Love and Money and in an Indeterminate Age

Peter Thiel’s Strategy Quadrant

PayPal founder Peter Thiel is obviously a prescient individual with ample cognitive gifts.

You should take the time to view his session at SXSW this year: You are Not a Lottery Ticket

The future has always been uncertain. But the extent of uncertainty has increased quite markedly since the dawn of the Network Age. Just as disintermediation and productivity are amplified by 21st century tech, so too is risk. But because we are now ever-better at the gathering and analysis of ever-more data, an emergent “new religion” informs our thinking. The physics of this faith are more quantum than newtonian, and more probability than design. Thiel poses a most interesting question: Is optimism a cogent strategy in a fundamentally uncertain world?

Thiel’s quadrant approach reminds me of Costanza’s Four Futures with world view juxtaposed to reality blending and bending reality to enable emergence of the future we cannot yet imagine.

The implications of Thiel’s observations are quite enormous:

  • Bubbles, for example, are a natural result of high uncertainty mixed with Helicopter Ben’s much maligned solutions to remedy the global economic malaise. High uncertainty and high optimism? Let Ben help.
  • Engineering stuff is very 20th century — it’s about finance now. The Maker Movement not withstanding, most Network Age stuff-based tech is simply consumables; commodities (unless, of course, you’re Apple). The engineering of great stuff is less likely to garner investment than is a complex financial instrument, when compared to the world of just 20 years ago.
  • Along with banks, insurance companies will own everything. No surprise there, he? The greater the threshold of uncertainty, the greater the pessimism. Insurance is a sensible choice if you’re on a career reinvention path.
  • Money itself is uncertain. Holding cash? With the twin scepters of negative interest rates on one hand and Cypriot Haircuts on the other, is it any wonder Bitcoin has garnered the attention it has? Alas, it is only a question of time before regulators curtail that little p2p experiment. It’s not a question of if regulations will choke the life out of it, but which agency gets to do it.

The new religion: probability and statistics. Sentiment analysis is the new liturgy and A/B testing our perennial penance for our sins, which are, as is everything else, TBD.

It’s the Luck Ethic now. There’ll be more on that later.

Posted in Big Data, Data Science