{"id":10404,"date":"2020-07-06T20:04:00","date_gmt":"2020-07-07T00:04:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=10404"},"modified":"2020-07-10T22:07:38","modified_gmt":"2020-07-11T02:07:38","slug":"what-is-optimism-zero-to-one","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/what-is-optimism-zero-to-one\/","title":{"rendered":"What Is Optimism in Business? Peter Thiel Explains"},"content":{"rendered":"\n<p>What is optimism, and what does it have to do with your business strategy? <\/p>\n\n\n\n<p>Business is all about <a href=\"https:\/\/www.shortform.com\/blog\/how-to-plan-for-the-future\/\">planning for the future<\/a>. So when you ask yourself, &#8220;What is optimism?&#8221; you should be thinking about your business and its future. What is optimism in business? Keep reading to find out.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">How Can Positive Thinking Help Your Business?<\/h2>\n\n\n\n<p>Businesspeople debate whether success comes from luck or design. Some popular writers and leaders emphasize luck and downplay the importance of design or planning in contributing to success. This makes many people think planning\u2014trying to shape the future\u2014is pointless. They&#8217;re not taking their own power to shape their plans, which asks the question: What is optimism in business? Why do you need it? <\/p>\n\n\n\n<p>For instance, author Malcolm Gladwell writes in <em>Outliers<\/em> that success results from \u201clucky breaks and arbitrary advantages.\u201d Warren Buffett notes that he was lucky to be born with certain qualities. Jeff Bezos and Bill Gates both claim luck played a role in their success.<\/p>\n\n\n\n<p>It\u2019s possible luck could play a role in an individual success, but luck isn\u2019t sufficient to explain how the same person\u2014for instance, Elon Musk, Jack Dorsey, Steve Jobs\u2014could achieve a series of extraordinary, multibillion-dollar successes.<\/p>\n\n\n\n<p>When Dorsey, the <a href=\"https:\/\/www.shortform.com\/blog\/creators-of-twitter\/\">founder of Twitter<\/a> and Square, tweeted in 2013 that \u201cSuccess is never an accident,\u201d most of the responses were dismissive, citing white male privilege over intelligent planning as the biggest factor in success. However, while connections, wealth, and experience\u2014and luck\u2014can be factors, in recent years, we\u2019ve tended to ignore or overlook <a href=\"https:\/\/www.shortform.com\/blog\/why-planning-is-important\/\">the importance of planning<\/a>.<\/p>\n\n\n\n<p>In the past, people thought differently. From the Renaissance and the Enlightenment into the 20th century, people believed you made your own luck by working hard. Ralph Waldo Emmerson wrote, \u201cShallow men <a href=\"https:\/\/www.shortform.com\/blog\/believing-in-luck\/\">believe in luck<\/a>, believe in circumstances \u2026 strong men believe in cause and effect.\u201d&nbsp;<\/p>\n\n\n\n<p>Today, <strong>whether you think of the future as determined by chance or design affects how you act in the present and whether you ultimately succeed<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Types of Optimism <\/h2>\n\n\n\n<p>When you ask yourself &#8220;what is optimism,&#8221; remember that there are two kinds of optimism in business. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>1) Definite Optimism<\/strong><\/h4>\n\n\n\n<p><strong>The <em>definite optimist<\/em> believes the future will be better as a result of planning and effort.<\/strong> Scientists, inventors, and entrepreneurs with this outlook made the world richer; advances in science and medicine increased lifespans. <\/p>\n\n\n\n<p>For instance, the advances included:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>1843: a tunnel under the Thames River<\/li><li>1914; the Panama Canal<\/li><li>1929-31 the Empire State building<\/li><li>1933-37: the Golden Gate Bridge<\/li><li>1956: beginning of the Interstate Highway System<\/li><li>1961-72: 12 men on the moon<\/li><\/ul>\n\n\n\n<p>From the 17th century through the 1960s, the prevailing attitude in the Western world was definite optimism. It led to great things, but unfortunately, few people have this attitude today.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>2) Indefinite Optimism<\/strong><\/h4>\n\n\n\n<p><strong>An <em>indefinite optimist<\/em> believes the future will be better, but attributes this to chance rather than effort or planning<\/strong>. He expects to profit from the future but doesn&#8217;t see any way to design it. Usually when people ask &#8220;what is being optimistic&#8221; they mean the idea of these chance encounters. <\/p>\n\n\n\n<p><strong>Instead of building new things, indefinite optimists rearrange existing things<\/strong>. For instance, bankers make money by restructuring existing companies; private equity investors and management consultants squeeze money from old businesses; lawyers profit from resolving old disputes or restructuring people\u2019s affairs. High-achieving Ivy Leaguers pursue these kinds of careers.<\/p>\n\n\n\n<p>The Baby Boom era produced a generation of indefinite optimists who <a href=\"https:\/\/www.shortform.com\/blog\/feeling-entitled\/\">feel entitled<\/a> to progress. For those born between the mid-forties and mid-sixties, things seemed to automatically get better every year with the onward march of technology. So Boomers grew up with the expectation of ongoing improvement with little planning.<\/p>\n\n\n\n<p>Even when technology stalled in the 1970s, wealthier boomers kept progressing because of their status, although others were left behind. The boomers who still shape public opinion today believe that what worked for them should continue to work. But they overrate the role of chance and underrate the value of planning.<\/p>\n\n\n\n<p>Indefinite optimism has characterized U.S. thinking since the early 1980s, when a long stock market rise began and finance came to be seen as the driving force of the future. But when you think about &#8220;what is being optimistic&#8221; you should consider your own role in making optimism real. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Indefinite Optimism at Work<\/strong><\/h3>\n\n\n\n<p>What is optimism and how did it work in American business? In the era of definite optimism that ran through the 1960s, successful people were those who created and built things. If the era continued today, society would need engineers to design future cities to exist underwater or in space.<\/p>\n\n\n\n<p>However, <strong>in the current era of indefinite optimism toward the future, the top careers are banker and lawyer.<\/strong> If they don\u2019t go to law school, college graduates find careers on Wall Street since they haven\u2019t learned or planned to do anything specific.&nbsp;<\/p>\n\n\n\n<p>Finance exemplifies indefinite optimistic thinking: You can&#8217;t plan for or shape the future, but you\u2019re optimistic you\u2019ll profit from it. The basic tenets are:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The market is random; you can\u2019t make any definitive conclusions about it.<\/li><li>You need to diversify to balance wins and losses.<\/li><li>The best thing to do with money is accumulate it in stock portfolios as opposed to putting it to work in the real economy.&nbsp;<\/li><\/ul>\n\n\n\n<p>Indefinite optimism pervades other parts of society as well. For instance,<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Politics<\/strong>: Instead of offering definite plans, politicians constantly adjust their positions and image to match what the latest polls tell them people are thinking. The public has become fixated on polls too. We prefer statistical analysis of public opinion to anyone\u2019s vision for the country.<\/li><li><strong>Government<\/strong>: Instead of coordinating complex, definite solutions to problems like infrastructure, energy, and space exploration, the government focuses on processes for managing problems. This takes the form of insurance\u2014Medicare, Social Security, and other transfer payment programs. As a result, entitlement spending has exceeded discretionary spending since 1975. Increasing discretionary spending would require definite plans for specific problems. However, indefinite process-thinking opts to improve things by writing more checks.<\/li><li><strong>Science<\/strong>: Ever since 1928, when Alexander Fleming accidentally discovered penicillin, scientists have sought to exploit chance (indefiniteness) with probability and statistics. For example, pharmaceutical companies search millions of combinations of molecular compounds hoping to discover a new drug. Similarly, researchers in biotech startups test things that might work instead of improving definite theories.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Where Indefinite Optimism Leads<\/strong><\/h3>\n\n\n\n<p>It\u2019s hard to say where indefinite optimism will lead, but it won\u2019t get us from 0 to 1. That would take a definite optimist with a plan. Not someone who wonders &#8220;what is being optimistic&#8221; without a plan. <\/p>\n\n\n\n<p>Our outlook of indefinite optimism with no planning results in illogical decisions. An example is how households and companies handle money. If we were definite optimists, our households would save money with the expectation of having it to spend later. Companies would invest profits so they could enjoy the rewards of additional wealth. But households aren\u2019t investing, and companies are letting cash accumulate on balance sheets instead of investing in new products\u2014because both households and companies lack definite plans for the future.<\/p>\n\n\n\n<p>Instead of making definite plans, Silicon Valley entrepreneurs often strive for a \u201clean startup\u201d that can adapt and evolve. Many companies believe there aren\u2019t any certainties when it comes to products\u2014they survey customers, create a minimum viable product, and improve it incrementally. But the way to build a great company is to start with a definite plan and create something new that people didn\u2019t realize they needed.<\/p>\n\n\n\n<p>You can\u2019t expect your business to succeed without a plan to make it happen. Rather than expecting <a href=\"https:\/\/www.shortform.com\/blog\/what-is-darwinian-evolution\/\">Darwinian evolution<\/a>, you need to apply intelligent design.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Value of Planning<\/strong><\/h2>\n\n\n\n<p>So what is optimism &#8211; the right kind? Optimism is planning. Steve Jobs succeeded because he was a definite optimist. He had a definite future in mind and definite plans to get there.<\/p>\n\n\n\n<p>Jobs\u2019s obsession with perfect design, the result of intensive planning, is evident to anyone who picks up an Apple device. But his most important design was the one he applied to his business.<\/p>\n\n\n\n<p>Apple changed the world by designing and implementing multiyear plans for new products\u2014not by surveying customers or slightly improving an existing product.<\/p>\n\n\n\n<p>Jobs planned for the iPod to be the first of a new generation of portable devices that would replace the PC, although the iPod was not seen as revolutionary when Apple introduced it. The Western world needs a cultural revolution to return to a definite future that\u2019s planned.<\/p>\n\n\n\n<p>What is optimism in business? Is it a real business plan? It&#8217;s definitely one way of planning for the future. Optimism can help you create and execute a business plan. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is optimism, and what does it have to do with your business strategy? Business is all about planning for the future. So when you ask yourself, &#8220;What is optimism?&#8221; you should be thinking about your business and its future. What is optimism in business? Keep reading to find out.<\/p>\n","protected":false},"author":5,"featured_media":10417,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,9],"tags":[97],"class_list":["post-10404","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-psychology","tag-zero-to-one","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Is Optimism in Business? Peter Thiel Explains - Shortform Books<\/title>\n<meta name=\"description\" content=\"What is optimism, and what does it have to do with your business model? All the great success stories built their future plans on optimism\u2014see how.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shortform.com\/blog\/what-is-optimism-zero-to-one\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Is Optimism in Business? Peter Thiel Explains\" \/>\n<meta property=\"og:description\" content=\"What is optimism, and what does it have to do with your business model? 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