The Age of the Unthinkable (19 page)

Moritz knew there were lots of mysterious, nonengineering pieces to keeping this treadmill of fresh innovation and change
alive. Take, for instance, the personality of tech entrepreneurs themselves. Moritz cultivated a skill few engineers cared
about: the ability to empathize with company founders. It was crucial to see their dreams exactly as they did, he believed.
Even if they were deluded, you had to know how and where to adjust their imagination. And sometimes — usually in the case
of the most brilliant ones — they were onto something. “The thing I am terrified of is losing that empathy,” Moritz said to
me one afternoon as we sat in his office on Sand Hill Road. “The best investments we have missed recently came because the
founders came in here and we blew them off because we didn’t understand them. We couldn’t empathize,” he told me. “That is
a fatal mistake.” And, he reflected, “If I were running American foreign policy, I would want to focus on empathizing.”

When Mike Moritz says he’s not driven purely by technology or when Farkash talks about using Syria’s Lebanon strategy to understand
Israel’s risks, they’re telling us something priceless about how we can get that “right view” that the Zen monks are so fond
of. They are reflecting the sense that in a fast-changing world, what really matters is often hidden in corners where the
usual “experts” in their professions don’t — or can’t — easily look. And they are giving us some guidance about how we
should
examine problems. “Intelligence is not a blend of deduction, insight, and inference from the body of evidence as a whole,”
one famous Cold War–era CIA paper explained. “It is a sequence of judgments on discrete units of evidence.” But intelligence,
then and particularly now, is
exactly
a blend of deduction, insight, and inference. It’s this skill that marks the greatest successes of the age, from men like
Warren Buffett (who negotiates billion-dollar deals in an afternoon if they feel right) to Steve Jobs (who attacks improbable
markets with radically different technology and design). Yet the old habit of discrete, piece-by-piece thinking remains, in
financial markets (“Ah, those mortgages will never affect our insurance business”) as often as in foreign policy. But in a
world where everything is connected, advance signs of change, of turbulence, are likely to appear only when we look in unexpected
places.

Farkash was right when he lamented that an agency like the CIA can’t quite grasp this. It’s true of almost any large organization.
In a postmortem examination of how the CIA missed signals of Iraq’s plans to invade Kuwait in 1990, for example, the agency
concluded it had simply been trying to solve the wrong math problem. “The bottom-line judgment that Iraq was unlikely to initiate
warfare in the near term, issued repeatedly in the year before the assault on Kuwait,” one study concluded, “was based on
the assumption that Iraq needed several years to recover from the military and economic devastation of its long war with Iran.”
This old-style analysis reduced Saddam’s intentions to a single variable — had the Iraqi army recovered? — that would be watched
and studied and obsessed over, even as it became less and less relevant. American officials were similarly astonished when,
one morning in 1998, they discovered that India had tested a nuclear weapon. Everything they had been looking at — the assurances
of the Indian government, the booming technology entrepreneurs, basic relations with Pakistan — suggested that a test was
unlikely. The three-letter acronym of the agency that let the Americans know that India’s bomb had detonated was not CIA,
it was CNN. Narrow-gazing not only leads to these kinds of misfires, it also fatally constrains the ability to imagine
good
ideas or policies. The chance for real brilliance or flair is usually best seen out of the corner of the eye.

John Doerr, the only other venture-capital investor with a record to match Moritz’s, liked to joke that educating a young
venture capitalist was like training a fighter pilot: it cost millions of dollars and often produced little more than a smoking
pile of rubble. But the reality, rarely discussed outside Silicon Valley, was even grimmer. Doerr’s firm had spent tens of
millions of dollars trying to teach the younger partners to fly. It never produced anyone to match Doerr; Moritz’s firm had
the same experience. “It’s very difficult to figure out from somebody’s background whether they will be successful in the
venture-capital business,” Moritz once mused. “I can think of numerous examples of people with glittering résumés and burnished
credentials who you would have thought would thrive in the venture business, and they flame out. I can think of people with
very unlikely backgrounds who have flourished in the venture business. We’ve given up on trying to predict who will and won’t
do well in the venture business.”

The big problem in training those young venture capitalists was that it was hard to get them to see like Moritz, to take in
everything at once instead of fixating on pieces of companies as if they were linear math problems. Engineers, for instance,
failed as investors because too often they fell in love with MIPS and bandwidths; the MBAs swooned over “cram-downs” or “ratchets”
or other geeky cash tricks. This was lethal. In places like Silicon Valley or Israel, the greatest threats and opportunities
were so new that there were no experts. The only way to spot dangers (and opportunities) was to break out of narrow ways of
seeing. It meant not simply changing how you ran your firm or collected intelligence but also — and this is the tough part
— undoing a couple of millennia of Western intellectual habits, notions that went all the way back to Aristotle’s idea that
you could understand something only if you could break it apart and examine all the pieces. This way of seeing bankrupted
some of Moritz’s most brilliant-looking competitors during the dot-com collapse of 2001. It was what sent Israel into Lebanon
with its hopes pinned on air power in 2006 and sent America into Iraq with a war plan that anticipated an end to violence
within two months. And it allowed radical deregulation of financial and commodities markets under the assumption that if we
knew how all the parts worked, there was no danger in their sum. Acting without seeing the whole environment was suicidal.
But acting with such a view? Well, that led to great fortunes and real security. And that is why the first step toward our
own deep security — whether for our country, our business, or our families — is teaching ourselves to see differently.

For much of the last decade, the experimental psychologist Richard Nisbett has devoted a large part of his research to the
question of how our cultural backgrounds condition the way we think. Nisbett dates his curiosity about the subject to a debate
he had with a Chinese graduate student in the early 1990s, when he discovered that there were fundamental differences in the
most basic elements of how the two of them thought. “The Chinese believe in constant change,” his student told him, by way
of possible explanation. “Westerners live in a simpler, more deterministic world. They think they can control events because
they know the rules that govern the behavior of objects.”

Until that moment, Nisbett later wrote, “I had been a lifelong universalist concerning the nature of human thought.” That
is, Nisbett (like most other psychologists) believed that everyone basically thought and reasoned in the same way; any differences
were due to the quirks of our education, families, or experiences. There was no shortage of literature, dating back even before
Freud, documenting the ways in which overambitious parents, painful economic status, or personal appearance affected the way
we thought and behaved. In fact, the entire discipline of modern psychology was to some extent based on unearthing and then
deciphering these secret codes of our personalities. But the more Nisbett thought about what his graduate student had said,
the more curious he became. Culture, he figured, had to make some sort of difference. But explanations about how it might
do that, he found, were surprisingly underdeveloped.

If such explanations were hard to come by, evidence of cultural differences, once you started to look for them, were everywhere.
Colleagues of Nisbett, for instance, once conducted a study in which they observed American and Japanese mothers playing with
their children and found that everything from the way the two groups fed the children to how they talked to them was distinct.
American mothers used nouns (“Look at the doggie,” they might say) twice as often as the Japanese, who instead emphasized
relationships (“I give this to you; now you give it back to me”). When they tested children from different cultures, they
discovered that the East Asian children were picking up new verbs nearly twice as quickly as nouns — and far faster than American
or French children of the same age, who were busy learning noun after noun. The question that soon obsessed Nisbett was whether
these early cultural twists in education played out in later life. Did they, for example, offer insight into old truisms about
Asians being more family-centered or Americans being more rebellious?

So, starting in 1993, Nisbett began a series of experiments that offered some of the first reliable data on how culture shapes
thinking. It was controversial work. After all, suggesting that culture shaped thinking seemed awfully close to making other
uncomfortable suggestions about how culture might limit intelligence or individual potential. The research could quickly lead,
critics feared, into ideas like “Asians can’t handle democracy.” So Nisbett stuck tightly to quantitative science, and most
of his papers — and those of the researchers who joined his work — were carefully written to avoid stretching the conclusions
about what they found in the lab very far outside it. But what they did find, particularly in experiments about how people
see, offered one of the clearest explanations about why we often make the errors of the type Louis Halle warned against and
that Farkash and Moritz somehow instinctively avoided.

In late 2004 Nisbett and two graduate students, Hannah Faye Chua and Julie Boland, set out to recruit a group of fifty graduate
students from around the University of Michigan campus in Ann Arbor. Half of the students had been raised and educated in
the United States; the other half, though now students at UM, had been raised in China. On the day of the experiment, the
students arrived at Nisbett’s lab and filled out a short questionnaire about their personal histories. Then Chua led them
to an awkward-looking lab setup on a table which included a computer screen at one end and a chin rest at the other. On a
desk nearby was a head-mounted device that would track the students’ eye movements. After strapping on the device, the research
subjects placed their chin on the small plastic rest, and the lights in the lab were turned off. A picture of a small cross
was beamed onto the screen in front of them. Then, one by one, at thirty-second intervals, a series of pictures appeared on
the screen. The pictures all had a similar visual motif, an image of a large object in what Nisbett called a “realistic complex
background”: a tiger in a forest, for instance, or a horse in a field of flowers. The research subjects were shown thirty-six
images for about three seconds each. After each image, the screen returned to the white background with a cross, and the students
were asked to refocus on the cross. When a new image appeared a few seconds later, the eye-tracker silently recorded where
they looked and for how long. Then the screen went to white again and the process was repeated.

When the students had finished, Chua sorted the eye-movement data and found a pattern so clear that her first instinct probably
should have been to wonder if there was a mistake somewhere. While observing the images flashed in front of them, American
students immediately looked at the foreground objects — the horse or the tiger, for example. And once they spotted that image,
they spent the bulk of the time before the screen went white again looking right at it. The Chinese, by contrast, usually
looked at the environment around the main object first, probing that “realistic complex background” of forest or field. They
did look at the focal object, but for far less time than the Americans did. “There was no time point at which the Chinese
were fixating [on] the objects significantly more than the backgrounds,” Nisbett wrote later. This was, to a Western point
of view, a bit weird. It was as if someone took out his wallet to show you pictures of his kids and you started complimenting
the furniture in the snapshot.

It was too simple to say that the Americans stared at the main object to the exclusion of everything else, but when the researchers
later tested the students to see what they recalled, this was more or less the pattern that emerged. The Americans had a better
ability to recall specific objects they had seen: horse, car, dolphin. The Chinese often forgot what object had been in a
given scene but recalled the backgrounds in detail. In fact, simply by changing the backgrounds, Nisbett and his colleagues
could fool the Chinese into saying they had not seen a particular object before. You could flash a picture of a brown horse
in a field, a stream, or a forest, but if you put the same brown horse in a street scene later on and asked the Chinese students
if they had ever seen it, they usually answered no. What was going on? Nisbett hazarded this guess: “East Asians live in relatively
complex social networks with prescribed role relations. Attention to context is, therefore, important for effective functioning.
In contrast, Westerners live in less constraining social worlds that stress independence and allow them to pay less attention
to context.” That was partly true — and you can see why, in a world where context matters so much, Western-style seeing might
be a liability. But there was something much more profound occurring as well, something vitally important for our own thinking
about the world.