From 0 to 1: unlocking the secrets of business and the future

Chapter 12 Success is not winning the lottery (2)
In a clearly optimistic future, there will be engineers designing underwater cities and space settlements, and in a less clearly optimistic future, there will be more bankers and lawyers.Finance is actually a concentrated expression of unclear thinking, because people only think of doing finance when they don't know how to make money.If you don't go to law school, good college graduates choose Wall Street because they don't have a realistic plan for their careers.And once they get to Goldman Sachs, everything in the financial world is unclear.You can still be optimistic because you want to succeed, but the fundamental problem is that the market is random.You can't know anything definitively or substantively, and variety becomes extremely important.

Financial uncertainty can be eerie.Think about what happens when those successful entrepreneurs sell their companies?What are they doing with the money?In such a financialized world, something like this:
·Entrepreneurs don't know what to do with their money, so they keep it in the bank.

·The bankers don't know what to do with the money, so they give the money to different institutional investors for investment in different directions.

• Institutional investors don't know what to do with their money, so they invest in stocks.

·Companies try to generate free cash flow to boost the stock price by paying dividends, or buying back shares, and repeating the cycle.

In such a cycle, people don't know what to do with money in the real economy.But in a world of uncertain futures, people just love endless options; money is more valuable than anything else it can get.Money is a means to an end, not an end, only in a definite future.

unclear politics
Politicians in Western countries are always accountable to the people during the election period, but now they have adjusted to pay attention to the opinions of the people all the time.Modern voting systems push politicians to trim their images to match what the populace wants, and in most cases, they do.The accuracy of statistician Nat Silver's predictions of the election outcome is astonishing, but what is even more striking is how much buzz the four-year predictions generate.What fascinates us now is the idea of ​​using statistics to predict the nation a few weeks into the future, rather than the national blueprint 10 or 20 years from now.

It's not just the electoral process - the nature of government has also become unclear.Governments used to have the ability to coordinate solutions to complex problems, such as atomic weapons and lunar exploration.And after 40 years of sluggish progress with no clear purpose, the role of government now is to provide insurance; our solutions to major problems are Medicare, Social Security, and a bewildering array of unemployment programs.These entitlement payments have eroded government discretionary spending every year since 1975.To increase discretionary spending, we need clear plans to address specific problems.But according to the unclear logic of welfare spending, we can only get things done by sending more checks.

ambiguous philosophy
You see this kind of ambiguity not only in political science, but also in political philosophers who hold different ideas from the left and the right.

The philosophy of the ancient world was pessimistic: Plato, Aristotle, Epicurus, and Lucretius all accepted that human potential should be strictly limited.The only question is how to come to terms with our tragic fate.And most modern philosophers have become optimistic. Nineteenth-century philosophers, from the right-leaning Herbert Spencer to the neutral Hegel to the left-leaning Marx, all believed in the power of progress. (Think of Marx and Engels’ praise of capitalist technological triumphs above.) These thinkers expected material progress to dramatically change human life for the better: they were definite optimists.

In the second half of the 20th century, confused philosophy became the frontier trend of thought.Two outstanding political thinkers, John Rawls and Robert Nozick, seem to stand on two diametrically opposite sides: in terms of egalitarian left-leaning thought, Rawls focuses on fairness and distribution; On the right-leaning of liberalism, Nozick is concerned with maximizing individual freedom.They all believe that human beings can live in peace, so unlike the pessimistic thinking of ancient philosophers, they are both optimists.Unlike Spencer or Marx, however, both Rawls and Nozick are ambiguous optimists: they do not have any concrete plans for the future.

Their ambiguity takes different forms.Rawls's "A Theory of Justice" opens with the famous "veil of ignorance": for anyone who knows the real state of the world, the inferences of fair politics do not hold.Instead of working to change people and technology in our real world, Rawls fantasizes about an "inherently stable" society that is fair but lacks dynamism.Nozick opposed Rawls' fair concept "model": For him, any voluntary exchange should be allowed, and any social model cannot be static, and it is impossible to maintain fairness through coercive means.He, like Rawls, has no concrete conception of the good society, since both are preoccupied only with process.Now we exaggerate the difference between left-leaning liberal egalitarianism and individual liberalism, because almost everyone shares an ambiguous attitude with someone else.In philosophy, politics, and business, discussions of process have delayed plans for the future indefinitely.

unclear life
Our ancestors have studied human life, and attempted to prolong human life.In the 16th century, Spanish conquistadors searched for the Fountain of Youth in the jungles of Florida.Francis Bacon wrote that "the prolongation of life" should be considered to be achieved by medicine - and this medical technique would be the most noble.In the 17s, Robert Boyle put extending life (and "regaining youth") at the top of his future scientific wish list.Whether through geographical exploration or experimental research, the most eminent scientists of the Renaissance believed that death could be defeated. (And some of these death-defying men died in action—Bacon contracted pneumonia and died in 60, while he was still working on an experiment: If a chicken were frozen in snow, it would whether the lifespan will be extended.)
We still haven't solved the mystery of life, but 19th-century insurance companies and statisticians managed to uncover a mystery about death that haunts our minds to this day: They discovered that reducing death to mathematics probabilistic approach. The "life table" tells us the probability of our death at each age, which is unknown to our predecessors.But we seem to have given up on the secrets of longevity in favor of more favorable insurance contracts.Current knowledge about human longevity has led to the realization that life and death are natural events.Today, there are two beliefs in society: death is inevitable, and it happens randomly.

At the same time, random attitudes have implications for biology itself. In 1928, the Scottish bacteriologist Alexander Fleming forgot to cover the lid of the petri dish in the laboratory, and later found a mysterious mold in the petri dish that could resist other bacteria: in this way, he discovered by accident penicillin.Scientists have since dared not underestimate the chance of serendipitous discovery.Modern new drug development amplifies the opportunity of "Flemingian chance" by a million times: pharmaceutical companies randomly combine molecular compounds, conduct research, and hope to have new breakthroughs.

But the results are often not as good as before.Despite the impressive progress made over the past 200 years, biotechnology has failed to meet the expectations of investors or patients in the last few decades. "Eroom's Law" (Eroom's Law) reveals the dilemma faced by drug development. Since 1950, the number of new drugs approved to invest $10 billion in research and development will be halved every 9 years.Information technology has been developing faster and faster in recent years, but the problem facing biotechnology is whether it can keep pace with information technology.Table 6–3 compares biotechnology start-ups with computer software start-ups.

Biotech startups are an extreme example of unclear thinking.Researchers only experiment with things that might work, rather than developing definitive theories of how the body's systems work.Biologists say they need to take this approach because basic biology is so hard.IT start-ups, they say, work because we built our own computers and made them reliably execute our commands.Biotechnology is difficult because we didn't design our bodies, and the more we learn about our own bodies, the more complex they are.

But one might now wonder: Have biological difficulties become an excuse for biotech startups to operate in uncertain ways?Most of the people involved expect something to happen in the end, but very few maintain the enthusiasm and devotion to a particular company that success requires.The founders of biotech start-ups are professors, but they are often part-time consultants rather than full-time employees—even in biotech companies that started with their own research projects.Everyone then emulates the professor's ambiguity.Liberals often say that onerous rules limit the development of biotechnology, and this is true, but vague optimism may pose a greater challenge to the development of biotechnology in the future.

Is an uncertain optimism about the future likely to last?

What kind of future does our unspecified optimistic decisions lead to?If American households save money, at least they have money to spend later.And if American companies invest, they can look forward to reaping new fortunes in the future.But American households are not saving, and American companies are simply letting money sit on their books instead of investing in new projects because they don't have any solid plans for the future.

The other three attitudes toward the future all play a role.Definite optimism about the future allows you to create the future you want.Definite pessimism about the future can replicate what already exists, nothing new.An ambiguous pessimism about the future also works, because such a future is self-fulfilling: If you are a lazy person who doesn't demand much from life, your demands are easily met.But ambiguous optimism about the future seems unsustainable at all: How can the future be better if it is not planned for?
In fact, most people in modern society should have heard: unplanned progress is called "evolution".Darwin wrote that life "evolves" itself, if not prepared.Every life is just the result of random mutations of certain organisms, and the best version will win out in the end.

Darwin's theory can explain the origin of trilobites and dinosaurs, but can it explain phenomena in other fields that are far from biological?Just as Newton's physics couldn't explain black holes or the Big Bang, Darwin's biology couldn't explain how to build a better society, or start a new business from scratch.But in recent years, Darwinian (or pseudo-Darwinian) metaphors in the business world have become commonplace.Journalists have compared survival in a competitive ecosystem to business survival in a competitive market, hence headlines such as "Digital Darwinism," "Internet Darwinism," and "Survival of the Most Clicked."

Even in engineer-dominated Silicon Valley, the current buzzword calls for building a "lean startup" that can "adapt" to a changing environment and "evolve" as it changes.Entrepreneurs are told that everything in business is unpredictable: that all we should do is listen to customers, create a "basic usable product," and iterate until we succeed.

But Lean is a method, not a goal.Making small changes to something that already exists may get you local market maximization, but it won't help you get global market maximization.You can come up with the best app that lets people order toilet paper from their iPhone.But corrections without a bold plan won't take you from zero to one.For an optimist with an ambiguous future, companies are the strangest place to be: without a plan, why would you want your business to succeed?Darwinism may be a useful theory in other contexts, but for startups it is intelligent design that works best.

Long-term planning remains paramount

What does it mean to prioritize planning over opportunity?Now, "good design" is an aesthetic imperative, and anyone, from a slob to a yuppie, cares deeply about how they look.Indeed, every great entrepreneur is first and foremost a designer.Anyone who has held an Apple smart device or a sleek MacBook in their hands has sensed Jobs' obsession with perfect visuals and experiences.But the most important thing we learn from him has nothing to do with aesthetics.Jobs' best designs were his businesses.Apple uses its imagination and executes a clear future plan for many years to create new products and distribute them effectively.Forget "basically usable products" - ever since Jobs founded Apple in 1976, he has realized that the world can only be changed by accurately planning for the future, not by listening to focus groups or copying others success.

Long-term planning is often underestimated in our world of short-term gains where the future is uncertain.When the first iPod was released in October 2001, industry analysts commented on it as "a great appeal to Macintosh users" and "no impact" on anyone else.Jobs planned to make the iPod a new generation of portable mobile devices, but most people did not see this.Figure 10-6 shows the results of this long-term plan.

The power of planning explains the difficulty of valuing private firms.When a large company wants to buy a successful startup, it pays either too high or too low: the founders of a startup sell only if they don't have a firm plan for the company, and the acquirer It could be that the bid is too high; a founder with clear plans for the future won't sell the company, which means that the buyer's bid is not high enough. In July 2006, when Yahoo offered $7 billion to buy Facebook, I thought we would at least think about it.But Mark Zuckerberg announced at the meeting: "Okay, guys, this meeting is just a procedure, it doesn't take 10 minutes. We obviously won't sell Facebook." Mark knew that he could lead the company to create how future, Yahoo doesn't know.In a world where everyone's vision of the future is uncertain, businesses with a clear purpose are always undervalued.

you are not a lottery ticket

We must rediscover a clear path to the future, but in the Western world it will take a cultural revolution to actually do that.

Where to start?John Rawls must be kicked out of the philosophy department, Malcolm Gladwell must be persuaded to change his theories, and polls cannot influence politics.But countless philosophy professors and Gladwells around the world die hard, let alone politicians.Even with wisdom and good intentions, it is extremely difficult to make some changes in crowded places.

A start-up is an opportunity where you can clearly master doing your best.You have agency not only over your own life, but over an important corner of the world.And it all starts with resisting the domination of unfair probability, because you are not a lottery ticket whose fate is determined by probability.

(End of this chapter)