Zero to one, by Peter Thiel

This book was a real surprise. I think it is the first simple “how to think like an entrepreneur”-book that I have recommended people to read. There are a lot of very interesting thinking in this short book that I think everyone who tries to make the world a better place, and realise that more than incremental change is needed, should read. I have found Peter interesting, but did not expect him to cover so many of the most important challenges in this short book. But maybe is was Blake Masters that helped him?

It is written without any references/footnotes and in this case I think that is perfectly OK as, for most of it, Peter writes about things he has knowledge about and expericne of.

What I find frustrating is his simplified view of technology as the only driver of change. It is as if values and structures don’t exist. In many ways, the ideas are very close to a simplified version of Marx, but a mirror image. If the books would have included a more nuanced approach to change I think it could have been a classic.

One of the big surprises for me was that Peter spend so much time on our generation’s major challenges from a global perspective. He does this in a way where it is natural, as it should be. This is such a stark contrast to books who claim to have a global approach and about important things, but then basically just focus on American trivial ideas/innovations (a good example of a book that fails in those areas is Bold by Peter Diamandis http://www.pamlin.net/new/?p=2282)

The following could be from any UN sustainability study or progressive international NGO:

“Without technological change, if China doubles its energy production over the next two decades, it will also double its air pollution. If every one of India’s hundreds of millions of households were to live the way Americans already do—using only today’s tools—the result would be environmentally catastrophic. Spreading old ways to create wealth around the world will result in devastation, not riches. In a world of scarce resources, globalization without new technology is unsustainable.”

He also brings up some of the most important and forgotten aspects in today’s society:

“we have inherited a richer society than any previous generation would have been able to imagine.

Any generation excepting our parents’ and grandparents’, that is: in the late 1960s, they expected this progress to continue. They looked forward to a four-day workweek, energy too cheap to meter, and vacations on the moon. But it didn’t happen. 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.”

His urge to get people to think beyond the incremental is very refreshing and all organisations working with global challenges could benefit from his comparison between old and new ideas

Old ideas that still dominate

1. Make incremental advances
   Grand visions inflated the bubble, so they should not be indulged. Anyone who claims to be able to do something great is suspect, and anyone who wants to change the world should be more humble. Small, incremental steps are the only safe path forward.
2. Stay lean and flexible
   All companies must be “lean,” which is code for “unplanned.” You should not know what your business will do; planning is arrogant and inflexible. Instead you should try things out, “iterate,” and treat entrepreneurship as agnostic experimentation.
3. Improve on the competition
   Don’t try to create a new market prematurely. The only way to know you have a real business is to start with an already existing customer, so you should build your company by improving on recognizable products already offered by successful competitors.
4. Focus on product, not sales”
   “If your product requires advertising or salespeople to sell it, it’s not good enough: technology is primarily about product development, not distribution. Bubble-era advertising was obviously wasteful, so the only sustainable growth is viral growth.”

New ideas that are needed, and more fit for the 21st century, but that are still seen as radical

1. It is better to risk boldness than triviality.
2. A bad plan is better than no plan.
3. Competitive markets destroy profits.
4. Sales matters just as much as product.”

I was also surprised that he makes similar observation as I have done about higher elite education.

“Elite students climb confidently until they reach a level of competition sufficiently intense to beat their dreams out of them. Higher education is the place where people who had big plans in high school get stuck in fierce rivalries with equally smart peers over conventional careers like management consulting and investment banking. For the privilege of being turned into conformists, students (or their families) pay hundreds of thousands of dollars in skyrocketing tuition that continues to outpace inflation. Why are we doing this to ourselves?”

The contribution from different groups in society is also very much spot-on.

“Bankers make money by rearranging the capital structures of already existing companies. Lawyers resolve disputes over old things or help other people structure their affairs. And private equity investors and management consultants don’t start new businesses; they squeeze extra efficiency from old ones with incessant procedural optimizations. It’s no surprise that these fields all attract disproportionate numbers of high-achieving Ivy League optionality chasers; what could be a more appropriate reward for two decades of résumé-building than a seemingly elite, process-oriented career that promises to “keep options open”?”

He is also seem rightfully frustrated by how short-sighted we are.

“We are more fascinated today by statistical predictions of what the country will be thinking in a few weeks’ time than by visionary predictions of what the country will look like 10 or 20 years from now.”

And how we simplify things in dangerous ways.

"meaningful progress requires that we think about the future for more than 140 characters or 15 minutes at a time."

His approach to change and what the obstacles are is also interesting.

“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.”

His urge to focus on important issues combined with a frustration that we fiddle around the margins is very refreshing.

“We are within reach not just of marginal goals set at the competitive edge of today’s conventional disciplines, but of ambitions so great that even the boldest minds of the Scientific Revolution hesitated to announce them directly. We could cure cancer, dementia, and all the diseases of age and metabolic decay. We can find new ways to generate energy that free the world from conflict over fossil fuels. We can invent faster ways to travel from place to place over the surface of the planet; we can even learn how to escape it entirely and settle new frontiers.”

His frustration that many entrepreneurs make vague bold claims is also easy to relate to.

“Here are some bad answers: “Your stock options will be worth more here than elsewhere.” “You’ll get to work with the smartest people in the world.” “You can help solve the world’s most challenging problems.” What’s wrong with valuable stock, smart people, or pressing problems? Nothing—but every company makes these same claims, so they won’t help you stand out.”

But I would argue that the problem with “You can help solve the world’s most challenging problems.” Is not that too many make such claims, but that those who do tend to define those claims do so in very trivial ways and thereby undermine the idea of working with the word’s most challenging problems. For those who are serious here is a good list to start with: http://www.pamlin.net/new/?publication=12-risks-that-threaten-human-civilisation-full-report

When it comes to the market for sustainable technologies (those making it possible for 11 billion or more to have a great life without destroying the planet) Peter’s observations should be discussed more:

“At the start of the 21st century, everyone agreed that the next big thing was clean technology”… “Could successful energy start-ups be founded after the clench crash just as Web 2.0 start-ups successfully launched amid the debris of the dot-coms? The macro need for energy solutions is still real. But a valuable business must start by finding a niche and dominating a small market.”

“Cleantech gave people a way to be optimistic about the future of energy. But when indefinitely optimistic investors betting on the general idea of green energy funded cleantech companies that lacked specific business plans, the result was a bubble.”

“Our task today is to find singular ways to create the new things that will make the future not just different, but better”

Interestingly his own contributions to something significant are hardly discussed at all. But he does mention a few things.

“In addition to helping find terrorists, analysts using Palantir’s software have been able to predict where insurgents plant IEDs in Afghanistan; prosecute high-profile insider trading cases; take down the largest child pornography ring in the world; support the Centers for Disease Control and Prevention in fighting foodborne disease outbreaks; and save both commercial banks and the government hundreds of millions of dollars annually through advanced fraud detection.”

There are no discussions about these “contributions”. Compared to his clarity and logical approach to different aspects in society it is strange to see Peter suddenly list controversial methods in important areas without any discussion about pros and cons.