📖 Zero To One

An insane truth

We might describe our world as having retail sanity, but wholesale madness. Details are well understood; the big picture remains unclear. A fundamental challenge — in business as in life — is to integrate the micro and macro such that all things make sense.

The history of tech

We seem to believe in a sort of technological end of history by default. Speaking of "developed" versus "developing nations" is implicitly implying some convergence to the "developed" status quo.

That's because for most of recent human history — from the invention of the steam engine through about the late 1960's — technological progress has been tremendous. But prior to that, people lived in stagnant societies, and made money by taking it from others. The Industrial Revolution wrought a paradigm shift in which people made money through trade, not plunder.

After the 60s, many were supremely confident that the next 50 years would bring unprecedented technological progress. But with the exception of the computer industry, they didn't. Per capita incomes are still rising, but that rate is starkly decelerating.

Horizontal vs. vertical progress

  • Horizontal — aka. Extensive, globalization, copying things that work, going from 1 to n.
    • Determinism: it's a statistical question.
  • Vertical — aka. Intensive, technology, doing new things, going from 0 to 1.
    • Indeterminism: the standard deviation with a sample size of 1 is infinite, stadistically, we are in the dark.

Globalization and technology do have some interplay, though. Maybe not everyone can have a car because that would be environmentally catastrophic. If 1 to n is so blocked, only 0 to 1 solutions can help.

Startups — from 0 to 1

The easiest answer to "why startups?" is negative: because you can't develop new technology in existing entities. That only happens in startups, you can only do that if you're surrounded by others to want to go from 0 to 1.

All successful companies are different; they figured out the 0 to 1 problem in different ways. But all failed companies are the same; they botched the 0 to 1 problem.

Complexity = People^2

Size and internal vs. external coordination costs matter a lot. North of 100 people in a company, employees don't all know each other. Politics become important. Incentives change. Signaling that work is being done may become more important than actually doing work.

The path from 0 to 1 might start with asking and answering three questions.

  1. What is valuable? ( difference between business and academia )
  2. What can I do? ( ensures that you can actually execute on a problem )
  3. What is nobody else doing? ( importance of being novel )

The rephrasing of these questions is: What important truth do very few people agree with you on?. The business version is: What valuable company is nobody building?. And finally, you know you're on the right track when your answer takes the following form: Most people believe in X. But the truth is !X.