I attended a discussion with Peter Thiel yesterday at Harvard Business School. This is my second time hearing Peter speak in the last 12 months, and I find his brand of intellectual honesty quite refreshing in the age of politicized, reinforced conformity we live in today. That doesn’t mean I agree with everything he says, but you have to admire a guy who can express a uniquely contrarian viewpoint without a hint of irony. In true HBS spirit, you get the sense that he really does want to have a discussion about some of the biggest issues facing the world, not just express his views in a vacuum without the expectation of a rebuttal.
The main theme of Thiel’s short speech was the distinction between two views of the future: the “definite” and the “indefinite.” The definite future is one in which we choose one future worldview and allocate resources against it. Thiel argues that the America of the 50’s and 60’s, in which science fiction novels and government spending on the Space Race were overwhelmingly popular, believed in a definite future, and that this was good for innovation. We believed that man would walk on the moon, that robots would live in our homes, and that scientists could engineer a pill that contained all the nutritional value of our three daily meals. We got only one of those right, but that’s not the point. The point is that aligning oneself around a common goal and believing in it, perhaps foolhardily, is the only way to achieve true greatness. Occasionally, one of those crazy dreams will come true.
In contrast, the indefinite future is one in which we accept our inability to predict anything useful and hedge our bets by putting our resources behind a portfolio of activities down the road. This philosophy best reflects the American psyche of today. How often have you heard our politicians say, “There’s no silver bullet. We need to approach this with a portfolio of solutions.” It is as if America no longer believes in its ability to invent the future. The concerning part of an indefinite view of the future, according to Thiel, is that technology plays no role in it. Instead of putting all our resources behind a panacea-like solution that does not yet exist, the indefinite futurist invests a little bit in every conceivable solution he already has. Thiel believes this philosophy, by definition, fails since almost every major problem we have would have been solved already by current solutions. Taking a portfolio approach to the future may feel intellectually honest and is more politically palatable, but it is doomed to fail the mission of advancing the nation forward through innovation.
Thiel applies this distinction to entrepreneurship in a fascinating way. By definition, entrepreneurs have a definite view of the future. If they don’t, they should get another job. Similarly, they shouldn’t raise money from VCs who don’t also have a definite view of the future. In his own words:
Investors should think in as definite a way as possible about the future. Don’t admit you don’t know and lean back. It’s obnoxious to entrepreneurs. Someone who says “it might work or might not work” is not the kind of person you want to be working with [if you’re an entrepreneur]. There’s room for actuarial science, but not everything is actuarial math.
I think this type of investor attitude goes beyond Eric Paley’s definition of conviction on a given deal. The definite future is a worldview — the belief that our own concentrated actions can actually invent the very future we seek. If you believe that, it makes the decision to support entrepreneurship a really easy one.