I went to school with Richard at Cornell. Richard studied math. Quiet and studious disposition. Played chess and poker. Traded stocks and started companies in his free time, learned to code for fun - before that was a cool thing to do. Fashion: very understated, unless drinking - then he'd wear all sorts of bizarre and flashy things. One of the most brilliant people I met in my four years.
Then he disappeared. Just like John Galt.
Except he didn't go to Atlantis, he went back to South Africa. He couldn't stay in the U.S. because he no longer had his Student Visa. Every once in a while, there would be a sighting, and he'd pop back on my radar. "Richard spotted visiting NYC." "Richard rumored to have taken up tennis." "Richard rumored to have sold two companies." "Richard rumored to be simultaneously starting a hedge fund and a tech startup."
Ships crossing in the night, every couple years, we'd manage to collide. On those occasions, I'd ask him: "Richard, you love America. When are you coming back?" Richard always gave me the MacArthur response - I shall return.
Fast forward. Richard returns, in force. The company he co-founded two years ago, DataProphet, is a growing success in South Africa. They are now opening an office in San Francisco as a beach head for the U.S. market. The company is shaking up the call center industry by using machine learning technology to increase profits (up to 34%, in one case study). Because results are scientifically measurable with a control group, the company's business model is remarkably bold: they only charge against a percentage of upside they generate.
I do. I care about the exceptional people that our society accidentally, but systematically, ostracizes.
In the novel, John Galt invents an electric motor powered by (sci-fi) 'free energy'. This technology could have revolutionized the American economy. But instead, he is forced out, and the blueprints for the motor are scrapped. And this is the great tragedy, the great archetype, that Ayn Rand uses to make her criticism of society. We need people like this - with their ingenuity, their creativity, their vivaciousness - to carry us, like Atlas - to solve problems, invent things, start businesses, to imagine and create the future. Why is it that instead of lionizing these people, we add to their burdens?
In real life, these people exist. Richard is one of them. I can hardly keep track of all that he's accomplished in the six short years I've known him. He's started at least four companies, three of which created value, solved real problems, and resulted in positive economic outcomes for multiple stakeholders. But despite graduating with a math degree from Cornell University, he did all these things, not in Silicon Valley or New York City, but in Cape Town.
My friend Branko Cerny is another. Branko graduated Magna Cum Laude from Dartmouth with degrees in Psychology and Government. Google hired him right out of school. But during his senior year, Branko and James, one of his friends from school - a talented engineer - had started working on a next-gen email client. When Kima Ventures, the same investors that backed Sparrow (email client acquired by Google), decided to invest in the project shortly after Branko joined Google, Branko made the brave decision to leave the comfort of a safe, remunerative, and cushy job - and start a company.
I remember when Branko made the decision. We had recently become friends, and he had asked me for some advice. Instead of encouraging him, I discouraged him. Instead of telling him of the glories of entrepreneurship, I gave him the unvarnished, somewhat jaded perspective of life in the trenches. My message to Brako was: If you do this, prepare for the grind. Prepare to be rejected. Prepare to be broke. Prepare to fail. Branko listened. He understood. But he did it anyways. Why? Because Branko was obsessed with solving a problem for people. Email sucks, people suffer, something should be done.
But Branko is Czech. So as soon as Branko decided to leave Google, his Visa sponsorship was revoked. For a year and a half, he struggled to stay in the country while he built a team, launched a product, pivoted and iterated to please customers, and raised money. Against all odds, he survived - and this spring, his startup, Immediately, raised $2M from angels and VCs. And they have continued to hit milestones, hire amazing people, and satisfy customers.
We almost kicked him out.
I could go on and on. I am surrounded by stories like this. My friend Tal Raviv - Israeli-American, U Penn grad, and creative Swiss Army Knife (hacker, product manager, serial entrepreneur) - is another one of these exceptional people that we're very lucky to have in our tech community. Tal has an amazing sense of humor, so he recently shared this idea on Cheeky: Idea #92: Cold Shower Ventures. Give it a read. It got me thinking...
All of this begs the question: what should be done about this?
If I was as naive as I used to be, I would create a petition supporting The Startup Visa and ask you to sign it.
But I'm actually going to do the opposite.
A Contrarian Amongst Contrarians?
Who is Peter Thiel? Peter Thiel is a contrarian amongst contrarians. Which is funny, because it's ironic. What do you call a contrarian amongst contrarians? Or, even more ironic, what do you call a contrarian whom everyone agrees with?
Think about it for a second. Peter Thiel, a contrarian, is now heralded as "America's leading public intellectual" by Fortune. Every time Peter takes a contrarian stance on an issue, half the public - myself included - instantly come into agreement. So... is the stance still contrarian?
Here's an example: Peter is a libertarian - itself contrarian - but then he makes a contrarian argument (that is, contrarian to fellow libertarians) in support of increasing the minimum wage. On cue: libertarians everywhere go "Say, whaaat?!"
So, kind readers, allow me the presumption of doing what I've been waiting for other, braver, Thiel acolytes to do. I am going to assume that Peter represents the New Orthodoxy, the New Establishment, and I am going to present the Counter-Thesis to Peter's Thesis.
Peter frames Zero To One around a binary. There are two kinds of opportunities, Peter says: 0-to-1 opportunities - which represents technological, intensive, vertical progress - and 1-to-N opportunities - which represents globalizing, extensive, horizontal progress.
This is a great binary. But the problem with binaries, as I've heard it said, is that there are two kinds of people: people who think in binaries, and people who don't. Peter is the latter. He does not think in binaries, except when it suits him. So when he presents us with one, he is merely suggesting to us - the feeble, simple minds of the public - a useful lie, a useful over-simplification, as a way of accessing a more sophisticated and multi-layered truth.
Evidence of this false binary: Valar Ventures, which has raised at least $100M to invest in tech startups overseas. From Xero in New Zealand, to Skype in Estonia, to Spotify and King in Sweden, to Deep Mind in the UK, Supercell and Rovio in Finland, Wunderlist and Soundcloud in Berlin, Alibaba in China - globalization is transforming the technology industry. Yet I recall Peter making comments to the effect that San Francisco will continue to reign supreme as the place to innovate. Yet he raises a $100M fund to invest overseas. Contradiction?
Over the last year, I've come to appreciate what Kierkegaard meant by 'there is truth in paradox'. Perhaps I am projecting this onto Peter, but I get the sense that his thinking is self-consciously dialectic. What the heck am I saying? I'm saying that - Yes, Peter is right - San Francisco will continue to reign supreme. And that - Yes, Peter is right - globalization is transforming the technology industry, creating a fabulous arbitrage opportunity investing overseas.
This is where 0-to-1 meets 1-to-N, and the useful false binary breaks down. Going back to Tal's idea above - what is so powerful about 1-to-N innovation, is that entrepreneurs from places like South Africa, the Czech Republic, and Israel are exposed to different kinds of problems than entrepreneurs from San Francisco.
Entrepreneurs in San Francisco are exposed to - and frequently parodied for solving - "1% problems" and "1st World Problems". Don't get me wrong - I am all in favor of solving 1% problems. In fact, I'm in favor of solving 0.00001% problems. Those problems are fascinating. Because often, when you solve the problems of - again, frequently pilloried - rich, white men who want to drive electric sports cars, you end up starting a truly world-changing company like Tesla. And that's great. So if you want to start that type of company, and solve that type of company, and have that type of impact, come to San Francisco.
But the double-contrary truth, that Peter's new fund Valar is preaching more loudly than his book, is that many of the "secrets" in the world, many of the 0-to-1 opportunities, will be found in 1-to-N parts of the world. And as reality is complex, many of the 1-to-N opportunities will surface more 0-to-1 opportunities. Sometimes demand drives supply. Sometimes supply drives demand. You can't have black without white, light without dark, 0-to-1 without 1-to-N. Or so says the Tao.
So Play The Game On Hard Mode
Given my vote of No Confidence in the ability of the U.S. government to solve problems, instead of appealing for a change in the law, even an obvious change in the law, such as, say - automatically granting graduates of top U.S. universities work Visas - I will not appeal to you, or to our government.
I submit to you that perhaps the status quo, as f'ed up as it is, may indeed be the best of all possible worlds, because it acts as a filter. Those who really want it, those who can take the heat, those who can overcome obstacle after obstacle after obstacle - people like Richard, Branko, and Tal - they will succeed. They will succeed despite how unnecessarily hard our system makes it for them. They are playing the game on hard mode.
And despite the absurdly misguided protectionist logic that informs our public policy, by kicking out these job creators (for fear of them taking our jobs! ha.), by sending them back to their countries, by forcing them to work really hard to come back - we have stumbled into accidental genius. The broken system has two unintended, positive, consequences. Firstly, when they do come back, they bring back with them fresh 0-to-1 problems ("secrets", in P.T. parlance) from their home countries. Secondly, they come back with new networks, new skills, preparation and experience. We have unwittingly created the perfect Darwinian training ground. Beware - the creatures that adapt to these pressures come back stronger than ever before.
Disclaimer: As you can tell, I am quite bullish on Richard, Branko, and the like. I express these bullish views by doing business with them, not just by writing. I am an advisor to Branko's company and I am helping DataProphet with its US operations.