According to Silicon Valley all-star Peter Thiel, there are two ways that the world can develop: by copying products and following norms that already exist, or by creating entirely new things. Doing what’s already familiar and comfortable moves the world from 1 to n; where n is the number of improvements to an old model. In other words, it  builds on what’s already been discovered. By contrast, new creations take us from 0 to 1, opening new worlds of possibility. It is the entrepreneurs with the 0 to 1 mentality, those unwilling to rest on their predecessors’ laurels, who will move the world forward.  

Genius is rare. But even more uncommon than genius is courage. An interesting way to open up a job interview is to ask applicants about an important, but unpopular, truth to which they ascribe.

This contrarian thinking is what changes the world. It takes seeing things in a way that the mainstream does not to create something entirely new. No one has a crystal ball (that actually tells the future), but we can be certain that the future will be different than the present, and that it will develop out of the world we know today.

We all hope that the future will be brighter than the present. This progress can take one of two forms: horizontal or vertical.  Horizontal, or extensive, progress is growth by copying. Current technologies and practices become increasingly widespread. Globalization is horizontal progress writ large, and China is its chief exemplar. China imitates leading countries, from city planning to technological implementation.

In contrast to horizontal progress which copies old ideas, vertical progress (also called intensive progress) creates new ideas. If globalization is the mechanism by which horizontal progress is actualized, then technology is the tool by which vertical progress is realized. If China is a paragon of horizontal progress, then Silicon Valley is the epicenter of vertical progress.

The terminology commonly employed to discuss progress suggests the horizontal progress paradigm. Think about the dichotomy of developing world and developed world. The underlying logic is that the developed world has arrived and the rest of the world will catch up if they start employing the developed world’s “best practices.” But today’s successful models will soon be tomorrow’s lost causes, abandoned for more effective, efficient ways of doing things.

What most people don’t realize is that the horizontal model is unsustainable. If hundreds of millions of households in China and India consume resources the way that Americans do, it will ravage the environment.

It won’t be big corporations or isolated individuals or risk-averse bureaucracies, but small teams of dedicated people with a shared sense of mission, that will make the world better. The people ready to take things from zero to one will be the difference makers.

In 2012, passenger airlines raked in over $160 billion, but flights are so cost-intensive (fuel, food for the passengers, and so on) that airlines were making less than 40 cents per passenger.

Google, by contrast, made “only” $50 billion that same year, but the company is far less cost-intensive (or labor-intensive, for that matter) and has no competition to speak of, so they keep far more of the profit.

The difference between the airline industry and Google can be summed up with two terms: perfect competition and monopoly. With perfect competition, numerous people work within the same niche. They are part of a homogenous block of goods and services. Individual differences are largely superficial. Each must set prices according to the market. This is part of the competition ideology. Companies in a perfect competition like the airline industry eek out a stressful existence. Ultimately, there is not much capital to be gained in a perfect competition, which means it’s hardly capitalism.

It’s a bit unfair that the word “monopoly” brings to mind a string of negative associations, from banana republics to greedy tycoons. “Healthy competition” is seen as part of capitalism, and monopoly is seen as capitalism turned savage. We need to adjust our fundamental assumptions: Monopoly is the true capitalism because capital is actually accrued—not at the expense of others, as occurs within the perfect competition. A monopoly need not be established by bribes and smooth talk with government officials attempting to secure protectionist policies. As Google and other innovative tech companies have shown us, monopolies are established when a new idea shifts the entire landscape.

If you want your company to succeed, don’t elbow your way into a perfect competition, where you will be saving pennies where you can and scraping them together to make little to no profit. Create a company that moves things forward, from 0 to 1. This way, you will build the capital that capitalism’s name suggests. You will set a new curve for everyone else to build around.

Not only do we misunderstand monopoly, we misunderstand competition. If a creative monopoly is the pathway to new growth, then competition is the pathway to pennilessness. We’ve bought into the myth that capitalism and competition go hand-in-hand, but the more we compete, the less capital is generated.

Belief in healthy competition has lead to twisted thinking and failed practices. Like any other ideology, it has its accepted teachings and commandments. Its facts are so plain that we lose sight of their influence. It’s embedded into the fabric of our education system: your grades must be relatively superior to those of others to gain an advantage, to be accepted into a more “competitive” university to get a better job with “competitive” pay. It’s seen as a good thing to “make a killing.” Such colloquialisms reveal the extent to which the ideology of competition has found its home in business.

But this is the language of competition, not capitalism. Capitalism is about the accumulation of capital, but when there is perfect competition, all profits are competed away. The entrepreneur who wants to make something new and derive value from it must avoid markets approaching perfect competition. It’s best to avoid undifferentiated commodity markets like the plague.

Marx believed that people fought because they were different; the starker the contrast, the more vicious the clashes. Shakespeare seemed to believe just the opposite, that warring parties tended to share similarities. Think of Romeo and Juliet, where the Montagues and the Capulets are “two households, both alike in dignity,” yet they viewed themselves as adversaries, and their hatred grew with their similarities.

Think of Google and Microsoft as modern-day warring families in a Shakespearean drama. There’s the Schmidt family and the Gates family. There was no reason to think that they’d clash. Indeed, they were different in their conception; Microsoft was creating office apps and computer platforms while Google was perfecting its search engine. There shouldn’t have been much to fight over, but they began to see the other as a threat. They were so focused on each other that they began to compete, and the products they made began to reflect this competition. They cut into each other’s business. Their skirmishes have been numerous: Google against Bing, Chrome OS against Windows, Docs against Office.

War is costly, and in the end, succumbing to the competition model rather than sticking to the capitalization model has bled both companies and allowed Apple to slide in and rake it in. In 2013, Apple’s market capitalization was $500 billion, more than Google’s and Microsoft’s market capitalizations combined.

Most people are under the impression that there is nothing left to be discovered. The blank spaces in the map have been filled in and most laws guiding the physical universe have already been discovered and leveraged for human benefit.

The Unabomber thought the same way. People might be quick to write off the Unabomber as deranged. The truth is that his ideas were unnervingly rational and cogent. Ted Kaczynski, as he was known before being connected to his mail bomb murders, was actually a genius. He was 16 when he started at Harvard, and went on to become the youngest assistant professor in the history of UC Berkeley, hired when he was only 25 years old. 

In a lengthy anonymous submission to multiple newspapers (published at the urging of the FBI) Kaczynski expressed with dispassionate, coherent prose why the modern world needed to burn.  He began with the premise that human goals fall into one of three categories: simple goals, which can be readily completed; hard goals, which require effort but are ultimately achievable; and impossible goals, which no amount of talent or intelligence can accomplish.

Kaczynski argues that all hard tasks have been already accomplished at this point in human history. All that remains are simple goals and impossible goals, neither of which will provide humans with a sense of purpose and satisfaction.  With only goals so easy that a toddler can do it and so difficult that even a genius can’t work it out, we are depressed. The only solution to this conundrum is to destroy existing institutions and technologies and start over.

Kaczynski lost faith in the future. We might like to relegate him to the loony bin, but his disillusionment with technology and his desire to return to earlier eras is by no means rare. Think about the hipster mainstays: vinyl record players, pseudo-vintage photography and décor, and dad-era mustaches. These are superficial symbols, but they do suggest that the young, modern urbanite is looking backward rather than forward, that anything worth doing has already been done.

It’s not just hipsters and the Unabomber who are guilty of the excluded middle. Religious fundamentalism operates in the same way: there are a few unalterable truths, and then there’s divine mystery. Anything in between is heretical. The same tendency is evident in newer religions like environmentalism: there’s the facile fact that we have to protect the environment, but beyond that we trust Mother Nature. Libertarians feel the same about free market.

There are least four factors that have led us (wrongly) to the conclusion that there are no secrets left. One trend is incrementalism. We have been told all our lives that it’s best to move things forward baby-step by baby-step. Gradually, we work our way through assignments and grade school, and, in exchange for our cooperation, we were given grades that indicated our performance. This process stultifies any of the radical, contrarian, zero-to-one thinking that leads to discovery.

A second trend becoming endemic is risk aversion. So many people are afraid of being wrong, of making a mistake. They look to the mainstream to corroborate their insights. If the mainstream does, they might feel better, but their ideas probably won’t be that ground-breaking.

A third trend is toward complacency. The elites in most sectors tend to be the most disenchanted with the world. They find no need to search for anything new when they already have their fingers in pies that are still lucrative. The implicit messaging to incoming classes at Ivy league schools is, “You’ve made it to the summit. You’re set for life now.”

The fourth trend is the belief that the world is “flat,” that the competition is no longer just local or domestic but global in scale. In a pool of competitors billions deep, what hope is there that you would be the one to develop that amazing idea and not one of the millions of other people who are more intelligent and better connected. This is the kind of thinking that keeps people in bed instead of exploring. It sees no point in even trying.

The belief that there are no more secrets might have reduced our susceptibility to bizarre cults, but the growing aversion and intolerance to unorthodoxy has hamstrung many people from following up on creative impulses. Our sense of wonder needs to be reignited.

The truth is that secrets are everywhere, waiting to be uncovered. When we stop pursuing secrets and content ourselves with maintaining what’s already working, we end up like HP, a company whose board devolved into a circus and gossip panel, more interested in a witch hunt than creating new products.

There are two varieties of secrets: secrets of nature and secrets about humanity. The former deal with the world around us, the laws governing the physical universe. The latter are insights into the human condition. When you are on the hunt for secrets, ask yourself what secrets nature is telling you, and what secrets humans are withholding from you. One place to begin is with common cultural assumptions, as well as a culture’s taboos. The secret that competition and capitalism are opposites is one that was not immediately evident to most people. To find secrets, look where no one else is looking.

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