> not doing business with people wearing suits is that it's the exact same attitude as those who only do business with suits
If you mean it's prejudicial, then yes. Thiel said as much.
But it's not exactly the same. The brand that goes along with a suit is, "I want to impress you by doing things excellently in the traditional way." I can see how that would be off-putting for someone trying to invest in disruptive start-ups.
> What someone wears or looks like should be a bad predictor for anything
But when Thiel says "I will not do business with people who dress in a suit, no matter what their idea is" the response from entrepreneurs will be always dressing in hoodies. Now that Thiel said this, in fact the non-conformists are the ones dressing in suits. Otherwise, they're just conforming to Thiel's preferred aesthetic in order to pass his bogus filter.
It's like reading all of (say) pg's essays to see what he says he likes, and then adapting to it. 'pg, to his credit, has bemoaned that everything he says seems to get parsed to hell by people who want him to invest.
Occasionally after I didn't get a job offer I would later stumble across a blog post by someone at the company that says "candidates must obviously do X" and I didn't do X. I could have fixed this by reading everything written by every principal at the company ever before an interview. Maybe that's how they find people who are "really interested."
I'm pretty sure that by the time hoodies are as traditional as suits are now, Thiel will be dead. Or at least he'll have a new heuristic (if he doesn't already).
Conforming to preferred aesthetics to pass bogus filters is an integral part of our lives. Otherwise, we wouldn't have and use euphemisms.
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.
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
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.
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.
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.
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.
>>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.
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.
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".
Yes, there is cubic zirconia and things like that. But notice how society reacts, and rejects cubic zirconia? It isn't because cubic zirconia is inferior. It is because it is not expensive, so it makes for a poor costly signal!
Not gamed in that sense. Gamed in the sense that a diamond ring is purchased not as a show of commitment, but with the intent that it will be perceived as a show of commitment by the receiver.
If the giver knows that the receiver is treating the ring as a sign of commitment, they can decide "well I'm not really committed to this person, but I can help convince them that I am by buying them a diamond ring."
Diamond ring is purchased as a show of both wealth and commitment. The recipient is left to judge- if the giver is very wealthy, it is clearly not a strong sign of commitment. If the giver is very poor, it is clearly a strong sign of commitment.
Because you could buy a suitable ring there (it will have an icky feeling to most people, so it will be cheaper than a "new" ring) and then sell it back when you now longer needed her to think you were committed.
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.
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.
I am not sure I buy that reasoning. The ring certainly has utility from the perspective of the giver: the giver knows that it is going to elicit a positive response. A donation to charity cannot be worn, cannot be accessorized, cannot be shown off. I disagree with your assessment - in today's society, a ring has far more social value than a charitable donation.
The ring is shiny, and pretty, and can be socially displayed to elicit the attention of others.
The example you provide re-affirms my point. The evaluation criteria you are reverting to is wealth. And as a heuristic for wealth, the ability to purchase an expensive ring is a reasonable metric.
As a heuristic for a good partner, it is next to useless. As a screening criteria for the complex quality of "goodness" in partner, it is likely less than useless.
If you are evaluating partners purely on their wealth and willingness to waste that wealth to enter into a partnership with you, then a ring is a more reasonable criteria.
For an assessment on more nuanced basis (e.g. does the potential partner truly love me?), it is not a very good indicator, and may even be a contra-indicator precisely because it can be gamed easily.
What does dressing up in a suit have anything to do with respecting someone's time?
I'd say that respecting someone's time is actually about, you know, their time. Not being late to the meeting, not letting it run late, and so on. How much time I spend getting dressed in fancy clothing is utterly irrelevant - or at least should be.
We're talking about signaling, right? Dressing in a suit is a signal that you thought about and planned ahead for the meeting. It's certainly more of a signal of that than it is: "I'm trying to impress you by doing things the traditional way."
>>Dressing in a suit is a signal that you thought about and planned ahead for the meeting.
I don't see how that equates to respecting someone's time though. It can mean you respect them, as a person, but respecting their time is a different thing, in my opinion, because, again, it is not related to their time, but yours (in the form of spending your time to get ready and look good, etc.).
"I have prepared for the time that we're going to spend together" is respecting their time. I don't have a strong opinion on the degree to which a suit is a good signal of this.
Eh not really. It doesn't take very long to put on a suit, once you have done so a couple times - especially not with wrinkle free shirts and clip on ties.
What a suit really does is make you look more manly (broader shoulders) and there is a certain impression by wearing the same clothing powerful people wear.
If you mean it's prejudicial, then yes. Thiel said as much.
But it's not exactly the same. The brand that goes along with a suit is, "I want to impress you by doing things excellently in the traditional way." I can see how that would be off-putting for someone trying to invest in disruptive start-ups.
> What someone wears or looks like should be a bad predictor for anything
There are entire fields of study that disagree with you, including http://en.wikipedia.org/wiki/Signalling_theory