Grow the Merry-Go-Round

Helping people move to cities is the biggest piece of low-hanging fruit in society.

America has seen the rise of winner-take-all cities. The largest economic opportunities are in cities like New York, Los Angeles, and San Francisco. The financial return to living in these cities is increasing — especially if you work in technology or finance.

In the words of Axios reporter Kim Hart: “Economic opportunity for most Americans increasingly hinges on one factor: where you live.”

Cities are like a merry-go-round. To oglers who stand still on the ground, they look like they’re spinning at dizzying speeds. In truth, for people who enjoy the buzz of a city, rotating around the merry-go-round is as fun and social as it gets. It’s kind of like a party. Unfortunately, the merry-go-round never stops. It just spins faster and faster. This means to hop on, you have two options: (1) Pay somebody to give you a metaphorical boost or (2) Run really, really fast, and try to jump on. If you try to jump on and fall, you’ll hurt yourself. But, if you make it on the merry-go-round, you’ll be in the center of the action. You’ll gain social and financial traction by moving with the speed of your surroundings.

Consider three famous lines about New York. The first one is from Jay-Z in Empire State of Mind on the struggle and rarity of “making it” New York: “Eight million stories, out there in it naked. City is a pity, half of y’all won’t make it.”

The second quote, which is from Dorothey Parker, says jumping on the merry-go-round is the hardest part, but once you make it, you’re there to stay. She said, “Yet, as only New Yorkers know, if you can get through the twilight, you’ll live through the night.” 

Finally, the third one from writer E.B. White highlights the miraculous charm of a city where everybody is chasing dreams, destiny, and hope.

“The city is like poetry: it compresses all life, all races and breeds, into a small island and adds music and the accompaniment of internal engines. The island of Manhattan is without any doubt the greatest human concentrate on earth, the poem whose magic is comprehensible to millions of permanent residents but whose full meaning will always remain elusive.” — E.B. White

Each quote illuminates the experience of New York life. Jay-Z’s words highlight the make or break intensity of city life. People move to New York to pursue a grand vision, but pay the price in the high cost of living. The first few years are the hardest, as Parker’s quote reveals. Even if the streets of New York are crowded, the individual is invisible. You’ll never feel lonelier than times when, even though you’re surrounded by thousands of people, you don’t have an emotional connection with any of them. New York is a hard place to find community. But once you find friends and a professional network to support you, the gates of possibility open to you. And finally, as E.B White observed, in most cities, those gates lead to a small number of end states. In Hollywood, movies. In San Francisco, tech. In Boston, academia. But New York is a kaleidoscope of ambition. 

Data supports the allure of cities. One paper founded: “The high-tech sector is increasingly concentrated in a small number of expensive cities, with the top ten cities in ‘Computer Science,’ ‘Semiconductors,’ and ‘Biology and Chemistry,’ accounting for 70%, 79% and 59% of inventors, respectively.”

Likewise, an Axios study found, “The top 25 metro areas (out of a total of 384) accounted for more than half of the U.S.’s $19.5 trillion GDP in 2017.” 

As shown by the chart below, cities like New York and Los Angeles are experiencing the most economic growth. 


Screenshot 2019-10-14 12.28.31.png

And yet, that growth isn’t nearly as fast as it could be. Even if its an imperfect measurement of human flourishing, a society’s wealth is strongly correlated with the happiness of its citizens. Moreover, due to the laws of compounding returns, small increases in the rate of growth bring large benefits over time.

For example, pretend there are two countries: Country A and Country B. Country A grows at 5 percent per year, so it will double its wealth in 14 years. Meanwhile, since Country B grows at 2 percent per year, it will take 35 years to double its wealth. Moreover, if growth rates between the two countries stay the same, the wealth gap between them will expand. 

Land-use restrictions are a major roadblock. Homeowners in major cities make it difficult to build new apartments and office spaces. For example, whenever I return to San Francisco, I’m surprised by its lack of density. Most new building is restricted to only two neighborhoods: SOMA and South Beach. Away from those neighborhoods, the city is filled with two-story, single-family homes because apartment buildings are illegal to build in 78.6% of San Francisco.


Source:  Sonja Trauss

Source: Sonja Trauss


A recent paper found reducing restrictions in three cities — New York, San Jose, and San Francisco — to the level of the average median U.S. city would increase the growth rate of economic output for those cities by 36.3 percent. Notably, this increase in productivity would benefit the rest of the country too. The authors found U.S. GDP in 2009 would have been 3.7 percent higher had these restrictions been lower, meaning the average American would have earned an additional $3,685 that year.

Did you catch that?

Cities aren’t the only ones who benefit from more people on their merry-go-round. As the fruits of innovation spread, the entire country benefits too. Increased innovation doesn’t just benefit cities. It benefits the country as a whole. For example, if the speed of iPhone production increases, people from Indiana to Texas to Florida who buy an iPhone will benefit too. 

If we want to increase prosperity, we need more people on the merry-go-round. When it comes to economic success, the more people, the better. Big cities tend to increase average worker productivity and thus, average worker wages. As William Fischel wrote in Zoning Rules: “An urban area with twice as many workers pays wages that are about 10 percent higher than the wages that similar workers would earn in the smaller area.” In San Francisco, for example, founders of technology startups benefit from the large pool of talent, investors, and journalists. But often, the increases in pay are offset by housing higher prices, which repel people from cities. 

Here’s the central challenge: How do we get people into cities?

There are two solutions: Increase the housing supply and/or improve transportation.


More Housing Means More Affordable Housing

The merry-go-round is plenty big, but it doesn’t have enough seats. Moreover, there are restrictive minimums on seat sizes, which limit how many people can ride on a single seat.

Opportunities are handed to people who secure seats, but the lack of supply makes seats more expensive than they need to be. Sure, some real estate is fancier than others. But once you have a seat, you can see how the game is actually played.

Cities are expensive, and apartment costs are rising fast. Everybody talks about building more apartments. Their arguments follow the basic laws of supply and demand. In Economics 101, students learn we can reduce costs by increasing the supply of a good. So, we can lower the cost of apartments by building more of them.

Tall buildings are the fastest way to increase density. Even if there’s no more space on the ground, there’s unlimited space in the sky. Unfortunately, I don’t think major cities are going to relax housing restrictions and allow taller buildings anytime soon. Outlining problems with zoning laws, economist Albert Hirschman said it best: “We have a case where the weak are oppressed by the incompetent.” 

If we can’t build more seats on the merry-go-round, we’ll have to play with the homes we already have. Luckily, we have two options. We can rearrange the seats into smaller units or increase the number of people who ride on each one.

Urbanist Alain Bertaud offered the following suggestion in a recent interview with Russ Roberts: Reduce restrictions on minimum apartment sizes.

In Paris, people can live in spaces as small as eight square meters. Small living spaces aren’t pleasant, but at least they’re on the merry-go-round. But in New York, these tiny living spaces are against the law. At 80 square feet or 150 square feet for a studio, the minimum apartment size is fairly large, which keeps people out of the city. Here’s Bertaud:

“As fewer and fewer Americans are married, and more and more people are living on their own, the idea of limiting household size, of square footage, is just a recipe for high rents and people living very far from where they work.”

These restrictions worked better when a higher percentage of families occupied apartments. But today, because people are getting married later and young people are moving to cities, an increasing number of apartments are occupied by unmarried tenants who are desperate for space on the merry-go-round.


How Transportation Can Save Us

On a recent Saturday night,  it took my friend more than an hour to travel from Brooklyn to his apartment in Manhattan. Usually, the trip takes 20 minutes. The delays were caused by the infrequent L-Train, which connects Williamsburg and Manhattan. The travel time is so long we joked he traveled to a different time zone.

We can increase urban density without building more or lowering the average apartment size. Improved transportation increases the effective size of a city. According to an article in The New York Times:

“Higher incomes are correlated with lower commute times…Subway delays disproportionately affect lower-income New Yorkers because their already long commutes get even longer and they may have no choice but to wait out even the worst delay…Even if an extreme delay occurs only once every ten or twenty trips, individuals must commit more time to commuting every day to insure against lengthy delays. As an area’s household income declines, the length of extreme subway downtime spells increases.”


Source:  New York Times

Source: New York Times

People who live in cities aren’t just buying space. They’re buying time. Time inequality is a relatively new phenomenon. After World War II, American living was defined by a two-tier system. Cities weren’t sexy places to live. They were littered factories, meatpacking districts, and repulsive industry smells. The wealthy lived in the suburbs and commuted to the city for work. This mechanism was self-regulating. Long commute times were the price one paid for big lawns and extra home space. Though their neighborhoods weren’t as nice, the poor benefited from short commute times, and many even walked to work.

But now, cities have a three-tier system. Ultra-wealthy people tend to live in the heart of the city, incomes fall as people move towards the outskirts of the city, and average wealth tends to rise again in the suburbs. Factories, manufacturing and distribution centers have moved away from the heart of the city, where space is cheap. Meanwhile, cities have become hubs for creative and knowledge workers.

Now that cities are cool, living arrangements are inverting.

The ultra-wealthy live in city centers. In addition to pricey apartment space, they pay extra for food, childcare, and education for their children. As The Atlantic writer Derek Thompson has shown, that’s why cities are increasingly dominated by three groups: (1) people with no children and (2) white, college graduates with no children, and (3) adults with young children who are younger than six years old.


Source:  Atlantic

Source: Atlantic

Housing prices fall as distance from urban hubs increases. As I said to a visiting friend last weekend, rents fall by roughly a couple hundred dollars with each additional subway stop away from the city. In the New York area, prices rise again once you leave the edges of the city where the white-picket-fence aspect of the American Dream is still alive. Westchester, Fairfield County, and Morris County have some of the nicest homes I’ve ever seen. Similar trends are visible in Chicago, San Francisco, and Washington D.C.

Making trains run faster or on more routes isn’t enough. We also need to make them more reliable. High-variance in travel times threatens the jobs of train commuters. People with access to transportation can effectively parachute onto the merry-go-round even if they don’t live there.

For proof of the benefits of fast transportation, look at China.

When I was in Hong Kong, I stayed in a small home 20 kilometers from the city center. To my surprise, the trains run so often none of the stations show when the next train will arrive. My morning trains to the city were always on time, and they never took more than 25 minutes.

Friction in face-to-face communication is a barrier to economic growth. In mainland China, fast transportation lubricates the economy. Bullet trains reduce the cost of traveling to face-to-face interactions between skilled workers who live in different cities. One study found productivity rises whenever a secondary city on the outskirts of a major one is connected by bullet train to a Chinese economic center.

According to a recent article in The Economist:

“[Bullet trains expand] the viable area of China’s clusters. The Jingjinji region around Beijing has five high-speed train lines today. By 2020 there should be 12 more intercity lines, and another nine by 2030. Towns that are woven into the networks can see their fortunes change almost overnight.”

Likewise, a recent study found that “a new daily flight from Silicon Valley to an international city leads to $23 million of additional venture capital dollars raised by startups in the region. The easier is it so travel somewhere, the easier it is to do business there.  

Fast transportation reduces the tyranny of distance. Contrast China and San Francisco. New York and Chicago are roughly the same distance as Beijing and Shanghai. But the trip between New York and Chicago is served by one train per day that takes 19 hours, while Beijing and Shanghai are connected by 35 trains per day, some of which take as little as 4.5 hours.

At this point, you’re probably thinking: “America needs to build more transportation options and infrastructure.”

Pump the breaks, ladies and gentlemen. Not so fast…

American infrastructure is slow to build and prohibitively expensive. Construction of the first New York City subway (which traveled from City Hall in Lower Manhattan to West 145th Street in Harlem) took four years, six months and 23 days. In comparison, the recently opened Second Avenue Line opened nearly a decade after its official groundbreaking. Costs soared. Today, New York’s subways’ average, inflation-adjusted cost is 20 times as much as it was in the early 1900s.

One mile on the recently opened 2nd Avenue Subway Line cost $2.2 billion to build. By comparison, subways in Paris, Berlin, and Copenhagen cost about $402 million per mile, roughly than 80% less. In Seoul, subway development costs even less — $64 million per mile. To summarize: It’s 35 times more expensive to build a subway in New York than in Seoul.

Increasing dynamism starts with helping people climb on the merry-go-round. Even though it would help, we don’t need to build more homes on the merry-go-round. We can rearrange our existing homes. Decreasing minimum apartment sizes would help people secure a spot. Even though the apartment sizes would be small, the rising prices of apartments prove there’s demand for these small urban dwellings. In addition, fast and reliable transportation can enable commuters. For driven individuals, living on the merry-go-round is best, but working there is enough to gain momentum.

If we want to go fast, we need to grow the merry-go-round.

Talking To Strangers

My deepest conversations are often with total strangers.

Navigating Penn Station demanded my full attention, so I wasn’t wearing headphones when I stepped onto the crowded Amtrak heading from New York to Washington D.C.

To my surprise, there was only one empty seat in my car. An elderly, white-haired woman was sitting in the aisle next to an open window seat. Her head was tilted down to read a blue-covered fantasy novel, so I couldn’t see her eyes. I could only see her navy jacket, enhanced by the kind of jewelry that takes a lifetime to collect.

“Excuse me. Is anybody sitting in the seat next to you?”

She looked up with a snarl, and said: “Umm… is the train full?”

I got the message. Her leather bag occupied the window seat beside her, and a turquoise suitcase that was half her size monopolized the legroom. I simply glanced towards the open seat that was about to be mine. Then, I offered to put her suitcase in the storage compartment above.

Before I could touch the bag, she protested, “It’s heavy.”

I smiled and said, “That won’t be a problem.” I lowered the handle of her luggage, picked it up, and lifted it into the storage compartment above her seat. As expected, it was lighter than the handkerchief in her lap. 

My battle was only halfway done. I needed to engage her in conversation. Otherwise, the journey would be miserable. Even as I sat down, I could sense the anguish in her tired, bloodshot eyes. After five minutes of small talk, just as we left an underwater tunnel and ascended onto the bright New Jersey meadowlands, she opened up. For the rest of the trip, she would speak, and I would listen.

She told me about the unexpected death of her husband two or three years ago, the loss of her daughter to cancer, and how she moved to Connecticut at 80 years old to help her 56-year-old daughter (she had four remaining) find a job. Then, she told me her beloved cat died once she arrived in the Northeast — the cat who helped her through those unexpected deaths. Now, that cat is gone, too.

Though she has her church, her bridge club, and her daughters, her life has a hole.

“I’m missing the one thing we need most in life: companionship.”

I snapped back into reality and extended my right hand. She extended hers, and finally, we shook hands. She had strong fingers for such a frail woman. Her knuckles were the size of New York City skyscrapers, but her burly hands were balanced by pink nail polish, three silver rings, and another gold one.

She was in good shape for an 80-year-old. Or, so, I thought.

As our hands parted ways, she turned to me and said, “I’m sorry about my nose.”

“What do you mean?”

“I fell a couple of weeks ago, and now I have this loud blemish on my face. I can’t believe you have to see me like this.” I raised my eyebrows in a high arch and told her I hadn’t noticed. I was telling the truth, but she heard it as a white lie.

Comforted by the security of the moment, she spoke again. “My daughters say I’m lost, so I’m seeing a therapist.”

To fill the hole of companionship, her therapist suggested she try online dating. After her initial skepticism, you’d expect from a great-grandmother from rural North Carolina, she did.

At first, she was unsuccessful. “I don’t like guys with beer bellies or baseball hats,” she said.

But then, she met a man named Casper. They exchanged messages about theatre and the opera and agreed to rendezvous at a highway-side Starbucks halfway between where they each lived in the Northeast. 

“Well… how do you like him?”

“He was short, but I liked everything else about him. He’s 5’7,” and I’m 5’7”, so I don’t know how I feel about that. But I knew things would go well when he arrived in a suit and tie. We got along famously

“We agreed to meet a second time in Parsipanny, New Jersey, and now, we’re going to spend the next four days in Philadelphia. We’ll see how things go. His wife died seven years ago, so he’s looking for somebody like me.”

Moved by her candor, I rested my head against the leather seat behind me and had a flash of insight: long-term friendships are lovely, but they’re often restricted by the chains of precedent. Over time, we develop norms. Like hikers on a steep mountain range, we stick to the well-worn paths of conversation. That’s why it’s hard to have deep conversations with family or keep childhood friendships alive when your interests evolve.

But in a first time meeting like this one, you can speak from the heart. You can talk about love, grief, death, despair, and everything in between.

Peter Thiel: Uncommon Knowledge

Here are the quotes that stuck out from Peter Thiel’s interview with Peter Robinson on Uncommon Knowledge.

I’ve organized the quotes into discrete sections. And at times, I paraphrased Peter for the sake of clarity. Unless otherwise noted, everything below is a quote from Thiel.

The Enlightenment

You can distinguish the intellect and the will. The medievals believed in the weakness of the will but the power of the intellect. Modern people tend to believe in the power of the will and the weakness of the intellect.

We don’t trust people’s ability to think through things at all anymore in the 21st century.

The enlightenment always white-washes violence. There are many things we can’t think about under enlightenment reasoning, and one of them is violence itself. If you go to the anthropological myth of the enlightenment, it’s the myth of the social contract. So what happens when everybody is at everybody else’s throat? The enlightenment says that everybody in the middle of the crisis sits down, has a nice legal chat, and draws up a social contract. And maybe that’s the founding myth — the central lie — of the Enlightenment. Girard says something very different must have happened. When everybody is at everybody’s throat, the violence doesn’t just resolve itself, and maybe it gets channeled against a single scapegoat where the war of all against all became a war of all against one and somehow gets resolved in a very violent way.

The state of the world

The mania we have around artificial intelligence is that it stands for the proposition that humans aren’t supposed to think. We want the machines to do the thinking, but it’s because we’re in a world where individuals aren’t supposed to have intellectual agency of any sort anymore. We don’t trust rationality.

We’ve substituted the realities of politics for these increasingly fictionalized worlds and that’s probably a very unhealthy thing.

In the last 40 or 50 years, there’s been a shift from exteriority which is doing things in the real world to the interior world, which can be thought of as a shift from politics to entertainment. (Yoga, meditation, video games, etc.)

I’ve always like the quote from Milton in Paradise Lost where “the mind is it’s own place and of itself can make a hell of heaven and a heaven of hell.’ You’re supposed to be skeptical of that because that’s what Satan says when he gets to hell. But its just in my mind. If I just change my mind, I can change where I am. That’s not quite true. There’s an external reality, but somehow the temptation to turn everything into something therapeutic, psychological, and meditative has been a powerful one in the post 1960s America.

Faith and Reason

You don’t want faith to be unreasonable, and you don’t want it to be reasonable because then you could just use reason, so it’s a complicated question of how you get faith and reason to work together.

We always have to go back to intellect, mind, and rationality as core values. There are ways in which we’ve gone too far from them. But at the same time, it can’t just be interiority. We also should be acting on our world, and we shouldn’t be in a yoga, meditative, and psychological retreat. And then there’s all these ways where science and technology were such a big driver of society of progress for centuries. There are so many parts of this that no longer feel positive to people.

The state of the world

From 1989-2017, people in the West read the events of 1989 as what was inevitably going to happen in the East, and China read them as ‘not going to happen because we’re going to learn from history and make sure it doesn’t happen here.’ The exact same events were interpreted in different ways. And they were probably not going to happen because China wasn’t going to let them, and we were oblivious to this because we were so convinced of this determinacy of history.

The free trade theories are correct in theory, but in the real world, this stuff is always super messy. If you’re negotiating a free trade theory, you want the person negotiating it to not be a doctrinaire free trader because a doctrinaire free trader will believe that the worse of a job they do negotiating, the better a job they’re doing because even if you concede everything and get nothing from the other side, there are still these gains from trade. And that’s what free trade always tell you: you don’t need to work very hard on these trade treaties.

There is a Marxist theory that the time for Communism would come when interest rates went to zero because the zero percent interest rate was a sign that capitalists no longer had any idea what to do with their money. And there were no good investments left, which is why the interest rates went to zero, and therefore the only thing to do at that point was re-distribute the capital. It doesn’t mean that zero-percent rates lead us to socialism, but I find it alarming that rates are as low as they are.

If we believed in globalization, the way globalization is supposed to work is the less developed countries are supposed to converge. They converge and grow faster. Therefore you get a higher return for investing in them, and therefore capital should be exported from the developed to the developing countries. That is the direction which capital flowed circa 1900 when the United Kingdom had a current account surplus of 4% GDP and the extra capital was invested in Argentina’s bonds and Russian railroads and all these different things. Globalization ended badly in 1914, but that at least made sense because the money flowed in the correct direction. This time we’re in a much crazier form where the money is flowing the wrong way. Chinese peasants shouldn’t be saving money in low-yielding US bonds or negatively yielding European bonds. They should be investing in China, where they should get a higher return.

The future is something that has to be thought of in relatively concrete terms and it has to be different from the present. And only something that’s different from the present and very concrete can have any sort of charismatic force.

Think a lot harder about the future…try to think concretely what you want to do…there’s always a question, where is the frontier, where are some pockets of innovation where you can do some new things and not be in a crazed competition.

Note: If you enjoyed these quotes, you’ll like my 15,000 word essay on Peter Thiel, which provides context for many of the quotes in this interview. In it, I discuss Thiel’s Judeo-Christian influences and his relationship with philosopher Rene Girard.

Title image: Dan Taylor, CC BY 2.0, via Wikimedia Commons

The Online Writing Roadmap

If you’re ready to start writing, but don’t know where to begin, this page is for you.

It’s a list of the best things I’ve written and read about online writing.


The Basics

The Ultimate Guide to Online Writing: In this post, I outline my entire philosophy of writing online. Writing online is the fastest way to accelerate your career. It’s the best way to learn faster, build your resume, and find peers and collaborators who can create job and business opportunities for you.

Why You Should Write: Writing online is a guaranteed way to shrink the world. A well-written article can change your life because the internet rewards people who think well. Everything you write is an advertisement for the kinds of people and opportunities you want to attract, and if you have a voice, you can build a platform. As Derek Sivers once wrote: “The coolest people I meet are the ones who find me through something I’ve written.”

How to Maximize Serendipity: Writing online is the fastest way to increase serendipity. If you can maximize your surface area for luck, you’ll accelerate your progress and create opportunities for yourself.


Finding Great Ideas

How I Choose What to Read: Information is like food. Any chef will tell you it’s impossible to cook a world-class meal without world-class ingredients. Writing is the same. The quality of your output depends on the quality of your input.

How to Learn on the Internet: Tell me what you pay attention to, and I’ll tell you who you are. In this post, I outline my strategy for learning for the internet.

Where the Wild Things Are: It’s a law of the universe: Creativity always starts at the edge. If you want to find interesting ideas, you have to escape the mainstream spotlight.

How to Maximize Creativity: Creativity can’t be created directly, but it can be cultivated. Turns out, there are a simple set of tricks you can use to maximize your creativity.


Building the Writing Habit

The Magic Moment: This post answers the question: “When should you start writing?” In it, I argue that you should start writing right when you have an epiphany because the moment right after an epiphany is the only moment in the creative process where the rush of enthusiasm trumps the fear of judgment.

How to Cure Writer’s Block: By the time you finish this article, you’ll be done with writer’s block forever. In it, I focus on three strategies for ending writer’s block: (1) gather supplies, (2) talk it out, and (3) start with abundance.


The Craft of Writing

My Writing System: In this post, I outline the system I use to generate articles, organize them, and prepare them for publishing. I share my basic rules for writing and editing, such as switching context and adding a list of banned words.

Robert Caro’s Writing Secrets: Robert Caro’s is the world’s greatest biographer. Never, never, never in a million years did I think I would read a 1,200 page — 700,000-word — window into the politics of New York. But first-rate writing is seductive, no matter the topic. Facts alone aren’t enough. They’re too black-and-white. Readers yearn for images and anecdotes that make the information pop. For facts to stick in the reader’s mind, they must be enriched by colorful stories. Aided by subtle visuals and roller coaster narratives, Caro brings his biographies to life. That’s Robert Caro’s secret: he unlocks the electricity of sight.


Recommended Articles by Other People

Nat Eliason: 21 Tactics to Help You Become a Better Writer (Highly recommend)

Jordan Peterson: Jordan B. Peterson’s 10 Step Guide to Clearer Thinking Through Essay Writing

Paul Graham: Writing, Briefly

Eugene Wei: The Rhythm of Writing

Khe Hy: Create Your Own Luck with a Writing Practice

Ernest Hemingway: The Art of Fiction

Venkatesh Rao: Tips for Advanced Writers

Morgan Housel: Make Your Point and Get Out of the Way

Gergely Orosz: Why Writing Well is an Under-Valued Skill

Morgan Housel: Why Everyone Should Write

Steve Cheney: On How to be Discovered

Tyler Cowen: My Personal Moonshot

Julian Shapiro: Writing Well

Nivi: How to Write Like a Great Entrepreneur

Scott Adams: The Day You Became a Better Writer

Ratings Gone Wrong

Five-star rating systems are broken.

And for all the greatness of the internet, I can’t believe we’re still stuck with them.

Historically, the internet has been a gift for people with obscure tastes. I like Derek Thompson’s framing: the internet is like Tokyo. The Japanese city is famous for all kinds of strange shops, which make economic sense in a city with 40 million people, but not in a small city like Des Moines, Iowa. That’s why, on the internet, you can be niche at scale.

From dating to Airbnb apartments to Pez Dispensers on eBay, the internet is an incredible matching machine. A newsletter like Monday Musings works better as a global email newsletter than a local neighborhood magazine. If the internet wasn’t so unbelievably massive, I wouldn’t write it.

For reasons I’ve discussed before, mass media catered to the masses. That’s why the commerce companies who advertise on mass media focus on the averages, not the extremes. The internet is different. It’s a gift to people with obscure tastes and strange obsessions.

Unfortunately, five-star ratings cater to a world of averages. By de-risking our experiences, they eliminate the potential for the kinds of strange and spectacular experiences that are so memorable. Worse, rating systems don’t transfer across platforms. Intuitively, we know that a 4.6 on Uber is much worse than a 4.6 on Yelp. But unfortunately there’s no way to know how ratings are valued when you join a new platform.

Should we trust the 4.1 on TaskRabbit? How about the 4.8 on Handy?

To illustrate my point, I’ll focus on food, books, and travel.

Food: Most of my favorite restaurants are quirky and weird. They’re the kinds of restaurants that would turn off some people. They look nothing like the recent wave of fast-casual chains, which are optimized for modern rating systems. Instead of enabling memorable and one-of-a-kind experiences, 5-star rating systems encourage restaurants to play it safe and eliminate all the potential for downside risk. No matter where you go, following a 5-star rating system will lead you to generic coffee shops with the same wooden chairs and minimalist design. I call this The Algorithmic Trap. In an ideal world, restaurant ratings would change throughout the day because a 5-star restaurant that’s packed for dinner is usually a worse experience than the same one that’s empty for lunch.

Books: Many of my favorite books are loved by a small group but disliked by most people. They’re usually weird and obscure. To put it in terms of ratings, they have tons of 1-star reviews and a handful of passionate 5-star ones. Unfortunately, the Amazon five-star ratings system hurts these books and makes them impossible to find. That’s why the 5-star rating system on Amazon is so unhelpful. To Amazon’s credit, they’ve made massive strides on social recommendations. The “people who bought this also bought” section has improved tremendously, but still doesn’t yield as many surprises as it should. Until something changes, I’ll keep relying on friends and footnotes for book recommendations.

Travel: Scroll down TripAdvisor and you’ll see a handful of mainstream experiences. Every city has the same mix of walking tours, bar crawls, and open-top bus rides. Borrrrrrrrrrrr….ing. However, there is one exception. To their credit, Airbnb incentivizes hosts to rent out quirky homes by featuring them on the home page. Instead of focusing on ordinary averages, Airbnb highlights the crazy extremes. That’s why I love the platform so much. More of that, please.


Source:  Airbnb

Source: Airbnb

Whenever I analyze a system, I look for the incentives that drive it. As Charlie Munger once said: “Never, ever, think about something else when you should be thinking about the power of incentives.”

The world needs rating systems that lead us towards eclectic experiences. Unfortunately, the incentives of 5-star rating systems inspire bland experiences. Maybe, rather than a universal rating for a given experience, the software could adjust to your specific preferences. After all, one person’s 5-star is another one’s 2-star.

Ratings systems could also give more weight to friends or trusted influencers. Or, perhaps the software could highlight low or high-variance experiences that reflect the user’s risk appetite. If I’m in a big group, I want certainty. But if I’m traveling alone, I’m willing to put up with some flops in exchange for epic adventures.

Until the incentives change, we’ll be stuck with experiences that are too safe to be exciting and too generic to be memorable.


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The Magic Moment

“When an idea strikes, take it as fast as it can go quickly. Don’t get stuck on a detail.” — Rick Rubin

Eminem walked into the room and saw his hero.

The man in front of him was tall, confident, and muscular. There are moments in life where you don’t get a second chance. The stakes are big, so you have to perform. This was one of those moments and the blonde haired, 7-mile rapper knew it.

Dr. Dre greeted Eminem in the office of his music label, Interscope Records. Eminem’s clothes were as casual as the moment was intense. The shine of his lemon-yellow sweatsuit screamed creativity, but his attitude screamed business. From the time he locked eyes with Dr. Dre, Eminem raced through the small talk. 

From the beginning, Dre knew Eminem was special. Most contracts in the record industry take months. They pass through layers of approval from lawyers, executives, and bureaucrats. But Eminem was too talented. There was no time for that. Dre insisted on closing the deal immediately.

Dre was so impressed with the young rapper that he invited Eminem to his house for a recording session that evening. When Eminem walks into the studio, Dr. Dre plays a sample of Labi Siffre’s “I Got The…” from 1975. Eminem stepped up to the moment. Once the sound of the beat kicked in, Eminem didn’t waste any time. He started free-styling. Within minutes, in his first recording session at the home of his childhood hero, Eminem created the iconic hook to his Grammy-award winning song, “My Name Is.”

As Dr. Dre recounted:

“It’s one of those things where you just know. Something special is happening. I’m rushing. I’m trying to get this recorded because sometimes, as a producer you can feel when the magic is happening and you don’t want the artists to lose this momentum. It was magic.”

Sitting in his home studio, Dr. Dre sensed The Magic Moment. Creative momentum is rare. Crucially, once Eminem found momentum, Dr. Dre transitioned right into producer mode. Moved by the nervous rush of a first-time meeting with his personal hero, Eminem was spurred to greatness. Powered by the butterflies of excitement, he birthed the raw material for an Emmy-Award winning song.


Intuitive Insight

The intuitive mind can learn and respond to the world without our conscious awareness. 

In one study, highlighted in a book Designing for Behavior Change, people were given four biased decks of cards. Some of the decks set people up for success, while others ensured their failure. None of the participants knew the decks were rigged. Once the game began, people’s bodies showed signs of physical stress when they were about to use a money-losing deck. The stress arose at the subconscious level. The automatic response occurred because the intuitive senses realized that the decks were fishy before the conscious mind realized the decks were rigged.

There’s wisdom inside of you that’s deeper than rationality. Unlike conscious thoughts, it reveals itself in quiet hunches and subtle hints. Even if you can’t explain it, you have an internal sense of what matters, what’s relevant, and what’s interesting.

Once we start creating, we can benefit from the trial-and-error of unconstrained creativity. We’re no longer constrained by our tools. Writers don’t have to buy paper, musicians don’t have to buy tape, and filmmakers don’t have to buy film. Since storage is free, we can splatter paint against the wall and keep the best of what sticks. 

Writing, like many other crafts, is a process of discovery. Once you realize that all creators stumble towards their discoveries, you’ll be freed from the shackles of perfectionism. If writers always waited until they had the answer, nobody would write anything. For proof, look at other creators. Often, musicians go into creation mode once they can hear their hook, while artists start painting once they stumble upon an immaculate scene with the perfect lighting.

Likewise, writers should start writing right when a new idea clicks. 

When The Magic Moment arrives, get to work. The moment right after a major epiphany is the only moment in the creative process where the rush of epiphany trumps the fear of rejection. It’s when body meets mind. Run to your canvas or your beat pad. Start creating when the rush of epiphany arrives, when your wild intuition can overpower your rational prefrontal cortex. 


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The Empathy of Epiphany

Writers are particularly guilty of procrastination. 

The craft demands logic and rationality, so they ignore the subtle whispers inside them. They’re trapped by the chains of perfectionism, which prevent them from taking the first step. Turns out, the process of creation is like driving through thick fog. You have to trust the road in front of you. Unless you move towards your destination, you won’t know where you’re going.  

Start writing before you can see the entire road ahead of you. The moment of complete preparedness will never come. As your fingers waltz across the keyboard, you can embody two mental states at once. Seconds before your Magic Moment of insight, you hadn’t synthesized the idea you’re about to explore. But after the epiphany, you see the world with a fresh set of lenses.

For writers, there’s a special advantage to writing at The Magic Moment. Non-fiction writers express ideas to readers who haven’t thought as much about them, so they need to understand the beginner’s mind. As you type, you can simultaneously empathize with a reader who hasn’t connected the dots you have and hold the fresh memory of what came together for the dots to connect in your head.


The Magic Moment

The Magic Moment is a moment where you have the freedom to create without the demands of publishing.

You can’t predict a Magic Moment. They’re spawned by long periods of incubation, but they strike when the mind is at rest. They’re likely to come when you’re showering, driving, or exercising because that’s when the mind is at rest and you can finally hear yourself think. Like a surfer in the ocean, when a special wave swells up, you have to catch it and ride it to shore.

The Magic Moment is a time to run wild; to be steered by your delirious intuition instead of the crippling logic of rationality. If you’re craving clarity, remember that simplicity is not a starting point. It’s the result of throwing ideas on the page and running them through the narrow mill of feedback and compression. You’ll do your best work right when you think of a good idea, rush to your computer, and bring the idea to life as fast as you can. That candle of novelty will help you externalize your ideas before the flame of insight dies out. 

For writers, the first draft is unlike any other draft. In the first draft, you go from nothing to something. The rest is just revision. Words have all the patience in the world. They don’t die or disappear. Rather, they sit on the page and wait for you to inject them with life.

Inspiration is perishable, so strike while the flame is hot.


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Peter Thiel’s Religion

“I am the Lord your God.” — 1st Commandment

Human culture began with a murder. That culture was fueled by rage and rivalry, which led to violence. Managing that violence is the secret reason for all religious and political institutions.

In The Bible, The Cain and Abel story is the first act of life after the Garden of Eden. Cain is a farmer and the older brother to Abel, who is a shepherd. Initially, Cain admires Abel. But eventually, when Cain turns envious of his younger and more successful brother, he kills him. The two brothers represent two halves of the human psyche: Abel represents the part that looks up towards the transcendent, where Cain represents the other that looks down towards death and destruction.

Depending on who you ask, the significance of the Cain and Abel story ranges from nothing to everything. For some, the Christian cross is too strange to be taken seriously. It’s archaic and stuck inside a biblical world that can no longer speak to the challenges of life with iPhones, Tinder, and $12 avocado toast. But to others, religion is the foundation of human culture. Without it, peace cannot be maintained and violence will erupt like an angry volcano. 

What does Peter Thiel think? Is religion a superfluous add-on or the origin of everything?

In this essay, we’ll explore the significance of religion and the Cain and Abel story. We’ll learn why the story is an archetype for human relationships, even in the Western world where people stiff-arm religion like it’s the Heisman trophy.

We’ll study religion through the lens of Peter Thiel. He’s an investor who found wealth in PayPal, a student who found wisdom in Libertarian ideals, and a philosopher who found faith in the resurrection of Jesus Christ. Thiel was raised as an Evangelical and inherited the Christianity of his parents. But his beliefs are “somewhat heterodox.” In a profile in the New Yorker, Thiel said: “I believe Christianity to be true. I don’t feel a compelling need to convince other people of that.”

Three simple statements will lead us towards our ultimate answer about the importance of religion: 

  1. Don’t copy your neighbors

  2. Time moves forward

  3. The future will be different from the present

Rather than focusing on Thiel’s actions, I’ve chosen to focus on his ideas. First, we’ll explore the principles of Peter Thiel’s worldview. We’ll begin by explaining Thiel’s connection to a French philosopher named Rene Girard. We’ll return to old books like The Bible, old ideas like sacrifice, and old writers like Shakespeare, and see why this ancient wisdom holds clues for modern life. Then, we’ll return to the tenets of the Christian story. We’ll cover the shift from cyclical time to linear time, which was spurred by technological development and human progress. We’ll see why the last book in The Bible,The Book of Revelation, is a core pillar of Thiel’s philosophy. Then, we’ll close with Thiel’s advice and wisdom almost as old as Cain and Abel: the Ten Commandments.

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Some disclaimers: I’ve never met Peter Thiel. The contents of this essay are based on public information and my own intuition. Hopefully, some of it is interesting. Inevitably, some of it is wrong. I am not a Christian and only have a basic understanding of Christian theology. If you agree with everything in this essay, I haven’t challenged you enough. I’ve also chosen an interpretation of the Bible, and especially The Book of Revelation that aligns with Thiel’s philosophy. Thiel fanatics will say I’ve only scratched the surface. Others will say I’ve gone too deep. And both might complain I’ve focused too much on his relationship with Christianity. 

I don’t agree with all of Thiel’s conclusions, but I admire his rigorous and independent thought. By the time you finish reading this essay, you will too. 

I wrote this essay because I’m fascinated by Christianity and impressed with Thiel. I’ve spent the past decade as an agnostic, just like everybody around me. But after a recent change of heart, I’m on a quest to develop my own conclusions about religion. 

This essay is an introduction to his ideas, but it’s not just about Thiel. It’s about modern society, human behavior, and the philosophy of religion. 

Let’s begin.


Thiel’s Intellectual Background

To understand Thiel’s ideas, we need to begin with the person who influenced Peter Thiel more than any other writer: Rene Girard. 

Rene Girard was a French historian and literary critic. He’s famous for Mimetic Theory, which forms the bedrock of Thiel’s worldview. Thiel studied under Girard as an undergraduate at Stanford in the late 1980s. Their relationship stretched beyond the walls of Palo Alto classrooms and became a lifelong friendship. When Girard died, Thiel spoke at the memorial service.

Mimetic Theory rests on the assumption that all our cultural behaviors, beginning with the acquisition of language by children are imitative. He sees the world as a theatre of envy, where, like mimes, we imitate other people’s desires. His theory builds upon the kinds of books and people that modern people tend to ignore: The Bible, classic fiction writers such as Marcel Proust, and playwrights like Shakespeare. 

Mimetic conflict emerges when two people desire the same, scarce resource. Like lions in a cage, we mirror our enemies, fight because of our sameness, and ascend status hierarchies instead of providing value for society. Only by observing others do we learn how and what to desire. Our Mimetic nature is simultaneously our biggest strength and biggest weakness. When it goes right, imitation is a shortcut to learning. But when it spirals out of control, Mimetic imitation leads to envy, violence, and bitter rivalry.

Mimesis is the Greek word for imitation. Imitation is not the childish, low-level form of behavior that many people think it is. Since humanity would not exist without it, humans aren’t as independent as they think they are. Early psychologists like Sigmund Freud didn’t take imitation seriously enough. In one essay, Thiel described human brains as “gigantic imitation machines.” 

Our capacity for imitation is unconscious. This drive towards imitation separates us from other animals, and historically, it enabled our evolution from earlier primates to humans. Imitation is linked to forms of intelligence that are unique to humans, especially culture and language. 

We’ve known this for centuries. In the time of Shakespeare, the word ape meant both “primate” and “imitate.” Learning and human behavior is learned through imitation. Without it, all forms of culture would vanish. As any dancer will tell you, the heart beats fastest when two people agree to imitate each other and move in perfect sync. These are the moments when time disappears; when years of trust are built in seconds of synchronicity. 

Thiel speaks with a religious reverence for Girard’s theory:

“[Girard’s ideas are] a portal onto the past, onto human origins, and our history. It’s a portal onto the present and onto the interpersonal dynamics of psychology. It’s a portal onto the future in terms of where we are going to let these Mimetic desires run amok and head towards apocalyptic violence… It has a sense of both danger and hope for the future as well. So it is this panoramic theory… [It’s] super powerful and extraordinarily different from what one would normally hear. There was almost a cult-like element where you have these people who were followers of Girard and it was a sense that we had figured out the truth about the world in a way that nobody else did.”

Thiel credits Girard with inspiring him to switch careers. Before he internalized Girard’s ideas, Thiel was on track to become a lawyer. He worked as an associate for Sullivan & Cromwell in New York City, where the hours were long and the competition was cutthroat. As Thiel recounts, all the lawyers competed for the same shared goals. They ranked themselves not by absolute progress towards a transcendent end goal, but by progress within their peer group. 

As Peter Thiel recounted:

“When I left after seven months and three days, one of the lawyers down the hall from me said, ‘You know, I had no idea it was possible to escape from Alcatraz.’ Of course that was not literally true, since all you had to do was go out the front door and not come back. But psychologically this was not what people were capable of. Because their identity was defined by competing so intensely with other people, they could not imagine leaving… On the outside, everybody wanted to get in. On the inside, everybody wanted to get out.”

Competition distracts us from things that are more important, meaningful, or valuable. We buy things we don’t need with money we don’t have to impress people we don’t like. Trapped in a never-ending rat race, lawyers climbed the corporate ladder by winning favor with partners at the top. Others engaged in small acts of sabotage against their coworkers. 

Law school was worse. Like lobsters in a bucket, wannabe lawyers battled for law school placement and law firm employment. Each goal led to the next. Rather than focusing their attention on the end goal of developing a legal expertise, transforming the Constitution, or rescuing the powerless from tyrannical injustice, they elbowed their peers so they could score higher than their classmates on standardized tests. The competition was zero-sum. The better one student did, the worse their peers scored.


How Girard Influenced Thiel in Business

Thiel sees the world at a strange angle. His contrarian streak runs through everything he does. But until now, nobody has explained the roots of his singular philosophy. 

His verbal tendencies double as a mirror into his mind. Listen to a Thiel interview and you’ll notice how often he reframes the question before answering. When he speaks, he skips between perspectives faster than a game of hopscotch. He says things like “One version of this is…” or “You could say that…” He has an uncanny ability to consider cultural trends and investment trades from a diversity of perspectives. Sometimes, I wonder if he sees life as a game of chess, where he plays against himself and simultaneously switches from black, to white, and back again. Listen carefully and you’ll see how often he hides answers inside of questions. By playing both sides of the board with the rigor of a Dostoyevsky novel, he sees what others miss with crystal clarity. 

In the words of one of his friends: 

“Peter is of two minds on everything. If you were able to open his skull, you would see a number of Mexican standoffs between powerful antagonistic ideas you wouldn’t think could be safely housed in the same brain.”

Before playing a game, you have to know the rules. Breakthrough businesses are so innovative that people don’t have the words to describe them. He focuses on questions as much as answers, so he can identify the difference that makes the difference. For example, people still talk about Google as a search engine and Facebook as a social networking site. Both descriptions miss the point. Google succeeded because it’s a machine-powered search engine. Until Facebook, social networks mostly helped people become virtual cats and dogs. Facebook succeeded because it helped people create real identities online. 15 years after its founding, people incorrectly frame the history of social networks. He doesn’t just focus on the brushstrokes. He looks at how the painting is framed. 

Thiel’s companies are governed by Girard’s wisdom. Girard observed that all desires come from other people. When two people want the same scarce object, they fight. In response, as CEO of PayPal, Thiel set up the company structure to eliminate competition between employees. PayPal overhauled the organization chart every three months. By repositioning people, the company avoided most conflicts before they even started. Employees were evaluated on one single criterion, and no two employees had the same one. They were responsible for one job, one metric, and one part of the business. 

Thiel provided the first outside money into Facebook and still serves on the company board. His $500,000 investment was partially informed by Mimetic Theory because he saw Girard’s ideas validated by social media. As Thiel said: “Facebook first spread by word of mouth, and it’s about word of mouth, so it’s doubly Mimetic. Social media proved to be more important than it looked, because it’s about our natures.” 

To be sure, not all of Thiel’s investments have been successful. Thiel’s hedge fund, Clarium Capital, was unsuccessful. The fund fell 13 percent in August 2008, 18 percent in October 2008, and lost money for the third year in a row in 2009. By September 2009, the total assets under management had fallen from a peak of $7.8 billion to a mere $850 million, most of which was Thiel’s personal capital.

People who work with Thiel are told to look for heterodox ideas and people with clear visions of the future. Thiel doesn’t like to be an operator because it’s a low-leverage activity. Instead of banging the keyboard himself, Thiel installs strong CEOs and leaders whose judgements are similar to his own. Time and again, these skilled operators have the agency to act without Thiel’s approval, and are encouraged to pursue bold visions of the future. They have freedom to pursue bizarre ideas and people who don’t fit the standard mold. 

In an epic exchange between two billionaires, Jeff Bezos said: 

“Peter Thiel is a contrarian, first and foremost. You just have to remember that contrarians are usually wrong.”

In an email to Ryan Holiday, Peter responded as such: 

“Contrarians may be mostly wrong, but when they get it right, they get it really right.”

Across PayPal and Facebook, Peter Thiel’s philosophy can be summarized in a single sentence: Don’t copy your neighbors. It’s like a search for keys. Instead of looking in the light, Thiel and his employees look in the dark, where nobody else is looking.


Section 1: Don’t Copy Your Neighbors

“Do not love the world or the things in the world. If anyone loves the world, the love of the Father is not in him. For all that is in the world—the lust of the flesh, the lust of the eyes, and the pride of life—is not of the Father but is of the world. And the world is passing away, and the lust of it; but he who does the will of God abides forever.” — 1 John 2: 15–17

Everybody imitates. We cannot resist Mimetic contagion, and that will never change. But there are bad ways to copy and good ways to copy. Bad imitators follow the crowd and mirror false idols, while good imitators copy a transcendent goal or figure. 

Imitation draws people together. Then, it pulls them apart like an ocean riptide. 

At first, two people who share the same desire will be united by it. But if they cannot share what they both desire, their relationship will transform. They’ll turn from the best of friends to the worst of enemies. Conventional wisdom says that we loathe people who are nothing like us. But when it comes to envy, jealousy, and resentment Girard takes a different perspective. Since small disagreements loom large in the imagination, Girard wrote that social differences and rigid hierarchies maintain peace. When those differences collapse, the infectious spread of violence accelerates. The fiercest rivalries emerge not between people who are different, but people who are the same. The more two people share the same desires, the greater the risk of Mimetic competition. 

Consider the famous opening words of Shakespeare’s Romeo and Juliet: “Two houses, both alike in dignity…” Through bloody battles between the Montagues and the Capulets, Shakespeare reminds us that people fight not because they’re so different, but because they’re so alike. Similar people are most prone to Mimetic envy because we tend to compete for status with the people who are closest to us. When two people are different and far away from each other, the tension will stay calm. Thus, the more we resemble our peers, the more Mimetic conflict will arise. 

Shakespeare wasn’t the only writer to identify the vicious Mimetic impulse. Sigmund Freud called the tendency for conflict between two similar people “The Narcissism of Small Differences.” We reserve tooth-grinding envy for people most like ourselves. Thomas Hobbes wrote that “if any two men desire the same thing, which nevertheless they cannot both enjoy, they become enemies; and in the way to their End… endeavor to destroy, or subdue one another.“

True to the observations of Shakespeare, Freud, and Hobbes, academics are famous for institutional elbow-knocking. 

Prestige-oriented environments can create nasty feuds over little prizes. A family friend named Julia tells a head-spinning story about her time at Columbia University. She couldn’t leave her books in the library. When she did, competing students often stole them. Not because they needed money or material goods, but because they felt surges of envy. Rather than absorbing the course material and preparing themselves for a life after college, students sabotaged their peers and shared false study guides. Relationships were shattered by sour resentment. Classmates could not be trusted, especially those who wanted to help. 

As Julia’s story demonstrates, academic rivalries are vicious because they focus on hierarchies over knowledge. They bicker over trivial details and compete for a limited set of status-based titles. In each department, there can only be one chairman. In each university, one president. Speaking about the faculty relationships at Harvard, Henry Kissinger once said: “The battles were so ferocious because the stakes were so small.” By obsessing over their competitors, the faculty lost sight over the big picture and fought over the small scraps of superficial status games. The more they strived to be different, the more their actions mirrored each other. 

Choose your enemies well. Like two children who fight for a toy, the more you fight somebody, the more you resemble your enemy. 

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Toys: Lessons from Rene Girard    

I’ll be honest. When I first read about Mimetic Theory, I was skeptical. Girard’s ideas seemed trivial and I couldn’t find any evidence to support them. Then, I started seeing his ideas everywhere. Once I saw empirical evidence of Girard’s ideas, I started taking them seriously.  

Mimetic Theory shines brightest in trivial everyday moments, such as watching children play with toys. First, you have to understand Mimetic Theory at an intellectual level. Then, you have to understand it at an emotional one. Until then, Girard’s ideas might feel like ancient and irrelevant ideas. Once you watch these ideas impact your family, your friends, and your coworkers, you will have the same revelation Peter Thiel had as a student in Girard’s class at Stanford.

Girard observed that even when you put a group of kids together in a room full of toys, they’ll inevitably desire the same toy instead of finding their own toy to play with. A rivalry will emerge. Human see, human want. 

Our capacity for imitation leads to envy. Babies’ interest in a particular toy has less to do with the toy itself and more to do with the fact that the other babies desire the toy. As soon as one child desires the toy, so do the others. Eventually, even though there are many toys available to play with, all the children want the same toy.


Toys: Lessons from Joseph Henrich

Harvard anthropologist Joseph Henrich found empirical evidence for Girard’s observations about children and toys. In his book, The Secret of Our Success, he shows that humans are cultural learners. Mimetic desire is innate, not learned. We copy other people spontaneously, automatically, and unconsciously. And we are especially likely to copy people who are more successful than us, especially in moments of difficulty or uncertainty. 

Henrich illustrates our Mimetic nature by studying children and how they desire toys. Even at a young age, and especially in moments of confusion, they emulate people around them. In one study, Henrich found that babies engaged in social referencing four times more often when an ambiguous toy was placed in front of them. When faced with an ambiguous toy, babies altered their behavior based on adults’ emotional reactions. In their early years, babies depend on elders to navigate the world and outsource their decisions to them. 

I can relate. Nothing piques a child’s desire like watching their friends receive a new toy. Throughout my childhood, I remember coming home to my parents to ask for new toys. Back when I needed a car seat to ride in a vehicle, I asked for Thomas the Tank Engine train sets. Once I could read and write, I asked for the same LeBron James jersey my friends had. And in my first month of college in North Carolina, I demanded the same “Nantucket Red” Vineyard Vines pants as my fraternity brothers. 

None of these desires were my own. Looking back, these desires came from my peers. I wasn’t the only one. My friends’ desires moved in perfect synchronicity. Once one kid received a cool new toy, so did the rest of the group. When my parents wouldn’t buy me a toy, I shot back with Mimetic-fueled social proof: “But my friend Jeremy just got a new baseball glove and now I need one.” 

Turns out, I’m not crazy. 

Through toys, Girard and Henrich show how our tendency to desire the same scarce resources as our peers leads to envy and competition. 

Mimetic competition is visible in every aspect of social life. People shift their attention from the object of desire to the other person, and the drive to beat them. From bored students, to ambitious graduate school students, to empire-building business professionals, the objects we fight about change, but human nature doesn’t. 


Competitive Strategy in Business

Thiel’s Christianity-inspired worldview lines up with Michael Porter’s philosophy of business strategy. Porter is a Harvard Business School professor known for his theories on economics and business strategy. He believed that strong businesses aim to be unique, not the best. Trying to outcompete rivals leads to mediocre performance, so companies should avoid competition and seek to create value instead of beating rivals. 

As Thiel once wrote: 

“Once you have many people doing something, you have lots of competition and little differentiation. You, generally, never want to be part of a popular trend… So I think trends are often things to avoid. What I prefer over trends is a sense of mission. That you are working on a unique problem that people are not solving elsewhere.”

After the 2008 financial crisis, when the new General Motors went public in 2010, CEO Dan Akerson announced that his company was free of legacy costs and ready to compete again. As he shouted to reporters: “May the best car win!” This phrase reflects an assumption that competition is the best way to grow shareholder value. It implies that if you want to win, you should try to be the best. But this is the wrong way to think about competition. 

We analogize business to war. In war, victory requires that the enemy is crippled or destroyed. Rivals who pursue the “one best way” to compete will converge on a collision course, where everybody listens to the same advice and pursues the same strategies, leading to zero-sum outcomes where total industry profits fall towards nothing. 

When you compete to be the best, you imitate. When you compete to be unique, you innovate. In business, multiple winners can thrive and coexist. You don’t have to annihilate your competition. While imitation creates a race to the bottom, innovation promotes healthy competition and economic growth. In that way, business is like the performing arts, not war. In the performing arts there are many entertaining singers and actors, each with a distinct style. The more talented and differentiated performers there are, the more the arts flourish. This is the essence of positive-sum competition. 

To drive the point home, let’s turn back to Peter Thiel. The third chapter of his book, Zero to One is called “All Happy Companies Are Different.” 

Thiel’s book applies Girard’s ideas to business. Like Girard himself, he says companies should avoid competition and walk the path of differentiation. He explains that many businesses create a lot of value, but don’t capture a lot of the value they create. As a result, even very big businesses can be unprofitable. 

According to Thiel, monopoly is the end state of every successful business. If you want to create and capture lasting economic value, don’t compete. The more unique companies are, the more the business world can flourish. Consider Thiel’s favorite example: the airline industry. 

As I type these words, I’m sitting in the United Airlines lounge at Denver International Airport. I’m writing during a five-hour layover on my way from New York to Los Angeles. In front of me, I see a lemon yellow Spirit Airlines jet preparing for takeoff. To advertise its affordable prices, the engine on the right wing says “Home of the Bare Fare.” Like the Southwest Airlines Boeing 737 to its left, the rise of low-cost airline carriers reflects the price sensitivity of flyers. I’m part of the bargain-hungry tribe too. This morning, I woke up at 3:50am so I could take a dirt-cheap 6:10am flight from La Guardia. As part of the journey, I also swallowed a five-hour layover in Denver so I could pay with frequent flyer points. My body screams for sleep, my mind shouts for productivity, and thankfully, due to the triple-shot cappuccino on the table in front of me, I’ll meet my writing quota today. 

Let’s wrap my morning in economic language. Air travel is an “elastic good.” Small changes in price lead to big changes in demand for a flight. Behavior differs between leisure travelers and business travelers. Leisure travelers are particularly sensitive to price fluctuations, so they fly much less when prices are high than when they are low. In contrast, business travelers don’t have as much flexibility. Since there’s money at stake, their decision to travel isn’t as influenced by shifts in price. 

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The airline industry suffers from near-perfect competition. Each year, U.S airlines serve millions of passengers and create hundreds of billions of dollars in consumer value. But in 2012, when the average airfare each way was $178, the airlines made only 37 cents per passenger trip. Whenever one airline makes a move such as lowering prices or adding an extra inch of leg room, its rivals match it. Since all the airlines chase the same price sensitive customers, they compete for every sale. That’s why, compared to the major tech companies, the major airlines in America are starving for profit. 

As a contrast to the hyper-competitive airline business, consider Google. Here’s Peter Thiel: 

“Compare [the airlines] to Google, which creates less value but captures far more. Google brought in $50 billion in 2012 (versus $160 billion for the airlines), but it kept 21% of those revenues as profits—more than 100 times the airline industry’s profit margin that year. 

Google makes so much money that it’s now worth three times more than every U.S. airline combined. The airlines compete with each other, but Google stands alone.”

Perfect competition is the default state in Economics 101. In a perfectly competitive market, undifferentiated companies sell homogenous and substitutable products. Firms don’t have market power, so their prices are determined by the iron laws of supply and demand. 

High profits attract competition. According to economic theory, if outside entrepreneurs hear about profits, they’ll start a new firm and enter the industry. Increased supply will drive prices down, which will decrease total industry profits. If too many firms enter the market, the entire industry will suffer losses. If companies start to lose money, they’ll go out of business until industry prices rise back to sustainable levels. Most importantly, in a world of perfect competition, no company will make an economic profit in the long run. Just like the airline industry.

Thiel offers an alternative to perfect competition: monopoly. Without competition, they can produce at the quantity and price combination that maximizes their profits. Successful strategies attract imitators, so the best businesses are difficult to copy. Firms in a competitive industry who sell a commodity product cannot turn a profit.  But companies who have a monopoly can set their own prices since they offer an in-demand product that cannot be replicated. Monopoly firms are big fish in a small pond. 

Don’t copy your neighbors.


Section 2: Time Moves Forward

“The twentieth century was great and terrible, and the twenty-first century promises to be far greater and more terrible.” — Peter Thiel

In this section of the essay, we will depart from a focus on Thiel. Instead, we’ll explore Christianity and the history of time. By doing so, we will have the necessary context to frame Thiel’s worldview in the next section. 

The Christian story begins with: “In the beginning, God created the heavens and the earth.” At its root, the story is about how the world went bad and how we can fix it. The world is broken because humans are broken. Human sin is responsible for the world’s evil, and our relationship with God is broken because it was ruined by human rebellion. God is the central character in the story. That’s why instead of worshiping things, Christians are instructed to worship their creator. God’s purposes are central, not theirs. Humans need to be ruled, and man must glorify its king. Only under God’s rule can man discover his deepest satisfaction and forever enjoy the Kingdom of Heaven. 

The Resurrection is a symbol that someday, all wrongs will be made right. Christians do not take it as a symbol, but as a concrete fact. Christians say that if you believe in Jesus — that he was raised from the dead and is the Son of God — he will restore your life until every pain and heartache becomes untrue.

Linear conceptions of time, and especially the idea of progress, emerged with Christianity. In a cyclical conception of time, the circle of time closes where it opened. There is no beginning or end. For example, the Hindu Vedas teach that the world spins along an endless cycle: creation, rise, decline, destruction, and rebirth. Even if the cycle repeats for millions of years, it will continue to spin forever. 

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With a linear perspective, time moves from the past to the future. It begins with the Garden of Eden at the beginning of The Bible and ends with the Kingdom of Heaven. 

With Jesus as its savior, Christianity is the only religion that sees a human as the Son of God. When Jesus died on the cross, he paid for the sins of humanity so he could end evil and suffering. Jesus speaks of his return to earth in Matthew 19:28. He says: “I tell you the truth, at the renewal of all things, the Son of Man will sit on his glorious throne.” Instead of relying on a cyclical re-birth, Jesus’ return will fix the material world by destroying all decay and brokenness. 


From Cyclical to Linear Time

Religious or not, it’s worth studying Jesus Christ. He’s had more influence than anybody in human history. For example, Western Civilization divides time into two periods: before and after Jesus Christ. He’s a universal icon. 

In a letter called One Solitary Life, James Allen Francis wrote

“Twenty centuries have come and gone, and today he is the central figure of the human race. I am well within the mark when I say that all the armies that ever marched, all the navies that ever sailed, all the parliaments that ever sat, all the kings that ever reigned—put together—have not affected the life of man on this earth as much as that one, solitary life.”

Earlier this year, I attended a series of Questioning Christianity lectures in New York City. Every Thursday, Tim Keller spoke about the core tenets of Christianity: faith, meaning, satisfaction, identity, morality, justice, and hope. In one of his talks, he spoke about the human transition from hope to optimism. From praying for a better world to working hard to ensure a better future. In the sermon, Keller argued that humans are future-oriented beings. If we don’t have a positive vision for our future, we become slaves to the desires of the present day and crumble under the suffering of daily life. That’s why we need to believe that our lives are marching towards an end that’s worth striving for. Otherwise, we will become adrift like a log in the ocean. 

In his final lecture, Keller quoted Robert Nisbet, the author of The History of the Idea of Progress. In it, Nisbet argues that ancient people saw time as cyclical, and no idea has been more important to Western Civilization than the idea of progress. 

The Ancients assumed that humanity was doomed to cycles of pessimism. Even if they held ideas of moral, spiritual, and material improvement, the idea that humanity can improve itself, step-by-step and stage-by-stage into an earthly paradise is uniquely Western. Christian theology sees time as linear. It moves away from the Garden of Eden, and toward a day of judgement, justice, and the establishment of a divine, peace-filled kingdom. 

The linear perspective on time was born out of Greek philosophy. Controversial at the time, writers like Seneca wrote that mankind had advanced in the past, and will continue to advance in the future. But the idea of progress did not crystallize until St. Augustine. His book, The City of God, was the first full-blown philosophy of world history. By fusing the Greek idea of growth with the Jewish idea of sacred history, St. Augustine introduced a Christianity-inspired linear theory of humanity. He believed in the unity of mankind, a succession of fixed stages of human development, the assumption that all that has happened and will happen is necessary, and the vision of a future condition of heaven on earth. 

Through a belief in Redemption, Christians turned their minds to the supernatural and adopted a belief in an eternal heaven. Nisbet writes: 

“Of all the contributions to the idea of progress by Christian thought, none is greater than this Augustinian suggestion of a final period on earth, utopian in character, and historically inevitable.”

Christian ideals of progress are sprinkled throughout The City of God. At the end of his book, St. Augustine refers to the seven stages of early history. The last, still-yet-to-come stage will consist of peace and happiness on earth. He wrote that as a result of the inevitable historical development from the primitive world of the Garden of Eden, those who put their faith in Christ will experience an earthly paradise. ¹ 

Beginning with the Greeks and accelerated by the Christian writers such as St. Augustine, Western philosophy is defined by the march towards heavenly perfection. People in the West see progress, evolution, and innovation as synonyms. We assume that increased freedom and knowledge is limited only by the passage of time and an active commitment to creating a better future. Like a law of nature, progress was as inevitable as cherry blossoms in the spring.

If time is cyclical, the future will look like the present. The arrow of time points back towards its origin and ends where it began. Taken to the extreme, cyclical perspectives on time implicitly remove human agency. No matter what you do, the world will return to its original state. 

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Girardian Sacrifice: How Violence Stops Violence

Once Tim Keller’s lectures were over and I understood Nisbet’s philosophy of progress, I turned to a series of Rene Girard interviews. As I started reading, I was shocked to see Nisbet’s idea of progress fit Girard’s theory of Mimetics like a pair of puzzle pieces. 

The similarities are stunning. Girard saw sacrifice and the scapegoat mechanism as the reason for Christianity and the center of human culture. The Christian story is the ultimate Girardian ritual because Jesus is a classic scapegoat, but with an all-important twist. Where previous myths were told from the perspective of the community, the Christian story is told from the perspective of the victim. And according to Girard, this is the essence of biblical revelation. The Gospels classify Jesus as a scapegoat. True to the scapegoat phenomenon, Jesus is not killed by the Romans, the Jewish priests, or by the crowd alone, but by everybody. The death of Jesus, like a scapegoat ritual, is a collective and community murder. 

Like all scapegoat victims, Jesus is killed despite his innocence. Christianity reveals the radical injustice of the scapegoat phenomenon. All scapegoats are both insiders and outsiders. At once, they must be insider enough to be part of the community, but outsider enough to blame for the community’s problems. As the Gospel of John says: “It is better for one man to die for the people, than for the whole nation to be destroyed… They hated me for no reason.”

Sacrifice is a social event. Without sacrifice, human beings wouldn’t have a culture. All human societies are built around religion because it’s the only way to peacefully work with the scapegoat mechanism. When humans engage in a Mimetic crisis, the violence can only be fixed by murdering the scapegoat. This process of killing the victim again and again is the main peace pill in an archaic society. People perform ritual sacrifices together, and when a priest is appointed to kill a victim, he kills the victim in the name of the whole community. After all, a community can’t scapegoat somebody unless it thinks the scapegoat is guilty. That’s why scapegoating has to be unconscious. Once the group ritual is performed, violence is repelled and peace is restored for the community. 

Ritual protects communities from the great violence of Mimetic disorder thanks to the real and symbolic violence of sacrifice. Girard said “sacrificial systems contain violence.” His message has two meanings. Violence is the disease and the cure for the disease. Sacrificial ritual is always violent. And yet, since the real and symbolic violence of sacrifice restores peace in the community, it prevents the escalation of runaway Mimetic violence. In that way, humanity contains violence with violence because sacrifice saves the community from its own violence. 

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How Time Relates to Girardian Sacrifice

It’s hard to gauge the impact of various philosophies of time. Even as I argue for it, I’m skeptical that a linear perspective on time is a meaningful driver of innovation and technological progress. And yet, my skepticism is balanced by my own relationship with my future self. 

Creating explicit images of my future has made me healthier, happier, and much more productive. I re-write my 25-year vision multiple times per year. Then, twice a month, I meet with a personal coach to make sure my short-term actions sync up with my long-term goals. By treating my future self with the same respect as my current self, I’m better able to ignore the nagging impulses of the moment and work towards a better future for myself and humanity. 

Fueled by a healthy skepticism, I’d love to see two studies. The first one would track the relationship between technological progress and conceptions of time. Scientists would ask proxy questions for determining a culture’s time horizon, and use it to evaluate its impact on productivity growth. The second study would measure the relationship between urban life and farm life. In my recent podcast conversation with Jason Zweig, he shared his experience growing up on a farm in upstate New York. Farm life encourages cyclical thinking in a way city life doesn’t. On a farm, you’re mesmerized by simple pleasures: the movement of the sun, the turn of the seasons, and the emotions of the turbulent skies. Aside from violent rainstorms and purple-painted sunsets, synthetic city environments take us away from nature. I suspect that people in cities are more likely to see time as linear, while people who grow up in nature see its cyclical traits, such as the rise of the sun, the seasonal thunderstorms, and the changing of the seasons. 

Likewise, ancient cultures saw time like an endless wheel. They believed that every so often, the universe would wind down and burn up, and after this re-birth, history would begin again. And everything, from our bodies to our souls, would be purified. Relative to the Christian tradition, this philosophy assumes the futility of long-term progress. 

Girard offers a historical perspective for the transition from cyclical time to linear time. He identified a cyclical loop: First, when a scapegoat is sacrificed, peace is restored in the community. Then, the culture lives peacefully for a short time. But eventually, tensions flare and violence returns to the community. To restore the peace, a new scapegoat must be named and sacrificed, which re-starts the sacrificial loop. 

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How Linear Time Drives Progress and Long-Term Thinking

To Peter Thiel, short-term thinking is the essence of sin. Like The Bible, he advises us to make plans and sacrifice the present for the future. Greatness is like chess. To win, you must study the end game and work towards the one you want to see. Thiel’s favorite chess player was José Raúl Capablanca who said: “To begin you must study the end. You don’t want to be the first to act, you want to be the last man standing.” 

Thiel says a bad plan is better than no plan at all. Having no plan is chaotic. He supports people who trade the shiny mirage of short-termism for the calm, controlled grace of a long time horizon. Like Capablanca, they are the kinds of people who study the end-game and work backwards from there. 

In a thought-provoking essay called Peter Thiel and the Cathedral, Pascal-Emmanuel Gobry argues that Cathedrals were the equivalent of the Apollo project in the High Middle Ages. Like America’s Apollo program, each Cathedral required a specific and ambitious plan for building it. Medieval cathedrals were the first man-made structures to soar higher than the Egyptian Pyramids, which were monuments to death. But cathedrals are dedicated to the triumph over death. Moreover, cathedrals can only be built with scientific knowledge and communal support. They require scientists, mathematicians, engineers, craftsmen, and artists. And all of them need a long time horizon.  

Long time horizons aren’t just psychological. They’re cultural. Modern society suffers from temporal exhaustion. Or as, sociologist Elise Boulding once said: “If one is mentally out of breath all the time from dealing with the present, there is no energy left for imagining the future.” 

As I’ve written before, the speed of technology and the hyperconnectivity of society have placed us in a “never-ending now.” Like hamsters running on a wheel, we live in an endless cycle of ephemeral content consumption — a merry-go-round that spins faster and faster but never goes anywhere. Even the virtues of information consumption have changed. Most people I know care more about being informed than being well read. By focusing on the desperate screams of moody news anchors and not the books you’ll find in libraries, they let the culture’s moods dictate their own. The news has swept us into a dizzying chaos. When we whirl in its vortex, we become overwhelmed by the slightest breeze of chaos and lose sight of our place in history. 

For the opposite perspective, consider the Japanese. Some of its citizens recently witnessed the 66th cycle of a ritual that began more than 13 centuries ago. In a city called Ise, people have been rebuilding the grand Jingu shrine with wood and thatch since the 7th century. This Shinto ritual does more than keep the structure intact. It helps the master temple builder train the next generation and injects participants with a long-time horizon. This Japanese commitment to maintenance allows it to sustain structures and rituals for millennia. We shouldn’t be surprised that Japan is home to most of the oldest companies in the world. 

With that said, I don’t endorse the Japanese perspective in all its forms. The country is not as innovative as it once was. When I speak with friends who do business there, they complain about the rigid hierarchies and the inability to take risks. Instead of copying the Japanese commitment to long-term thinking, we should learn from it and use Christian-theology to build upon it. 

Thiel concludes that time is linear, not cyclical. The future won’t look like the present. It will either be much worse or much better. Or more explicitly, “stagnation leads straight to apocalypse.” If we don’t, we’ll suffer from limitless Mimetic violence; and if things go well, we might find our place in God’s peaceful kingdom. 

Informed by its linear conception of time and the Christian image of heaven, Thiel applauds the grand visions of yesterday’s leaders. Modern presidents no longer inspire Americans with positive visions of the future. The visions of the past weren’t just ambitious. They were clear and specific. Unfortunately, there is no modern equivalent of the Manhattan Project, the Apollo Project, or Nixon’s 1974 plan to defeat cancer by the end of the decade. 

Christians were the first group to reject cyclical time. They shouted that the future could be meaningfully better than the past. By doing so, they initiated a positive feedback loop, where progress led to progress, which led to more progress. 

Guided by this belief in the possibility of progress, Christians follow a high-resolution painting of a perfect future. It’s as if humanity is on a mission. They believe humans are here to reflect God’s light onto the world. Instead of returning to the Garden of Eden, humanity will march forward, from the past to the future, and create “a new heaven and a new earth.”


Section 3: The Future will Be Different From the Present

“And I saw a new heaven and a new earth: for the first heaven and the first earth were passed away; and there was no more sea.” — Revelation 21:1

“The cliche goes like this; live each day as if it were your last. The best way to take this advice is to do exactly the opposite: live each day as if you would live forever.” — Peter Thiel

A New Heaven and a New Earth

The Book of Revelation is the last chapter in the New Testament. In this section, I interpret it in a way that supports the rest of Thiel’s conclusions. Inevitably, I have misspoken here. If I met Thiel, this is the section I would focus on. It’s foundational to Thiel’s worldview and I’ve never heard him speak about this section of The Bible in public. 

Here’s what I do know: Thiel is trying to save the world from apocalypse. 

The Book of Revelation paints two outcomes for the future of humanity: catastrophic apocalypse or a new heaven and a new earth. Some of the Christians I know believe that humans aren’t literally taken out of this world and transported into heaven. Instead, as explained in Revelations 21, heaven comes down to earth. According to this vision, humanity will be cleansed, renewed and perfected. The horrors of the world will be undone. People will receive the lives they’ve always wanted. All evils will be repaired, and the pain of existence will vanish like evaporating water after a thunderstorm. Better yet, the joy and glory of a world after redemption will be greater because humans have suffered to reach it.

I suspect Thiel holds this philosophy. To Thiel, The Book of Revelation is more than a metaphor. It’s a playbook for guiding humanity from the garden of the past to the city of the future.

As Thiel once wrote:

“For Girard, this combination of mimesis and the unraveling of archaic culture implies that the modern world contains a powerfully apocalyptic dimension.”

Under globalization, Thiel believes that the probability of a civilization-ending apocalypse is increasing. Just because we no longer believe that Zeus can strike humans with sky-lighting thunderbolts, doesn’t mean that existential risk isn’t possible. Like Girard, he worries that the world is becoming more Mimetic. Worse, globalization is raising the threat of runaway mimesis and an apocalyptic world with cold corpses, dead horses, and splintered guns. 

In an essay called The Optimistic Thought Experiment, Thiel advises us to build the modern equivalent of Noah’s ark, so we can survive the floods of Girardian evil. Thiel fears that due to technologies like nuclear weapons, humans are already capable of destroying the world. With modern technology, a tiny number of people are capable of inflicting unprecedented levels of damage and death with the push of a single button. That though, doesn’t mean we should stop innovating. A lack of progress leads straight to a bleak, ravaged, and apocalyptic world. He writes

“The entire human order could unravel in a relentless escalation of violence — famine, disease, war, and death. The final book of the Bible, the Book of Revelation, even gives a name and a place: The Battle of Armageddon in the Middle East is the great conflagration that would end the world. Against this future, it is far better to save one’s immortal soul and accumulate treasures in heaven, in the eternal City of God, than it is to amass a fleeting fortune in the transient and passing City of Man.”

Here, Thiel encourages us to be specific about the long-term future we want to create. Here, he counters the secular and Eastern philosophy. Under the secular mindset, there is no transcendent future after death. This is it. You have one life. Similarly, according to Eastern religions, we lose our individuality and lose our material lives so we can become part of the whole again. But Christianity offers a different perspective: work for the fruits of eternity instead of chasing the fleeting pleasures of the day. Don’t place too much weight on the present moment. Instead of focusing on meaningless scandals, endless political dramas, or the limitless accumulation of wealth, we should focus on the impending catastrophe at the end of the road. Work to prevent runaway Girardian violence. That way, when the Day of Judgement comes, we’ll lean towards the side of the good. 

If there was ever a silver bullet, Thiel believes living with a long time horizon is it. 

Whether the future is better or worse will depend on our actions. Like Girard, Thiel, believes that Western political philosophy cannot cope with global violence. In 2004, three years after 9/11, Thiel sponsored a philosophical conference called “On Politics and Apocalypse.” Thiel contributed an essay called The Straussian Moment. In it, he tried to find common ground between Girard’s Mimetic theory and the work of two right-wing political philosophers: Leo Strauss and Carl Schmitt. He argued that the issue of violence and existential risk has not been taken seriously enough since the Enlightenment. 

Here are Thiel’s words: 

“The Christian statesman or stateswoman knows that the modern age will not be permanent, and ultimately will give way to something very different. One must never forget that one day all will be revealed, that all injustices will be exposed, and that those who perpetrated them will be held to account.

The postmodern world would differ from the modern world in a way that is much worse or much better — the limitless violence of runaway mimesis or the peace of the kingdom of God… One must never forget that one day all will be revealed, that all injustices will be exposed, and that those who perpetrated them will be held to account.”

As a libertarian who holds the New Testament as a seminal text, Thiel seeks to increase individual freedoms while preventing runaway Mimetic violence. As promised, here’s where Girard’s observations of the past can shape our understanding of the present. Everybody condemns hate-fueled online speech. If Girard’s theories are accurate, online fighting might be the preventative medicine we need, even if it tastes disgusting and comes with painful side-effects. The forces of globalization and technology may have abolished the boundaries of violence. 

If so, the cure is nested inside the disease. Online, social-media based arguments might repel an apocalyptic scenario. Perhaps Thiel sees Facebook as a place to contain unbounded Mimetic violence. It simultaneously perpetuates violence and prevents it from happening. After all, if people fight on social media, they won’t fight on the streets. Like a boiling kettle, we have to let out steam somewhere. Better to cool the pot on social media than in the streets. In the words of Thiel, “social media proved to be more important than it looked.”


Four Ways of Thinking About the Future

The pull towards Girardian conflict stems from pessimism and short-term thinking. In Zero to One, Peter Thiel describes four ways of thinking about the future: definite optimism, indefinite optimism, definite pessimism, and indefinite pessimism. In a definite world, the future is knowable. There is a predetermined plan for what the future will look like. An indefinite world is more of a random walk. Like a lottery, the future is out of our control. It’s governed solely by probabilities and chance events, which makes it impossible to act with any agency. 

Thiel defines the four quadrants as such:

  1. Definite Optimism: The future will be better and we know how.
  2. Indefinite Optimism: The future will be better and we don’t know how.
  3. Definite Pessimism: The future will be worse and we know how.
  4. Indefinite Pessimism: The future will be worse and we don’t know how. 
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Background to Definite Optimism

Innovation begins with inspiration. Positive visions of the future inject people with imagination, which pulls the future forward. 

A quick browse through the history books shows that Americans, and especially the government, used to make big plans and live with Definite Optimism. To illustrate the idea, let’s turn to my favorite example: The Reber Plan. 

Reber Plan

The Reber Plan is my favorite example of Definite Optimism. In the 1940s a San Francisco-based teacher and amateur theater producer devised a plan to reconstruct the San Francisco Bay Area. People took the plan seriously. Newspaper boards across California endorsed it.

Reber proposed two large earth and rock dams, one between San Francisco and Oakland, and another between Marin County and Richmond. Dams would drain water from north to south and convert the Bay from saltwater to freshwater. Congress explored the project. Engineers planned to construct a 32-lane highway and scatter high-rise buildings throughout the reconstructed city. To test the plan, the Army Corps of Engineers built a 1.5-acre scale model of the proposed design.

Ultimately, the Reber Plan didn’t work. The freshwater lakes would have evaporated too quickly. Nevertheless, due to the spirit of the post World War II age, people gave the Reber Plan the respect it deserved. 

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Ford Motors Airplanes During World War II

As Americans geared up for World War II in the early 1940s, President Franklin D. Roosevelt (FDR) called upon the nation to increase its production of airplanes. But in a 1940 speech to Congress, FDR said: “I should like to see this Nation geared up to the ability to turn out at least 50,000 planes a year.” At the time, nobody thought FDR’s goal was possible. 

Americans were still plagued by the Great Depression. Roosevelt spoke to 132 million Americans. Only 48,000 of them earned more than $2,500 per year, the modern equivalent of $40,000 in today’s dollars. Nearly one-third had no running water. And none of them had antibiotics or unemployment insurance. 

At the time, Americans were producing fewer than 1,000 planes per year. The Nazis had 7 million soldiers, but America had less than 200,000. American industry responded with passionate intensity. Ford Motors had never built an airplane, but America sought to produce more airplanes at Willow Run than Hitler produced in all of Germany. To build the plant, builders moved 650,000 cubic yards of dirt and laid 58 miles of grain tile underground. Production exceeded expectations. Ford Liberator bombers took flight in the spring of 1942, ahead of schedule. Within five years, Ford produced tens of thousands of airplanes per year. War production board chief Donald Nelson captured the ambition of the moment: “When we are talking about America’s war production job we are discussing the biggest job in all of history.”

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Today, these bold visions would be ignored and dismissed as lunacy. Definite Optimism is withering. Big dreams are now seen as childish illusions. We no longer trust amateurs with vast imaginations, and we no longer challenge people to imagine futures that look radically different from the present. Instead, we defer only to experts with mainstream opinions. 

The Reber model has been demoted from a grand vision of the future to a meager Sausalito tourist attraction. “Let’s dam the San Francisco Bay” is too grand and too specific. Instead, we say “Let’s improve the economy” or “promote information.” We doubt the potential of grand plans. Instead, we put our faith in small tweaks and A/B tests, implying that millions of small actions are a better way of improving the world and creating a desired future. 

We’ve moved from an atmosphere of utopian promises to one of dystopian threats. Definite Optimism has disappeared.


The End of the Future

Since the Financial Crisis, tens of thousands of Americans have moved into the Indefinite Optimism and Definite Pessimism quadrants. 

According to Thiel, this shift has been worse than acknowledged. A 2011 essay called The End of the Future, which lives on the homepage of the website of his venture capital firm, argues that progress has stagnated. We’ve shifted away from funding transformational companies and toward companies that solve incremental problems, and sometimes even fake ones. To be sure, he doesn’t only invest in companies with little competition like Palantir and DeepMind. His firm also invested in Airbnb, Stripe, and Postmates.

Today, we’ve narrowed the definition of technology to Angry Birds and goofy SnapChat filters. That’s why Thiel longs for the days when technology alluded to space, airplanes, and rockets that generated more energy than a small atomic bomb. 

NASA’s star spangled splendor transformed consciousness. Astronauts with stomachs of steel traveled the impossible distances of space. The Apollo 8 mission required superhuman precision, equivalent in scale to throwing a dart at a peach from a distance of 28 feet, and grazing the top of the fuzz without touching the fruit’s skin. To reach the moon, America’s pioneers traveled across 240,000 miles, about fifty-eight times the distance Columbus sailed when he discovered the Western world. As the Apollo rockets pierced through the stratosphere, and navigated the pin-drop silence of outer space, they inspired people back on earth to expand their horizons.

Literally. 

America’s imagination peaked in 1969, when Neil Armstrong stepped foot on the moon. He stepped on moon-dust less than a decade after Alan Shepard became the first American in space, and only 8 years after President John F. Kennedy’s speech at Rice University where he said: “We choose to go to the moon, not because it’s easy, but because it’s hard.”  

As the American people watched their comrades explore the distant skies and travel to the moon, they thought they’d witnessed the opening of a new frontier. Humans were no longer trapped on the pale blue dot. Soon, all of humanity would traverse the stratosphere and soar through space. Science fiction writers such as Arthur C. Clarke predicted imminent commercial space travel, interstellar exploration, and genuine artificial intelligences. The Apollo Project didn’t just shake the Florida launchpads. It shook the entire world. 

To echo the point, Thiel likes to quote a 1967 best-selling book called The American Challenge. The book predicted that America would be a post-industrial society by the year 2000. Americans would work four days per week and seven hours per day. The year would be comprised of 39 work weeks and 13 weeks of vacation.

Unfortunately, this dream never arrived. Transportation machines soared higher and faster for 200 years. In the span of a single lifetime, people went from traveling by horse and buggy to walking on the moon. Depending on who you ask, it seemed like humanity was guided by the invisible hand or an all-powerful God. Interstellar travel and vacations on the moon were the future, and everybody knew it. 

In an unexpected twist, the physics stagnated. Transportation stopped improving. And today, we’re no longer pushing the limits of height and speed. 

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Just ask Pan American World Airways, the iconic airline of the Post World War II era. After Americans stepped foot on the moon, the airline’s customer center was inundated with phone calls from around the country. First the astronauts. Then, the people. Customers wanted to reserve seats on the first trips to the moon. Between 1968 and 1971, Pan Am accepted 93,005 reservations for planned commercial flights to the moon. Fast forward five decades and only 12 men have ever walked on the moon. No American, let alone any ordinary human being, has stepped foot on the moon since 1972. 

The rate of technological progress is slowing. The only major exceptions are semiconductors, DNA sequencing, and communications technology. Side effects of slow growth plague the economy. Real median wages haven’t risen since 1973. Meanwhile, the costs of housing, healthcare, and education are rising faster than inflation. More than 40 million Americans are collectively liable for more than $1.5 trillion in student loans. 

In response, we’ve lowered our efficiency standards. The Golden Gate Bridge was built in less than four years in the 1930s. The recently completed Golden Gate Bridge access road, Doyle Drive, took seven years to build and cost more in real dollars than the original bridge. Buildings, too. The Empire State Building was built in 15 months from 1931-1932. 80 years later, The Freedom Tower took more than 12 years to build. We’ve masked our lack of progress with government money printing, rising debt levels, and distractions of digital technology. 

America is not as dynamic as it once was. We see it in the statistics and feel it in our politics. And yet, ask the average person, and they’ll tell you that we’re living in a world of exponential technological growth. 

Don’t believe Thiel? 

Follow the money. Warren Buffett, the richest investor in America bets against change. The less the world changes, the more Buffett succeeds. BNSF Railway, where Buffett recently invested $44 billion is the largest non-financial company in the Berkshire Hathaway portfolio. Thiel proclaims that 40 percent of railroads involve the transport of coal, so Buffett’s investment will do especially well if the travel and energy consumption patterns of the 21st century look like the past. 

After digging through the 2018 Berkshire Hathaway Annual Report, I’d like to add context to Thiel’s thesis. Buffett’s firm has poured millions of dollars into renewable energy. In addition to coal and natural gas, Berkshire Hathaway Energy (90% owned by Berkshire Hathaway) has made meaningful investments in solar, nuclear, hydro-electric, geo-thermal, and in particular, wind.

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From a distance, we see a mirage of progress. From up-close, once we remove the smartphone screens in front of us, we feel the reality of struggle and stagnation. According to a recent survey, 80% of Americans think the next generation will be worse off than the current generation. As Tim Keller wrote in Making Sense of God

“Younger Americans today are perhaps the first generation to be certain that they are and will be “worse off” than their parents. The interconnected nature of the world makes nightmare scenarios—pandemics, global economic collapse, climate-change disaster, cyberattacks, terrorism—all seem like genuine possibilities, even probabilities… Today hope has narrowed to the vanishing point of the self alone. In our current phase of American history we have lost belief in God and salvation, or in any shared sense of national greatness and destiny.”

This intuition is supported by data. Millennials are less well off than members of earlier generations were when they were young. They have lower earnings, fewer assets, and less wealth. Children born in 1940 had a 90% chance of earning more than their parents. But children born in the 1980s have only a 50% chance. Christoper Kurz, an economist at the Federal Reserve has shown that millennial households had an average net worth of about $92,000 in 2016, nearly 40% less than Gen X households in 2001, adjusted for inflation, and about 20% less than baby boomer households in 1989. Wages tell a similar story. In short, millennials have it tough and it isn’t their fault. With the rise of dystopian films, Hollywood creates and reflects these dark predictions about the future.

Unable to pay for college or afford an apartment in a job-filled city, many Millennials have lost hope. 

One friend doesn’t want to have kids because “the entire state of California is going to be underwater by 2050.” Or, in the words of a comedian on Twitter: “The fun part about living right now is we get to see how it ends.”


Millennials: Young and Yearning

When I speak with friends and travel the 50 states, I’m struck by how numb many people are to the world. Besides immigrants and their children, both of whom inspire me with their ambition and passionate work ethic, I see fear, complacency, and extreme risk-aversion everywhere. 

Benjamin Franklin once said: “If everyone is thinking alike, then no one is thinking.” 

The most talented people follow the same narrow tracks. People are afraid to dream big or stand out. Without a positive vision for their future, these young Americans are stuck playing vicious, zero-sum status games. Instead of constructing our own desires, they mirror the goals of people around them. Patrick Collison, the CEO of Stripe, shared a similar observation: 

“If you’re in the US and go to a good school, there are a lot of forces that will push you towards following train tracks laid by others rather than charting a course yourself. Make sure that the things you’re pursuing are weird things that you want to pursue, not whatever the standard path is. Heuristic: do your friends at school think your path is a bit strange? If not, maybe it’s too normal.”

There’s a lack of differentiation. As Thiel observed: 

“There is something very odd about a society where the most talented people get all tracked toward the same elite colleges, where they end up studying the same small number of subjects and going into the same small number of careers… It’s very limiting for our society as well as for those students.”

The top colleges have become vocational schools for investment banking and management consulting. In 2007, for example, half of Harvard seniors took jobs in finance or consulting. This mirrors my own experience. My college jobs department steered us towards high-status jobs instead of high-impact ones. Students, professors, and advisors cared more about perception than reality. It felt as if the goal of life wasn’t to improve the world, but to win awards and build an impressive resume. Instead, my smartest friends were pushed towards a handful of fields: law, management consulting, and investment banking. Other options were peripheral and besides the point. 

Young Americans are trapped by student loans, crippled by path dependence, and constrained by runaway housing costs. They’re raised in institutional environments where conformity is praised and originality is punished. Like Pavlov’s rats, they’ve responded with authoritarian obedience. To no fault of their own, they’re sleepwalking through life as if their best years are already behind them. 

I recently had dinner with a fraternity brother in Manhattan. Let’s call him Jim. Right after the bacon cheeseburgers arrived and just as we splattered ketchup on our crispy French Fries, I asked him how he liked his job. First, he paused for time. Then, he wiggled his eyes left and right, and said “Good. I’m learning a lot.”

Immediately, I smirked and questioned his answer. It reeked like Orwellian doublespeak. In my experience, “learning a lot” is code for “boring, but I’m putting up with it.” 

Jim told me he liked his job because it taught him how to “collaborate” and “work with people.” His words sounded like they were parroted from the company’s Human Resources department. I poked and poked. And after 10 minutes, we reached the truth. 

He explained how the school system taught him to follow rules, mimic his peers, and listen to teachers. That’s how Jim was taught to succeed, so that’s his strategy for climbing the corporate ladder. It’s as if the age-based fraternity hierarchy never left his mind. Pledge first. Succeed later. All the while, he’s spent years marching along the institutional track, obeying orders and doing exactly what others told him to do, without questioning why he should listen to them in the first place.

Spoiler alert: Jim is wasting his time.

He knows how to get things done, but never asks if it’s worth doing in the first place. Instead of working on important problems, he’s building “options” for the future. Like so many other college graduates, he’s been pushed into a mundane and uncreative profession. His dream-filled heart is crushed by the cold logic of investment banking. His words echo those of another friend, who said: “I’m just trying to get through the next 25 years as fast as possible.” 

Sparkling dreams have become minor annoyances, like a buzzing fly in a lakeside cabin. Student loans keep him stuck on the institutional treadmill. He paid too steep a price for college, and now he’s unable to question the system and forced to accept the institutional doctrine as gospel. As I listened, I wondered what would happen if a high-voltage defibrillator shocked him and he woke up from his intellectual slumber. 

Until then, he’ll stagger along the soul-crushing stepping stones of life: work hard in middle school so you can do well in high school; work hard in high school so you can do well in college; work hard in college so you can get a respected job; and get a respected job so one day, towards the end of your career, you can finally do what you want to do. All the while you “build skills” and “accumulate options,” as if the next corner will provide the happiness you’ve been seeking all along. 

In an essay called The Trouble with Optionality, Harvard professor Mihir Desai worries that the language of finance has polluted life. He condemns the modern, finance-fueled affair with optionality. Rather than taking risks or working on important projects, students acquire options. In finance, when you hold an option and the world moves with you, you enjoy the benefits; when the world moves against you, your downside risk is protected and you don’t have to do anything. The more optionality, the better. Picking a path reduces optionality, so people stay in limbo and don’t make commitments. This language doesn’t only apply to career planning. Some students talk about marriage as the death of optionality. But life is not like options trading. 

Optionality is a means to an end, not the end itself. Our obsession with optionality can backfire. In theory, these safety nets give them freedom. Bolstered by the confidence of security, they can jump head-first into ambitious projects. In practice, they become habitual acquirers of safety nets and never work on anything of substance. The longer they spend acquiring options, the harder it is to stop.

Desai advises:

“The shortest distance between two points is reliably a straight line. If your dreams are apparent to you, pursue them. Creating optionality and buying lottery tickets are not weigh stations on the road to pursuing your dreamy outcomes. They are dangerous diversions that will change you.”

When we pursue optionality, we avoid bold decisions. Like anything meaningful, venturing into the unknown is an act of faith. It demands responsibility. You‘ll have to take a stand, trust your decision, and ignore the taunts of outside dissent. But a life without conviction is a life controlled by the futile winds of fashion. Or worse, the hollow echoes of the crowd.

By brainwashing us into thinking that prosperity is inevitable, privilege can have a numbing effect. Among my friends in the upper echelons of society — the ones with the means to pursue transcendent dreams — I wonder if they’re too comfortable. Nobody believes in destiny. Social events revolve around binge drinking and conversations so superficial a robot could automate them. They’re dozing off in an intellectual slumber. Rather than rising to the level of their dreams, they fall to the average of their environment. In my college classes, where the annual education costs $40,000 per year, the vast majority of students wasted the time away on Facebook. Office hours were an afterthought. “Try hards” were mocked and made-fun-of, and nobody had a vision for their future.

We lack courage, not genius. We’re swimming in money, but starving for ambition. Every venture capitalist I meet says there’s too much money and not enough good ideas. As Peter Thiel reminds us:

“Progress is neither automatic nor mechanistic; it is rare. Indeed, the unique history of the West proves the exception to the rule that most human beings through the millennia have existed in a naturally brutal, unchanging, and impoverished state. But there is no law that the exceptional rise of the West must continue.”

We increasingly believe that progress is inevitable. Progress, though, is not guaranteed. We must work for it. Otherwise, our living standards will not improve, and may get worse. 


The Promise of Christianity 

To offer solutions, Thiel turns to the Christian value of hope. He has a heterodox view of Christianity. In his reading of history, the non-violence of Jesus is the antidote to Mimetic conflict. 

When I speak with Christians, they always return to the importance of hope. They have a point. Our beliefs about the future impact our thoughts about the present. The more we can turn our attention away from the ephemeral present and towards the eternal future, the more we can pursue grand visions and persist through the challenges of the day. The present cannot be divorced from the future. They are codependent. 

One of my friends works for a California-based investment firm which manages $6 billion in investment assets. For the first three years, during the initial fundraising process, investors turned their cheeks. The firm struggled to raise capital. And yet, in the face of rejection, the fund’s Christian founder maintained faith in the face of struggle. As my friend observed: “She succeeded because her Christianity gave her hope.” 

Our spirits rise when hopes are high. That’s why the day before Christmas is as exhilarating as Christmas Day. Big, bright gifts sit under the tree. Smaller ones hang in firetruck-red socks over the living room fireplace. Children play. Parents cook. Grandparents tell stories. And the rush of anticipation releases everybody’s serotonin.

Likewise, everybody knows that a team with belief is hard to beat. But a team that doesn’t believe they can win is hopeless. The importance of belief and momentum is evident to any shouting fan in any arena across the country. And yet, few consider its importance at the societal level. 

Christianity promises a Living Hope that enables believers to endure unimaginable suffering. A hope so resilient that like a Captain America’s shield, it can survive any evil, any sickness, or any torture. No matter the obstacles, certainty about the future gives you the confidence to act in the present. 

Thiel’s idea of Definite Optimism is Christian theology cloaked in secular language. By raising our spirits, a positive vision for the future unites society and raises our spirits. And that’s what the Western world needs right now.

Technological growth is the best way to reduce suffering in the world. Technological progress has stagnated since the 1970s, which contributes to the vile political atmosphere and the pessimism of modern Westerners. Thiel says we should acknowledge our lack of progress, dream up a vision of Definite Optimism, and guided by Christian theology, work to make it a reality.


Section 4: Peter Thiel’s Advice

“Enter through the narrow gate. For wide is the gate and broad is the road that leads to destruction, and many enter through it. But small is the gate and narrow the road that leads to life, and only a few find it.” (Matthew 7:13)

Now that we’ve outlined the Christianity-inspired foundations of Peter Thiel’s worldview, we’ll close with Peter Thiel’s advice for how to live. I’ll conclude with three actionable, Thiel-inspired principles: (1) create a positive vision for the future, (2) be careful who you copy, and (3) follow the Ten Commandments. 


Search for Secrets

“It is the glory of God to conceal a matter; to search out a matter is the glory of kings.” — Proverbs 25:2

Thiel opposes the idea that luck is all-powerful. He encourages human agency and believes in the power of a single individual to bend the future to their will. Thiel believes we attribute too much to luck, which stops us from actually doing things. As he proclaimed, “you are not a lottery ticket… you can either dispassionately accept the universe for what it is, or put your dent in it, but not both.”

For example, if you treat startup investments like a series of lottery tickets, you won’t think hard about them, and as a result, you will fail. Thiel asks: “Is this a business that I have enough confidence in that I would consider joining it myself?” If yes, he’ll consider an investment. If the answer is no, he won’t. He doesn’t see the world as a mere distribution of luck-based outcomes. Instead, he praises conviction, bets on transcendent founders, and invests in the kind of companies he’d want to work for. 

God is an all-encompassing term for things we don’t understand. Under that definition, luck is the secular God. Naturally, Thiel speaks about luck in the context of startup investing. “It’s just a matter of luck” is a statement of the deep nature of the universe. Deferring to luck is counter-productive. Treating people and events like lottery tickets makes us doubt our agency. 

Look for secrets instead of luck. Thiel recommends one book: Things Hidden Since the Foundation of the World by Rene Girard. The title is as revealing as the contents of the book. It comes from Matthew 13:35, which reads: “I will proclaim what has been hidden [since] the foundation of the world.” 

In job interviews, Thiel famously asks: “What very important truth do very few people agree with you on?” With it, Thiel can identify heterodox thinkers who aren’t blinded by Mimetic dogmas or intellectual fashions. He insists that there are still secrets left to uncover. Some are small and incremental. But the most valuable secrets are big enough to shake the world. Like Easter eggs, these broad and unconventional truths are hidden in places where nobody looks. You can find them, but you have to dig in obscure places. Other secrets are hidden in plain sight. They’re so obvious that nobody thinks about them. And once you learn about them, you’ll pinch yourself for not seeing them before. 

Writing in Zero to One, Thiel says: 

“The big secret is that there are many secrets left to uncover. There are still many large white spaces on the map of human knowledge. You can go discover them. So do it. Get out there and fill in the blank spaces. Every single moment is a possibility to go to these new places and explore them.”

Thiel’s attraction to secrets comes from a conservative writer named Leo Strauss. His writing was obscure because he hid truths behind a curtain of mystery. That way, they would only be shared with a small, select group of people. Make no mistake. Even today, forbidden truths are exchanged in closed forums, private conferences, and corner offices on the 72nd floor. They’re shared in whispers, not shouts. 

Strauss did not believe in transparency. He believed that even in the most open-minded societies, many truths were too problematic to be shouted. His contemporary disciples, like Thiel, conceal their words. They hide controversial ideas in esoteric language, and Strauss described the benefits as such:

“It has all the advantages of private communication without having its greatest disadvantage—that it reaches only the writer’s acquaintances. It has all the advantages of public communication without having its greatest disadvantage—capital punishment for the author… Their literature is addressed, not to all readers, but to trustworthy and intelligent readers only.” 

Sometimes, Straussians hide truths in plain sight. When they do, they’re concealed in unpopular characters, such as devils, beggars, and buffoons. Pseudonymous Twitter accounts are the new Straussian philosophers, but with one important twist. Instead of sharing their names and hiding the truth, today’s Straussians hide their names, but share the truth.  


Be Careful Who You Copy

“Then I saw that all toil and all skill in work come from a man’s envy of his neighbor. This also is vanity and a striving after wind.” — Ecclesiastes 4:4

Even if imitation is inevitable, we can reduce the negative effects of it. We can avoid the kinds of competition that lead to violence. If Girard is right, we are not as individualistic as we think we are. If we must copy others, we should be careful who we copy. 

Thiel encourages people to ask themselves: “How do I become less competitive in order that I can become more successful?”

Ask a Christian and they’ll say that you should only imitate Jesus. That’s why, in Revelations, humanity receives a warning: “In the future, an Antichrist will come who brings a promise: we can all be Gods and models for one another, and we can all live in harmony together.” In a world where everybody is a model, anybody can become a scapegoat. This is a recipe for evil. Rather than turning to each other for answers, the Bible tells us to imitate Jesus, and nobody else. Or as Christ says: “Imitate me as I imitate the father.”

I’m not sure that works for me. I feel an intellectual pull towards Christianity, but not an emotional one. Many of my secular friends feel the same way. Telling them to only follow Jesus’ teachings wouldn’t be productive. To a Christian, Jesus’ words carry the weight of the world. To me, they’re like a brick: heavy enough to make me careful, but light enough to add other ones to my mental backpack.  

According to Girard, the more differentiated a society, the more stable it is. But on the internet, everybody feels like an undifferentiated peer. Social media decreases the distance between people and their role models, so the pull to idolize false gods is greater than ever. Pair that with the blank slate theory that anybody can do whatever they want, and you have a recipe for runaway Girardian conflict. YouTube celebrities and Instagram influencers sell the exact kinds of behaviors that the Bible warns us about. By manufacturing envy, they tell fans that if they look like them, dress like them, and act like them, they can become them. 

We all form our identity by looking towards others. Since everybody copies, we can improve society by encouraging people to copy the right people. As a kid, back when I was 100% sure I was going to be a professional baseball player, I looked up to J.T. Snow, the first basemen for the San Francisco Giants. I was obsessed. I scavenged the kids’ section for his jerseys and waited patiently for autographs at the annual Giants meet-and-greet. I copied his mannerisms, his jersey number, and his position on the baseball field. And in 4th grade, I brought a chocolate ice cream cake to school to celebrate his birthday. 

Here’s how Thiel would respond to my imitative instincts: Be careful who you copy. If you’re going to follow a role model, find one who you won’t compete with. Don’t look to your peers for answers. Find somebody in a different stage of life who you admire and respect. They should be somebody who defied the status quo and took an independent path. In life, you have two options: (1) you can dispassionately accept the universe for what it is, or (2) you can put your dent in it. But you can’t do both. 

Win the decade, not the day. For example, if you’re a writer, your goals should transcend the New York Times Bestseller List. Think bigger than that. If you’re going to model a famous writer, pick a dead one such as Tolstoy or Hemingway. They are real enough to model. Since they’re dead, you won’t compete with them directly. Better yet, you can copy more than their writing. If you want to stretch your imagination, you can live where they lived and read what they read. That way, you can ignore superficial status competitions and think beyond the day-to-day stress of writing a book.

I suspect this is why Thiel admires Elon Musk so much. Since the first day of SpaceX, Elon has been on a mission to go to Mars. Since the entire company was aligned around the mission, the employees were motivated and paddling the boat in the same inspiring direction.

Great people trade the temptations of today for the trophies of tomorrow. Think like you’re immortal. Place the eternal before the perishable. Treat people like you’ll know them for the next ten thousand years and work on the kinds of projects you’ll be proud to tell your grandchildren about. Live like you’ll be alive forever. When in doubt, follow the Ten Commandments.


Follow the Ten Commandments

“Thou shalt not covet your neighbor’s goods.” — 10th Commandment

To return to our initial question about the significance of the Cain and Abel story, we return to Rene Girard. From history, Girard learned that human relations are built on the primacy of violence. That’s why the Cain and Abel story is the archetypal example of Mimetic conflict, and Thiel sees Christianity as the optimal solution to apocalyptic violence. 

As Girard once said: “There are fundamentally only two ways of looking at religion: as superfluous, added on—or as the origin of everything.” If there can be no in-between, I suspect that like Girard, Thiel sees religion as the origin of everything.

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Thiel closed his Dave Rubin interview with practical career advice, inspired by the Ten Commandments. 

The first commandment says that we should only look to God. There is only one God and you should worship him. Look up, not around. Follow The Bible, which says there is no salvation in anyone other than Jesus. You won’t figure out what to do by looking at your peers, so don’t copy the people around you. Instead, we’ll end up in copycat rivalries where we claw and fight with each other like crabs in a bucket. 

The last commandment says you shouldn’t covet your neighbor’s goods. Inspired by the 10th commandment, Thiel encourages listeners to avoid competition. True to Mimetic Theory, the last commandment focuses on the neighbor instead of the object of desire because all objects are desirable when they belong to your neighbor. Society will push you towards competition, but you shouldn’t compete with your peers or depend on them for guidance. Competition is for losers. Instead of looking to the people around you for answers, find models that you cannot compete with. If you’re Christian, follow Jesus, and if you’re not, follow an intellectual hero who is way ahead of you. Rather than using your peers as a reference point, find your own transcendent orientation. 

Let the flame of Definite Optimism burn away the Mimetic virus. Use the Internet to curate your environment, so you can be hyper-mimetic towards the rare few who are anti-mimetic. Copy the people who don’t copy people. Take risks. Build a differentiated skillset. Pursue timeless wisdom, not intellectual fashions. Be skeptical of convention, and don’t let it double as a shortcut to the truth. Work on problems that nobody else is working on, especially if you’re uniquely capable of solving them. And ultimately, ask the questions you’re not supposed to ask, so you can find the answers you’re not supposed to find. 

Guided by the Cain and Abel story, remember the danger of imitating the wrong person. At first, it can inspire cooperation. But over time, it leads to envy, violence, and the apocalypse. 


Footnotes

¹ In addition to St. Augustine, writers such as Adam Smith, Thomas Jefferson, and Benjamin Franklin supported Christian ideals of progress. Adam Smith’s book, The Wealth of Nations is regarded as economics’ foundational text. Smith declares that there’s a natural order to the progress of nations. His “invisible hand” doesn’t just speak to the stability of the economic system, but also to the natural progress of wealth, labor, skill, rent, and profits. Western civilization is built on these ideals. Two of America’s founding fathers, Thomas Jefferson and Benjamin Franklin operated with a similar progress-inspired philosophy.

Writing two years before his death in 1824, Thomas Jefferson marveled at all the progress he had witnessed in his life: “And where this progress. No one can say. Barbarism has, in the meantime, been receding before the steady step of amelioration, and will in time, I trust, disappear from the earth.”

Likewise, in a letter to a friend, Benjamin Franklin wrote: “It is impossible to imagine the height to which may be carried, in a thousand years, the power of Man over Matter.”


Acknowledgements

Thank you to Kevin Harrington for the conversations that led to this post. Your wisdom and feedback is invaluable to me, and I’m grateful for our friendship. This essay is for you. 

Thank you to the other people who contributed to this essay through feedback and conversation: Brent Beshore, Lyn Cook, Nick Maggiulli, Sid Jha, Bushra Farooqui, Jeremy Giffon, James Patterson, Manan Hora, Ben Colley, and Michael Naka.

Cover Photo: Dan Taylor | CC 2.0 License via Flickr.

How to Cure Writer’s Block

By the time you finish this article, you’ll be done with writer’s block forever.

I had writer’s block until I learned about David Sedaris. As a comedian, he can’t afford a creative block. He credits his systematic note-taking strategy is the key to his success. He always carries around a notebook. That way, he can save funny stories he notices or overhears.

As he once wrote:

“Everybody’s got an eye for something. The only difference is that I carry around a notebook in my front pocket. I write everything down, and it helps me recall.”

His note-taking system is idiot proof. Instead of depending on his brain to remember important information, he relies on his notebook. He reviews his notebook every morning. He types the best ones into a notebook on his computer, where they can be instantly searched for the rest of his life.

When he’s stuck, Sedaris turns to his diaries. Sometimes, he reads a diary entry to his audience. When he speaks, he listens for feedback. If the audience laughs at the joke, the idea gets a check mark. If there’s a silence, he writes a skull. And when a story gets repeated laughs, he adds it to his comedy routine, where he re-writes the joke until he masters the timing, the framing, and the rhythm that’ll shake the room with boisterous laughter.

Congratulations. You just learned everything you need to know about writer’s block. And now, it’s time to break down those principles.

I recommend three strategies: (1) gather supplies, (2) talk it out, and (3) start with abundance.


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Gather Supplies

For years, I thought most of my writing struggles were innate. Perhaps I wasn’t smart enough. Or maybe I wasn’t born with the writers touch. All the while, I tried to make up for my handicap by spending more time at the computer. Instead of implementing a new strategy, I adopted a masochistic strategy. I locked myself to the keyboard and forced myself to type. The more I wrote, the more I hated writing.

Then, I had an epiphany. I had enough good ideas. But I never saved them.

Sedaris does most of his writing away from the page. Instead of locking himself in a room and jamming at the keyboard like a birthday piñata, he creates the kinds of experiences that spark fresh ideas. Then, when an idea leaps into his mind, he writes it down. Instead of essays, he writes phrases.

Kendrick Lamar does the same thing:

“I have to make notes because a lot of my inspiration comes from meeting people or going outside the country, or going around the corner of my old neighborhood and talking to a five-year-old little boy. And I have to remember these things. I have to write them down and then five or three months later, I have to find that same emotion that I felt when I was inspired by it, so I have to dig deep to see what triggered the idea… It comes back because I have key little words that make me realize the exact emotion which drew the inspiration.

Kendrick’s strategy is simple. The human mind works by association. The mind looks for trails of thought, and once they find one, good ideas create more good ideas.

World-class writers don’t have their best ideas by staring at the blank page in front of them. The more time Kendrick spends meeting people, traveling, exploring his old neighborhood, or talking to children, the better his music.

A fresh insight is a fragile thing, so Kendrick is a prolific note-taker. Ideas are perishable. His pen preserves what his memory forgets. When an idea isn’t saved, it starts to decay. But once his pen stops dancing across the page in front of him, he returns to the activity before him.

Small actions repeatedly done have transformative long-term benefits. Today, I live my life in pursuit of creative supplies. If I save three ideas per day, I’ll have 1,000 by the end of the year.


Talk It Out

When observation doesn’t work, I find new ideas in conversation.

Like a river in high-spring, conversations always flow in surprising directions. Its casual, call-and-response nature is fuel for fresh ideas. Speaking with smart people is a guaranteed way to unlock creative inspiration, and when the conversation is over, I write new ideas down.

Sometimes, I record my conversations. I use an app called Otter to transcribe them. For example, I record and transcribe every conversation with my friend Nik Sharma. Using only the raw material from those conversations, Nik and I write multiple articles per year. Crucially, we never sit down to write. We originate ideas by laughing about cultural trends and dreaming up bizarre ideas. Once our conversations are over, we read our transcripts, bold the best parts, and use those bolded sections as the foundation for our articles.

My best ideas grow in conversation, not isolation. This system for capturing ideas lets me spend more time with people I love and less time in the agony of isolated creativity.

Even as a writer, my goal is to write as little as possible. I want all my writing to happen away from the screen. The less I write, the better my ideas. Books, conversations, and surprising experiences are the genesis of most great ideas. I want perfect alignment between the activities required to write at a high-level and those required to live a meaningful life. The more time I can spend with friends and family, the better.

Instead of creating ideas in front of the computer, I start my writing as late as possible. My fingers only meet the keyboard when I have an abundance of ideas. Once my brain is buzzing like a third-grader in line for their first upside-down roller coast, I know it’s time to write.


Start with Abundance

Start writing once you have so much information that you can’t not write. Don’t write with a blank page. Start with a treasure trove of facts, ideas, and images instead

I use a “Two Screen Strategy.” Once the left side of the screen, I have a standard blank page. On the right side, I have a library of notes. Whenever I’m stuck and don’t know what to write next, I find instant inspiration on the right side of my screen. With nothing more than a quick scroll, I can spark an insight in seconds. If I’m stuck, I simply don’t have enough ideas on the right side of my screen.


Sebastian Junger once wrote: “If you have writer’s block, you don’t have enough ammunition.”

Don’t waste your time spinning wheels. Arm yourself with ammunition, and writer’s block will disappear like a mirage in the desert. Instead of creating new information, you organize the information you already have. It’s like the visual arts. Instead of creating a painting from scratch, you create a collage with photos from magazines in your living room. And once you’re in the trance of creation, you connect existing ideas and let new ones emerge.

Don’t try to be creative at your computer. Staring at a flashing black cursor against a blank white page will never inspire new ideas. Luckily, the pain of writing will plummet once you stop trying to have your best ideas in front of your screen.

Gather supplies, talk it out, start with abundance, and you’ll make writer’s block a thing of the past.


Why You Should Write

Words are the atomic unit of the internet.

With the stroke of a pen, you can build your network, improve your thinking, and create opportunities for yourself.

Until now, the internet has connected us with people in our past. But writing online connects you with the people in your future. As Derek Sivers once wrote: “The coolest people I meet are the ones who find me through something I’ve written.”

Writing online is a guaranteed way to shrink the world. A well-written article can change your life because the internet rewards people who think well. Each post is an advertisement for the kinds of people and opportunities you want to attract, and if you have a voice, you can build a platform.

In any field, the most successful people double as writers. Chefs write recipes, comedians write jokes, and entrepreneurs write business plans. The examples are endless.

Writing is like weightlifting for the brain. Just as you’ll improve your food diet if you start cooking, you’ll improve your information diet if you start writing. Testing the limits of your ideas is the fastest way to improve them and raise your intelligence. Don’t take my word for it. Listen to Jeff Bezos:

“People who write a lot, also listen a lot. They also change their mind a lot. Not necessarily with new data, but sometimes re-analyzing the same data. They also work hard to disconfirm fundamental biases.”


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An empty white page is a mirror into your mind. When the ideas in your mind are clouded, so are the words on the page in front of you. Re-writing is re-thinking. It’s the best single best way to sharpen your ideas. And once your ideas are as clear as a Neiman Marcus mirror, you’ll be able to teach them to others.


The Lessons in Front of You

The internet is the library we always dreamed of. It’s a place to learn, network, and connect with experts.

You no longer need to depend on an institution for a platform. You can build your own following now. Two decades ago, online publishing was limited to authors, journalists, and media moguls. Today, anybody can have more reach than the kings you read about in history books.

Writers engage with reality like it’s a full-contact sport. It’s a collision between your mind and the world. Writers are professional observers.

When you know you’re going to write, you change the way you live. You can no longer sleepwalk through life. The most powerful insights come from everyday experiences that people ignore.

As Sherlock Holmes said: “The world is full of obvious things which nobody by any chance ever observes.”

The best way to learn faster is to have a stake in the outcome. Risk awakens our learning muscles like a splash of cold water. If you want to learn to cook invite friends over for dinner; if you want to learn about stocks, invest in the stock market; and if you want to learn about an idea, publish an article about it.

Instead of ignoring the mundane, writers welcome it. From the annoyance of a DMV line to the wrath of a torrential downpour, many of my best ideas arrive in moments of extreme inconvenience. Recently, during a cancelled flight in Washington D.C., I realized that airports are lawless places. You can sleep on the floor, put your feet on chairs, have dessert for breakfast, brush your teeth in public, or chug a Heineken at 7am.

There are no rules.

Like my delay at the airport, since each moment is a potential future sentence, writers live with more curiosity. From the beauty of morning light to the heat of the afternoon sun, they soak up the world with passionate intensity.

Writing initiates the ultimate positive feedback loop. Online writers are rewarded with instant feedback, and fast feedback loops are the best way to accelerate your learning. Better yet, writing regularly will inspire you to live an interesting life. As your writing improves, so will the opportunities available to you.


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How to Start Writing

Most writing advice is simple.

Use stories to illuminate what you’re trying to say. Write in short sentences. Make one point per sentence. Communicate with a smooth and natural tone, as if you’re talking to a friend at a bar. If you have writer’s block, you don’t have enough notes, so rather than starting with a blank page, start with an abundance of notes. There you go. That’s just about all you need to start writing well.

Don’t just write for yourself. Share your ideas by publishing them online. Writing in public is like inviting guests to your house for dinner. You have to clean and double check everything. Just like when you cook a meal for your guests, you try harder when others are watching and your reputation is at stake.

As James Clear says:

“If you wish you would take something more seriously, do it publicly… Social pressure forces you to up your game.”

Demand for quality writing far exceeds the supply of it. Since people who don’t write in public are blind to the benefits, there’s relatively little competition for those who take the craft seriously. Good writing is rare. There may be more writing than ever, but most of it is shallow. People are bombarded with worthless ideas and the distractions of the news. They’re tired of clickbait articles, exaggerated political dramas, and attention-burning articles. People are starving for creators who speak with depth and nuance. That’s why everybody reads Wait But Why and Joe Rogan stole the culture.

If you want to grow an audience, treat your readers like they’re as important as the Pope. Every paragraph, every sentence, and every word matters. Readers who feel respected will return to your website and tell their friends about your writing. Once you build the writing habit, you’ll be surprised by how easy it is to reach people.

People dream of the advantages you take for granted. Writing is free. You already have everything you need: an internet connection and easy access to a computer. You pay in time, not money. The only thing standing between you and your writing goals is discipline.

Learn to write.


The Amazon Arbitrage

“Grand strategy is the art of looking beyond the present battle and calculating ahead. It requires that you focus on your ultimate goal and plot to reach it.” — Robert Greene, The 33 Strategies of War


Let’s travel back in time.

Back to 279 BC. There was a Greek king whose name was Pyrrhus, and his army of 25,000 soldiers defeated the Romans in two bloody battles. In them, Pyrrhus lost thousands of soldiers and valuable military resources that couldn’t be replenished. And while he won two battles against the Romans, the greatest army the world had ever seen, Pyrrhus didn’t have enough soldiers to keep fighting.

The Romans may have lost the battle, but they were only temporarily defeated. Even though they suffered more casualties than King Pyrrhus’ army, the Romans still had a large reservoir of replacement soldiers, all of whom were eager to sharpen their swords and march into battle.

The casualties harmed King Pyrrhus more than the Romans. Aware of his disadvantage, Pyrrhus famously told a friend that another battle against the Romans would “utterly destroy him.” Damaged by the size and strength of the Roman army, Pyrrhus surrendered against the Romans. He gathered his troops and sailed back to Greece in defeat.

The lesson is this: Pyrrhus won the battles but lost the war.

His victories came at too great a cost — just like many Direct-to-Consumer (DTC) brands who sell on Amazon.


Why Brands Work with Amazon

At first glance, using Amazon as your main distribution channel makes perfect sense.

The initial investments are minimal and the bank accounts fatten right away. Better yet, brands who sell on Amazon don’t have to build their own shelf space or master complex logistics. The dirty work is taken care of. They don’t have to worry about apps, themes, hosting, engineers, and all the other technical challenges of building a website.

It’s easy to start selling on Amazon.

Sites like Forooition and My Work from Home Money have step-by-step tutorials for sellers who want to set up an Amazon store. There, they can learn how to secure a loan for initial inventory and sell goods on one of the most trafficked websites in the world. Once they’re set up, they can access Amazon’s unlimited supply of customers.¹

When it comes to shopping, Amazon is more important than Google. Amazon is the 4th biggest website in America. More than 47% of customer searches start on The Everything Store. 63 percent of Americans subscribe to Amazon Prime, which is more than the number of people who earn more than $50,000, attend church monthly, or own a telephone landline. You can’t afford to ignore Amazon.


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Where DTC Brands Go Wrong

Socrates once said: “When a random internet blogger talks about Amazon, you should listen.”

Like fire, Amazon can kill you or keep you alive. Use it wrong and you’ll burn down your treasured home. Use it well and you’ll have a roof over your head and healthy, nutritious food every night. Thousands of Amazon employees work night and day to optimize every part of the website, and when you sell on Amazon you benefit from their hard work.

Amazon’s organic traffic makes it easy to reach customers right away. It’s retail on big, Barry Bonds style steroids. For many brands, Amazon is like a drug. Once you get addicted, you can’t stop. The up-front costs are cheap and the short-term experience feels good, but the long-term implications hurt more than a knife to the stomach.

When I speak with retailers who’ve never managed a digital budget, they map what they know about retail onto digital. But Amazon isn’t a traditional retailer, for better and for worse. Retailers who work for most big companies are guided by the traditional rules of retail. They’re used to working with grocery stores and wholesalers whose margins are thinner than the prosciutto at your favorite Italian deli. Many of these brands have an army of distributors so ruthless that Genghis Khan would have been proud. Every day, brand associates go into the retail stores to restock the shelves, and if they can undermine their competitor by stealing an inch of shelf space, they do it.

Merchandising on Amazon is different. Instead of swinging their swords over shelf space, sellers fight for reviews and keyword rankings.² In just a couple hours, they can put products on “shelves” and sell those products in more countries than Carmen Sandiego.

Brands are used to working with data-scarce wholesalers and grocery stores who know little about private label products. Those who maintain product quality, respond to customer service requests, and keep up with inventory demands will likely reach more customers on Amazon than they would with traditional retail partnerships. Nevertheless, the costs of working with Amazon are as real as the benefits.


Amazon’s Private Label Push

Brands who sell on Amazon don’t receive any information about their customers.

Name. Email. Birthday. Nothing.

Brands can’t communicate with customers on Amazon and they sure as hell can’t build community on it. Worse, they’re sharing precious data with a $900 billion company that aims to suck the margin out of profitable product categories by launching private label brands.

Amazon launched 66 private label brands in 2018, and while most of these brands are still small, Amazon can build DTC skills faster than DTC brands can build efficient customer journeys and the logistics required to manage them.

Many industry insiders fear Amazon’s future private label dominance. They believe that due to Amazon’s reach, resources, and distribution advantages, they’ll inevitably dominate every category they enter. After all, they have proprietary access to valuable data, thousands of 53-foot trailers, a dedicated air hub in Ohio, and more than 100 million square feet of distribution center space across the United States.


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Amazon has the power and they know it. Amazon knows which sellers are struggling to fulfill demand, and which command a large margin for their products. The private label product opportunities are in the data. With it, Amazon can anticipate customer needs, trends, and unfulfilled desires. Rather than surveying users, they look at their shopping carts. Where others guess, Amazon knows.

Third-party sellers on Amazon Marketplace are now required to offer hassle-free returns, often without a physical return of the product. Friends in the industry who work with Vendor Central tell me that Amazon typically takes 60 days to pay sellers. Moreover, Amazon can change the price of your product without warning. Worse, if commodity suppliers raise prices on Amazon and fall down the search results, another company will undercut their prices and steal their sales.

Great for buyers. Terrible for sellers. As Bezos famously said: “Your margin is my opportunity.”

Look, I get it. Hearing these words from the wealthiest person in the world isn’t exactly comforting. To this day, if you type Relentless.com into your search bar, you’ll be redirected to the Amazon home page.

Hint, hint… ladies and gentlemen… Jeff Bezos means business.

But if I’m being honest, I think the fear of Amazon private labels are overblown. If you’re a brand manager, I have good news for you: Amazon hasn’t figured out how to replicate their success in basic private label categories, such as batteries. A 2016 study estimated that Amazon captured 94% of all battery sales with its Amazon Basics brand. Since basic batteries are a commodity, they attract buyers who seek generic alternatives because they focus on price above other variables.

“The Everything Store” continues to struggle, even as it gains market share in the overall clothing category. Amazon now controls more than 550 brands, and 68% of them are apparel-focused. But in product categories where brand matters, Amazon struggles. One study looked at 23,000 products and found that “shoppers aren’t more likely to buy Amazon brands, even when the company elevates them in search results.”

Selling on Amazon can bring long-term risks. You give up community, brand equity, customer data, and customer communication. By selling on the platform, you trade long-term sustainability for quick revenue. By doing so, you give up the compounding benefits of owning your own infrastructure and driving customers to those owned sales channels.


How is Amazon Changing?

Behind the veil of colorful branding is the messy logistics process of moving product from the manufacturing plant, to the warehouse, through the white picket fence, and onto the customer’s front door step. Brands know this, and many of them will need to partner with Amazon.

A successful partnership with Amazon begins by understanding how the company is changing.

Amazon is moving away from fulfillment and towards becoming a marketplace. That way, the company can accelerate its flywheel advantage.

Trend #1: Amazon is Moving Away from Fulfillment and Towards Marketplace

The genesis of the Amazon Marketplace product came from Jeff Bezos’ observation that sellers on the platform lacked the skills to ship directly to customers, which hurt the Amazon customer experience. With Amazon Marketplace, Amazon wanted to help anybody sell on Amazon, no matter where they were located, or what they wanted to sell — 24 hours a day, 7 days a week.

Bezos and his Seattle-based minions removed small points of friction, streamlined the on-boarding process, and became the easiest way to start selling online. Customers signed up in masse. Selection grew exponentially. Brands handed control over the customer experience to Amazon and shipped their product inventory directly to Amazon’s fulfillment centers.

Hard-to-replicate tacit knowledge, such as shipping and logistics became competitive advantages.

Trend #2: Amazon’s Flywheel Advantage

As Amazon expanded into new markets beyond books, the customer experience improved and the number of SKUs skyrocketed. In the process, Amazon earned a 12-15% commission for products sold through Amazon Marketplace and collected data points along the way. Rather than holding purchased inventory, Amazon sits in the middle between brands and customers.

As brands flocked to Amazon Marketplace, its flywheel spun faster and faster. Amazon Marketplace has three core advantages: low prices, fast delivery, and vast product assortment. Each one of Amazon’s advantages makes the others stronger. Customers associate Amazon with selection, so Amazon has become the de facto storefront for the booming world of online commerce.

Consider the seller on-boarding process. To reduce friction, Amazon eliminated the UPC code requirement, which lowered the barrier-to-entry for new, less established sellers in particular. In 2017, an estimated 65 percent of gross merchandise volume sales on Amazon were attributable to third party sellers. Today, Amazon is handing responsibility for logistics back to the brands themselves. More than 100,000 businesses make $100,000 or more per year on Amazon. Commissions from Marketplace fulfillment services totaled $6.4 billion in Q1 2017, accounting for approximately 25% of Amazon’s total revenue.

By increasing convenience, removing checkout friction, gathering purchase history, and providing value, Amazon’s flywheel spins faster and faster.


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Data and Re-Targeting

If you want to build a sustainable DTC brand, you need to own as much of your critical infrastructure as possible. You should create your own site, even if the up-front costs of creating one are steep. The long-term returns of building a site are generally worth the up-front investment, if only because creating a memorable brand experience reduces competition, raises your margins, and accelerates data collection.

Look. I get it. It’s hard to resist the allure of instant sales and a pre-made online store. But first-party data is worth its weight in gold.

First and foremost, retargeting pools are more efficient. Searching for new potential customers is expensive. But once you find one, advertising costs plummet. All things being equal, companies with more data and the means to use it effectively will improve their re-targeting capabilities. They can educate their customers and re-target them in a cost-effective manner, which drives down customer acquisition costs. Guided by customer data, DTC brands can drive customers to high-relevance articles. Instead of driving traffic to a landing page, they can lead people to content on their owned and operated sites, which can drive up Facebook relevance scores and drive down the cost of closing a sale.

In contrast, brands who sell on Amazon are likely to advertise there too. “Sponsored Products” are paid ads that appear at the top of search results, and as Amazon aggregates additional sellers and customers, its advertising business will grow faster.


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Companies who manage their own owned and operated websites are gifted with their own version of presents under the Christmas tree: customer emails, phone numbers, addresses, names, and interests. Tracking pixels are Santa and Christmas is 365 days a year. But data that isn’t acted upon is like a bad gift from your Aunt. You won’t use it. And worse, you’ll pay for it in clutter and storage costs.

The benefits of owned and operated websites accrue to brands with savvy performance marketing and data analytics teams. The best ones can analyze customer data, and use it to map out customer demographics and psychographics. They benefit from higher customer lifetime values, increased potential of a profitable exit, and complete control over the customer journey from discovery to purchase.

Business 101: You never want to fully depend on one partner.

Business 102: Amazon is a massive platform and you can’t afford to ignore it.

Nice… Congrats on your MBA.


Partnering with Amazon

Working with Amazon is a delicate balance. Treat Amazon like a bottom of the funnel sales channel, not a top of the funnel brand building platform. Own your branded search keywords, so you can capture customers with strong purchase intent and prevent them from switching to your competitors.

Armed with a website, you can control three critical aspects of their brand: (1) storytelling, (2) commerce, and (3) the checkout cart.

We’ll take each in turn.

  1. Storytelling: The best direct-to-consumer brands tell their own story. That’s why brand strategists must balance quick revenue and long-term sustainability with the compounding benefits of owning your infrastructure and driving customers to your owned sales channels. Over the long term, brands who focus on brand equity and build relationships with customers will outperform those who emphasize third party sales channels.

  2. Commerce: Catchy slogans, press releases, and colorful logos get all the media attention, but successful Direct-to-Consumer brands need to lock down the nitty gritty details as well. Premium aesthetics are just the beginning. Sales requires product, collection, and acquisition pages. The more customers visit your owned site, the cheaper your customer acquisition costs can be.

  3. The Checkout Cart: Owning your own site demands integration between shipping rates and delivery carriers. You should also agree to pre-set rates with payment processors who can manage fraud protection. That way, you won’t have to rely on one platform. Since Amazon often operates with a “guilty until proven innocent mentality,” bad actors on Amazon can get your store delisted.

Amazon is a great place to sell products, but a terrible place to build a brand. That’s why DTC brands need to build their own infrastructure.


Winning the Battle, but Losing the War

“Do not be ashamed to make a temporary withdrawal from the field if you see that your enemy is stronger than you; it is not winning or losing a single battle that matters, but how the war ends.”— Paulo Coelho, Warrior of the Light

Focus on the war, not the battle.

The relationship between DTC brands and Amazon is remarkably similar to that of King Pyrrhus and the Roman army. Don’t risk your long-term survival by selling on Amazon, even if it gives you quick revenue and low-overhead in the short-term. Doing so will increase the chances of a Pyrrhic victory, where the cost of winning in the short-term leads to long-term defeat.

The battles of business are different from the battles of antiquity. In business, people don’t die. Rather, when companies lose battles, they waste resources, lose market share, and watch their marketing dollars evaporate like a lake in the Sahara. As the water disappears, the very companies who once looked like up-and-coming unicorns begin to struggle. Their profits are squandered to big competitors who, like the Romans, have the resources to stay patient and replace their fallen soldiers.

Venture-backed DTC brands shouldn’t depend too much on Amazon. To become self-sufficient, they should build their own site, control the customer experience, and own their customer data.

Otherwise, just like King Pyrrhus, they’ll win the battle but lose the war.


  1. This article was co-authored with Nik Sharma. You can text him with questions or comments: +1 (917) 905-2340

  2. Note: If you’d like to receive future posts by email, subscribe to my Monday Musings newsletter.


Footnotes

¹ Amazon sellers participate in one of two programs: Vendor Central and Seller Central.

Amazon’s invite-only program is called Vendor Central. Brands who sign up for Vendor Central sell their products directly to Amazon. Then, Amazon re-sells the product. Brands are only responsible for billing, inventory, and the back-end of the supply chain. Amazon handles storage, shipping, pricing, boxing, returns, exchanges, and even gift wrapping.

Brands who use Vendor Central can sell unlimited products for a fixed fee. They don’t have to manage back-stock or the excess inventory that picks up dust in storage. The benefits don’t end there. Brands can access to Amazon Marketing Services, where they can run keyword-targeted ad campaigns and drive traffic to branded or product detail pages. Once a brand signs up for Vendor Central, their products are listed as “Sold by Amazon,” which boosts shopper confidence and leads to increased sales. Then, Amazon ships those products on the brand’s behalf, which gives them access to the most efficient checkout experience in the world.

Like magic, the friction disappears. Amazon is like a personal chauffeur. For brands, the experience is like driving on the highway, raising your hands of the steering wheel, taking a nap, moving towards your destination, and never running out of gas. Amazon does the hard work for you.

All brands can participate in Seller Central. On it, brands are classified as third-party sellers, and trade ease for flexibility. They don’t have to give up control of pricing, promotions, and the number of units they want to sell. While they can sell directly to Amazon’s 95 million Prime members, they have to pay traditional Amazon seller fees, and manage the logistics of storage, shipping, packaging, and returns unless they participate in the Fulfilled by Amazon (FBA) program. In it, brands can store their products in Amazon’s fulfillment centers, where Amazon packs, ships, and provides customer service on a brand’s behalf. Additionally, FBA items qualify for free shipping and Amazon Prime.

Before participating in either program, brands should consider the tradeoffs. Seller Central brands are responsible for lost inventory and taxation liabilities. All else being equal, Seller Central vendors typically receive fewer sales because their products don’t come with the “Sold by Amazon” endorsement.

To recap, using Amazon’s word class infrastructure keeps headcount and overhead low and promises immediate revenue. With Vendor Central, brands sell their products directly to Amazon, which then re-sells them to customers. On Seller Central, brands sell directly to Amazon’s customers, and Amazon takes a fee for each sale.-

² There is one caveat. Brands who sell on Seller Central can use Amazon customer data to learn more about who is buying products and where those buyers are coming from. But that data cannot be used to re-market to Amazon’s customers, which makes it less valuable.

Learn Like an Athlete

LeBron James didn’t always have thick calves, a raging six-pack, and arms like the Incredible Hulk.

Ask LeBron about his off-season training regimen, and he’ll share a detailed run-down of his workout plan and on-the-court practice routine. When he entered the NBA, LeBron wasn’t a strong shooter. I’d bet the house that early in his career, LeBron built his off-season training regimen around his weak jump shot and disappointing 42% field goal percentage during his rookie season. As his Instagram posts reveal, LeBron worked for his strength, agility, impeccable history of injury avoidance, and an outstanding 54% field goal percentage during his 14th NBA season. 


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Athletes train. Musicians train. Performers train. But knowledge workers don’t. 

Knowledge workers should train like LeBron, and implement strict “learning plans.” To be sure, intellectual life is different from basketball. Success is harder to measure and the metrics for improvement aren’t quite as clear. Even then, there’s a lot to learn from the way top athletes train. They are clear in their objectives and deliberate in their pursuit of improvement.

Knowledge workers should imitate them.


What Does a Learning Plan Look Like?

Similar to how LeBron structures his training to win NBA championships, knowledge workers should train to build skills, complete projects, and increase their productive power. Armed with an effective system, we’ll learn faster and have more fun doing it.

My friend Nick Maggiulli is a case study in building a learning plan. 

In 2015, he decided to learn a programming language called R. Two years later, he was a data science expert. That new skill propelled Nick into his next long-term endeavor, a personal blog. Nick started writing a blog post every Tuesday, starting on January 1st, 2017. Fast forward to today, and he’s now published a post every week for the past 131 weeks. Despite his success, his pursuit of knowledge is relentless. Last time I visited his apartment, I saw an 850-page book about tax law on his living room table. He plans to devote the next year to study the American tax code, so he can know as much about tax law as anybody at his company. 

Nick should serve as a role model for all of us. 

Even among the most ambitious individuals, learning plans are rare. Most people are reactive. They don’t plan. Like surfers in a violent ocean, they surrender to their environment. They direct their attention towards the never-ending shouts of email newsletters, friend recommendations, and social media feeds.

We can do better.


What Should You Do? 

Learn in three-month sprints and commit to a new learning project every quarter.

Even the longest projects are simply a collection of short term tasks. Knowing that, you should break down the project into daily increments, and create a series of daily and weekly goals to learn the skills required to complete the project on time. 

The end goal should be clear. Start by writing down a positive vision for your future. Focus on the end goal, not the skill itself. For example, rather than saying “I want to learn how to draw,” I focused on the end goal: “moving forward, all the charts, graphs, and images on my website will be hand-drawn.” 


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I like Daniel Gross’ framework for learning. When I interviewed him, he told me to build a video game for myself. Like a video game, productive projects have multiple levels. They follow the Goldilocks Principle: not too easy, not too hard. The learning project needs to be challenging enough to demand focus, but easy enough to make consistent progress. That way, you can enter the optimal state of learning. 

If you get stuck, the “video game” is too hard. When this happens, you should stop. Work on a smaller step or retreat to a manageable challenge. Otherwise, you will lose your motivation to continue learning. Conversely, if you’re bored, the video game isn’t difficult enough, so you should attempt a tougher challenge that you haven’t seen before.

Everybody loves novelty. Even if your learning plan is bounded by a strict goal, the details should be flexible. The activities should be cohesive enough to keep on track, but diverse enough to stay interesting. For example, if you want to learn about the Space Race between America and the Soviet Union, you can read books, watch documentaries, listen to podcasts with astronauts, and explore newspaper articles from the time-period. Choose what excites you, as long as it serves the end goal.

I encourage you to share your learnings. Publish an essay, a book review, an art project, or open source your code. Sharing your ideas will help you digest them, and if your posts are interesting, you may attract experts in your field of curiosity.

If you can publish your findings along the way, even better. Sharing your work is the best way to speed up your feedback loops, which will help you learn faster and improve your plan based on the feedback you receive. For example, I’m learning to draw, and that’s why I’ve included drawings in this article.

If you want to learn to code, post your software on Github; if you want to learn guitar, share your music on Instagram; and if you want to improve your writing, start a blog. Sharing your work is like inviting friends to your home. It forces you to be clean and double check everything, which accelerates the learning process.


Learn Like an Athlete

The more you learn, the easier it is to learn. Pick the right projects, and you’ll develop a personal network effect, where each new skill increases the value of skills you already have. 

You’ll improve your process every time you complete a learning challenge. By pushing through the cycle of start to finish, you’ll discover quirks about yourself, accelerate your learning process, and ultimately, learn like an athlete.


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Closing Comments

  1. I’ve created a template to help you learn like an athlete. You can download it here.

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The Paradox of Ambition

In Silicon Valley, ambition matters more than financial success.

The interestingness of your ideas matters more than the size of your bank account. The culture is built to support companies and entrepreneurs who want to pursue moonshot ideas.

Silicon Valley culture is a perspective shift. In school, it helps to fit in. In the Valley, it helps to stand out. Where school teaches you to pursue guaranteed success, the Valley teaches you to pursue projects with exponential upside; where school teaches you to follow the rules, the Valley teaches you to ignore them carefully; and where school teaches you to pursue well-defined targets, the Valley teaches you to pursue lucrative goals that others can’t see.

The wilder your target, the easier it is to find your place in the Valley. The motto is simple: If you want to thrive in Silicon Valley, raise your ambitions.


The Paradox of Ambition

Ambition is a paradox. We’re taught that hard goals are hard and easy goals are easy. In entrepreneurial environments, the inverse is true. Paradoxically, hard goals can be easier to accomplish.

Ambition is like free money. The more you have, the faster you can progress.

Elon Musk understands the paradox of ambition better than anybody. His ideas are so ambitious that employees will move across the country or take a pay cut to be involved. Likewise, investors will invest at higher revenue multiples, and journalists will write about the company because they know their Elon Musk profiles attract clicks.

In that way, ambition is a virtuous cycle. The more you have, the more you succeed, and the more you succeed, the higher your ambitions become.

But before we move on, I’d like to qualify my thesis. Ambitious projects are much more likely to attract support if they improve the world. They can’t be trivial, and they certainly can’t be evil. They should be distinct, innovative, and inspiring.


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Personal Introductions

Moments of tremendous progress often come down to the quality of a first impression. You meet an investor, and they make a large seed investment. Or perhaps, you meet a big-name journalist who writes a profile of you in the New York Times.

No matter the opportunity, moments of serendipity begin with accelerating heartbeats. The strength of a memory is tied to emotion. Ambitious ideas are easy to remember because they raise the hairs on the listener’s skin. Novelty helps too. If you share an ambitious, mind-expanding idea, your chance of attracting support skyrockets.

Ambition inverts the calculus of personal introductions.


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When you make a social introduction, you put your reputation on the line. You burn some hard-earned social capital in the name of doing a favor for a friend. But when you make an introduction for a talented and ambitious friend, the calculus flips.

It’s cool to know ambitious people. Rather than lowering your status, making an introduction for an ambitious friend can raise it. Instead of taking somebody else’s time, people see you as “in the know.” And if ambitious people hang around you, then you must be doing something right. The more you work on ambitious projects, the easier it is to meet the people you want to meet.

I recently hosted a 19-year-old kid from Ireland at my apartment in New York City. Jeff found me through my newsletter and cold emailed me last year. He was visiting New York and asked me to dinner. Based on the quality of his cold email, I said yes.

While dining over a Margarita pizza on the Lower East Side, he told me that he built a nuclear fusion reactor in his dad’s basement when he was 15 years old. To do it, he studied explored high vacuum equipment, high voltage electronics, neutron detection, and plasma physics.

Hearing his story widened my eyes and raised my heartbeat. In the weeks that followed, I encouraged him to apply for a handful of grants. Speaking over WhatsApp, I helped him refine his story and raise his ambitions. Six months later and I’m proud to report that he received every grant he applied for.

As part of the Emergent Ventures grant, Jeff recently visited Silicon Valley. Based on his story and a handful of cold emails, he met some of the biggest names for coffee, including Patrick Collision and Daniel Gross. Another person he met on Twitter was so inspired by his story that he introduced him to Sam Altman, the Chairman of Y-Combinator.

As he said to me with a wink: “Not bad for a rural kid from Western Ireland.”


Lessons from Stripe

Of all the companies in Silicon Valley, Stripe has raised the status of ambition the most.

The ambition flows from the top. I once read that Stripe CEO Patrick Collision ends every meeting by asking two questions:

  1. Is this the most ambitious plan you could come up with?

  2. What would you propose if you had unlimited resources?

Based on conversations with friends who work there, Collison’s questions have rippled through the organization. The leadership begins at the top. In recent years, the company’s has increased its ambitions from building a world-class payments processor to “Increasing the GDP of the Internet.”

As Mark McGranaghan, an employee at Stripe, wrote:

“Stripe’s insight was that tackling ambitious problems doesn’t just make the potential prize bigger. Ambitious efforts are often more feasible than smaller ones, because the strongest people want to work on the most ambitious efforts. In our experience this positive talent effect was stronger than the negative effect of problem difficulty. So, paradoxically, tackling a bigger problem could be both more rewarding for the company and in a sense more tractable.”

Stripe runs on the Paradox of Ambition.

In the software industry, recruiting is hard, but very important. The best engineers are 10-100 times better than average ones, and in Silicon Valley, the best ones leave sexy companies for even sexier ones.They want to work on hard and energizing problems that impress their friends and families. Therefore, the more ambitious the vision, the easier it is to build and recruit the best software engineers.


Raising the Level of Ambition in Society

We should raise the level of ambition in society.

Ambition is a non-rivalrous good. Consider a car. If I own a car and I give it to you, I no longer own the car.

But ambition works the opposite way. It’s positive-sum. We can both have more ambition. That’s why ambitious people attract other ambitious people like an N52 magnet. Better yet, when two people with inspiring ambitions meet, they can support each other and pursue their ambitions in tandem.

Instead of exhibiting diminishing returns, raising the level of ambition in society has increasing returns. I’m reminded of a quote from Tyler Cowen:

“At critical moments in time, you can raise the aspirations of other people significantly, especially when they are relatively young, simply by suggesting they do something better or more ambitious than what they might have in mind. It costs you relatively little to do this, but the benefit to them, and to the broader world may be enormous.”

Ambition is a self-fulfilling prophecy. Raise your sights and waltz along the fine line between impossible and transformative. If your heartbeat is rising, you’re doing it right.

Learn from Silicon Valley and take advantage of the Paradox of Ambition.


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