Here's To The Crazier ones: Part 2
Here's To The Crazier ones: Part 2
The end of software, and the beginning of AI.
In a previous essay sub-titled “The Birth and Death of Industries, and How to Build Goliath”, we discussed how wealth is built in different industries by great men, how such wealth is discovered, and how the secrets to their wealth eventually find the hands of someone of similar ambition, citing examples of the Steel, Oil, and Automobile industries respectively. And not to beat an already dead horse, I dare say the same thing happens, within industries.
An industry built on one idea can be rebuilt on another depending on the times and the pace at which the technology for that industry improves. For example, microprocessors were the core component of the technology industry in the days of Apple’s Steve Jobs and Intel’s Andrew Grove. In the last 20 years, software has been the core component of the most dominant technology companies like Peter Theil’s PayPal and Elon Musk’s Tesla.
Although microprocessors and software are yet to fiddle out completely from the industry, the last few years have ushered in a significantly threatening piece of technology called Artificial General Intelligence (AGI), AI for short. And just like the battle between Peter Theil and Elon in the early days of PayPal, the fight for dominance over AI has not been pretty.
When we asked “Is Free Speech a Business Model?” in that essay, we tried to explore why Elon’s foray into AI was cut short by his pursuit of Free Speech with X.com, and in “What happens after Elon? we did not mention why Elon named his son Lil X, nor do we plan to in this essay. But to take a quote from one of the writer’s favorite podcasts on Founders surprisingly named Founders Podcast, we would say this:
“You can always understand the son by the story of his father, The story of the father is embedded in the son.” - Francis Ford Coppola, Filmmaker.
Good Times
There’s a popular saying that I am sure you’re familiar with, but for the sake of this essay, I think it needs repeating.
Good times create weak men, weak men create hard times, hard times create strong men, and the strong men create good times.
When you read something like this, it sounds so cliche you wonder what the writer’s intention is. Is it to make you feel guilty for being born in relative affluence? Or to inspire you to greater courage to face the challenges of poverty. It’s worth noting, however, that whatever the intention of the quote, it makes the reader feel something.
Elon Musk has been a major theme in our newsletter for the past few months, not just for his accomplishments but because the lessons to be drawn from his life and work in technology are simply more than meets the eye.
As we try to figure out where he is headed, we do not deem it a bad idea to understand where he is coming from and what inspired him to take the risks he took in his bold attempt to cement his name in the sands of time, nor do we think ourselves nosy individuals, we’re just curious.
Did he come from poverty? Did he get his heart broken? Why did he go from PayPal to Tesla and SpaceX? Why didn’t he become an OnlyFans guru instead? Why didn’t he stop at Tesla? We might not know the exact answers to these questions, but they are better off not being left unexplored, so, shall we?
Born in South Africa, a country known for its systemic racial segregation policies and its mandatory conscription of white males to the South African military after high school, Elon was able to escape the drudgery of this systemic racism as his family was well-to-do. Just before the country’s Apartheid regime came to an end, he was able to flee the country to his mother’s side of the family in Canada to avoid conscription, also because he and his father could never get along.
Although Musk has denied all allegations of any inheritance of a gold mine from his father, he didn’t deny his father’s loan of $28,000 to him and his brother for their first startup Zip2. Musk only had $2,000 in the bank so his father probably knew what he was doing giving him exactly $28,000 because the company that his two sons built would go on to be sold for $307 million.
How else would you describe being born with a silver spoon?
Even though Peter Theil was born in Germany, a country in the western region of Europe known for its famous military dictator (Hitler) and his historic war with the people of Israel, much of his upbringing occurred in South Africa and Namibia (previously South West Africa) where his family lived briefly before finally settling in California.
Theil changed elementary school seven times and attended a school in Swakopmund that required students to wear uniforms and utilized corporal punishments like striking kids on their hands with a ruler. But unlike Musk who had African tales of being bullied as a kid (he also wore uniforms), Theil’s experience of forced conformity instilled a distaste for uniformity and regimentation later reflected in his support for individualism and libertarianism. It is no wonder when pressed to work under the previous version of Elon, he had no other choice but to rebel despite its future consequences (and opportunities).
Competition is for Losers.
In a 2014 lecture at Stanford, Peter Theil shared his thoughts on starting startups and how to build a monopoly business in which he delved into the history of competition and how to capture value in an existing/growing market.
I cannot recall much from his lecture. Still, it is difficult to forget the restaurant story Peter told which is the perfect example of a business that exists solely for competition. He gave an example of a restaurant that sells British food in Palo Alto, which is differentiated enough to capture value in the restaurant market but not enough to expand and dominate larger portions of the market (the whole of California) or even the entire market (US).
That is competition, and Peter was no fan of that.
If you think many people would regard Elon’s ousting as CEO of PayPal by Theil as much less of a competition between the two founders and much more of a gradual monopoly, you would probably be right. The two founders had different strengths (temperaments) which, as we explained in Part 1 of this series, are suited to separate life cycles in the life of a business, founder, country, or civilization.
Elon had already proved with Zip2 that he could do something difficult and make it profitable. PayPal (named X under Elon) didn’t need that anymore. It needed someone who could take what Elon had done, what he had proved, and what money he had made, and spread its influence to create according to Tesla: “the world's leading Internet payment system”.
PayPal needed leadership, not genius.
Theil had the skills to steer the ship that would become PayPal. Hell, he assembled one of the most formidable technology teams in the history of the internet. He had a bright idea for the future of PayPal and the time was perfect for him to step in. Although most would not picture Theil as their archetype of a leader, it is worth noting that leadership is at its core, tribal. People of like minds gravitate towards personalities that share their belief system, desires, and more importantly their griefs, even momentarily.
The problem was, that the vehicle wasn’t his, so rather than compete for the position of CEO of a company that needed him with a co-founder who put more into the company than he did, he let his co-founders; Max Levchin, David Sacks, and others decide with the board of the company and all in favor of Peter Theil leading the company. That was how they went from being in the passenger seat of Elon’s McLaren to the driver’s seat.
Zero competition.
Strong Men
If Elon’s story had ended here, we probably would have never heard of Musk’s name in any book or podcast. Little did we know, Elon would go on to lead two of the most groundbreaking hardware-focused companies in the history of the United States and the rest of the world, right after suffering probably the most ego-crushing defeat of any founder. It’s almost as if he needed that one failure to set the stage for his future success.
Jeff Bezos never came close to being ousted as CEO of Amazon. Still, he did go from being at the forefront of a company that was taking over the world book by book, to almost losing his company, having to sell out 20% of amazon.toast (as it was called at the time) to early investors to raise just $1 million to keep his toast alive, taking 60 meetings to get 22 people to match the amount.
Good times, still.
Where it all goes to dust is when you look between the lines of the lives of these founders and what their newfound wealth meant for the rest of the world. But before we talk about the rest of the world, why don’t we visit their immediate environment? Their families, the state they lived in, and their country. If they claimed their parents weren’t supportive, surely they would use their wealth to better impact their children’s lives, right?
Wrong.
After the PayPal saga, Elon, Theil, and the rest of their associates went on to do incredible things with their newfound wealth. And while they were off conquering the world, people around them suffered.
Peter Theil while working on Palantir, went on a large tirade to take down Gawker, a media outlet that allegedly exposed him for being, gay. It was so huge a book had to be written about it. Peter started a conspiracy that led to a lawsuit against Gawker for trying to destroy the lives of Hulk Hogan and himself. Bezos, when asked to comment on Peter’s conspiracy believed Theil needed a thicker skin. He had bought the Washington Post when faced with a similar challenge.
While Elon was working as CEO of Tesla and Space X, homeless individuals ravaged the streets of the city he lived in, and policies that de-prioritized families were passed into law. These laws benefited the Silicon Valley elite as they appealed to their individualistic nature. Until the negative effect of these laws started affecting them personally, they seemed to take no notice.
Elon lost his first son prematurely and although he claims his first son died in his arms, his ex-wife; Justine Musk asserts that she was the one holding him when he died. His second son who later transitioned into a woman denounced him as his father. His other children followed suit, choosing to rebel against their father in their unique ways.
Arnold’s “screw your freedom” comment as the Governor of California was icing on the cake.
I am not one to judge another man since things are easier said than done, and the judgment you apply to others will eventually fall on you. But we can see from this dynamic that physical and financial wealth are more easily acquired than empathy. A trait that is only acquired through suffering, strengthening the character of the one who suffers in the process.
Building Resilience
“Greatness comes from character. And character isn't formed out of smart people, it's formed out of people who suffered." -Jensen Huang, Nvidia CEO.
The last 20 years have seen a large amount of wealth being created in the technology space resulting from the work of smart and talented individuals who were crazy enough to challenge the status quo and push for things to be different. But the world has also become a different place since they came in to change it because they did and certain things in life need to stay the same.
It is up to even crazier individuals to (sometimes) challenge hubris and ask, why change? Why can’t some things stay the same? Surely there must be a reason why “x-model” lasted centuries.
We shouldn’t fail to understand that for all our technological innovations and flying contraptions, human beings tend to remain the same. Or at least they have for the past 100 years. We still feel hungry, enjoy rewards and suffer punishment, feel love and express dislike, desire sex and fear shame, feel envy, and sometimes overuse authority, these things haven’t changed.
A healthy understanding of the fundamentals of the human condition is what would help anyone weather any circumstance. Be it a divorce or a hostile takeover of one’s company. Such knowledge will help one build the systems and networks necessary to prevent his/her entire enterprise from collapsing from one unfortunate event.
It will help you to build resilience.
Here’s to the Crazier Ones.
If you are insane enough to challenge what you deem hubris in today’s world, we would like to let you know that you would be walking a very tightrope between individual success and absolute ridicule. The rewards may be little at first but they compound over time, if that is, you are resilient enough to suffer for much longer than those you deem crazy.
Supposing you embark on this journey, here are a few things you should know.
Bet on yourself
Your most important asset would be the repertoire of evidence you have stacked in favor of your ability to perform. All your past awards, accomplishments, and lessons from past defeats should be brought before you. You’ll need them as a foundation of the mountain you call evidence. Talk is not enough.
Find your tribe
Even though you would be betting on yourself, once you embark on this journey you would find people who are like you in no small manner. They share not just your belief in the future, but your pains as well and sometimes (although rare) as much as a past. These are the members of your tribe.
But you will never find them if you decide to stay at home.
Choose the people that choose you: Networking.
Networking is a popular subject that few people understand, and the ones who do hardly practice it.
In my few decades of living, I have understood that life has been made such that you can get by without asking much. And if you are conscientious enough, what you seek will eventually come to you. There’s a reason the blind get by in life, and crippled billionaires exist.
It is the same reason Henry Ford remains probably one of my favorite Founder of all time as he begs us not to pity those who have any slight impediment to their being or nature, imploring us to allow them to do the work for which their body and minds are best suited, especially since they do not complain.
tweets strongly about attracting the energy you put out. Very little need be said about how you gain followers by tweeting as people resonate with your tweets and how you receive help by first helping others. It is the same in real life.Become Worthy
The best way to start, join, or find a network is to become worthy of being in that network. That’s the whole essence of networking. Once you become what you seek, it is only a matter of time before what you seek draws itself to you. In the same way, wealth is attracted to competent and consistent people, good partners and relationships come to trusting and giving people.
Arm yourself (money)
A healthy financial situation will help you stay mentally stable and sustain your relationships. It will also enable you to fight battles and celebrate victories in style.
Although making money is not the primary focus of this newsletter, it is hard for you not to stumble upon opportunities for acquiring wealth when you think clearly and consistently make better decisions than your peers in your field of work.
An incomplete foundation will rot and eventually tumble, money will help you build on a solid foundation.
Helping others
It is worth noting that human beings hate being helpless or thought of as helpless (at least in my experience). So, if there is a way that you can help someone know more, or suffer less, without shame being conferred on them, and in a way that does not put you at too much risk of being ridiculed (helping others always carries some risk) it would be wise to do so for whatever reason you choose.
Not so crazy after all?
Choose your enemies wisely
It is the downfall of many tyrants to see an enemy in everyone. He who knows his friend and his enemy would enter a thousand battles and win a thousand victories.
The first is a quote from Robert Greene and the second is, I can’t remember honestly.
This goes without saying that many win-win scenarios can be created if you are patient enough to think long-term. Not everyone who attacks you is your enemy and not everyone who helps you is your friend. There is always someone who wants your spot, mental toughness cannot be stressed enough.
Life goes on after you win
Friends, fearing a loss is one thing, not having a plan for what to do after you win is another. Only one thing in life is certain, and that’s death. Even taxes are relative to your jurisdiction (and your accountant).
So if we are guaranteed that the things we acquire on earth do not go with us when we die, why don’t we prepare our minds for the burden they will become if we are fortunate enough to acquire them?
To end this essay I would like to ask: what would you do if you had a million dollars?
Great article.