There’s a lot more to this book, but it all seems to be pointing at the same central, hard-to-describe idea. Something like “All progress comes from violations of the efficient market hypothesis, so you had better believe these are possible, and you had better get good at finding them.”
The book begins and ends with a celebration of contrarianism. Contrarians are the only people who will ever be able to violate the EMH. Not every weird thing nobody else is doing will earn you a billion dollars, but every billion-dollar plan has to involve a weird thing nobody else is doing.
Unfortunately, “attempt to find violations of the EMH” is not a weird thing nobody else is doing. Half of Silicon Valley has read Zero To One by now. Weirdness is anti-inductive. If everyone else knows weirdness wins, good luck being weirder than everyone else.
Thiel describes how his venture capital firm would auto-reject anyone who came in wearing a suit. He explains this was a cultural indicator: MBAs wear suits, techies dress casually, and the best tech companies are built by techies coming out of tech culture. This all seems reasonable enough.
But I have heard other people take this strategy too far. They say suit-wearers are boring conformist people who think they have to look good; T-shirt-wearers are bold contrarians who expect to be judged by their ideas alone. Obviously this doesn’t work. Obviously as soon as this gets out – and it must have gotten out, I’ve never been within a mile of the tech industry and even I know it – every conformist putting image over substance starts wearing a t-shirt and jeans.
When everybody is already trying to be weird, who wins?
Part of the answer is must be that being weird is a skill like any other skill. Or rather, it’s very easy to go to an interview with Peter Thiel wearing a clown suit, and it will certainly make you stand out. But will it be “contrarian”? Or will it just be random? Anyone can conceive of the idea of wearing a clown suit; it doesn’t demonstrate anything out of the ordinary except perhaps unusual courage. The real difficulty is to be interestingly contrarian and, if possible, correct.
(I wrote that paragraph, and then I remembered that I know one person high up in Peter Thiel’s organization, and he dresses like a pirate during random non-pirate-related social situations. I always assumed he didn’t do this in front of Peter Thiel, but I just realized I have no evidence for that. If this advice lands you a job at Thiel Capital, please remember me after you’ve made your first million.)
Scott Alexander, “Book Review: Zero to One”, Slate Star Codex, 2019-01-31.
January 31, 2022
QotD: Weird attempts to violate the Efficient Markets Hypothesis
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