Why Peter Theil is Half-Wrong
Peter Theil, cofounder of Pay Pal and current venture capitalist believes that innovation is currently stagnating across most fields except for computers. We’re making progress in the digital world, but stalling in the physical world - in the real world. In his own words:
“Whether we look at transportation, energy, commodity production, food production, agro-tech, nanotechnology — that with the exception of computers, we’ve had tremendous slowdown,”
The argument he makes is that certain movements such as environmentalism, increasing risk aversion, and government regulation have been the primary impediments to innovation:
“I believe we are in a world where innovation in stuff was outlawed. It was basically outlawed in the last 40 years — part of it was environmentalism, part of it was risk aversion,” he says. “And all the engineering disciplines that had to do with stuff have basically been outlawed one by one.”
In general, I agree with this perspective that government regulation is an obstacle to innovation in many fields: e.g. think healthcare, material engineering, financial sector, etc. But, I think that regulation is probably only a small part of the reason there is so much innovation in the realm of the digital, and so little in the realm of the physical.
From an economic perspective, labor and capital is going to where there are the greatest returns - and the greatest value that we can obtain right now is collecting more information, organizing it, and making it easier to access. Imagine you were doing research before the Internet and the World Wide Web were developed - you wouldn’t have had easy, realtime access to the huge troves of research and new ideas appearing around the world (research papers, brief ideas expressed on twitter, ted talks). Just consider how much easier it is to obtain answers to any questions that you may have a whim to know the answers to. So, having seen the powerful transformation of information availability experienced over the last 20 years, and realizing that so much more can be done, at a macroeconomic level it seems to make sense that more time should be spent on building the information platform that will make research in all those other fields much easier. The benefits from organizing information and making it accessible trickle down to all fields, and I think that cross discipline benefit is actually the motive that is causing there to be more innovation in the digital realm than in the physical. Not to mention the power that is continuously gained from improved computing power, and algorithms, that allows analysis of ever lager models and data sets.
Now, there are questions about whether the type of innovation that has been happening on the Internet of late falls into this category. But, I think there’s no doubt that new data is being made available through applications like Twitter, Facebook and Foursquare that create new possibilities for the types of research that can be conducted.
A country’s power (both economic and military) is to a large extent dictated by it’s ability to improve the accessibility, organization and transmission of information. The more efficient it’s informational capabilities, the more the engine of economic growth is revved up. Rich Barton, the founder of Expedia, Glassdoor, and Zillow, gave a talk during the Techstars program I participated in - and he said his goal is to democratize information and help people make decisions. All his businesses follow this thread, and so do his investment decisions seemingly. I think that’s a good frame for evaluating what companies are worth working on.
The Deception of Difficulty
I remember when I was growing up, roughly around the fifth grade, I would occasionally hear older people mention the field of TRIGONOMETRY.
“TRIGONOMETRY”
What an awe-inspiring word that is to a fifth grader. It makes them shudder in their seat trying to imagine what such an impassable realm of thought might contain. There was an aura about it that suggested it would be some sort of mental and spiritual transcendence. Then - a few years later - in the glorious awakening - it turned out to be triangles - fucking…. triangles….. three-lines connected at three points. (slow clap)
Throughout my life, I’ve always marveled at what the next level of life and of knowledge would hold. And, upon climbing to that next level, I have almost always been met with disappointment. The next level of knowledge to be attained, the next experience to be had, always turned out to be somewhat less magical than I expected. The times when I did feel a sense of magic while attaining new knowledge came not from the difficulty of its content, but instead from its surprising simplicity. Far too often society has a tendency to take simple things, and veil them in difficulty - to make things seem harder than they actually are.
Let me be clear and say that this post is not me trying to be arrogant. On the contrary, what I am trying to get across is that sometimes people are deceived into being impressed by certain realms of knowledge, which, when explained with clarity, actually turn out to be far less complicated than they’re portrayed to be. Most of the sciences fall into this category - and this is unfortunate.
I believe that one of the greatest ails of society is making things seem more difficult than they actually are. There is an immense disservice that we do to ourselves, collectively, by instilling in our shared consciousness the belief that certain realms of thought are inaccessible to the majority of the population. Exaggerating and mythologizing the achievements of our great thinkers and their works does nothing but to provide us with a sense of awe, that in turn demoralizes the ambition of too many capable individuals.
Most magic is not as magical as it may seem.
So, why does this happen? Why do realms of though like math and computer science get veiled in mystery? I’m not sure, but here are what I think some of the causes are:
A tradeoff between accuracy and interestingness.
Often times it is more ‘interesting’ to portray something as excessively complex, to portray someone as a genius, rather than to be accurate about the true contents of the subject, or the individual.
Laziness or Bad Teachers - Leading to More Bad Teachers
Deceptions occur when people cast something as difficult because they did not take the time to understand it, or because they had a teacher who did not have clarity themselves. When people don’t understand something, they try to make it seem more complicated than it actually is. This leads to a vicious cycle where people who don’t understand, end up teaching others, making it seem even more difficult to their successors.
Starting at the wrong place
Sometimes, basics of a given topic, and its assumptions, are not adequately covered, and people are recommended to start too deep. This is manifested in the lack of history that is used to teach many topics - for example, we learn calculus without learning how it came about, without grasping what problems it was intended to solve. Seeing how problems and their solutions unfold is probably the best way to learn, but this happens rarely.
Wanting to Sound Distinguished
When something is simple, but people want to seem important and indispensable, they wrap simple concepts in words and language that make those concepts difficult to distill. This achieves their desire to sound distinguished, but harms the ability for others to get to the root of things.
The consequence of all this is that people approach new fields of knowledge with two things: fear, and an expectation for magic.
The fear is unfortunate, because it scares many people off before they even begin. It makes people discount their own abilities, and leads them to strive for less than they are actually capable of achieving. How many people have shied away from math all together because they were made to feel like they could not understand it? Perhaps, it was those who were teaching them that did not understand.
The expectation of magic is unfortunate, because it leads people to constantly question themselves, and their comprehension of the subject they are studying. It is a disillusionment and questioning after the fact of comprehension. When something turns out to not be as complicated, or as magical, as it was portrayed to be, they are not sure if they actually understand it. This type of disillusioned self-doubt leads to listlessness, and a lack of certainty in one’s own uncertainty. People are quicker to question their own deficiencies if something doesn’t make sense, rather than question the thing which does not make sense. We should constantly question the assumptions and contents of what we learn - if something doesn’t make sense, we should examine its basis with honesty. It could well be that you are right, and the material is wrong - so take a moment to consider this possibility. Be bold.
I do believe that there is substantial value gained by making things seem less magical, and in turn more attainable. It would be empowering for people to know that things are not as far out of reach as they may think. This applies to experiences as much as it does to knowledge. Although the next realm of knowledge you dive into, or the next life experience, turns out to be less magical than you thought it would be, it just means that there is more possibility for you to now make real magic, to try to locate that subtle process through which true magic is made.
And Then, Suddenly, It Works
Chris Dixon:
An idea getting tried over and over tends to be a positive signal (which is one reason that competition is overrated). It’s very easy when you spend lots of time around startups to get cynical. You could tweet and blog predictions that every new startup will fail and how the ideas are derivative and you’d be right 95% of the time. The hard part – and what matters for founders and investors – is figuring out the right mix of timing and execution to finally get it right.
This is exactly right. Once you’ve been deeply embedded in the technology scene for years, the easiest thing in the world to be is cynical. But that’s a mistake. So often, great ideas don’t take off simply due to a mixture small imperfections in execution and mostly, timing.
But great ideas are still great ideas. They always find a way. If not today, then tomorrow.
Source: parislemon
That feeling,
when you reach into your pockets,
and realize you have nothing.
Weekend Projects - Rotten Netflix: Rotten Tomatoes overlayed on top of Netflix (Extensions)
Last weekend, I took a day to hack together an extension that injects Rotten Tomatoes reviews into the Netflix UI, so that you can easily see the critics’ ratings as well as Netflix’s personalized ratings.
Here are the links to the extensions for Chrome and Safari:
Chrome: https://chrome.google.com/webstore/detail/bididflonamappcfophnbijljnfagepj
Safari: http://www.mediafire.com/?li7j7965f67ryrg
Someone on Hacker News asked for some information on how the extensions were built, and I wrote a high level overview I thought would be useful to share here as well. This is a good example of how to build a Cross-Domain/Cross-Origin Extension, that modifies users’ existing UIs. There’s lots of different things that you could overlay onto lots of different sites, and this is a good starting point for figuring out how to make those mashups:
You can find the source on github (not very well commented):
https://github.com/nicolaerusan/RottenNetflix
How the Extensions are Built:
Using Chrome extensions, you’re able to inject a javascript file into pages users browse to. You can limit which pages the javascript file is injected into using the Chrome Extensions’ manifest.json files (in my case I limit it to injecting only into netflix.com and it’s subdomains).
Here’s how the injected javascript works in steps:
1. A user browses to a netflix.com page
2. Retrieve all the elements on the page that correspond to movie names (This is done by looking for all DOM elements with a specific class name that Netflix is using to identify the movies, in this case I found that the movie name is stored in the alt attribute of .boxShotImg elements).
Note: If Netflix changes their html so the elements with the class names I’m searching for no longer have the movie name as their alt tag, the script will no longer work and would need to be updated to match whatever classes Netflix changes to.
Now we know the movies on the page, we need to get the ratings from Rotten Tomatoes. - I was going to try to use the Rotten Tomatoes API for this, but they have a rate limit of 10 calls per second, and no way to ask for ratings for multiple movies per call, so this doesn’t work well when you have +10 movies per page, per user. - So, given that I couldn’t use the Rotten Tomatoes API, and given that Rotten Tomatoes’ urls follow a predictable pattern, I did the following:
3. For each movie name, figure out the Rotten Tomatoes URL corresponding to that movie name, e.g. www.rottentomatoes.com/m/[THE_MOVIE_NAME_WITH_UNDERSCROES_FOR_SPACES]
4. Crawl the URL of the Netflix page with an AJAX GET Request. (means we’re doing as many AJAX requests as their are movies appearing on the Netflix page)
5. In the HTML that’s returned from the AJAX request, search for the element that holds the movie’s RT rating, in this case, and element with id #all-critics-meter ~ the HTML in there is the RT rating for that movie (Note again here, that I assume RT has this consistent naming convention on its pages, and in its URL pattern, if any of this changes, again the script won’t work).
6. Append the RT rating of each of the movie elements we’ve retrieved to the corresponding element on the Netflix page. (where I append the RT rating depends on what Netflix page the user is currently looking at, e.g. the Genres page, the home suggestions for you page, or the individual movie page .. but there are not that many pages to take care of with Netflix).
Hope that is somewhat clear and systematic.
One last side note is that when I was porting to the Safari extension, I hit a snag because I was unable to directly make AJAX requests to rotten tomatoes from Netflix, because of Cross-Origin ajax restrictions. This is overcome in the Safari extension by communicating from the injected script, to another page that the extension itself has (background.html), which IS allowed to make Ajax requests cross-origin. The background page makes the ajax requests, gets the data we want, and sends it back to the injected script (all communication between the background.html and the injected script happening via Safari extensions’ provided messaging protocols.
Building Apps On Top of Your Genome: OAuth For Your Health Data
There’s an interesting TED talk up right now about the ‘Genomic Revolution’ (link to talk). The idea of the talk is that soon our genome will soon be so cheap to sequence, that it will become a key part of our ‘identity’ data. It will be used in providing personalized health care, but it will also be a core piece of data for other applications as well. Resnick encourages us to reflect on exactly what this means, and how we can participate/influence the oncoming ‘Genomic Revolution’.
In fact, there’s lots of interesting ideas even mentioned in the talk (reminiscent of Gattica):
- Dating apps based on genomes.
- Job applications including your genome (e.g. if you want to go to space, you need to pass certain genome requirements).
- Self-improvement/productivity apps based on your genomic pre-disposition?
What else would you build if you had access to this data? (would love to actually hear ideas)
One of the key things for this to happen is to have something that can store this health data, and can then give other app’s access to that data (in a system similar to what oAuth is for Facebook and Twitter Apps right now). This could be an interesting project to work on, and it asks an important question of how ‘data management’, and granting access to data will work in the future. What data do you want to have access to, that you don’t have access to right now - and what would developers build if they could have access to that data? Will online genome data storage and sharing be something the existing Genome companies like Resnick’s company, and 23andMe do first, or is there room for purely software companies to win in this space?
The Locker Project is a cool idea on this front - that helps you to preserve your data in a local store, and grant access to the data from there. This may be the right approach in spirit, however, I think they’re still missing out on a ‘consumer’ focused application of their technology. It could be that they’re sin the process of building the interface/app that will be a big consumer hit based on this idea right now. I’m excited about this space, and I think there’s some interesting approaches to data management and access that I’ll write about in an upcoming blog post.
So… if you had access to this data - what would you build?
I will prepare and some day my chance will come.”
- Abraham Lincoln
App: Automatically Donate 10% of All Money In Your Bank Account to Charity
What if you could automatically donate 10 percent of all the money that comes into your bank account to charity? Would you do it?
This is one application I’ve been toying with building in my mind, but for the time being its more of a thought experiment than a real intention. Still, I think its interesting to consider this application from both the perspective of technological/institutional feasability, and also from the point of view of moral and economic justifiability. The idea is inspired by one of Peter Singer’s essays: Famine, Affluence, and Morality. For those who aren’t familiar with Peter Singer, he’s a controversial Australian philosopher who has written on several topics including abortion, animal rights and charity.
In the essay Famine, Affluence, and Morality, Singer argues that (in very simple terms):
- there is immense suffering that exists in the world that can be partially alleviated through charity
- we have a moral duty to alleviate suffering when we can.
- there is an abundance of wealth in the developed world, and most people have substantial expendable income
- given 1, 2, and 3, people with expendable income have a moral duty to alleviate suffering in the developing world by donating some portion of their salaries to charity.
It’s a pretty basic argument, and Singer himself claims he donates 25% of his salary to charity (Unicef and Oxfam) [Wikipedia]. The core concept is that the lives of those receiving the 5% of my salary that I donate, would enjoy that 5% far more than I would (this drawing on the idea of decreasing marginal benefit of income). Now, I’m not sure exactly the form in which Singer donates his percentage (e.g. a lump sum he saves at the end of the year, or what?). But, it is easy to imagine building an application that automatically apportions a percentage of any money deposited into your account towards a charity of your choice. Think of it as a feature that could be added into Mint. The siphoning off of the funds could take place whenever money is deposited into the account. This type of application would be based on a subscription charity model: choose to donate to charity once, and be committed until you turn it off type of application. And, by making it a % model, rather than your standard 20$ a month model, this type of application also has some notion of each person donating in proportion to their ability to do so.
In my mind there are two appealing aspects to this application (at first glance anyways):
- Being automated. You don’t have to fatigue yourself with decisions about how much to donate, and when.
- Being proportional to ability. Each person donates a percentage of their income, rather than a fixed sum (there are analogies to taxation here).
So, what do you think about this type of application? Would you be up for donating some percentage of your income to charity? Why or Why Not?
There are lots of different questions that emerge from this thought experiment. Here are some of the different things I’ve been thinking about:
- What are the differences between donating some percentage of your income to charity, versus just paying more taxes to the government instead? Are charities more efficient than government organizations?
- Would we actually be doing the ‘right’ thing by donating our money to charity? Is this the best use of our funds, or would the economy grow faster if we didn’t do this, and in turn potentially benefit everyone more in the long run in different ways?
- To what extent should we focus on ‘growing’ the economic pie, rather than equally dividing it? And, how do varying ‘divisions’ of the economic pie in turn affect growth rates of the economy, and overall happiness?
- Do we really have a duty to alleviate the suffering of others whenever we can? How does this interplay with our duty to bring others happiness? (a recent post on Hacker News brought up the interesting question of whether its more worthwhile to work on projects that bring people happiness, versus working on projects that alleviate injustices [http://news.ycombinator.com/item?id=2882356]]).
- On the macro scale, are we measuring the success of an economy by its ability to maximize happines, or to minimize suffering? In reality it seems to be neither, it’s GDP we use - there’s a great speech by Robert Kennedy about this.
- How should we choose charities to which to donate given that there are so many different causes? And how do we hold these organizations accountable for how they use our funds?
- If we built this application, how many people would actually use it, and what percentage of their income would they donate?
Concluding Sidenote:
I’ve thought of another variation of this application for overcoming debt - i.e. some fraction of your income is set aside to pay off your debt, and we are able to project when you will have paid off your debts.
Sometimes I Wish I Didn’t Know
Over this past weekend I had some free time to catch up on TED talks and listen to some talks from iTunes University for inspiration (strongly recommend an amazing series of talks from the Stanford Entrepreneurship series - first time I’ve heard either Bill Gross or Jack Dorsey speak, and both of them made a strong impression on me).
Ironically, a lot of the things I’ve been thinking about working on/writing about were discussed in one or another of these talks. I was planning on writing blog posts about all these different concepts, and making prototypes of interesting ideas I had - but, after seeing all these talks, I felt a bit discouraged from further fleshing out some of these ideas. They already exist… so what’s the point of working on them? As you can imagine, this line of thinking is a bit saddening… and sometimes, I wish I just didn’t know about things that were already out there. Knowledge is a double-edged sword: it can move you towards better actions, or it can freeze you in inaction.
On the one hand, knowing that someone has already developed the product you are thinking of developing, or has articulated the idea your are thinking of articulating, has the potential benefit of saving you redundant effort. On the other hand, if you don’t known that what you are planning on working on already exists, you may continue to develop it on your own, and emerge with something unique to your vision, that may potentially be better than what already exists.
A perfect illustration of this is the case of Reddit. When the founders started working on Reddit, Digg was already becoming the fore-runner in the social bookmarking domain. However, the Reddit founders had no idea that Digg existed until after they had already launched Reddit. Had they done more research, or heard about Digg, their passion, and drive to develop their own community may have been curtailed. Thankfully, they didn’t know, and they continued pushing ahead on their own unique solution to the problem! My personal feeling is that some degree of ignorance is always preferable, because additional research has a tendency to produce scarecrows to action.
There has to be some balance between seeking knowledge, and acting in ignorance. There is some optimum division between time spent diverging, and doing research, and time spent converging on something even though you don’t have all the knowledge at hand.
Sometimes, it really is better to not know, and to act in ignorance. Being unaware of the problems with what you’re doing, being unaware of the work that has already been done in a field, can let you push forward with an idealism and conviction in the meaning of your work, and with a novelty of approach that can be the force needed to get you far enough. Far enough - so far that once you face the problems, or discover your competitors, your vision has already been manifested in its unique form and you feel compelled to forge ahead and tackle the problems you face. Naivety can sometimes be more valuable than wisdom. Too much knowledge before action can create fear, and cause you to steer away from the domain entirely. But, perhaps the truer wisdom is to know about competitors, to know that your thoughts have already been thought, and then to still forge ahead regardless, confident and satisfied in your unique realization of those same ideas.
It’s hard to say.
