Peter Thiel - You are Not a Lottery Ticket [video](ustream.tv)
ustream.tv
Peter Thiel - You are Not a Lottery Ticket [video]
http://www.ustream.tv/recorded/29931127
36 comments
Says the guy who won the lottery. I'm frankly more interested in the guy who blew up during the dot com boom and who is currently some random employee at some random company, with a past filled with mistakes - frankly you'd learn more from his actual failures, than from Thiel's failure masking success.
It's as hard to learn from failure as it is to learn from success.
I saw this vividly when I was in law school. You get your whole grade based on one exam at the end of the year, which is typically comprised of several essays.
People who did well often had an inordinately high opinion of themselves, but people who did poorly often had an inordinately low opinion of the system. It's random, it's based on luck, I did better in classes I didn't study for than classes I did, etc.
It's hard to learn from mistakes. Just as we rationalize success, we rationalize failure. It's not about whether the person speaking is a success or failure at all, but the merits of the argument being made.
I saw this vividly when I was in law school. You get your whole grade based on one exam at the end of the year, which is typically comprised of several essays.
People who did well often had an inordinately high opinion of themselves, but people who did poorly often had an inordinately low opinion of the system. It's random, it's based on luck, I did better in classes I didn't study for than classes I did, etc.
It's hard to learn from mistakes. Just as we rationalize success, we rationalize failure. It's not about whether the person speaking is a success or failure at all, but the merits of the argument being made.
In many cases, success comes from experience, and experience comes from failure. When you succeed, you don't really know why, exactly (luck plays a huge role and can mask many mistakes)--but when you fail you can at least guess why, because your trajectory differed from the successful one, and you can observe the difference between the expected path and the actual path at key points and draw some conclusions.
I've written and thought about this a lot, and focused a bit on alignment. ( http://michaelochurch.wordpress.com/2013/03/21/gervais-macle... ) My bias is chaotic, so I tend to think that people are a little better (morally speaking) than neutral, but that institutions tend to become a little bit worse. It's not a huge gap. The average person might be a moral C+ and the average organization might be C-.
As you said, people tend to become biased in their views based on success or failure. People who succeed tend to overestimate how good they are, and how good the world is. People who fail tend to underestimate one or both (the "one" case being a defense mechanism).
It takes a real mix of experiences to pick up the nuances, which include not only an accurate view of the average person and institution, but also the tools to assess them.
So why does failure bring slightly (and, really, just slightly) more wisdom?
I tend to think that people will on average improve with experience, so both the successful and failed person will become better humans if they learn the right lessons. This means that conclusions-about-self aren't as useful as conclusions-about-world because the self changes and can be improved. However, the array of institutions out there doesn't seem to change in quality. The failed person has been exposed to a more accurate sampling of human organizations and is more likely to have an accurate understanding of how they work.
I almost feel like some successful people deliberately portray a naive worldview (when, in fact, many are experienced and cynical like everyone else) because they want the social status that comes with being assumed to have had only positive experiences.
As you said, people tend to become biased in their views based on success or failure. People who succeed tend to overestimate how good they are, and how good the world is. People who fail tend to underestimate one or both (the "one" case being a defense mechanism).
It takes a real mix of experiences to pick up the nuances, which include not only an accurate view of the average person and institution, but also the tools to assess them.
So why does failure bring slightly (and, really, just slightly) more wisdom?
I tend to think that people will on average improve with experience, so both the successful and failed person will become better humans if they learn the right lessons. This means that conclusions-about-self aren't as useful as conclusions-about-world because the self changes and can be improved. However, the array of institutions out there doesn't seem to change in quality. The failed person has been exposed to a more accurate sampling of human organizations and is more likely to have an accurate understanding of how they work.
I almost feel like some successful people deliberately portray a naive worldview (when, in fact, many are experienced and cynical like everyone else) because they want the social status that comes with being assumed to have had only positive experiences.
You might learn more from the first person you looked at from a random employee at a random company.
The second person, you might not. The 100th, you wouldn't. There is only so much you can learn from failure, when it is the rare, immense success you care about.
It might be rare, but in terms of outcome averaged sampling, you'd learn much more from examining the few, significant strings of immense success.
It is not a series of independent random events, summing up. Wealth distribution is not normally distributed.
It is not a series of independent multiplicative random events. Wealth distribution isn't even log-normal.
It's a severe power law. There is some ordering principle that is not captured by simplistic luck based models that people put forward. Luck may still dominate, but it is not clear how, or why. And strict wealth based "Matthew effect" models don't work either, since throughout most of history the advantages of a socioeconomic advantage decays, rather than compounds, over 15 generations.
Skill hypotheses become much more plausible when you look at the statistics.
The second person, you might not. The 100th, you wouldn't. There is only so much you can learn from failure, when it is the rare, immense success you care about.
It might be rare, but in terms of outcome averaged sampling, you'd learn much more from examining the few, significant strings of immense success.
It is not a series of independent random events, summing up. Wealth distribution is not normally distributed.
It is not a series of independent multiplicative random events. Wealth distribution isn't even log-normal.
It's a severe power law. There is some ordering principle that is not captured by simplistic luck based models that people put forward. Luck may still dominate, but it is not clear how, or why. And strict wealth based "Matthew effect" models don't work either, since throughout most of history the advantages of a socioeconomic advantage decays, rather than compounds, over 15 generations.
Skill hypotheses become much more plausible when you look at the statistics.
For anyone potentially dissuaded to watch the talk based upon this parent comment, please know that this talk is not actually about the dynamics of individual success.
Instead, it reflects on how the aggregate outlook of a society across two axes (optimistic-to-pessimistic and determinate-to-indeterminate) affects its strategies, pursuits, and stability.
The title of the talk is just Thiel pushing back on our society's increasingly indeterminate yet optimistic outlook, which, as Thiel subtlety alludes, may be tragically unstable.
Instead, it reflects on how the aggregate outlook of a society across two axes (optimistic-to-pessimistic and determinate-to-indeterminate) affects its strategies, pursuits, and stability.
The title of the talk is just Thiel pushing back on our society's increasingly indeterminate yet optimistic outlook, which, as Thiel subtlety alludes, may be tragically unstable.
>I'm frankly more interested in the guy who blew up during the dot com boom and who is currently some random employee at some random company, with a past filled with mistakes
Here you go, sort of:
http://www.businessinsider.com/james-altucher-mistakes-2013-...
Here you go, sort of:
http://www.businessinsider.com/james-altucher-mistakes-2013-...
Why learn from the guy who made the mistakes when you can learn from the guy who didn't?
Because success generally changes things, while mistakes generally don't. You can't clone a previous success exactly, because its presence alters the environment from the one in which it was initially achieved, and you have to account for that. You essentially have to show the same sort of creativity as the original success showed, and thus you haven't really learned much.
By contrast, things that were mistakes in the past tend to still be mistakes in the present. Usually they continue to be mistakes in the future as well. That's something you can really learn from, as you go through the creative process toward success that you were going to have to go through anyway.
By contrast, things that were mistakes in the past tend to still be mistakes in the present. Usually they continue to be mistakes in the future as well. That's something you can really learn from, as you go through the creative process toward success that you were going to have to go through anyway.
A key word is "tend". I've tried to learn from past failures only to realize that the world has changed in a few short span and my lesson no longer applied. In the immortals words of a song "what was once good, now is bad". When one realizes this, life gets a bit harder.
I guess you should try and learn from both, but in general we pay more attention to the successes than the failures.
As an extreme example, a lottery winner should say "you should play the lottery, it made me rich!" ignoring all of those who made an overall loss.
Think of it like the housing crash, everybody knew somebody who was getting rich from property.
As an extreme example, a lottery winner should say "you should play the lottery, it made me rich!" ignoring all of those who made an overall loss.
Think of it like the housing crash, everybody knew somebody who was getting rich from property.
The best thing you can hope to learn from someone you view as having made no mistakes is that they've made just as many if not more than others.
Also because survivorship bias: http://en.m.wikipedia.org/wiki/Survivorship_bias
EDIT: Linked to Wikipedia
Also because survivorship bias: http://en.m.wikipedia.org/wiki/Survivorship_bias
EDIT: Linked to Wikipedia
I'm not sure why you assume he didn't make any mistakes, or even that he didn't make any serious one. Just because he was ultimately successful doesn't mean there was a lot more behind it than pure "right-decision-making" or skill.
How many great people never finished their works because of something completely outside of their control?
How many great people never finished their works because of something completely outside of their control?
It's not either/or. You generally need to learn from both.
The problem is social stratification. If you're a normal person, you end up mostly around people who didn't succeed and get only half the story. If you have a break-out success (or just luck) you end up in a world where everyone has, and there's a lot of self-congratulatory just-worlding. Either way, you get a biased account.
I think it's most adaptive to learn from both sides while playing the attitude of the successful, to make yourself seem like a high-status person. You always want to seem (except to true friends whom you'd actually like to help, with accurate information) like you've had an unbroken chain of successes and can't imagine anything else; you just don't want that to bleed into self-deception. Maybe the reason why psychopaths do so well in life is that they're most resistant against cognitive dissonance. It's easy for them to maintain a successful front without falling into self-deception or delusion. For everyone else, there's nonzero cognitive load in doing that.
The problem is social stratification. If you're a normal person, you end up mostly around people who didn't succeed and get only half the story. If you have a break-out success (or just luck) you end up in a world where everyone has, and there's a lot of self-congratulatory just-worlding. Either way, you get a biased account.
I think it's most adaptive to learn from both sides while playing the attitude of the successful, to make yourself seem like a high-status person. You always want to seem (except to true friends whom you'd actually like to help, with accurate information) like you've had an unbroken chain of successes and can't imagine anything else; you just don't want that to bleed into self-deception. Maybe the reason why psychopaths do so well in life is that they're most resistant against cognitive dissonance. It's easy for them to maintain a successful front without falling into self-deception or delusion. For everyone else, there's nonzero cognitive load in doing that.
So in your universe, you're a superstar, psychopath, or failure?
The meaning of "success" is subjective. Don't self-deceive yourself into adopting somebody else's definition of "success". Peter Theil has a vested interest in you adopting success criteria that will ultimately enrich him. (That isn't a criticism)
I had a friend who was a priest. He owned almost nothing, and probably had less than $5,000 to his name. His vision of success was helping people who were indigent, incorrigible or otherwise considered broken by society. Was he a failure?
The meaning of "success" is subjective. Don't self-deceive yourself into adopting somebody else's definition of "success". Peter Theil has a vested interest in you adopting success criteria that will ultimately enrich him. (That isn't a criticism)
I had a friend who was a priest. He owned almost nothing, and probably had less than $5,000 to his name. His vision of success was helping people who were indigent, incorrigible or otherwise considered broken by society. Was he a failure?
> psychopaths do so well in life
Do they?
Do they?
On their own terms, yes.
The serial killers are the lower classes of psychopaths, usually with other mental issues.
They don't all become CEOs but they generally rise to the highest level permissible by their intelligence. An 80-IQ psychopath isn't going to rise to the top of a bank, but he will end up in a position of power over other people.
Of course, they blow themselves up every few years or so, but they usually move away unharmed.
The serial killers are the lower classes of psychopaths, usually with other mental issues.
They don't all become CEOs but they generally rise to the highest level permissible by their intelligence. An 80-IQ psychopath isn't going to rise to the top of a bank, but he will end up in a position of power over other people.
Of course, they blow themselves up every few years or so, but they usually move away unharmed.
I don't know if there's been a lot of rigorous academic research on the topic or not, but there have been a handful of articles in the pop business press, talking about the connection between being "CEO material" and displaying the traits of a psychopath. For example:
http://www.forbes.com/sites/jeffbercovici/2011/06/14/why-som...
http://www.forbes.com/sites/jeffbercovici/2011/06/14/why-som...
Psychopaths are genetically built to be extreme r-strategists (see: http://en.wikipedia.org/wiki/R-strategist ). What seem like stupid social behaviors are actually practice so that, when they are in a high-stakes social situation, they can win it. Most people find the psychopaths around them to be petty and stupid and think, "How could that guy ever succeed?" Well, the psychopath has decided that you're not of primary importance to the game he is trying to play, so he's using you for practice.
By the time they're adults, psychopaths have a wealth of social experience and knowledge, often gained from high-pressure social situations they created at a rate exceeding what most people would ever encounter. When they want something, they're very good at playing to win.
The prehistoric context was that developing an outsized social ability enabled someone to have an above-normal number of sexual encounters. The lack of emotional attachment and compassion, likewise, keeps them from pair-bonding and slows down their proliferation.
In the work context, organizations are also r- or K-selective (quantity vs. quality) in how they replicate process. Get-big-or-die companies are r-strategists, while "lifestyle businesses" tend to be K-strategic. As the business world becomes increasingly r-strategic, so does the character of people running it.
By the time they're adults, psychopaths have a wealth of social experience and knowledge, often gained from high-pressure social situations they created at a rate exceeding what most people would ever encounter. When they want something, they're very good at playing to win.
The prehistoric context was that developing an outsized social ability enabled someone to have an above-normal number of sexual encounters. The lack of emotional attachment and compassion, likewise, keeps them from pair-bonding and slows down their proliferation.
In the work context, organizations are also r- or K-selective (quantity vs. quality) in how they replicate process. Get-big-or-die companies are r-strategists, while "lifestyle businesses" tend to be K-strategic. As the business world becomes increasingly r-strategic, so does the character of people running it.
Just watched this talk.. absolutely great material. I wish he was a slightly better/more confident speaker, but I got over it.
For someone who is the farthest thing from libertarian, is there any more literature on the idea of big planning, deterministic optimism, etc in a libertarian framework? His examples of the US as optimistic and deterministic were all "centrally planned", and done through government, not individuals or groups of individuals (corps, ngos, etc). Or at least that's how I perceived it.
For someone who is the farthest thing from libertarian, is there any more literature on the idea of big planning, deterministic optimism, etc in a libertarian framework? His examples of the US as optimistic and deterministic were all "centrally planned", and done through government, not individuals or groups of individuals (corps, ngos, etc). Or at least that's how I perceived it.
Maybe look at Mises on entrepreneurship or John Mackey (of Whole Foods) in Conscious Capitalism for deterministic optimism in libertarian framework.
Perhaps "Atlas Shrugged" contrasts both indeterminite pessimism (the failing state and despair-filled question "Who's John Galt?") and the determinite optimism of engineers/makers and Galt's Gultch.
Perhaps "Atlas Shrugged" contrasts both indeterminite pessimism (the failing state and despair-filled question "Who's John Galt?") and the determinite optimism of engineers/makers and Galt's Gultch.
If you enjoyed this, you might want to read this article:
Gödel Incompleteness For Startups
http://skibinsky.com/godel-incompleteness-for-startups/
Equally thought-provoking with regard to startups and how to approach them.
Equally thought-provoking with regard to startups and how to approach them.
This. It's a very good speech, but if I could change one thing about how he speaks it would be to not allow him to use uh / uhm every few words.
He reminds me of Mark Zuckerberg in speech, even the quality of his voice is similar.
He reminds me of Mark Zuckerberg in speech, even the quality of his voice is similar.
I recommend:
Two Cheers for Anarchism (Scott)
and Why Things Fail (Ormerod)
I'm usually not a fan of Peter Thiel's ideas—always seemed quite a bit on the extreme side of the spectrum to me—but this talk is fantastic. I have a new respect for his viewpoints, and a renewed zeal to work harder.
I still think he discounts the effect that random chance has in your ability to succeed, on many counts, but he at least seems to understand it extremely well and speaks about it in a way which seems to indicate he respects the complexities involved. Quite good and thought-provoking to watch regardless of how you think of success.
I still think he discounts the effect that random chance has in your ability to succeed, on many counts, but he at least seems to understand it extremely well and speaks about it in a way which seems to indicate he respects the complexities involved. Quite good and thought-provoking to watch regardless of how you think of success.
luck favors the prepared.
This organizes a lot of thoughts I've had regarding the economic history of the 20th century. It seemed that something really changed in patterns of invention and investment somewhere in the late 70s, whereby - as Peter notes - big ideas and making plans became considerably less fashionable.
I hadn't made the connection to the surge of effort in law and finance, but it's a convincing argument.
The real question, then, is: Can we return the western economies to an optimistic-deterministic point of view? It would require really reframing a lot of public debate - or perhaps taking discourse elsewhere from regulated airwaves where the established players seem to worship an utterly indeterminate world view, as evidenced by continuous coverage of uncontrollable events.
I hadn't made the connection to the surge of effort in law and finance, but it's a convincing argument.
The real question, then, is: Can we return the western economies to an optimistic-deterministic point of view? It would require really reframing a lot of public debate - or perhaps taking discourse elsewhere from regulated airwaves where the established players seem to worship an utterly indeterminate world view, as evidenced by continuous coverage of uncontrollable events.
Lecture notes from his CS183 Startup class was about similar subjects. If you found the talk interesting you'll like the notes as well.
http://blakemasters.com/peter-thiels-cs183-startup
http://blakemasters.com/peter-thiels-cs183-startup
One reason the western world is appearing more indeterminate and becoming less optimistic is because of the diminishing returns of progress. That's the main problem in Europe. A hundred years ago, most people had difficult lives and technical progress offered a clear path to better lives. Now most people there have a pretty good life and understandably don't want it to change.
The OP's link didn't work for me. Here's one with sound only, no video, no slides, no transcript.
http://schedule.sxsw.com/2013/events/event_IAP15892
Thanks for that, original link was blocked for me as well.
According to the Googles, you can grab the .mp3 of the talk here: http://mp3yeah.com/download.php?id=83442458&t=Peter%20Th...
transcript?
Looks like the same talk as was transcribed here: http://blakemasters.com/post/23435743973/peter-thiels-cs183-...
All of a sudden this video is password protected. Anyone has the password?