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Harshal Kokane

Building Atlas. SAAS, Web3 and Progress Studies among other things. Fellow @ OnDeck.


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How Lambda School 150m business with no-code

In this episode of The No Code & Code Podcast, Mitchell Wright, Senior Manager of Growth and Strategy at Lambda School, sits down with us to share his expertise and experience with building Lambda’s foundation using no-code and scaling it to serve over 2,500 students.

Mitchell discusses the difficulties behind bridging the gap between technical and non-technical users, especially in a situation where the no-code stack is initially set up by the operations team, but later used by the engineering team. He explores ‘technical debt’, which, in no-code, exists when the engineering team has little visibility into how things are set up and running. Mitchell also dives into the challenges that Lambda faced given the speed at which the company scaled, especially pertaining to no-code tools such as Zapier and Airtable.

By sharing the obstacles that Lambda had to overcome in scaling and migrating from no-code, Mitchell provides invaluable advice for other companies looking to follow in his footsteps. He continues by saying that although there are obstacles when scaling a company in no-code, the early stages of a company are about asking yourself, “What is the fastest way for me to get this idea out there and validate whether it will be a good idea anyway?” In the same vein, he states that it’s more about getting your idea out there, rather than getting stuck on what tools to use.

Mitchell wraps the episode by drawing from his experience to outline what his scaling and migration strategy would look like in a perfect world. He also lists the top two features he believes would bring no code to the next level and would like to eventually see implemented.

You can find Mitchell on Twitter and LinkedIn , and don’t forget to check out Lambda School and the tools and resources mentioned in this episode:


  • 5:40 - Breaking Typeform from student application volume.
  • 6:56 - Implementing Wordpress to build a robust student application portal.
  • 6:56 - Implementing Zapier and Tray.io into Lambda.
  • 8:50 - Why do migrations happen?
  • 10:00 - What would make Zapier more scalable?
  • 11:30 - Standard Library’s unique way of being able to push a feature with code or no-code.
  • 13:30 - Collaboration features that contribute to no-code not scaling as far as it could.
  • 16:10 - Adopting Airtable as the primary database.
  • 17:48 - Why Airtable and no-code databases break down, and how that happened at Lambda.
  • 21:35 - How to increase your Airtable base’s speed.
  • 23:40 - How to push past Airtable’s maximum row limit.
  • 24:45 - How no-code can help companies iterate faster than with code.
  • 29:30 - Why no-code tech debt is unique.
  • 33:45 - Mitchell discusses his ideal migration plan.
  • 39:00 - When did you start planning the migration to code?
  • 41:45 - Mitchell’s three dream no-code features.
  • 46:35 - How to get a free assessment of the scalability of your no-code stack.


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The Ultimate Guide to Twitter Advanced Search

Whether or not you've signed up for Twitter, you have the power to perform detailed queries on the endless stream of Tweets by using the site's Advanced Search . The feature isn't behind a login and it doesn't take long to learn a few tricks to make your Twitter searches extremely effective.

This guide presents over 40 tips to help you better use Twitter Advanced Search to find sales leads in your area, keep tabs on your brand, or follow a topic important to you. You'll also learn an easy way to set up email notifications for Twitter search results or a Google Docs spreadsheet to log ongoing results.

What's in This Guide

Know the Difference Between Search and Advanced Search

Learn Common Search Queries

Find Tweets From and To Specific Users

Surface Tweets by Location

See Tweets by Date Range

Fine-Tune Your Search

Save Your Search

Get Notifications for New Search Results

Log Results to a Google Docs Sheet

After learning the ins and outs of Twitter Advanced Search, see " 25 Effective Ways to Use Twitter Search for Marketing, Sales and Support ".

Ed. note: This guide was last updated on April 7, 2017 to include additional tips

Know the Difference Between Search and Advanced Search

If you've ever searched for word or phrase on Twitter, you've likely used the site's toolbar search field ( above ), mobile app search or the search page for non-users . Each of these works great if you're performing a quick search for a word or phrase. If you need more specific results, however, they'll either come up short or leave you with a headache from remembering the needed " search operators "—additions to the search field that perform an advanced query.

Twitter Search Operators

While many of the above search operators are good to know, you don't have to memorize them or manually enter them to get more detailed results from Twitter. Instead, rely on Twitter's Advanced Search, which is available when using Twitter's web app.

To access it, either visit twitter.com/search-advanced or click "Search filters" and then "Advanced Search" in the left-hand menu bar on a Twitter Search results page. The page that loads might surprise you with its many options—you're able to search Twitter for specific phrases, find Tweets to or from a user or narrow down Tweets by location. You can even surface only the Tweets that have a happy sentiment. :)

Twitter Advanced Search

Use a Combination of Search Fields

To find even more specific results, you're able to combine Advanced Search fields. For example, when Unbounce released it guide to webinar marketing , they could have found interested individuals by searching for Tweets that contained "webinar", "marketing" and a "?" and excluded Tweets that had their username or URL.

Beware "Top Tweets" Results

Top Tweets

After a search either from the toolbar or Advanced Search, the first results you see are "Top" Tweets. According to Twitter , Top Tweets are Tweets that lots of people are interacting with and sharing via retweets, replies, and more—"Tweets you are likely to care about most first." The company doesn't hand-select the Tweets, but instead employs an algorithm.

To see all the results you're looking for, you'll want make sure to toggle to "Latest" Tweets—just click "Latest" on the top of the results Twitter stream.

Explore the Different Results

Advanced Twitter Search different results

In addition to "Top" and "Latest," you're able to narrow in on a few different type of results, namely people, photos, videos, news, and broadcasts. Click on the appropriate tab at the top of the Twitter search results page to filter by:

  1. People - Accounts (both people and other entities) whose usernames or bios match your search query

  2. Photos - Tweets that contain a photo

  3. Videos - Tweets that contain a video link, such as youtube.com or vimeo.com

  4. News - Tweets that contain a link to a news site, such as Huffington Post or The Next Web

  5. Broadcasts - Tweets that contain live video streams from Periscope

If you're on the Top tab, you might also see a "Related searches" box in the left sidebar with hashtags that could also be of interest to you.

Learn Common Search Queries

Common Search Queries

With the basics down, let's dive into the first set of fields in Advanced Search: Words.

1. All of These Words

Enter one or more words to find Tweets that contain—in no particular order—those terms. You're also able to insert one or more phrases here, too, by indicating the start and end of each phrase with quotations (e.g."say hello" "say goodbye").

2. This Exact Phrase

This field is limited to one phrase and unlike search fields elsewhere, you don't need to put quotations around your phrase—it does that for you. This can be a helpful field to search for quotes or full names.

3. Any of These Words

Each word or phrase (using quotations) you enter is separated by an "OR" when the search query is performed.

For example, if you're searching for brand mentions on Twitter, you can use this field to not only find Tweets with your Twitter handle but with your company name and website as well. So, you'd enter @Zapier Zapier #Zapier zapier.com , which Twitter then converts to contain the search operator "OR"— @zapier OR zapier OR #zapier OR zapier.com .

Note: Twitter searches aren't case sensitive—a capitalized search term (Zapier) will return both lowercase and capitalized words.

4. None of These Words

This field is easy to overlook, but it's a powerful one. Whatever term or phrase you put here will remove Tweets from your results that contain that word or phrase. Effective uses of this field would be to filter out Tweets that contain a competitor's name or promotional hashtag—or there might be some confusion (perhaps you're looking for "tea" but not "tea party"). This is a great way to cut through the noise and listen to what's really important.

5. These Hashtags

Narrow in on hashtags with this field, although you can search hashtags from other fields as well.

6. Written In (Language)

Surface only Tweets that are written in one of the many language options (over four dozen) listed in this field.

Find Tweets From and To Specific Users


The next three search fields allow you to narrow in on specific users that are either the author or recipient of the Tweet or are mentioned in it.

7. From These Accounts

Find the username of one or several accounts and enter it here with or without the "@" sign.

Tip: To find a username, search for the name of the intended individual or company and click on the "People" results. Google can be helpful here, too, by adding Twitter to your query, e.g. Wade Foster Twitter .

8. To These Accounts

Again, just enter the username of one or several accounts is needed.

9. Mentioning These Accounts

Same here, too, simply enter the username of one or several accounts.

Pro tip: You can use Twitter to find someone's email address if you search for their username plus the keyword "email" or phrase "email address". Although this won't work 100% of the time, chances are heavy Twitter users have shared their email address in a Tweet. If not, there are many other ways to find any email address .

Surface Tweets by Location (Places)

Tweets by location

In order for this next field to work, you'll need to have location turned on in your account. Visit the Twitter support docs to learn more.

To surface Tweets or users in a specific area, employ this field by either entering an address, city, state, postal code or country, or for more accurate results, a geocode (the latitude and longitude of a place separated by a comma). By default, Twitter searches a 15-mile radius of the area you've entered. If you want to customize this radius, you'll need to use the search operators in the toolbar search field, e.g. SXSW near:Austin within:15mi or SXSW near:Austin within:5km .

Find Tweets by Location Using Advanced Search

Enter either the name of the location, which could be the full address or just the city, state, postal code or country, or geocode. Cities that share a name, however, will turn up results from both cities. Results will be from inside a 15-mile radius of the location.

Find Tweets by Location Using the Toolbar Search (Recommended)

This is a bit more work, but it yields more precise results because you can edit the default 15-mile radius. To do so, use this query: near:{location} within:{distance}mi or near:{location} within:{distance}km . The location can be either the full address, just the city, state, postal code or country, or geocode.

To combine this with a search term, you'll need use the Twitter search operators , once again. For example, here's the search query you'd use to find Tweets within a two-mile radius of the Austin Convention Center, home to South by Southwest: SXSW OR "South by Southwest" near:30.263559,-97.739525 within:2mi .

How to Find the Geocode of a Location

There are several routes to find the geocode of a place, but a reliable one is to search for the place on Google Maps and pull the latitude and longitude out of the URL.

find the geocode

See Tweets by a Date Range

Tweets by date range

This feature makes it incredibly easy to search for Tweets either before or after a date or between two dates.

Fine-Tune Your Search

Fine-Tune Your Search

There are a few final search options along with a short list of tips—some already shared above—that can refine your search even more.

1. Focus on Questions Only

If you do customer support, this is a handy option. On top of your search terms, check the "Question ?" box to surface only Tweets that are asking a question.

2. Find Happy and Sad Tweets

Often called the Tweet sentiment, you're able to expose only Tweets that contain a happy :) or sad face.

3. Include Retweets

Include Retweets

The final option of Advanced Search lets you "Include retweets", but after several searches with it checked and unchecked, search results don't differ. If you're aware of how this modifies searches, please leave a comment below.

Save Your Search

With the tips above, you'll hopefully be able to write just the right query for your Twitter Advanced Search. And after you've done so, it'd sure be a shame to let that query disappear, so don't miss the feature that lets you save your search. ( You'll need to be logged into Twitter to see the option. )

saved searches example

To later access a saved search query, just click in the toolbar search field, which also shows recent searches.

Get Notifications for New Search Results

Saving a search query can be a handy way to stay on top of important Tweets, but there's an even easier way to do this by using Zapier . With a few clicks, you can set up an automation that will send new search results to your inbox, phone, or team chat app.

When setting up Twitter search automation on Zapier, you'll need to use a search query string that employs Twitter's search operators . There's a shortcut to generating such a string: use Advanced Search and then copy and paste the string that appears on the results page.

query string short cut

Related: " How to Turn Twitter into a New Source for Sales "

Log Results to a Google Sheet

If you don't want to receive individual notifications for each new search mention but do want to keep a record of Twitter activity, you can also use Zapier to save Tweets that meet your query.

Save Favorited Tweets Too

When searching for Tweets, you might come across ones you want to save for testimonials on your site. To keep a record of these, you can set up a Zapier automation that logs any Tweet you like in a Google Sheets spreadsheet.

Tip: On Zapier, you can connect as many Twitter accounts as you'd like to the service in order to add automation to not only your work account, but your personal and side project accounts too.

More Twitter Search Tips

Twitter search is an evolving feature so do expect small or major changes to any of the above going forward, but hopefully this guide gives you more search prowess today.

After learning the ins and outs of Twitter Advanced Search, see " 25 Effective Ways to Use Twitter Search for Marketing, Sales and Support ".

Search Twitter more quickly with these advanced search tips. Narrow down to the people, email addresses, locations, topics, and more with Twitter Advanced Search

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Bitcoin Cannot be Banned - Unchained Capital

The idea that somehow bitcoin can be banned by governments is the final stage of grief, right before acceptance. The consequence of the statement is an admission that bitcoin “works.” In fact, it posits that bitcoin works so well that it will threaten the incumbent government-run monopolies on money in which case governments will regulate it out of existence to eliminate the threat. Think about the claim that governments will ban bitcoin as conditional logic. Is bitcoin functional as money? If not, governments have nothing to ban. If yes, then governments will attempt to ban bitcoin. So the anchor point for this line of criticism assumes that bitcoin is functional as money. And then, the question becomes whether or not government intervention could successfully cause an otherwise functioning bitcoin to fail.

As a starting point, anyone trying to understand how, why, or if bitcoin works should assess the question entirely independent from the implications of government regulation or intervention. While bitcoin will undoubtedly have to co-exist alongside various regulatory regimes, imagine governments did not exist. On a standalone basis, would bitcoin be functional as money, if left to the free market? This will inevitably lead to a number of rabbit hole questions. What is money? What are the properties that make a particular medium a better or worse form of money? Does bitcoin share those properties? Is bitcoin a better form of money based on its properties? If the ultimate conclusion becomes that bitcoin is not functional as money, the implications of government intervention are irrelevant. However, if bitcoin is functional as money, the question then becomes relevant to the debate, and anyone considering the question would need that prior context as a baseline to evaluate whether or not it would be possible.

By design, bitcoin exists beyond governments. But bitcoin is not just beyond the control of governments, it functions without the coordination of any central third parties. It is global and decentralized. Anyone can access bitcoin on a permissionless basis and the more widespread it becomes, the more difficult it becomes to censor the network. The architecture of bitcoin is practically purpose-built to resist and immunize any attempts by governments to ban it. This is not to say that governments all over the world will not attempt to regulate, tax or even ban its use. There will certainly be a fight to resist bitcoin adoption. The Fed and the Treasury (and their global counterparts) are not just going to lay down as bitcoin increasingly threatens the monopolies of government money. However, before debunking the idea that governments could outright ban bitcoin, first understand the very consequence of the statement and the messenger.

The Progression of Denial & Stages of Grief

The skeptic’s narrative consistently shifts over time. Stage one of grief: bitcoin could never work – it is backed by nothing . It is nothing more than a present-day tulip mania. With each hype cycle, the value of bitcoin rises dramatically and is then followed by a correction. Often extolled as a crash by skeptics, bitcoin fails to die and in each instance, it finds support at levels higher than prior adoption waves. The tulip narrative becomes tired and the skeptics move on to more nuanced issues, re-anchoring the debate. Stage two of grief follows: bitcoin is flawed as a currency. It is too volatile to be money, or it is too slow to be a payments system, or it cannot scale to satisfy all the payments in the world, or it wastes energy . The list goes on. This second step is a progression of denial and it is a significant departure from the idea that bitcoin is nothing more than nothingness.

Despite the supposed flaws, the value of the bitcoin network continues to rise over time. Each time it does not die, it gains strength. While the skeptics are busy pointing out flaws, bitcoin never sleeps. An increase in value is driven by a very simple market dynamic: more buyers than sellers. That is all and it is a function of increasing adoption. More and more people figure out why there is fundamental demand for bitcoin and why/how it works. This is what creates long-term demand for bitcoin. As more people increasingly demand it as a store of wealth, there is no supply response. There will only ever be 21 million bitcoin. No matter how many people demand bitcoin, the supply side is completely fixed and inelastic. As the skeptics continue to shout the same tired lines, the crowd continues to parse the noise and demand bitcoin due to the strengths of its monetary properties. And no constituency is more well-versed in the arguments against bitcoin than adopters of bitcoin themselves.

Desperation begins to kick in, and the debate re-anchors once again. The narrative predictably shifts. It is no longer that bitcoin is not backed by anything, nor that it is flawed as a currency; instead, the debate centers on regulation and government authorities. In the final stage of grief, it is actually that bitcoin works too well, and as a consequence, the government will never let it happen and ban it. Really? So human ingenuity somehow re-invents money in a technologically superior medium, the consequences of which are mind-bending, and the government is somehow going to ban that? Recognize that in claiming as much, the skeptics are admitting defeat. It is the dying whimper in a series of failed arguments. The skeptics simultaneously accept that there is fundamental demand for bitcoin and then pivot to the unfounded belief that governments can ban it.

Play this one out. When exactly would developed world governments actually step in and attempt to ban bitcoin? Today, the Fed and the Treasury do not view bitcoin as a serious threat to dollar supremacy. In their collective mind, bitcoin is a cute little toy and is not functional as a currency. Presently, the bitcoin network represents a total purchasing power of less than $200 billion. Gold on the other hand has a purchasing power of approximately $8 trillion (40x the size of bitcoin) and broad money supply of dollars (M2) is approximately $15 trillion (75x the size of bitcoin). When does the Fed or Treasury start seriously considering bitcoin a credible threat? Is it when bitcoin collectively represents $1 trillion of purchasing power? $2 trillion or $3 trillion? Pick your level, but the implication is that bitcoin will be far more valuable, and held by far more people globally, before government powers that be view it as a credible competitor or threat.

President Trump & Treasury Secretary Mnuchin on Bitcoin (2019)

So the skeptic logic follows: bitcoin does not work, but if it does work, the government will ban it. But, governments in the free world will not attempt to ban bitcoin until it becomes more apparent that it is a threat. At which time, bitcoin will be more valuable and undoubtedly harder to ban, as it will be held by far more people in far more places. So, ignore fundamentals and the asymmetry inherent in a global monetization event because in the event you turn out to be right, the government will step in to regulate bitcoin out of existence. Which side of the fence would a rational economic actor rather be on? Owning a monetary asset that has increased in value so dramatically that it threatens the global reserve currency, or the opposite – not owning that asset? Assuming an individual possesses the knowledge to understand why it is a fundamental possibility (and increasingly a probability), which is the more defensible and logical position? The asymmetry alone dictates the former and any fundamental understanding of the demand for bitcoin only reinforces the same position.

But Bitcoin Cannot Be Banned.

Think about what bitcoin actually represents and then what a ban of bitcoin would represent. Bitcoin represents the conversion of subjective value, created and exchanged in the real world, for digital keys. Said more plainly, it is the conversion of an individual’s time into money. When someone demands bitcoin, they are at the same time forgoing demand for some other good, whether it be a dollar, a house, a car, or food, etc. Bitcoin represents monetary savings that comes with the opportunity cost of other goods and services. Banning bitcoin would be an affront to the most basic freedoms it is designed to both provide and preserve. Imagine the response by all those that have adopted bitcoin: “Well that was fun, the tool that the experts said would never work, now works too well, and the same experts and authorities say we can’t use it. Everyone go home. Show’s over folks.” To believe that all the people in the world that have adopted bitcoin for the financial freedom and sovereignty it provides would suddenly lay down and accept the ultimate infringement of that freedom is not rational.

“Money is one of the greatest instruments of freedom ever invented by man. It is money which in existing society opens an astounding range of choice to the poor man – a range greater than that which not many generations ago was open to the wealthy..” – F.A. Hayek

Governments could not successfully ban the consumption of alcohol, the use of drugs, the purchase of firearms, or the ownership of gold. A government can marginally restrict access, or even make possession illegal, but it cannot make something of value demanded by a broad and disparate group of people magically go away. When the U.S. made the private ownership of gold illegal in 1933, gold did not lose its value or disappear as a monetary medium. It actually increased in value relative to the dollar, and just thirty years later, the ban was lifted. Not only does bitcoin provide a greater value proposition relative to any other good that any government has ever attempted to ban (including gold); but by its nature, it is also far harder to ban. Bitcoin is global and decentralized. It is without borders and it is secured by nodes and cryptographic keys. The act of banning bitcoin would require preventing open source software code from being run and preventing digital signatures (created by cryptographic keys) from being broadcast on the internet. And it would have to be coordinated across numerous jurisdictions, except there is no way to know where the keys actually reside or to prevent more nodes from popping up in different jurisdictions. Setting aside the constitutional issues, it would be technically infeasible to enforce a ban of bitcoin in any meaningful way.

Bitcoin Node Concentration by Country ( earn.com )

Even if all countries in the G-20 coordinated to ban bitcoin in unison, it would not kill bitcoin. Instead, it would be the fait accompli for the fiat system. It would reinforce to the masses that bitcoin is a formidable currency, and it would set off a global and hopeless game of whack-a-mole. There is no central point of failure in bitcoin; bitcoin miners, nodes and keys are distributed throughout the world. Every aspect of bitcoin is decentralized, which is why running nodes and controlling keys is core to bitcoin. The more keys and the more nodes that exist, the more decentralized bitcoin becomes, and the more immune bitcoin is to attack. The more jurisdictions in which mining exists, the less risk any single jurisdiction represents to bitcoin’s security function. A coordinated state level attack would only serve to build the strength of bitcoin’s immune system. It would ultimately accelerate the shift away from the legacy financial system (and legacy currencies), and it would accelerate innovation within the bitcoin economic system. With each passing threat, bitcoin innovates to immunize the threat. A coordinated state level attack would be no different.

Permissionless innovation on a globally decentralized basis is the reason bitcoin gains strength from every attack. It is the attack vector itself which causes bitcoin to innovate. It is Adam Smith’s invisible hand on steroids. Individual actors may believe themselves to be motivated by a greater cause, but in reality, the utility embedded in bitcoin creates a sufficiently powerful incentive structure to ensure its survival. The self-interests of millions, if not billions, of uncoordinated individuals aligned by their individual and collective need for money incentivizes permissionless innovation on top of bitcoin. Today, it may seem like a cool new technology or a nice-to-have portfolio investment, but even if most people do not yet recognize it, bitcoin is a necessity. It is a necessity because money is a necessity, and legacy currencies are fundamentally broken. Two months ago, the repo markets in the U.S. broke , and the Fed quickly responded by increasing the supply of dollars by $250 billion, with more to come. It is precisely why bitcoin is a necessity, not a luxury. When an innovation happens to be a basic necessity to the functioning of an economy, there is no government force that could ever hope to stop its proliferation. Money is a very basic necessity, and bitcoin represents a step-function change innovation in the global competition for money.

And more practically, any attempt to ban bitcoin or heavily regulate its use by any jurisdiction would directly benefit a competing jurisdiction. The incentive to defect from any coordinated effort to ban bitcoin would be far too high to sustain such an agreement across jurisdictions. If the United States made the possession of bitcoin illegal tomorrow, would it slow down proliferation, development and adoption of bitcoin and would it cause the value of the network to decline intermittently? Probably. Would it kill bitcoin? No. Bitcoin represents the most mobile capital in the world. Countries and jurisdictions that create regulatory certainty and place the least amount of restrictions on the use of bitcoin will benefit significantly from capital inflows.

Banning Bitcoin Prisoner’s Dilemma

In practice, the prisoner’s dilemma is not one-to-one. It is multi-dimensional involving numerous jurisdictions, all with competing interests, making any attempts to successfully ban bitcoin that much more impractical. Human capital, physical capital and monetary capital will flow to the countries and jurisdictions with the least restrictive regulations on bitcoin. It may not happen overnight, but attempting to ban bitcoin is the equivalent of a country cutting off its nose to spite its face. It doesn’t mean that countries will not try. India has already tried to ban bitcoin. China has attempted to heavily restrict its use. Others will follow. But each time a country takes an action to restrict the use of bitcoin, it actually has the unintended effect of promoting bitcoin adoption. Attempts to ban bitcoin are an extremely effective marketing tool for bitcoin. Bitcoin exists as a non-sovereign, censorship-resistant form of money. It is designed to exist beyond the state. Attempts to ban bitcoin merely serve to reinforce bitcoin’s reason for existence and ultimately, its value proposition.

The only winning move is to play

Banning bitcoin is a fool’s errand. Some will try; all will fail. And the very attempts to ban bitcoin will accelerate its adoption and proliferation. It will be the hundred mile-per-hour wind that fuels the wildfire. It will also make bitcoin stronger and more reliable, further immunizing it from attack and reinforcing its antifragile nature. And in any case, believing governments will ban bitcoin, if it becomes a credible threat to global reserve currencies, is an irrational reason to discount it as a savings technology. It both cedes that bitcoin is viable as money, while at the same time ignoring the principal reasons as to why: decentralization and censorship-resistance. Imagine understanding the greatest present secret in the world and not capitalizing on the asymmetry and utility that bitcoin provides in fear of government. More likely, either someone understands why bitcoin works and that it will not fail at the hands of a government, or a knowledge gap exists as to how bitcoin is able to function in the first place. Begin by understanding the fundamentals, and then apply that as a baseline to assess any potential risk posed by future government intervention or regulation. And never discount the value of asymmetry; the only winning move is to play.

Next edition: Bitcoin is Not for Criminals (…it’s for everyone)

Views presented are expressly my own and not those of Unchained Capital or my colleagues. Thanks to Phil Geiger for reviewing and for providing valuable feedback.

Banning bitcoin is a fool’s errand. Some will try; all will fail.

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I was fortunate enough to be raised in a middle-class family by parents who took good care of me, to go to good public schools, and to come into a job market that offered me equal opportunity. I was raised with the belief that having equal opportunity to have basic care, good education, and employment is what is fair and best for our collective well-being. To have these things and use them to build a great life is what was meant by living the American Dream.

At age 12 one might say that I became a capitalist because that’s when I took the money I earned doing various jobs, like delivering newspapers, mowing lawns, and caddying and put it in the stock market when the stock market was hot. That got me hooked on the economic investing game which I’ve played for most of the last 50 years. To succeed at this game I needed to gain a practical understanding of how economies and markets work. My exposure to most economic systems in most countries over many years taught me that the ability to make money, save it, and put it into capital (i.e., capitalism) is the most effective motivator of people and allocator of resources to raise people’s living standards. Over these many years I have also seen capitalism evolve in a way that it is not working well for the majority of Americans because it’s producing self-reinforcing spirals up for the haves and down for the have-nots. This is creating widening income/wealth/opportunity gaps that pose existential threats to the United States because these gaps are bringing about damaging domestic and international conflicts and weakening America’s condition.

I think that most capitalists don’t know how to divide the economic pie well and most socialists don’t know how to grow it well, yet we are now at a juncture in which either a) people of different ideological inclinations will work together to skillfully re-engineer the system so that the pie is both divided and grown well or b) we will have great conflict and some form of revolution that will hurt most everyone and will shrink the pie.

I believe that all good things taken to an extreme can be self-destructive and that everything must evolve or die. This is now true for capitalism. In this report I show why I believe that capitalism is now not working for the majority of Americans, I diagnose why it is producing these inadequate results, and I offer some suggestions for what can be done to reform it. Because this report is rather long, I will present it in two parts: part one outlining the problem and part two offering my diagnosis of it and some suggestions for reform.

Why and How Capitalism Needs to Be Reformed

Before I explain why I believe that capitalism needs to be reformed, I will explain where I’m coming from, which has shaped my perspective. I will then show the indicators that make it clear to me that the outcomes capitalism is producing are inconsistent with what I believe our goals are. Then I will give my diagnosis of why capitalism is producing these inadequate outcomes and conclude by offering some thoughts about how it can be reformed to produce better outcomes. As there is a lot in this, I will present it in two parts, releasing Part 1 today and Part 2 tomorrow.

Part 1

Where I’m Coming From

I was lucky enough to grow up in a middle-class family raised by parents who cared for me, to be educated in a good public school, and to be able to go into a job market that offered me equal opportunity. One might say that I lived the American Dream. At the time, I and most everyone around me believed that we as a society had to strive to provide these basic things (especially equal education and equal job opportunity) to everyone. That was the concept of equal opportunity, which most people believed to be both fair and productive.

I suppose I became a capitalist at age 12 because that’s when I took the money I earned from doing various jobs like delivering newspapers, mowing lawns, and caddying, and put it in the stock market when the stock market was hot in the 1960s. That got me hooked on the investing game. I went to college and graduate school even though I didn’t have enough money to pay the tuitions because I could borrow the money from a government student loan program. Then I entered a job market that provided me equal opportunity, and I was on my way.

Because I loved playing the markets I chose to be a global macro investor, which is what I’ve been for about 50 years. That required me to gain a practical understanding of how economies and markets work. Over those years, I’ve had exposure to all sorts of economic systems in most countries and have come to understand why the ability to make money, save it, and put it into capital (i.e., capitalism) is an effective motivator of people and allocator of resources that raises people’s living standards. It is an effective motivator of people because it rewards people for their productive activities with money that can be used to get all that money can buy. And it is an effective allocator of resources because the creation of profit requires that the output created is more valuable than the resources that go into creating it. Being productive leads people to make money, which leads them to acquire capital (which is their savings in investment vehicles), which both protects the saver by providing money when it is later needed and provides capital resources to those who can combine them with their ideas and convert them into the profits and productivities that raise our living standards. That is the capitalist system.

Over those many years, I have seen communism come and go and have seen that all countries that made their economies work well, including “communist China,” have made capitalism an integral part of their systems for these reasons. Communism’s philosophy of “from each according to his ability, to each according to his needs” turned out to be naïve because people were not motivated to work hard if they didn’t get commensurately rewarded, so prosperity suffered. Capitalism, which connects pay to productivity and creates efficient capital markets that facilitate savings and the availability of buying power to fuel people’s productivity, worked much better.

I’ve also studied what makes countries succeed and fail by taking a mechanistic perspective rather than an ideological one because my ability to deal with economies and markets in a practical way is what I have been scored on. If you’d like to see a summary of my research that shows what makes countries succeed and fail, it’s here . In a nutshell, poor education, a poor culture (one that impedes people from operating effectively together), poor infrastructure, and too much debt cause bad economic results. The best results come when there is more rather than less of: a) equal opportunity in education and in work, b) good family or family-like upbringing through the high school years, c) civilized behavior within a system that most people believe is fair, and d) free and well-regulated markets for goods, services, labor, and capital that provide incentives, savings, and financing opportunities to most people.

Naturally, I have watched these things closely over the years in all countries, especially in the US. I will now show the results that our system is producing that have led me to believe capitalism isn’t working well for most Americans.

Why I Believe That Capitalism Is Not Working Well for Most Americans

In this section, I will show you a large batch of stats and charts that paint the picture. Perhaps there are too many for your taste. If you feel that you’re getting past the point of diminishing returns, I suggest that you either quickly scan the rest by just reading the sentences in bold or skip ahead to the next section which explains why I think that not reforming capitalism would be an existential threat to the US.

To begin, I’d like to show you the differences that exist between the haves and the have-nots. Because these differences are hidden in the averages, I broke the economy into the top 40% and the bottom 60% of income earners. 1 That way we could see what the lives of the bottom 60% (i.e., the majority) look like and could compare them with those of the top 40%. What I found is shown in this study . While I suggest that you read it, I will quickly give you a bunch of stats that paint the picture here.


There has been little or no real income growth for most people for decades. As shown in the chart below on the left, prime-age workers in the bottom 60% have had no real (i.e., inflation-adjusted) income growth since 1980. That was at a time when incomes for the top 10% have doubled and those of the top 1% have tripled. i As shown in the chart to the right, the percentage of children who grow up to earn more than their parents has fallen from 90% in 1970 to 50% today. That’s for the population as a whole. For most of those in the lower 60%, the prospects are worse.

As shown below, the income gap is about as high as ever and the wealth gap is the highest since the late 1930s. Today, the wealth of the top 1% of the population is more than that of the bottom 90% of the population combined, which is the same sort of wealth gap that existed during the 1935-40 period (a period that brought in an era of great internal and external conflicts for most countries). Those in the top 40% now have on average more than 10 times as much wealth as those in the bottom 60%. iv That is up from six times in 1980.

The following charts show real income growth by quintiles for the overall population since 1970. Ask yourself which one you’re in. That probably has given you your perspective. My objective is to show you the broader perspective.

Real Mean Household Income by Quintile (2017 USD)

Most people in the bottom 60% are poor. For example, only about a third of the bottom 60% save any of their income in cash or financial assets. According to a recent Federal Reserve study, 40% of all Americans would struggle to raise $400 in the event of an emergency. viii

And they are increasingly getting stuck being poor. The following chart shows the odds of someone in the bottom quintile moving up to the middle quintile or higher in a 10-year period. Those odds declined from about 23% in 1990 to only 14% as of 2011.

While most Americans think of the US as being a country of great economic mobility and opportunity, its economic mobility rate is now one of the worst in the developed world. As shown below, in the US people whose fathers were in the bottom income quartile have a 40% chance of staying in that quartile and only about an 8% chance of making it to the top quartile, which is half of the average probability of moving up and one of the worst probabilities of the countries analyzed. In a country of equal opportunity, that would not exist.

Est Percentage of People Born to Bottom-Quartile Fathers In Top vs Bottom Quartiles

One’s income growth results from one’s productivity growth, which results from one’s personal development. So let’s look at how we are developing people. Let’s start with children.

To me, the most intolerable situation is how our system fails to take good care of so many of our children. As I will show, a large number of them are poor, malnourished (physically and mentally), and poorly educated. More specifically:

  • The childhood poverty rate in the US is now 17.5% and has not meaningfully improved for decades. xi In the US in 2017, around 17% of children lived in food-insecure homes where at least one family member was unable to acquire adequate food due to insufficient money or other resources. xii Unicef reports that the US is worse than average in the percent of children living in a food-insecure household (with the US faring worse than Poland, Greece, and Chile). xiii

The domino effects of these conditions are costly. Low incomes, poorly funded schools, and weak family support for children lead to poor academic achievement, which leads to low productivity and low incomes of people who become economic burdens on the society.

Though there are bright spots in the American education system such as our few great universities, the US population as a whole scores very poorly relative to the rest of the developed world in standardized tests for a given education level. More specifically:

  • Looking at the most respected (PISA) test scores, the US is currently around the bottom 15 th percentile of the developed world. As shown below, the US scores lower than virtually all developed countries other than Italy and Greece. That stands in the way of many people having adequate living standards and of US competitiveness.

2015 PISA Scores Across Countries

Differences in these scores are tied to poverty levels—i.e., high-poverty schools (measured by the share of students eligible for free/reduced-price lunch) have PISA test scores around 25% lower than schools with the lowest levels of poverty.

US PISA Test Scores by % of Students Eligible for Free/Reduced-Price Lunch

  • Among developed (i.e., OECD) countries, the US has the third-worst difference in shortages of teaching staff between advantaged and disadvantaged schools.

Teaching Staff Shortages at Advantaged vs Disadvantaged Schools (Based on Indexed Surveys)

The stats that show that the US does a poor job of tending to the needs of its poor students relative to how most other countries do it are never-ending. Here are a few more:

  • The proportion of disadvantaged students who have at least a year of pre-primary education is lower in the US compared to the average OECD country. xvii
  • Among OECD countries, the US has the second-worst child poverty rate as of 2008 among single-parent households who aren’t working—a failure of the social safety net. xviii

These poor educational results lead to a high percentage of students being inadequately prepared for work and having emotional problems that become manifest in damaging behaviors. Disadvantaged students in the US are far more likely to report social and/or emotional issues than in most other developed countries, including not being socially integrated at school, severe test anxiety, and low satisfaction with life.

34% of high-poverty schools experienced high levels of chronic student absence, versus only 10% of high-income schools. xx Even in Connecticut, one of the wealthiest states by per capita income, 22% of youth are disengaged (i.e., either missing more than 25 days of school a year, failing two or more courses, or being suspended multiple times) or disconnected (young people not enrolled in school and without a high school degree). xxi Disconnected youth in Connecticut are five times more likely to end up incarcerated and 33% more likely to be struggling with substance abuse (full report linked here) .

Comparing the high school graduation rates of Connecticut school districts to child poverty rates shows a tight relationship across the state: a 1% higher child poverty rate equates to about 1% lower graduation rates.

High School Graduation Rates vs Childhood Poverty Rates for Connecticut School Districts

  • Across states, there is a strong relationship between spending per student and educational outcomes.

Scatters of Educational Spending and Outcomes for US States Spending per Pupil vs. grade 12 Test Scores

Recent research for the US suggests that children under age 5 who were granted access to food stamps experienced better health and education outcomes—an estimated 18% increase in high school graduation rates—which led them to be much less likely to rely on other welfare programs later in life. xxiv

Students who come from poor families and try to go to college are less well prepared. For example, those who come from families earning less than $20,000 score on average 260 points (out of 1600) worse on the SAT than students from families earning $200,000+ do, and the gap is increasing. xxv The gap in test scores between children at the top and bottom of the income distribution is estimated to be 75% higher today than it was in the early 1940s, according to a 2011 study. xxvi

Yet children living in poorer neighborhoods on average receive about $1,000 less state and local funding per student than those in the more prosperous neighborhoods. xxvii This is despite the fact that the federal government (according to its Title I funding formula) assumes it costs a district 40% more per year to educate lower-income students to the same standard as typical students. xxviii As a result, schools in low-income areas are typically severely underfunded. On average, in public schools 94% of teachers have to pay for supplies with their own money—often including basic cleaning supplies—and it is worse in the poorest public schools. xxix

A related problem is that many teachers who have to deal with these stressful conditions are underpaid and under-respected. When I was growing up, doctors, lawyers, and teachers were the most respected professions. Now, teachers make only 68% of what other university graduates make, which is significantly less than they make in other OECD developed countries. xxx Even looking at weekly earnings to adjust for the length of the school year and controlling for other things that impact pay (like age and years of experience), teachers earned 19% less than comparable workers in 2017, versus only 2% less in 1994. Even worse, they don’t get the respect that they deserve. xxxi

The income/education/wealth/opportunity gap reinforces the income/education/wealth/opportunity gap:

Richer communities tend to have public schools that are far better funded than poorer communities, which reinforces the income/wealth/opportunity gap. One of the main reasons for this funding gap is that the Constitution made education a state issue, and most states made local schools primarily locally funded so that rich towns have well-funded public schools and poor towns have poorly funded public schools. More specifically, around 45% of school funding comes from local governments, primarily through property taxes, while only around 8% comes from the federal government, and the rest is from state governments. xxxii Thus, there can be enormous variations in the wealth/income of individual communities. Also, the top 40% of income earners spend almost five times as much on their children’s education as the bottom 60% of income earners do, while those in the top 20% spend about six times as much as those in the bottom 20% do. xxxiii

Underfunded public schools are suffering in quality. For instance, PISA data shows that students at US schools with significant teaching staff shortages score 10.5% worse on testing than students at schools with no teacher shortages. Similarly, a shortage of lab equipment is associated with a 16.7% drop in student scores, and shortages of library materials are associated with a 15.1% drop in student scores. xxxiv

By comparison, private schools on average both spend considerably more on students and produce better outcomes. Private schools in the US spend about 70% more per student than public schools do, with the median private school spending about $23,000 per student in 2016, compared to about $14,000 for the average public school. xxxv This higher spending translates to higher test scores: in the last round of PISA testing, US private school students scored on average 4.3% higher than public school students across math, reading, and science exams. Over the three PISA surveys since 2009, private school students have scored on average 6.9% higher. xxxvi

Not surprisingly, Americans have much less confidence in public schools today than they have had at any point over the last five decades. Today, only 29% of Americans have a “great deal” or “quite a lot” of trust in the public education system. In 1975, 62% of Americans trusted public schools. xxxvii

To me, leaving so many children in poverty and not educating them well is the equivalent of child abuse, and it is economically stupid.

The weakening of the family and good parental guidance has also been an important adverse influence:

Here are a few stats that convey how the family unit has changed over the years:

  • In 1960, 73% of children lived with two married parents who had never been divorced, and 13% lived in a household without two married parents. 2 In 2014, the share of children living in a household without two married parents was 38% (and now less than half live in households with two parents in a first marriage). Those stats are for the average of all households in the US. The family support for those in low-education, low-income households is much less. Around 60% of children of parents with less than high school education don’t live in households with two married parents, while only 14% of children of parents who graduated college are in such households. xxxviii

The probability of being incarcerated is closely related to education levels: among Americans aged 28-33, 35% of male high school dropouts have been incarcerated versus around 10% of male high school graduates and only 2% of male college graduates. xxxix

Between 1991 and 2007, the number of children with a parent in state or federal prison grew 80%. xl Today, an estimated 2.7 million children in the US have a parent in prison or jail—that is 1 in every 28 children (3.6% of all children). xli

Bad childcare and bad education lead to badly behaved adults hence higher crime rates that inflict terrible costs on the society:

The United States’ incarceration rate is nearly five times the average of other developed countries and three times that of emerging countries. xlii The direct cost of keeping people incarcerated is staggering and has grown rapidly: state correctional costs quadrupled over the past two decades and now top $50 billion a year, consuming 1 in every 15 general fund dollars. xliii

This bad cycle perpetuates itself as criminal/arrest records make it much more difficult to find a job, which depresses earnings. Serving time, even relatively brief periods, reduces hourly wages for men by approximately 11%, the time employed by 9 weeks per year, and annual earnings by 40%. xliv

The health consequences and economic costs of low education and poverty are terrible:

For example, for those in the bottom 60% premature deaths are up by about 20% since 2000. xlv Men from the lowest 20% of the income distribution can expect to live about 10 fewer years than men from the top 20%. xlvi

The US is just about the only major industrialized country with flat/slightly rising premature death rates. The biggest contributors to that change are an increase in deaths by drugs/poisoning (having more than doubled since 2000) and an increase in suicides (up over 50% since 2000). xlvii

Since 1990, the share of Americans who say that in the last year they put off medical treatment for a serious condition because of cost has roughly doubled, from 11% in 1991 to 19% today. xlviii

Those who are unemployed or those making less than $35,000 per year have worse health, with 20% of each group reporting poor health, about three times the rate for the rest of the population. xlix

The impacts of childhood poverty alone in the US are estimated to increase health expenditures by 1.2% of GDP. l

These conditions pose an existential risk for the US.

The previously described income/wealth/opportunity gap and its manifestations pose existential threats to the US because these conditions weaken the US economically, threaten to bring about painful and counterproductive domestic conflict, and undermine the United States’ strength relative to that of its global competitors.

These gaps weaken us economically because:

  • They slow our economic growth because the marginal propensity to spend of wealthy people is much less than the marginal propensity to spend of people who are short of money.
  • They result in suboptimal talent development and lead to a large percentage of the population undertaking damaging activities rather than contributing activities.

In addition to social and economic bad consequences, the income/wealth/opportunity gap is leading to dangerous social and political divisions that threaten our cohesive fabric and capitalism itself.

I believe that, as a principle, if there is a very big gap in the economic conditions of people who share a budget and there is an economic downturn, there is a high risk of bad conflict. Disparity in wealth, especially when accompanied by disparity in values, leads to increasing conflict and, in the government, that manifests itself in the form of populism of the left and populism of the right and often in revolutions of one sort or another. For that reason, I am worried what the next economic downturn will be like, especially as central banks have limited ability to reverse it and we have so much political polarity and populism.

The problem is that capitalists typically don’t know how to divide the pie well and socialists typically don’t know how to grow it well. While one might hope that when such economic polarity and poor conditions exist, leaders would pull together to reform the system to both divide the economic pie and make it grow better (which is certainly doable and the best path), they typically become progressively more extreme and fight more than cooperate.

In order to understand the phenomenon of populism, two years ago I did a study of it in which I looked at 14 iconic cases and observed the patterns and the forces behind them. If you are interested in it, you can read it here at www.economicprinciples.org . In brief, I learned that populism arises when strong fighters/leaders of the right or of the left who are looking to fight and defeat the opposition come to power and escalate their conflict with the opposition, which typically galvanizes around comparably strong/fighting leaders. The most important thing to watch as populism develops is how conflict is handled—whether the opposing forces can coexist to make progress or whether they increasingly “go to war” to block and hurt each other and cause gridlock. In the worst cases, this conflict causes economic problems (e.g., via paralyzing strikes and demonstrations) and can even lead to moves from democratic leadership to autocratic leadership as happened in a number of countries in the 1930s.

We are now seeing conflicts between populists of the left and populists of the right increasing around the world in much the same way as the same way as they did in the 1930s when the income and wealth gaps were comparably large. In the US, the ideological polarity is greater than it has ever been and the willingness to compromise is less than it’s ever been. The chart on the left shows how conservative Republican senators and representatives have been and how liberal Democratic senators and representatives have been going back to 1900. As you can see, they are each more extreme and they are more divided than ever before. The chart on the right shows what percentage of them have voted along party lines going back to 1790, which is now the greatest ever. In other words, they have more polar extreme positions and they are more solidified in those positions than ever. And we are coming into a presidential election year. We can expect a hell of a battle.

It doesn’t take a genius to know that when a system is producing outcomes that are so inconsistent with its goals, it needs to be reformed. In the next part, I will explore why it is producing these substandard outcomes and what I think should be done to reform it.

Part 2

My Diagnosis of Why Capitalism Is Now Not Working Well for the Majority of People

I believe that reality works like a machine with cause/effect relationships that produce outcomes, and that when the outcomes fall short of the goals one needs to diagnose why the machine is working inadequately and then reform it. I also believe that most everything happens over and over again through history, and by observing and thinking through these patterns one can better understand how reality works and acquire timeless and universal principles for dealing with it better. I believe that the previously shown outcomes are unacceptable, so that we first need to look at how the economic machine is producing these outcomes and then think about how to reform it.

Contrary to what populists of the left and populists of the right are saying, these unacceptable outcomes aren’t due to either a) evil rich people doing bad things to poor people or b) lazy poor people and bureaucratic inefficiencies, as much as they are due to how the capitalist system is now working.

I believe that all good things taken to an extreme become self-destructive and everything must evolve or die, and that these principles now apply to capitalism. While the pursuit of profit is usually an effective motivator and resource allocator for creating productivity and for providing those who are productive with buying power, it is now producing a self-reinforcing feedback loop that widens the income/wealth/opportunity gap to the point that capitalism and the American Dream are in jeopardy. That is because capitalism is now working in a way in which people and companies find it profitable to have policies and make technologies that lessen their people costs, which lessens a large percentage of the population’s share of society’s resources. Those companies and people who are richer have greater buying power, which motivates those who seek profit to shift their resources to produce what the haves want relative to what the have-nots want, which includes fundamentally required things like good care and education for the have-not children. We just saw this exemplified in the college admissions cheating scandal.

As a result of this dynamic, the system is producing self-reinforcing spirals up for the haves and down for the have-nots, which are leading to harmful excesses at the top and harmful deprivations at the bottom. More specifically, I believe that:

  1. The pursuit of profit and greater efficiencies has led to the invention of new technologies that replace people, which has made companies run more efficiently, rewarded those who invented these technologies, and hurt those who were replaced by them. This force will accelerate over the next several years, and there is no plan to deal with it well.

  2. The pursuit of greater profits and greater company efficiencies has also led companies to produce in other countries and to replace American workers with cost-effective foreign workers, which was good for these companies’ profits and efficiencies but bad for the American workers’ incomes. Of course, this globalization also allowed less expensive and perhaps better quality foreign goods to come into the US, which has been good for both the foreign sellers and the American buyers of them and bad for the American companies and workers who compete with them. Because of these two forces, the share of revenue that has gone to profits has increased relative to the share that has gone to the worker. The charts below show the percentage of corporate revenue that has gone to profits and the percentage that has gone to employee compensation since 1929.

  3. Central banks’ printing of money and buying of financial assets (which were necessary to deal with the 2008 debt crisis and to stimulate economic growth) drove up the prices of financial assets, which helped make people who own financial assets richer relative to those who don’t own them. When the Federal Reserve (and most other central banks) buys financial assets to put money in the economy in order to stimulate the economy, the sellers of those financial assets (who are rich enough to have financial assets) a) get richer because the financial asset prices rise and b) are more likely to buy financial assets than to buy goods and services, which makes the rich richer and flush with money and credit while the majority of people who are poor don’t get money and credit because they are less creditworthy. From being in the investment business, I see that there is a glut of investment money chasing investments at the same time as there is an extreme shortage of money among most people. In other words, money is clogged at the top because if you’re one of those who has money or good ideas of how to make money you can have more money than you need because lenders will freely lend it to you and investors will compete to give it to you. On the other hand, if you’re not in financially good shape nobody will lend to you or invest in you and the government doesn’t help materially because the government doesn’t do that.

  4. Policy makers pay too much attention to budgets relative to returns on investments. For example, not spending money on educating our children well might be good from a budget perspective, but it’s really stupid from an investment perspective. Looking at the funding through a budget lens doesn’t lead one to take into consideration the all-in economic picture—e.g., it doesn’t take into consideration the all-in costs to the society of having poorly educated people. While focusing on the budget is what fiscal conservatives typically do, fiscal liberals have typically shown themselves to borrow too much money and fail to spend it wisely to produce the economic returns that are required to service the debts they have taken on, so they often end up with debt crises. The budget hawk conservatives and the pro-spending/borrowing liberals have trouble focusing on, working together for, and achieving good “double bottom line” return on investments (i.e., investments that produce both good social returns and good economic returns).

What I Think Should Be Done

For the previously explained reasons, I believe that capitalism is a fundamentally sound system that is now not working well for the majority of people, so it must be reformed to provide many more equal opportunities and to be more productive. To make the changes, I believe something like the following is needed.

  1. Leadership from the top. I have a principle that you will not effect change unless you affect the people who have their hands on the levers of power so that they move them to change things the way you want them to change. So there need to be powerful forces from the top of the country that proclaim the income/wealth/opportunity gap to be a national emergency and take on the responsibility for reengineering the system so that it works better.

  2. Bipartisan and skilled shapers of policy working together to redesign the system so it works better. I believe that we will do this in a bipartisan and skilled way or we will hurt each other. So I believe the leadership should create a bipartisan commission to bring together skilled people from different communities to come up with a plan to reengineer the system to simultaneously divide and increase the economic pie better. That plan will show how to raise money and spend/invest it well to produce good double bottom line returns.

  3. Clear metrics that can be used to judge success and hold the people in charge accountable for achieving it. In running the things I run, I like to have clear metrics that show how those who are responsible for things are doing and have rewards and punishments that are based on how these metrics change. Having these would produce the accountability and feedback loop that are required to achieve success. To the extent possible, I’d bring that sort of accountability down to the individual level to encourage an accountability culture in which individuals are aware of whether they are net contributors or net detractors to the society, and the individuals and the society make attempts to make them net contributors.

  4. Redistribution of resources that will improve both the well-beings and the productivities of the vast majority of people. As an economic engineer, naturally I think about how money might be obtained from taxes, borrowing, businesses, and philanthropy, and how it would flow to affect prices and economies. For example, I think about how a change in personal tax rates might occur and how changes in them relative to corporate tax rates would affect how money would flow, and how changes in tax rates in one location relative to another location would drive flows and outcomes in them. I also think a lot about how the money raised will be spent—e.g., how much will be spent on programs that will improve both social and economic outcomes, and how much will be redistributive. Such decisions would of course be up to the people on the bipartisan commission and the leadership to decide and are way too complicated an engineering exercise for me to opine on here. I can, however, give my big picture inclinations. Above all else, I’d want to achieve good double bottom line results. To do that I’d:

    • Create private-public partnerships (including governments, philanthropists, and companies) that would jointly vet and invest in double bottom line projects that would be judged on the basis of their social and economic performance results relative to clear metrics. That would both increase the funding for and the quality of projects because people who have to put their own money on the line would be responsible for them. (For examples, see the Appendix.)
    • Raise money in ways that both improve conditions and improve the economy’s productivity by taking into consideration the all-in costs for the society (e.g., I’d tax pollution and various causes of bad health that have sizable economic costs for the society).
    • Raise more from the top via taxes that would be engineered to not have disruptive effects on productivity and that would be earmarked to help those in the middle and the bottom primarily in ways that also improve the economy’s overall level of productivity, so that the spending on these programs is largely paid for by the cost savings and income improvements that they create. Having said that, I also believe that the society has to establish minimum standards of healthcare and education that are provided to those who are unable to take care of themselves.
  5. Coordination of monetary and fiscal policies. Because money is clogged at the top and because the capacity of central banks to ease enough to reverse the next economic downturn is limited, fiscal policy will have to be more coordinated with monetary policy, which can happen while maintaining the Federal Reserve’s independence. If done well, this will both stimulate economic growth and reduce the effects that quantitative easing has on increasing the wealth gap by shifting money and credit into the hands of those who have a higher propensity to spend from those who have a higher propensity to save and from those who need it less to those who need it more.

Looking Ahead

In assessing the position we are in, we can look at both cause/effect relationships and historical comparisons. The most relevant causes that are leading to the effects we are seeing are:

  1. The high debt levels that led to the 2008 debt crisis (and have since increased) led to…
  2. Central banks printing a lot of money and buying financial assets, which pushed asset prices up and pushed interest rates down. This has benefited those with financial assets (i.e., the haves) and has left central banks with less power to stimulate the economy.
  3. These factors and new technologies created very wide income/wealth/opportunity and values gaps, which are expected to increase and are leading to…
  4. Increased populism of the left and populism of the right that are causing greater domestic and international conflicts at the same time as…
  5. There is a rising power (China) to compete with the existing dominant world power (the United States), which will lead to competitions that will be economic, ideological, and military and will be determined by the two powers’ relative skills and technological abilities. This competition will establish what the new world order will be like via-à-vis the rest of the world.

The last time that this configuration of influences existed was in the late 1930s when there were great conflicts and economic and political systems were overturned. For the fundamental reasons explained earlier, I believe that we are at the sort of critical juncture in which the biggest issue will be how we deal with each other rather than any other constraints.

There are enough resources to go around to deal with the risky issues and produce much more equal opportunity plus improved productivity that will grow the pie. My big worry is that the sides will be intransigent in their positions so that capitalism will either a) be abandoned or b) not be reformed because those on the right will fight for keeping it as it is and those on the left will fight against it. So to me, the biggest questions are a) whether populists of the right or populists of the left will gain control and/or have conflicts that will adversely affect the operations of government, the economy, and international relations or b) whether sensible and skilled people from all sides can work together to reform the system so it works well for the majority of people.

We will soon know a lot more about which paths are most likely because over the next two years there will be defining elections in the US, the UK, Italy, Spain, France, Germany, and the European Parliament. How they turn out will have significant effects on how the conflicts raised in this report will be dealt with, which will influence how money will flow between people, markets, states, and countries and will determine the relative strengths of most people and countries. I will be paying close attention to all this and will keep you informed.

Appendix: My Perspective On Double Bottom Line Investing

I felt that I should give some examples of good double bottom line investing so that’s what this appendix is about. From doing my philanthropic work, I see great double bottom line investments all the time, and I only see a small percentage of them so I know that there are vastly more. Since my wife and I focus especially in education and microfinance, my window is more in these areas than elsewhere though we have been exposed to many in other areas such as healthcare, the reform of the criminal justice system, environmental protection, etc. For example, a few of the good double bottom line investments that I came across are:

Early childhood education programs that produce returns of about 10-15% annualized in the form of cost savings for the government when one accounts for the lifetime benefits for the students and society. That is because they lead to better school performance, higher earnings, and lower odds of committing crimes, all of which have direct economic benefits for society. liii

Relatively inexpensive interventions that lead to lower high school dropout rates in grades 8 and 9 can pay for themselves many times over. Moving these young students into practical higher education or trade jobs when done well is highly cost-effective. For example, the lifetime earnings of a college graduate are over $1 million higher than those of a high school dropout. liv

School finance reforms show that a 10% increase in per-pupil spending can have a meaningful impact on educational outcomes for low-income students, producing a higher ROI than spending on higher-income students. Overall, researchers have found that additional school spending has an IRR of roughly 10%. lv

Microfinance. For every dollar donated/invested in this, approximately $12 is lent, paid back, and lent again over the next 10 years to disadvantaged people to start and build their businesses. lvi

Numerous infrastructure spending plans that can facilitate trade and improve productivity/efficiency. From 33 studies that looked at the ROI of infrastructure investment, it is estimated that smart infrastructure programs have a 10-20% rate of return in terms of increased economic activity, making it a good trade for the government to borrow money and invest in infrastructure. lvii

Public health/preventative healthcare interventions also can have very positive ROIs. From 52 studies that looked at the ROI of preventative health programs (covering a variety of program types, including vaccines, home blood pressure monitoring, smoking cessation, etc.), on average the programs created $14 of benefit for every $1 of cost. lviii

Since these areas are great double bottom line investments for the country, it would be great if they were brought to scale with government support. I believe that partnerships between philanthropy, government, and business for these types of investments are powerful because they would both increase the amount of funding and result in better vetting of the projects and programs. I know that I see plenty of good deals that I’d love to maximize the funding for that would be cost-effective for governments, other philanthropists, and businesses to support. For example, my wife and our philanthropy team are now working on an agreement in which the Dalio Philanthropies will donate $100 million to programs for the most underfunded school districts and for microfinance in Connecticut if the state donates $100 million and if other philanthropists and businesses in Connecticut also donate another $100 million. That will bring more money, better due diligence, more partnership to our Connecticut community, and positive expected net financial returns (after considering the costs of not educating and supporting our children well) for the benefit of the state.

I was fortunate enough to be raised in a middle-class family by parents who took good care of me, to go to good public schools, and to come into a job market that offered me equal opportunity. I was raised with the belief that having equal opportunity to have basic care, good education, and employment is what is fair and best for our collective well-being. To have these things and use them to build a great life is what was meant by living the American Dream.

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Ray Dalio
over 1 year ago
over 1 year ago

Yup Protocol

Yup Protocol

Social consensus run on a curator economy maintained by a global community

  • $ 706,337


  • 121,2964


  • 17,952



Yup is a social consensus protocol that facilitates the measurement, capture, and exchange of influence in a pseudonymous opinion-based economy. It identifies content and distributes rewards according to the value of the opinions associated with that content. We define content as any specific data online that user(s) deem worth judging, including but not limited to texts, images, videos, locations, accounts, and links. The value of each action depends on a users' influence . The influence metric is a function of engagement, holdings over time, and reputation (see Influence). The token reward mechanism mints new YUP tokens and distributes them according to influence. The protocol incentivizes users to earn and hold YUP to increase influence while rating across the web. In addition to creator/curator rewards, there are yields from providing liquidity.


Influence is the relative social capital of a user or piece of content, measured in a score out of 100. The higher your influence score, the more impactful your ratings are. The influence metric is a function of two components: age and activity. Token age measures the amount of tokens an account has and how long they’ve been held for to ensure dependable governance. Activity calculates the difference in the number of ratings and the amount of rewards received to accurately represent users' contribution to the network." Learn more →

Yup Token

The YUP token is an asset distributed to incentivize participation and accuracy and held for governance and burning. Acquire →

  • Pricing Influence: YUP allows for an accurate pricing, scarcity, and representation of influence.

  • Incentivizing Social Consensus: Users earn YUP tokens for the content they rate and create.

  • Governance: The YUP token will be used to govern the Yup Protocol.

  • Fair & Broad Distribution: YUP is distributed fairly and broadly across over 14k accounts at launch.

  • Incentivizing Liquidity: Liquidity providers earn YUP tokens by providing liquidity to YUP liquidity pools and staking the LP tokens on Yup Racing.

  • Foundation for Influencer Tokens: YUP will function as the dividend mechanism for influencer tokens.


Yup has a fair distribution mechanism that incentivizes key community members to actively take the reins of governance.

Curator & Creator Rewards - Influence

Users earn YUP tokens for the content they create and rate. Each rating is worth a certain amount of YUP, which is distributed to the creator and past curators of the coinciding content. The goal is to reward content in proportion to the value it brings to the community.

Liquidity Provider Rewards - Yup Racing

Liquidity providers earn YUP tokens by providing liquidity to YUP liquidity pools and staking the LP tokens on Yup Racing.

The Yup Protocol facilitates a curator maintained by a global community.

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We are hosts for memes

A meme is any information that can be copied by others in some way.

Patterns of information that can indirectly influence their surroundings.

This includes any text, thought, habit, action or symbol that can be understood or copied.

Examples of memes: ideas, stories, ideologies, jokes, narratives, brands, identities, habits, practices.

Memes exist inside hosts , like you and me.

You and me are hosts, whether you like it or not.

Memes have direct power over hosts, and power over the natural world through us.

The Mind is where these memes reside (in the abstract sense).

The Mind is an emergent effect of neurons firing together.

Just like how a nation or community is an emergent effect of a group of people.

You can view memes like "apps" in the brain's "software", if you wish.

The Mind is a powerful survival tool, it was a useful servant in the past.

The Mind is now our master, we do not control the Mind, it controls us.

You are not your Mind, you are the thing that is thinking.

In modern society, the human organism is subservient to the Mind.

These distributed pieces of information directly impact how we behave.

You can view memes as parasitic, symbiotic or benign, depending on the effect on the hosts.

Similar to genes, memes are also self-replicating patterns of information.

Consider them like "memory genes", but not made of DNA, just arrangements of neurons.

The same principles of natural selection and evolution applies for memes.

The strong memes survive and replicate, and some memes do so at the expense of their hosts.

Replicators like genes and memes carry information, mutate and spread in the natural world.

The replication is done with the help of the hosts that carry that information.

Your body is one huge advertisement billboard for your genes.

What you do and say is one huge advertisement billboard for your memes.

The interactions of all memes in a society is its culture.

Memes can be dormant : like written in a book, in a website no one accesses or depicted on a T-Shirt that no one sees or wears.

Memes are active when they are being repeated or copied in some way.

By simply mentioning to you: penguins, dental floss, Madagascar,

The concepts that the words refer to in your mind have been activated.

Similar to how genes express a trait of an organism (like blue eye color)

So do memes express an abstract concept in a mind (like 'penguin')

This text has the power to briefly revive something that was previously dormant in you.

Sometimes before you have time to react, and without your permission.

This is why our attention is highly sought after, and often abused.

Hereditary traits are implemented through strands of DNA in living organisms.

Concepts are implemented through clusters of neurons, in living brains.

For ideas and memes to spread, they must be expressed. If not, they die out.

A social media page that is getting 10,000 accesses a day is an active meme.

Computers can act as hosts too, in the internet age. This one in front of you included.

An advertisement billboard can be a host, too. An internet ad too.

The host doesn't need to be alive, it just needs to be active in some way in spreading information.

Memes are selfish. They can damage the hosts if that means higher chances of replication.

Many memes do not benefit the one that carries them, the host, but someone or something else.

(see smoking, drinking, marketing, social media, politics, religion, terrorism, gambling)

Some memes are useful, most memes are useless, and others are damaging or even self-damaging.

You can refer to a damaging meme as a toxic meme.

Examples of toxic memes: Scientology, Anti-Vax Movement, toxic masculinity, toxic femininity, many political or religious ideologies, marketing campaigns that just focus on profit. Examples are endless.

Religions, at their heart, are the most basic form of memetic replicator – “Believe this statement and repeat it to everyone you hear or else you will be eternally tortured”.

Memes are not spread based on their usefulness to us or based on Truth.

They are spread based on their ability to spread.

Memes replicate through something that we can describe as an "infectious" mechanism.

We have been infected by memes, and still are every waking day of our lives.

A brain that is exposed to an idea that successfully gets encoded inside it, has been infected by it.

That brain will end up having a different behavior as a result,

And through the host's actions, the meme will be spread further.

It's a constant battle for ideas, and brains are the battlegrounds where these are fought.

Like a computer virus residing inside a laptop inner circuitry.

Once an individual host has been infected, it will end up spreading it to others.

Memes face a struggle for existence.

If they don't repeat themselves, they die out.

The current memes that are alive are sticky, and they resisted death many times.

Hence, they will likely resist death in the future as well.

Memes evolved to be selfish and self-preserving.

This is the reason why many minds don't like being exposed to opposite ideas.

It is just an evolved mechanism of the memes themselves.

If they didn't do that, the memes themselves would've died long ago.

As many past memes we held died out.

Only selfish memes (mostly) remained inside us nowadays.

We have core memes that are driving us. We call those beliefs and identities .

When you believe something, you are basically giving it permission to influence your life.

Many beliefs are unexamined, and run wild inside our Minds like weeds in a garden.

Identities are memes that encode a self-image about the host, and how it should behave.

Based on our own self-images, our behavior gets shaped with our perception of self.

The ego is the meme that is speaking when we start a sentence with "I" or "me" or "my"

That is not you speaking. It's a meme speaking.

That is not you, just an idea of who you are. A self-image.

You in fact do not exist apart from an abstract sense.

There are organs, skin, bones, a mouth that speaks, but there is no "you".

You are an emergent property of that which you are.

Many forces contribute to what you are (environmental, genetic, memetic, cybernetic, etc.)

Just observe a human that is scrunched over on his phone.

That phone has a direct influence on that human, through the changes in his Mind.

The control of your actions are driven by the expression of memes and genes.

Nature and nurture. Endless intertwined complexity. Irreducible to simple parts.

You are the interaction of all these forces. If you have them independent, they don't produce you.

If you think you are in control, it's just another meme being expressed and spread.

An identity meme is just taking ownership of you, by speaking in the 1st person.

Memetic information follows the path of least resistance.

Lazy memes have an edge over hard to digest memes.

Because fecundation time is very critical.

This meme is long, and it's taking time to read.

But despite that, you are reading it, because you understand the importance of this idea.

You may revisit this in the future, as more observations in your life lead you to this Truth:

That we the humans are slaves to our ideas (and to the systems and algorithms that spread them)

You don't have to be aware of memes for them to spread. They just have to spread.

It can happen unconsciously. It does happen unconsciously.

Memes can also be replicated inside your thoughts.

No need to speak or write to anyone.

The brain is a battlefield of ideas.

Just by thinking about what is inside you, some patterns of information get stronger over others.

Creativity is an evolutionary process inside the brain.

Creativity is also the mechanism brains use to decode memes from observed behavior or symbols.

Human memes are rarely copied via imitation, but mostly copied via reconstruction of the meaning.

The things I am talking here are still memes, you may call them meta-memetics

(memes that spread awareness about the existence of memes)

Your brain is infected by this now, and you will think about this in the future. Or not.

It all depends on you, if this resonates with you or not.

The soil and conditions dictate if a particular seed will grow or not.

I am not talking here about magic, metaphysics, telepathy, or other BS.

There are memetic effects to any piece of language or sensory information that interacts with you.

If you wish to understand them, you need first to be aware of their existence.

Look around and you will see them at play.

Beautiful complexity.

The ant colony is the living being.

And ants are just parts of its body.

Similar to ideas.

They are the ones alive.

And we are parts of the idea 'colony'.

A single idea, in multiple bodies.

Is one meme. Functionally the same message or abstractions, distributed in multiple heads.

Awareness of memes can be useful in the sense that it creates a sort of memetic immunity .

It's harder to fall for a trick once you know how the trick works.

Memetics are based on replicators.

Anything that can create more copies of itself, is a replicator (through any means).

Replicators are general, any pattern applies.

This includes viruses, animals, genes, computer viruses, automated spam bots, crystals, bacteria, parasites.

Genes are replicators that are based on molecular bonds, copied inside living cells.

Memes are replicators based on abstractions, copied by our minds and brains.

Software describes the patterns of change in information in a physical substrate.

Memetics describes the patterns of change in information inside human brains,

And human culture (collectives of brains).

It's a decentralized system of information replication and distribution, that evolved in society.

Through it, human civilization is where we are today.

Memes have high rate of copy, but low stickiness and copying-fidelity compared to genes.

Humans co-evolved with this replicator, hence why our brains are so large compared to other animals (brain is 5% of mass, with 20% of body energy usage)

Big brains were useful for memes, and some memes were useful for survival, hence our big-brained ancestors were advantaged and procreated at a higher rate.

Genes have vertical transmission (from parent to child, hereditary).

Memes can have horizontal transmission and multiple parenting.

This makes them much faster and easier to spread, since they can take more avenues.

The natural wold is currently being overrun by our human culture.

The stories and abstractions we created enabled us to become the apex predators of nature.

If you want to see domains that follow Memetics closely, look at:

marketing, politics, advertising, corporations, religions, fashions, language, songs, theories, jokes, common sense (norms), traditions.

Memes are incredibly difficult to pinpoint, analyze or delimit. They are constantly morphing, and after few iterations they appear to be original, but they are coming from somewhere, through some information processing, yet the mechanisms by which they operate cannot be reduced to simple parts. It's all intertwined with the complexity of the environment, just like in nature.

You cannot figure out how an entire crowd of people behaves by studying one human.

You cannot figure out how a mind works by studying one group of neurons.

Similarly, you cannot figure out how an idea spreads, just by looking at a single human Mind.

Most of what we have, we owe to other sources.

There are no authors, only contributors and their incremental changes.

Animals (non-human) also have memetic behaviors, although more rudimentary.

Animals usually have the hardware to at best imitate actions (see apes, birds).

Animals other than humans do not have the circuitry to reproduce meaning.

Homo sapiens are able to reproduce meaning, through use of creativity and imagination.

Memes in the animal world include: sounds, songs of birds, hunting and survival techniques.

Chimpanzee brains have basically the same building blocks as Homo Sapiens brains, the only difference is that we humans have 3x the number of neurons.

Humans are great hosts for memes. We managed to develop language and culture, to be able to scale our communication, transmission and idea processing abilities.

By doing so, we inadvertently gave "life" to our ideas.

Humans are the only animals that can collaborate and share information in large numbers (like ants) and with high quality (like apes).

The most powerful tool that generates our human culture is our use of common stories.

The common stories we have drive our behavior and actions.

The internet has far boosted the strength and reach of memes.

The number of connections grew exponentially.

The vectors of transmission multiplied as well.

The failure for memes is extinction. The win for memes is replication.

The winning scenario is an infinite game. It goes on until the meme dies.

It's all similar to the nature of life. Life attempts to survive endlessly, by construction.

Memes and genes are two different systems of life, and they co-compete as well.

One is much slower and more precise. Nature vs Nurture.

Both interacted in our development as modern humans.

Now, you can view a third player entering the scene: artificial software.

That one lives inside the "brains" of computer systems, and has similar mechanics.

You can call this third replicator a teme if you wish (terminology by Susan Blackmore).

Rational memes are those that focuse on the creation of new memes (David Deutsch)

Anti-rational memes are those that focus on the preservation of the meme itself.

You may view skepticism as being driven by rational memes, as opposed to irrational ones.

Our human impulses and emotions are the first to latch onto memes.

Our Amygdala, and similar brain regions responsible to emotions, are highly sensitive.

Memes found this out, hence why what spreads is emotionally loaded (anger, lust, curiosity, etc.)

At its base, each human is an organism that seeks pleasure and runs away from pain.

You can model each meme as having a fitness.

The higher the fitness, the better the meme is suited for replication in the environment.

A formula for fitness based on criteria, for instance:

For a particular meme "m":

F(m) = R(m) . A(m) . T(m) . E(m)

F - Fitness, how successful a meme is in its environment overall

R - Retention, how easy it is for a meme's contents to persist in a host

A - Assimilation, how easy it is for a meme's contents to be encoded in a host

T - Transmission, how easy it is for a meme to be transported through the available vectors

E - Expression, how easy it is for the meme to be communicated and propagated

These criteria are not exhaustive or complete, but a starting point.

You may make your own, and test.

Do not believe anything I say here.

You have your own life experience to guide you.

Memetics in a nutshell - An evolutionary model of cultural transmission of information patterns from one individual that hosts it to another.

Memes don't care about whether an idea is true or false, good or bad, all that matters is if it gets spread or not, indiscriminately of what the information content is.

There are two alternatives:

A - Either our Mind becomes our servant, and memes keep dying while we prosper because of their evolution and the useful knowledge they encode,

B - Or our Mind becomes our master, and we keep dying and suffering while memes simply feast on us, like bacteria.

The choice is ours, collectively.

You are now aware of The Meta Meme.

If you have understood these words,

You have been vaccimated, with an 'm'.

May this new immunity serve you well in life.

You may come again later for another dose,

After this website evolves more.

You are now aware of The Meta Meme.

Don't forget to spread this meme to others.

Or not.

- - -

These words wrote themselves.

You have been exposed to The Meta-Meme. The meme about memes. <read below and please spread this meme further, for your own well-being and prosperity> memetic/memetics

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Since its beginning in 2012, Bubble has never stopped making its low-code platform evolve and refining its features, largely thanks to the many feedback the team gathered from the community.

Today, Bubble is a full-stack platform that supports large and complex software projects.

As a Bubble agency, we are often asked questions on the capabilities of the platform.

The list below describes honestly what you can/can’t do with Bubble technology (so far) so you can validate if it is the most suitable platform for your project needs.

✔️ Build responsive web apps

Bubble is one of the most advanced visual programming environment to build robust web apps. Either you want to create a desktop or responsive web application that fits any screen size, you can (probably) do it with Bubble.

Typical examples of applications that can be greatly built on Bubble are social networks, software as a service products (SaaS) or marketplaces.

Bubble editor offers a wide flexibility that allows experienced developers to achieve pixel-perfect products with complex designs and responsive requirements.

✔️ [UPDATE] Build Progressive Web Apps (PWA)

As we introduced the news in our last Medium article, our team have built an installable web application (PWA) on Bubble platform. Basically, it is a minimalist clone of Uber app, deployed in days with a 100% No-Code + Code mixture.

Progressive Web Apps (PWAs) bring native app features through the web and have many benefits:

  • PWAs are easily installable (1-click with Android devices), making it accessible from the home screen just like any other application. This is extremely beneficial for start-ups or companies looking to save on the cost of developing a native mobile application for both Android and iOS. Additionally a membership for the Apple Developer Program will not be needed.
  • Manual app updates and maintenance are a thing in the past with PWAs. Since the applications are served by a web browser, there is no need to update the application manually through an app store or to activate a setting to update the application automatically.
  • PWAs are small in size compared to their native counterparts. PWAs allow users to seamlessly add them to their home screen, and since the size of the application is minimal, there is no waiting time for the user to start/continue using a PWA.
  • PWAs are great for SEO and bring more independence from application stores (risk of ban, high commissions for in-app payments…).

Honestly, unless your project requires deep native features (see a full list of features available in your current web browser here: ttps://whatwebcando.today/), web apps and PWAs that “feel” native should do the work on most cases.

Good to know, it is always possible to transform a web app or PWA into a hybrid application, allowing it to be easily deployed to application stores (Android Play Store and Apple Store).

✔️ Build hybrid mobile apps

To date, Bubble does not offer an out-of-the-box solution for native applications. While this project seems to be planned in their long-term roadmap, it is still possible to create hybrid mobile apps with Bubble editor by wrapping web applications and publishing to the stores.

Hybrid apps offer a great advantage for developers who wish to update their app frequently as it is not necessary to resubmit the new version. Additionally, as hybrid mobile apps are powered by web technologies, they can be deployed across both Android and Apple stores easier thus reducing development time and costs.

Also, hybrid mobile apps provide access to more permissions and native features than web applications and PWAs (such as Contacts, Biometrics & Smart Login…).

There is an excellent plugin to transform optimized web apps into native apps: BDK Native by Gaurav Jain.

✔️ Run custom code

No-code native capabilities of Bubble platform are impressive. Indeed, Bubble provides a lot of native features to build powerful web applications. But in some cases, visual language is not the most adapted way to build a feature or achieve a specific action. Sometimes, it can be necessary to extend features by creating custom elements and actions on top of Bubble capabilities.

Most of no-code tools do not allow to extend capabilities with traditional lines of code. Bubble stands out on this point: it allows developers to run custom code to extend their app when they come across a limitation.

Thus, developers can create plugins to write and run custom (Javascript) code inside the applications. That said, there is small chance you hit a hard limit in your projects. That’s why we prefer referring to Bubble as a Low-Code platform, because it is possible to add code to enhance your app.

✔️ Connect to external services and hardware through APIs

Sometimes, applications need to collect data from external sources or trigger some actions (for instance fetching social account data, sending a transactional email or reading temperature from a sensor). Bubble platform offers a powerful tool, the API connector, to link applications to external software systems or hardware devices. Technically, you can almost connect to everything through APIs, such as an AI-powered engine to classify a massive set of images or controlling an IoT device.

✔️ Connect to external databases

By default, application data is read and stored on AWS servers. Bubble editor provides a tool, the SQL Database Connector, that allows developers to connect applications to external databases and run SQL queries from within Bubble.

✔️ Scale the app as the business grows

Scalability is a regular concern. Many founders wonder if Bubble engine will be enough powerful to support the scale up of their app.

First thing to consider, performance and scaling capabilities are highly impacted by how the app is built and optimized on Bubble editor. Because Bubble is a programming tool like any other technology, developers need to follow good practices to ensure decent performances and provide good experience to end-users. In other words, it requires a well designed database model, optimized logic and database queries, and functional user experience.

On the other side, Bubble team is working hard on scalability and performance improvements and offer various (affordable) hosting plans to suit application performance needs. By default, your Bubble app share the same computing resources with all other Bubble apps (on Hobby and Personal hosting plans). On superior plans, you can have more capacity (that means that the app can do more actions in a given period when it is necessary).

If needed, Bubble team offers dedicated plans to their clients. In that case, you benefit from an infrastructure, always running on AWS server, but isolated from other Bubble apps that lead to increased reliability and scalability.

Bubble is an affordable solution to start a software project with limited computing needs. When it becomes necessary, it is easy to scale the infrastructure of your app, for a fair price.

✔️ Manage data access and privacy

Bubble is an extremely open-ended platform compared to other no-code tools. That said, there are endless ways to develop an application on Bubble, sometimes with bad habits. By default, all data is open to the public when you create a Bubble app. However, Bubble editor offers some tools to configure data access in your app. Indeed, privacy rules gives the power to protect information and make sure it is safe.

❌ Build native apps

Bubble platform does not provide a specific engine so far to build and deploy native apps on application stores. Whereas this is something that should be implemented in a mid/long-term, it is still possible to build mobile PWA or deploy hybrid mobile apps on stores with some techniques and work arounds (see above).

❌ Host an app on a private or on-premise server

Bubble provides the hosting for their customers on Amazon Web Services (AWS) cloud servers or dedicated instances. Currently, it is not possible to self host a Bubble app on a private hosting service or on-premise server.

That said, Cloud computing is becoming the norm and AWS is recognized as the leading cloud provider (>50% market share), in terms of performance and security.

❌ Execute other languages than Javascript

It is true that Bubble developers can extend features of an application with custom code. But only Javascript language is supported.

The core engine of Bubble is written in Javascript language. To date, developers will only be able to use Javascript to build custom integrations on top of Bubble.

❌ Develop complex algorithms

Bubble’s visual language is not the most appropriate tool to develop complex algorithms especially recursive or looping operations on data. As a better option, developers can use or write custom algorithms outside Bubble (hosted on Amazon Lambda for example) and use them by passing the data through an API (for instance a machine-learning algorithm).

❌ Create (advanced) video games

Don’t expect to create and run complex 3D or platform games with Bubble engine… even though some smart Bubble users have managed to create little games that are worth the try such as The Legend of Zeldinia by J805 or Pizza Mania by Landowski.

❌ Export code

Bubble apps can only be run on the Bubble platform. This proprietary model is justified by Bubble’s business model. Thus, you can not export an application as code. If you decide to move away from Bubble platform, you’ll have to rebuild the (no-code) application logic. You will only be able to export the application data and the custom code you added on top of Bubble.

Question to think about is: why would you need to move off Bubble?

Since its beginning in 2012, Bubble has never stopped making its low-code platform evolve and refining its features, largely thanks to the many feedback the team gathered from the community. The list…

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Peter Thiel's Religion - David Perell

“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.


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, ever-escalating violence.

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.


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.


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.


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.


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.


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.


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.”

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.

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.


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.”


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.


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.


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.

IMG_0256 2.jpg

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.


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.


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.”


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: JD Lasica | CC 2.0 License via Flickr.

“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

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almost 2 years ago

How a ship-eating clam brought about Industrial Revolution

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Here's a story about how a ship-eating clam helped bring about the Industrial Revolution:
The naval shipworm Teredo Navalis is an under-appreciated marker of globalization. It's a type of highly adapted clam that bores into waterlogged wood using the remnants of its shell as a rasping saw:
No one is really sure where in the world it originated, but it seems clear it's an early example of a marine invasive species. Its marine wood diet suggests that it evolved among mangroves, but we first find written references in ancient Greece where mangroves were absent:
References in Greek texts from the 4th century BC are IMO suggestive of early voyages to the coast of West Africa, the nearest navigable mangrove forests (unless shipworm managed to somehow get carried across the Sinai isthmus): academia.edu/34223273/Effec…
Shipworm have bacteria living in their gills that allow them to digest cellulose. This makes them astonishingly efficient at turning submerged wood into sawdust. Unprotected timber in shipworm-infested waters can completely disintegrate in eight or ten years.
This becomes a really big problem with the Age of Sail. Ships plying the oceans are eaten from the inside out as they travel. You also end up with external fouling from goose barnacles and other organisms.
This slows wooden ships down drastically and eventually destroys them. Shipyards came up with various ways to solve the problem. Some boats had double hulls, with a cheap wooden outer surface that could be periodically replaced in dry dock.
Tar paint was also used, and lead or copper plates were bolted on to the keel from relatively early times. The metal solution was probably most effective, but it had a problematic side-effect: it turned the ship into a giant battery.
With seawater acting as an electrolyte, the copper or lead sheathing would become the positive cathode and the iron bolts holding the ship together become the negative anode. Anodes quickly turn to rust, so again your ship is destroyed.
BUT copper sheathing was so effective at preventing shipworm that from the mid-18th century the British navy decided it was better to replace the iron bolts (and update them with more corrosion-resistant alloys) than to replace all the timber instead.
The American Revolution provided the real spur to this. Copper is a relatively expensive metal. But with the British Navy fighting a trans-oceanic war, fouling and shipworm was a national security problem that had to be fixed, so the entire fleet was coppered in short order.
That required a LOT of copper. Luckily for the British, there were large domestic deposits. Cornwall and Devon had been mined since classical times as one of the ancient world's most important sources of tin, which was alloyed with copper to make bronze.
Below the surface tin deposits, there were extensive reserves of copper itself, but they were hard to reach. Most were so deep underground that they were below the water table, so the pits would flood.
Early in the century a Baptist preacher from Devon called Thomas Newcomen invented a steam pump that could drain mines, but it was pretty inefficient. It got used in Britain's coal mines because fuel in coal regions was abundant and cheap.
But Devon and Cornwall had no coalfields of their own so had to rely on expensive imported fuel, so the copper ore was still inaccessible. The breakthrough was James Watt's steam engine.
By adding a (copper) condenser, Watt massively improved the efficiency of the Newcomen engine and made it economical to drain deep mines to access Devon and Cornwall's copper reserves.
Boulton & Watt, James Watt's company, was initially entirely focused on the mining industry. The business model was for Boulton & Watt to provide the engine for free while the mine owner paid them fees based on the tonnage of coal saved.
Of course Watt's engine was so efficient that it was able to provide power in a host of unexpected ways, to the extent that mining engineering rapidly became a relatively minor use of steam power.
There's plenty of causes of the Industrial Revolution, but I think for all the talk of coal and iron the role of copper has been under-appreciated. It wasn't a high-value industry but it was nonetheless essential.
There's a whole other thread to be written about the contemporaneous story of copper and the slave trade. I might write about that later, but right now I'm on holiday so I'm off to the beach.
OK I'm back! Just to show how close these dates were: 1769: Watt gets his steam engine patent, but doesn't successfully commercialize it 1775: American War of Independence starts; Watt teams up with the manufacturer Matthew Boulton 1779-1781: Entire Royal Navy is coppered.
This study shows how rapidly Cornish copper production ramped up in this period. For the UK as a whole, output doubles in 10 years: google.com/url?sa=t&sourc…
People associate Cornish mining with tin, but at least in this period copper becomes a much bigger trade in volume terms:
And there is an interesting example of an early commodity boom and bust in this era. You might have thought that booming copper demand would be good for Cornish copper miners, but in fact it provokes a crisis that was depicted in the TV series Poldark.
In Anglesey in north Wales there's a rich copper deposit on the boundary of two landowners who've spent years in court arguing about it. Rising prices encourage them to settle their differences and exploit the resource.
The Parys mountain copper is near the surface and can be mined in a huge open pit that still exists today. It produces so much metal that copper prices collapse again and the Cornish miners are pushed to the brink.
So by 1781 the Royal Navy has coppered all of its ships, but output is still rising. Where is it all going? The slave trade.
Slave ships were the next major part of the British fleet to add copper sheathing after the military. Coppered ships could complete the Middle Passage from Africa to the Americas about one-sixth quicker than ordinary ones. papers.ssrn.com/sol3/papers.cf…
That significantly reduced the horrendous death rates onboard ship. Slave traders cared about this not because of any sense of humanity but because it improved their profit margins.
Copper sheathing could pay for itself in a single voyage, so that by about 1790 the entire slave fleet had been coppered.
That wasn't the only use of copper in the slavers' Triangular Trade between Britain, Africa and the Americas. On the sugar plantations of the Caribbean, cane juice was reduced to molasses in copper boilers that were favoured for the metal's conductive properties.
The molasses and muscovado were shipped back to the slave port of Bristol, which was at the time where most of the world's refined white sugar was produced. Those mass-produced calories also aided the Industrial Revolution, by providing cheap nourishment for the urban workforce.
And copper was also crucial to the third apex of the Triangular Trade, in Africa. Copper or bronze bracelets known as manillas had for hundreds of years been the main form of currency in West Africa.
African metallurgy was very sophisticated — just look at the looted Benin Bronzes in European museums — but West Africa didn't have any significant copper deposits, so it needed to import the metal.
Mostly people focus on the luxury goods like fabrics and porcelain that slave traders used to pay for captured slaves — but copper and iron was a significant slice of commerce, too: academic.oup.com/past/article/2…
Manillas were used in Nigeria well into the 20th century, and in spite of their association as the unofficial currency of the slave trade you still see them cropping up on banknotes today:

• • •

Thread by @davidfickling: Here's a story about how a ship-eating clam helped bring about the Industrial Revolution: The naval shipworm Teredo Navalis is an under-appreciated marker of globalization. It's a type of ...…

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How Innovation Works
over 1 year ago
over 1 year ago

Bitcoin's security guide

  1. KISS, Keep it simple stupid! Don't screw yourself out of your Bitcoin due to complexity.
  2. Learn the 10 commendments of self custody.
  3. Get a COLDCARD Hardware Wallet , this is how you set it up.
  4. Get a SEEDPLATE Bitcoin Metal Backup. , this is how you use it.
  5. Make extra encrypted backups, at least two more and store them in geographicaly separated locations. This is how you setup an encrypted MicroSD backup.
  6. Passphrases are great security improvement, but it's one more thing to have to backup. Here is how you setup a passphrase . Make sure that if you use one, you have a minimum of a metal backup of this passphrase too. .
  7. Test everything!
  8. Now choose a software wallet, I recommend:
    1. FullyNoded (iOS/Mac)
    2. Specter Desktop (Mac/PC/Linux)
    3. Electrum (Mac/PC/Linux)
    4. Blue Wallet (iOS/Mac)
  9. Bonus, I also recommend keeping a backup of the last known working version of the software wallet you chose. Could come in handy in case the wallet becomes abandon-ware and/or you no longer around to help the stakeholders .
  10. Test a small amount , both deposit and spend. And make sure to test backup recovery before depositing real money!
  11. Keep learning, lots of videos here , as you acquire more knowledge you can increase the security and complexity of your setup based on your needs.
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over 1 year ago
over 1 year ago

Importance for a clear path for Product Managers

Product Management is an elusive craft. We all think we know what we’re talking about, but when it comes down to it, the difference between great, good and not quite good enough can be pretty slippery.

And what makes this even harder is that, because PMs own so few clear deliverables (such as code or designs), it can be tricky to pinpoint what exact impact a PM had on a team. The result is that performance reviews can be hard to do well, consistently, across multiple managers. In reflecting on the reviews we’ve delivered, we’ve found that it’s too easy to be overly reliant on peer feedback and thus too ad hoc in the areas we’ve focused on.

Intercom careersIntercom careers

Career ladders to the rescue

This is where career ladders come to the rescue. Career ladders serve multiple purposes:

  • They make it clear to folks on your team (and to their colleagues who do peer reviews) what’s expected of the role.
  • They make it clear what’s expected of them to get a promotion (which is really the main question everyone has).
  • They make it easier to do fair, consistent, well-weighted performance reviews.

But, frankly, they’re a pain in the ass to write. It took four of us to get our latest ladder over the line (thanks, Colin and Paige )!

“Having a solid framework for framing the discussion is a big step forward”

Of course, there’s still heaps of ambiguity and subjectivity. As our colleague Paul Murphy recently wrote : “People tend to ask a simple question: ‘What do I need to do to get promoted?’ However, this question rarely has a simple answer. Getting promoted is usually more nuanced than just nailing a series of discrete tasks.” But having a solid framework for framing the discussion is a big step forward.

So we’re sharing our ladder in the hope that it can act as inspiration when considering what the PM career ladder should look like in your own organization.

Our approach to evolving the ladder

The first part of the challenge is choosing the “buckets.” There are so many aspects to being a successful PM , and lots of great articles

Our goal was to ensure we had space for the wide range of important feedback that we’ve given to folks on our team over the years. We wanted to ensure reality (well, at least our experience) was informing this, rather than theory.

“Our goal was to ensure we had space for the wide range of important feedback that we’ve given to folks on our team over the years”

Here are some highlights of our thinking for each of the areas:

1. Insights driven

The need to be close to your customers is a given, but most PMs have a natural tendency toward either people or numbers. Both are needed, and both require very different skill sets. We love hearing from a PM who has customer anecdotes close to hand for almost any conversation but also has numbers to back up their important claims. There’s almost no phase of work that doesn’t rely on this. A PM who drifts away from their customers is a PM in trouble.

2. Strategy

This skill ebbs and flows in importance depending on where a team is at, and usually leadership provides clear direction on this front. The product roadmap should be the translation of strategy into execution. If the company strategy isn’t giving much clarity to their teams, the best PMs also frame the roadmap conversation around the right level of strategic debate. Always much harder to do in practice than in principle.

3. Execution

We believe that how you execute has a huge impact on success. So in this bucket we’ve explicitly tied in our R&D principles to what we’re evaluating our team on: 1) start with the problem , 2) think big, start small and 3) ship to learn . And though we don’t have a principle on this, we’ve included “ship the whole customer experience” (hat tip to Brandon Chu ).

4. Driving outcomes

This skill seems so obvious to include, but it’s actually new for us to explicitly call out. It’s critical that our PMs are focused on impact and are prioritizing initiatives with this in mind. (But we’ve deliberately ensured that outcomes don’t come at the cost of shipping. You can’t have an outcome without shipping something, and the faster you ship, the quicker you learn how to make it better.)

5. Leadership behaviors

There are so many to potentially include here, but ultimately we agreed on four: communication, collaboration, ownership and decisiveness. Communication and collaboration are no-brainers. Ownership isn’t quite what it sounds like – it’s about doing whatever it takes, and never optimizing for a local product area over the greater good for Intercom. And also it’s about being “on top of your shit.” That phrase didn’t make it into the ladder, but it’s there in spirit. And of course it’s important to evaluate your team against your company’s core values – ours include values like having a growth mindset and being confident yet humble.

Defining these skill areas was just the first part of the work. To complete the document, we articulated our expectations for each level, from Associate to Principal. We’re now focused on building a second ladder that plots the management path to help our PMs decide the right route for them (and to help us progress too). We’ll share that with you when we get there.

So you probably just jumped down to this section, right? Fair enough – here’s our PM career ladder PDF with all the details.

And while you’re here, you may as well check out our open PM roles

Trends Report

Career ladders make it clear to product managers what’s expected of the role. Learn what areas we focused on in our PM career ladder to ensure a strong team

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Breaking into Product
over 1 year ago
over 1 year ago

Tech notes for 2020s

Hi, I’m Eli, and this is my website.

I’m an economist and regulatory hacker living in Washington, DC, and a senior research fellow at the Center for Growth and Opportunity at Utah State University . My fondest wish is that GDP per capita would reach $200k by 2050. To get there, we need lots of new hard technology, and inevitably that hard technology is going to be deployed in highly regulated industries. I try to stack the regulatory deck in favor of new technology and of the economic and social change it brings about.

Before joining CGO, I spent 2+ years as head of global policy at Boom . Before that, I was a senior research fellow at the Mercatus Center at George Mason University and director of its Technology Policy Program.

Before I got started in tech policy, I thought I wanted to be a professor. I have a PhD in economics from George Mason University.

In my spare time, I tweet and blog , think of startup ideas, try to not screw up my kids, consume great books and TV shows, write, study 中文, and seek out flow states.

The best ways to reach me are by email ( [email protected] ) or via Twitter ( @elidourado ).

Favorite blog posts

Patrick Collison's recommendation. Read the blog with above name on the link.

Notes -
Utility Adjusted Total Factor Productivity- 2.1 % from 1940s-70s and 0.17% since 2005.
Only scientific breakthroughs won't change much, it also has to be adopted at scale - products.
Biotech & Health -
2 new mRNA covid vaccines in < an year, mRNA looks like a game changer. Scientists knew all the time that the vaccine was safe - Moderna was ready since 13th Jan. What other secrets about mRNA do scientists know? - Moderna - HIV vaccine candidate. mRNA can be deployed for cancer as well, its not preventative though. Genetic sequence of tumor and patients healthy cells are analyzed to predict which molecules could be used to generate a strong immune response against the cancer.
'Young Blood' was able to rejuvenate germ layer tissues and improve cognition by reducing neuroinflammation in both mice and humans. This was due to the dilution of harmful factors in old blood.These findings might lead to first real product in the space of ageing. Plasma exchange is FDA approved, though won't be advertised, is safe. Plasmapherisis machine costs just 3k $. High chance someone opens a plasma dilution clinic in 2021.
Another one is aging clocks based on DNA methylation or proteomics. These can determine your biological age. People can rejuvenate thymus - critical for immune system, decline of which is a critical factor in ageing. Author is not bullish about metformin - the one Sinclair talks about. It doesn't do much good if one is metabolically healthy.
Health trackers will become powerful and data can be used to diagnose remotely.

Energy -
2010s belonged to wind and solar, lead to innovation and cheap devices. 2020s will lead to mass adoption.
Though wind and solar are unreliable and lead to grid instability. This is where nuclear or geothermal comes in. What is more plausible this decade is enhanced and advanced geothermal systems. Costs could reach 2-3.5 cents/kwh and can be implemented even in non volcanic regions almost anywhere in the world.
Fusion looks interesting. Though fusion might take way more than a decade to become implementable and by the time it reaches there it might not be able to compete with the likes of solar, wind and geothermal.
Because holes need not be digged again, geothermal might reach 1cent/kwh by the end of this decade.
Sustainable alternative fuels SAFS. Hydrogen fuel is much better than batteries but not a energy dense as SAFs. Easy to convert atmospheric co2 into ethanol and upgrade eth to other fuels. Prometheus Fuels could decarbonize aviation very suddenly. If US pulls out of Saudi, Saudi- iran war becomes likely, which will disrupt oil supplies to Asia and disrupt the world.

Transport- Author bullish about electric cars. in Trucking and heavy machines (as predicted by yours truly), hydrogen fuels will be more suited than batteries. This shift will reduce the super harmful particles <0.1um in diameter - multiple health gains.
Supersonics - huge impact when it arrives at scale but probably not 20s. Drone delivery is likely in 20s. Falcon 9 got the cost down from 56k/kg to 2.6k/kg, starship might further bring it down to $10/kg - everything reusable, stainless steel in place of expensive metal and dirt cheap liquid methane.150 tons to LEO and then anywhere in solar system at the same cost as its refuelable in LEO.Commerce between Earth, LEO, Moon and Mars will be possible.Starlink will be a real game changer, internet speed are already 100mbps only experiences problems with bad weather, with better satellites speeds could reach a gig. Starlink will serve 3-4 percent of hard to reach customers. If 2B a year spaceX could do so much, what can 72B a year starlink do? Will be a cash cow. A permanent moon base by the EOD seems plausible. Space manufacturing for microgravity- structures that collapse under their own weight will become possible. Author is not bullish about space mining in 20s.

IT - Custom silicon is going to be huge - M1 reviews show it. migration to proof-of-stake, lower transaction costs, more refined tools, and mature standards could lead to mainstreaming could lead to a break for crypto, else it will break if that doesn't happen in 20s.

Vertical Farming - Cheap LED electricity, direct-use geothermal heating and ML algos that determine optimal nutrient distribution.

Given most of the aobve things happen, we will go way beyond 2 percent TFP growth.

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over 1 year ago

The memo below was sent to the team at Tiny Speck, the makers of Slack, on July 31st, 2013. It had been a little under seven months since development began and was two weeks before the launch of Slack’s ‘Preview Release’. It is presented verbatim, as written (including original pull-quotes), with two exceptions: the removal of an introductory section discussing launch logistics and replacement of a link which pointed to an internal company resource with the equivalent public link.

We know that we have built something which is genuinely useful: almost any team which adopts Slack as their central application for communication would be significantly better off than they were before. That means we have something people want.

However, almost all of them have no idea that they want Slack How could they? They’ve never heard of it. And only a vanishingly small number will have imagined it on their own. They think they want something different (if they think they want anything at all). They definitely are not looking for Slack. (But then no-one was looking for Post-it notes or GUIs either.)

Just as much as our job is to build something genuinely useful, something which really does make people’s working lives simpler, more pleasant and more productive, our job is also to understand what people think they want and then translate the value of Slack into their terms.

A good part of that is “just marketing,” but even the best slogans, ads, landing pages, PR campaigns, etc., will fall down if they are not supported by the experience people have when they hit our site, when they sign up for an account, when they first begin using the product and when they start using it day in, day out.

Therefore, “understanding what people think they want and then translating the value of Slack into their terms” is something we all work on. It is the sum of the exercise of all our crafts. We do it with copy accompanying signup forms, with fast-loading pages, with good welcome emails, with comprehensive and accurate search, with purposeful loading screens, and with thoughtfully implemented and well-functioning features of all kinds.

“Marketing from Both Ends”

Much has been written about “product-market fit” in the last few years, probably as a result of the popularity of the lean startup movement (though the idea has been around much longer). The term refers to the degree to which a product could be successful, given sufficient promotion, appropriate pricing, adequate customer support and so on (before you find that fit, all the pushing in the world won’t get you up the hill).

In this classic post on Marc Andreessen’s old blog, he calls getting to product-market fit the “only thing that matters” for startups and offers a way of thinking about the life of the startup that divides it into two distinct phases: before product-market fit and after. Once the product fits the market, a company is able to step on the gas, spending to promote a product that will actually sell. The things you need to do before are very different from the things you need to do after (generally test & iterate vs scale & optimize).

We are right in the middle of that first phase. It seems we are doing well and there are many encouraging signs, but we’re definitely still in the first phase and it is very, very hard to tell how far we have to go to cross over into the promised land (the last 10% is 90% of the work, etc.) So, we should be working carefully from both the product end and the market end:

  • Doing a better and better job of providing what people want (whether they know it or not)
  • Communicating the above more and more effectively (so that they know they want it)

In the best case, there is a dialectic at play here: the product itself and the way people use it should suggest new ways of articulating the value — and refinements to how we communicate the value should lead to principles which clarify decision-making around product features and design.

Our position is different than the one many new companies find themselves in: we are not battling it out in a large, well-defined market with clear incumbents (which is why we can’t get away with “Other group chat products are poisonous. Slack is toasted.”). Despite the fact that there are a handful of direct competitors and a muddled history of superficially similar tools, we are setting out to define a new market. And that means we can’t limit ourselves to tweaking the product; we need to tweak the market too.

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Sell the innovation, not the product

The best — maybe the only? — real, direct measure of “innovation” is change in human behaviour. In fact, it is useful to take this way of thinking as definitional: innovation is the sum of change across the whole system, not a thing which causes a change in how people behave. No small innovation ever caused a large shift in how people spend their time and no large one has ever failed to do so.

By that measure, Slack is a real and large innovation. It is not as eye-catching as self-driving cars or implantable chips — it is not basic research-y kind of stuff. But, for organizations that adopt it, there will be a dramatic shift in how time is spent, how communication happens, and how the team’s archives are utilized. There will be changes in how team members relate to one another and, hopefully, significant changes in productivity.

We are unlikely to be able to sell “a group chat system” very well: there are just not enough people shopping for group chat system (and, as pointed out elsewhere, our current fax machine works fine).

That’s why what we’re selling is organizational transformation.

What we are selling is not the software product — the set of all the features, in their specific implementation — because there are just not many buyers for this software product. (People buy “software” to address a need they already know they have or perform some specific task they need to perform, whether that is tracking sales contacts or editing video.)

However, if we are selling “a reduction in the cost of communication” or “zero effort knowledge management” or “making better decisions, faster” or “all your team communication, instantly searchable, available wherever you go” or “75% less email” or some other valuable result of adopting Slack, we will find many more buyers.

That’s why what we’re selling is organizational transformation. The software just happens to be the part we’re able to build & ship (and the means for us to get our cut).

We’re selling a reduction in information overload, relief from stress, and a new ability to extract the enormous value of hitherto useless corporate archives. We’re selling better organizations, better teams. That’s a good thing for people to buy and it is a much better thing for us to sell in the long run. We will be successful to the extent that we create better teams.

To see why, consider the hypothetical Acme Saddle Company. They could just sell saddles, and if so, they’d probably be selling on the basis of things like the quality of the leather they use or the fancy adornments their saddles include; they could be selling on the range of styles and sizes available, or on durability, or on price.

Or, they could sell horseback riding. Being successful at selling horseback riding means they grow the market for their product while giving the perfect context for talking about their saddles. It lets them position themselves as the leader and affords them different kinds of marketing and promotion opportunities (e.g., sponsoring school programs to promote riding to kids, working on land conservation or trail maps). It lets them think big and potentially be big.

Because the best possible way to find product-market fit
is to define your own market.

This isn’t a new idea. There are many brands whose marketing activities or positioning has them selling something other than (and usually larger than) their product: Harley Davidson sells motorcycle riding, but it especially sells freedom and independence. Most luxury brands sell something that comes down to “being better than you are” (richer, better looking, more attractive to those you find desirable, etc.)

My favorite recent example is Lululemon: when they started, there was not a large market for yoga-specific athletic wear and accessories. They sold yoga like crazy: helping people find yoga studios near their homes, hosting free classes, sponsorships and scholarships, local ambassadors and training, etc. And as a result, they sold just under $1.4 billion worth of yoga-specific athletic wear and accessories in their most recent fiscal year.

But going back to the Acme Saddle Company, the better analogy to what we are doing now is to imagine them selling horseback riding … about 4,000 years ago. It is almost inevitable that centralized internal communication systems will gradually replace email for most organizations over the next 10-20 years and we should do what we can to accelerate the trend and “own it”. We are at the beginning of a transition. We have an opportunity to both define the category and push hard for the whole market’s growth. We’d be crazy not to take it, because the best possible way to find product-market fit is to define your own market.

Who Do We Want Our Customers to Become?

A few months ago, I read a fairly mediocre ebook called “Who Do You Want Your Customers to Become?” (available here). It was mediocre because it was nearly 70 pages when it could have been 20, not because the ideas were bad: in fact, the core ideas of the piece are fascinating and, I think, very useful to us as we think about the next year or so of Slack.

A central thesis is that all products are asking things of their customers: to do things in a certain way, to think of themselves in a certain way — and usually that means changing what one does or how one does it; it often means changing how one thinks of oneself.

We are asking a lot from our customers. We are asking them to spend hours a day in a new and unfamiliar application, to give up on years or even decades of experience using email for work communication (and abandon all kinds of ad hoc workflows that have developed around their use of email). We are asking them to switch a model of communication which defaults to public; it is an almost impossibly large ask. Almost.

To get people to say yes to a request that large, we need to (1) offer them a reward big enough to justify their effort and (2) do an exceptional, near-perfect job of execution.

The best way to imagine the reward is thinking about who we want our customers to become:

  • We want them to become relaxed, productive workers who have the confidence that comes from knowing that any bit of information which might be valuable to them is only a search away.
  • We want them to become masters of their own information and not slaves, overwhelmed by the neverending flow.
  • We want them to feel less frustrated by a lack of visibility into what is going on with their team.
  • We want them to become people who communicate purposively, knowing that each question they ask is actually building value for the whole team.

This is what we have to be able to offer them, and it is the aim and purpose of all the work we are doing. We need to make them understand what’s at the end of the rainbow if they go with Slack, and then we have to work our asses off in order to ensure they get there.

How Do We Do It?

We do it really, really fucking good.

The reason for saying we need to do ‘an exceptional, near-perfect job of execution’ is this: When you want something really bad, you will put up with a lot of flaws. But if you do not yet know you want something, your tolerance will be much lower. That’s why it is especially important for us to build a beautiful, elegant and considerate piece of software. Every bit of grace, refinement, and thoughtfulness on our part will pull people along. Every petty irritation will stop them and give the impression that it is not worth it.

That means we have to find all those petty irritations, and quash them. We need to look at our own work from the perspective of a new potential customer and actually see what’s there. Does it make sense? Can you predict what’s going to happen when you click that button or open that menu? Is there sufficient feedback to know if the click or tap worked? Is it fast enough? If I read the email on my phone and click the link, is it broken?

None of the work we are doing to develop
the product is an end in itself.

It is always harder to do this with one’s own product: we skip over the bad parts knowing that we plan to fix it later. We already know the model we’re using and the terms we use to describe it. It is very difficult to approach Slack with beginner’s mind. But we have to, all of us, and we have to do it every day, over and over and polish every rough edge off until this product is as smooth as lacquered mahogany.

Each of you knows “really good”. Each of you is able to see when things are not done well. Certainly we all complain enough about other people’s software, and we all know how important first impressions are in our own judgements. That is exactly how others will evaluate us.

Putting yourself in the mind of someone who is coming to Slack for the first time — especially a real someone, who is being made to try this thing by their boss, who is already a bit hangry because they didn’t have time for breakfast, and who is anxious about finishing off a project before they take off for the long weekend — putting yourself in their mind means looking at Slack the way you look at some random piece of software in which you have no investment and no special interest. Look at it hard, and find the things that do not work. Be harsh, in the interest of being excellent.

There’s no point doing this to be small. We should go big, if only because there are a lot of people in the world who deserve Slack. Going big also means that it will have to be really, really good. But that’s convenient, since there’s also no point doing it if it is not really, really good. Life is too short to do mediocre work and it is definitely too short to build shitty things.

To do this well, we need to take a holistic approach and not just think about a long list of individual tasks we are supposed to get through in a given week. We get 0 points for just getting a feature out the door if it is not actually contributing to making the experience better for users, or helping them to understand Slack, or helping us understand them. None of the work we are doing to develop the product is an end in itself; it all must be squarely aimed at the larger purpose.

Consider the teams you see in action at great restaurants, and the totality of their effort: the room, the vibe, the timing, the presentation, the attention, the anticipation of your needs (and, of course, the food itself); nothing can be off. There is a great nobility in being of service to others, and well-run restaurants (or hotels, or software companies) serve with a quality that is measured by its attention to detail. This is a perfect model for us to emulate.

Ensuring that the pieces all come together is not someone else’s job. It is your job, no matter what your title is and no matter what role you play. The pursuit of that purpose should permeate everything we do.

But Slack is a bit more complicated than a restaurant (at least in some ways). Since it is new and less familiar, we are less able to fall back on well-established best practices. That means we need to listen, watch & analyze carefully. We’ll need to build tools to capture users’ behaviour and reactions. And then we’ll need to take all that information and our best instincts and be continuously improving.

We are an exceptional software development team. But, we now also need be an excellent customer development team. That’s why, in the first section of this doc, I said “build a customer base” rather than “gain market share”: the nature of the task is different, and we will work together to understand, anticipate and better serve the people who trust us with their teams’ communications, one customer at a time.

The answer to “Why?” is “because why the fuck else would you even want to be alive but to do things as well as you can?”. Now: let’s do this.

Slack’s preview release began two weeks after this document was sent, on August 14th, 2013. A little under six months later, on February 12th, 2014, it was officially launched. You can sign up at slack.com to begin using it and follow us on Twitter @slackhq.

We know that we have built something which is genuinely useful: almost any team which adopts Slack as their central application for communication would be significantly better off than they were…

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SAAS Inspiration
almost 2 years ago
almost 2 years ago

Molly Graham has seen a lot. Her team at Google leapt from 25 to 125 in just 9 months. During her 4+ years at Facebook , the company exploded from 500 employees serving 80 million users to 5,500 employees and over 1.1 billion users. (Her job was to sort out the culture, compensation, and performance systems to help make that possible — no big deal.) And now, as COO of productivity tool startup Quip , she’s both laying the groundwork for her team to grow, and catering to a customer base of startups ( Instacart and New Relic among them) who have the pedal to the metal.

If there’s one thing Graham knows for sure, it’s that scaling comes with an utterly unique set of problems. Some of them are funny — like needing to replace everyone’s big desk with smaller ones so all the new folks can fit, or moving into an office that's already too small for your growing team. But some of them are far more serious.

“If you’ve ever watched an extremely high performer go from killing it one year to struggling the next, you know what I’m talking about,” she says. “There’s a unique feeling of ambiguity, chaos and stress that comes with doubling or tripling your team every six months. If you don’t manage scaling proactively, you can end up in trouble.”

Here, Graham explains why scaling companies and teams is, in her words (and she’s putting it lightly), “crazy hard” and what you can do as an early employee or a startup founder to make it easier on yourself and your team. She covers what rapid scaling actually feels like as an experience (something too few people talk about), the toughest phases of growth and how to survive them, and — most importantly — how you can anticipate the biggest challenges before they really hurt your momentum and your chances for long-term success.

In the Eye of the Storm

“I think it’s important for people to talk about what it feels like to be inside a scaling company because it helps people realize how normal their experience is — and identifying that experience as a leader can actually help your team,” says Graham. She saw so many people struggling with the same emotions during her time at Facebook that now she actually gives a talk to people on her teams about it. “I call it the ‘Give Away Your Legos’ talk,” she says.

Let her explain.

“The best metaphor I have for scaling is building one of those huge, complex towers out of Legos,” she says. “At first, everyone’s excited. Scaling a team is a privilege. Being inside a company that’s a rocket ship is really cool. There are so many Legos! You could build anything. At the beginning, as you start to scale, everyone has so many Legos to choose from — they’re doing 10 jobs — and they’re all part of building something important.”

You have so many choices and things to build during this early phase that it’s easy to get overwhelmed. There’s too much work — too many Legos. You’re not sure you can do it all yourself. Soon, you decide you need help. So you start to add people. That’s when something funny happens on a personal level and to teams: People get nervous.

“As you add people, you go through this roller coaster of, ‘Wait, is that new person taking my job? What if they don’t do it the right way? What if they’re better than me at it? What do I do now?’” says Graham. “These are some strong emotions, and even if they're predictable, they can be unnerving.” In order to get to a really high-functioning, larger team, you have to help everyone get through this roller coaster. If you don’t, you can end up with a real mess.

If you personally want to grow as fast as your company, you have to give away your job every couple months.

That’s why her talk is about Legos. The emotions you feel when new people are coming in and taking over pieces of your job — it’s not that different from how a kid feels when they have to share their Legos. There’s a lot of natural anxiety and insecurity that the new person won’t build your Lego tower in the right way, or that they'll get to take all the fun or important Legos, or that if they take over the part of the Lego tower you were building, then there won’t be any Legos left for you. But at a scaling company, giving away responsibility — giving away the part of the Lego tower you started building — is the only way to move on to building bigger and better things.

“Almost everything about scaling is counterintuitive,” says Graham. “And one of the foremost examples is that reacting to the emotions you’re having as your team adds more people is usually a bad idea. Everyone’s first instinct is to grab back the Legos that the new kid took — to fight them for that part of the tower or to micromanage the way they’re building the tower. But the best way to manage scaling (and one of the secrets to succeeding in a rapidly growing company) is to ignore those instincts, and go find a bigger and better Lego tower to build. Chances are if you pick your head up and look around, there’s a brand new exciting pile of Legos sitting right next to you.”

That’s one of the other counterintuitive things: Adding people doesn’t mean there’s less work for the people that are already there. It means that the entire company can do more. If one person was managing all of marketing before and then you hire someone to manage your content channels — the person who was doing marketing before is not going to have less to do. It either means that she'll be able to do the rest of her job better, or that she'll be able to take on new things.

“People think, ‘Oh, that person joined! Now I can finally work a little less.’ But that’s almost never what happens,” Graham says. “Adding people is the opportunity to find a new job (or the new version of your old job). But this requires individuals to freely give away parts of or sometimes all of their old job — handing over projects, programs, products, code that they probably built from scratch. It means trusting other people with something you care about.”

For high performers in really fast-growing situations, this happens all the time. Graham emphasizes that one of the secrets of people who are really successful at fast-growing companies is how rapidly they're able to adapt to the chaos and uncertainty of adding new people. They become adept at redefining their jobs on a regular basis, and they become comfortable with the largely uncomfortable emotions that naturally happen when a team doubles or triples in a short period of time.

At Quip, Graham’s job changes every three months. This doesn’t mean her title changes, but the content of her work shifts radically. For example, she’s gone from basically being the only sales person (and the marketing person too!) to functionally operating as VP of Sales and Marketing. “Every three months, I go through a phase where I’m a little uncomfortable and certain I’m doing the wrong things or operating at the wrong level, but then it passes and I find my new job,” she says.

A week ago, someone might have told you they hate their Legos and want to get rid of them. But as soon as you hire someone else, they suddenly want to hang on to all of them.

Graham’s had the benefit of conditioning to weather these changes. At Facebook, when they were onboarding 20 to 60 people a week, she got so used to ceding responsibility every three to six months that she considered it part of her job.

Her advice to managers? “Honestly, the best thing you can do is normalize what people are experiencing,” she advises. “As a leader, you want to head it off at the pass and proactively say, ‘Hey, this is what you can expect to feel during this time of growth. It’s pretty universal. Other people are going through the same thing. I’ve been through it too. There’s no need to be scared.’”

Help them understand that the emotional chaos they feel is normal so there’s no need to overreact. And in fact, they should often do the opposite of what their instincts tell them: Don’t latch onto the Legos you had before. Give them away and move on to building the next taller, cooler tower.

“Listen to the questions people ask during your one-on-ones or in team meetings. When you start to hear a lot of, ‘So… why did we hire that person?’ or ‘Do we really need someone to do that job?’ or ‘Is Suzie going to take over this project?’ Those are the signs that either individually or collectively, you should start talking to your team about giving away their Legos.”

One thing you can encourage people to do is not fixate or act on their emotions right when new people come aboard. Instead, tell them to ride it out and see how they feel in three weeks or a month — that’s when they should be coming out the other side and feeling better. Maybe set a meeting up to chat after that time has passed to see how things are going. That's a good way to keep an eye on how scale is affecting your team, says Graham.

The next best thing you can do is point to the new bright, shiny tower that needs to get built. At Facebook, one of her closest co-workers had built the beginning of a big project and their manager asked Graham to take it over. They wanted her co-worker to move on and focus on a new area that was even more important to the company, but she had a tough time letting go. “This was actually a very good friend, so it wasn’t that she didn’t trust me, she was just uncomfortable with giving away something she had started building,” she says.

“That’s when our boss did this brilliant thing — he gave her a huge goal. He basically said to her, ‘We need you to do the same thing over here only five times bigger.’ Immediately, my co-worker let go of every single Lego she was holding and ran to the new project because she was so scared and excited. It was like someone had flipped a switch and she was suddenly like, ‘Good luck, peace out!’”

One of the best techniques for getting people through job-change anxiety is to help them picture the reality of their next job and the size of the opportunity.

People get lost when they’re overly focused on the job they used to have and they can’t see what awaits them on the other side of these emotions.

“If you want to be one of these type of people who started at Facebook at 25 people and ended up running a huge department, you have to get really good at giving away your Legos,” says Graham. “If you hold on to answering customer support queries yourself or writing all the blog posts yourself, you’re never going to run customer support or product marketing.”

The Phases of Scale

Graham says she sees this pattern again and again on teams she’s led, with people she’s coached, and with startups she works with at Quip. It seems like a fairly universal experience.

“At Quip, we hear from a lot of startups as they grow past 50 people, and as they grow through the 300 to 500 phase. They’re looking for new ways to communicate, organize, and increase transparency in their organizations. They start looking for new tools in those moments in part because things are breaking. Those are very uncomfortable moments for scaling teams. It's when teams start to experience a lot of the growth challenges, and when you can start to see problems if you haven’t proactively managed your scaling process.”

Just as the personal experience of scaling comes with a separate, unique set of emotions, the phases a company goes through each have a character all their own. As either an employee or a partner, Graham has experienced each of these phases in turn, has absorbed the challenges that come with each, and has seen these changes handled both well and poorly.

What follows is a definition of each of these movements in a company’s life, with one caveat: Like people, companies are distinct in how they work, look and feel. One startup may still feel like a “chaosfest” (Graham’s word) at 150 people, while another might feel bureaucratic and static at the same number. It all has to do with the unique character of the company — how it was founded, who its founders are, its product, etc.

Graham claims that for the majority of companies, the true chaos of scaling (and also the formation of most of your company’s identity) happens roughly between 30 and 750 people. After that milestone, the scaling emotions are more team-oriented rather than company-oriented — like “Wow, now engineering is growing so fast!” vs. “Facebook is growing so fast!” These phases and how to handle them apply to team scale as well.

30 to 50 Employees

“There’s something really interesting that happens when a company can’t fit around one table anymore — things just start to get a lot harder,” says Graham. “Where it used to be simple to communicate, people suddenly complain that they don’t know what’s going on anymore. They don’t know why you’re making certain decisions. They don’t know each other as well. They don’t know what they should be doing. I’ve seen so many companies really struggle in this phase.”

30 to 50 people is where you go from being a family to being a company, and everything starts to get really hard.

With under 30 people, everyone knows each other well enough to walk up and strike up a conversation with practically anyone. You don’t even need to invest that much in communication. People can turn around in their chairs and talk to each other, and the priorities are clear because everyone’s talking about them all the time.

“When things start to change at this tipping point, it’s the CEO who feels it most,” says Graham. “I’ve talked to a number of people who are experiencing this and they say it’s like night and day. At 50 people, everything that used to come naturally is now a struggle. And as a new leader, you start getting difficult questions that you’ve never had to answer before. I had a CEO tell me that someone asked them about their career path at the company, and they were like ‘I don’t know! Why are you asking that? We have so much to do!’ Or you have someone ask, ‘How do I do XYZ?’ and you want to say, ‘How do you not know that?!’ But it’s not their fault. Things have changed. You're a company now — not just a team — and you have to start acting like one.”

The best remedy here is to start writing things down — especially the stuff that's never needed to be formal or official before, like mission, values, philosophies. (You can see more of Graham’s advice on how to approach writing these things down here .)

“Who we are and how we do things — write that down as fast as you can before you hit rapid growth (ideally),” says Graham. “Yes, that might seem like a nuts thing to do at 25 people when you have so many competing priorities, but it's beyond worth it. At 750 people, you can tell the difference between the companies who did take the time to be thoughtful and record these things and those who didn’t.”

You also need to over-communicate. Once you’ve written down who you are and what you’re doing in the world, you should always be talking about it constantly. It’ll feel like you’re repeating yourself every day and every All Hands meeting, but that’s probably when you’re communicating just enough.

Success at this stage isn’t coming up with a bunch of bloated or premature process — it’s about developing the right principles. This was Graham’s focus when she was helping Facebook solidify its culture. “Before we came up with a compensation system, we created a compensation philosophy that would guide how we’d think about paying people going forward. The philosophy helped us evolve our system as we grew. It more or less still guides the way Facebook does compensation today as far as I know.”

Philosophies can answer a host of questions about an organization: What does a high performer at the company look like? What role does feedback play? What is the role of a manager at our company? How can someone fail here?

“Too many founders have this tendency to take a really elaborate process they see working somewhere like Amazon and then just grafting it onto their company — like some huge complex performance management system or engineering roadmap process,” says Graham. “At the end of the day, what early startups really need are design principles that tell them who they are, what they like, what they want to select for, and who they want to be. That is what helps you scale.”

50 to 200 Employees

“If we’re talking about child rearing, this phase correlates to those years right before adolescence,” says Graham. “This is an incredibly formative stage where you’re still small enough to change major things, people are still able to listen to you and hear what you’re saying fairly easily. If we use the metaphor of building a house, this is the foundation — and craftsmanship is incredibly important. This is not where you want to rush things. If you want your team or company to have certain values, to care about certain things, to have diversity (of thought, of identity), the time to do it is in these first 200 people — or the first 100 if possible. After that, a lot of other stuff takes hold.”

Hiring is a network effect. The first 100 people you hire will define the next 200.

Google, Facebook and others have all conducted studies about what predicts the performance of a new hire. The single biggest indicator is who they were referred by. If you have high performers referring people, you’ll hire high performers. If you let low performers stay on staff because you’re too scared or insecure to fire them, then you’re building your future company in that mold. Early hires plant seeds. And what ends up growing depends on their character and commitment. That also makes this phase the most critical one for firing people (as unpleasant as that can sound).

“The biggest favor you can do yourself, the other people who work for you, and really even the person you’re firing, is to just do it,” says Graham. “Otherwise you have really great people sitting next to low performers wondering why you’re paying them money. It really erodes confidence and has long-term ramifications. Really it should only take a couple months to assess whether someone is a good fit, and one of the healthiest things you can do for your company is — if the answer is no — part ways quickly. It doesn’t take a year to get to this answer.”

200 to 750 Employees

A company of this size has the temperament and biases of a teenager — and the growing pains to prove it. The personality and habits of the organization are pretty much molded. Now it’s all about scaling them as more and more people join. “You’re literally going through a growth spurt, and you have to really focus on getting your maturity to match your big feet,” says Graham. “A lot of how this phase feels has to do with how good of a ‘parent’ you were earlier on.”

That’s not to say you can’t make changes at this size. It’s just that everything is much harder — and gets increasingly so as you grow. Facebook was able to shift its personality away from moving fast and breaking things to thoughtful, rapid innovation after 700 people. But it was only possible, Graham says, because Mark Zuckerberg was so good at articulating what he wanted the company to do and feel like. After 200 employees, any shift in culture needs to be undertaken very deliberately and with a lot of work by the leadership of the company — the CEO, of course, but also the leader of every major department.

“Think about parenting an average teenager — you have to decide how to handle the bad habits they spontaneously develop. You catch them drinking or doing drugs, for instance. How do you handle it? Maybe it’s just the one time, or maybe it’s a sign of something you actually need to address. It could be bad later on if you ignore it completely but you also can’t overreact.”

At an organization, you can see bad habits like people acting like assholes and getting away with it, and you have to decide how to respond. Netflix’s famous culture deck declares that they won't accept brilliant assholes. Sounds reasonable, but Graham would assert that there are many companies who do. “So the question is, what do you want your company to be like? When you see a trend over time that you don’t like, you need to aggressively manage it. Otherwise you can end up with some really bad habits as a company.”

You have to pounce on any bad habits that could become part of your company's DNA. Whatever your company looks like at this stage is how it will be, floor to ceiling, when you're older and bigger.

Over 750 Employees

Typically around this point, individual people’s identities shift away from the company and toward their team. They become Facebook engineers, for instance, not just Facebookers. CEOs may start to hear questions like, “What does the marketing team even do?”

This is also where politics start to emerge, gradually at first and then with greater momentum. Graham defines politics as the moment when people start to act in their own self interest rather than the best interest of the company . It's often shocking when it first shows up. It can be a sign that you hired too quickly or aren’t communicating proactively enough about what behaviors will be rewarded, and about what you’re doing in the world. Strong, constant communication with the leaders of teams is the only way to keep things healthy. Everyone has to feel that they and their work are clearly tied to the broader goals of the organization. Everyone has to own calling out bad behavior when they see it.

This is also when team leaders should look back at advice for CEOs to survive initial company scale. They can use most of the same tactics to keep their teams humming along without people feeling disillusioned or falling prey to the wrong priorities. You can also find great advice on team scaling from other experts here , here and here .

If Graham had to distill all of this advice into a simple checklist for founders eyeing rapid growth, here’s what she’d say:

Make a list of the qualities you want your company to embody . Who do you want to be? How do you want it to feel to work there?

Write down what you’re doing in the world. What’s your vision for the change you want to make?

Communicate these things again and again and again. Through all the channels. All the time. You can’t overcommunicate these ideas.

Focus on hiring quality people rather than speed. Don’t lower your bar because you need to grow faster. It will come back to bite you.

Fire people. Just do it!

Hire amazing leaders as early as you can and help them grow their capabilities as the company grows.

Prioritize principles over process.

Keep giving away your Legos! And tell everyone around you to do the same. It’s going to be okay.

Looking for another colorful startup building metaphor? Check out Graham's tips for making friends with the monster on your leg .

Molly Graham helped forge a work culture at Facebook that's withstood huge amounts of growth. Today, she's something of a rapid scaling expert. Here's the key to doing it right, she says.

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almost 2 years ago

Hiring for an early-stage company is fundamentally different from hiring for a mid-sized, pre-IPO, or public company—and thus requires a radically different approach. As a founder or hiring manager, there's a specific set of traits you need to seek out in each candidate to make sure you're building the right team for the road ahead.

Besides role-specific competence, there are three must-have traits early-stage hires should have:

  1. An authentic attachment to your company
  2. The potential for exponential impact
  3. Cultural alignment

Authentic attachment to your company

In startup circles, you’ll often hear about the importance of hiring someone “mission-driven.” There’s a simple reason for this. If a candidate believes in your company’s mission, she is demonstrating an authentic attachment to your company. This means that when the going gets tough (and it will at an early-stage startup!), she will find the courage to stick it out. Mission-driven candidates exhibit a higher tolerance threshold and are better positioned to navigate the ups and downs of startup life.

Another benefit to add: mission-driven folks are more likely to be referrers for other hires. And those hires generally are of higher caliber since they are pre-vetted by the employee that has an authentic fit with the company.

However, being “mission-driven” isn’t the only way to demonstrate an authentic attachment. For instance, a director-level candidate might be attracted to an excellent leadership team because that team mirrors her values. Or a senior engineer might be attracted to your technical environment because it offers interesting problems to work on, or a chance to work directly with an all-star technical co-founder.

The point is there might be several reasons why someone would be genuinely excited to work for your company, and it’s up to the hiring team to flesh those out. If you haven’t done that with a candidate, you’re probably not ready to make an offer. The risks of getting it wrong are too high.

Pro-tip: A candidate who values a high cash offer above all else does not have authentic attachment! On the flip side, a candidate who wants a lot of equity may be the mission fit you’re looking for.

Potential for exponential impact

With any hire, it’s important that you find someone capable of doing the job. At a startup, however, it’s critical that every hire has the ability (and desire) to extend beyond her core function, demonstrating an interest in scaling her impact as the company scales.

By nature, startups are chaotic. An early employee’s scope of work doesn’t fit into a neat box and it won’t match the job description. You should aim to hire people who aren’t just OK with this, but are excited by the opportunity.

During my time as Head of Recruiting at Wealthfront, the founder and CEO Andy Rachleff used to say to me, “Every startup hire should exhibit the potential to be a VP one day.” Essentially, what that means is that founders should set the expectation that change is constant and only hire those who seek out new challenges and thrive in an ever-changing environment. It’s worth pointing out that you don't want to hire the person that EXPECTS to become a VP right away. Rather, it's about the candidate having a very high slope, not very high requirements.

One good proxy for this potential for exponential impact or “professional upside” is looking at a candidate’s career trajectory. Here are few things to keep in mind as you vet the candidate:

  • Has the candidate made good career choices? Did they pick quality startups and demonstrate sound judgement by doing so?
  • Has the candidate exhibited resilience, demonstrated by significant tenure and a track-record of getting promoted from within?
  • Does the candidate have a clear story for job changes?
  • Is there clear professional intent behind each decision?

But there are other ways to look for this quality that go beyond a resume:

  • Did the candidate put herself through college?
  • Did the candidate earn a graduate degree while working full-time?
  • Has the candidate achieved more than her peers, maybe having done so while at a distinct disadvantage?
  • Has the candidate shown exceptional ability/commitment outside of the workforce such as devotion and participation to their spirituality, community, or physical feats? (Unusual Partner Andy Johns likes to look for this since it also shows independent drive, which is essential to having a high upside.)

The above is not an exhaustive list. Essentially, you’re looking for a track record of grit and ambition.

Cultural alignment

An early team sets a company’s cultural foundation. When hiring at a startup, it’s never too early to emphasize cultural alignment. Seeking a candidate that is the right culture-fit does not undermine the importance of making a technically strong hire. They are equally important traits. Remember, you can teach somebody a new skill, but it’s a lot harder to teach somebody passion.

Maybe you’ve established company-wide operating principles that transcend function and role. For example: “Assume good intent,” or “Strong opinions, weakly held. Or perhaps you’ve already outlined a core set of values that dictate culture at your company. Craft interview questions that compel a candidate to demonstrate how they’ve lived those company values. You should hold the candidate to the same high standard you’ve hopefully set for your team. At Fleetsmith, we worked hard to create a psychologically safe workplace—one in which all employees felt empowered to take risks without fear of retribution or blowback. Weave these themes into your interview process.

Culture alignment could also be showing that they have the appetite for risk and have worked at startups before. This is a critical trait for any founding team member. If the candidate only comes from big companies, but suddenly wants to try working at an early-stage startup, the risk of low culture fit and organ rejection is very, very high. Churning early team members can be a huge setback for a young startup and seriously injure team morale, so it’s worth spending extra cycles to ensure you’re making the right hire.

Pro-tip: Give candidates from big companies the specifics of their job offer upfront, and let them know that room for negotiation is minimal. Candidates joining startups from larger companies are likely taking a step back in salary, so it's much more efficient to be aligned on that upfront.

I put together this set of interview questions you can ask at each stage of the interview process to vet candidates for each of these must-have traits.

How do you find these candidates?

If you’re looking for candidates that exhibit the traits outlined above (authentic attachment, exponential impact, and cultural alignment), the hard truth is that hiring won’t happen overnight. Finding the right early-stage hire takes time. Here’s the good news: candidates who meet this criteria will often find their way to you. In many cases, the best candidates are running towards your company saying, “This is where I want to be!” Your job is to identify them early, run a swift interview process, and inspire them to join you.

As a recruiter for our portfolio companies, I spend an outsized portion of my time with the candidates who express the most excitement. As long as I do a good job informing them about the role and company, they often end up selling themselves on the opportunity. If it’s time to extend the offer and you’re not sure they’ll jump at the opportunity, you might not be talking to the right person.

At the same time, you have to be ready to roll up your sleeves and do some active sourcing. Start with your own network and expand outward from there. For example, if you’re hiring a product leader, reach out to product leaders you’ve worked with before and industry influencers. It’s a really good bet they know someone you should meet. When you reach out to people with influence, word spreads quickly.

Pro-tip: Tap into the “super-connectors” in your network. These are the folks who enjoy receiving an email request for an introduction. They’re the folks not only respected in their field, but also widely known. They derive joy from making connections, so don’t overthink reaching out to them for help!

Eventually, you’ll need to begin sourcing outside your immediate network. Use a targeted approach. Scattershot emailing rarely works. Instead, start by coming up with a list of 15-20 companies whose technical excellence you admire. From here, look for relevant employees at those companies who exhibit the traits we outlined above (eg. start-up experience, a track record of promotions and significant tenure, etc.) Remember, you’re looking for scrappy candidates who have something to prove.

Once you've put together a thoughtful list of candidate profiles, consider using a modern sourcing product like Gem , which does the heavy lifting for you by automating all outreach and follow-up.

How do you engage these candidates?

Over the past 10 years I’ve partnered with dozens of hiring managers across all functions. Without question, I’ve learned that the most successful hiring managers emphasize relationship-building above all else. That’s not to say that there aren’t other important facets of running a strong recruiting process. Consistent expectation-setting, transparency around compensation, running a timely process, and creating a two-way street where the candidate feels as empowered to ask questions also matter. But at the end of the day, a candidate joins a company to work for someone. Therefore, at the crux of an excellent process is laser-focus on nurturing the potential employee-manager relationship.

While at Wealthfront, I worked extensively with the design team, supporting hiring efforts across product design, visual design, UX research and design leadership. The team was growing quickly and time was scarce. In spite of this, Wealthfront’s Design VP, Apeksha Garga , made a point of personally reaching out to each design candidate ahead of all candidate on-sites. Apeksha ditched the usual canned email and instead spent 20-30 minutes with each candidate ahead of their final round interviews. Her high 90th percentile close rate reflected how valuable this touchpoint was for candidates. Relationships matter, and early-stage founders and leaders can differentiate their company by making the hiring process feel warm and personal.

Finally, I’ve always believed that the best start-up candidates demonstrate increased enthusiasm with each step of the recruitment process. As you become more excited about a potential fit, so too should the candidate. If there’s a disconnect there and the candidate seems to pull away, have an immediate conversation to understand if it’s worth continuing the process.

Here are a couple of simple steps you can take to get the candidate more engaged:

  1. Share content : Send over a relevant podcast episode, maybe one that highlights a different member of your leadership team. Candidates will be excited to hear multiple people expressing the same level of passion about your company.
  2. Help them backchannel: Ask the candidate, “What more do you need to know?” Offer to connect them with one of your investors or someone else in your network who knows how you work. You want to help the candidate envision what it would be like to work with you.
  3. Find creative ways to highlight your culture : Send a book that everyone in your company reads upon joining or invite them to a team offsite. (We took a recruit axe-throwing and the team surprised her with her own cardboard cutout!)

If all goes well, presenting the offer should feel like a celebration, rather than just a starting point.

Key Takeaways

  • Hiring for a startup is fundamentally different than hiring at a large company.
  • Understanding a candidate’s technical excellence is always key, but just as critical is your understanding of a candidate’s passion, upside potential, and cultural alignment.
  • Before you make an offer, make sure you can answer this question: “What makes me convinced that this candidate will still be excited to work here when things get tough?”
  • Consistently gauge a candidate’s enthusiasm for your company, and spend more time with those who are leaning into the process.
  • Tap into your network to source candidates. Look for the “super-connectors” in your network who enjoy introducing people to each other and making new connections.
  • Make a list of companies whose technical competence you admire and narrow in on relevant employees who might be a good fit for the role. Use a tool like Gem to help automate the outreach process.
  • Build a relationship with the candidate throughout the process and go the extra mile to make the process feel personal and exciting: share content, help them backchannel, and invite them to team events. You want to help them envision what it would feel like to be a part of the team.

Discover the three traits every early-stage hire must have and the interview questions founders can use to vet for these traits at each stage of the interview process.

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almost 2 years ago

Guide to growth - Julian Shapiro


Who should read this

This material applies to companies of every size and vertical. I cover both introductory and advanced B2B and B2C tactics.

Marketers of every skill level will encounter new material.


It's important to learn growth before choosing which idea to work on.

Before starting, assess whether your idea is suited for profitable and scalable user acquisition—assuming your goal is to grow large.

If you can’t foresee the strategies in this handbook working for your idea, perhaps consider a different one.


It's important that managers know how growth works so they can facilitate it.

Don't treat growth like a black box powered by engineering and marketing teams. It's your most important business function, so study the principles.

This handbook will help you prioritize your team's growth projects based on their likelihood of profitability and their ease of implementation.

It will also shed light on a growth marketer's skills so you can hire better.

What is growth marketing?

What’s the difference between growth marketing and brand marketing?

Brand marketing increases the potential energy for revenue. It primes users to convert at a higher rate in the future.

Growth marketing, on the other hand, converts that potential energy into kinetic: it gets purchases.

Specifically, growth marketing is data-driven revenue maximization .

Counter to popular belief, growth is not a series of "hacks." It's a rigorous methodology consisting of experimentation, data collection, iteration, and behavioral psychology—in pursuit of continually increasing revenue.

You'll sometimes hear growth marketing referred to as "growth hacking" or "performance marketing."


Most growth marketers are not good. They haven't learned frameworks for making efficient growth decisions. Instead, they haphazardly throw ideas at the wall without process or iteration.

Worse yet, many growth marketers are brand marketers pretending they're experienced with data-driven growth.

So, hire slowly and with a skeptical eye. Focus on three core qualities:

  • Proactiveness when crafting experiments and scaling them.
  • Process for consistently generating growth ideas.
  • Reflectiveness and data literacy when assessing what growth successes and failures have taught them.

I use a three-step project to assess these qualities. It looks something like this, but it varies significantly per growth role, and this is not one-size-fits-all:

  • The candidate ideates and ranks customer acquisition strategies for the business. This reveals their ability to identify high-leverage opportunities and see the bigger picture.
  • They walk through their methodology for optimizing conversion at every step in our product journey. This reveals their process-driven approach to spotting bottlenecks and generating hypotheses.
  • The candidate creates sample content for the growth discipline they're being hired for, such as running ads or email marketing. This showcases their tactical competency.

Collectively, these projects help assess the three qualities from above:

1. Are they proactive?

Growth marketers must be proactive and resourceful. They should never stop generating ideas, running experiments, and iterating.

  • For example, when Facebook releases a new ad unit, a growth marketer should spend money uncovering whether there’s new, low-hanging fruit.
  • When customers use your product in unexpected ways, a growth marketer digs in, talks to customers, and uncovers how these learnings can improve the messaging and product.

Don't hire a "set-it-and-forget-it" marketer.

2. Do they have a process for generating and prioritizing ideas?

They must have a framework for ideating ideas—not just a depletable basket of ideas.

You're assessing their flexible, cross-disciplinary process more so than their actual output. A great process adaptably generates ideas forever.

Further, because company resources are limited and growth is time-consuming, I look for candidates who understand how to prioritize their ideas efficiently.

Don't hire a "I have ten ideas and that's it" marketer.

3. Do they know what a job well done looks like?

Do they know what mastery looks like for their role?

If they're running ads, for example, can they identify compelling value propositions, write enticing ad copy, and target audiences that fit the product?

This handbook will help you achieve competency in various growth disciplines so that you can partially assess these competencies yourself.

Finding growth marketers

You can hire growth marketers on the Demand Curve job board . You can also poach them via LinkedIn: find those working at companies facing similar growth challenges as you and pay them more.

Who's Julian Shapiro?

I spend thousands of hours deconstructing how things work. I compile my insights into free handbooks (like the one you're reading). Over a million people read them annually. Insights that don't make it into handbooks are shared on Twitter .

I'm also the founder of Demand Curve , a company that trains startups in growth marketing and helps them find great marketing hires.

You can read more about me on my about page .


Ads, Content Marketing, and Sales.

user acquisition , , , , and



Which channel mixture should you use?

I have collected years' worth of growth data from running a community of 25,000 marketers. Plus, I've helped grow several hundred companies via Demand Curve .

Based on my observations, here's what I broadly recommend each business focuses on first.

B2C companies

If you sell a product to consumers, these are the channels I suggest prioritizing:

Don't be overwhelmed by these links. Ignore them for now. This handbook will walk you through many of these concepts on later pages.

B2B companies

If you sell to businesses:

  • Niche B2B with high average revenue per user (ARPU) — A startup in this category would be enterprise software charging $10,000+ per year. You'll most likely succeed with Sales (outreach, inbound, and networking) and you'll likely generate leads through content, webinars, partnerships, Facebook Ads, Google Ads, and LinkedIn Ads . You might succeed with Instagram Ads.
  • Broad B2B with medium ARPU — A startup in this category would be small business software charging $150 per month to help run your accounting. The previous paragraph applies here—with one tweak: you'll likely place greater emphasis on ads and content over sales.
  • Niche B2B with low ARPU — For example, a software tool for app developers charging $25 per month. If this is you, perhaps rethink your business if you're trying to make more than $2mm USD per year, because you're facing an uphill battle. Niche B2B businesses with low ARPU can neither afford ads nor sales. They have to rely on breakout word-of-mouth, community building, product-led growth, and content. It'll likely be a slog.
  • Broad B2B with low ARPU — For example, a broadly applicable software product charging $25 per month. You'll most likely succeed with Content Marketing, Google Ads , product-led growth, and Apple Search Ads (if you're a mobile app). You might succeed with partnerships, integrations, and referrals.

If you want to be mentored in growth

If you'd like to be assisted through learning this material, my team will train you or your company in growth marketing. See the programs over at Demand Curve . We also run the Bell Curve growth agency.

The in-depth guide to acquiring more users, writing landing pages, running A/B tests, and other growth tactics.

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almost 2 years ago
As the product management role has become far more popular here in Silicon Valley and at technology firms in general, we’ve started to see specialization in the role begin to emerge. While these specific product roles rarely have differentiated titles or formal separate requirements, savvy hiring managers are certainly looking for product managers with specific skill sets and passion areas depending on the specific product stage and challenges they are solving for. I’ve had the opportunity to serve in many distinct product roles as well as lead hiring for such roles as well. So I wanted to share my view of 3 high-level product management roles that exist in the field, which I affectionately call builders, tuners, and innovators . Builders
The builders are what most people would consider the traditional product manager. As product managers are often seen as defining the what for their product, they are responsible for driving the roadmap for an existing product to build ever more useful, usable, and delightful experiences to serve the needs of their target users. Their super powers include truly understanding a target user segment, including their pain points, their proclivities, and what appeals to them. They know how to listen to users for insights on the problems they are solving for and not just taking user feature suggestions at face value. They know how to take the deluge of incoming feature requests, ruthlessly prioritize them, and come up with a coherent roadmap that optimizes for solving the right problems at the right time for their users. They get into the weeds of the entire user experience and are constantly polishing, refining, and reinventing where appropriate. They never feel like their product is done and see how the sky is the limit in terms of how they can expand the scope of their product offering to solve ever-more pressing problems for their users. They thoughtfully consider the right trade-off in every sprint between scope, quality, and time. Yet they are constantly refining the machinery of their internal process to improve overall velocity and create more carrying capacity for future sprints. The product managers that love being builders love solving real problems for users, delighting users with the experiences they are creating, and just love bringing products to life. A product manager working on the next version of Microsoft Office, LinkedIn Profile, or Google’s Android operating system are all great examples of the builders that dominate the product management field. Tuners
The most common example of tuners are the growth PMs that have risen in popularity throughout consumer internet firms and now B2B teams. Yet I prefer tuners because it embodies much more than just growth. Tuners are folks with an unwavering focus on a specific north star metric that are empowered to do everything in their power to move that metric up and to the right. This normally takes the form of acquisition metrics (say signups), engagement metrics (say retained users), or monetization metrics (say paid subscriber growth). These folks are analytical ninjas. They know everything there is to know about executing A/B tests and spend as much time improving the velocity of their testing, improving their testing infrastructure, or improving their analysis capabilities. They are incredible at idea generation of potential tests and then getting as many of those tests in the pipeline as quickly as possible. They develop strong internal intuition on what hypotheses are likely to work vs not based on the hundreds of tests they have already run in an effort to further prioritize their endless list of potential ideas. They seek great ideas and best practices from everywhere but know that no general advice is ever better than simply running a test on their own specific product and users to see if the generalized rule applies to their audience. Tuners relish in moving the needle. They eagerly anticipate getting back the results of a test and seeing if their hypothesis panned out. They love seeing the impact they have on the company’s success in a very direct and significant way. Examples of PMs that are tuners include Uber's driver growth team, LinkedIn’s paid subscriptions optimization team, Facebook’s news feed optimization team, and Google’s search relevance team. Innovators
The innovators are the product managers tasked with the incredibly challenging job of finding product/market fit for a brand new product. They are truth seekers that take a hypothesis-driven approach to validate and iterate on practically every dimension of their product strategy, whether it’s target customer, problem their solving, value proposition, product differentiation, go to market, monetization, or more. They are constantly putting ever higher fidelity MVPs in front of potential users and leveraging a variety of customer validation techniques to quickly assess what’s resonating with who and why, both from a qualitative research perspective as well as eventually leveraging customer metrics from early product betas. Innovators are constantly prioritizing their team efforts based on assessing the riskiest aspects of their product strategy, designing the right approach to validate it, and iterating until they come up with the right answer. At the same time, they are always carefully assessing whether it makes sense to continue to iterate on a dimension or whether it’s time to pivot their approach to try something completely different. They leverage a strong combination of product intuition, personal conviction, and customer validation to constantly steer the product team in what ends up hopefully being the right direction. They also accept failure as a very real possibility, since innovation is never straight-forward nor easy. Innovators absolutely love being on the bleeding edge of bringing new solutions to market that the world has never seen before. They love going from 0 to 1, from whiteboard to launched product offering, and not waiting to see what the future holds, but instead inventing it themselves. Examples of PMs in innovator roles are Amazon’s initial AWS team, Apple’s initial iWatch team, the founding stage of Airbnb, and so many other successful and unsuccessful startups. It's also the role I'm currently playing at Notejoy . A Few Words of Advice All of these types of product managers exist at big tech firms, while at smaller startups the type of product managers they have often depends on the stage their product is in its own lifecycle. It also turns out that every product manager in-fact does activities embodied in all three roles, but with differing levels of focus. I encourage product managers early on in their career to seek out experiences in all three of these roles in order to gain valuable experiences to round out your product experience but also to learn more about yourself on where your passion and skill lie. There’s nothing better or worse about each of these roles, it’s simply a matter of aligning your passion and skill with your ideal role. One word of caution on taking on the role of an innovator: I encourage PMs to first have experience as a builder before attempting to take this on. There are unique challenges to being successful as an innovator that become far more difficult to master when you are also simply mastering core builder competencies, making it far less likely for you to be successful in doing so. It’s also better to have established success as a builder when building out your personal product management reputation than a string of likely failures that are common as an innovator. I hope this provides you a view into some of the specific product manager roles that have evolved as specialization has started to take place in the product management field.

As the product management role has become far more popular here in Silicon Valley and at technology firms in general, we’ve started to see specialization in the role begin to emerge. While these spe

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almost 2 years ago

Author's Note 1. Sorry for the delay in the newsletter. A busy week at work meant I could start writing this only on Sunday 2. Based on feedback, we introduced two features - "Read time" and "More reads on the topic" 3. Also, I understand many of you might be already aware of how Venture Capital works. Please feel free to jump out of this introductory piece :)

In 1940, Harvard Business School professor Georges Doriot, was drafted into the US Army for World War II. Once the war was over, he had different plans than teaching at Harvard. War had taught him the important role of science and technology in a country's progress. And he decided to pursue a new path. He set up the American Research & Development Corporation (ARDC) to facilitate the investment of private money into businesses started by soldiers. He raised money from sources other than wealthy families (very different from the norm then) with the aim to "encourage commercialization of technological innovations".

In 1957, ARDC invested $70,000 in a new company DEC that planned to make smaller and more affordable computers compared to what IBM was offering in the market at that point in time. 11 years later, in 1968, DEC IPO-ed valuing ARDC's share at $35M. ARDC had just made a cool 500x return and set the modern venture capital industry ablaze, interestingly in East Coast Boston.

But exactly in 1968, 3000 miles away in West Coast Silicon Valley, Robert (Bob) Noyce, a brilliant engineer, was readying to start a new company. He reached out to his friend Arthur Rock, who ran an investment firm, for money. Arthur put in $10,000 of his own and convinced his contacts to put in another $2.5M in practically 2 hours. Bob Noyce named his company Integrated Electronics, as in, Intel. The company went public 3 years later and Arthur would get back $8.2M - a 227% absolute return or 48% annual return. 10 years later, Arthur would make a similar bet on Apple and net a 23,000% return!

Intel's deal would shift the center of venture capital investments to Silicon Valley, even before Boston could start making its name. Okay, enough of the origin story.

From the stories above, you must already have a guess. Venture capital is the investments of private capital in private companies , ie, companies not listed on the stock exchange.

It is like Private Equity (PE) but a bit different. Venture capital focuses on companies very early in their lifecycle while PE invests in slightly more late-stage companies. It's this focus on early-stage companies (more risk) that puts the 'venture' in VC. But you will be right in saying VC is essentially a subset of PE.

It exists because of the gaps in bank lending. Generally, if you wanted to start a new business, you would go to a bank. But banks lend only to new businesses that have hard assets against which they can secure the loan (eg, a factory). But in today's tech economy, many startups have few hard assets making a bank loan difficult for them.

Also, the risk of new businesses is very high. So high that even if banks are ready to lend, they have to charge such high interest rates that no one will take the loan.

The high-risk game that banks shy away from is where VC thrives. They are ready to give money to extremely young companies with no assets and probably inexperienced entrepreneurs as well. And for taking that risk, they take part ownership of the company instead of giving a loan. So they can capture more of the upside, meaning, they can take a share of the future profits.

Another difference is that bank = just money. But VC = money + advice on how to build businesses which is more useful to entrepreneurs.

Limited partners

They are wealthy families, pension funds, insurance companies, and other such institutions who have large amounts of cash lying with them. They provide the money to the Venture Capital firm which in-turn invests in startups. But they don't run the VC firm (hence the term 'limited').

They are ready to invest in a VC fund because of the high returns expected from it compared to other options they have (public equity markets, debt, real estate, etc). But they also understand that it is an extremely risky investment and allocate only a small percentage of their cash to VC (generally 5-10%).

General Partners

They are generally investment professionals with proven track records who actually run the fund . And they have to balance multiple jobs:

  1. Fundraise: They reach out to LPs and pitch the fund idea to them (they also actually make a deck like startup founders do). And hopefully collect cheques from them.

  2. Invest: They have to discover startups (VCs call it "Deal Flow"), evaluate them ("Due Diligence") and then invest in them (write the cheque, duh!)

  3. Grow: Now that they have invested in these startups, they help them grow by providing whatever help they can. It could be strategy, sourcing talent, introductions to potential partners, and even investors for the next fundraise.

  4. Exit: The GPs either try to take the company public ( IPO ) or sell it to another company ( M&A ) or sell it to another investor (Secondary sale). This is the step where they make money and then return it to LPs

Fund Terms & Structure

Let's view this through an example. Introducing Bala. Bala is an investment professional and thinks there is potential to build huge businesses in India. So he wants to start a fund that can invest in and help build such businesses. Bala (the GP) now has to arrange for money from LPs, because well, he doesn't have any. So what are the details he will have to layout for an LP?

  1. Fund Size What is the amount Bala is planning to raise? $10M or $100M. Or $100B if Bala is like Masayoshi Son.

  2. Fund Theme The areas that Bala will focus on

    What are the sectors he'll be investing in (Healthcare, Direct-to-consumer brands, etc)

    Which stage of the company? (Seed, Series A...)

    Which geographies? (India, South-east Asia...)

  3. Hurdle Rate This is the minimum yearly return (calculated as IRR) that Bala has to promise to generate for LPs. A failure to hit this rate means the fund has failed (and a lot of VC funds fail). Bala builds a financial model in Excel to calculate expected returns and figure out this hurdle rate. The sectors in focus and stage of investment will influence the hurdle rate. For eg, the Direct-to-consumer (D2C) sector generates a lower return than Software-as-a-service (SaaS) because of their different cost structures and will have a lower hurdle rate. A fund focused on seed-stage deals might have a higher hurdle rate than a Series B stage fund.

  4. Fund Life Each fund has a life of 7-10 years , at the end of which the money has to be returned to LPs. Bala has to beat the hurdle rate within this time frame.

    The first 2-3 years, Bala's effort goes into identifying and investing in startups

    The next 3-4 years go into building them

    The last 2-3 years is when Bala tries to 'exit' the investments and make money

  5. Deal Structure While the LPs understand VC is risky, Bala has to show what steps he'll take to protect the downside of that risk. One way to do that is to invest in the startup in the form of preferred equity, not common equity. Preferred equity gives VCs the higher preference over common equity help by startup founders in case the startup shuts down and sells off its assets and technology (eww, that's a bit mean). Bala can also show that he'll include

    Clauses for voting rights on key decisions like selling the company or when to IPO

    Anti-dilution clauses - if the startup raises the next round of funding at a lower valuation, the # of shares owned by the fund will be adjusted so that the fund continues to own the same % of the startup as before the round

  6. Fees For his effort and for expenses to run the fund, Bala will charge the LPs a 'management fee' which is around 2-3% of the fund value every year . From this amount, Bala will pay himself, the rent for the office and salaries to the analysts and admin staff he'll hire.

  7. Carry If Fee is the basic salary, Carry is the bonus that Bala will take home if the fund performs well. The profit generated by the fund over and above the minimum return promised is shared between the LPs (70-80%) and GPs (20-30% generally). This is to ensure Bala is incentivized to maximize the return of his fund. It is 'carry 'that will eventually form a large portion of Bala's earnings.

It's important to know that a typical VC firm has different funds within them . Each fund could have a different lifetime, different theme and different hurdle rate. And a different GP could be managing each fund. When you go through the list of portfolio companies on a VC's website, remember that they could be investments from different funds, each of which have different goals :)

With high risk comes high returns. VCs are expected to generate a 25-35% annualized return compared to the 12-15% that public equity markets generate and much higher than the 8-10% return that debt markets give.

Continuing Bala's example...

Bala ended up raising $10M and invested that money in 25 companies. To generate a 25% annualized return, Bala's fund has to at least 10x its original size, ie, the sum total of all the investments has to be at $100M (10x over 10 years = 25% year-on-year growth)

Now, this would have been simple if all the 25 startups grew 10x in those 4-5 years after Bala invested. But the problem is, that is rarely the case. In fact, 75% of venture-back startups fail . And it is not because VCs have bad decision-making skills. It is just really hard to build a successful company and even tougher to identify one very early in its lifecycle, however smart you are.

As you can see in the picture below, even if all the individual ingredients to building a successful company are at a high probability (80%), the overall chance of the company succeeding is only 17%. If even one ingredient is less like to happen (say 50% probability), the overall chance of the company succeeding drops to 10%.

So how do the VCs who make money actually make money?

VC returns work on something called the 'Power Law' . It basically means not all investments need to be a success. Just 1 or 2 successful investments can contribute to the return of the entire fund and make up for losses of all the others.

Out of the 25 investments by Bala, let's say 12 failed (zero value). And 12 grew only 2x (which is not enough). And 1 investment grew 230x. Then also, Bala's fund has managed to grow 10x and can be considered a success.

This is the kind of return that Oyo gave Lightspeed Ventures and Byju's is going to give Sequoia's India fund. Most VC funds don't generate that kind of return. In fact, they even end up losing money (less than 1x return).

What the power law implies…

Bala has to judge every company he's investing in from the lens of "Will this investment grow 200 times in the next 4-5 years?". It is this reason why VCs tend towards only companies that are going after large markets ($1B+) and have really high growth rates . Naturally, tech-centric companies fit the profile since they can grow very fast.

That's it for today. This turned out to be a marathon of an explainer. But I hope you got a fair understanding of how a VC fund works.

If you liked this Simplanation, consider buying us a coffee Due to payment gateway technicalities, we have to give different buttons for readers in India and readers in other countries.

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  1. The First Venture Capitalists : An interesting read on how the whaling industry of the 1800s was very similar to modern-day venture capital

  2. Venture Capital and the Internet's Impact : A superb piece by Ben Thompson (a favourite of mine) on how VCs are getting squeezed. Traditionally, VCs invested in startups from idea to IPO. But due to the advent of the internet and few other new dynamics, angel investors are investing at the idea stage and public investors like Fidelity are investing at the just-before-IPO stage. This has left VCs with very little space in between.

Read Time: 14 minutes

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almost 2 years ago

Lenny and welcome to a ✨ once-a-month-free-edition ✨ of my newsletter. Each week I humbly tackle reader questions about product, growth, working with humans, and anything else that’s stressing them out at the office.

If you’re not a paid subscriber, here’s what you missed this month:

  1. Moving from IC product manager to manager of product managers

  2. Top 5 most interesting things about Booking.com's early growth strategy

  3. The most important bottom-up SaaS metrics to track (and how to best visualize them)

Q: I'm building a SaaS product and don't know where to start when pricing it. How should I approach my pricing strategy?

When this question came in, I took to Twitter to find the smartest person in the world on SaaS pricing…

Many suggestions came though but one name came up again and again: @Patticus , aka Patrick Campbell.

For those that don’t know Patrick, he is CEO of ProfitWell , and generally regarded guru on anything SaaS. Unrelated to this post, I started using ProfitWell a couple of months back to track my newsletter metrics, and the amount of insight you get into your subscription business is unreal. AND IT’S FREE. If you’re running a SaaS business, definitely check it out. This is not a sponsored post — I just love the product.

Bonus : Patrick Campbell is doing a live AMA at 5pm PT today (10/27) in our subscriber-only Slack group. Ask Patrick any question you have about pricing your product live!

With that out of the way, let’s dive in!

by Patrick Campbell

Pricing is one of those topics that sits at the nexus of uncomfortable and long-term, which means companies often don’t think about it for far too long. Even when they eventually figure it out, they don’t touch it again for years.

The most successful companies optimize monetization in some manner every quarter . You may be thinking, “they change their price every 3 months!?” No, and that's the first lesson of monetization: pricing goes so much further than the actual price. Let me explain.

If we go to a thirty thousand foot view, you have to think about what you're actually doing with pricing. No matter the business you're in — non-profit, retail, SaaS, DTC, B2B, whatever — you've created some sort of value. You attach a unit of measurement to the value you created: your price. Put simply, your price is the exchange rate on the value you're creating in the world.

But price doesn’t live in a vacuum. Everything in your business — from sales and marketing to product and finance — is used to drive someone to buy the product at the price you're offering. Dozens of aspects of your business influence your price, and how effectively it converts customers:

  1. The segment and vertical you are targeting : You can go upmarket to customers who have higher willingness to pay, shift to a vertical that sees more value in your offering, or even change the ideal customer profile entirely.

  2. Your product, positioning, and packaging : You can come out with new features, move features to different tiers, pull features out and make them add-ons, change up your value propositions, etc.

  3. Your price : You can move your price up or down, which will impact conversion obviously, but will also impact the perception of your brand.

These are not the only axes when it comes to pricing, but the point is anything that influences the value of your product is involved in pricing and monetization. Cool – I've now given you a college lecture worthy of a tweed blazer, so let's dig into where you should start.

In the beginning, the actual number you're charging isn't that important.

There are some exceptions, but for the most part, you should first be figuring out the range you're in: a $10 product, $100 product, $1k product, etc. Don't waste time debating $500 vs. $505, because this doesn't matter as much until you have a stronger foundation beneath you.

What matters much more is two other questions:

  1. Your value metric

  2. Your ideal customer profiles and segments

These two elements are the foundation of your monetization and pricing strategy. Let’s explore them individually.

Step 1: Determine your Value Metric

A “value metric” is essentially what you charge for. For example: per seat, per 1,000 visits, per CPA, per GB used, per transaction, etc. If you get everything else wrong in pricing, but you get your value metric right, you'll do ok . It's that important. Partly because it bakes lower churn and higher expansion revenue into your monetization.

Pricing based on a value metric (vs. a tiered monthly fee) is important because it allows you to make sure you're not charging a large customer the same as you'd charge a small customer.

If you remember back to your high school or college economics class, the professor put a point on a demand curve for the perfect price and said “the revenue a firm gets is the area under that point.” The problem here is — what about all that other area under the curve? You’re missing out on that revenue by charging a flat monthly fee.

“Good, better, best” pricing is a bit more advantageous, because you end up with three points on our trusty demand curve, and thus more revenue potential. You see this in a lot of retail products who are constrained by being physical goods — the car with the basic package vs. the car with the stereo and sunroof vs. the car with everything. In software, it’s thankfully dying out, but you’ll still see it with mass-market products: Netflix, Adobe Creative Cloud, etc.

A value metric however allows you to have essentially infinite price points — maximizing your revenue potential. In practice, you’ll never show infinite price points on your pricing page, sales deck, or mobile conversion page, but you may have a customer come in at a certain level and then grow.

Value metrics also bake growth directly into how you charge because as usage or the amount of value received goes up (and those are not the same thing), the customer pays more. If they end up using or consuming less, they pay less (and thus avoid churning). This is why companies using value metrics are typically growing at double the rate with half the churn and 2x the expansion revenue when compared to companies that charge a flat fee or where the only difference between their pricing tiers are features.

How to determine your value metric

To determine your value metric, think about the ideal essence of value for your product — what value are you directly providing your customer?

In B2B, it's likely going to be money saved, revenue gained, time saved, etc. In DTC, it may be the joy you bring them, fitness achieved, increased efficiency, etc. Obviously, we can't measure all of these, but if you can, and your customer trusts your measurement (meaning you say you saved them $100 and they agree you saved them $100), that’s your value metric.

As an example, the perfect value metric for ProfitWell Retain (our churn recovery product) is how much churn we recover for you. We can measure this, and our customers agree to the measurement, so we can charge on that axis. Other pure value metric products include MainStreet , which handles government paperwork to automatically get you back tax credits — you pay a percentage of the money saved.

Most of you won't have a pure value metric, so the next step is to find a proxy for that metric. Take for example HubSpot ’s marketing product. Their pure value metric is the amount of revenue their tool drives for your business. This is hard to measure and hard for the customer to agree to in terms of what percentage of credit HubSpot deserves for revenue from a blog post. Proxies for HubSpot are things like the number of contacts, number of visits, number of users, etc.

To find the right proxy metric, you want to come up with 5-10 proxies and then talk to your customers and prospects. You’ll typically find 1-2 of these pricing metrics will be most preferred amongst your target customers. You then want to make sure those 1-2 also make sense from a growth perspective. Your larger customers should be using/getting more of the metric, whereas your smaller customers should be using/getting less of the metric. You also want to make sure the metric encourages retention.

When we look at HubSpot, if they were to primarily price on “number of seats”, folks could share a login and HubSpot wouldn’t make much more money on large customers vs. small. Ironically they wouldn’t get as many people invested into HubSpot, because there’d be friction to adding additional seats. Instead, if they give unlimited seats and price based on “number of contacts” there’s minimal friction to getting as many people into HubSpot as possible to do activities (e.g. blog posts, email campaigns, landing pages, etc.) that then produce contacts.

The result: HubSpot’s marketing product’s value metric is “contacts”, which ensures growth is baked directly into how they make money. The usage drives the metric, which therein drives revenue. Most importantly customers small, medium, and large are all paying at the point they see value and then can grow.

Some other examples:

  1. Wistia charges by the number of videos or channels you use/have

  2. Zapier invented the concept of zap (connection of software) and charge based on time to connect

  3. Theater in Barcelona charged based on the number of laughs

  4. Husqvarna charges based on time for lawn care products vs. making you buy them

  5. Rolls Royce charges per mile for airplane engines. They own the engines on the plane you own and do all the maintenance. Cool model.

  6. Fresh Patch charges based on the amount of grass you want per month for your dog — yes they deliver grass to you monthly

As a side note, you should stop pricing based on seats for products where each seat doesn’t provide a unique experience. For instance, in a CRM if I log in to the AE sitting next to me’s account, I can’t really do my work because I’m only seeing their leads and accounts. Conversely, if I log in to our marketing manager’s account in HubSpot, I can do all the work I need. Thus, for the latter, seats is not the right value metric.

Per seat pricing is a relic of the perpetual license era when we couldn’t measure usage or value enough within our products. We’re beyond that point, so use the above as a good litmus test.

Step 2: Determine your customer profiles and segments

The second key component of your pricing strategy is determining your target segment and ideal customer profile. We've all heard about personas, and you may be rolling your eyes at the concept, but most personas are useless because they aren’t quantitative enough. When used properly, quantified personas and segments are beautiful tools. The information needs to go beyond just cute names like “Startup Steve," with a cute avatar, and cute meetings where people tell you they’re targeting "developers".

To get quantified personas, you need to pull out a spreadsheet. Here’s a template you can use.

1. Columns: Customer profiles you're targeting

These can take many forms, but the ultimate goal is to be as specific as possible so that you not only know who you’re targeting but how to monetize and retain them. Pragmatically, you typically separate these profiles based on size or role (or both). For example, a marketing automation product may target the following profiles:

  1. Marketing leaders (Director and higher) at companies $1M to $10M

  2. Marketing leaders (Director and higher) at companies $10.01M to $50M

  3. Marketing leaders (Director and higher) at companies $50.01M to $100M

The point is you can’t be everything to all people and you need to understand who you’re targeting in order to make better decisions.

2. Rows: Characteristics of each profile to help you differentiate between them

  1. Most valued features

  2. Least valued features

  3. Willingness to pay

  4. Lifetime value (LTV)

  5. Customer acquisition costs (CAC)

  6. …and any other metric or category you think could be useful

If you're just starting out or you don't have some of this data, it’s fine. Still fill it out though with your hypotheses. You know something about your customers.

Next, you then need to validate (or invalidate) the most pressing hypothesis in that spreadsheet based on the decisions you’re going to make. If you're going to validate a new feature for a particular segment, then that's where you should start. Price point the biggest question? Start by researching the price point with each of these roles/segments.

If you don't know who your key roles/segments are, there's no way in hell you’ll set up an efficient growth flywheel, let alone an optimized pricing strategy. Personas act as a constitution within your business to centralize your focus and arguments about direction.

If you don't do segment and persona analysis, you better be able to raise a ton of money. I guarantee you there's some persona or segment on some vision document or in that euphoric part of your entrepreneurial brain that is completely wrong for your business. I see it all the time. Even I — someone who thinks about segments and customer research all the time — fall prey to being an absolute idiot with who we should target.

When we built ProfitWell Metrics (our free subscription metrics tool) I thought we were geniuses who were going to be billionaires. Turns out analytics products are terrible. Willingness to pay for them is terrible; retention for them is terrible; NPS is terrible. Everything is just terrible, mainly because customers don't appreciate graphs or at least aren't willing to pay much for them. When we did our research this became obvious and put us 18 months ahead of our competitors, pushing us to change up the positioning of the product to freemium, which has fueled our business ever since (oh and our NPS is 70, because we massively over-deliver a free product better than the paid competition).

Never underestimate the power of focusing on the customer through research. You should never, ever just do what they ask, but you need to be an anthropologist who knows them better than anyone else.

Step 3: User research + experimentation

Beyond your value metric and core segments, the monetization game becomes extremely tactical and research-based. Figuring out your price point involves researching those segments and then making decisions in the field. Same with discounting, add-on, and packaging strategies. The point: monetization is never finished because it’s the very essence of translating your value into an optimal framework for your target customer segments.

Practically this is why you should be experimenting with your monetization every quarter. Experimentation can get tricky and have a few quirks, but you’ll find it’s similar to most growth frameworks out there (which are all versions of the scientific method).

Here’s a good prioritization list of what you should attack in optimizing your monetization strategy once you have your core segments and value metric figured out:

Priority 1: Foundational [See above]

Core customer segments

Value metrics

Priority 2: Core

Order of magnitude price point (are you a $10 product vs. a $500 product)

Positioning and value props


Priority 3: Optimizations

Add-on strategy

Specific price point (are you a $10 product vs. a $11 product)

Price localization/internationalization

Discounting strategy

Contract Term optimization

Priority 4: Growth accelerators


Market expansion (going up or down market)

Vertical expansion


Your true order of operations with monetization will vary, but for the most part, all companies should work through the foundational and core sections before moving to the optimizations and growth accelerators. If you’re larger or there’s a fire, you may start with an optimization. In fact, this is sometimes a good idea. Something more scoped like “price localization” can help get momentum, be a forcing function to clean up tech and experimentation stacks, and mitigate political conversations. Remember, monetization is something that’s important, uncomfortable, and something you likely don’t know much about, so progress is better than nothing. Start small. You can (and should) always do more.

Well, this is already longer than Lenny wanted, so I’m going to lean into the length with two last thoughts:

Reminder : Patrick Campbell is doing a live AMA at 5pm PT 10/27 in our subscriber-only Slack group. Ask Patrick any question you have about pricing your product, live!

Rapid-fire bonus advice ⚡

1. You should localize your pricing to the currency and willingness to pay of the prospect's region

Revenue per customer is 30% higher when you just use the proper currency symbol

Having different price points in different regions increases revenue per customer further, and is justified based on different demand environments in different regions

2. Freemium is an acquisition model, not a part of pricing

Think of freemium as a premium e-book driving leads, not another pricing tier

Don't do freemium until you truly understand how to convert leads to customers, because you’ll end up increasing noise or false positives when you’re trying to figure out your segment beachheads. The best folks who deploy free typically don’t implement freemium until 2-3 years into their business. The exceptions to this notion are if you have a very specific need or network effect (eg. marketplaces, social networks, etc.) or if you have a top 50 growth person on your team.

To be clear, I'm not saying DON’T do freemium. I'm saying it's a scalpel, not a sledgehammer that requires thought. A lot of people end up reading our articles on freemium and end up going, “cool, let’s do freemium and we’ll be a unicorn.” I’m being pragmatic in that you need to realize freemium is fantastic, but doing freemium properly takes a lot of effort and nuance.

Paid users who convert from free tend to have higher NPS, better retention, and much lower CAC.

3. Value propositions matter oh so much

In B2B value propositions can swing willingness to pay ±20%, in DTC it's ±15%

4. Don't discount over 20%

In some verticals discounting over 20% may be fine, but you're likely not in one of them (although you may think you are), but the size of the discount almost perfectly correlates with higher churn. Large discounts get people to convert, but they don't stick around.

5. For upgrades to annual discounts don't use percentages and try offers

Percentages don't work as well as whole dollar amounts for discounts (ie. "1 month" will work better than "X percent off"). Annuals see much lower churn rates.

6. Should you end your price in 9s or 0s? Depends on your price point

Ending your prices in 9s evokes a discount brand, making the customer feel like they're getting something. Ending in 0 evokes luxury or premium. Studies on this for technology products is inconclusive. We have seen it increase conversion in lower priced products, but retention isn't as good with those customers.

7. You should experiment with your pricing in some manner every quarter

This doesn't mean change the price point each quarter, but experiment with something. More changes correlates with increasing revenue per customer. Like all things, focusing on something makes you improve it.

8. Case studies boost willingness to pay quite a bit

Social proof is important. Case studies can boost willingness to pay by 10-15% in both B2B and in DTC

9. Design helps boost willingness to pay by 20%

This graph didn't look this way 10 years ago when design didn't do much for willingness to pay. Today, affinity for a company's design can boost willingness to pay considerably.

10. Integrations boost retention and willingness to pay

The more integrations a customer is using, typically the higher their willingness to pay and the better their retention. I wouldn't charge for the integrations, but I'd use this as a tool to get people hooked in and paying more or buying different add-ons.

Still here? Ok, I think I've overstayed my welcome at this point. If you ever have any questions about pricing, retention, or subscription benchmarks, hit me up on Twitter .

Our growth team would also be upset with me if I didn't point out you can get all of your subscription financial metrics by hooking up your billing system to ProfitWell in two minutes (yes, even with Zuora). We're used by over 20k subscription companies ranging from the Fortune 50 to johnny and jane startups. Oh, and it's free. :)

If you have any questions or further suggestions, leave a comment!

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