The Diff - Longreads + Open Thread

Longreads

• A classic: Clifford Stoll on how he and a team identified and surveilled a hacker in the mid-1980s. All sorts of good things here: there's the tradeoff between stopping a hacker and figuring out what they're up to (and who they are); security breaches come from patience multiplied by luck rather than big insights; and the first line of defense against communist spies is good old-fashioned American accounting (the hacker was spotted because he had accrued some billed time on a shared computer system, but didn't have a billing address so there was no way to send an invoice).
• Boaz Barak with thoughts on AI safety: what's especially good about this piece is that it's not militant in either direction—instead, it's talking about safety as a continuum and a process rather than a binary state that's achieved at one specific time. And that describes the "alignment" process for plenty of other general-purpose technologies, too: we didn't so much solve cars as continuously raise our standards for what constitutes a workable solution to their externalities.
• A good Bloomberg piece on the dark side of EBITDA. EBITDA as a concept is often unfairly maligned: it is a more generous measure of earning power than a net income or free cash flow-based metric, but the whole point is to evaluate how much cash the business throws off and then decide which levers to pull in terms of capital expenditures and capital structure. But the adjustments management teams make leave room for some bad behavior. This, too, can be reasonable: sometimes, there are expenses that don't tell you much about the state of the business, and should be removed from calculations of the company's long-term earning power. But if management has broad discretion about what those are, and goes looking for a counterparty that will avoid asking too many difficult questions about where the numbers come from, it can lead to a disastrous deal. (This is one reason why many private equity firms hire associates out of investment banking programs–it gives them a leg up playing this adversarial game. Those who tried to push through and justify questionable adjustments during their time as IB analysts are also best equipped to sniff these out in a diligence process.)
• In Wired, a profile of a Russian cyber-criminal who was in a US prison until being returned to Russia as part of a prisoner swap. The piece notes that his particular flavor of hacking was quite beneficial to Russia: he breached the networks of companies that distribute earnings releases for publicly-traded companies, and traded ahead of them. That was both a source of USD-denominated income for Russia and a way to make US capitalism function a bit worse. But this also looks like a more straightforward kind of pull: he shared the bounty with many well-connected people in Russia, so he had plenty of friends who owed him a favor.
• Mark Koyama on the contrarian-squared case that feudalism is a useful concept after all. A common experience is to learn about a simplified feudal org chart in a history class in grade school, then learn later on that the situation was more common and historians don't even like the term "feudalism" any more. But then if you keep going, it turns out that "feudalism wasn't real" is a simplified summary of one set of historians arguing that another set generalized their model of medieval society too much.
• In this week's issue of Capital Gains, we look at how to increase the randomness in your life so you don't get locked in to a suboptimal path. The good news is that you don't have to worry: you're basically guaranteed to do this anyway, and you'll always be able to look back and see that the most important decisions you ever made were slightly wrong.
• In this week's episode of The Riff: why you shouldn't try to build another Berkshire, tech CEO's public personae, and why economic growth means a Chipotle for every cuisine. Listen with Spotify/Apple/YouTube.

Open Thread

• Drop in any links or comments of interest to Diff readers.
• A few new models have dropped recently. Any specific capabilities the latest round have that readers have discovered?

Diff Jobs

Companies in the Diff network are actively looking for talent. See a sampling of current open roles below:

• A company building the new pension of the 21st century and enabling universal basic capital is looking for a mobile-focused engineer who has experience building wonderful iOS experiences. (NYC)
• An AI startup building regulatory agents to help automate compliance for companies in highly regulated industries is looking for lawyers with 3+ years of big law experience to help improve their product and core models. Crypto experience / familiarity a plus. (NYC)
• A company building better analytics for pricing insurance is looking for a senior software engineer who likes turning messy data into clear answers. (NYC or Boston)
• An OpenAI backed startup that’s applying advanced reasoning techniques to reinvent investment analysis from first principles and build the IDE for financial research is looking for software engineers and a fundamental analyst. Experience at a Tiger Cub a plus. (NYC)
• A well-funded startup that’s building the universal electronic cash system by taking stablecoin adoption from edge cases to the mainstream is looking for a senior full-stack engineer. (Remote, Singapore)

Even if you don't see an exact match for your skills and interests right now, we're happy to talk early so we can let you know if a good opportunity comes up.

If you’re at a company that's looking for talent, we should talk! Diff Jobs works with companies across fintech, hard tech, consumer software, enterprise software, and other areas—any company where finding unusually effective people is a top priority.