What Goes Into Creating An Amazing Company: Independent Thinking (4/9)

Over the years, I have developed a working model of what goes behind creating an amazing company. As I look to build my 3rd venture - ithinkyouare - the world's 'compliment' app - I thought this might be a good opportunity to publish these ideas

In case these strike a chord with you, or you think of someone with whom they will - the misfits, the rebels, the round pegs in square holes - I am also building the initial team of pirates for ithinkyouare - so do get in touch with me

The Fallacy Of Group-Think (Or, How Often The Overwhelming Majority Is Wrong On Things)

The trap of group-think starts from thinking 'If everyone is doing the same thing, or holds the same opinion, they must be right'

The problem with that is that everyone else is also thinking that

It's sheep-behaviour

Instead, it's instructive to study history to realize how often the overwhelming majority was collectively wrong in their thinking. Here are some examples, just from the top of my head:

• In the 1600s, Gailieo was the only person saying that the sun was the center around which all planets including Earth revolved: This was against the prevailing view supported by the Catholic Church, where the Earth was considered the center of the universe. He was tried by the church, found "vehemently suspect of heresy", and was forced to recant and spent the rest of his life under house arrest. Of course, now we know he was right, the world was wrong
• In Germany, post World War 1, everyone thought that Hitler was meant to transform their country: Hitler and the Nazi Party promised to restore Germany's honor, and most Germans supported him, desperate for change. After World War 2, the horrors of the Holocaust and the devastation caused by the Nazi regime became evident. Today, the Nazi era is recognized by Germans as the darkest chapter in their history, serving as a cautionary tale about the dangers of unchecked power and the importance of independent, critical thinking
• In 2007, virtually everyone (including the best of financial 'experts') thought the financial world was all hunky-dory and that the world was in for virtually endless growth: In 2008, the bubble burst. Lehman Brothers, a major investment bank, filed for bankruptcy, triggering a cascade of financial failures and a global economic downturn

The Power Of Independent Thinking

In a world where Group-think is a common cognitive fallacy, being able to think independently, and rationally is a huge leverage

You will realize truths about the world, that few other people recognize

And being able to see things simply as they are, without any lenses of hype, and noise, is nothing short of a superpower

Here are some examples of people, organizations, and countries that have (to their great benefit) thought independently:

Warren Buffet: Warren Buffet has been, in virtually all domains, an extraordinarily independent and rational thinker. His decision to continue to stay in his bought-in-the-1950s simple home in Omaha (when all the movers and shakers of the finance world were moving in/around Wall Street), his incredible ability to not fall for market hype and deep understanding of 'inherent value' of companies (where most of his peers were busy looking at 'stock trends'), his steadfast refusal to not investing in things that are not in 'his circle of competence' (when most of the finance sectors was bullish on tech/internet), his decision to donate over 99% of his wealth to philanthropy (when most of the super-rich have been busy maximizing their piles), his personal decision to have an unusual-marriage-arrangement that worked for the people involved, and his decision to marry again after his first wife passed away. This is not a guy who will buy/do anything because everyone thinks it's cool/trendy/the next big thing/the accepted norm

The result - he has been the most consistent figure in the Forbes Richest list (since it was first published in 1987) than any other human alive

But that's just material success. His real contribution has been as a teacher of the simple wisdom of life, and by demonstrating the power of clear, rational thinking, he has inspired and changed the lives of millions all over the world, such as myself, even when we have no link with his core professional competence - investing

WhatsApp: WhatsApp as a company has never been shy of taking the path rarely traveled. From resisting pressures to become an ad/games/some-other-fad linked model (because they wanted to create the world's primary personal communication utility, not just another 'engagement' app), to choosing an obscure language like Erlang to power their backend (because even if it was rarely used in the tech world, it perfectly fit their needs), WhatsApp always did what it thought was right, not what was consensus among experts/competitors/investors. Today it's the largest messaging app in the world by far at 1.2B daily active users (Facebook's messenger is a distant second at 400M daily active users)

Sweeden: Sweeden's laissez-faire approach to the COVID19 pandemic (virtually no lockdowns, and an attempt to keep running the country in business-as-usual mode, because they thought that in the long-term this path would cause less net suffering) was an extraordinary outlier to the rest of the world (as rationally thought out approaches often are). It was almost uniformly criticized by the rest of the world. But Sweeden stuck to its guns. And the results are in.

From the linked report - "Sweden did much better than other countries in terms of the economy, education, mental health, and domestic abuse, and still came away from the pandemic with fewer excess deaths than in almost any other European country, and less than half that of the United States—the country where both the president and major newspapers repeatedly used Sweden as a?cautionary tale. The conclusion is uncomfortable for other governments. It was not Sweden that engaged in a?reckless, unprecedented pandemic experiment, but the rest of the world. Millions of people were deprived of their freedoms without a?discernible benefit to public health"

If you can think independently and not fall for herd mentality, you can achieve exceptional outcomes

What It Takes To Be Independent Thinking

There is a reason independent thinking is rare to find in human beings or companies. It takes a bunch of (uncommon) things:

• Rationality, And A First-Principles Approach: Being able to think from the fundamentals, being able to ask the right questions, having healthy skepticism, and having the ability to hold opposing thoughts in your head at the same time - these are signs of true intelligence, and are not particularly common to find
• An Eye For Facts: In a world consumed by opinions, and endless polarized arguments, where an individual's opinions are often just a mirror of group consensus, the ability to distinguish facts from subjective opinion is priceless
• Being Able To See All Aspects Of Something: Most things have 2-sides-to-the-coin. Smart people (and organizations) are able to both appreciate both sides (and understand their reasonings), and come to a 'greater truth' that encompasses the best points of each
• A Thick Skin: It's not easy swimming against the current. Until life proves you right (or mostly right), the cost of taking the path less traveled is often (well-meaning) ridicule. But as Gandhi said 'First they laugh at you, Then they ignore you, Then you Win'. You have to be patient till you Win

How To Encourage Independent Thinking In An Organization

For an independent-thinking organization, you need independent-thinking founders, and you need them to scout for independent-thinking first hires. Once you have taken care of 'nature', you then look at what you can do to 'nurture' the same quality. Here are a few things that help:

• Encourage Questioning: Create a culture that encourages people to ask questions, and not simply 'accept' instructions from above, when it does not make sense to them. Discussions on intelligent questions benefit both sides: the questioner will likely put more conviction into something if they are convinced of the 'Why' and the questionee will inevitably learn something, and perhaps revisit their original hypothesis
• Don't Take 'But Everyone's Doing It' For An Answer: In the same vein, make sure that 'Everyone's Doing It' is not considered a valid answer to anything in the workplace. Encourage people to do everything consciously, and with independent reasoning
• Don't Also Accept Unreasoned Contrarianism: This can also go to the other extreme. Some people and organizations in their desire to be contrarian simply oppose all 'mainstream' conventions. That's as stupid as groupthink. It's the 'Rebel without a Cause' phenomenon. What should win in an organization is solid reason, not contrarianism for the sake of it
• Inculcate Patience: Patience is a good friend to independent thinking, because if you make bold, 'unconventional' (but rational) decisions, the results might not come immediately, and till they come, you will need to wait it out patiently and not lose track of your reasoning, even while it seems like everyone else in the world is walking in the other direction

Good luck building an independent-thinking organization! It's a rare thing, but it's also the kind of thing that produces extraordinary outcomes