Peter Thiel’s book Zero to One deals with startup strategies to build a better future. Peter is one of the most recognized entrepreneurs in Silicon Valley, a co-founder of PayPal, Palantir, and Founders Fund, and was the first external investor in Facebook.
The book details the philosophy and strategies necessary to create startups with exponential growth: creating monopolies, avoiding competition, betting on new technology, creating cults, the importance of founders, and more. The title, Zero to One, refers to two types of companies:
- 0 to 1: Use technology to invent new products or services. Ex: Google, Apple, etc.
- 1 to n: Copy or expand existing products or services. Ex: restaurants, gas stations, etc.
This post focuses on chapter 6, You Are Not a Lottery Ticket, which develops different visions of societies. A society can have two types of visions:
- Definite: the future is clear, allowing you to craft a plan and try to build it.
- Indefinite: the future is unclear, preventing you from crafting a vision.
Building an ambitious vision makes sense if the future is definite. But if you think it is indefinite, you cannot visualize the future; you will give up trying to modify it, attribute changes to luck, and watch others make history.
Society also has two other perspectives:
- Optimistic: which looks forward to a bright future.
- Pessimistic: which is afraid of a worse future.
Combining these four definitions in a 2×2 matrix generates four quadrants of society’s visions.
Now I will explain each quadrant using the examples from the book. Then I will explain Panama’s past, the present, and the road to an optimistic and definite future.
Pessimistic and Indefinite
All cultures have a myth of a decline from a golden age. A society with a pessimistic and indefinite vision foresees a worse future and does not know what it looks like or what to do about it. Historically this is the most common quadrant.
This is Europe’s quadrant since 1970, when the continent was subjected to a visionless bureaucracy, increased socialist policies, and enacted too many laws creating a straitjacket to innovation. From the inside, they know that they have unsustainable policies that will lead to hard times.
Pessimistic and Definite
A society with a pessimistic and definite vision foresees a worse future, has a clear idea of what it looks like, and is prepared to face it.
China is pessimistic and definite. Its growth strategy is to copy what has worked in the West without regard for innovation. In China, the middle and upper classes, which consume far more resources than the lower class, have expanded dramatically. China has 1.44 billion people (at the end of 2020) consuming natural resources. They are in trouble because demand is increasing, and natural resources are becoming scarcer, resulting in a higher cost of living.
From the outside, everyone thinks that China has a great future, but internally they are terrified of the brain drain and desperate to invest in other countries to get their money out of China.
Optimistic and Indefinite
A society with an optimistic and indefinite vision foresees a better future but only builds more of the same, so it does not make ambitious plans. Instead of working for years to invent something, optimistic and indefinite people like bankers, lawyers and consultants improve the processes of existing companies. In this quadrant, a few new startups are founded.
An indefinite person exclusively values money per se. In contrast, a definite person perceives money as a means to build ambitious goals.
Indefinite Finance: The financial industry represents indefinite thinking because it is one of the most significant ways to make money when you don’t have a concrete plan.
Indefinite Politics: Voters are more interested in how a politician reacts to an event or if he says something controversial than in their 20-year vision.
The US government used to coordinate solutions to big problems like nuclear technology and space exploration. Today, it focuses primarily on insurance and money distribution.
In politics and business, debating marginal processes or improvements has become the way to avoid working on ambitious master plans.
Indefinite Companies: Entrepreneurs are told to listen to the customer, make a minimum viable product, and iterate on that product until success. But, the lean methodology process has to be accompanied by a daring vision to get from 0 to 1.
Let’s take Apple as an example of an ambitious plan. Everyone has experienced good Apple product design. However, the most important thing that Steve Jobs designed was his company. He devised a multi-decade master plan to create products and distribute them. Steve Jobs changed the world by planning and understanding human needs from first principles.
A company with a definite master plan will consistently be underestimated by companies with an indefinite master plan — which are the majority.
Optimistic and Definite
A society with an optimistic and definite vision can imagine a better future, plan to achieve it, and work together towards a clear north.
From the 1800s to the 1960s, the optimistic and definite led the West. Scientists, engineers, doctors, and merchants built richer, healthier, and more productive societies. Each generation had more inventors and visionaries than the previous one.
Examples of feats they executed:
- 1843: A tunnel was built under the River Thames in London.
- 1869: The Suez Canal was built.
- 1889: The Eiffel Tower, the tallest building in the world for 40 years, was built in 793 days.
- 1914: The Panama Canal was built.
- 1931: The Empire State Building was built in 410 days.
- 1937: The Golden Gate Bridge was built in 4 years.
- 1945: The Manhattan Project produced the first nuclear bomb.
- 1942: The Alaska Highway, consisting of 2,700 kilometers, was built in 234 days.
- 1965: The United States Interstate Highway, consisting of 32,200 kilometers, was built in 9 years.
- 1972: NASA put 12 people on the moon. The Apollo program started in 1961.
You can study more examples of optimistic, definite, and fast projects on Patrick Collison’s website, co-founder of Stripe.
In that era, the government did not only propose daring plans. Around 1940, John Reber, a school teacher who taught himself engineering, designed and promoted the Reber Plan — which consisted of constructing two giant dams in San Francisco, California. Building this would result in gaining 20,000 acres of land. Newspapers promoted this plan, and it went all the way to the United States Congress to discuss its feasibility. The army even built a 1.5-acre model. Unfortunately, they concluded the plan was not viable, so it was not built.
Nowadays, if a teacher designed and proposed such a vision, no one would take it seriously. If the vision came from someone powerful, they would tell him that his arrogance had clouded his sight. Until the 1950s, society welcomed big visions. Bold and grand visions of the future have become curiosities of the past.
You Are Not a Lottery Ticket
We must return to an optimistic, definite world, and startups are the most powerful tools to achieve that change. It starts with rejecting luck and daring to invest many years of effort into a clear and ambitious master plan.
Societies have shifted quadrants over the years. We must strive to move and stay in the optimistic and definite quadrant. Therefore, as a Panamanian citizen, the question I ponder is:
What quadrant is Panama in?
Before 1990, during the military repression of the dictatorship, the vision was pessimistic and definite. During this time, corruption was widespread, businesses could not operate freely, and there was a lot of oppression. It was clear Panama would become a shithole if it continued in the direction it was heading.
From 1990 to 2014, it was optimistic and definite. During that time, Panama expanded the Canal, built the first metro line, founded Panama Pacifico, increased immigration greatly, facilitated the creation of many new companies, and enacted a special regime for the establishment of multinational headquarters (Law SEM), which resulted in intense economic growth.
An important caveat is that at any given moment, some countries, like Panama, can fall in any quadrant, depending on the state of mind of the person giving the opinion. I’ll make a brief argument of opposite quadrants.
From 2014 to 2022, Panama had a pessimistic and indefinite vision. A big concern is that Panama might catch the “left-wing virus” and demagogues seize power, leading to a “second Venezuela.” I know many friends and business leaders investing internationally or taking out passports abroad “just in case.” Panama also has too many bankers, lawyers, or consultants and too few computer engineers or scientists.
From 2014 to 2022, Panama had an optimistic and definite vision. Panama can execute big plans. Let’s think about the organization and collaboration that took place to receive the Pope in 2019. Churches were renovated, thousands of new temporary homes were created, the biggest event ever in the country was executed, the subway expansion was accelerated, and much more.
In addition, Panama has a lot of entrepreneurs per capita; it is one of the fastest growing economies in Latin America; it is building out a multi-decade master plan of metro lines and roads; it just built a cruise terminal in Panama City, expanded the airport, immigration is increasing, and every year we have more startups accepted to Y-Combinator.
Sometimes the quadrant depends on the eye of the beholder.
How can Panama become more optimistic and definite?
Building new companies and startups, growing tech, engineering, and scientists workforce, and betting on government leaders with bold master plans. The first step is to recognize that change is in our hands. We must create and work on concrete, ambitious, and aspirational master plans for our lives.
Those with the ability and desire to take business risks should dare to undertake them. Those of us who graduated from good universities should avoid the comfort of optimizing processes of the companies of yesteryear and help improve education for the rest.
My first job after college was within the old guard — a process consultant. I knew that path was not for me. So, inspired by some friends who founded a company, I ended up working in a Venture Capital fund in Panama. I learned about Silicon Valley from Paul Graham’s Essays and founder mentality during that time.
Founders are contemporary philosophers dedicated to changing the world with their companies. I tell recent graduates that getting a job at a big company or getting an MBA aren’t the only alternatives — you can start a startup or work for one. In his essay A Student’s Guide to Startups, Paul Graham explains this in-depth.
After meeting many entrepreneurs and learning about them, I decided to undertake a new venture myself. In 2014 I co-founded Porta Norte, a new-urbanist solarpunk master-planned community of 650 acres (262 has.) with a multi-decade master plan. The mission is to expand Panama City so that the residents of Panama can live in walkable neighborhoods connected with nature and with public spaces full of culture. It is a definite and optimistic vision.
We should applaud, support, and invest in startups like Cuanto and Panadata, the first two startups to go to Y-Combinator in Panama — which is harder than getting accepted to Harvard. I am honored to be an angel investor in both startups in their first round.
Let’s encourage entrepreneurs and governments to think big. Let’s brainstorm, support, and bet together on daring, definite, and optimistic plans such as:
- Building Startup Cities.
- Building a beach in Avenida Balboa.
- Creating a ferry system to connect the coasts.
- Developing a top Computer Science university.
- Producing local energy to achieve energy independence.
- Building energetic self-sufficient buildings and neighborhoods.
- Connecting America with a highway between Panama and Colombia.
- Connecting Panama, Colombia, Central America, and America through a high-speed train.
- Increasing immigration of scientists, engineers, doctors, artists, entrepreneurs, and builders.
What other plans can you think of? Which startups, companies, or existing plans are worth supporting? How can we help build a definite and optimistic society?
If you have an ambitious, definite, and optimistic plan for Panama or the world, please share it in the comments, talk about it among friends, help it become a reality and ideally execute it. Let’s become optimistic and definite to build a better future together.
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