Peter Thiel said:
“Humans are distinguished from other species by our ability to work miracles. We call these miracles technology.
The single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.
Whenever I interview someone for a job, I like to ask this question: ‘What important truth do very few people agree with you on?’ This question sounds easy because it’s straightforward. Actually, it’s very hard to answer. It’s intellectually difficult because the knowledge that everyone is taught in school is by definition agreed upon. And it’s psychologically difficult because anyone trying to answer must say something she knows to be unpopular. Brilliant thinking is rare, but courage is in even shorter supply than genius. Most commonly, I hear answers like the following: ‘Our educational system is broken and urgently needs to be fixed.’ ‘America is exceptional.’ ‘There is no God.’ Those are bad answers. The first and second statements might be true, but many people already agree with them. The third statement simply takes one side in a familiar debate. A good answer takes the following form: ‘Most people believe in x, but the truth is the opposite of x.’
No one can predict the future exactly, but we know two things: it’s going to be different, and it must be rooted in today’s world. Most answers to the contrarian question are different ways of seeing the present; good answers are as close as we can come to looking into the future.
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.
If you can identify a delusional popular belief, you can find what lies hidden behind it: the contrarian truth.
It is better to risk boldness than triviality. A bad plan is better than no plan. Competitive markets destroy profits. Sales matter just as much as product.
The most contrarian thing of all is not to oppose the crowd but to think for yourself.
Monopoly is the condition of every successful business.
All Rhodes Scholars had a great future in their past.
The overwhelming importance of future profits is counterintuitive even in Silicon Valley. For a company to be valuable it must grow and endure, but many entrepreneurs focus only on short-term growth.
You can expect the future to take a definite form or you can treat it as hazily uncertain. If you treat the future as something definite, it makes sense to understand it in advance and to work to shape it. But 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: when people lack concrete plans to carry out, they use formal rules to assemble a portfolio of various options. This describes Americans today. In middle school, we’re encouraged to start hoarding ‘extracurricular activities.’ In high school, ambitious students compete even harder to appear omnicompetent. By the time a student gets to college, he’s spent a decade curating a bewilderingly diverse resume to prepare for a completely unknowable future. Come what may, he’s ready--for nothing in particular.
We have to find our way back to a definite future, and the Western world needs nothing short of a cultural revolution to do it. Where to start? John Rawls will need to be displaced in philosophy departments. Malcolm Gladwell must be persuaded to change his theories. And pollsters have to be driven from politics. But the philosophy professors and the Gladwells of the world are set in their ways, to say nothing of our politicians. It’s extremely hard to make changes in those crowded fields, even with brains and good intentions. A startup is the largest endeavor over which you can have definite mastery. You can have agency not just over your own life, but over a small and important part of the world. It begins by rejecting the unjust tyranny of Chance. You are not a lottery ticket.
The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined.
Along with the natural fact that physical frontiers have receded, four social trends have conspired to root out belief in secrets.
First in incrementalism. From an early age, we are taught that the right way to do things is to proceed one very small step at a time, day by day, grade by grade. If you overachieve and end up learning something that’s not on the test, you won’t receive credit for it. But in exchange for doing exactly what’s asked of you, you’ll get an A. This process extends all the way up through the tenure track, which is why academics usually chase large numbers of trivial publications instead of new frontiers.
Second is risk aversion. People are scared of secrets because they are scared of being wrong. By definition, a secret hasn’t been vetted by the mainstream. If your goal is to never make a mistake in your life, you shouldn’t look for secrets. The prospect of being lonely but right--dedicating your life to something that no one else believes in--is already hard. The prospect of being lonely and wrong can be unbearable.
Third is complacency. Social elites have the most freedom and ability to explore new thinking, but they seem to believe in secrets the least. Why search for a new secret if you can comfortably collect rents on everything that has already been done? Every fall, the deans at top law schools and business schools welcome the incoming class with the same implicit message: ‘You got into this elite institution. Your worries are over. You’re set for life.’ But that’s probably the kind of thing that’s true only if you don’t believe it.
Fourth is ‘flatness.’ As globalization advances, people perceive the world as one homogeneous, highly competitive marketplace: the world is ‘flat.’ Given that assumption, anyone who might have had the ambition to look for a secret will first ask himself: if it were possible to discover something new, wouldn’t someone from the faceless global talent pool of smarter and more creative people have found it already? This voice of doubt can dissuade people from even starting to look for secrets in a world that seems too big a place for any individual to contribute something unique.
Recruiting is a core competency for any company. It should never be outsourced. You need people who are not just skilled on paper but who will work together cohesively after they’re hired. The first four or five might be attracted by large equity stakes or high-profile responsibilities. More important than those obvious offerings is your answer to this question: Why should the 20th employee join your company. Talented people don’t need to work for you; they have plenty of options. You should ask yourself a more pointed version of the question: Why would someone join your company as its 20th engineer when she could go work at Google for more money and more prestige. There are two general kinds of good answers: answers about your mission and answers about your team.”
Painting: Bacchus and Ariadne by Titian