Summary of ‘Zero to One’, Chapter 6: You are not a lottery ticket

Summary: Multiple people have founded multiple unrelated billion-dollar businesses. This proves that success is not random. Is the future knowable? Since mid-C20, our culture has said “no”. Schooling encourages extreme generalism and “well-roundedness,” spread-betting on an unknowable future. We are “indefinite” in our attitude to the future. Yet we are also optimistic: we think it will get better. The four categories made by {definite,indefinite} * {optimistic,pessimistic} are alternative cultural attitudes. All have been held by a culture: the USA is indefinite optimistic; Europe is indefinite pessimistic; China is definite pessimistic; the West used to be definite optimistic. See the USA’s indefinite optimism in finance: the market is random, but it’ll get better. See the USA’s indefinite politics: no more grand space plans, just health insurance. See the USA’s indefinite philosophy: Rawls etc argue process, where C19 philosophers like Marx argued over future visions. See the USA’s indefinite science: we computationally sift through molecules for drugs, and forget about theories of biology. See the USA’s indefinite software startups: we randomly iterate in a Darwinian fashion, only finding lots of local optima. This indefinite optimism is uniquely unsustainable: who is going to make things better? We must either slip into pessimism, or reprioritize design, planning, and prediction.

Does success come from luck or skill? Many successful people claim luck, but they’re likely being humble. Serial entrepreneurship is higher than one would expect assuming luck. Some people have founded multiple unrelated billion-dollar businesses.

We can’t control everything, but we should not assume that the future is random. Such indefinite attitudes explain many problems today. Schools encourage extreme generalism: we emerge into the world ready for nothing. We should not strive to be “well rounded” but to be a “monopoly of one”. There are four views of the future, generated by two orthogonal binary choices. The first choice is definite vs. indefinite - do you believe the future is predictable? The second is optimistic/pessimistic - will the future be better than the present? These are big cultural attitudes. The indefinite pessimist view is Europe today - it doesn’t know where it’s going, but doesn’t think it’ll get better. The Chinese are definite pessimists - they predict it will get worse (they’re advancing rapidly because they’re just copying the West, and they know it). The definite optimist attitude is that of science types from C16 through to C20, with extraordinary progress in C19 and early C20. They had grand visions which were taken seriously - e.g. a schoolteacher John Reber had a plan to transform the San Francisco Bay’s geography, which was taken seriously despite his lack of credentials. Since the 1970s, the USA’s world view has been “indefinite optimism” - things will get better, but we don’t really know how; we just expect it. This is a hangover from the Baby Boomer generation, who saw rapid progress but were not involved in creating it; and have been treated well by income inequality for the rest of their lives. The attitude no longer makes sense today.

The financial world is indefinitely optimistic. We’re told that we can’t beat the market. We don’t know what it will do but it will get better. Investment is indefinite: investors spread their investments over a portfolio of diverse things, with the hope that one of them will pay off. Money flows around as people chase it, but no one really knows what to do with it, because they don’t have a definite vision.

Politics is indefinite. Instead of visions of the country in several decades, politicians rely on daily polling. The government is indefinite. It no longer enacts grand plans (think going to the moon); it mainly provides insurance and other payments.

Our philosophy is indefinite. Very different philosophers of C19, like Marx and Herbert Spencer, were definite optimists. Today’s, like John Rawls or Robert Nozick, are indefinite: they have no vision of the future. Rawls and Nozick just focus on process: what should people do; what should they be allowed to do? Neither focus on where we should be going. The same in business: people argue over process (Kanban? Waterfall?) instead of arguing over visions of the future of the business.

Our lives are indefinite. In C17 we were obsessed with prolonging life and destroying death. Now our mortuary tables tell us that death is inevitable but random.

Our science is indefinite: pharma companies randomly sift molecules to find a hit. The number of new drugs per dollar of research has halved every nine years since 1950. Could biotech ever see the rate of progress we have seen in software? Biotech startups are radically different to software startups. We don’t understand the body and biotech startups don’t try to refine theories; their work is computational and scattergun.

Indefinite optimism is uniquely unsustainable: how can we make progress if we don’t know how to make it? Darwinism is one answer: everything is just random iterations, try it and see. Startups are told to “iterate” and listen to customers to tell them what to do next. We have to be “lean” be able to “pivot”. But just doing this without a plan will just get you to a random local optimum. Intelligent design works best.

We should prioritize design over chance. We can learn from Steve Jobs as a designer. But his real work was not designing iThings, but a business. Apple had a grand plan many years in advance and worked methodically towards it. The iPod was the first step towards the post-PC world.

Planning makes valuation hard. The plan of a company is mostly secret or inaccessible. Zuckerberg didn’t sell to Yahoo in 2006 for $1B - he had a plan for the company which Yahoo couldn’t have.

Changing our indefinite attitude requires a cultural revolution.

Tagged #zero-to-one, #summary.

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