Twice Read Books: Peter Thiel's "Zero to One" Or, On Secrets & Mysteries
Alpha, beta, and gamma secrets
Recommended:
Peter Thiel, From Zero To One: Notes on Startups, Or How to Build the Future
Other Works Referenced / Supplemental Readings:
Nick Bostrom, “Information Hazards”1
Paul Graham, “What You Can’t Say”2
H.P. Lovecraft, “The Call of Cthulhu”3
Believing in Secrets
… a conventional truth can be important - it’s essential to learn elementary mathematics, for example - but it won’t give you an edge. It’s not a secret.”
-Peter Thiel, Zero to One
Do you believe in secrets?4
Not the tawdry ones about infidelity, children born of wedlock, sexual perversions, or hidden crimes. Those secrets are solely material for personal diaries, posthumous memoirs, private detectives, and blackmailers. Let's call these alpha secrets, after the radiating particle that penetrates little of the world, being stopped by a sheet of paper, a layer of skin, or a few inches of air. Alpha sources are poisonous if ingested or inhaled, but not very significant in the grand scheme human life.5 Similarly, alpha secrets tell us at most something unknown about one person or a few of them. Hardly an expansion of human knowledge or ability, they are fodder for distraction and gossip. In other words: poisonous and best avoided.
What about state secrets, the kind that spies try to uncover and counterespionage agent try to protect? A plan for a secret attack, a system for decrypting enemy diplomatic cables, a new aerospace material that makes planes less visible to radar - all of these are valuable only while they are secret. After being revealed they may fill newspaper columns and give material for historians to “reexamine” historical events, but they are not much more significant than alpha secrets. Once known, all they do is restore a status quo, because opponents change their behavior to counter the revealed secret. Life goes on. Call these beta secrets, after the particle more penetrating than the alpha, but that still does not travel far.
We are after secrets far more impactful than any alpha or beta secret could ever be.
Secrets Hidden From The Origin of the World
Remember our contrarian question: what important truth do very few people agree with you on? If we already understand as much of the natural world as we ever will - if all of today’s conventional ideas are already enlightened, and if everything has already been done - then there are no good answers [to this question]. Contrarian thinking doesn’t make any sense unless the world still has secrets left to give up.”
-Peter Thiel, ibid.
Peter Thiel, in his 2014 book Zero to One: Notes on Startups, Or How to Build the Future, wants his readers to go and find secrets. Not man-made and hidden ones, like alpha and beta secrets, but secrets of the world itself, whether of nature or about human beings - the things that tell us not just facts about particulars, but about whole classes of things, and give us power over them. The Pythagorean Theorem was, for most of the existence of humanity, an unsuspected secret. So were special and general relativity, the existence of radioactivity, and the structure and function of DNA. Beyond the natural science, until the 21st century no one knew that people would be willing to rent their homes out to strangers, use their cars to provide unlicensed taxi rides, or work as unofficial delivery drivers for restaurants, all when coordinated by smartphone apps. Or, perhaps more regrettably, that people are keen to judge their self-worth by the number of Likes and shares their vacation photos receive on social media platforms.
Call these gamma secrets, after the ray that can penetrate just about everything, streaks across vast distances of space, and reveals to us hidden worlds.
In a few of cases - notably the last example - the people who found gamma secrets were able to capture the value of their discovery and generate enormous wealth. Other cases that spring to mind are that steam from a boiler could be drive machinery to perform useful work, that monoclonal antibodies can treat autoimmune disorders and malignant tumours, and that it was possible to build an Internet search engine orders of magnitude better than any competitor.6
One interesting feature of a gamma secret is that, once it is known, it becomes a part of basic knowledge - just think of the Pythagorean Theorem. Sometimes, the discoverer or first mover (not always the same people), as noted above, can claim a lot of the value for themselves. Other times, it escapes into the aether. That’s not necessarily a bad thing - Ernest Rutherford was not a man terribly driven by profit; recognition as the discoverer of the nucleus of the atom was sufficient for him (the Nobel Prize was nice too). And the benefit to humanity is incalculable is incalculable. It’s just that once the secret is out, the door is closed to someone else profiting by its discovery - once they built Google, everything afterward in internet search is a series of footnotes to Brin and Page.
Being Actually Contrary
Thiel’s contrarian question is:
“What important truth do very few people agree with you on.”
The form of a good answer, Thiel says, is:
Many people believe that X, but the truth is the opposite of X.
The form isn’t quite enough. The content of X is vital.
If X = “God exists,” you’ve just picked a side in an endless dispute (see “Mysteries” below). Even if you are right, this doesn’t reveal anything about the natural or human world, nor can knowing this fact give you or humanity an edge. The space marked out by “the opposite of X” needs to contain a gamma secret. Those secrets, once found and exploited, produce results, undeniable changes in the world and what human beings can do, even if just by expanding the frontiers of scientific knowledge, the next places we can look for more secrets. Gamma secrets extend human power.
The reason Thiel asks the question is because he is an investor. A secret of nature or about people can be the basis of an enormously successful company, one that can create value for society and return to investors 10x, 100x, or even 1000x the capital used to get it started. As the first outside investor in Facebook, and one of the principal investors in both Tesla Motors and SpaceX, Thiel’s saying that gamma secrets are important carries a lot of weight. He’s a contrarian in the real, not the pretend, sense of the word - someone who takes risks based on what he believes.7 8
To use Thiel’s most famous investment, whether online social networks are an overall good for humanity or not, their rapid growth and the enormous success of the companies that own them is the demonstration of a correct answer to a Thiel Question: “Most people think that people wouldn’t want to share lots of things about themselves online with others, but the truth is the opposite of that.” That’s a gamma secret. Execution, the 90% of the effort you do after finding the secret, is vital - think of Einstein working out the mathematical basis of general relativity, and proposing ways it could verified through experiment, after he had the initial insight - but finding the secret makes sure you are exerting yourself in the right direction.
Mysteries
Let me ask you something
Answer if you can
Think before you answer
There is no correct answer
-DEVO, “Don't Shoot (I'm A Man)"
The opposite of a secret is a mystery. A mystery is something that very likely no one can know such as:
Is there an afterlife?9
Do human beings have free will?
Is the United States the greatest country in the world?
Is democracy the best form of government?
Further, even if you have an answer, that answer doesn’t give you an edge.
Mysteries are matters for revelations, opinions, rhetoric, and philosophical/academic arguments. The above questions, and an infinitude of others, are not just hard to answer in any final way, it is difficult to think of what would even count as final answers to them.
Contrast the above mystery questions with “what is the stuff in willow bark that gives it the power to reduce headaches and fevers?” That can be answered by isolating the chemical compound in the bark that, distinct from all the other compounds, reduces headaches and fevers. That was a gamma secret. Any particular answer to a mystery question is not.10
At best, a mystery attains popular consensus around one particular answer - whether that answer is true or not is beside the point. Major religions have consensus around the existence of the afterlife, though their admission standards differ. For all the speculation in philosophy departments, we treat the people we know and ourselves as if we all have free will. Most people, most of the time, reliably believe that the country of their birth is the greatest country in the world.11 The last question, about democracy, is more of a borderline case. People certainly want to live in democratic countries, often risking their lives to immigrate illegally, though whether this is primarily due to their high standards of living and job-filled economies or because of their democratic values is uncertain and probably unknowable.12
One of the marks of a distinct society, at any level of organization (cult, startup, university, bureaucracy, nation-state, organized religion) is broad consensus around answers to mysteries. These are held as propositions for belief rather than gamma secrets to be found - Paul (Bunyan)’s believing the United States is the greatest nation on Earth gives him little to no edge against Peter (the Great)’s belief that Russia is the greatest nation on Earth. A consensus around the answer to a mystery is spread sometimes by persuasion, sometimes by indoctrination, sometimes by force, not by demonstrations or formal proofs. It’s one of the reasons that mysteries are so often topics for opinion writing - the topic is so poorly defined that its not clear what would count as a real answer, so the reading public accepts opinions from just about anyone with prestige and a platform on the topic. They may not agree with the opinion, but they don't think the opinion writer is disqualified from answering.13
Mysteries can become gamma secrets when they are well enough defined that they can admit of a demonstration, when they become something that can be found out through diligent searching and original thinking.14 This is one of the powers of philosophy - work on a conceptual problem hard enough and it (hopefully) becomes a new branch of science - as physics, once it ceased being a metaphysical inquiry about the nature of change (as it was to Aristotle and the Scholastics), became a mathematical science after Newton. Compare it to groping around in the dark blindly versus groping around in the dark with a flashlight and a strong idea about where not to bother looking, even if you aren't clear on where you should look. Philosophers grope in the dark, then stub their toe and point the way to a scientist with a flashlight.15
Are We Looking for Gamma Secrets?
To recap, what distinguishes a gamma secret from a mystery is that:
(a) it unlocks power: new branches of knowledge, new technologies, and/or profitable new businesses, and
(b) it is defined in such a way that it can be given a demonstrative answer, whether through an experiment, a mathematical proof, or a new business venture.
What interests Thiel is that so few people seem to believe there are gamma secrets, or spend their time looking for them. He sees evidence of this in the way the education system treats knowledge: every student sits through the same topics for equal amounts of time each year, regardless of the applicability of the knowledge (math is more applicable than gym) or the student's own talents or interests. This continues through university, where bright young people are assured that it doesn't matter what you study as long as you do it well.16 If our society really believed there were gamma secrets left to be found we would be directing students into paths to pursue them, rather than telling them to get “breadth” from their education and extracurricular activities, in order to have the best resumes for seeking jobs.
At the highest level, he attributes this neglect of gamma secrets to our society having become Indefinitely Optimistic. He believes you can divide societies into four groups by their position along two axes: Optimistic/Pessimistic, Definite/Indefinite.
Definite Optimistic: the future can be better, and we can make and execute plans that will make it so. Thiel believes the United States believed this between the 1930s and 1970s, and that some startup companies (the ones he judges most likely to succeed) embody this mindset. Only people with this outlook believe there are gamma secrets to look for.
Definite Pessimistic: the future will be worse, in ways we can make and execute plans to mitigate. Survivalists arguably embody this mindset. Thiel argues it is the guiding philosophy of the Peoples Republic of China. Stockpiling wealth and resources are the order of the day, not looking for secrets - a riskier activity.
Indefinite Optimistic: the future can be better, but there’s no way to plan for it, nor secrets to look for, so you should have maximum optionality (e.g. develop a diverse portfolio of skills). Thiel thinks this the attitude of the United States, and much of the Western world at present.17
Indefinite Pessimism: the future will be worse, you don’t know how, and there is consequently no way to plan for it, so “eat, drink, and be merry.” Thiel thinks this mindset is exemplified by the European Union. We're all doomed, so there's no reason to look for secrets.
Thiel blames the current indefinite optimism of the United States on the Baby Boomer generation, those born between roughly 1946 and 1964, the cohort who occupies most of the contemporary world’s positions of real power. These are people for whom, through all their years of growing up, the world got progressively better and better without their having to do anything. They went to college, got jobs, and continued to earn higher and higher incomes with each year. When economic productivity stalled, the rising value of the assets they had acquired cushioned them. Naturally, they are inclined to think that success is just out there waiting to happen, and that young people simply need to be ready for it by copying what they did: get an education, get a job, and hope for the best.
Thiel worries (and I think he is right about this) that indefinite optimism is not sustainable: we are working through the capital generated by previous generations, and if we don’t believe that through deliberate actions we can make things better, we will slide into indefinite pessimism and self-fulfilling prophecies of decline.18
How to Look for Secrets
Thiel distinguishes between natural secrets - those you need to master some part of physical science to pursue - and secrets about people. Many of the largest companies at present, those that began as startups, started off pursuing and finding secrets about people. I’ve already covered Facebook, but here are a few others:
Microsoft: developers want operating systems that are widely distributed and are open to development without paying fees to the publisher.
Apple: consumers want user-friendly personal computers that are difficult to break, even at the cost of power and functionality.
Twitter: Convenient, easy to use, short form communications are what the people want, especially when it becomes possible to follow developing stories in near real time without having the intermediary of a cable news channel, or to develop an audience without the gatekeepers of traditional media.
Tesla: Despite naysayers, there really exists a market for electric cars, but the mass of consumers will not readily adopt them until they become more widespread - until there is a social proof of their reliability and utility. The first market is with wealthy, tech-savvy people, who will demonstrate the viability and coolness of the technology to others.
While the above are nominally technology companies, and certainly focus attention on their technology, the innovations they have brought in are largely incremental: things that already existed and they marginally improved, or that they brought together to build consumer-friendly products.
Even SpaceX, for all their technical innovations, can be understood as finding a secret about people: the cost of launching stuff into space had been artificially inflated by a monopolistic consortium of aerospace companies. There was actual demand - on the part of NASA, the Department of Defence, and private companies - to support an alternative, lower cost venture, but a false belief existed that rocketry was incredibly high risk and not feasible for a startup.
While Thiel doesn’t discount looking to nature for secrets - he thinks medicine and in particular nutrition have lots of secrets to be found - it’s easier for most people to look for secrets about people. After all, you are a person and you’ve known them all your life! Spending a decade or more growing your knowledge of a field to the point where you could start looking for secrets in a natural science may break you as a human being to the point where you have no will to take risks anymore (the benefit to society of tenure is certainly debatable). But a means to exploit a secret about people can be rapidly prototype and rolled out, especially if you deliver it through the Internet.
Where to Look for Secrets
“Almost certainly there is something wrong with you if you don’t think things you don’t dare say out loud.”
-Paul Graham, “What You Can’t Say”
On the topic of where to look for secrets about people, Paul Graham provides sound advice. In his essay, “What You Can’t Say”, he provides a general formula for discovering what you can’t say in any era:
What opinion are you reluctant to voice in front of a group of your peers?
(Narrowing further) what opinion would you be ridiculed/ostracized/punished for expressing because many - or at the least the most influential - worry that it might be believed.
(No guarantee that the set S = { x | x is something you can’t say} contains billion dollar startup opportunities, however).
“I suspect the statements that make people maddest are those they worry might be true.”
“In any period, it should be easy to figure out what such labels are [e.g. heresy, blasphemy, divisive, inappropriate], simply by looking at what people call ideas they disagree with besides untrue.”
-Paul Graham, ibid.
To Graham’s list of labels I would add “stupid” and “crazy.” Calling an idea stupid isn’t calling it false or untrue, it is an attempt to use the threat of social ostracism to control the search for knowledge.
Of course, by chasing heresies you may only be finding alternative, less popular answers to mysteries rather than being on the trail of a gamma secret. Graham’s whole essay optimistically assumes that there is, between eras, genuine progress without belief cycling, where an old prejudice becomes popular again and suppresses whatever our present orthodoxies are. There's no guarantee that a mysterious answer will be enduring, just that it prevails for a period of time.19 Progress worthy of the name depends upon finding gamma secrets, rather than just spreading an alternative answer to a mystery, whether through persuasion or suppression.
Even if your set of heretical or otherwise frowned-upon beliefs yields a gamma secret, an answer to Thiel’s Contrarian Question, that secret will not necessarily be exploitable. Sometimes you’re at the wrong locale in spacetime. Imagine Charles Babbage conceiving of the idea of Facebook while working on his Difference Engine:
“Ada! Put down that horse racing form for a minute; I have had the most brilliant idea. We’ll connect everyone in the world together through telegraph lines in their homes. We shall call it Portraitbook, and users will all have their own accounts where they can send telegraphs to each other. With their home Jacquard looms they’ll be able to send each other pictures and weave them them into tapestries!”
One good means I have heard to decide which ideas to pursue is to answer the question “how many miracles do I need to happen for this idea to succeed?” If (# miracles) > 1, find another idea. In science, it depends on a critical experiment that disconfirms the null hypothesis - even better if said experiment is cheap and easy to perform, like Rutherford's alpha scattering experiments at the Cavendish Laboratory. In business, especially startups, it depends upon there being an accessible market for the service or product, and being able to the business get up and off the ground without Fortune 500 or small nation-state levels of capital, preferably with a distribution system and technology stack already in place (Facebook would not have been feasible if Zuckerberg and Co. had to invent the Internet as well as their platform, nor SpaceX if NASA and Roscosmos had not done the initial development of orbital rocketry). In art and literature it depends upon… I really have no idea. Steven Pressfield prays to the Muses each morning - maybe that is a gamma secret…
I ’m going to go out on a limb and say that just about everyone reading this is a definite optimist, and not just because that sounds like a more attractive way to describe yourself. Even if you’re not pursuing a gamma secret in your work, even if you’re not working in a startup, you believe they are out there to be found and that it’s worthwhile to try and find them, and to help others who are striving.
Appendix: Are There Neutron Secrets?
“Information hazard: A risk that arises from the dissemination or the potential dissemination of (true) information that may cause harm or enable some agent to cause harm.”
-Nick Bostrom, “Information Hazards”
Pressing our radiation metaphor to the limit, are there neutron secrets? Neutrons, lacking a positive or negative charge, can penetrate through the strong nuclear force to the core of atoms, unbalancing them. These unbalanced atoms can become new isotopes or, in the case of some isotopes of elements like uranium, blow apart into lighter elements through fission, potentially producing self-sustaining chain reactions as freed neutrons go on to fission other nearby nuclei.
What kind of secrets would these be? Dangerous ones. If such things exist, I think they would be the equivalent of information hazards, as first discussed by Nick Bostrom.
Consider, for example, how many social conventions and norms depend upon beliefs that are common knowledge: you believe that I believe that you believe that everybody believes that X. People who don't believe X suppress their views in public and express them only - if at all - to their closest confidantes. If it were revealed that a clear majority, or at least a sizeable minority, believe that not-X is the case, the norm would be undermined. Here the belief is not X, but that “everyone believes that X is true.”
I'm thinking here specifically of the current (and hopefully future) mass belief that it is wrong to have and act on pejudicial beliefs about other races’ moral character or intellectual capacity. This belief, if it is common knowledge20, plausibly limits (but does not stop) both racist speech and actions such as discriminatory hiring or refusing to offer service to visible minorities. If it were revealed that >40% of the public held deeply racist beliefs, the norm would be endangered and possibly collapse.21 Rather than a fact about the world - that racist opinions are rare and abominable - it would be transformed into a matter of opinion or preference.
This would be a neutron secret. Like a gamma secret, there is an unknown fact that could be demonstrated - perhaps a massive data breach of social media and email accounts, with the hackers including a repeatable, undeniable data analysis of sentiments in the records. However, unlike a gamma secret, it's hard to imagine anyone thinking it worth theit time to find such a secret, even if it existed. It seems more like something that would be stumbled upon by accident.
Then there are the secrets described by H.P. Lovecraft, the idea equivalent of something like an atomic bomb or antimatter: sheer annihilating force:
The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents. We live on a placid island of ignorance in the midst of black seas of infinity, and it was not meant that we should voyage far. The sciences, each straining in its own direction, have hitherto harmed us little; but some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the deadly light into the peace and safety of a new dark age.
-H.P. Lovecraft, “The Call of Cthulhu”
The fun of Lovecraft's stories, of course, comes from the fact that we don't believe such secrets could exist, but it gives us pleasant chills to pretend that they could.
Then again, if you are a firm believer in a mystery answer that has become an answerable secret (e.g. “where does the vast variety of living forms come from, and why are so many similar to others?”), the undermining of your worldview could feel very much like Lovecraft's narrator in the story describes.
Thiel uses the term “secrets” exclusively without discriminating between types. The distinctions in the essay are mine.
I am not saying that radioactive pollution is not a big deal - I would recommend anyone rapidly vacate a place where polonium has been spilled. Just that alpha scattering radiation is relatively easier to deal with.
If you found this newsletter through a search engine - as opposed to finding it copied down by some scribe onto vellum - I doubt it was AltaVista.
For more on the fake kind of contrarian, see my previous essay, “Let's Stop Pretending to be Original Thinkers.”
Just a note for people who bother to read these footnotes: I understand that Thiel is a controversial figure, but my concern is only about the ideas in the book. If it helps, imagine Thiel and his cowriter plucked it off the shelf in Borges’ Library of Babel.
Presumably, if there is one, the dead know about it, but are not in a position to make money on that knowledge. You tend to have to be alive to merit venture capital, though this may not apply during investment bubbles.
Even experimental findings about human manipulability, like those documented by Robert Cialdini in his book Influence: Science and Practice, are only demonstrations to free will partisans that the will can be undermined, which is not something they have ever denied.
I once, listening to an acquaintance describe his ordeal to return to his homeland, had to stop myself from asking “but why do you want to go back to Shitfuckistan?” Basic decorum, and remembering the elementary truth above, stopped me from insulting him. Also, your heart is where your family is.
It's not as if a survey of migrants would yield much information. Social Acceptability Bias will lead people to prefer to ascribe noble, principled reasons for their choices (to others and to themselves) rather than self-serving, mercenary ones.
Most, in fact pretty much all of the time, opinion writing is not persuasive writing - as in, its not intended to persuade anyone reading it. It serves as a coordination mechanism for a tribe of fellow believers, who look to leading figures to decide what they are going to believe in the ideological battles of the day, whether on the street or in online forums. Compare the editorials in the New York Times or the Washington Post to the writings of Robin Hanson or Eliezer Yudkowsky, and you’ll see the difference.
More about original thinking, and the fake varieties that masquerade as it, in this previous essay of mine, “Let's Stop Pretending to be Original Thinkers.”
Not all mysteries admit of reformulation into a secret. Probably all of the things we care about most deeply in life are mysteries, and our lives are pre-rational commitments to answers. Compare Montaigne on why he was friends with Raymond de Sebonde: “If I am pressed to say why I loved him, I feel it can only be explained by replying: 'Because it was he; because it was me.’”
There are jokes about the earnings of engineers vs. those of fine arts majors, but not all compensation is monetary - liking or being at the least able to tolerate your work is more valuable than just about any amount of money.
People who believe this often quote Martin Luther King Jr.’s saying “the arc of the moral universe is long, but it bends towards justice.” In other words, keep hoping for that change.
The glib quotations ignore the fact that King and the Civil Rights Movement worked really, really hard to make change happen, believing that their current period held a real opportunity to succeed, and they made definite plans to do so. They believed there was a gamma secret about American society, that the conditions African-Americans were made to live in, particularly in the Jim Crow South were not a permanent settlement, and that the consciences of northern liberals and progressives could be tweaked by people of color visibly standing up for their rights.
If you are reading this in the future (post 2020s) and your world sucks really bad because people in our epoch did not try hard enough to find gamma secrets to make the world better, I’m really sorry.
I'm a realist about moral truths, but any particular person's “morality,” even that of a whole society when it is prosperous and peaceful, is no guarantee that they are moral, just that they obey the natural human tendency to go along to get along.
Bostrom refers to these as Norm Hazards.
Enjoyably text, really makes you think. It connected with another idea: “secrets” of some other type are known to a larger population but won’t give you too much of an immediate edge in the competitive arena, but rather in favor of yourself, such as therapy, good sleep, exercise, reading, and more recently carbs. I hear people saying all the time “I had no idea it would impact me this much”. There’s an argument though that those could be competitive advantages on a longer term, but that’s discussion for another time.