh I won't make it in time, but no worries, it's just 5 more dollars [or whatever the rate is]."
In the experiment you mentioned, the fine is small enough, that it doesn't produce any significant revenues. The goal is to minimize the number of people who show up late.
Imagine if the day-care made the "fine" high enough that they actually want people to show up late. Ie, think credit-card interest rates and late-payment fees. In that case, regardless of whether tardiness goes up-or-down, the daycare would win either way.
Let's compare this to Ben Horowitz' situation. Imagine if it takes him 5 minutes to read and send a cookie-cutter response. That works out to a hourly rate of $240/hour. Even for a VC, that's a pretty damn good hourly rate. If Ben stops getting spammed by people, I think he'd be perfectly happy with that. If he were to get flooded by spammers willing to pay him $500k/year to send cookie-cutter responses, I think he'd be ok with that as well. It's a win-win for him.
Ten times that wouldn't be worth it, if it distracts from a single other important task. Assume $2400 / hour, six hours per day of effort on it, five days per week, 52 weeks per year. $3.7 million. It's a lot to a charity, it's not a lot versus his net worth and what he can do with his time at A16Z, against the distraction of writing emails for that effort every 5 minutes (which is why he won't continue with this long-term; he'll make a splash with it, get the headlines, do a good deed with the donated funds, and be on to the next thing, which isn't writing emails for $5/$20/$50).
Andreessen Horowitz put $25m into the B series for the company running this service, which puts a different complexion on the ROI he's hoping to get from answering a handful of emails in his free time...
tbh I wouldn't be that surprised if some of the companies willing to spend $20 to exchange emails with Ben Horowitz are actually worth his time replying to, especially if he has a PA he trusts to decide which emails are worth him having a look at.
My child's daycare charges $1 a minute for being late. But there is a bit of a grace period. When we are three minutes late they don't even bother to record it.
Sounds similar to the Catholic concept of "indulgences". Wonder if sinful actions increased considerably after people had a monetary way to avoid hell.
I'm curious what the fine level was relative to the income of the parents, and if the fine was viewed more as a convenience fee than a penalty.
I'm thinking if the fine was raised to a high enough dollar amount, tardiness would again drop off, or at the very least, revenue would increase enough to justify hiring someone to stay late...
I don't think income plays into it. It converts the transaction of one of spending social capital (social mores, trust) to financial capital; social capital, IMHO, is harder to acquire, therefore far more valuable.
"It is true that a ‘‘large enough’’ fee would eventually reduce the behavior.
For instance, many day-care centers in the United States clearly announce
a fee for coming late at the start of the year, and this fee is large
and proportional to the length of the delay. The resulting penalty is more
severe for the average delay than the nonlinear fine we introduced in our
study, even after adjusting for difference in prices and incomes in the two
countries. Casual observation shows that there are few delays, but we have
not examined if the average delay is different from the one in our sample.
Comparing the two systems would be an interesting research project."
The daycares my kids have gone to have all charged a moderate late fee, but said very explicitly that if you are habitually late, you will be kicked out of the daycare.
One of the daycares at 5:30 would just take the kids with her on her nightly errands, and you'd have to run all over town to find them at the grocery store or whatever.
These are both ways of making it clear that it is socially unacceptable to be late.
The daycare we enrolled our kid at has a $12 fee for every 15 minutes past their closing time. I think that's priced steep enough to discourage, and also on par with having to pay two adults to stay later (they have a two adults with the children at all times policy).
I'd really like to see this study re-done with multiple fine sizes. My intuition is that monetary repercussion is valued smaller than the social repercussion.
There might even be a optimal fine level to make profit off the tardy parents.
While I've always loved this anecdote, and it may be true, I seem to recall some flaws being found in this particular study. That said, I can't back up my memory with sources--there are some 1600 citations of "A Fine is a Price", and no stand-out "this has been refuted" reference showing up at a glance. :-/
Check out aspen forums if you can't just make a new PayPal. If you're just using it to send money and not receive it really should be no trouble to make a new one.
Ben Horowitz invested tens of millions into this company [0]. This looks like a pivot away from all the bitcoin hardware and using Ben's relative celebrity status to give it some attention.
Half this thread is about what Ben needs the money for or whether he ought to be donating more to charity, but that's not what this is about. This is just PR for a recent pivot of one of Ben's companies.
Almost offtopic: How do people do this? (and by "this" i mean [0]) Raise millions and millions from established VCs with entirely unproven ideas, no traction, no nothing? Every once in a while we hit an article about a company like that and meanwhile us normal founders are struggling to close a very modest seed round. Is it just a network thing?
Guessing, but - in convincing someone in a position of power over you, it is very hard for them to reasonably deny you when you have REAL demonstrated experience.
If you don't, its the easiest and sensible thing to deny you.
The founder with past experience (startup payoffs) is in an entirely different light.
37Signals has been doing something similar (with the charity portion). I heard about it while listening to the new podcast by Noah Kagan. For $500, you can go visit 37Signals for a day and see how they work. Price has been rising every year.
Neat idea. It does seem like a bit of a publicity stunt - I don't think Ben Horowitz really needs the 20 bucks, but this is a cool use case for bitcoin.
I wrote a lengthy question and signed up but at the payment screen it required a credit card. I would have preferred a third party service like PayPal. I am not inclined to enter my credit card information into random websites. I would have been happy to donate the $20 otherwise.
How does 21 measure the value of a response? I could send Horowitz an essay of an email and he could reply with "k", or some plagarized response. Would I still have to pay $100?
Thanks! What are your thoughts on the response? Did you follow up asking for an introduction or explaining better? Might make more sense to do so in a week or two when his inbox is less stuffed (and the price drops from $100)
This is such an incredible way to raise money for a great cause. If you have people trying to access you, why not put something like this together? I love that this is benefiting someone other than Ben. Kudos to him for doing this. Hopefully more follow his example.
are you serious? if Horowitz was really committed to the cause he would just personally donate a large amount of money (he has plenty) and not bother engaging in any of the public virtue signaling behaviors.
it seems pretty obvious that he put the "donated to charity" sticker on the form to deflect accusations that he was profiteering from his fame. seems to me more like he was getting too much shit mail and wanted to try an experiment with gating it behind cash so people would put up or shut up.
Yes. This. Ben Horowitz is petrified that we will perceive the immense revenues he's going to get from $20 Q&A sessions as profiteering, especially considering the paucity of his other business interests. Virtue signaling, indeed!
Personally, I think it's cliche to always invoke charity as a way to lessen some perceived negative or appear to not be profiteering. After all the VC firm is clearly not a charity (his business in other words) so why is it necessary to walk on eggshells and always donate money to charity. To me this is just a typical pc correct way of doing things.
no, Ben Horowitz does not want to be perceived as engaging in personal nuisance abatement so he makes it look more socially acceptable.
in other words, he wants to be able to take questions by email, because there is some upside for him in that (discovering new prospects for investment probably), but there is huge downside in the risk of getting spammed by shit emails.
he implements a $20 cash gate on that to mitigate the downside, but then realizes he has introduced a new downside, of appearing greedy or craven in some way, therefore he donates it to a virtue signaling charity. it will be a very small amount of money either way.
my point is that the charitable donation aspect is NOT what is driving Horowitz' behavior here. I was responding to a post which suggested it was that.
Definitely a fantastic way to abate nuisance outreach is to allow people to entitle themselves to your time for the price of a 12 pack of beer.
This will have the opposite effect of the one you propose. Virtually everybody can afford $20; what he's doing is giving people new permission to contact him, and not only that but by attaching a price tag to it he's giving them expectations about his attention.
yes, actually. compared to $0 cash gate, anyway. he wants some level of email interaction, but only if you're above some threshold of seriousness. its not a very high threshold, but is enough to prevent trolling and spamming in any case.
You really think that now that he's posted this offer, nobody's going to troll or spam him without spending $20 first?
I'm not suggesting that this is the most impactful charity thing anyone's ever done --- this is marginal stuff, to be sure --- but the trope where we try to unwind any charitable impulse anyone has to some insidious subtextual personal interest is always tiresome and virtually never very insightful.
Pretty sure he signed up because he's a part owner of the cash gate company. If it was important to him to cash gate himself earlier he certainly had the means to implement a crude version of it.
Are any popular Bitcoin apps using their APIs? I don't really see how an API marketplace paid via Bitcoin is better than a credit card bill at the end of the month based on API usage.
I don't see how it is not better. Credit Cards require use of credit providers and all the overhead that entails; minimum payments included. Most of the time this does not bite us and it Just Works except for when we try to step outside of the expected transaction model as we do with say Paypal which has known and necessary pros and cons. A proper bitcoin API has the potential to allow for the transactional web everyone was hoping would come to pass back in the day and since it is NOT owned by a single company, the way companies were clamoring to be the mico-payment provider of the web, it just might happen. If we are going to make an HTTP level API it really needs to be based on a technology any new company can start up a service for rather than centralizing it. Not to mention CC somewhat imply a lower bound of $0.01 which is too costly for some transactions.
It would be amazing if I could pay for access to the Wall Street Journal or New Yorker articles without locking in a full sub. There must be thousands of people who would pay a premium price or $0.15 for individual articles but would not go for a full membership. Then journalists could actually charge for content. We HNers would likely pay for longform but not the dreck we collectively complain about. Weakening the cultural pull of clickbait news.
Seriously, an idea - actually modestly FUND someone who sends one of these emails. Then do this exercise again in the future, the response will be at least 2x!
Wait, are you saying that startups have huge piles of money to give to Ben Horowitz? It's arguable that the bulk of his wealth has come from the returns from startup investing, but by the time they generate any kind of return for him, they're no longer startups.
I always wondered what I should write people like that - unless I am pitching them for a project. "So I herd on Hackernews you are a really, really cool. Wanna go for chili next week and troll around?"
It's relatively easy to flood his email. Imagine how much fun an Eastern European kid can have with this. All he needs is a database of cards to cycle through.
You can make your own charity and support whoever you want. Why does the National Rifle Association only support gun issues? Why not preserving historical buildings? Well, because there are other organizations to preserve historical buildings.
that's a bad example, because the organization that cured polio moved on to 'other things' and is now one of the 'go to' examples of charity drift and nonprofit mismanagement.
That's interesting, and I didn't know it before (reference?), so thank you! But my point was to use an apolitical example to illustrate the flaw in logic. Whether or not the same organization was mismanaged is irrelevant to that point. In fact, that they "moved on" to other things is evidence to my point that you cannot infer a polio-cure organization actively excludes other illnesses in a general "what are important problems to solve" sense.
Whatever you do with the $20 I still find unreasonable to make you contactable via a paywall: moreover if you have no time, you have no time even if each communication will donate $20 for a good cause. For a person of the wealth of B.H. it's simpler to just give directly money and avoid to receive unwanted communications.
Bill Gates' book The Road Ahead had the idea of a paywall to fight spam, someone who really wants to get your attention could attach a $20 "stamp" to their mail, and if it's a really important mail, say from a long-lost family member, you'd refund them. If it's just spam, you can keep the money.
I'm still waiting for someone to build an email system where only the header is sent along. The body of the message must be retrieved from the original server using a unique key included in the header. This would decrease spoofing of IPs and make black listing more accurate.
> To come to our surprising conclusion, Uri ran an experiment: Out of 10 daycare centers across Haifa, they randomly chose six and introduced a small fine for parents who showed up more than 10 minutes late in each of them. In day cares where the fine was introduced, parents immediately started showing up late, with tardiness levels eventually leveling out at about twice the pre-fine level. That is, introducing a fine caused twice as many parents to show up late. What about the remaining four day care centers that remained fine-free? Tardiness didn’t change at all
Source: http://freakonomics.com/2013/10/23/what-makes-people-do-what...