Naval Happiness
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So let's talk about why we're doing this podcast. This really is a discussion of highly practical philosophy.

- Philosophy as we normally think of it is impractical. It's something that's put up on a pedestal. It's something that was written a long time ago in fancy language, very abstract, very obtuse. And perhaps some of it feels like truisms to us and some of it feels unapproachable. But really for anyone, if you live long enough, you become a philosopher because you start trying to solve the big problems in your life. And the big problems are the old ones. They're the ones that we've been trying to solve since the beginning.

How do I stay happy? How do I become healthy? How do I become wealthy? How do I raise the family that I want? So what this podcast is about is the practical philosophy that we have confirmed for ourselves and that has worked for us. What one monkey can do, another can. If this person learned something interesting that made them happier, healthier, or wealthier, then I can do it too.

That's what we focus on here. It's the practical philosophy of health, wealth, and happiness. It seems to me if you were going to sum it up in one word, it would just be health. Financial health, mental health, physical health. Health is just a state of being well. So let us get to the state of health in

in our finances so we're not fearful day to day and that's where we started and we spent a lot of time on that. Let's get to the place in physical health where we're not suffering from afflictions, disease and addictions and let's get to the state of mental health where we're relatively at peace and quite content with ourselves.

Even though you can certainly achieve happiness and mental health without financial health, the truth is in modern society most of us understand that financial wealth can give us freedom, it can give us time, it can give us peace. You're not going to buy your way to happiness, but you will buy your way out of common causes of unhappiness.

In olden times, one of the routes to finding peace was you would become a monk. You would renounce things. You would renounce sex. You would renounce money. You would renounce shelter. You would renounce attachments. And you would go off in the woods. And after 30 years, when you'd finally gotten over the fact that you weren't going to have these things, then you might find some peace. And the truth is, most of them probably never got over it. Lots of monks out there, not a lot of enlightened people.

I think it was Osho, he said, "Every time I meet a prostitute, "she wants to talk about God, "and every time I meet a priest, "he wants to talk about sex." Whatever it is that you deny yourself will become your new prison. If you have a desire for material comfort, it's actually gonna be easier and faster to fulfill it in modern society if you know what you're doing and are capable, then it will be for you to renounce it. It'll take a lifetime to renounce it, and maybe then it won't work, but you can make some money and be materially successful in less than a lifetime.

You can get there without it and probably have a more lasting form without it, but that's playing on hard mode. Physical health, of course, is the foundation of everything. If you don't have your physical health, you have nothing. Another great Confucian saying that I liked was that a sick man only wants one thing. A healthy man wants 10,000 things. When you're sick, when you're down, all your other desires run away. Without the ability to get up and function, you can't turn into this desiring machine that you are.

Physical health is actually the most important, but I speak the least on that topic because I have the least specific and unique knowledge. I'm not self-actualized in that regard. I'm in okay health, okay shape, and I have an okay diet. I understand a lot of the theory of it, but I would feel fraudulent giving you that theory unless I were a paragon of excellence in that domain. Whereas I think in wealth, I'm much more self-actualized.

And on the peace side, I've gone from being a mostly unhappy person to being a very happy person. And that I think was deliberate. It was practiced. It was effort-based. It was through realizations and made progress. So I have a chance to tell you what worked for me.

Happiness is an extremely loaded term. It means completely different things to different people. And it's difficult to talk about because everybody has strong preconceived notions of what happiness is and how they would get to it. I'm going to conflate happiness and pleasure and peace and

and joy and bliss, I'm going to mix them up. I'm not doing so deliberately, but at the same time, this is not math. We cannot clearly bound these words. They mean different things in different contexts to different people. So let's just try and get into the spirit of what I'm saying rather than get hung up on specific words and details. I think that's extremely important. When some people are talking about happiness, they're really talking about pleasure thrills like

I had a really good meal, therefore I'm happy. Other people are talking about a general state of contentment and well-being. Other people are referring to...

enlightenment like a Buddha would have reached, many people will take the point of view that there's no such thing as happiness or happiness is counterproductive or misery comes from pursuing happiness. And there's a lot of truth to this and we'll get into it. But at the same time, sometimes I'll say the way to be happy is X and people will say, well, didn't you just say that happiness is a cause of misery? This is not mathematics. You cannot link algorithms together. This is more like poetry. If you read 50 different poems from a poet

and then you try to map them out analytically and refer words from one poem to another and see if that made sense, you missed the point. Don't fixate on the words. Don't even fixate on the sentences. Ponder the overall thought process and message. The first step towards increasing the level of happiness in your life

is realizing that you can. This is where a lot of people get tripped up. For the vast majority of people, some amount of their happiness, in fact, probably a lot more than they think is in their control. So the first step is not easy and you might be stuck on this for a long time and many people are where they deep down believe that happiness cannot be developed or changed and so they devalue it

They say, "Well, I don't wanna be happy." Genetics may account for half or more than half of things like strength, athletic performance, and intelligence, but your genetic set point is only about half of it. And happiness or general contentment is much more malleable than the other things.

It's very hard for me to change my athletic performance purely through working out. I'm going to be genetically much more limited. But I think in terms of my mood and temperament and my outlook on life, am I a peaceful person or not? How angry do I get? These things are much more malleable. So happiness is a skill like nutrition and fitness. It is a skill that you identify and develop until you get better and better at it and it slowly gives you results. It is not something that is God given to you and you're stuck

Although if you start with a high setting, then by all means keep it. It is a skill that can be learned and developed.

desire is a contract you make with yourself to be unhappy until you get what you want. You start becoming disturbed because you want something and then you work really hard to get that thing and you're miserable in the meantime. And then when you get that thing, you actually revert to the state you were in before you had that thing. It's not like you get to some blissful peak level that you stay on. There's this delusion that there's something out there that will make me happy and fulfilled forever. That is a complete delusion. No one thing seems to do that.

We can talk later about enlightenment, and that does seem to head in that direction of a permanent solution, but we're not gonna explore that just yet. We're just talking about common sense happiness. There's no single permanent solution to it. Rather, it is a process of understanding. It is a process of self-discovery. It is a process of training yourself and seeing certain truths

If obtaining things were to permanently make us happy, then the cavemen would have been miserable and we should all be deliriously happy right now. So obviously net happiness per person is not going up. It might even be going down. Modernity probably brings more unhappiness than past times. So happiness is returning to that state where nothing is missing in this moment.

A common complaint where I'm from, where I'm surrounded by lots of smart overachievers, is that happiness is for stupid people or happiness is for lazy people. A lot of times entrepreneurs will say, I don't want to be happy because I want to be successful. If I'm too happy, perhaps I will lose my desire and I will no longer work hard and I will no longer be successful. And like everything else, there is some truth to this. Generally, the more intelligent you are, the more you can see behind the facade of

of everyday life being easy or safe. You can see all the risks and the downsides and the calamities that await us. You can see the cynicism and the manipulation behind so many things that are portrayed as being good for you or good for society. You naturally become cynical and you signal your intelligence through cynicism. Very smart people will often communicate in purely cynical observations. It's okay to not want to be happy, but we're gonna explore together

whether you can increase your happiness level without significantly lowering your drive and without significantly lowering your intellect. So let's take the first one, which is, I'm not happy because I'm smart. Partially true.

you are unhappy partially because you know too much, you've been exposed to too much, you understand too much. But that doesn't mean that you can't undo it and retain your intelligence. You're not smart because you're unhappy, so don't get it backwards. But yes, you're unhappy because you're smart. It means that it's going to take more work for you to be happy. But the good news is smart people are good at figuring out the truth. And it turns out the more you dig into certain deep truths,

the naturally freer and more peaceful you will become, and that peace will itself lead to happiness. If you're so smart, why aren't you happy? I absolutely believe that is true.

The beauty in being mentally high functioning in our society is that you can trade it for almost anything. If you're smart, you can figure out how to be healthy within your genetic constraints. If you're smart, you can figure out how to be wealthy within your local environmental constraints. If you're smart, you can figure out how to be happy within your biological constraints. But your biological constraints are a lot larger than you might think. For people who have ever gotten drunk,

been on psychedelics, meditated deeply, experienced altered states of mind through breathing and hypnotic techniques, they turn into versions of themselves that are much happier for brief periods of time. Now, some of this is a fake pleasure-driven happiness, of course, but there's some truth to it as well, or you wouldn't desire that state.

So in a sense, it can show you the dynamic range that you have as a human, the ability that you have to go into certain states where you're happier is actually quite large. So how do you nudge yourself in that direction on a perpetual basis, as opposed to just visiting there by essentially stunning your mind into submission and silence?

Besides I'm too smart for it, the other objection is I don't want it to lower my productivity. I don't want to have less desire or less work ethic. Fact check on that is true. The more happy you are, the more content and peaceful you are, thus less likely you want to run out there and change the world. But at the same time, being unhappy is very inefficient. The peaceful person doesn't have experience

extraneous thoughts going through their head. If you are a driven, unhappy person, your mind will be on 24-7. What are the consequences of this? Your sleep is much worse. You're much more likely to react, become angry, and dig yourself into a hole that you then have to dig yourself out of

your decisions are going to be emotional and impetuous. You're much more likely to be in the busy trap, where you're busy all the time, running from one thing to another because you can't mentally prioritize. You don't have peace of mind when it comes time to make judgments. You have too many threads going through your head and you don't have time to devote to making those judgments. So there's a trade-off. If you become the Buddha tomorrow, it's unlikely you'll also launch rockets to the moon like Elon Musk. But on the other hand,

There are enough successful, optimistic leaders, scientists and innovators, especially as they get older, that you see it's not necessarily the case that happy people have to be ineffective. As I became much happier in my life, I actually became much more effective. I was able to form relationships with people that earlier in my life I would have kept at a distance, whatever preconceived notion. I can make decisions much more clearly now because of see what the long-term outcome is going to be.

And I cut straight to the chase. I don't try and negotiate an extra 20% here or there because I know that that's going to make me unhappy long term. It's going to make the other person unhappy and it'll make the deal less stable. So I've actually been more productive even though I've worked less hard because I've made better decisions. In the modern age, the quality of the decision you make is everything because we're all leveraged. You can be leveraged through code, community, media, capitalization.

capital, labor, et cetera. If you're a smart person, every decision you make these days, you're leveraging it in some way. And so the quality of your decision making is more important than anything else. If Warren Buffett makes the right decision 85% of the time and his competitors make it right 65 or 70% of the time, Buffett's gonna win everything. That's the source of his strength, good decision making. He makes one decision a year.

to it most. Most of the time he's sitting around reading books, thinking hard, reading S1s, playing bridge, traveling, golfing, etc. Obviously hard work is not the solution. Good decision making and high leverage is a solution. Having a peaceful mind

being a happier person, relying less on momentary pleasure and being calmer in general will allow you to have the frame of mind where you make better decisions and will actually increase your effectiveness. As long as the increase in effectiveness is higher than the reduction in drive, you're well off. Finally, I would say, do you want to be the best in the world by working the hardest or

Or do you want to be the best in the world who worked the least for it, right? Who worked the most intelligently for it? If you were an omniscient, omnipotent being, imagine you were the universal God for a moment. Then just by pushing a butterfly in one direction or just by snapping your fingers, you would know exactly how the particles would collide from there on out that would change everything in the universe. You could get anything done. Omniscience is omnipotence. Knowledge is power. Through pure knowledge,

we can achieve happiness and that happiness will actually increase our decision-making capability. It'll give us more time to read. It'll make us more knowledgeable about how we and other people operate. It will make us more effective. It will increase our judgment and it should increase our earnings and the returns that we need to be financially free.

In some very deep level, all pleasure creates its own offsetting pain and fear of loss on the other side. I had a tweet recently where it said, in an age of abundance, pursuing pleasure for its own sake creates addiction. I was upgrading an old Miyamoto Musashi line, do not pursue pleasure for its own sake. Musashi, he was a Japanese swordsman. In his time, when you pursued pleasure, it might mean a very different thing. He didn't have unlimited pleasure.

unlimited processed food, he didn't have internet pornography, marijuana or alcohol available on demand. Now that we're in an age of abundance, if we pursue pleasurable things directly for their own sake, we land into addiction very easily, which is hard to get out of. I think the modern struggle is really about lone individuals disconnected from their tribe, disconnected from their religions, disconnected from their cultural networks, trying to stand up to all these things that have been weaponized, alcohol,

drugs, pornography, processed foods, news media, internet, social media, video games.

With these things, you can basically engage in fake play and fake work. Before, you would have to go socialize with your friends. Now you just get drunk with a bunch of strangers and it's easy and good. Before, you would have had to go find a mate and have sex and create children and raise a family. Now you just watch a lot of porn. Before, you might have needed to go climb trees and hunt and get fruit for a little bit of natural sweetness. Now you can just buy all the gelato that you want.

The modern struggle not only is trying to stand up to these things that are weaponized, that are giving you small doses of pleasure, but desensitizing you and exposing you to the misery of their loss and their absence.

If you drink alcohol or if you take some kind of drug regularly, try the following thought experiment. What events do you most look forward to? I will bet you there are the events where you get to do these things. So if you drink alcohol, you look forward to dinner time or you look forward to that party that's coming up or when you get to go out with your friends to the bar. To see how artificial it is, resolve that the next one you go to, you're not going to drink at all or you're not gonna do the drug. And now ask yourself, how much am I looking forward to that event? You'll find not at all.

This creates a conundrum. If I give up these sources of artificial pleasure that can lead to addiction and desensitize me or just bring misery down on me later by missing them, then I'm miserable because I don't get to socialize with anybody. I don't have fun. I don't go out. Breaking addictions is very hard, not just because you have to break the physical addiction, but because you then also have to change your lifestyle

to the lifestyle that you would be happy without that substance. For example, if I want to drink because I get to hang out with friends and be social, and I do that enough, and pretty soon I'm hanging out with a whole bunch of friends that I actually would not hang out with sober. I can't tolerate these people sober. I can't tolerate these topics sober. I can't tolerate these venues sober. I can only do it drunk. Well, if I stop drinking, then what happens?

I have to get rid of these friends. I have to get rid of these activities. I have to find brand new activities and brand new friends. This is very hard and very socially unacceptable. These fake relationships and these fake activities were just being held together by the alcohol. I realized a while back that it's actually a problem to really look forward to holidays and to weekends because it indicates two things. One is it takes the joy out of the everyday because now you're living in the future. You're suffering the rest of the time. And the second is it means you have

accepted a way of life in which most of your time is spent suffering. Let's talk about peace and then we'll talk about truth and how these all relate to happiness. A lot of times when I'm saying you want to be happy, what I'm actually saying is you want to find peace. We say peace of mind, but what we really want is peace from mind.

The moments of greatest pleasure, whether from doing a drug or having an orgasm or you're kite surfing and you find the edge or you're laughing with somebody or you're looking at some incredible sunset, what happens in all of these is the mind goes quiet. The mind calms down. That voice in your head where you're talking to yourself goes silent for a moment. And then you go into a sense of awe or beauty or bliss or joy or pleasure.

All of us seek this, all of us chase it. Deep down, what we're actually looking for is peace from our mind. I'm not making the mind out to be an enemy. The mind is a very useful tool, but somewhere along the way, it became an uncontrollable tool. It became a master rather than just a servant. Our mind is evolved

to be paranoid, fearful, and angry. We are the most paranoid and angry creatures to ever walk this earth. Human beings are apex predators at the top of the food chain. We killed, subjugated, or domesticated every other species on this planet. And we did it through fear and violence and of course cooperation, but we've killed everything else. We've tamed everything else. We were scared enough to go fight it, kill it, and own it.

Nature is brutal. Turn on any nature documentary and you'll see A eats B, B eats C, C eats D, D eats E, and nature is red in tooth and claw.

we are derived from violence and blood modern society is a lot safer yes it still makes sense to be careful and to be paranoid it still makes sense occasionally to get angry but not all the time not as much as we're hardwired to do modern society is safer and more peaceful so it's okay to dial it down the threat level is not as high as our genes think it is if you were walking through the woods a thousand years ago with a friend and you thought you heard a tiger wrestling in the bushes

Let's say 9 out of 10 times it's a rabbit, 1 out of 10 times it's a tiger. Well, the person who's an optimist catches a rabbit 9 out of 10 times, it gets eaten the 10th. The person who's a pessimist stays alive every time. Pessimism is rewarded in our evolved nature, but we live in much safer times. So we have to find ways past that. We have to find ways towards peace. Modern life, on the other hand, is more hectic in other ways. The sources of stress that we have are more chronic. Let's

Let's define stress for a moment. Physically, stress is when something wants to be in two places at one time. If I take an iron beam and apply pressure to both ends in different directions, I'm creating stress in the beam because one part wants to be north, the other part wants to be south. I create stress on the beam. In a person, stress is when we can't decide what's important, so then you want two things at once that are mutually incompatible. I want to relax right now, but I need to get some work done. I'm under stress. I need to go to that party, but I also need to go to work.

But when you truly give up on something, it's actually no longer stressful.

When you accept that something is completely out of your control, there's no point in being stressed about it. So it does imply that you have some level of control over it. The mind is constantly creating stress for you through situations where it's being more paranoid or more angry than is actually warranted for your environment. We want to find peace from mind. We want to have tools that allow us to not turn off the mind, because you can't suppress the mind. If I say to you, don't think of a white elephant, you just thought of a white elephant. So you can't force the mind into anything. But

but where the mind on its own calms down and naturally goes away. And how do you do that? How do you end up with a more peaceful mind? Because a more peaceful mind automatically creates a happier person. One phrase I like is that peace is happiness at rest, happiness is peace in motion. A peaceful person doing an activity will end up happy doing that activity. A happy person just sitting there will be peaceful.

So the goal actually is not happiness, even though we'll use that term a lot. The goal is actually peace. So the question is, how do you get to peace? The first problem with getting to peace is that no activity will get you to peace because peace is fundamentally inactivity. Peace is the sense that everything is fine. And if everything is fine, you're not making physical activity to change it, so you're physically at peace. And you're not making mental activity to try and change it either because that'll create mental stress because you'll want to

be somewhere other than you actually are. So peace itself is not a thing that can be directly achieved. You cannot work towards peace. What you can work towards is understanding. I think this is an old religious saying, but it says the name of God is truth.

And what that's basically saying is that when you understand certain things, when you learn certain things, when you're convinced of certain things, and when they become a deep part of you, then you naturally become a more peaceful person. One of the tweets that I put out a while back was, the closer you get to the truth, the more silent you are inside. We intuitively know this. When someone is blabbing too much, that person who talks too much at the party, the

the court jester, you know there's not a peace inside. You know Robin Williams was not peaceful inside. Whereas with a wise person, if we expect to meet a Lao Tzu, a Socrates, we expect them to be quiet. That is an indication that they are wise. And not quiet because they're trying to look wise, but quiet because they're internally quiet. We understand that peace and wisdom sort of go together.

Kapil Gupta, who's written far more on this topic than I have, said, wisdom begets stoicism, stoicism does not beget wisdom. And I thought that was very insightful. And his basic point is that as you become wise, you naturally become stoic. It's not by practicing being stoic that you become wise. That's cart and horse getting reversed. As an aside, I had a tweet the other day that got incredibly misinterpreted. So many people fail that IQ test.

They basically said, the smarter you get, the slower you read. All these people got triggered about it, of course, this whole speed reading crowd. A lot of people said, well, Bill Gates reads 150 books per year. And then a bunch of people said, oh, well, I read really slowly, so I must be smart. Actually, no, I said, if A, then B. That does not mean if B, then A.

Truth is very fought over. When we say truth, the biggest problem we're going to run into is that what society wants for you is not what's always good for you. Society is the largest group and groups search for consensus. Individuals search for truth. It is not acceptable for

for society to tell you the truth on many things. There are many things society throws out all day long that if you're a smart and critical thinking person that you disbelieve, but you're forced to go along with it, even though deep down, you know it's not true.

money isn't going to make you happy. That's a society truth. That's not an individual truth. Look at all the individuals trying to make money. Deep down, they know that, yes, money will get rid of a lot of sources of unhappiness and at least put it to the point where happiness is then under my control. It's my choice as opposed to being inflicted upon me externally.

That is just one of a billion lies society tells you. Another lie society tells you is that you send your kids to school for education. No, they get an hour a day of education. They get indoctrination. They get taught at the speed of the slowest student. They get taught mostly subjects that are irrelevant or obsolete.

Education is a combination of a small bit of education, a large dose of socialization, a large dose of compliance training, a massive dose of babysitting, which is helpful for parents who can't take care of their kids at home. Also, it keeps young troublemakers off the streets.

especially at the teenage level, who might be going out and committing crime and causing problems or getting in trouble. So school does a lot of things, but education is just a very tiny piece of it, as all the homeschooling stats clearly show, and even the unschooling stats are starting to show. Society does not just tell you things that are false, it programs you to beat yourself up when you cross one of these boundaries, when you transgress against society's truths. And a classic example of that is guilt. Guilt is society's voice speaking in your head.

Guilt is society programming you so effectively that you are your own warden. So truth seeking is a very hard business because you essentially have to, with deep conviction, understand things that you are told are wrong all day long. When we talk about peace and how to get there, what we're really talking about is the search for truth.

try to see the advantage of getting to something by truth rather than by practice. Let's say I'm trying to quit smoking. There are techniques I can try, but they're always painful and difficult. Very often there'll come a moment when I see something a certain way, like I see myself a certain way, or I get diagnosed with lung cancer and I understand that I'm going to die, or I see a friend get in trouble with similar bad habits.

when i see something strong enough when i understand it then the habit can often disappear by itself the bad habit can dissolve that's an extreme example much more simply might be i see some facet of myself that i don't like i see some facet of somebody else that i then can't unsee and i can no longer be friends with them understanding and seeing changes organically in

in a way that pure practice and technique cannot. When you're practicing how to do something, there's always a gap between you and the thing. There's always a repetition that you have to keep doing. There's always a struggle. There's always conflict. If we want peace, then one of the things we have to give up on is self-conflict. We even have to give up on self-improvement because self-improvement is just a dressed up form of self-conflict. We have to instead

use our natural curiosity for everything to understand things better and then through understanding we will naturally improve ourselves. Once we truly understand the effects of unhealthy food in our body, when we can see the extra weight we're carrying, when we can track the glucose spike and crash and see how we physically feel worse for having eaten too much sugar, when we see how caffeine hops us up and then crashes us down at the end of the night, then we automatically change for the better.

So the path towards peace is truth.

I don't have heroes. Heroes is a big word. There are people that I look up to and I've learned a lot from. Matt Ridley has got to be near the top of that list. Growing up, I was a voracious reader, especially reading science. Matt had a bigger influence on pulling me into science and a love of science than almost any other author. His first book that I read was called Genome. I must have six or seven dog-eared copies of Genome lying around in various boxes.

It helped me define what life is, how it works, why it's important, and placed evolution as a binding principle in the center of my worldview. That is a common theme that runs across Matt's books. After that, I read his book, The Red Queen, which laid out the age-old competition between bacteria, viruses, and humans, a topic that's extremely relevant today.

I also read his book, The Rational Optimist, which helped me realize that it was rational to be optimistic because of the technological advancement, the scientific advancement that we've had as a human species since we first came across fire.

the stone axe and basic tools. His book, The Origins of Virtue, helped me take a game theoretical framework towards virtues and ethics. His book, The Evolution of Everything, continued that theme towards everything evolving. I'm sad to say I've missed one or two of your books in there, Matt, The Agile Gene. I have to go back and read that one. And most recently, Matt wrote a great book called How Innovation Works, which will be out by the time this podcast is out there.

I had the pleasure of reading an advanced copy over the last week. Welcome, Matt. Honored to have you here. Do you want to give us, in your own words, a little bit of your background and how you got into writing about science? Naval, it's great to meet you and really interesting to hear that story of how you've read so many of my books and got the point of them.

I'm someone who's enjoyed writing all my life. I became a professional journalist after a brief career as a scientist. I only got as far as doing a PhD in biology and then decided that I wanted to be a writer instead. So I became a journalist on The Economist magazine. I was science editor there for a number of years and then a political reporter and correspondent there as well. I then became a freelance writer. That was when I wrote The Red Queen after leaving The Economist.

which was a book close to the topic I'd been studying as a biologist, that is to say, the evolution of sex. From there on, I've been incredibly lucky because people have given me contracts to write books about things that interest me. At the moment, it's about every five years that I do a book, but I don't do a book until I'm interested enough in a topic. It's a very difficult decision, plunging into writing a book on one topic and thereby not doing all the other topics you want to write books about.

I read this book in preparation for this conversation. So it suffered from becoming a chore because normally one reads purely for enjoyment at their leisure. And this time it became more about hitting a deadline. That said, this has been your most impactful book for me since Genome. It was very revealing.

There are two things about this book that put it in a different class than your previous books for me. One is that it corrected a longstanding misconception I have about how Silicon Valley works. I am steeped in Silicon Valley. I've been here since 1996. I'm an investor in hundreds of companies. I've started close to a dozen companies. I thought I know this game as well as anybody, and your book corrected a serious error that

that I had in my mind of the framework of how Silicon Valley works. And we can get into that. The second thing about this book is that it was actionable. The first half was this collection of incredible stories about inventors and innovators that would be fun historical reading in its own right. But then the second half was explaining how innovation works and what helps it work, what stops it from working, what creates the conditions for it to work and not work.

So I recommend this book for two classes of people. One is innovators and would-be innovators themselves. If you're an entrepreneur in Silicon Valley, Shanghai, or Bangalore, and you're thinking about creating products, whether it's social media, launching rockets, building airplanes, or genetic engineering, you need to read this book because it will give you a better view of the history of innovation as well as the future of innovation than any other book that I know of.

That context will be incredibly important when you're trying to figure out things like, do I file patents? How important is the role of science? How important is the role of government? How long will it take for my innovation to be adopted? How much can I expect to sink into legal battles versus explaining things to people versus building the product?

It's a must read for that category of people. The other category that it's very relevant for is government officials, because to the extent that many of them pay lip service to the idea of building the next Silicon Valley or attracting entrepreneurship, they don't know how. People ask me this all the time and I give them basic vague things like, yeah, you need to have some freedom. You need to have nice weather. You need to have a university system. But this book has an actionable playbook near the end of how to foster that good environment.

I'm very encouraged that you think it's practical and actionable because that's one thing I wanted to do in this book. Most of my books are on the whole thinking about the world rather than changing the world. But in this case, I wanted to try and zero in on the practicalities of what innovation does involve.

There's one line that I pulled out from near the end of the book, which is this idea. You said that innovation is the child of freedom and the parent of prosperity. And I love that line. That's a great tweet right there. Child of freedom as to how do you create innovation? You have a very expansive definition of freedom in there. And the parent of prosperity, why it's important. We can get into both of those, but I thought that was a good summary. I don't know if you meant that to be the summary you wanted, but that is the one that stuck out to me.

Yes, indeed, your own ideas are often triggered by other people's ideas. You need someone else to tell you what you're saying, almost. This freedom theme, which ended up on the cover of the book, was pointed out to me by the first reader of the book. It was a very intelligent friend of mine called John Constable, who thinks about things very deeply. He came back and he said, "The basic theme is freedom. Have you realized that?" And I said, "I don't think I have realized that, no."

I then rewrote some sections and probably that's where that soundbite came from was one of the last rewrites. I would say another theme that is very obvious and

and very profound is that there's conversation that goes on over and over about almost everything in history, which is, is history the product of a few great men and women, a few great accomplishments, a few great moments, a few great battles, a few great inventions that happen to come along? Or is it an inevitable, inexorable, and evolved process? You conclusively lay out lots of evidence that innovation is an evolutionary process rather than

an invention process. And actually, you call it innovation rather than invention. That seems like a deliberate choice. Tell me about that choice. I try and draw a distinction between invention and innovation. It's not a distinction that is cast in iron, but I think this is the best way to think about it. Invention is the coming out with a prototype of a new device or a new social practice.

Innovation is the business of turning a new device into something practical, affordable, and reliable that people want to use and acquire. It's the process of driving down the price. It's the process of driving up the reliability and the efficiency of the device. And it's the process of persuading other people to adopt it, too. Thomas Edison captures this point very well. I don't think he used the word innovation much. He used the word invention. But he is mainly an innovator.

because he's not necessarily coming up with original ideas. He's taking other people's ideas and turning them into practical propositions. It was he who said that this is a process of 1% inspiration and 99% perspiration.

What I'm trying to do in this book is rescue the perspirators from obscurity and slightly relegate the inspirators who always think they deserve the most credit and who sometimes complain about not getting enough reward because it's their original idea.

I like to tell the story which Charles Townes used to tell, the inventor of the laser, of a rabbit and a beaver looking at the Hoover Dam. And the beaver is saying to the rabbit, no, I didn't build it, but it's based on an idea of mine. That is how inventors quite often think about innovation. Come on, I had the idea. It's a huge amount of work and talent to turn an idea into something practical. This

This is something that you learn in Silicon Valley very early on, that ideas are a dime a dozen. Every idea has been floating around. Even a lot of the old ideas that failed weren't necessarily bad ideas, they were just the wrong time. In 1999, for example, we had the dot-com bubble.

We had things like Webvan and Cosmo which crashed, but now we have Instacart and Postmates and DoorDash, which actually work. We had Pets.com that crashed. Now we've had the big dog food company bought by Amazon for over half a billion dollars. So these things do work. They just need that right structure of previous innovations to build on top of. And sometimes you're jumping too far ahead. The previous innovation stack, the shoulders that you want to stand on, the giants don't yet exist. So you're trying to bootstrap too much.

One of the things I'm doing in this book is slightly downplaying the importance of disruption. Most of the time, innovation is an incremental process. It looks disruptive when you're looking backwards, but at the time, it's surprisingly gradual. The first version of a new technology looks surprisingly like the last version of an old technology.

- This is the misconception about Silicon Valley that you fixed for me, which is I grew up reading science and scientists, and I originally wanted to be a scientist, but I was never very good. I knew I wasn't going to be a world-class physicist, and I wanted to make money, so I pivoted into technology business, which I thought was commercializing science and bringing it to the masses. I came to Silicon Valley thinking that invention

was a thing that I read about where a genius inventor comes up with a new invention and it changes the world. Oliver and Wilbur Wright created the airplane. Samuel Morse created the telegraph. Alexander Graham Bell created the telephone. Or Newton and Lee discovered calculus. Without them, we would have been stuck in the dark ages for God knows how long. That was my view of how the world worked.

When I came into Silicon Valley, I looked around and I didn't see that happening. I didn't see a single genius inventor creating a single thing that suddenly changed the world. I saw instead lots of people doing lots of tinkering. Somewhere in the back of my head, I adopted this mentality that even though I am in Silicon Valley and even though it is the engine of innovation for the world today or seems like it,

We're not as innovative as we used to be. We've lost the great people. We've lost the audacious goals, and we don't invent new things. The lone inventor has gone away. Your book showed me that that was a myth. That lone inventor never existed. Innovation is going on all around us right now, especially in the unregulated domains. There's an old quip in Silicon Valley that the reason we do well is because we operate in the last unregulated domains. But

It didn't seem to me like there was innovation going on, but now that I realize it's an evolutionary process with lots of people, looking at it from the inside is a different view. Perhaps I am in an innovative industry, but I just can't see it because I see the evolutionary process internally as opposed to the breakthrough process.

I'm delighted to hear that that is what you're experiencing because I very much set out to make that point. It's not a case that there was a golden age when individuals invented things and nowadays it's teams that do it. It was always teams in the sense of collaborators. They weren't necessarily working for the same institution. And our habit of giving the Nobel Prize or the patent to

to one individual has tended to pull out the great man of history and put him on a pedestal where he doesn't necessarily deserve to be. He's very important, but he's putting the last stone in the arch and other people built the rest of the arch. In the book, I describe one of my heroes, and that's Norman Borlaug, who

developed these short-strawed, high-yielding varieties of wheat in Mexico, then persuaded India and Pakistan to take them up, and effectively kicked off the Green Revolution, which drove famine largely extinct on the Indian subcontinent and led to India becoming an exporter of food rather than a

chronically starving country. But where did he get the idea of these dwarf varieties of wheat, which could handle higher applications of fertilizer and therefore produce greater yields? He got it in a bar in Buenos Aires at a conference from Burton Bales. Burton Bales is a fairly obscure agronomist who happened to be at this conference, but he had seen Orville Vogel growing this stuff in Oregon and crossing different varieties. Orville

Orville Vogel had got these varieties from a guy called Cecil Salmon, who'd been on Douglas MacArthur's staff in Tokyo at the end of the war and had visited agricultural stations in Japan and found these dwarf varieties growing, and they had been developed online.

crossed, hybridized, and bred by Gonjira Inazuka. And he had got them from somewhere in the Korean peninsula. And at this point, the trail goes cold. If you then jump back to Norman Borlaug and say, yes, but he didn't persuade India single-handedly. He talked to M.S. Swaminathan at

an Indian geneticist who picked the ball up and did a huge amount of work to persuade his countrymen to take up this technology. So there's a nice example of what looks like a linear chain of people, but in a sense, it's also a team collaborative enterprise and a much more gradual story than it would be in the normal way of telling it.

This also helps explain why it tends to be geographically concentrated. If it was a breakthrough by lone individuals, you'd expect innovation to be highly geographically distributed.

But it tends to be very geographically concentrated where you're surrounded by other inventors, tinkerers, and thinkers because you're always building on little bits and pieces. We see that in Silicon Valley where it's geographically dense and concentrated almost to a level that seems unfair to the rest of the world. One person's idea at a cocktail party goes to the next person at a coffee shop, goes into a prototype which goes to a VC who talks about it within their portfolio company, who then mentions it to another entrepreneur and so on.

I'm amazed by how geographically concentrated innovation is at any one point in history. In the last 50 years, it's been California. But there was a period when it was Victorian Britain. There was a period when it was the Low Countries. There was a period when it was Renaissance Italy. At some point, it was Ancient Greece. It was Fujian China for a while. It was probably the Yangtze Valley at a different point.

Why is the bushfire only burning in one place at one time? The key to this is understanding the ecosystem in which these innovative people operate because they're not only getting ideas from each other and daring each other on to be innovators and experiencing some unique aspects of freedom to allow them to do it.

but they're also directly borrowing technologies. It became clear to me when I was writing about the Haber process, which fixes nitrogen from the air, a very important process for good and evil in terms of making explosives, but also in terms of making fertilizer, that it couldn't have happened without all the other industries around it in Germany that were producing the high-quality metals and chemicals that were necessary for this process. The same will be true in Silicon Valley. One

idea won't work without the neighboring company producing devices and programs that are necessary in developing your idea.

Now it's gotten to another level where when you first create an innovation, when you launch a new product, you need customers. The early adopter customers tend to be other innovative companies. In Silicon Valley, we have a critical mass of thousands of innovative companies that will adopt products from each other. So you not only find your innovator base and your talent base in one place, but you also find your customer base in one place.

That network effect ends up being very tight. And of course, the local politicians exploit it with high taxes and low services, constantly attacking and blaming technology for all evils. But it works for them because this has turned into the golden goose. It's the oil reservoir that will always be gushing so they can get away with a lot.

until it no longer is gushing. One of the patterns of innovators is that they move. They move from uncongenial regimes to congenial ones. The secret of Europe when it was at its most innovative was that it was fragmented politically. It's very hard to unify Europe because of all the mountain ranges and peninsulas. So you end up with lots of different countries.

A lot of the innovative people like Gutenberg, the pioneer of printing, had to move from his hometown to another town to find a regime that would allow him. The same is true, I reckon, of China in the Song Dynasty, which is the period when it was most innovative. It was a surprisingly decentralized empire at the time, and it was possible for people to move around and escape from local rule that wasn't promising.

America is the exception that seems to prove this rule because although it looks like an empire from the outside, a great big unified country, once you get inside it, you find that California has quite different regime from other parts. Even this week, Elon Musk was talking about leaving California because he's so upset with the way they're treating the end of lockdown and moving to Texas.

Like a 15th century European innovator threatening to leave one part of Germany for another part of Germany.

For a long time, I had thought despite the poor political governance, California was impregnable. It had too much of a network effect. The lock was too strong. But now I can see the cracks. This pandemic, of course, is accelerating things, forcing people to work remotely. Twitter recently announced they're going to go to fully remote. Many of the companies that I've been involved with are wondering, should we even go back to having an office? I wouldn't be surprised if the next Silicon Valley moves to the cloud. That

That would be an incredibly good thing for all of humanity because then we could distribute it. Obviously, some things can't move to the cloud. You can't have a manufacturing plant in the cloud. But the initial coordination, invention, social networking, conversation, design work, a lot of that can happen in the cloud.

There is recent precedence for this. I don't know how much you've been tracking the crypto revolution, but crypto obviously went through its big hype cycle a few years ago. But at this point, there's a lot of innovation going on in crypto. We're now sort of in that silent under the radar phase where great entrepreneurs are actually building great products that will be more widely deployed in the next five to 10 years. What's interesting about crypto is it is truly geographically distributed.

Some of the biggest innovators in crypto are scattered all around the world. More than half of my crypto investments are outside of the Bay Area, which is not true of any other class of investment that I do. Many of the top crypto innovators are anonymous, like Satoshi Nakamoto, most famously. Crypto companies raise money in public, in plain sight by issuing tokens so they're not locked into the Sand Hill Road venture capital model.

The crypto system is starting with finance, but is laying the foundation for future companies to be built completely distributed with potentially anonymous contributors, anonymous funding, anonymous cash, anonymous developers. There's even a holy grail in crypto called a distributed autonomous organization, which are these companies that are

smart contracts living in the blockchain, completely extra sovereign outside of the state, able to engage in contract laws, contract enforcement, payments, dividends, investment, equity, debt, payouts, reputations, and reconstructing the corporation, but modernizing it from the Magna Carta days, you know, back in the 1600s, to a modern code-based living on the blockchain, mathematical, reputation-based anonymous system.

I wouldn't be surprised if 10 years from now that the rest of the tech industry is just as distributed as the crypto industries today. California and the Bay Area will still do fine. There will still be a hub. I don't believe that innovators are going to get priced out of the Bay Area just because innovators are the highest earners in history. They're the most leveraged people. They're leveraged through code, capital, media, labor, intelligence. They can create more than everybody else on a per capita basis. So they can always afford to live wherever they want to live. They won't be forced up by prices.

but they may be forced out by regulations. They may be forced out by not being able to go to work because the government forbids them. They may be forced out because the place is no longer attractive to live. If they are forced out, it would be amazing for everybody

if they've moved the cloud rather than to another physical location from where we may be displaced. In the examples that you gave, they're punctuated. In between each one of them, there's 50, 100, 200 years that passes where there is no place to innovate. Therefore, the rate of innovation collapses.

So if innovation is the flower of a well-tended garden, if you have to uproot those flowers and shift them, there is a huge deadweight loss to all of society when for decades or perhaps even centuries, we have to wait for another garden to emerge and for people to coalesce there for this right magic soup of regulation combined with innovators, combined with good weather, combined with rich society. All of that has to assemble.

Thank you very much for that, because that has filled in a gap in my understanding in one go. I've always been interested in the fact that these innovation bushfires eventually are extinguished, usually by some combination of chiefs, priests and thieves, if you like.

I like that. Chiefs, priests and thieves. Or as a wag might say, chiefs, priests and thieves. What's the difference? You're right, exactly. So in Ming China, it's a very restrictive, authoritarian and interfering political regime that kills the ghost that's laying the golden eggs.

In Abbasid Arabia, not hugely different in the time period, we're talking about the 1100s, a great flowering of knowledge and innovation is crushed by the religious fundamentalist revival when Islam goes from being a very open-minded to a very closed-minded structure. Something similar is happening in Paris around the same time, Bernard of Clairvaux burning books. There's a period when it's possible the world could have lost this

It could have given up on innovation everywhere.

The flame had been extinguished. Fortunately, the Italian city-states kept the flame burning. And I write about Fibonacci, the Italian merchant who brings Indian numerals from North Africa back to Italy, and they spread around the world. It's lucky that somewhere keeps the show on the road at each stage in history. But it's not accidental. These are people escaping the other regime and starting it again.

But I did worry that in the old days, there was always somewhere else to go. In this global world, you could imagine a sufficiently benighted cult taking over the entire world and saying, "No, we don't want learning, innovation, and technology. We want to stop everything." It's very unlikely. But what if America really does lose its mojo and we have to rely on China for the world's innovation engine?

China is not a free place. It's a politically tutorial regime, albeit there's a certain amount of freedom for entrepreneurs below the level of politics. If that's our only hope, it's not a great prospect. Maybe India can pick up the baton. Europe's not great at picking up the baton at the moment. It's not a very innovative continent. It's trying to...

centralize all its decision-making through the European Union. But India has done this before. It was probably the first place to start all this going and is a place of free thought and a lot of spontaneous order, a lot of spontaneous disorder too. Maybe that's the place. But you've given me another prospect, which is that actually this can escape the chiefs, priests, and thieves into the cloud where it can

be out of their reach for at least long enough until they work out how to reach it. I think the digital innovation can escape into the cloud. Obviously, physical innovation requires physical infrastructure, and that would depend on the enlightened city-state, a Switzerland-type place or a Singapore or a New Zealand. But then you have the small market problem. You don't have many early adopters of the technology, so although you can build a prototype, you can't deploy it in volume.

I do think physical innovation is in trouble. And you talk about this in the book. The speed of innovation has been very low in places like, for example, speed. We can't travel any faster than we used to. And why is that? It's mostly regulatory reasons. And it's because one underlying theme running this whole book is innovation is a process of evolution.

Like any process of evolution, it requires trial and error. Innovation happens by taking the body of innovators that surround you one step further, engaging in lots of trial, and having error and feedback from customers and the economy. All of those pieces are necessary. You need to have a body of innovators around you, which means that there has to be a place where they can all gather, whether it's online or offline. There has to be the ability to take lots of tries. You need venture capital.

You need startups, you need a friendly environment to start a business. And then error. We don't like people making error anymore. So we try to cover the downside risk, but by doing that, we also cut off the upside.

And then finally, you need that feedback loop from the environment. And part of that involves a large customer base. So I'm optimistic that we can do this in the digital domain. And I can see that happening in crypto, for example, but I'm a little pessimistic in the physical domain, which is unfortunate because a lot of the big problems of humanity that we have to solve, like the energy problem, getting nuclear fusion working at large scale, or the transportation problem, moving people around

quickly with hypersonic jets or even some of the biotech problems. These require physical infrastructure,

large markets, and relatively deregulated environments. So I think you're right. We're down to India and China, and neither of those is ideal. China is not going to be a place where the next Jew fleeing the Nazis is going to go to because China is not an immigration destination. It doesn't attract the best and brightest. California doesn't create entrepreneurs. California attracts entrepreneurs. China is not going to be an attractor. Because of that, it will always be very limited. India...

even though it has a lot of the other elements, doesn't have the basic infrastructure that make it an attractive place to go to. And because of its poverty level, does have a very anti-innovation culture. Innovators in India often survive by keeping their heads down. You can see this in how India banned crypto

Hopefully that'll get overturned, but they can do things like that. Early on, something got listed on eBay India that wasn't supposed to be listed. So they just rounded up the local eBay managers and threw them in jail. The history of India fostering innovation recently has not been great. That said, there is a flowering going on right now in places like Bangalore and Mumbai and Delhi. Hopefully as India gets richer and is run by a more competent government, we're going to see them step out of the way and allow India to become an innovation hub.

The market there is large enough. They're poor enough that they could welcome it. They're English speaking. They're very well educated. There's a deep respect for STEM. So India could be one of these hubs, but they would also have to then have immigration and places that are clean and beautiful and nice where people want to live because innovators are going to go live where they want to live because they're so productive.

You also said something else very interesting. What about people who may create a global movement to stop innovation? That is very scary and very possible. If you look at environmentalism, environmentalism runs on two tracks today. There's the local environmentalism, which everybody can get behind, clean up my rivers, save the species. I want trees, forests, and parks. And everybody likes that. Then it gets mixed into this global command and control environmentalism, which is

which says you must stop progress. You must stop innovation. You must stop everything because you're destroying the environment. One of the things that you talk about in your book is how the world is reforesting, how innovation allows us to do more with less and how we've become much more efficient as a society. We're not.

We're not going to be able to stop India and China from growing. We're not going to stop them from innovating. We're not going to stop them from modernizing. We can do what Elon Musk does. He says, let me give them solar powered electric cars and rockets as quickly as possible so they can jump through the wasteful phase of innovation where there's a lot of environmental destruction and get to the part where we can all afford clean rivers and beautiful forests, nice parks and other species in our environment. By the way, I credit this to Gino. The book paints a picture of

of utopia, not in the sense of a top-down human-enforced platonic sense of this is how the world should be run, but in how the natural world is designed and operates and our role in it as an intelligent cooperative ape to fit into that environment. Genome paints a picture of paradise being a garden.

Every human knows that and it's even in our deeply embedded myths and Adam and Eve paradise is a garden. They fall from grace, they fall out of the garden. Where do you want to be living? In your little apartment in New York City or a little flat in London? Or do you want to be sitting in a beautiful garden out in the sunshine? Humans inherently want a clean and beautiful environment, but that movement gets hacked by top-down command and control mechanisms by chiefs, priests, and thieves who can then

squander our existing resources as well as squash innovation, which prevents us from moving forward.