
Why Aren't More Highly Intelligent People Rich? - RickJWagner
https://www.inc.com/jeff-haden/why-arent-more-highly-intelligent-people-rich-a-novel-prize-winning-economist-says-another-factor-matters-a-lot-more.html
======
CJefferson
I have read the article, and I feel is missed one obvious possible thing.
Maybe highly intelligent people don't care about being rich?

Certainly reaching a "comfortable" income has value, but beyond that there is
a limit. I am an AI researcher in University, so I guess under some measures I
might come up as "highly intelligent" (whatever that actually means). I'm
fairly sure (based on emails I keep getting) I could go into industry and earn
much more money. However, the cost/benefit ratio to me isn't worth it.

~~~
Stubb
Bingo, we have a winner! Speaking for myself, I'm at a point where I'm making
enough money and have been making decisions to increase my free time. Things
like working 100% from home so that I don't waste time commuting and turning
down job offers that would pay more because they'd cut into leisure time. An
extra $50k/year (or whatever) wouldn't be worth an additional hour of work per
day to me.

~~~
surething123
Your time must sure be valuable, at roughly $192 an hour ;)

~~~
Stubb
The marginal cost of my time when I'm already making enough money is expensive
as fuck.

~~~
scarface74
This entirely.

For context, I’m not referring to SV software engineer salary just normal big
city America.

I know a guy who probably now makes a little more than I do on his main job,
is my age, but has been saving and investing much more consistently.

He’s always doing side gigs for $50 - $70/hour. Which is really nothing for a
software engineer even in my city and much less than he would be making as a
full time contractor.

When an opportunity like that comes up for me to “make extra money”. I always
turn them down even at much higher rates. Anything we can’t get with my
relatively average salary and my wife working we don’t need. I enjoy my time
way too much. I don’t think I would work a contract that paid the equivalent
of twice my salary as a side job.

~~~
ryandrake
I can relate to your friend more, honestly. $50-70/hr is not an elite high
level professional salary, but it’s no joke, and much more than the $0/hr
you'd otherwise make farting around on HN or watching Netflix.

When you’re young and able, life is merely a race to turn time into money fast
enough to allow you to survive long after you can no longer turn time into
money.

Every day I waste now may translate into a week of eating dog food after I can
no longer work. Therefore, I generally want to maximize the dollar utility of
my time, while I can. If I could guarantee that I’d drop dead as soon as I
retired, maybe I’d stop and live a little now. But since I can’t (an don’t
want to commit suicide when I run out of savings), well, an extra dollar is an
extra dollar!

“Money isn’t everything” -says someone with a lot of it.

~~~
scarface74
We are both in our 40s. Not exactly young.

------
krisroadruck
Having worked in digital marketing for over a decade, I've been exposed to
hundreds of business models. The percent of them making someone rich on the
back of selling scammy bullshit to stupid/gullible people is disturbingly
high. I've long privately lamented that apparently to have a good shot at
being rich, you must be perfectly ok with being a shitty person. I feel like
highly intelligent people probably have a harder time talking themselves into
making unnecessary piles of money by screwing people over.

Note: This seems far more prevalent in the B2C non-software non-vc-backed
space. But then I expect there are a lot more individual millionaires being
minted from those types of businesses than from silicon valley SaaS startups.

~~~
JohnFen
> I've long privately lamented that apparently to have a good shot at being
> rich, you must be perfectly ok with being a shitty person.

It's broad-brushing, of course, but I think there's more than a little truth
to this.

------
mech1234
This article is extremely brief and contradicts the more nuanced reality of a
lot of published research.

For people with higher intelligence, their income is generally higher. The
correlation is strong, the effect size is large, and the research has
replicated very well. Conscientiousness also correlates strongly positively
with income in a similar way.

This article seems to start with a baseline assumption of what "rich" means,
but doesn't state what that assumption is. I imagine it is a pretty high bar
and the article is essentially saying "successful moonshots come from all
walks of life/ all IQ levels."

Taleb has written on this topic and when he did it prompted a lot of
discussion. He notes that above a certain IQ threshold, the correlation
becomes lower, and uses this observation to dismiss the whole correlation.
However, if you look at the scatterplots he uses in his own article, you start
to realize how strong the relationship really is. I can't find his article
yet, might be able to find it soon...

[https://thesocietypages.org/socimages/2008/02/06/correlation...](https://thesocietypages.org/socimages/2008/02/06/correlations-
of-iq-with-income-and-wealth/)

[https://www.sciencedirect.com/science/article/abs/pii/S01602...](https://www.sciencedirect.com/science/article/abs/pii/S0160289607000219)

[https://danielmiessler.com/blog/how-nassim-taleb-is-both-
rig...](https://danielmiessler.com/blog/how-nassim-taleb-is-both-right-and-
wrong-about-iq/)

>How important is intelligence to financial success? Using the NLSY79, which
tracks a large group of young U.S. baby boomers, this research shows that each
point increase in IQ test scores raises income by between $234 and $616 per
year after holding a variety of factors constant. Regression results suggest
no statistically distinguishable relationship between IQ scores and wealth.
Financial distress, such as problems paying bills, going bankrupt or reaching
credit card limits, is related to IQ scores not linearly but instead in a
quadratic relationship. This means higher IQ scores sometimes increase the
probability of being in financial difficulty.

~~~
huherto
Yes, the article lacks clarity and detail. It almost makes you think that IQ
is not important. When we know it very important. Necessary but not
sufficient.

------
pablooliva
How about why are not more rich people intelligent? From my limited experience
I have found that the most outstanding characteristic of those who I have
met/crossed paths with that are rich is not intelligence, but a lack of
ethics/morals.

~~~
scarface74
I wouldn’t go that far. I think it’s a combination of luck, demographics and
being willing to sacrifice other things in life to become rich.

------
jokoon
1\. Because wealth depends on your social network. Humans are a social
species, the more social you are, the better status you have. That's how
business works. Intelligence is often the inverse of being social.

2\. Even if one is more intelligent, he/she is not that much more intelligent.
Of course intelligence matters, especially in certain fields, but overall
intelligence will not allow people to gain an edge, or at least not an edge
that will make a big enough difference.

3\. Wealth and status stems rather from certain moral values, rather than
abilities. Of course modern society tends to value new ideas and innovation,
but human societies, in general, still favor a certain set of traditional
values that make it harder for intelligent people to get favors. And in
general, innovation breeds change, and change always brings its share of
problems. You can look for anti-intellectualism.

Not to mention that intelligent people don't really seek wealth at all, they
know it's much preferable to seek recognition from their peers.

~~~
bediger4000
> but human societies, in general, still favor a certain set of traditional
> values that make it harder for intelligent people to get favors.

What set of values is that? Is this across western developed economies, or as
you seem to imply, across all societies?

------
thorin
It's quite probable that they are interested in things that don't directly
relate to making money. I know many senior researchers with Phd's in the UK
who get paid something like 30-40K GBP - I don't know the exact figure but
that's about right. They could probably earn at least 4 times that if they
worked in banking or accounting but that doesn't interest them. Often they
aren't even aware it is a possibility. So it's more a question of motivation
rather than intellect as with many things in life.

------
huherto
I thought it was pretty much accepted that IQ is very important for success
but it is not enough. Among the Big 5 personality traits, Conscientiousness is
very important too. Conscientiousness includes (Competence, Order,
Dutifulness, Achievement striving, Self discipline, Deliberation). So it makes
sense. You have to be Smart, Conscientious and Lucky.

~~~
JohnFen
> I thought it was pretty much accepted that IQ is very important for success

I don't think so. I think it's orthogonal to "success" (I'm assuming that by
"success" here, you mean wealth).

There are tons of people who are wealthy but not terribly bright, and there
are tons of people who are bright but not wealthy. From my personal
observation, it looks like the intelligence distribution is about the same in
the set of "wealthy people" as in the set of "not wealthy people".

------
puranjay
This article assumes that the pursuit of wealth is a universal trait and not,
you know, a byproduct of culture and upbringing

~~~
oerpli
I think it is more some innate drive some people have and (most) other people
don't.

In my family I was always the only one that placed any importance on pursuing
wealth. I would say that my upbringing wasn't that vastly different from my
sisters. Also from what I gathered at lunch with my colleagues, most of them
don't really care about a few k more per year and would prefer benefits like
"flying business".

------
nils-m-holm
As my sociology professor noted, "These are the three most common ways to
become rich, in order of decreasing probability: fraud, inheritance, luck. In
particular note the absence of hard work." \-- Or intelligence, I would like
to add.

~~~
huffmsa
Yeah but your socialism professor is approaching that topic with a certain
amount of bias, aren't they.

~~~
bediger4000
That's not really in evidence. "Sociology" and "socialism" aren't even close,
so you're kind of doing some propagandizing without examining the facts.

------
ScottFree
Calvin Coolidge said it better:

"Nothing in this world can take the place of persistence. Talent will not;
nothing is more common than unsuccessful men with talent. Genius will not;
unrewarded genius is almost a proverb. Education will not; the world is full
of educated derelicts. Persistence and determination alone are omnipotent. The
slogan Press On! has solved and always will solve the problems of the human
race."

------
fallingfrog
When I was in my 20’s I went to interview for a job as a carpet cleaner. They
gave me a spiel to learn (everyone needs the “deep fiber treatment”) and then
some paperwork to sign. But, reading the fine print, I discovered that I was
to use my own car, I was to pay for the gas, I was to pay to rent the
equipment, I was to pay for the cleaning supplies, I was to do all the work,
and at the end of the day I was going to get a _ten percent_ commission.

That was the moment I understood capitalism. Intelligence is not what makes
you rich; neither is hard work. What makes you rich is skimming a large
percentage of the value of the labor of a large group of people. That’s how
you end up with billions of dollars. Not by being smart (although I’m sure it
doesn’t hurt) and certainly not by being scrupulous. By having _leverage_. By
owning the means of production.

Now as developers or techies we own a little bit of the means of production in
the form of skills we have in our heads. But believe me when I say that
they’re coming for that too in the form of intellectual property, software
patents, and noncompetes. All of those things depress wages because they take
the means of production out of our control. It’s really important to be able
to see this. Money is a form of power and power is about _leverage_. Not
intelligence or hard work.

~~~
cvwright
What owning the means of production gets you, typically, is debt.

Leveraging that debt to create something of value to others — that is what can
make you rich.

Otherwise you just go broke in a big way.

------
icedchai
More folks need to read "The Millionaire Next Door." I read it in my early
20's and it was an eye opener. Becoming "rich" (upper middle class, single
digit millions, don't have to worry about working, not "billionaire" rich) is
more of a matter of living below your means, saving, and investing
consistently.

You can take luck out of the equation if you have _time._ Unfortunately most
people are too old before they realize this (if ever)...

------
hyper_reality
The crux of this article is just repeating some researchers finding that:

> Innate intelligence plays, at best, a 1 to 2 percent role in a child's
> future success. Instead, financial success is correlated with
> conscientiousness: Self-discipline, perseverance, and diligence.

Which is interesting research, but the article doesn't mention the huge role
that being born to a rich family and having good opportunities plays. By
framing this as "hard work pays" rather than "talent and intelligence pays",
they are missing the elephant in the room.

~~~
humanrebar
The article prominently mentions partner choice, which is different than hard
work.

If your partner is on meth or likes to commit felonies, you probably won't
become rich soon.

~~~
Broken_Hippo
Even drug abuse - or felonies - seriously differs depending on if you are rich
or poor. A poor person needing rehab might only have NA to rely on because it
is free and allows both parents to watch children: A rich person can likely
pay for an inpatient facility and child care. Even before rehab, the poorer
person's meth habit is going to take up a larger percentage of the family
finances, adding additional stress. The effect of a meth habit really depends
on how rich one is when it starts.

A similar thing happens for felonies. IIRC, simply being poor makes it more
likely that you commit felonies and more likely that you get caught for
others. The richer person can do their cocaine in relative privacy, even if
they are outdoors in their own yard. The poor apartment dweller doesn't have
such luxuries.

Divorce is also an issue: I've met multiple folks that stayed married to their
partner simply because they couldn't afford the fees to get divorced, let
alone think about a lawyer if they felt they needed one.

Both have stress, but they have vastly different tools available to help them
out with the situation.

~~~
wayoutthere
Absolutely; I dealt with addiction issues some years back and I was allowed to
take 6 months -- at full pay -- to sort everything out. People higher on the
income scale often have more access to treatment and better safety nets to be
able to make it stick. Addiction is largely a nuisance for the wealthy rather
than an existential threat.

I fortunately have never been arrested, but from my peers who have the
troubling trend is that if you can afford a good lawyer, the DA will almost
immediately plead your felony down to a misdemeanor with no jail time
attached. Rich people are far less likely to suffer consequences, even if
they're caught because the justice system isn't built to deal with defendants
who can fight their case.

The only divide in the US that matters right now is the wealth gap.

------
julbaxter
Being rich has more to do with inheritance (cultural, societal, material,
financial and biological) than intelligence.

------
Hnrobert42
This article largely espouses the bs that wealth reflects hard work. The
corollary is that the poor are just lazy. While the author throws in a few
scientific studies, do not be fooled by the veneer of rigor.

Is hard work the primary determinant of success? Maybe. But this article
offers no real support for that position.

------
mfer
I was recently reading about intelligence and intelligence tests. Who defines
what as things that make someone intelligent?

For example, we have a separate category for emotional intelligence because
that's not traditionally been considered intelligence. What's measured and
pushed for in intelligence isn't really the full range of intelligence.

Lost in there are things, like emotional intelligence, that enable people to
more easily move toward their goals. Someone can be wicked smart with general
knowledge, spacial relations, and other more common things measured with
intelligence but lack in the people skills needed to make their ideas a
reality.

Intelligence is complicated. What we measure isn't all their is to
intelligence. What we prize in IQ isn't everything that's useful for
intelligence.

/rant

------
motohagiography
Wealth is just responsibility, and if outlier intelligence people are
underrepresented among those who choose to accumulate responsibility, this
should come as no surprise to anyone. Most extra-intelligent people choose the
freedom to solve problems and to be stimulated intellectually, which is an
orthogonal concern to taking responsibility, risk, credit, command, and
dividends.

I divide intelligent from smart as the difference between a capacity for
abstraction and the ability to get what one wants. Lots of smart people are of
medium intelligence, and lots of highly intelligent people are not very smart
at all. What I wish I could teach is that, smart is an outcome, intelligence
is an attitude, and genius is an effect.

~~~
JohnFen
> Wealth is just responsibility

I don't understand what you mean by this.

~~~
motohagiography
It just means you are responsible for assets. When you choose to take
responsibility for things, you become wealthier. It's the same thing.

------
Apreche
Because we don't live in a meritocracy where we give more power and wealth to
the smartest people (by whatever flawed measure of intelligence). We give more
power and wealth to the luckiest, most selfish, and most ambitious people.

------
payne92
For the subset of highlight intelligent people that care about being rich (not
all do): there's also luck.

The luck vs skill ratio of life is often skewed toward the "luck" side more
than many of us want to admit.

------
social_quotient
Should we be thinking about this a bit more broadly?

Why aren’t more highly intelligent people more accomplished?

The emphasis on money is fine but I think a more productive conversation is
why do we find super smart/intelligent people not doing notable things? I
think as a society we owe it to each other to push the boundaries of what we
are gifted at/in as a way of contributing and building some concept of legacy.
Again money is a single metric which many people either don’t care about or
hit a local maximum on but what about the other possible metrics?

Thoughts?

------
petra
It kinda makes sense.

There's a personality trait that measures "working hard" called
conscientiousness.

It's stable and hard to impossible to change among adults.

But it's possible that's it's learned in childhood.

So a smarter child will need to exert less/little work in getting good enough
grades. So he may develop less of that personality trait, and become less
hardworking.

And that shows.

BTW, choosing a more interesting job instead of a higher paying one - like
many mentioned here - is directly related to that trait: it's about choosing
play over work, basically.

------
JohnFen
I have never noticed a correlation between being wealthy and being
intelligent. I think it's clear that intelligence is not necessary to obtain
wealth, and being intelligent is not sufficient to obtain wealth.

What's needed (as the article dances around) is a strong desire to become
wealthy. It has to be your overt goal. Most people (of any intelligence level)
don't have that desire or goal.

~~~
Ambele
What correlation have you noticed?

~~~
JohnFen
I'm not sure that I understand what you're asking. I was saying that I don't
see a correlation between wealth and intelligence. I also stated that I do see
a correlation between being wealthy and making attaining wealth your primary
goal.

Are you asking about something else?

~~~
Ambele
Hey John, I was providing you with an opportunity to share some of your wisdom
regarding correlations you have noticed. Presumably a number of intelligent
readers are curious about wealth given they clicked on the title of this
article. Correlations do not always establish causations but causations
sometimes require expensive studies to establish.

------
chriscatoya
Nassim Nicholas Taleb would argue this isn’t even relevant:
[https://medium.com/incerto/iq-is-largely-a-
pseudoscientific-...](https://medium.com/incerto/iq-is-largely-a-
pseudoscientific-swindle-f131c101ba39)

------
floppiplopp
Being rich has nothing to do with intelligence. It is a matter of luck, luck
to be born in the right family, in the right country, at the right time, luck
to have the right connections, and luck to have a lot of starting capital.

------
huffmsa
Because you need to have the capacity for intelligence, and the capacity and
desire to be good at business (accumulate wealth).

No one asks why there aren't more highly intelligent people with massive
"successful" families.

It's non-transitive

------
Radle
I am repeating smart comments from other people but there are some reasons why
such astounding results happen:

Let's look at the article >Like how much the difference between my income and
yours, for example, is based on our relative IQs. ... >But Heckman's research
reveals something else entirely. Innate intelligence plays, at best, a 1 to 2
percent role in a child's future success.

Intelligent people might have a different understanding of success than the
author.

Further down in the article: >But what you can control is how conscientuous
you are. How diligent you are. How persistent you are. > >How hard you work.

And there's one of our Elephants. For me it seems obvious that working hard
can only make you happy if you love your work. I wouldn't be surprised to hear
that smarter people tend to optimize for their own happiness, health, well
being etc. Or of that of their family and friends instead of "working hard".

Or to put it like @CJefferson > Maybe highly intelligent people don't care
about being rich?

Another Elephant was pointed out very well by @hyper_reality >but the article
doesn't mention the huge role that being born to a rich family and having good
opportunities plays

We live in a time of income inequality like no other generation ever before
us. Having the right parents is responsible for most of your success.

Overall the article seems to have only one message. "Work harder or you don't
deserve success."

That's terrible and terrifying because it implies that if you are not
successful. Then it's your fault for not working hard enough.

At this point we should go back to the start. Smart people are more likely to
understand how incredible rigged this whole thing is. So smart people avoid
playing this rigged game. They don't compete with you over financial success,
they are playing a different and more fulfilling game.

I don't know if you guys had this, but when i was in school there were always
these stupid "games" in the break, where the bullies would call anyone who
didn't participate as a looser in terms of the game. It never made any sense
to go to other people do something and say "I got your", "You lost", when they
didn't even play the game.

This didn't change when we grew up and it makes sense to handle authors of
articles like this one like we did back in school. Ignore them, play our own
games, don't invite them for it.

~~~
mapcars
>We live in a time of income inequality like no other generation ever before
us

Income inequality always been there, I don't think we are in some special
situation compared to let's say ancient Egypt or something.

>Having the right parents is responsible for most of your success

Was it not like this pretty much all the time?

------
claudeganon
Fixation on money seems more something people obsessed with individual power
pursue versus those driven by a desire for knowledge or understanding.
Einstein was famously a socialist who refused an offer to become prime
minister of Israel, for example.

------
lolc
Funny how the article doesn't even question the premise that all people want
to get richer.

------
cityzen
Maybe highly intelligent people aren’t as insecure as this self-proclaimed
“influencer” author?

------
paulus_magnus2
The same reason why intelligent people don't win lottery jackpots?

[can explain my reasoning if needed]

------
chunkyslink
My guess without reading the article is, that money bores them ?

------
beardedman
Because money is not the only worthy cause.

------
muki
Maybe it's because the claim that the smartest, toughest, bestest people win
in capitalism has little to no grounding in reality.

The article is basically begging the question of what capitalist markets
prefer in terms of "properties" its actors should "hold". I don't know of any
evidence that contemporary capitalism rewards "intelligence" apart from pop
cultural and ideological claims. In that sense, the conclusions presented are
in no way "new" or "informative".

It's just a restatement of a deeply seated wish that we could somehow explain
away the largely immoral differences in the standard of living with some
property suposedly outside of moral consideration (intelligence, gender, race
- it doesn't really matter).

------
malux85
Intelligence doesn't necessarily mean industriousness, by my observation many
highly intelligent people are (almost by definition) curious and lack the
focus required to monazite in a capitalistic society.

And I know this will get downvoted, mostly by the people I'm talking about :
If you're still working a day job where you swap your time for money, you are
not highly intelligent, maybe intelligent, but not highly. Jobs are for
suckers, automate your wealth generation.

~~~
barrkel
What if you enjoy what you do and get a sense of gratification from working
alongside other people and being paid for it?

When I spend my time at work, I don't actually feel like I'm selling my time;
I feel like I'm actualised as who I am, what I am, and doing things that
matter, and the company shows its appreciation via my bank account.

Some of my coworkers are wealthy from previous employment in finance industry,
but they still work here because they enjoy it, it keeps them connected with
everything.

One guy in particular implemented hedging and arbitrage strategies over
various cryptocurrency exchanges - he automated his wealth generation - but
he's still with us working on machine learning when he's not out sailing.

------
dschuetz
Why are many rich people dumb? Because many of them just inherited their
fortunes. That article isn't worth any time.

~~~
icedchai
Inheriting a fortune takes luck. Maintaining that fortune takes skill. Look at
many lottery winners.

------
mdszy
Maybe because the path to getting rich has literally nothing to do with
intelligence and is 100% about being lucky?

~~~
efdee
So all luck and nothing else? Do these people just sit in the grass all day
waiting for luck to deliver the money into their laps?

~~~
mdszy
That's literally what happens to those whose riches are the result of
inheritance, which is the source of a great many rich people, so yes.

~~~
efdee
You're saying that's the only way to be rich. That's incredibly shortsighted.

~~~
krapp
They're saying that's the most common way to be rich, which is true. Even
among entrepreneurs, many were either born with access to wealth, married into
wealth or both.

~~~
efdee
No, they're saying it's the only way to be rich. That's what 100% means.

------
ArtWomb
Conversely, it seems, only the world's richest are some of the world's
smartest

[https://www.bloomberg.com/billionaires/](https://www.bloomberg.com/billionaires/)

~~~
paganel
Not so sure about that. Apart from George Soros I don’t know of any multi-
billionaire with whom you could have an interesting conversation about the
pre-Socratics, the whys and whens Antiquity “fell” (my bet is on the early
600s in the time of Heraclius) or how interesting some of the Huguenots were
when they were writing about killing tyrants. Most of the billionaires are
rightfully more interested in expanding or at least keeping their wealth, and
that is orthogonal with knowing and talking about really interesting stuff.
But that is old news already, Plato had written about it ~2,400 years ago.

~~~
orbifold
The smartest people I know are mathematicians or physicists most of them
couldn’t care less about any of the historical narratives you‘ve just
mentioned.

~~~
paganel
Maths and physics is just “techne” stuff, it has been here for ~13 billion
years, they’ll probably still “be” here for another 13 billion years after
we’re gone, while on the other hand humans are a lot more interesting. Again,
read your Plato or start getting to know more interesting people, not only
“technicians”.

------
roenxi
If intelligence was enough to build modern society then we wouldn't have
needed years 1AD thru 2020. We could have skipped straight to the internet age
when the likes of Socrates and Confucius walked the earth.

Assuming we reward people in fashion correlated to their material contribution
it is clear that intelligence isn't the critical measure. We do and should
reward based on a best-effort guess to estimate how much someone materially
improved the lives of others. An intelligent person might be able to do a
better job but it isn't obviously better than any other personality attribute.

------
krn
At least in Europe, people enjoy living in a society where everyone is more or
less economically equal, and there are relatively few benefits of trying to
become a multimillionaire. Unlike in the US, wealth usually brings more social
isolation than public admiration.

When people think they want to be rich, what they actually want is to have
more freedom and certainty in their lives. In such an environment, there is
much less pressure to take risks. Especially, for highly intelligent people
who feel safe about their jobs and happy about their work-life balance.

~~~
linuxlizard
That sounds marvelous. Is Europe hiring?

------
dominick
People with the highest levels of intelligence are generally autistic.

In my area of the world, all the software companies are terrible. The quality
of the staff and the quality of the software are both terrible. This really
doesn't just apply to software, it applies to everything. Cars before Tesla
were so bad at everything. It is clear all these companies don't have
particularly good staff in high positions.

I don't know about car companies, but in terms of the software companies here,
the process goes like this:

1\. A manager in a particular industry commissions the building of software to
solve a problem in that industry

2\. The manager has a lot of industry knowledge due to their position and the
time they have spent in the industry

3\. The software is made, a company is then spun out of that software

4\. The founder doesn't really even know much about software. As they were a
manager, they were more about social connections and people

5\. They hire more social people

There is nothing in this process that relates to intelligence. The intelligent
person could theoretically create much better software, but they have no
industry knowledge, and can't even get hired because they are not social.

