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It's debatable whether Signalling Theory really applies to creatures who have enough coginitive ability to model thought processes in their peers. As soon as y

It's debatable whether Signalling Theory really applies to creatures who have enough coginitive ability to model thought processes in their peers. As soon as you make it publicly known that a particular selection criteria is in effect, the same salespeople you are trying to avoid will learn the new behaviour they need to adopt to meet those criteria. So now slick salesguys know not to wear suits when they pitch to Thiel. I realize the desire to develop "clever hacks" to arrive at truths, but in reality they are heuristics, and heuristics can and will be defeated by interested parties. In the long term, there is simply no substitute for doing the work of honest, stringent evaluation on the actual qualities you are looking for. This "don't take pitches from suits" is limited, temporary advice at best.

SilasX 12y ago
It still has value as a "brown M&M" filter [1] where you're testing for whether they were thorough enough to follow your stated criteria, regardless of whether it has any other predictive power. Of course, even then, it's not the (non)suit per se but the fact of having done your research. [1] from the story about the band that checked whether the venue manager followed such detailed specs as not having brown M&Ms in the bowl
- dllthomas 12y ago
  An interesting point. Then there's the question of whether people who research their potential funding sources to such a level are more or less likely to be good investments. That's a lot less clear than in the Van Halen case - here, I see plenty of arguments in both directions.
  - SilasX 12y ago
    What would be an argument for dis-correlation? I have a hard time seeing how someone better at startups would be less likely to do their homework on a potential investor, given that they'd think ahead in numerous other ways. It would have to be a situation in which think ahead for everything but this, or in which their happy-go-lucky style is miraculously good at making the right choices everywhere but here.
    - dllthomas 12y ago
      It's not that they would be less likely to be good relative to themselves-but-did-research. It's that someone focused on the sale is what Thiel is purportedly trying to avoid in dismissing those in suits. Someone focused on the sale of the company to investors more than on the company might be even more likely to do that research than the best bets, and that might cause dis-correlation.
    - tomjen3 12y ago
      Who is most likely to be doing through homework: somebody who is having great success and can expect multiple competing offers or somebody who isn't having much success and has a really hard time raising money? Now by no means is it a given that amount of success now tells anything about amount of success tomorrow, but if they aren't at least positively correlated then VC have no business being in business.
- danielweber 12y ago
  The brown M&M filter is good because you want people to read every single instruction in regards to something critical to crew and audience safety. On the other hand, reading every single Peter Thiel has ever written doesn't seem like a good use of an entrepreneur's time. On the other other hand, if you are Peter Thiel you can make people ask "how high?" when you say "jump." I can see the heady appeal of that.
sliverstorm 12y ago
Don't fool yourself. Humans are not "above" signalling theory. For example, explain to me how diamond wedding rings are not a perfect example of Costly Signalling. Our signalling arms races just tend to move more quickly.
- kannanvijayan 12y ago
  If one is using the ability to procure diamond rings as an evaluation of suitability as a partner, as opposed to an evaluation of whether they can afford a diamond ring (which may well be a proxy for one of the criteria for partnership - wealth - but not sufficient), then it can and will be gamed. If you're using a diamond ring as a proxy for whether someone truly loves you, I'd suggest you're opening yourself up to be taken advantage of. If you're using a diamond ring as a criteria for evaluating the wealth of a potential partner, I suppose that's a bit better. I wasn't suggesting that humans were above signalling theory. Just questioning whether it had any real utility for complex evaluations like "is this person reliable and trustworthy" or "is this person going to make a good partner".
  - JoeAltmaier 12y ago
    The ring is a symbol of commitment (sunk a month's pay into it) from a person whom you have already done a pretty good screening on. Its not the only criterion; disingenuous.
    - kannanvijayan 12y ago
      Then a months worth of pay, given cash in hand to the partner, or given to a charity in the name of the partner, should be an equivalent signal. Once again, I question the utility of screening based on this, even screening out on the basis of "not giving a diamond ring".
      - sliverstorm 12y ago
        No, that's the neat thing about Costly Signalling. Giving the partner a month's worth of pay in cash is not equivalent, because in Costly Signalling the resource is wasted on purpose to demonstrate how inconsequential that resource is to the signaler. Giving the partner cash or giving to charity both have utility. A ring has no utility. Thus a ring is the only one of the three which can be a costly signal. If you had a hundred billion dollars to your name, you wouldn't care an ounce about spending ten thousand on a diamond ring. Ten thousand dollars just doesn't matter. But a minimum wage worker cannot say the same. The ring is a socially established demonstration of this.
enraged_camel 12y ago
>>It's debatable whether Signalling Theory really applies to creatures who have enough coginitive ability to model thought processes in their peers. I don't think it's debatable at all, because in this particular case, it is not about cognitive ability, but meta-cognitive ability. You need to first recognize the signal and process it, and then be self-aware enough to understand why you processed it the way you did. Whereas the fact of the matter is that people are on auto-pilot most of the time. This is why we put so much emphasis on things like first impressions, which are also a form of signaling.

SilasX 12y ago

It still has value as a "brown M&M" filter [1] where you're testing for whether they were thorough enough to follow your stated criteria, regardless of whether it has any other predictive power. Of course, even then, it's not the (non)suit per se but the fact of having done your research. [1] from the story about the band that checked whether the venue manager followed such detailed specs as not having brown M&Ms in the bowl

dllthomas 12y ago
An interesting point. Then there's the question of whether people who research their potential funding sources to such a level are more or less likely to be good investments. That's a lot less clear than in the Van Halen case - here, I see plenty of arguments in both directions.
- SilasX 12y ago
  What would be an argument for dis-correlation? I have a hard time seeing how someone better at startups would be less likely to do their homework on a potential investor, given that they'd think ahead in numerous other ways. It would have to be a situation in which think ahead for everything but this, or in which their happy-go-lucky style is miraculously good at making the right choices everywhere but here.
  - dllthomas 12y ago
    It's not that they would be less likely to be good relative to themselves-but-did-research. It's that someone focused on the sale is what Thiel is purportedly trying to avoid in dismissing those in suits. Someone focused on the sale of the company to investors more than on the company might be even more likely to do that research than the best bets, and that might cause dis-correlation.
  - tomjen3 12y ago
    Who is most likely to be doing through homework: somebody who is having great success and can expect multiple competing offers or somebody who isn't having much success and has a really hard time raising money? Now by no means is it a given that amount of success now tells anything about amount of success tomorrow, but if they aren't at least positively correlated then VC have no business being in business.
danielweber 12y ago
The brown M&M filter is good because you want people to read every single instruction in regards to something critical to crew and audience safety. On the other hand, reading every single Peter Thiel has ever written doesn't seem like a good use of an entrepreneur's time. On the other other hand, if you are Peter Thiel you can make people ask "how high?" when you say "jump." I can see the heady appeal of that.

sliverstorm 12y ago

Don't fool yourself. Humans are not "above" signalling theory. For example, explain to me how diamond wedding rings are not a perfect example of Costly Signalling. Our signalling arms races just tend to move more quickly.

kannanvijayan 12y ago
If one is using the ability to procure diamond rings as an evaluation of suitability as a partner, as opposed to an evaluation of whether they can afford a diamond ring (which may well be a proxy for one of the criteria for partnership - wealth - but not sufficient), then it can and will be gamed. If you're using a diamond ring as a proxy for whether someone truly loves you, I'd suggest you're opening yourself up to be taken advantage of. If you're using a diamond ring as a criteria for evaluating the wealth of a potential partner, I suppose that's a bit better. I wasn't suggesting that humans were above signalling theory. Just questioning whether it had any real utility for complex evaluations like "is this person reliable and trustworthy" or "is this person going to make a good partner".
- JoeAltmaier 12y ago
  The ring is a symbol of commitment (sunk a month's pay into it) from a person whom you have already done a pretty good screening on. Its not the only criterion; disingenuous.
  - kannanvijayan 12y ago
    Then a months worth of pay, given cash in hand to the partner, or given to a charity in the name of the partner, should be an equivalent signal. Once again, I question the utility of screening based on this, even screening out on the basis of "not giving a diamond ring".
    - sliverstorm 12y ago
      No, that's the neat thing about Costly Signalling. Giving the partner a month's worth of pay in cash is not equivalent, because in Costly Signalling the resource is wasted on purpose to demonstrate how inconsequential that resource is to the signaler. Giving the partner cash or giving to charity both have utility. A ring has no utility. Thus a ring is the only one of the three which can be a costly signal. If you had a hundred billion dollars to your name, you wouldn't care an ounce about spending ten thousand on a diamond ring. Ten thousand dollars just doesn't matter. But a minimum wage worker cannot say the same. The ring is a socially established demonstration of this.

enraged_camel 12y ago

>>It's debatable whether Signalling Theory really applies to creatures who have enough coginitive ability to model thought processes in their peers. I don't think it's debatable at all, because in this particular case, it is not about cognitive ability, but meta-cognitive ability. You need to first recognize the signal and process it, and then be self-aware enough to understand why you processed it the way you did. Whereas the fact of the matter is that people are on auto-pilot most of the time. This is why we put so much emphasis on things like first impressions, which are also a form of signaling.