The course of lectures "Startup". Peter Thiel. Stanford 2012. Lesson 13

Original author: Blake Masters
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In the spring of 2012, Peter Thiel ( Peter Thiel ), one of the founders of PayPal and the first investor FaceBook, held a course at Stanford - "Startup". Before starting, Thiel said: “If I do my job correctly, this will be the last subject that you will have to study.”

One of the students of the lecture recorded and posted the transcript . In this habtopopic, shellx translates the thirteenth lesson, astropilot editor .

Lesson 1: Challenging the Future
Lesson 2: Again, Like in 1999?
Lesson 3: Value Systems
Lesson 4: Last Step Advantage
Lesson 5: Mafia Mechanics
Lesson 6: Thiel Law
Lesson 7: Follow the Money
Lesson 8: Presenting an Idea (Pitch)
Lesson 9: Everything Is Ready, But Will They Come?
Session 10: After Web 2.0
Session 11: Secrets
Session 12: War and Peace
Session 13: You Are Not a Lottery Ticket
Session 14: Ecology as a Worldview
Session 15: Back to the Future
Session 16: Understanding Yourself
Session 17: Deep Thoughts
Session 18: Founder - Victim or God.
Occupation 19: Stagnation or Singularity?

I. Madam Luck

A. Substance

The most important philosophical question regarding startups is: what role does luck play in achieving success? No matter how important this issue is, whether it is luck or the exclusive competence of the founders, however, it is rather difficult to choose a method for solving it. Statistical methods are useless if you have only one case in the sample. It would be great if you could put a number of experiments. Let's say launch Facebook 1000 times under the same conditions. If this worked 1000 times out of 1000, we would decide that the matter is in competence. If this worked only once, we would decide that it was luck. But of course it is obvious that such experiments are impossible.

Opinions on this issue are almost always biased. Some people tend to explain everything with luck. Others believe that competency is more important. It depends on whose story you believe. The insider’s story will be that talented people gathered, worked hard and achieved a result, while an external observer will reduce everything to a good choice of place and time. Your opinion on this subject can change, because it is quite difficult to have a reasonable, confirmed point of view for or against one of these versions.

Basically, people are inclined to believe that it is luck. However, the level of competence probably plays a much more important role than is commonly thought. We will soon talk about some thoughts and arguments in favor of this version. But the main thing I want to say is that there is no single answer to this question.

B. Arguments against the theory of luck

Not the most convincing argument against the theory of luck involves the use of disparate data as evidence of the repeatability of success. Several people have successfully established many companies worth more than a billion dollars. Steve Jobs created Next Computer, Pixar, and perhaps both: the first Apple Computer and modern Apple. Jack Dorsey founded Twitter and Square. Elon Musk - PayPal, Tesla, SpaceX, and SolarCity. In favor of the theory of luck, it is said that all these examples are just examples of one great success; it is obvious that the success stories of these people flow from one another. However, it would be foolish to say that these people were just lucky.

C. Seal of time

It is worth noting how many points of view have changed over the entire time. I will quote the famous words of Thomas Jefferson: “I firmly believe in luck. And I noticed: the more I work, the more successful I am. ” From the 18th century until the 1950s or 60s, luck was perceived as something that could be improved and controlled. She was not some strange external force that cannot be comprehended.

Today's usual perception of luck is more like that of Malcolm Glwell than Thomas Jefferson; success, we are told, "depends as much on your environment as on your personal qualities." You cannot control your destiny. You just need to be in the right place at the right time. Everything around is a series of coincidences.

D. For startups

The idea that luck plays a big role also prevails in the startup community. Paul Graham attributes startup success to luck. Robert Cringely wrote The Random Empires. I do not want to find fault with these people, they are obviously very skilled and quite successful. The only thing is that they determine the majority dominant point of view on startups.

This once again shows what would have happened if a successful entrepreneur had publicly stated that his success was entirely related to his skills. Such a statement would be perceived as ridiculous, arrogant and erroneous. The strength of the evidence presented and the validity of the arguments would not matter. When we know that a successful person is a specialist in his field, we try not to attach importance to it or not to notice it. Luck always plays a big role. No one has the right to show how he actually cope with everything on his own.

It is worth saying that one of the main reasons why this course of lectures exists and the desire to read it is to support the point of view in which luck is not the main factor of success. A course of lectures on startups would be useless if it were just a retelling of a bunch of stories in which people won the lottery. It would be very strange to teach someone to play slot machines. In the event that everything depends on luck, there is no point in learning for a long time. But it’s not just a matter of luck. Something we can manage. Note that this is lecture number 13. We are not going to be like people who build buildings without a thirteenth floor and superstitiously miss the thirteenth lecture. Luck is not something to outsmart or be afraid of. Therefore, we have lecture number 13. We will manage luck.

E. The past versus the future

One useful way to think of luck is to divide it into luck related to the past and luck related to the future. The part about the past basically asks: “How did I get here?” If you are successful, you were probably born in a suitable country. You won the geographic / genetic / inheritance lottery. This is a fairly long-standing debate: whether you had to work hard and that is what led you to success, or whether you are simply deceiving yourself, believing that this aspect did not contribute to your success.
But still, it would probably be more fruitful to focus on the future. Let others argue about the past. A much more interesting question is: is luck prevailing in shaping the future? Is the future predetermined?

II. Is it possible to manage the future

In our society, we tend to explain events more likely by their accidental origin than by someone’s skill or intent. This dynamics is necessarily abstract; it is very difficult to explain empirically. All we can do here is to realize that we have deviated greatly towards good luck and assume that it may make sense to return to a balanced state.

We can use a 2x2 matrix to help us think about the future. On the vertical axis we will have optimism and pessimism. On the horizontal axis we will have certainty and uncertainty. A definable future means that the things in it are known, and you can control them. In the indefinite future, things are unknown and not controlled. In such a future, there are simply a lot of random events.

What would you do if you fall into this quadrant? If you believe that the future is not definable - you would be amazed at the huge variety of developments. The statement is true for both cases: you are an optimist or a pessimist. Indeed, to envisage all the paths of events in life - this seems to be what almost everyone is doing. People go to school, take part in various activities, and enter various communities during this time. They, in fact, spend 10 years to build a resume suitable for all possible cases. They are preparing for a completely unknown future. Whatever side the wind blows in their versatile resume, you can find something for further work.

Compare this to a definable version of the future. If the future is definable, it makes more sense to have firm beliefs. You will not join dozens of communities or undertake any activity. There is only one goal - the best goal you need to achieve. This is clearly not the way people build their resumes these days.

We impose optimism / pessimism on the quadrants of certainty / uncertainty, and you will see even more refinement. Whether you look into the future with confidence or fear it is ultimately of great importance.

A. Certainty and optimism

Until the 1950s and 60s, the prevailing opinion about the future was certainty and optimism. There has always been a relatively well-defined path in which people thought that the future would be much better than the present. You could head west and get 640 acres of land. Concrete projects have been undertaken to improve society. There was a general orientation of society to work to make the future a better place.

B. Uncertainty and optimism

But the US has shifted out of this quadrant. Prospects, at least during 2007, were optimistic. But, since 1982, they have also become much more uncertain. The idea was that the future would be better, but not necessarily in exactly the way you think. Unlike a certain future in the past, in which there were many secrets, today the future contains not so many. Now the future is full of mystical secrets. God, nature and the market are unknown and incomprehensible. But the universe is still generous to us. Thus, it is better to just continue to study it and wait for progress in the future.

C. Pessimism

Or you may think that the future will not be very good at all. Oddly enough, China lies right in the quadrant with a certain pessimistic future. This is the exact opposite of a quadrant with an uncertain optimistic future in the United States. The point of view of China is such that it is possible to calculate the actions necessary in order to improve the life of society. Everything is quite certain. But when you do these calculations, it becomes clear that there are no reasons for optimism. China will age before it gets rich. He is forever doomed to be a poor version of the United States. Maybe he will copy everything. But he simply does not have time to catch up with the United States, even if he tries hard. This explains why, as a result, all these measures are applied, which seem draconian in terms of optimistic quadrants; for example, pursuing a single-child policy in the family, total environmental pollution, and thousands of people who die every year in coal mines. The basic point of view is pessimistic, but it is for a very definite reason that can be calculated.

And finally, a pessimistic indefinite quadrant. This is apparently the worst of all worlds; the future is not so good and you have no idea what to do. An example would be Japan in the early 1990s or Europe today.

There is a widespread belief that the United States is shifting from the upper right quadrant of optimistic uncertainty to the lower left pessimistic certainty. The argument, in other words, is that we are moving towards China. This is the future where everything goes to hell, and not only in a metaphorical sense.

D. Financial picture

Here we can add a financial picture to better illustrate all this. Let's start with some definitions. Investing is an investment in values ​​that you believe in, such as stocks or a company. You expect a high level of profitability. Savings, by contrast, are when you keep your money with the hope of spending it in the future. As a rule, getting in this case a very low yield.

If you look to the future with optimism, you will have few savings. No need to save money. The future will be better, and everything will form by itself. But if you are pessimistic, your level of savings will be higher. Because you expect the future to be worse than the present, and you want to have savings when that day comes.

E. Savings

The United States has a savings rate, it is not much higher than zero. It is something around 4%. If we include here the level of state savings of -10% of GDP, the savings rate will be -6%. It's funny, but this means that the United States looks to the future with great optimism (although there is a suspicion that the level of government spending is not as well thought out as the savings rate). The USA has a really very low level of savings.

China's savings rate is about 40%. This state of affairs is often criticized because it seems wrong that poor people save money, while rich people in the US spend it. This creates a trade deficit, it is believed that China should start to consume more and save less. Such criticism misses one important factor determining the course of China on the growth of savings; it is very difficult to spend money when your point of view on the future is pessimistic, and you believe that you are more likely to grow old than get rich.

F. Investments

There are many things in the world of certainty that people can do. A lot of things you can invest in. You can spend a significant portion of capital on investments. In a world of uncertainty, the rate of such capital is much less. It is not clear where to invest, so no one invests. The US has a very low investment rate. The main investors are corporations. But instead of investing, companies today generate huge cash flow - about one trillion dollars a year. They accumulate money because they have no idea what to do with them. By definition, you would not have free cash flows if you knew where and how to invest. The average consumer is no different either. The people have no ideas. Thus, we have a low investment rate, a low saving rate,

Pessimistic quadrants are always kind of stable. This is especially true of the quadrant with indefinite pessimism; if you think that things are going to hell and you think that you can’t influence it in any way, then most likely it will be so. You will stagnate for a long period of time. In the quadrant of a certain pessimism, you will be like China - stop in development, methodically copying objects without any hope for a radically better future.

The good question is whether or not vague optimism - which characterizes the United States from 1982 to 2007 - can become a stable quadrant in general. The fact that in the USA a low rate of savings and a low rate of investment is strange in itself. If you have a low rate of investment and a low rate of savings - just right to ask yourself what the future holds for you in general. The fact that no one thinks about the future is manifested in a low investment rate. So how can people be optimistic (while not having any savings) about the future if no one is striving for this?

G. Calculations and statistics

There are several schemes that we can use to deal with the question of “certainty versus uncertainty”, and from the point of view of mathematics, “calculations versus statistics”. In a world of certainty, calculations dominate. You can calculate any things accurately and definitely. When you send a rocket to the moon, you must accurately calculate where and at what time it will be. This is not like a startup developing iterations when you launch a rocket, and then focus on the situation. Are you flying to the moon? Or to Jupiter? Are you lost somewhere in space? In the nineties, there were many companies that had great starts, but had no successful touchdowns.

The uncertain future is such that mainly statistics fill its world with meaning. Bell curves and Random walks (mathematical model of the process of random changes) determine the future development paths. Standard pedagogical argument: in high school you need to get rid of matanalysis and replace it with statistics, which are actually important and useful. The idea that a statistical way of thinking will be the locomotive of the future has gained great popularity.

Using mathematical calculus, you can calculate the future ahead. You can calculate the position of the planets for decades to come. But no such specifics will give you the theory of probability or statistics. In these areas, all that you know about the future is that you are not aware of it. You cannot influence the future. Larry Summers once said about the economy: “I don’t know what will happen, and even if someone says that he knows, he has no idea what he says.” Today, all prophets are false prophets. This can only be true if you are looking at the future in terms of statistics.

H. Matter and process

Another way to look at the question of “certainty versus uncertainty” is through the prism of matter and process. What people do and what technologies they develop will depend on their perspective on the future. In terms of uncertainty, they will not know what to develop. There is nothing that would look promising if everything around is the result of a statistical sample. You want you to have a good method to manage this statistical distribution. This reminded me of the discussion on the HP board of directors that we talked about earlier: Tom Perkins' old-school stuff versus the processes of Patricia Dunn. If everything is uncertain, it will be presumptuous to think that the board of directors might know anything about the future.

How each of the quadrants works in practice, looks something like this:
  • optimistic, definite: engineering and art. Very accurate definitions.
  • optimistic, indefinite: jurisprudence and finance.
  • Jurisprudence is the process of applying specific rules with essentially undefined results. In jurisprudence, you assume that following a certain process will result in a positive result. And finance also has a completely statistical basis.
pessimistic, indefinite: insurance.
  • You will not make money, but you can protect yourself from expected losses.

pessimistic, definite: rationing of products during the war.

I. The death of grandiose projects

The United States used to be in an optimistic quadrant. Previously, we had any kind of ideas regarding grandiose projects, the implementation of which would take many years, but the result from the implementation of which would be very impressive. An example from the 19th century is the transcontinental railway. An example from the 20th century is Robert Moses, who in the 1920s held twelve high-ranking government posts at a time. He started as commissioner for the construction of parks. But in order to build parks - on the scale on which Moses wanted to do this - you have to level entire blocks with the ground, build roads and highways, and implement other structures. Moses got enough power to do all these things. Moses had more power than the mayor or governor of New York.

Today we would call it insanity. Of course, Moses had too much power. Such ambitious projects, especially with a single person as an architect, today would not have led to anything. The difference was that, unlike today, people believed in a definite future. The future can be planned. Moses seemed pretty smart and ethical enough. Instead of asking whether it is worth implementing the project, people asked who could implement this project best of all.

It all ended in 1965 when Moses planned a highway that would go through Greenwich Village. A fairly large number of people believed that the old buildings that were supposed to be demolished should be preserved, and challenged the construction. This was the last time a new highway was built in the state.

A more recent example is the Rib plan. John Reber was a teacher and theatergoer in San Francisco. In the 1940s, he came with the intention of radically reconstructing San Francisco. The main idea was to build two large land-rock dams, one between San Francisco and Auckland and the second between Maryne Country and Richmond. They would have to be dried and filled with fresh water. 20,000 acres of land would be flooded and a 32-lane highway built. And skyscrapers would be scattered around the completely remodeled city.

Details are not even as important as the fact that this plan was not just a fantasy. Under this plan, congressional hearings were held and an examination of its viability was conducted. It turned out that it was not feasible for several reasons, lakes with fresh water, for example, would evaporate too quickly, but people really took the time to consider this project. Today, on the contrary, such an idea would be considered insanity. Especially if it came from a man like John Reber. What authority does the teacher have to rebuild an entire San Francisco area? Such John Rebers have long learned to keep their ideas to themselves. It’s safer not to implement any grandiose ideas at all.

J. Indefinite optimism and finances

In the future, a certain optimism in your city under water and in space. In the future of uncertain optimism, you have finances. Such a contrast cannot please. The main idea in the field of finance is that the stock market is fundamentally random. This is just a Brownian motion. All you know is that you don't know anything. And it all depends on diversification. There are smart ways to combine different investments to get higher returns and lower risk, but the benefits of such tricks are negligible. You cannot know anything significant about any particular business. But you are still optimistic; finance cannot work if you are pessimistic. You assume that you are going to make money.

Uncertain optimism can be really strange. Think about that. What happens if someone in Silicon Valley builds a successful company and sells it. What will founders do with the money? Under conditions of uncertain optimism, events will develop as follows:
  • The founder does not know what to do with the money and puts their bank.
  • The bank does not know what to do with the money and gives it to the investment fund in order to diversify deposits.
  • The investment fund also does not know what to do with money and invests it in securities in order to diversify.
  • Companies are valued by how much money they generate. Therefore, they are trying to generate free cash flows. And when and if they do it - the money returns back to the investor. Etc.

What is really strange in this chain is that at any stage no one has a clue what to do with the money. Obviously, this is an exaggerated example. But it reflects a strange phenomenon. Money plays a much more important role if the future is uncertain. In such a future, ownership of funds is better than investing in specific projects. In a certain future, on the contrary, money is simply a means to an end.

One wonders if such circulating investments generally work. Can such a system be self-sufficient? Can this work if no one thinks about real things and brings new ideas to the system? The era of vague optimism is perhaps drawing to a close. Look at government bonds, which, in essence, are just another option for money. Profitability continues to fall. People hold them simply because they don’t know what else to do. Today you can earn 1.8% on government bonds. But expected inflation will be 2.1%. The expected return over the next decade will be -0.3%. You get negative returns when people run out of ideas.

Uncertainty refocused on investment. If earlier investors had ideas, now they are focusing on risk management. Very rarely, in a hedge fund, people wonder what will happen in the future. They are interested not so much in “What will we do” as in “How to manage risks”. The process dominates the gist. Venture capital fell victim to the same phenomenon. Instead of forming solid ideas of the future, the main question for today is how to get access to profitable deals. At least in theory, venture capital should have very little in common with this kind of statistical approach to the future.

K. Uncertainty and politics

If you think that the future is not defined, then the most important people for you are statistics. Sociologists are becoming more important than politicians. In the past 30 years, polls have been in an incredible trend. We have polls for literally everything. We believe in their reliability. It is not surprising then that politicians pay more attention to polls than care about the future. This helps explain the strange fact why John McCain chose Sarah Palin as his partner in 2008. McCain’s people studied all polls regarding governors and senators. Most of them were very unpopular. Palin’s popularity rating, on the other hand, was 89% in Alaska (which is apparently due to the annual payments to Alaskan residents of $ 1000 + as a payment for oil). After a simple analysis of the polls, Palin became the obvious choice. This did not work as expected. It had nothing to do with Palin's merit as a candidate; this case simply shows how statistical survey data can dominate common sense in politics. Our leaders are not going to defend unpopular points of view.

We can extend this idea to the entire government. Over the past 40-50 years, the size of the government apparatus has not changed significantly. But it itself has changed radically. In the past, the government has pursued and implemented concrete ideas. Think of a space program. Today, the government does not implement so many specific projects. Basically, it just moves money from one people to another. What are you doing with poverty? We do not know. Well, let's give people money, let them decide what to do with them and hope that it helps. If you are not able to solve problems, then the only thing you can do is simply distribute the money.

L. Uncertainty and literature

Science fiction also confirms the hypothesis of a shift toward uncertainty. 50-60 years ago, science fiction described the future in specific defined conditions. In 1968, Arthur Clark described the consumption of information in the coming year 2001. “2001: Space Odyssey”:

The text was automatically updated every hour ... you could spend your whole life doing nothing but reading constantly updated information from news satellites.

In this world, information will be updated automatically. It was a very definite idea of ​​the future. But the interesting thing is that the future in this future was uncertain. In it you will have a constantly changing flow of information about which you could not know anything in advance. The prediction seems surprisingly prophetic.

Compare this to William Gibson's 1984 Neuromancer:

The sky above the port was the color of a television screen tuned to an empty channel.

Here, 14 years later than 2001, described by Clark, is a future in which you see nothing. Everything around is a cloud of random probabilities.

M. Uncertainty and philosophy

There is also a philosophical version of this theory. Marx and Hegel prevail in an optimistic certain quadrant. The future will be better, and you can plan your life for 5 years in advance. Rawls and Nozick are also optimistic, but uncertain. In the socialist version, you must have a socialist state, because this is what people want, even if they themselves do not realize it. In the libertarian version, no one really knows anything, people should have the freedom to do anything, and then they themselves will come across success. Plato and Aristotle are completely pessimistic and definite. You can find out the nature of things, but there is no reason to be delighted with the future. Epicurus and Lucretius represent pessimistic uncertainty. The universe is empty. The bodies collide with each other randomly. Sometimes uniting, sometimes breaking up. You have no control over it. Therefore, you should simply take a stoic attitude of equanimity. Try to enjoy life, despite the fact that everything around will eventually fall apart.

Our society is probably moving in the direction of Epicurus and Lucretius. This trend has recently been observed in financial crises. While until 2007 society was uncertain and optimistic, now pessimism seems to be getting closer. It is difficult to say whether the situation will continue to develop in this direction. But vague pessimism has never been the dominant phenomenon in America.

N. Uncertainty and death

Another area in which uncertainty dominates is insurance and death. None of us know exactly how long we will live. But we often turn to statistical systems to find out the probability of death in a particular year. The probability of a student dying is one in a thousand. With age, the probability changes. People over the age of 100 have a 50% chance of dying this year. Only one in 10,000 survives to 100 years. Only one in 10 million survives to 110 years. We have pretty good statistics on this subject, and it’s in the order of things, we just don’t have another way to predict such things.

Therefore, the idea of ​​extending life does not enjoy much confidence. Society considers probability theory the last resort in this case - so much so that even ideas to prolong life are perceived as strange and even extravagant. Society believes that you just need to obey statistics. This perception is very different from the perception of 1600-1850, when people were delighted with the prospect of discovering a magical cure for death and even looked for a source of eternal youth. The point of view changed when people stopped believing in the existence of a literal source. The belief that society can radically change the nature of things died with this faith. So no one else is trying. In a world in which luck plays a big role, chance is too important. It robs people of their will. Belief in secrets has an effective effect. Belief in chance has no effect; it, on the contrary, keeps you from doing anything.

“Старикам тут не место” исследует точку зрения на будущее, в котором всё случайно и все умирают.
Вы не сможете преодолеть случайное с помощью знания.
Знание — тщетно.

О. Неопределённость и космология

Uncertainty exists in cosmology. Look at the rise of the theory of parallel universes in quantum mechanics in the 1970s. The basic idea is that every time something happens, the universe is split. Each of the branches represents a new world in which the event occurred or did not occur. Reality is the set of branches of a tree in which any event - every quantum outcome - actually happened. 55% -60% of theoretical physicists today adhere to multiverse theory. 50 years ago there were only 10-15% of those. There were no experiments confirming this theory. Probably, such experiments are impossible. So why do so many physicists adhere to a theory that cannot be proved? If you ask them, they will answer: "This theory is simply mathematically prettier." But is that true? Is an infinite number of universes better than one? Or is it just an echo of the shift towards the quadrant of the uncertainty of the future?

All these examples illustrate the mass transition to uncertainty that we have experienced in the last 30-40 years.

III. Is vague optimism possible?

Today we are in a kind of uncertainty. Which quadrant will we move to in the future? Can we return to the vague optimism that we were in from 1982 to 2007? Come on, are we moving into some other quadrant?

An uncertain future is iterative in nature. You cannot plan it; events unfold one on the basis of the other. The question is whether the iterative process can lead, if not to the best of the worlds, then at least to a world with gradual and potentially endless improvement. If so, then we may not climb the highest mountain in the world, but at least we will always go uphill.

A. Uncertain optimism in the rest of the world

This is Darwin's theory of evolution. At first there are only very simple organisms. In billions of years, an evolutionary tree appears. Not all possible life forms develop. There are no supersonic birds with titanium wings. Something may be imperfect. We can highlight a lot of not the best “design solutions”. But this is the trajectory of relentless, endless development. Darwin's theory plays a key role in understanding vague optimism.

How accurately can the theory of vague optimism be applied to economics? Perhaps not so sure. Look at the photos of Los Angeles. It was supposed to be the best city in the world. Los Angeles could be built from scratch at the beginning of the 20th century. It would be great. But at that time there was no grand master plan. And instead, he gradually crawled in all directions. The market did not solve the problem. Los Angeles is still one of the best cities in the world. But this is far from what he could be. The Los Angeles experiment at least gives reason to be pessimistic when it comes to uncertainty.

An even more serious problem for the residents of São Paulo. The airport was 5 miles from the city center. The whole journey takes 10 minutes by helicopter. But at rush hour by car, it takes 3 hours. Traffic congestion is terrible. The population of the city is 20 million people. The city is divided into areas with a population of 500k-1M people. Most people live in high-rise buildings. The standard of living is getting worse every year. Mumbai and Lagos are other examples of large congestion and urban decline. There is no reason for optimism, giving the right to believe that urban planning can improve the situation in these regions. The arguments against globalization can also be drawn here; most developing countries cannot catch up with the developed world because they are bogged down in the past and cannot be rebuilt.

The confrontation of economists and ecologists stems from the confrontation of optimism and pessimism. A market economy solves problems iteratively. The idea is that we do not have to worry about the environment, because we will come up with a solution to the problem along the way. This is a classic vague optimism. The counterargument of environmentalists is that we are all late: it’s too late, we need to do more than we can do. This is also still uncertainty, but already clearly pessimistic.

It is worth noting that things like geoengineering fall into an optimistic certain quadrant. Maybe we could scatter iron filings across the ocean to make phytoplankton absorb carbon dioxide. Potential solutions of this kind are not even remotely present in public discussions. Only radically vague things are discussed.

B. For startups

In the context of startups, obsession with uncertainty leads to the following phenomena:

  • Darwinist A / B testing
  • Iterative development
  • Machine learning
  • Lack of plans for the future
  • Short-term forecasts

I am not saying that all these things are fundamentally wrong. If they are not true, then this is not obvious. But it’s not at all a fact that they are correct. Of course, it is interesting to ask whether these things, like the multiverse theory in quantum mechanics, are a by-product of society on the way to the uncertainty quadrant.

By going through these points, it is easy to find flaws in each of them. According to Darwin's theory, it took billions of years to achieve a result. Startups don't have that much time. And even if so, Darwinism is optimistic in general, which cannot be said about the participants in the evolution process themselves. During the process of evolution itself, there may be a massacre and destruction. When people mention the theory of evolution in the context of business, they are probably going to do something like that. And iterative development and machine learning are an excuse for the last two points - the lack of plans and short-term forecasts. Of course, there are many counterarguments. But some planning, as a rule, is underestimated today in the culture of startups.

IV. The return of design

The field of finance, perhaps more than all others, contains elements of an indefinite way of thinking. The peak of the financial bubble in 2007 can thus be seen as the peak of an indefinite way of thinking.

Apple is the exact opposite of finance. It uses design at all levels. This is definitely a designer product. Corporate strategy is clearly defined. There is a definite plan for many years to come. Product release is carried out systematically.

A. Design and value

This lecture course does not provide investment advice. Running now to buy Apple stocks might not be the best idea. But over the past decade, people have been pretty keen on Apple stocks. The uncertain world of finance would ignore anyone who claims to have a secret plan for new products. Steve Jobs received stock at a price of $ 3 apiece. After Apple started selling in 2003, stocks were trading at $ 6. Investment funds have always underestimated Apple because they did not know what to think about the future. All shares were bought by ordinary people.

Following Apple came to realize that good product design plays an important role. Airbnb, Pinterest, Dropbox and Path - all create the impression of products that are not based on a statistical way of thinking. There is a feeling that there is some kind of telepathic connection between these products and what people want. This connection - exceptional design - seems to work better and faster than evolutionary A / B testing or iterative search on a vast field. The return of design is a large part of the opposition that goes against the dominant spirit of uncertainty.

B. Plans

Accordingly, there is an observation that companies with well-developed plans usually do not sell anything. If your startup has traction, you will receive offers to buy. In an uncertain world, you will take money, because money is your goal. PayPal had and implemented many great ideas. But in 2002, to be honest, they ended. It was not clear what to do now. Therefore, it made sense to sell the company.

But when a company has certain plans, these plans outweigh the decision not to sell. There is no reason to stop if you can do more. The company's mission - a secret plan - is able to rally the team around specific ideas that will be implemented over the next few months or years.

In an uncertain world, investors believe that covert missions have no value. But in a world of certainty, the stability of a secret mission is one of the most important metrics. Any company with a good secret mission will be underestimated in a world in which no one believes in secrets and no one believes in a mission. The ability to follow a long-term secret mission is incredibly important.

Today, young people are generally optimistic and uncertain. They add one line in the resume to another. They believe in tales of endless improvement, even if they have no idea what the path to it looks like. Maybe this will work. We should not completely discount the uncertain future, as luck always plays a role. But this is too overloaded a strategy. It allows luck to too dominate the realities of life. Something must be said in favor of an alternative to planning.

It is worth noting that you can always have a certain plan even in the most uncertain of the worlds. If you come into contact with the field of law or finance, you should still have a plan. Most business partners at Wall Street or law firms work for a while and then make a horizontal diagonal jump to another company offering more money. This iterative development method is a recipe for annihilation. It would be much better to work in the same bank or company for 10-15 years. In the end, there would be no one left but you who would be aware of everything that was happening. You must plan to become a partner or managing director from day one. Your plan may change, but if you do not have it, you simply go with the flow.

C. Designing perspectives

For the past quarter century, our society has belonged to the quadrant of indefinite optimism. But this quadrant is living out its time. We go down to pessimism. Can we instead move to a certain optimism? Computer science is our only hope. They have a definable nature as much as possible. It would be very strange to look at technology startups through the prism of uncertainty. But what you will do now and through what prism to look at is your business. An alternative title for this lecture would be “Control Alt Delete”. It is often better to redo everything from scratch than to fix it. And maybe it's time to start from scratch.

Note :
I ask for translation errors and spelling in PM. Debuted with the translation ShellX , editor AstroPilot , all thanks to them.

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