Quantopian Update

I've been working for almost a year on Quantopian! The year passed very quickly, but the exuberance I felt embarking on a new venture hasn't faded one bit. One of my best friends (JB) joined as co-founder in January, we hired a stellar python engineer in early February (the world famous RealDiehl), and lately an ML specialist. The four of us have been heads down on a from-scratch build of the Quantopian backtesting engine and IDE. Working with my teammates has been exhilarating and humbling - the code they cut is beautiful stuff, and the breadth of their combined expertise is overwhelming. 

We are still sprinting to roll the latest and greatest to private alpha but we need more help! Please check out the Quantopian jobs page and pass it to your nerd/geek/hacker/supercool friends and anyone who wants to come hack Wall Street with us.

Another big announcement: Quantopian will soon have a permanent office right in town Boston. We debated heavily where we should base ourselves: NYC, Boston, or San Francisco. I had Caitie and the kids ready to roll west, but one of our board members made an impassioned pitch for Boston. He got us to fall in love with the Hub all over again. In Boston, a startup stands out against the backdrop of established businesses, the staid medical profession, and academia. In a way, you feel a bit more respect for the risks you're taking with a new venture. You also feel just a tad crazy trying to start something brand new while you watch friends in other industries enjoy the country club living. That is good, because you have to be a little crazy to try starting a company. If you forget that, you might lull yourself into thinking this startup life is a safe bet, which would likely be the last thing to cross your mind before you flame out. 

On the more practical side, Boston is where JB and I have the strongest network. After we made the decision to stay in Boston, JB found a great article describing the quantitative analysis of startups done at Google Ventures. Here's the best snippet: 

Kraus says that analysts have discovered research that overturns some of Silicon Valley's most cherished bits of lore. Take that old idea that it pays to fail in the Valley: Wrong! Google Ventures' analysts found that first-time entrepreneurs with VC backing have a 15% chance of creating a successful company, while second-timers who had an auspicious debut see a 29% chance of repeating their achievement. By contrast, second-time entrepreneurs who failed the first time? They have only a 16% chance of success, in effect returning them to square one. "Failure doesn't teach you much," Kraus says with a shrug.

Location, in fact, plays a larger role in determining an entrepreneur's odds than failure, according to the Google Ventures data team. A guy who founded a successful company in Boston but is planning to start his next firm in San Francisco isn't a sure bet. "He'll revert back to that 15% rate," Kraus says, "because he's out of his personal network and that limits how quickly he can scale up." 

Nice to have a little statistical rationale, but it was really the speech in the board room that got us.

If you want to read more about Quantopian, please also check out the inaugural Quantopian blog post. 

Owning versus Earning

There are two ways to make jingle: own something, or earn money.

Our tax code favors ownership. I'm not an economist, so I can't begin to explain why that would or wouldn't be justified for the health of our economy (there's already plenty of economists doing that, here's a liberal leaning one talking about a right leaning one). I'm not a historian, so I can't tell you why it is the way it is, although my intuition is it is a vestigial policy of agrarian society where preservation of property was essential. But that's just a total guess.

What I do know is this - most people are not owners. Most people are debtors. The only two things debtors have going for them are: inflation and their income. As a person who's spent a good deal of time and effort trying to jump from the bottom 25% to the top 25% of economic classes, I can also tell you that the biggest hurdle is income tax. Government sponsored loans and grants, individual generosity, and a healthy portion of good luck, gave me my education, which transformed my life in every possible way (met nearly all my business partners in school, including my wife!). So, I can't really complain about paying my taxes. If you're old enough some of your taxes put me through prep school and college (thanks btw).

So, I'm not complaining. It is perfectly just for the society that aided me to expect me to pay taxes to do good for the other members of society. Nope, I'm not complaining, I'm just saying the tax code is flagrantly unfair and completely boneheaded.

The American dream, or at least my version of it, is everyone gets a fair shot at making it to the top of the economic strata, while enjoying generous freedoms along the way. The only rule is you will not be stopped based on color, creed, disability, gender, or other immutable personal traits. The problem is ownership, and the favorable taxes in bestows, is inherited. You don't have much control over what you own at birth. So, by favoring ownership with taxes, I think we've basically legalized a bias against an immutable personal trait: the economic circumstances into which you were born.

I'm not saying you need to disallow the transfer of property between generations. You earned it, go ahead and give it to the kids. But do we need to throw a huge headwind in front of everyone who wasn't born with it? Income tax is the largest barrier to accumulating property. It directly inhibits people from enjoying the same right of bestowing property on their own kids. By taxing income from labor twice as much as property, we block the only avenue to generating new wealth for those born without it. How can that be good for society?

My career has ended up being about startups. Very luckily, startups are all about creating new property to own as a founder. I happen to think creating new property from practically nothing is a very good thing for society, and if you have the gumption, I think you should go for it yourself. It may be the only realistic (not necessarily easy) way to make the leap from the bottom to the top. Maybe there is something to be said for encouraging that. But, I just don't think anyone understands the effects of taxes on the economy nearly well enough to justify social engineering with tax policy. So, in the absence of a more perfect understanding of the way taxes affect society, I think we have to default to the most simple model that would provide a level playing field: everyone pays the same tax rate.

Given the huge concentration in wealth and ownership, and hence the higher portion of tax receipts from the wealthy, we could probably maintain our tax revenues by making a small increase in cap gains, and a huge reduction in income tax. How about we make them both 20%? That seems fair to me. And if federal lawmakers can't find a budget that allows for the defense of the country, dignified retirement years, healthcare for everyone, and adequate national infrastructure investments with 20% of what we all produce then... can we just fire them? please?

Oh, speaking of lawmakers - and I mean you Congress - everyone knows you only use taxes to do favors. It is codified patronage. Tax policy is a joke, and frankly I don't think you guys should be able to make it evermore byzantine. Instead of the flash bomb politics at play debating whether the constitution should be amended to define marriage (for the record, my definition is: willing submission of your personal decisions to the will of one other person. Free advice - if by some miracle you find someone with whom you can mutually do that, marry them.), how about we do something practical and change the constitution to stipulate a flat tax rate and a limit on the national debt. Congress still gets to decide how to spend the receipts, but we stop pretending they can do good for anyone but themselves with tax policy. If they want to raise the tax rate, then amend the constitution again and raise it (see my notes above regarding firing, I wouldn't expect you folks to fair well in an election following a constitutional amendment to raise taxes).

Ruby 1.9.3-p0 with Rails 3.2.0 on Ubuntu 10.4

For the last 8 months I've been learning ruby on rails. My only work has been on a mac and in deployment heroku. Recently we decided to set up a jenkins server to run continuous integration against our commits, and we chose ubuntu for the host. As with any new configuration, there were lots of wrinkles, particularly since we are using the latest of ruby and rails.

The ruby-debug-base19 gem has been particularly tricky. I think it is because the issues around it are fairly new, so google debugging isn't as effective as it will be in a few weeks as more and more people run into the problems with installing this destined-to-be-common configuration.

So, I was really thrilled when I ran across this gist. It is one of those discoveries that, even after all these years, makes you just love the internet :). But, the experience is so much better because of github. Github is one of the very few new applications that promotes individual creativity and collaboration. Because the code I found from a fellow sufferer was a gist, I was tempted to fork it and tidy it up a bit more. I'm not the only one, half a dozen visitors did the same in different directions. The ease of use for github dramatically increases the velocity of creative collaboration. Hopefully more and more applications will learn to do the same, so we're using the internet for production in addition to consumption. Here is my final script, hth: 

things i look up way too often

to be updated from time to time...

• easy_install places egg files in this directory: /Library/Python/x.y/site-packages
• where x.y is the python version.
• easy_install can control the current version of a package with:
• easy_install PackageName==1.11
• calling a python parent class' init method:
• BaseClass.__init__(self, args...)
• http://docs.python.org/reference/datamodel.html#object.__init__

Quantopian is now accepting alpha requests via http://www.quantopian.com

Occupy .* is a meta-movement. The meta-revolution will be tweeted.

So, I haven't been really connected to the news for the past several weeks. I've been really engrossed in my own work, and quite honestly, trying to think of ways to make the next dollar. Since we're in full startup mode, when we hit the road we take terrible flights (5 hour delay on my flight home last night) and we stay with friends. My mom always told me that "company, like fish, stinks after three days" - sadly I haven't heeded my mom's advice; I've been staying for 4 and 5 days at a time. In addition to putting up with our excessively long visit, one of our friends is also a shrewd political/cultural observer. He's just the sort of guy who can explain a phenomenon like Occupy Wall Street. He summed it up thusly: the economic disparity in this country means OWS will just get bigger.

Staying in someone's home is a precious experience. You see them in the morning before they are glossed for the day. You eat breakfast and dinner together. And if you break the "company is like fish" rule, you get to see a few of the subplots in their lives develop. Thanks again to my friends and patient hosts if you are reading, I really do appreciate the chance to step into the middle of your homes and your lives for a few days. OWS was a minor subplot for my friend/host who put us up in Ann Arbor. He's a true Michigander, so explaining economic implosion and populist movements comes as naturally to him as grilling bratwurst. I asked him what OWS was demanding, and he said that OWS wasn't demanding anything. He hinted that demanding nothing was kind of the point. He got me thinking about OWS, and then I started reading a bit more. Here's what I think so far:

1. The Michigander was right. The underlying economic disparity is real, and can only be perceived by "the 99%" unjust. Here is the article that I think is the best synopsis of the facts, selectively biased to represent OWS.
2. Occupy Wall Street is a meta-movement. They aren't out to make demands, win concessions, or change you. They are out to change what we perceive as just and unjust. Up until now, based on the way wealth has been concentrated, we have all tacitly agreed that wealth concentration is just fine. OWS is slapping us in the face. That's it. I think the real impact will be the way other groups, organizations, and movements internalize the message. 

visually mapping music sets

Check out Chris Peccei's mining and mapping of mp3s - very cool example of a Voronoi using data that you'll intuit.  

private alpha update

Due to a bigger than expected pool, I need to split the alpha invites into two waves. So, some of you have been invited this week (welcome!), and some of you will be getting your invite next week (hang tight!).

Private Alpha Launch

My new thing is ready for private alpha - let me know if you want to be invited!

browser innards

I'm hoping to find a nice long stretch to read this article on browser architecture. Looks as fascinating as it is useful.
Thanks to Rich for the pointer.