The Contrarian Entrepreneur

How Antagonistic Approaches Yield Results

Iman Olya

23rd October 2021

Part 1: An Explosive Theory

Part 2: Contrarian By (Computer) Science

Part 3: Contrarian By (Human) Nature

Part 4: Break From The Crowd

Part 1: An Explosive Theory

Take time to be sure. But be sure not to take too much time.

This phrase was ringing in his head. He had spent 5 years traversing the seas, from Britain to the Americas and Cape Town to Australia. All in all, 20 years he had poured into refining his ideas. But he still was not sure.

He had collated mountains of evidence, written thousands of pages, and the logic made sense. Fossils, skeletons, drawings, notes all pointing to the same conclusion.

This conclusion, however, was world shattering.

It would be competition, in the form of a letter, that would finally push him to take the plunge. In 1858, Alfred Russel Wallace, an admirer and fellow naturalist wrote from Indonesia that he had reached the same conclusion in his work: our understanding of life on earth was wrong – there was no creator.

He felt panicked, unsure of what to do. But simultaneously he was now confident of his position and knew if he did not move, his compatriot would. He finally felt compelled to share. Alongside Wallace, he released a joint letter explaining the theory of Natural Selection.

A year later, Charles Robert Darwin released arguably the greatest scientific paper in history: ‘The Origin of Species’. He was lauded, and hated, in the same breath. A genius, a man of logic. But condemned to hell.

In the backdrop of Victorian Britain, explaining that man was not created in the image of God, and subsequently proving it with evidence… well, that was a death sentence at worst, and contrarian at best.

But Darwin still had diminutive doubt – a niggling thought in the back of his mind:

“ To the question why do we not find rich fossiliferous deposits belonging to these assumed earliest periods before the Cambrian system, I can give no satisfactory answer. The case at present must remain inexplicable.”
- Charles Darwin: The Origin of Species (p. 308)

In other words, Darwin could not explain the Cambrian Explosion. If Darwin’s theory of Natural Selection was right, life evolved gradually over millions of years. However, the Cambrian period, which began around 542 million years ago, seemed to herald a sudden increase in species diversity. Nor Darwin, nor his contemporaries could find evidence for fossils prior to the Cambrian, and the mystery has continued to perplex palaeontologists.

But ever the optimist, Darwin remained confident that fossils from the Precambrian would eventually be found, believing it to be a time when “the world swarmed with living creatures”. But what happens if this fossil record was not amassed? Could Darwin be wrong?

Part 2: Contrarian By (Computer) Science

Creationists, across religious, agnostic and atheist groups see Darwin’s doubt as telling. Any scientific method must by its very nature be clearly observable, testable, repeatable and capable of making predictions. Observation and testability may still need to be answered by Darwin’s followers: Neo-Darwinists.

Following decades of proposed explanatory theses, from Charles Doolittle Walcott to Eric Davidson, the Cambrian Explosion was not fully explained. Then came the bigger challenge. And it came from Computer Scientists.

1966. Philadelphia. A group of esteemed mathematicians grouped together to test the probability of Darwin’s last hope emerging. Specifically, they were testing the likelihood for the Darwinian mechanism to generate the information that DNA required to create new forms of life. Indeed, they were testing the likelihood of the Cambrian period creating enough life to bridge the pre and post-Cambrian periods together. It was simple enough – with or without fossils, if the maths could show that random mutation could make the simplest forms of life, then the more complex jumps would stand a better chance of being explained.

The findings were dangerous, or rather, contrarian:

“ The mutational mechanism as presently imagined could fall short by hundreds of orders of magnitude of producing, in a mere four billion years, even a single required gene. ”
- Frank Salisbury: Biologist, Utah State University, 1969

Not only was the Cambrian still inexplicable, the likelihood of life evolving as per Darwin’s theory of Natural Selection, was now being questioned.

More science emerged, with DNA mutagenesis experiments giving slim-to-none odds of random mutation acting on DNA to make the animals in the Cambrian Explosion. Robert Sauer estimated 10^63 and Hubert Yockey estimated 10^90 chance. Douglas Axe more recently estimated a 10^77 chance of animals forming via Natural Selection’s impact on DNA.

In layman’s terms, one chance in one hundred thousand trillion trillion trillion trillion trillion trillion (not a typo) for Natural Selection to create just one single protein. What’s crazier, is the millions of proteins required to make up one cell.

To put this into perspective, the most generous estimates of the age of the universe do not give enough time for a single self-producing organism to emerge via Neo-Darwinian theories.

Not surprisingly, competing factions within Darwinian thought have emerged seeking to explain this anomaly: Natural Genetic Engineering, Evo-Devo, Punctuated Equilibrium, Neutral Evolution, Neo-Lamarckian Epigenetic Inheritance, Self-Organization etc.

And newer theories are still emerging. According to Timothy Lyons, a geobiologist at the University of California, Riverside, the solution may be that oxygen levels rose to perhaps 2% or 3% of modern levels around 800 million years ago. These concentrations could have sustained small, simple animals, just as they do today in the ocean's oxygen-poor zones. But animals with large bodies could not have evolved until oxygen levels climbed higher in the Ediacaran (the period before the Cambrian).

But again, this does not definitively – by scientific method – prove Darwinian theories.

However, and perhaps more importantly, this anomaly is not common knowledge. For the vast majority of students, Natural Selection is taught as a foregone conclusion. There may yet be discovery of a fossil record that proves the Cambrian Explosion within a Darwinian light. But up to that point we should continue to test and challenge.

Part 3: Contrarian By (Human) Nature

Being contrarian is dangerous. For Darwin, it was extreme to challenge the Church. But his theories have helped accelerate biological understanding and scientific achievements.

Contrarian viewpoints on his theory of evolution should also not be taken lightly, but tested to the nth degree. However, and more importantly, they should not be shunned.

Peter Thiel is a famous contrarian by nature. His contrarian approach is what he outlines in his thoughts around economic growth and our lack of scientific development over the last half-century. See my last essay to understand more about his and Tyler Cowen’s analysis on this topic.

But quite interestingly, it is his contrarian view that has gotten him into trouble. For example, it is this exact contrarian approach that led to him supporting and funding Donald Trump’s first Presidential campaign. It is also this method that enabled him to legally dodge millions in taxation.

On the other hand, it is also exactly this thought process that enabled him to get magnificently wealthy. His challenge of the established banking and payment systems led to him build PayPal. In addition, his opposing views of competition helped tremendously. In his book Zero to One, which every techbro and business major has probably read (and should read), he outlines how competition is for losers. Monopoly is the key to success, long term success. It explains why he invested in companies like LinkedIn and Facebook, and part of the reason he started Palantir.

However, Thiel and Darwin may be more linked than just contrarian belief systems.

Thiel famously followed René Girard studiously. In fact, he did study under him at Stanford. And even though he does not mention Girard in Zero to One, many of his business philosophies follow in Girard’s theory of mimetic desire.

Girard’s mimetic theory of desire is built on the notion that we imitate each other’s wants. Simply put, imitators seek what models or idols want in a triangular fashion. Hence our desires are imitative or mimetic.

Examples are prevalent through our ability to learn language as children, our views on fashion, beauty, art (NFTs), college rankings, career paths, real estate prices and even liking viral content on social media.

Where this can become dangerous, is what Girard refers to as mimetic rivalry – or copying the vengeful desires of our rivals. Individual distinctions are lost and the two rivals become one in violence, which Girard calls “doubles”.

But of course, this is not sustainable – violence only begets violence. Hence Girard then builds in the concept of scapegoats: an innocent victim that takes the blame from both sides. To stop this reoccurring, prohibitions or rules, are enacted between the rivals to stop them falling into the same conflict again. Rituals help cement these prohibitions, enabling society to grow again.

We could argue that we have imitated, not challenged, Darwin’s theory in our education and scientific systems as we see it as essential, in spite of its drawbacks. We could equally argue Thiel is becoming a scapegoat, targeted by those on the left for hoarding wealth unfairly and those anti-Trumpers on the right for supporting Donaldo.

But regardless, Thiel leveraged the theory of desire brilliantly. He understood its power in social media particularly well. He was the first outside angel investment in Facebook, ploughing in $500k in August 2004. He was contrarian in that he was looking for something new, something different and something that would ultimately create monopoly. He was looking for a company that would not be hindered by competition. Simultaneously, he was betting that a new social tool bringing the world’s groups closer together, would amplify our mimetic desires and create a hotbed of mimetic rivalry. The applications of this would be endless and could even impact political elections.

With Facebook’s name change to Meta, we are seeing another iteration of Zuck’s approach to finding mimetic network effects. He knows that with almost 3bn monthly active users, the rate of growth for Facebook will begin to diminish. In order to mitigate this, he needs new products. But buying another Instagram will not solve this issue. In fact, buying TikTok would not even solve this issue. The beast is too big - it needs a radical shift to meaningfully turn to beauty. He needs to find something new enough and different enough that builds on the same network effects Facebook have already developed. But it needs to be integrative of other products in the market. Meta makes sense in that it aims to amalgamate multiple online experiences into a single channel. And it’s VR future-proofed. Zucks is betting that with critical mass adoption, particularly through the gaming channel to start, mimetic desires will flourish and network effects will take control. It also crucially aims to shift focus away from Facebook’s recent negative press coverage; with the Frances Haugen whistleblowing to antitrust lawsuits and teen mental health impacts, Meta can try to distance itself by building something new and appearing to move strategic direction away from its dirty legacy products and services. This is all done to make the product more attractive to the mimetic desires that enable doubling effects to take place. Zucks is betting big on this.

Part 4: Break From The Crowd

Pausing before entering the labyrinth of mimetic desire’s application to all walks of life, it is imperative for entrepreneurs to understand this concept in conjunction with contrarianism.

Being contrarian is not an always-on function. We do not have to follow the Thiel path of constantly taking the opposing route. It is definitely beneficial for steel-manning our beliefs, but often there is enough of a pie within competitive spheres to not have to find the next Google or Facebook. We can certainly innovate better within existing industries. Thiel’s ex-co-founder and friend, Elon, has built a phenomenal series of businesses that do just this: Tesla rebuilding the EV, SpaceX reimagining space exploration etc.

Neither is our mimetic nature a handcuffed reality of our existence. Evolutionarily speaking, we can adapt. The first step is to realise that we mimic. The second is to understand where we do this. The third is to find ourselves. This sounds tired and cliché but it is of absolute paramount importance, especially for founders.

Why do you truly want to go through the hardship of building a startup? Is it wealth? Is it fame? Is it legacy? Is it FOMO? In this day and age, everyone is getting funded… Who has inspired you to take this route? Understanding your formative existence and what moulded you into today’s you are key to unlocking this conundrum.

But of course, if this is the way forward for you as a founder, the key becomes building something that enables mimetic acceleration. In Silicon Valley this has been termed in many iterations, from product-market-fit to network effects. The concept is the same: build something there is a need for and that feeds our desire to want from the other. The stronger this connection to compounding desire, the more valuable the startup.

I have minimal reservation that Darwin’s doubt will be alleviated. I’d still take odds of one in one hundred thousand trillion trillion trillion trillion trillion trillion. If I did not have this optimism, I would not invest in startups. And if Darwin is wrong, it may lead to scientific conflict, or even a widespread return of the creator hypothesis. Neither of these are bad per se, but they do open the question of where in the mimetic cycle of desire we are headed towards, particularly given the existential nature of the issue.

Quite fittingly, in startups as in life, we are still bound by our evolutionary being. We should not run from this, but embrace it and learn how to utilise it. As Darwin put it:

“ We must, however, acknowledge, as it seems to me, that man with all his noble qualities... still bears in his bodily frame the indelible stamp of his lowly origin ”
- Charles Darwin: The Descent Of Man