Transcript ## **00:00** - Welcome & The Window of Creativity **Ela Richmond:** Welcome to the podcast, Mike. You've often talked about this window of creativity. Can you explain that a little bit more for families in our audience? **Michael Gibson:** Yeah, sure. Something people don't really think about is that creativity is perishable. Not only is it rare, but it also doesn't last in individuals and in societies. At the individual level, think of it like an athletic prime. We take it as given that even Michael Jordan has a life cycle to his career; despite his skills and talent, biology takes its toll and people have to retire. Well, sad to say, it looks like there's something similar when it comes to productivity and creativity. By that, I just mean taking an individual who, across their career, has a track record of producing works of originality and value. It could be novelists, painters, mathematicians, or scientists. When you look, it follows a similar pattern as the athletes. There's a rise from teens to 20s, and then sometime in our 40s, we seem to fade. Maybe it's not totally biology; it could be cultural matters or life stage issues. It could be that someone just has a lot to lose and stops taking risks. They have mortgage payments, a spouse, a dog, children. At any rate, people stop producing work as high quality as they did in their 20s and 30s. It's just sad, but it's something we have to recognize and work with. I think that's why I'm so interested in the things holding younger people back, because it seems like they've been delayed longer over time. To make a more controversial analogy, I feel like in the last 30 or 40 years with women entering the workplace and establishing careers, all of that has been fantastic. But at times, I think our society has told women they can delay things forever. It's like, "Hey, you focus on your career. Don't worry about a family." What we've seen is, at least now that I'm in my 40s, I meet a lot of women who thought they could do that, but it turns out it's really hard to have babies in their 40s, and they have to use extraordinary methods to try to do it. Look, having babies is creation. So is producing art and science. It's sad to say, but we just have a window where we seem to be better at it. I have a favorite novelist, Kazuo Ishiguro, who wrote *Never Let Me Go*, *Klara and the Sun*, and *Remains of the Day*. I was listening to an interview with him recently, and he made an interesting comment. The question was, "Now that you're older, what would you tell your younger self to do differently?" And he said, "I would say nothing, because that younger novelist was better than I am now. There are things that he was capable of that I'm no longer capable of doing." I was like, wow, that is a brutal statement, but there's a lot of truth in it. Look at musicians. When you look at the Beatles, they were tremendously creative. Paul McCartney was an incredibly prolific songwriter, but even someone as talented as him has a window. His work over the last 20 or 30 years is nowhere nearly as powerful as the work he did in those 10 years with the Beatles. ## **04:03** - Defining Creativity **Ela Richmond:** So how would you define creativity so we're all on the same page? **Michael Gibson:** I think it's creating original, valuable new things. "Original" means it's some departure from what has occurred in the past. It could be genres of fiction or a song that's different in some interesting way. The second piece, "valuable," is the hard one. There are lots of original things that are worthless, or worse than the status quo, or even take us backward. You can imagine all sorts of useless original things. But the valuable part, the two together, are what define creativity to me. ## **04:51** - The Biology of Creativity: Fluid vs. Crystallized Intelligence **Ela Richmond:** Why would there be a window of creativity? **Michael Gibson:** Well, part of it is biology. Look at math or chess. Psychologists who study intelligence and creativity talk about IQ. IQ is a measure that's supposed to predict your ability to solve problems, and there's a lot of validity to it. But as we age, they separate intelligence into two categories: fluid intelligence and crystallized intelligence. Fluid intelligence is your ability—it's almost like mental speed and agility. Take some new shape-shifting or shape-rotating problem; younger people just seem to have a peak in their twenties, and then it declines slowly after that. Whereas crystallized intelligence is just the raw storehouse of knowledge you have—vocabulary, facts of history, and so on. As we age, crystallized intelligence actually increases. But that fluid piece, there's a lot of evidence to show that it declines over time. Now, creativity is different from IQ. The ability to invent novel, valuable things is not the same as the ability to problem-solve under time constraints. There are lots of high-IQ people who are conformists, who are lazy, and who don't really produce new ideas. The psychologists who study creativity notice there's actually not a strong correlation between the ability to produce valuable original ideas and IQ beyond a score of 120. It's like a threshold effect where, sure, a little bit of a higher level of intelligence predicts some creativity, but only a little. Beyond that, not at all. ## **07:10** - The Genius Study that Excluded Nobel Winners **Michael Gibson:** This really came out in the history of the IQ test. Maybe you've heard of the Stanford-Binet test; it was an old version of the IQ test given in schools. The person behind that was very interested in the connection between intelligence and creativity. In the 1920s and 30s, he decided to conduct a longitudinal study to see the life outcomes of a group of geniuses, defined as children who scored above 130 on an IQ test at maybe age 12 or 15. He pulled together this group of people and followed them over 50 years. There were some borderline people who didn't meet the IQ cutoff that he kept out. Fast forward, he looks back at this group, and sure enough, IQ did predict the things that we now know it does: success within the professions, like doctors and lawyers. Some people became public intellectuals. But there was no one in that group who had masterworks of achievement. What's funny is that the two people he excluded from the group were William Shockley and Luis Alvarez. These two guys went on to win Nobel prizes—Shockley famously for inventing the transistor, and Alvarez for being the first to discover that the dinosaurs were killed by an asteroid. It's a great anecdote about how the IQ test did not predict someone's ability to create novel new things. And the irony is that William Shockley became obsessed with IQ. ## **09:12** - How Silicon Valley Was Born from Defection **Michael Gibson:** The reason Silicon Valley is where it is, is mainly due to William Shockley. He moves to Palo Alto, starts Shockley Semiconductor, and this is the birth of Silicon Valley as we know it. The people he hires end up defecting. They hate working for him so much because he's addicted to things like IQ tests. He was doing things like printing everyone's salary on the common room board. If there were product delays, he immediately thought people were lying. He was a very bad boss. These eight or so people decide they've had enough, and they quit. They start their own company called Fairchild Semiconductor, and they're known as the "Traitorous Eight." These people, Bob Noyce is one of them, go on to create Intel, and the rest is history. What I find so interesting is that Silicon Valley was born by this person excluded from an IQ test. He ends up creating the first defection startup because he's such a jerk about it. And then Silicon Valley has come to represent this idea in its fullest form, where you have a lot of smart people who are capable of inventing new things. This takes it to the level of cities, regions, and nations. Undoubtedly, over the last 50 years, when it comes to innovation, Silicon Valley is far beyond any other region. If you just look in terms of GDP wealth created, it outweighs like 40 of the American states and some countries. So what is it about countries that makes them more creative over time? That's an interesting question because it seems to be the case, as with individuals, so with countries: there's this life cycle with a beginning, a rise, a peak, and then some kind of decline and fall. We can think of great examples from history: ancient Athens, Florence in the Renaissance, Elizabethan London, maybe Paris in the 20s. These things peak and fade. Why couldn't we just have the golden age forever? What is it about institutions and laws and culture in a city that allows for flourishing and then ultimately death? I wish we could figure that puzzle out because a lot of our great achievements in science and the arts come from these golden ages. ## **12:17** - Intensive vs. Extensive Progress (Zero to One) **Ela Richmond:** I love Peter Thiel's perspective on progress, and I'm assuming this is the way that you're viewing progress as well. He says there are different types of progress, right? There's progress that is net new and moves the human race forward, and there's progress that is not net new and is just continuing on the same circle. You can be an amazing doctor, and that's really important and successful, but how do you see that difference between creativity as success versus being a doctor and being successful? **Michael Gibson:** There's an old example Peter used to use that related to discussions in economics about agriculture in the 19th century. It was about intensive versus extensive farming. Imagine a farmer trying to increase the yield of his crops. One way would be to just plant more crops—that would be extensive. It's like, "I only have this amount of farmland; I can grow more if I just extend the size of my farm." Versus, with the same plot of land, you can discover new ways of growing more, having a higher yield within that small boundary. That's intensive development. There was always this contrast between doing more with less versus just going from one to N. This fits the frame of globalization versus innovation. You think about the total addressable market for any good. It could be bananas, it could be Facebook. If you broaden the market from a single country to the rest of the world, that increases the market size quite dramatically. In some ways, that is an improvement that brings increased GDP, but it's not the same as inventing something wholly new, which would be like going from zero to one in Peter's famous phrase. That would be something like inventing a new way of growing more of your crop on the same plot of land. Norman Borlaug famously did this in the 1960s and 70s and was one of these unsung heroes of the 20th century who helped save the world by inventing new ways of growing rice in Asia, preventing a lot of famines. Innovation is one of these loosey-goosey things. A lot of people want to be innovative. The core of it is creating something that someone wants, someone needs, something valuable, and being able to deliver it at a high enough quality, at the right price, at the right time. It's so hard to do these things, and it does require some creativity to go from zero to one. One to N is not as hard a problem. ## **15:34** - How Much Knowledge Do You Need to Create? **Ela Richmond:** Most parents I've chatted with would probably ask, "My kid needs to know information, though. My three-year-old can paint a picture, and that's creativity. However, for them to create something new, they need to know information. How much do they need to know to start creating?" Because that is the sell with a university, right? We're teaching them the things they need to know so that they can be creative. What is your thought on that? **Michael Gibson:** Imagine someone sits down and plays a game with you. There's a given set of rules, and within that game, you come up with interesting ways of winning. That's certainly a form of creativity. We could easily transpose that to being a lawyer or a doctor. I bet there are very novel ways to win cases or interpret the Constitution to win an argument. But it's not the same as inventing a new game together with our own rules. That's a totally different style of creativity—inventing a new Constitution versus taking something that already exists and doing your best to perform well inside it. When it comes to dramatic breakthroughs, especially in science, technology, and the arts, it's really that second kind that moves the needle. I don't want to say that a lawyer isn't creative; it's possible to do interesting things. But creating a new market, a new product, or discovering a new theory is just a different level of creativity. It's almost like this dark energy or dark matter in our understanding of our capabilities. So much attention is applied to being "smart." That word is used all over the place, and IQ is part of that conversation. But creativity is this other faculty that, because we can't measure it, we're not good at acknowledging. And because we can't measure it, we don't know how to improve it. So maybe it's ignored in schools because, well, what the hell, we just don't know. There are some tests out there, like where someone's given a brick and they have to list how many different ideas they can come up with for it in a period of time. There are very, very weak correlations between those kinds of tests and predicting who is going to be creative. And there are just so many anecdotes of experts missing something because they're so hardened in their understanding of the world. To go back to the Beatles, apparently Paul McCartney had a music teacher in high school who thought he wasn't that great a musician. George Harrison went to the same high school, was two years younger, and had the same music teacher. That guy also didn't like George Harrison. It's pretty wild that there was this teacher grading these people who had no understanding of what they were capable of. I think that's true at a much lower intensity for a lot of people. Maybe they don't have the same ability to rotate shapes in their mind, but nevertheless, they're really creative at coming up with new ideas and testing things. ## **19:29** - Why College Can Make You Less Creative **Ela Richmond:** You argue that people should not go to college. Is it the way that information is taught? Is it the reason you are learning? What is the thing that makes it so that, yes, you're taking in information and educating yourself, but in some ways, you're becoming less creative? Why is that? **Michael Gibson:** You mentioned a question earlier I wanted to come back to that touches on this. You said something like, "How much do you have to know in order to create new things?" That question points to an interesting problem: there is some golden mean between too much and too little knowledge of a field or a problem. One story that illustrates that is about a statistician at UC Berkeley. He was a grad student and was late to a class. During the class, the professor had listed some of the unsolved problems in the field of statistics on the board. The class ended, and the guy who was late shows up, sees these problems on the board, and thinks it's the homework for the next class. He doesn't know that it's the unsolved problems of the field. So he goes to work on one of them and ends up deriving one of the answers. In retrospect, one of the things he always pointed out was that if he had known the problem was supposed to be unsolvable, maybe he never would have attempted it. Maybe he would have been intimidated. But because he didn't know, he was able to just naively attack it. I think there's something to that where our schools are these powerful institutions that can intimidate people into thinking that they're less capable of solving problems than they are. It's also the style of education where there's this conditioning where you're taught that you have to master these foundations in some kind of pyramid. Once you climb all the way up this mountain after 15 years—you go from high school to PhD to postdoc—only then are you able to finally address these unsolved problems in your discipline. By that time nowadays, you're probably in your mid-thirties. There's a lot to that style of education because it makes sense that you have to master the fundamentals. But it takes so long, and you're conditioned by how the people before you think, that maybe it prevents you from bringing novel tools and techniques to solving a problem. One idea I've had is, could we invert this pyramid? Young people should walk into a physics department and they should list, right in the front atrium, the top 10 unsolved problems in the field. One thing that would do is let you know that even the smartest professor in the Harvard physics department has not been able to solve this problem. It makes that person a little more humble. But then it also allows you to look at the frontier and say, "What do I want to work on? How do I get there fastest? And how am I going to discover or invent the tools I need to tackle that problem?" Because maybe it doesn't involve that pyramid. Maybe there are other things I could learn to help me. ## **23:15** - How Elite College Admissions Homogenize Thinking **Michael Gibson:** Then there's this wider cultural conditioning that I think is detrimental to creativity, involved with schooling and our culture in America now. Over the last 50 years, teens have just been transformed by this tournament where the goal is to get one of these exclusive, limited number of seats in the freshman class of an elite Ivy League school. That tournament is a labyrinth of tests, classes, and extracurricular activities, and the admissions committee is setting the standard for what matters. Here's where my old boss, Peter Thiel, comes in. He was a big fan of René Girard, a French literary critic and anthropologist who studied crowd dynamics, the madness of crowds, witch-hunting, and scapegoating. Girard came up with this theory about humans where the basic idea is, the more we compete for rivalrous goods—meaning goods that only one of us can have—the more alike we become. We see that in consumer goods. Take a look at water as a category. In a mature product category, all the products are the same and they're competing on fake differentiation. Is Dasani really different from Fiji or Smartwater? It's the shape of the bottle, it's some BS about electrolytes. This is not strong differentiation. The more you compete in a category, the more you become alike. So all these teens competing in this nationwide tournament are all becoming more and more alike. And here's the next step: the more you become alike, the less unique you are. The less unique you are, the fewer new ideas you have. This giant cultural shift, where the only path to success is to go to college, has really homogenized our intellect and our ability to think of new things. I think that's been really detrimental, and it has nothing to do with the curriculum. It's just the shape of life trajectories that occur in the US now. ## **25:55** - Motivating Children to Solve Problems **Ela Richmond:** I'm curious if you have any perspective on children and early education. What should early education look like, especially when it comes to creating motivation for solving problems? **Michael Gibson:** I've noticed my mom doesn't have this problem. We do a lot of puzzles together, like crossword puzzles. She's always loved solving riddles. Sometimes there's this initial resistance when someone puts a puzzle in front of me, where I feel challenged and it's almost like getting asked to do a workout. If it's difficult, there are all sorts of excuses you can bring up to quit: "I don't have time now," "Don't bother me." Deep down, there might be some insecurity. It's like you get presented with a puzzle, and if you're known to be smart, you feel like you have to prove yourself in that moment. That can be intimidating, so some people shrug it off. My mom is the opposite. She doesn't care where she is or what frame of mind she's in; she just loves puzzles and gets in there and won't quit until she figures it out. We were doing the Sunday New York Times crossword, and I had just had a tooth pulled. I was like, "Geez, I'm out." And she keeps asking me, even though I'm dying on the couch, "But what about this?" And then she did it. She got it without me because I had passed out. When I woke up, she had the answer. I realized with her, it's not a challenge to her identity. She doesn't feel that startup engine problem, like heating up the engine. I feel like that's true for a lot of kids. Because the difficulty of some of these problems can be so hard, the startup energy is tough to get going. There's something in education with younger people where we have to somehow teach them to overcome that resistance, that somehow they're not condemned to hell because they fail at solving this puzzle. I don't have strong views on curriculum, but I do think it has to be a mixture of allowing their intrinsic curiosity to blossom and doing your best to allow them to explore that. Famously, one-on-one tutoring is by far the best method of teaching and learning. There's a famous paper by Benjamin Bloom called the "Two Sigma Problem" because the people who had one-on-one tutoring were just so far superior to those in other methods. When it comes to instruction, there are techniques like spaced repetition and self-testing that have greater stickiness for people. For younger people, you have to wade them into this in some fashion, but it's a balance with the fact that their attention span is limited. It's an exciting time in education now with homeschooling, Montessori, and now these blends like the Alpha school in Texas, where they're starting to use AI to capture some of that one-on-one effectiveness. ## **30:57** - Startups as a Project of Self-Knowledge **Ela Richmond:** This also brings up the psychological aspect of building a startup. In order to create anything new, there's a lot of challenge, and it takes a different type of mindset. You're advocating for younger and younger people being capable of creating these amazing solutions. How does that work out with the psychological effects of building a startup? **Michael Gibson:** We make investments in companies founded by people sometimes in their teens. The question we often get from investors is, "My God, how do you possibly trust a 20-year-old to be a CEO?" where they have to make tough decisions involving who to hire, who to fire, product roadmaps, and raising money. It's a tough situation where we have to try to figure out this phrase we use: "from acorn to oak." Is there something in this person right now that we can trust to grow into the type of person who is capable of managing a bigger company? We focus on things like intrinsic curiosity. We meet people who are insatiable at learning. They're voracious readers, constantly going to workshops or lectures. That tells us that when it comes time to learn about different areas of the business, they're going to put in the time. Oftentimes with these younger people, they only want to know about a fire extinguisher when the house is a little bit on fire, so they have to be quick learners. We also want to know if they're good at attracting friends, mentors, or coaches. It's always interesting if someone's doing that on their own. All this together gives us a sense that they're going to be capable of growing into the role. Now, the psychological pressures. I've worked with adults who are very immature and can't take the pressure. I've seen adults act like complete children. There's a romanticization of adulthood where we pretend people are mature, especially in business, but that's not true. So adults have their own problems. That's why we love seeing co-founders rather than single founders. There's going to be an emotional roller coaster of wins and losses, dark nights of the soul. To get through that, it's key to have someone there with you in the trenches. The project of building a startup is fundamentally a project of self-knowledge. Because you have to do everything and it can be so intense, startups are going to expose all the flaws and weaknesses you have as a person. Let's say you're afraid of having difficult conversations. Well, your startup is going to require you to have them. Let's say you're afraid of admitting you're wrong. You're going to be wrong every day, and the world doesn't care. Let's say you don't like looking at legal documents or making cold calls. You're going to have to do these things. You're going to learn a lot about yourself running a company that you might not learn if you just have a specific role at a big company and you get to hide in your cubicle. That self-knowledge can be transformed. Either you acknowledge the weight of these weaknesses and address them, or you hire someone and delegate. What you can't do is ignore them. The startup will magnify everything about you. On the other hand, you gain self-knowledge about the good things. None of us knows what we're capable of just sitting in a chair. The philosophers tell us to look within ourselves, but that's not enough. When you start a company, it's going to bring the best things out of you that you didn't even know you had. You didn't know you could work 80-hour weeks or convince people to join your team and achieve incredible victories. That self-knowledge is priceless. I've seen people spin out. It's not the technology that breaks; it's the human factor. Maybe you're not capable of learning fast enough to overcome some of these weaknesses and you end up self-destructing. But whether the outcome is a billion-dollar company or you flame out after a year, what you gained during that time is going to make it all worth it, in a way that makes it better than business school or working at a company. You have to learn by doing. If you're just living in the solipsistic world of being in school, you're not learning how to deal with urgency or high-stakes environments. You're coddled. Given the track record of mental health in the U.S., I'd say schools have made that worse. What I've seen is when people are working in teams on something they love, they come to understand how to deal with these pressures better. ## **41:13** - What is the Prize for Taking the Hard Path? **Ela Richmond:** It seems like we have a lot of safety around us. Business school is a path, a stairstep. People I've met who have taken the route of just jumping in are like, "To be honest, looking back, I would never recommend my path to anybody because it was hard." However, they are personally very rewarded. The hardest period of my life was when I said no to the right answer and I didn't know what the next right answer was. A parent listening to this isn't necessarily going to be excited to tell their kid to drop out and build something. What is the prize? Why should they support their kid in making a decision that is inevitably going to be very difficult? **Michael Gibson:** I think the key idea is that it's not the outcome in terms of money earned that matters, but who you become in the process. Who you become is someone who can handle ambiguity, who can structure their own plans, and come up with what they want to do on their own. The people who play it safe in established institutions don't set their own goals. They have some broad goal, like a degree, but that's filled in by other people. They're given assignments and told how to do them. You become someone who has a brittle dependence on that institution for how to live your life. The differences between the two people are like differences in capability and skill. Think about skiing. You want to start on the bunny hills and only after time do you work up to the black diamonds. In life, we're all on this mountain. You can wait until 22 to get on the bunny slope, or you can start at 15. You're only going to be able to handle the black diamonds of adulthood if you start practicing now. I encourage parents, even if your children are in school, you have to find ways for them to manage risk and pursue their own curiosity. None of this adult supervision; you have to let them go. We have to rewild the American child. ## **44:44** - Would You Tell Your Kid to Drop Out of Harvard? **Ela Richmond:** If you had a child that was 18 and they got into Harvard tomorrow, would you tell them to drop out and start a company instead? **Michael Gibson:** I wouldn't say just drop out and do it with nothing in mind. In the best-case scenarios we see, it's usually some kind of slowly building momentum that takes the person out of school on its own, and we're there to support them. We don't pay people to convince them to leave school. The argument is, what do you learn in college? Is it skill accumulation or is it signaling? I tend to think it's more signaling about the type of person you are. Sadly, that signal is still valuable. If you have no dreams or plans about doing your own thing, then it is very safe and secure, and you'll make a pretty good income if you make it all the way through school. I would have this conversation frankly with my kids. I would also balance it with a conversation about cost-benefit. If they want to study poetry and philosophy, that's great. But if I'm on the hook to pay $400,000 to do it, that's clearly another conversation. So that's part of this discussion.