I was listening to the Dwarkesh podcast, and there was a specific sentence that felt extremely correct1.
Tyler Cowen
[In San Francisco], you come pretty close to thinking in terms of infinities, on the creative side and the destructive side. And no one in Washington thinks in terms of infinities; they think at the margin.
This struck a chord. Having lived on both coasts, this feels deeply true. Those trained in the school of infinities think differently to those trained in the school of margins.
There is a cultural difference between the West and East coast that reflects in two models of thinking.
I call those two models end-state vs. marginal thinking.
They look a bit like this:
Living in this world makes you think in terms of infinities.
And you were rewarded for it.
The bigger your vision, the more money VCs will give you. It will be easier to hire people and motivate them. You started this company in the first place because you did a great job of really thinking through this end state and pitching it to VCs, employees, and customers. In many ways, a startup is easier if you have a more well thought out end-state.
The more your peers will respect you. You’re respected for being different, and starting a movement around it. In a room full of people with grand visions, you carve out your niche. Choosing something non-obvious and taking it to the end state will let you find your group and build community.
The people we look up to think similarly. Great founders make great statements about how the world will be. Great VCs write grand theses on what the world will look like. That is why everyone in Silicon Valley is constantly talking about how AI will absolutely transform the world immediately. You are rewarded for saying wild things.
This is End State thinking.
Living in this world makes you think in terms of the margin.
And you were rewarded for it.
The better you are at marginal analysis, the better your chances are at getting that promotion. It will be easier to take the mounds of information in front of you and make sense of it. You got this job in the first place because you did really well in school analyzing every angle of the problem in front of you. In many ways, a corporate job is easier if you’re good at making sense of the information in front of you.
The more your peers will respect you. You’re respected for synthesizing the information in front of you in a clear, concise way. In a room full of people with different information, you combine their visions in order to command more resources. Choosing something obvious and taking it to the next level will give you notoriety.
The people we look up to think similarly. Great leaders make great statements about how to make sense of the world as it is. This is why everyone in top corporate jobs becomes a thought-leader – espousing different ways to create clarity.
And this makes sense because there is complexity in what already exists, and so you have to be careful about the next thing you add.
This is Marginal thinking.
Coming back to what that Tyler Cowen said – I think the answer is a mixture of both. How do you dissect your grand idea using marginal thinking to achieve what you have set out to in end-state thinking?
But we can’t ignore where people start. Most live within the blind spot of their thinking without recognizing it.
This thinking is why a lot of MBAs end up doing “Entrepreneurship” through Acquisition (EtA) or some B2B process optimization rather than dream of something truly different. It’s a reflection of starting with a different model of thinking.
It’s also why a lot of founders build cool things that have no business plan. People want to “re-imagine” the process and keep building features to avoid thinking through the complexities that marginal thinkers can reason through. Questions like “who will pay” and “how do you go to market?”.
Having been in both end-state and marginal worlds, the people who I have met who use marginal thinking are actually far wiser. Complexity is really hard to reason through, and it takes a certain type of mind to dissect that. And usually, those people are also right in the short run.
But in the long run, those with end-state thinking are much more correct.
Here’s the timestamped link to the video, and here’s an abridged version of that exchange:
Dwarkesh Patel
…what's the biggest difference in how they're [progress studies] received versus the audience here?
Tyler Cowen
Well, the audience here [San Francisco] is so different. You're the outlier place of America. And then where I normally am, outside of Washington, D.C., that's the other outlier place. And in a way, we're opposite outliers.
… you all are so out there in what you believe. I'm not sure where to start.
You come pretty close to thinking in terms of infinities, on the creative side and the destructive side. And no one in Washington thinks in terms of infinities; they think at the margin. Overall, I think they're much wiser than the people here.
But I also know if everyone, or even more people, thought like the D.C. people, our world would end. We wouldn't have growth. They're terrible.
That’s the relevant part. He then goes on to talk about Europeans, which is hilarious. That part is continued below.
Tyler Cowen
People in the EU are super wise. You have a meal with some sort of French person who works in Brussels—it's very impressive. They're cultured, they have wonderful taste, they understand all these different countries, they know something about Chinese porcelain.
And if you lived in a world ruled by them, the growth rate would be negative 1%.
So there's some way in which all these things have to balance. I think the US has done a marvelous job at that, and we need to preserve that.
What I see happening—the UK used to do a great job at it. UK, somehow the balance is out of whack, and you have too many non-growth-oriented people in the cultural mix.
No posts
Comments
Nothing yet. Say the first thing.
Sign in to join the conversation.