The Refractor in 3D: Focused on Technology, Business & Geopolitical Risks

“Sometimes taking time is actually a shortcut.”

― Haruki Murakami, What I Talk About When I Talk About Running

What happened?

January 17th, 2020 is the last time this letter went out. The world was a very different place then. There was a single identified case of Coronavirus in the United States. I was launching a Manhattan based, in person cybersecurity talent marketplace. The S&P 500 closed at 3,316 and the New York Times Headline was “Senate Opens Trump Impeachment Trial as New Ukraine Revelations Emerge.” Two months later, three out of four headlines on the NYT front page were about the pandemic, I had abruptly pulled the plug on my startup, and the S&P 500 closed at 2,237 on Monday March 23rd.

Our collective ability to make sense was going haywire. The stories we had been using to understand the world were no longer close enough to reality to be useful. It was time to step back and learn some new stories. This video, just a few weeks later, sums up how I decided to approach the first phase of the crisis:

The Murakami quote at the start of this letter is about his experience learning to swim for a triathalon. For the last five months, we’ve all been learning how to keep our heads above water. It has been a challenging period that has sent me seeking stories to replace those that were failing.

Where Are We Now?

While our stories about ourselves, others and the world we live in are falling apart, some universal truths endure. No two crises are the same, but what they do share are deep human truths about how individuals and groups will respond when faced with a new challenge. To tap into these timeless truths, I have dug into classical literature and come up with three texts that address the subjects of this letter, technology, business and geopolitics. To understand where we are now, in the midst of crises, we must examine ourselves.

  1. Technology - The Tempest, William Shakespeare

    Ferdinand courting Miranda (c. 1736–1738), William Hogarth

    The Tempest centers around the actions of a powerful magician and former duke, Prospero. Banished to a desert island along with his daughter, Prospero plots his comeback and takes control of the creatures and spirits of the island using his powers. One such creature, Caliban, is the son of the island’s former ruler, a witch named Sycorax.

    Throughout the play, we come to see Sycorax as an evil twin of sorts to Prospero. Sycorax imprisoned a spirit named Ariel, who Prospero also uses for his purposes, promising to set Ariel free when Prospero’s plan is fulfilled. The heroic, and slightly megalomaniacal Prospero is the inventor type, who seeks to use Ariel, the spirit of innovation, to right wrongs and protect his daughter, Miranda, a symbol of innocence and hope for the future. Caliban, the twisted and violent child of Sycorax represents the sycophantic offspring of the evil inventor.

    The chaste and compassionate Miranda, on the other hand, stands up to her father seeking mercy for the sailors who Prospero shipwrecks on their island, as part of his plot. Only those sheltered by technological overlords could exclaim “Brave New World” as Miranda does, when encountering the very men responsible for their banishment. It’s no coincidence that the title of Aldous Huxley’s dystopian novel “Brave New World”, is taken from The Tempest.

    Ultimately the similarities between Prospero and Sycorax become more apparent, with one major difference, how they relate to their offspring. Prospero raised Miranda in a bubble to be kind and have strong values. Ultimately, it is her influence that gets him to forsake his magical powers, forgive those who wronged him and return to his dukedom.

    This play deals with the power, innovation and technology. The ability to harness innovation (spirits) to produce technology (magic) is what gives one the power which is necessary to provide shelter for compassion. The delicate balance of the authoritarian founder, in constant danger of being corrupted by ultimate power, underscores the fine line between tyranny and benevolent dictatorship, while also making the case that such power is necessary in the right hands.

  2. Business - Don Quixote, Miguel de Cervantes

    Salvador Dalí | Don Quixote de la Mancha (1957) | Available for Sale | Artsy
    Don Quixote de la Mancha (1957), Salvador Dalí

    Don Quixote, the well known satire of chivalric romance is a lesson in starting a new business. If Joseph Schumpeter’s creative destruction is the romantic vision of entrepreneurship taught in school, actual business formation is Don Quixote. You must read the whole thing yourself to appreciate its business and entrepreneurship lessons, but I will focus on three ideas here. First, the importance of unflappable faith. Second, the ability to draw people and resources to your cause. Third, the importance of meta-stories.

    The one thing I knew about Don Quixote before reading it was the classic scene in which he mistakes windmills for Giants and charges at them full tilt, only to be defeated by their sweeping arms. While there are many hilarious scenes of Don Quixote’s defeats and he certainly appears to be a buffoon, the novel is more bitter than I expected. The repeated insults, offenses and drubbings he, his horse, and his squire take moves the reader to sympathize with the man, even if he brings it on himself. This is what it is like to be an entrepreneur, and why it takes a deep belief in something greater than yourself, ideally a vision of the world tied to a value system, to succeed. Don Quixote’s epic quest to rescue a princess and uphold the code of chivalry is just such a vision.

    I have already mentioned the other main characters in the novel: his horse, Rocinante, which roughly translates to “best nag,” and his squire, Sancho Panza, a loyal and doting companion. Not only does he recruit these two hapless supporters, but Don Quixote also repeatedly manages to turn people he has offended into allies, or at least win their forgiveness. Violating norms, whether business, legal or social, and then sheepishly getting away with it, is a crucial skill in entrepreneurship.

    This ability to win friends and allies is a type of world building that invites others to share your perspective. One of the most powerful themes in Don Quixote are meta-stories. Cervantes is constantly weaving in references to other stories, fictional or not, and even layering on his own stories. The best entrepreneurs are not only adept at telling their story, but also at getting others to repeat and recapitulate their stories. One of the most powerful ways of doing this is to tell a the story the audience wants to hear and share, within your story. Don Quixote builds story on top of story like an ancient city such a Beirut that contains layers of Phoenician, Greek, Roman, Ottoman and countless other cultures.

  3. Geopolitics - Demons, Fyodor Dosteovsky

    Student Nihilist, 1883 - Ilya Repin -
    Student Nihilist (1883), by Ilya Repin

    Finally, we come to politics and Dostoevsky. It is difficult to describe Dostoevsky because his works are so intimately psychological, but I will try to at least allude to some themes from this special novel. The theme of a fading national identity once rooted in a moral and religious foundation clashing with a revolutionary narcissistic nihilism and the intense power of personal charisma is the backbone of this story. The ability of a bad actor to manipulate dissatisfied idealists is also a prominent theme, and the ripple effects that can send society careening off into madness is the greatest overarching lesson. Suffice to say, I cannot do it justice here. Please read the book!

What Does The Future Hold?

Now that I have laid out some new (old) systems of thinking, I would like to share with you my plans for this letter in the future.

First, the goal of this letter will be to focus on risk in three dimensions — technology, business and geopolitics. Second, the letter will be published twice a month, with topical, but not late breaking analysis. Third, writing will be interdisciplinary, from cybersecurity to finance, from public policy to statistics, and many other disciplines.

If you enjoyed this letter, please share it and provide feedback on what you liked, what needs improving and what you’d like me to dive deeper into. Until next time, here are some links:

Risk links: