This will be my third blog topic and it’s a very important one. Perhaps the most important. Without meaning to sound hyperbolic, allow me to elaborate on that statement. The future contains all possible eventualities both good and bad. Your greatest desires and your worst fears lurk on the other side of this present moment. That is an awesome thought (in the original sense of the word) and yet, there is a commonly held belief that we have very little sway over the future, that it’s something mystical and fundamentally unknowable by mere mortals. Today, I will attempt to show how we can not only know the future but create it with part 1 of: How to build the future.
<<Quick note before I get into it; I borrow from many sources in order to create my content. I am not the originator of many of these concepts but my goal isn’t to create, instead I want to reiterate, integrate and transmit content that will benefit entrepreneurs. My benchmark is utility, not orginialiy.>>
For those who don’t know him, Peter Thiel is one of the most successful entrepreneurs of our era. He’s also a philosopher on the subject of startups. In his book — Zero to One — you will find a richness of content that will totally change your perspective on many subjects I will discuss, including this next one; figure 1. And figure 2.
Here we see two axis separated dichotomically; The first is whether or not we see the future from an optimistic or pessimistic perspective.
The next axis is about whether our approach to the future is indeterminate or determinate — meaning can we fundamentally predict it or not. When these two axis are integrated we get this matrix; Figure 3.
I think this is a great tool to in order to illustrate the resultant personas we can observe in each of these quadrants. I want to place the focus on founders to explain the implications of which quadrant one finds themselves in and the kinds of companies they will direct.
Why is insurance in the indeterminate pessimism quadrant? The business of insurance is about securing against negative outcomes by paying premiums today and it’s all based on probability — the likelihood of bad events happening (more on this later).
I place marketing agencies — of which there are far too many in my opinion — in the indeterminate optimism quadrant. Marketing agencies are clearly optimistic about the future because they help other companies grow by better positioning their product or service with respect to the market they are serving. It’s indeterminate because those marketing efforts are directed at a portfolio of clients and perhaps even their own firms but they are not themselves marketing a specific solution. The same goes for consultants, lawyers and financial services firms.
In the determinate pessimism quadrant you will find your typical market leading firm which commands an impressive market share, routinely selling the nth iteration or derivation of the product that got them that share in the first place. They are in a powerful position and they don’t want to lose that power; they know that there are many threats around them. Antitrust, encroachment from smaller more innovative competitors and simple bureaucratic inefficiency. These companies therefore, have an strong emperitave for corporate conservatism. They want to lobby for tighter regulations in their industry, undertake anti-competitive practices, all while staving off innovation because innovation is costly and why innovate when you can sell the same thing over and over and over again while making inconsequential changes (ahrem, I see you Apple).
Finally we have the determinate optimism quadrant, this is where startups live. A successful startup is born with the idea that the future can be better than it is currently and it will analyse, design, build and operate a solution that makes that future a reality. The only way startups can be successful is essentially if they succeed in bringing something truly new and better to the world on some important dimensions. Chief among them being that they solve a customer problem better than it was in the past.
One’s position in these quadrants will have a profound implications on their future, not only for companies but individuals. Tell me where you place yourself on these quadrants and i’ll have a good idea of your general approach to life. When I qualify entrepreneurs at the incubator i’m helping build, I try to assess their approximate positioning in these quadrants and, you guessed it, the closer they are to the top-left, the better. It validates that they have a willingness to figure things out and usually because they are driven by a sense of purpose (Strong why?) and are very optimistic about the future.
It’s important to note that I’m not claiming that any type of business is “better” than another. What’s better or worst is circumstantial and quite often subjective to the person working in one industry or another but, seeing as my content is geared towards entrepreneurs and startup founders I just want to articulate the sweet spot where great startups are created. I explain in detail why start startups in my first blog.
In part 2. I’ll go into much more detail about ways to shift your mentality from one quadrant to another, how belief systems can be a hindrance to innovation and what it means to live determinately. Entrepreneurs who grasp these concepts of the future will learn to be masters of their fates.