My favourite thing about Peter Thiel’s lectures (via BlakeMasters), was Thiel’s question: “What do you believe that almost no one else believes?”
This is basically the efficient market hypothesis applied to ideas.
Think of the set of all money-making ideas, and assume that you have a market full of entrepreneurs who want to make money. All of the obvious valuable ideas are grabbed and those markets become saturated. Only non-obvious ideas remain, and many of those are grabbed, too.
The bar of difficulty is high: most things have been taken already. Only the ideas that lie in unexpected directions are left, and most people don’t take those directions, because they don’t look like they could work to the average person.
Think of it as a treasure hunt, where all the areas of the map that are:
- Obviously promising for treasure
- Not dangerous
are exhausted. The only areas that remain are the ones that either seem non-promising, or dangerous. The business versions of these obstacles are: “that will never work, what a crazy idea”, and “that’s way too difficult, you’ll never manage that without getting eaten” respectively.
And yet, some opportunities will always exist. The map is never exhausted.
You just have to be either fearless (to get over the danger) or unconventional (to go to the areas that seem unpromising).
A nice illustration of the ‘non-promising’ argument is from Paul Buchheit inventing AdSense on his blog. It fits the pattern: people thought it was an obviously bad idea and, in any case, probably too hard.
The great thing about this process was that I didn’t need to sell anyone on my ideas. I would just write the code, release the feature, and watch the response. Usually, everyone (including me) would end up hating whatever it was (especially my ideas), but we always learned something from the experience, and we were able to quickly move on to other ideas.
The most dramatic example of this process was the creation of content targeted ads (now known as “AdSense”, or maybe “AdSense for Content”). The idea of targeting our keyword based ads to arbitrary content on the web had been floating around the company for a long time – it was “obvious”. However, it was also “obviously bad”. Most people believed that it would require some kind of fancy artificial intelligence to understand the content well enough to target ads, and even if we had that, nobody would click on the ads. I thought they were probably right.
However, we needed a way for Gmail to make money, and Sanjeev Singh kept talking about using relevant ads, even though it was obviously a “bad idea”. I remained skeptical, but thought that it might be a fun experiment, so I connected to that ads database (I assure you, random engineers can no longer do this!), copied out all of the ads+keywords, and did a little bit of sorting and filtering with some unix shell commands. I then hacked up the “adult content” classifier that Matt Cutts and I had written for safe-search, linked that into the Gmail prototype, and then loaded the ads data into the classifier. My change to the classifier (which completely broke its original functionality, but this was a separate code branch) changed it from classifying pages as “adult”, to classifying them according to which ad was most relevant. The resulting ad was then displayed in a little box on our Gmail prototype ui. The code was rather ugly and hackish, but more importantly, it only took a few hours to write!
I then released the feature on our unsuspecting userbase of about 100 Googlers, and then went home and went to sleep. The response when I returned the next day was not what I would classify as “positive”. Someone may have used the word “blasphemous”. I liked the ads though – they were amusing and often relevant. An email from someone looking for their lost sunglasses got an ad for new sunglasses. The lunch menu had an ad for balsamic vinegar.
AdSense is now worth 28% of Google’s revenue, or almost $10 billion.
Finding ideas in areas that don’t seem promising seems pretty hard. One trick is to ask the question: will things still be that way in 100 years? If not, how should they change?
Google may seem like it will exist forever, but are you really telling me that people will still be using Google for search in 100 years? Probably not. If that’s the case, then something will displace Google – sooner or later. Why not now?
I said at the start of this post that the business logic mirrors the idea logic. What about ideas?
Well, think of a set of beliefs. Actually, think of the set of all sets of beliefs, i.e. a load of ‘belief-packages’. What era you are born in, and where, determines where you land in this set. (Being born in ancient Greece means that I most likely have a very different set of beliefs to someone born in the UK today.)
We know that every era in the past had belief-sets that had mixed proportions of true/false factual beliefs, or right/wrong moral beliefs. No society thus far has had fully-true-on-average belief-sets, or fully ‘right’ belief-sets.
It is improbable that our society has got there. So there must be some factual beliefs that we hold that are untrue, or moral beliefs that are wrong.
It’s worth thinking about what those are. After all, at some point in the future someone is going to prove some of our beliefs wrong. Which ones do we think those will be?