Sunday, April 17, 2016

Zero to One, Peter Thiel

A book that FAR exceeds it's promise. It has a LOT of great experiential documentation on startups, but the astute observations on attitudes around the world, misconceptions people have and just plain pithy contrarian wisdom is what really sets it apart. Thiel "failed" to get a SCOTUS clerkship (barely) and thus ended up founding PayPal which merged with Elon Musk's to become a very successful business -- many good stories about how those things happened.

First the title -- Doing more of what we already know takes us from 1 to N, creating something new takes us from 0 to 1. "Today's "best practices" lead to dead ends, best paths are new and untried.

The question that Thiel asks when he wants to understand someone is "What important truth do few people agree with you on"? His answer is; "Most people think that the world will be defined by globalization, but the truth is that technology matters more".

Don't get me wrong, I LOVE technology, but I think the future of the world will be defined by MEANING -- the West won't survive Islam (or the next "meaningful opponent") if we don't define a meaning and purpose for our existence -- and yes, expansion. To have a purpose, you have to believe, and if you believe, you believe that others would be served by believing. "I'm OK, You're OK" is not a meaningful philosophy!

I loved this line: "Brilliant thinking is rare, but courage is in shorter supply than genius". Again, it IS TODAY, because bowing to the "standard PC position" is more important than it was prior to the Reformation! Modern thought turns smaller and smaller molehills into mountains -- see NC!

My top favorite big ideas of the book are:

1) Monopoly is GOOD, competition is BAD. (in a static world, monopoly would be bad) I'm not going to argue the whole position here, but he does it very well. "The history of progress is the history of a better monopoly business replacing incumbents".  Think about it -- when Apple came along and created the expensive iPhone, people got violent in waiting lines to get at it. THAT is monopoly power, and you in fact WANT it -- badly, and it is the only way that our world will improve (technology wise).  "Creative monopolists give customers more choices by adding completely new categories of abundance to the world".

2). You are not a lottery ticket --  but first a couple one liners (I love one-liners!) "Elite students climb confidently until they reach a level of competition sufficiently intense to beat their dreams out of them."  ... thus,  "All Rhodes Scholars had a great future in their past"

" ... if you expect an indefinite future ruled by randomness, you'll give up on trying to master it. Indefinite attitudes to the future explain what's most dysfunctional in our world today. Process trumps substance..."

HELLO -- see "diverse financial portfolio", "well rounded education", etc, etc.

He covers 4 basic global attitudes and makes EXCELLENT cases for each:
  • Indefinite Pessimism -- something bad is going to happen but not sure what. This is where Europe is "Europeans just react to events and hope things don't get worse". 
  • Definite Pessimism -- The future is bleak and we know why. China is the prime example -- they know they are copying, they don't see how they can innovate their way to true prosperity, so they try to get their money out of the country. 
  • Definite Optimism -- The future is bright and we know why. Western Civilization from the 17th century to the Moon Landing. 
  • Indefinite Optimism -- The future is bright but we have no clue why. "He expects to profit from the future but sees no reason to design it concretely". The United States today.  "Indefinite optimists are so used to effortless progress that they feel entitled to it". "A whole generation learned from childhood to overrate the power of chance and underrate the importance of planning". 
For those of you that were sentenced to serve in an institution like IBM for some period of time, there is this: "...arguing over process has become a way to endlessly defer making concrete plans for a better future".  Oh, and you can "reorg" and have new buzzwords too! ;-) 

It's hard to believe this review is getting long. The whole book is a small 195 pages and I'm really only covering the first 75! IMHO, unless you are doing a startup, you COULD skip the last 90 or so pages, but that is not what I recommend. 

I'll close with what I think might turn out to the biggest mistake of human history so far -- Darwinism. "Actually, almost everybody in the modern world has already heard an answer to this question [how Indefinite Optimism MIGHT work] progress without planning is what we call "evolution"". 

Thiel goes on to point out that we may have a good deal more faith in this concept than is warranted. As I've pointed out, "it evolved" has become the modern answer to "it's God's will!", and while Western Civilization was optimistically marching to the real "God's Will" from the Reformation to the Moon Landing, we haven't really "evolved" all that well since -- or as Thiel puts it. 

"The smartphones that distract us from our surroundings also distract us from the fact that our surroundings are strangely old: only computers and communications have improved dramatically since midcentury."

He summarizes on Darwinism ... "Darwinism may be a fine theory in other contexts, but in startups, intelligent design works best". Startups don't have a billion years to get it right ... does Western civilization?

I'm NOT doing the book justice -- he has some great stuff on "power laws",  computer "substitution" vs man / machine partnership (his company Palantir), what founders of companies (or lots of things) ought to be like, and some great thoughts on what kinds of futures we may be choosing from as we check our smartphones.


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