"The Myth of the Secret Genius"

I was sorting through my draft folder when I came across this post by Brian Klaas. I'm embarrassed that I didn't get around to posting this when I first saw it. It's a natural fit with our ongoing Ithuvania thread. 

Fortunately, it's more relevant now than when it first came out.

But those who doubt The Secret Geniuses, or express skepticism about their methods or their madness, must simply not be smart enough to see the bigger picture. If you question the Secret Geniuses, then all you’re doing is exposing yourself as one of the stupid proles, someone unable or unwilling to Think Big. If you can’t understand why it was secretly smart for Elon Musk to pick a fight with the advertisers who used to give Twitter billions of dollars of annual revenue, well then you’ll just have to live with the fact that you’re too conventional and too conformist. We pity you for not seeing the bigger picture, they say.

...

But there’s something else going with the Secret Geniuses. Venture capital is a world where the most effective way to get investors is to convince them you’re different—a one in a million visionary. This phenomenon is amplified because many investors are assuming that most of their bets will fail, but that every so often, one of their bets will produce a fat tail that leads to vast riches, as was the case with Facebook. When that happens, all the previous failures become meaningless, because the billions produced by the one success dwarfs the millions poured into the businesses that collapsed. Everyone in venture capital is looking for their Secret Genius. So, what’s the rational thing for an ambitious, money-obsessed narcissist with a start-up to do? Sell them one. Give them the myth they want to believe. Elizabeth Holmes, I suspect, knew she wasn’t really a Secret Genius, and could admit to herself that what she was selling was fraudulent, a failed technology dressed up in technical language that would trick people into believing it was the real deal, with the help of her confident smoke and mirror show. Elon Musk, I suspect, is high on his own supply and takes it as granted that everyone else (and especially his critics) is much stupider than he is. But whether the Secret Geniuses believe they are geniuses or not doesn’t really matter. What matters is what their investors think. That dynamic creates strong incentives for already eccentric narcissists to indulge their worst impulses. Set yourself apart from the crowd in ways that dazzle people and you can create a self-fulfilling prophecy with other people’s money. Using signalling theory, the Secret Geniuses develop ways to stand out, hoping it will convince doubters that they just don’t understand the genius (this is likely why Mark Zuckerberg has a terrible haircut mimicking Julius Caesar and always wears the same shirt).

 ...

Power, like wealth, is a magnet that attracts dangerous hucksters, and then rewards them. As I’ve written in my latest book, Corruptible, three traits known as the Dark Triad tend to, unfortunately, produce success. The three traits (Machiavellianism, narcissism, and being a psychopath) are disproportionately correlated with obtaining power, and by extension, wealth. I’ll leave it to your judgment to determine how many of the three apply to, say, Elon Musk.

Then, there’s overconfidence and over-promising. For whatever reason, we almost never punish rich people who over-promise and under-deliver. 

...

The Gates Foundation, which rewards grant money to applicants, subjected its awards to scrutiny and found something fascinating. The grant applications that promised the moon were more likely to get funding than those that promised more modest, realistic results. But when the proposals actually got funded, those that over-promised frequently delivered similar results to those who accurately depicted their research.

The language used mattered a lot. If someone referred to their research as “innovative,” or “game-changing,” for example, they would be more likely to get funding than if someone accurately depicted it as an important, but incremental step toward better knowledge. And guess who tended to use over-confident language that promised the moon?

Men.

The study therefore showed that one reason for gender bias in grantmaking isn’t due exclusively to sexism, but also to the fact that men were more willing to sell a big idea with more expansive, over-confident promises.

Now, imagine that instead of the more sterile world of Gates Foundation grant applications, you’re sitting around a table in Silicon Valley with a bunch of super-rich tech bro investors who are looking for their Secret Genius. Who do you think gets the most money?