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

Chapter 15 The Secret (2)
In economics, the disbelief in the existence of secrets leads to blind faith in the effectiveness of markets.But the existence of financial bubbles shows that markets sometimes simply don't work. (The more people believed in the role of markets, the bigger the financial bubble.) In 1999, no one wanted to believe that people were overestimating the Internet.Coincidentally, in 2005, the real estate industry encountered the same problem.Federal Reserve Chairman Alan Greenspan had to admit that there were "signs of a financial bubble in the local market" but claimed that "a bubble in housing prices is not going to happen for the country as a whole".The market reflects all available information and leaves no room for doubt.Then house prices fell across the United States, and the 2008 financial crisis cost us trillions of dollars.This fact suggests that the future still holds many secrets that economists cannot eliminate by simply ignoring them.

What happens when a company no longer believes in secrets?HP's tragic decline is a warning. In 1990, the company had assets of $90 billion.The next 10 years were 10 years of invention. In 1991, HP invented the inkjet printer (DeskJet500c) - the world's first affordable color printer. In 1993, it launched the Omni Book laptop, one of the early "ultra-handy" portables. In 1994, it launched the printer (Office Jet), the world's first machine that combines printing, faxing and copying.That relentless product expansion paid off handsomely: By mid-2000, HP was worth $1350 billion.

In late 1999, HP launched a new branding campaign emphasizing that it was an "invention" company, but since then, HP hasn't invented anything new. In 2001, Hewlett-Packard established the Hewlett-Packard Professional and Support Services Group, and the brilliant consulting service industry started from then on. In 2002, HP merged with Compaq Computer Corporation, presumably because it didn't know what else to do.By 2005, HP's market capitalization had fallen to $700 billion, about half what it was five years earlier.

HP's board is the epitome of dysfunction: Directors are divided into two factions, and only one faction cares about new technology.The leader of this faction was Tom Perkins, an engineer who first came to Hewlett-Packard in 1963 and, at the personal invitation of Bill Hewlett and David Packard, ran the company's research department. In 2005, the 73-year-old Perkins seemed to have stepped back from an optimistic era in the past: He believed that the board of directors should find the most promising new technology and let the company develop it.But the Perkins faction lost out to their opponent, another faction led by chairwoman Patricia Dunne.As a banker, Dunn believes that planning future technology is beyond the remit of the board.She thinks it is enough for the board to be a good "night watchman" and only need to pay attention to whether everything is normal in the accounting department and whether people follow all the rules.

Amid the infighting, someone on the board leaked information to the media.When it came to light that Dunn had arranged a series of illegal phone taps to track down the source of the leak, there was an internal backlash worse than the initial disagreement, and the board was humiliated.After giving up its quest for technological secrets, Hewlett-Packard was beset by gossip.As a result, HP's market capitalization at the end of 2012 was just $230 billion, less than it was in 1990 (adjusted for inflation).

believe in secrets
Secrets cannot be discovered without exploration.The experience of mathematician Andrew Wiles illustrates this point.After 358 years and many mathematicians trying to prove it in vain (the continued failure seemed to mean that it was an impossible task), Wiles finally proved Fermat's Last Theorem (Fermat's Last Theorem).Pierre de Fermat conjectured in 1637: when the integer n>2, the equation an+bn=cn about a, b, c has no positive integer solution.He claimed to write a proof, but he died before the proof was written, so his conjecture has long been an important unsolved problem in the mathematics world.Wiles began working on this conjecture in 1986, keeping it a secret until 1993, when he was close to finding out the answer.After 9 years of hard work, Wiles proved this conjecture in 1995.His success requires wisdom, but also a firm belief in the existence of secrets.If you think something difficult can't be done, you won't try it.Trusting in secrets is the key to effective exploration.

The truth is that there are still many secrets to be discovered, and only the persistent seeker can discover them.There is still much to be done in science, medicine, engineering and all kinds of technology.Whether marginal goals with competitive advantages in normal disciplines or ambitious goals that even the most daring minds in the scientific revolution hesitate to declare directly, we can achieve them all.We can cure cancer, dementia, all diseases of old age, and metabolic decay; we can develop new sources of energy to avoid conflicts caused by fossil fuels; we can invent faster means of transportation on Earth; and we can leave Earth entirely and inhabit new frontiers .But if we don't want to know, and force ourselves to explore these mysteries, we will never know them.

The same goes for business.Successful businesses are built on open but unknown secrets about how the world works.Think of all the new startups in Silicon Valley that take advantage of the often overlooked idle production capacity around us.Before Airbnb, an online home-rental company, tourists had no choice but to pay high prices for hotels, and property owners couldn't easily and confidently rent out their spare rooms.Airbnb saw this untapped service and unaddressed need that no one else saw.The same goes for car rental services Lyft and Uber.Few would have imagined building a billion-dollar company just by connecting people who travel with willing drivers.Moreover, the United States already has interstate taxis and private luxury limousines approved by the government.Only by believing and exploring the secrets can we discover business opportunities that are outside the routine and that are close at hand but not seen by ordinary people.For the same reason that so many Internet companies, including Facebook, whose business ideas are so simple, are often undervalued, there is a debate about the existence of secrecy.Think about it in hindsight: If such a seemingly simple idea can support important and valuable businesses, there must be many good companies waiting to be created.

how to discover the secret
There are two kinds of secrets: those of nature and those of man.The secrets of nature are everywhere, and to discover them you must explore unknown parts of the physical world.Secrets about people are different: gaps in human perception of themselves or things that people hide from others to know.When thinking about what kind of company to start, you need to ask yourself two distinct questions: What is the secret that nature is not telling you?What's the secret that humans haven't told you?
It's easy to think that nature's secrets are the most important: those who explore them speak with a formidable sense of authority.This also explains why PhDs in physics are so hard to work with - because they know the most basic principles and think they know all the truth.But does understanding electromagnetic theory automatically make a good marriage counselor?Do Gravity Theorists Know Your Business Better Than You?At PayPal, I interviewed a Ph.D. in physics who was an engineer candidate.Halfway through my first question, he yelled, "Stop! I know what you're going to ask!" But he was wrong.I brushed him off without thinking.Relatively speaking, people do not pay enough attention to human secrets.Maybe it's because people don't need 12 years of education to ask the questions that reveal these secrets: What is forbidden between people to talk about?What are the prohibited things or taboos?
Sometimes, exploring the secrets of nature and the secrets of human beings yield the same truth.Consider again the monopoly secret: competition and capitalism are opposites.If you don't know it in advance, you can find it naturally from experience: If you quantify company profits, you can see that profits are eaten by competition.However, you can also ask the question in a more humane way: What are the people who run the company taboo?You'll notice monopolies downplay their monopoly to avoid scrutiny, while competitors subtly exaggerate uniqueness.The differences between the two companies, seemingly subtle, are in fact enormous.

The best place to discover secrets is where no one is looking.Most people think only in the way they are taught in school, which itself aims at imparting conventional knowledge.So you might ask: what other important areas are not being standardized and institutionalized?For example, physics is a basic subject in all major universities.The counterpart to physics might be astronomy, but astronomy might not matter.What about nutrition subjects?Nutrition is important to everyone, but you can't major in nutrition at Harvard, and most top scientists turn to other fields.Most of the important research in nutrition was done three to forty years ago, but much of it is still seriously flawed.The food pyramid tells us to eat low-fat and eat lots of grains, but this may be a product of food kingdom lobbying rather than real science, and its main effect has been to speed up the obesity epidemic.There is still much to learn: we all know far more about distant planets than we do about human nutrition.Studying nutrition is no easy feat, but it's certainly not impossible—and that's precisely the area where secrets can be unearthed.

secret role

When you discover a secret, you'll be faced with a choice: Tell someone else?Or keep it a secret?

It depends on the secret itself: some are more dangerous than others.As Faust said to Wagner:
The very few who hold the secret,
Foolishly opened my heart wide open,

Show your enthusiasm to others,

Always persecuted and burned at the stake.

It's never a good idea to tell everyone everything you know unless your philosophy is perfectly conventional.

So who to tell?Whoever you have to tell, don't talk too much.In fact, there is a golden balance between choosing to tell no one and choosing to tell everyone - that is the secret of the company's existence.The best entrepreneurs understand this: All successful businesses are built on little-known secrets.A good business is a plotter who changes the world, and when you share your secrets, the audience becomes your plotter.

As Tolkien wrote in The Lord of the Rings:
the ever-extending road,
It starts at home.

Life is a long journey; the road stepped by the predecessors, at a glance, has no end.But there is another poem behind this story:

waiting for us around the corner
is the new way or the mysterious door,

Even if we pass by today,

Might return tomorrow.

Please choose this hidden path

to the moon or the sun.

The road doesn't have to go on indefinitely, just keep going.Choose the hidden path.

(End of this chapter)