Matt Ridley: How Innovation Works, Part 1

Key Takeaways

  •  Matt Ridley is one of Naval’s heroes 
    • “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 it lying around in various boxes.” – Naval Ravikant
      • “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.”
  •  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.” – Naval Ravikant
  • The next booming geographical city could be in the cloud:
    • “I wouldn’t be surprised if the next Silicon Valley moves to the cloud.” – Naval Ravikant
  • “Innovation happens by taking the body of innovators that surround you one step further, engaging in lots of trials and then 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 there has to be a place where they can all gather, whether it’s online or offline.”Naval Ravikant
  • “California doesn’t create entrepreneurs. California attracts entrepreneurs.” Naval Ravikant

Intro

Books Mentioned

Naval’s Relationship With Matt Ridley’s Books

  • Matt Ridley is one of Naval’s heroes 
    • “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 it lying around in various boxes.” – Naval Ravikant
      • “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.”
  • Naval then read The Red Queen, which laid out the age-old competition between bacteria, viruses, and humans 
    • He also read The Rational Optimist
      • “Which helped me realize that it was rational to be optimistic, because of the technological and scientific advancement that we’ve had as human species since we first came across the stone ax and basic tools.” – Naval Ravikant
  • The book The Origins of Virtue, helped Naval take a game-theoretical framework towards virtues and ethics. 
  • Matt’s newest book is How Innovation Works, which Naval also enjoyed reading

About Matt Ridley

  • Matt was working on his PhD in biology when he realized he wanted to be a writer and not a scientist
    • He became a journalist and became a science editor at The Economist. He later worked there as a political reporter and correspondent.
      • After that, Matt became a freelance writer and spend his time working on his first book, The Red Queen
        • “From there on, I’ve been incredibly lucky because people have given me contracts to write books about things that interest me.” – Matt Ridley
  • “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.” – Matt Ridley

Matt’s Newest Book

  • Naval says that Matt’s newest book, How Innovation Works, was an impactful and revealing read
    • The first half of the book is a collection of incredible stories about inventors and innovators 
    • The second half explains how innovation works, what helps it works and what stops it from working, what creates the conditions for it to work and not work
  • Naval recommends this book for two types of people:
    • Innovators: “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.” – Naval Ravikant
    • Government officials: The book provides actionable advice to building an environment of innovators
  • A quote from the book: “Innovation is the child of freedom and the parent of prosperity.” 

Invention vs. Innovation

  • Invention is the coming up with a prototype of a new device or a new social practice innovation
  • Innovation is the business of turning a new device into something practical, affordable and reliable that people will want to use and acquire
  • Sometimes inventions are created too early 
    • Webvan and Kozmo failed but Postmates and DoorDash work
      • “Sometimes you’re jumping too far ahead. The previous innovations stack or the shoulders that you want to stand on, the giants don’t yet exist, so you’re trying to bootstrap too much.” – Naval Ravikant
  • 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.” – Naval Ravikant

Individuals vs. Teams

  • Almost all innovations come from teams or someone building off of another person’s work
    • This helps explain why innovation tends to be geographically concentrated:
      • “If it was a breakthrough by lone individuals, you would 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.” – Naval Ravikant
  • Innovation tends to more across geographies over time:
    • Silicon Valley
    • Victorian Britain
    • Renaissance Italy
    •  Fujian China
    • Ancient Greece
      • “One of the patterns of innovators is that they move. They move from uncongenial regimes to congenial ones” – Matt Ridley
  • The next booming geographical city could be in the cloud: 
    • “I wouldn’t be surprised if the next Silicon Valley moves to the cloud.” – Naval Ravikant

Crypto

  • The interesting thing about crypto is that it’s 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” – Naval Ravikant
  • The Holy Grail of crypto is called autonomous organization:
    • “Smart contracts living in the block chain completely extra-sovereign outside of the state…modernizing it from the Magna Carta days to a modern code-based system living on a mathematical, reputation-based, anonymous blockchain.” – Naval Ravikant

Political Fragmentation and Innovation

  • Booming geographies can easily come to an end:
    • Ming China became a restrictive authoritarian country
    • Abbasid Arabia was crushed by a religious fundamentalist revival 
    • Religious leaders in Paris began burning books
  • “I think the digital innovation can escape into the cloud” – Naval Ravikant
  • “Innovation happens by taking the body of innovators that surround you one step further, engaging in lots of trials and then 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 there has to be a place where they can all gather, whether it’s online or offline.”Naval Ravikant
  • “California doesn’t create entrepreneurs. California attracts entrepreneurs.” Naval Ravikant
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Notes By Alex Wiec

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