Hi, everybody. This is Peter Diamandis. Welcome back to Exponential Wisdom with my brilliant friend, Dan Sullivan. Dan, how are you doing today? I'm doing really great, and I want you to know because of our topic, I'm feeling very young today. So I want to continue our conversation on innovation concepts, mechanisms, principles that entrepreneurs can sort of think through and use to drive innovation in their organizations. A few different topics we'll start on, but the first is an idea that I talk about, and it's kind of shocking to some people, not to you or me, but it's the notion that if you look over time,
In most large companies today, if you look across the organization at the age of the executives, the age of the innovation teams, the board, most organizations tend to be populated by executives in their 40s, 50s, 60s, and even 70s, but very few younger people in their organization at senior levels because it took a while to get there. And it's interesting because if you look back over time, historically, a person's most creative time, and this is not true for everybody, it's definitely not true for you, Dan, but most people's creative energy and time. comes earlier in their life. In fact, if you look over time and say, when does a Nobel laureate actually do their Nobel Prize winning work? Not when do they get their award, but when do they do their Nobel Prize winning work? Any ideas on that? Yeah, well, I happen to know that one. It's certainly before 30. Yeah, it's typically late 20s. And, you know, the Nobel Prize committee doesn't award them for 30 years and they get there, you know, later in their career when they least need it.
The other one as an example is if you go back to the early 1960s, it was May 25th and JFK, President Kennedy, made his clarion call saying, you know, I challenge this nation to go to the moon and NASA was created. And 400,000 people left their jobs and left school and went to Titusville, Florida and Huntsville, Alabama and Clear Lake, Texas. The average age of the engineers who built the Apollo program, any guess on that age? I have no idea. Same age, mid to late 20s. NASA was a very young organization. And the reason is, interestingly enough, there was no one to tell them how to do it. They had to make it up from scratch, the rendezvous and docking, the propulsion, the navigation. And again, it was a very young organization. And today, the average age of NASA has doubled since the Apollo days. And just one last example, if you fast forward from the 1960s to the 1990s during the dot-com revolution, if you look at the average age of the engineers who built the early dot-com companies who left school, even younger, right? Early 20s, mid-20s.
trying crazy ideas, experimenting, because they had far less to lose in their careers and their reputations. So there's something going on. And I just want to point it out because, you know, I'm in a room of executives and CEOs. You know, I asked them if you're running a Fortune 500 company, if some kid in their mid-20s came into your office and said, I got this crazy idea for this new product or service, do you listen to them? Or do you say, you know, hey, listen, kid, get back to the mailroom and work your way up. So we have this age bias that is important to be careful about. And now there's mental age and physical age.
But I think it's really important that people realize that good ideas can come from across the age spectrum. And sometimes youth and being naive is an important attribute. Peter, would you say from your own experience that the biggest reason why the 20-year-old generation can come up with the new ideas is because they're usually completely ignorant of the legacy issues in an organization and also they have no comprehension of the power structure? I really think that's a critically important part, right? They don't know what's impossible. They don't know what can't be done. They have a good idea. They jump into it naively and then they figure out how to make it work. Where?
A lot of other times people have seen things tried and failed and then I'm not going to try that again. But that's the wrong approach. What do you think? My sense is that typically, and this happens to entrepreneurs too, not just corporate people or government people, but what happens is that they've had bad experience a vast number of times where they possibly suggested something new and they got cut off or there was a penalty attached to it. And they've learned not to go there. And after a while, their entire approach to anything new is that they remember the pain the last time something new was attempted. And so they don't even make the attempt simply because it's painful. The young people haven't had that. And we avoid pain.
We try to avoid pain and it becomes something that is unfortunate. I want to give you one example, Dan, that I love. It just paints the picture perfectly. So this is regarding the National Institute of Health, NIH, here in the United States. In 1980, 10% of all NIH grants went to young researchers between age 31 and 33. So 10% went to young researchers, 31 to 33. In 2006, that number went from 10% of grants to 1% of grants. In 2007, more grants were given to 70-year-old researchers than those under age 30.
WTF, what's going on here? Yes. Yeah. I just think it's sinful and shocking that in NIH, we've got this situation where it's peer review and sort of the challenge becomes it's the government programs will typically fear failure so bad. It's the old saying, it's safer to go with Big Blue. So it's safer to go with the people you know, the people with more experience, the people who are at the higher institutions. And of course, that's not where research comes from. You know, it's taking risks, but a lot of our government organizations don't want to take risks, don't want to innovate.
So the question is, inside your organization, if you're running a company or an entrepreneur, are you taking risks? Are you willing to innovate? Are you willing to back young, naive ideas, even if you're not so comfortable with them? Important question. One of the things I try to do, you know, I'm in my 70s now, Peter, is to keep doing scary things. So in the course of a quarter, I always set for myself five improvements of a usually program level in terms of strategic coach, where I'm going to try out something new that quarter, and I don't have any sense whether this is actually going to work out. And I notice I go through periods of real anxiety.
As I approach a new quarter, my new quarter starts tomorrow, and I'm going through some anxiety right now because I'm trying out entirely new things, and I'm not sure it's going to work. It's that anxiety that actually makes me more creative. And so I've just established that in the realm of psychological, emotional, and intellectual growth that resembles being young is that that's the way that I have to do it. Well, I think that's key, and that's what most people lose that you retain, right? You and I are both kids. I'm in my mid-50s, and I feel like a kid inside. You're living life when you take those risks. You feel alive versus comfortable.
Another idea I want to talk about here in our innovation conversation is what are the motivators that motivate teams to do things? And I actually created a list that I use. There are four major motivations that will drive people. And if you can tie innovation to those motivators, those human drivers, then you can really get your team. So the first human driver, as I define it, is curiosity. Is there life out there in the universe? What's inside the box? And curiosity is more of a science-related sort of mindset. The second driver, Dan, that I list is fear. Fear drove.
All the efforts in World War II, it drove us going to the moon because the Russians had Sputnik and Gagarin before we ever did any of that. So we were fearful of the Soviets winning the space race. And so it drove a huge amount of capital. And actually, interestingly enough, I have a way of scientifically measuring the ratio of curiosity to fear as drivers. It's the ratio of the science budget, the defense budget in the US government. How's that? Yes, indeed. And the third driver is wealth creation. We will spend billions and billions of dollars developing new deep ocean drilling platforms to create wealth.
And then the final driver is significance. And I find that probably the most interesting one. Significance is a driver for taking risk for innovation. It's sort of what drove Lindbergh to cross the Atlantic. What are your thoughts about that as a human driver? You and I had a conversation, Peter, in Arizona about six weeks ago. You have an interesting factor that you haven't mentioned yet in this episode, but it's actually oftentimes the answer.
of how creative you are is what you would actually die for. The number four is really, I think that people will die more for significance than any of the other three that you have on your list, curiosity, fear, and wealth creation, that people will literally kill themselves to be remembered for doing something really, really significant. And they will certainly take great risks to appear as significant. It's interesting, right? I just added that as my 29th Peter's Law. I don't often add Peter's Law, but this came from a dear friend, Tom Bilow, who's the CEO of Quest Nutrition. His dad used to tell him, find something you would die for and live for it. And I agree that emotional energy powers you.
in your life. And I think significance is like the ultimate battery source to drive you over decades. Yeah, I mean, you can certainly see that if you remember The Right Stuff, the movie about the early Apollo pilots. Yeah. They had a death rate. I mean, these were fighter pilots originally, and they were certainly test pilots. And to be in the fastest plane, to go the highest, to break the sound barrier, and then be the first person to actually get into space, those were all very, very dangerous activities. But part of what was driving them is the significance of being the first person to do it. Absolutely.
I'm going to switch us a little bit into another innovation mechanism for entrepreneurs here, one that I've talked about and written about that I think is very important in the list of how you drive innovation inside your organization. And I call this giving birth to your idea above the line of super credibility. It's a really important concept. If you have a big, bold idea that you want to take a shot at, you're willing to take a risk, you're willing to invest the money, the time, your reputation to go and try this big, bold idea. How the world learns about your big, bold moonshot is really important.
And how you announce it is really important because if you announce it the wrong way, it could be dead on the vine. And if you announce it the right way, you can get tremendous benefit of the energy from the crowd. So, and you know this story well, Dan, we've talked about many times about how I announced the XPRIZE. But in 1993, I was watching the guys who... created DreamWorks, Geffen and Paul Allen and Steve... Billberg. Steve Billberg, thank you. And they were a press conference and they were announcing they were forming DreamWorks. And I see these four amazing Hollywood producers, billionaires on stage, and I'm going, oh my God, that's going to be an amazing production house. And it was just by virtue of who they were that it was super credible. And it hit me in that moment that in our minds, we have a line of credibility that if you hear about an idea below the line of credibility...
where it's an incredulous idea, you dismiss it out of hand. You go, that's a stupid idea. It'll never work. If you hear about it above the line of credibility, you say, yeah, interesting. Maybe it'll work. You give it time and it either drops below the line of credibility or it increases in credibility. And then we have this line of super credibility. And if you hear about an idea above the line of super credibility, you go, oh my God, that's amazing. How can I be involved? That's going to work. That's going to be incredible. And so when you announce an innovative project, when you're trying to like really do something big and bold, it behooves you to launch above the line of super credibility. You had given two great examples of that in our previous
Exponential Wisdom podcast, Peter, where you talked about Elon Musk and Jeff Bezos actually trying to be successful on the planet as a foundation so they could be successful off the planet. And I was just thinking, because you know the background to it, I didn't really know the background to either of the individuals. But if you're listening to this podcast and you say, You take, you know, creating Amazon or creating Tesla or that would be enough. That would be their end goal. But it's actually just the means that's going to set them up to do something even bigger. That gives the something bigger, incredible credibility, I think, around the world that these individuals are storing up their chips for a much bigger game that they're playing off the planet. Exactly. They're going to turn their success into significance. Money is an energy source and how they use that now to really take on much bigger problems. And it's upping their game constantly. And we've talked about this idea of giving birth above the line of super credibility. And when you're trying to be innovative on the planet.
Even when you're announcing to your team that as a company, we're going to go and take on this moonshot, how you announce that moonshot to your team really matters. Yes, it really matters. So think about super credibility. Dan, there's one last subject here in innovation that is a very cool idea that I want to share with our listeners. It's the idea of, again, how do you drive innovation inside your organization? So I want to give an analogy. When I was studying biology, I learned about Charles Darwin. And Darwin talked about what are called evolutionary pressures.
The finches evolved. What caused evolution of species or speciation to occur? It turned out he put his finger on a number of different things that caused rapid evolution to occur in different environments. The first was evolution occurred very rapidly. And this is genetic evolution. But as we're going to see here in a minute, this applies to idea evolution. When you had small gene pools, when you had small populations where a particular genetic mutation could spread to the entire population very quickly. So you had rapid evolution, rapid speciation, creation of new species when you started with small, small gene pools.
The second notion he identified was when you had geographic isolation. Like if you had a mountain range that was, if one finch, one of these little birds that he studied was on one side of the mountain range and another was on another side of the mountain range and crossing the mountain range was very difficult, they wouldn't interbreed and you'd get sort of drifting genetic mutations on two sides of the mountain range. So geographic isolation caused speciation, caused this differentiation to occur. And then the final thing was when you had high evolutionary pressures, like when... Six million years ago when an asteroid hit the Earth, that caused this really rapid environmental change and it caused change in temperatures and change. And so that evolutionary pressure, that environmental change caused such pressure that only the fittest were able to survive. So those three things, small population pools, high evolutionary selection pressures, and geographic isolation caused, according to Darwin, rapid iteration, rapid evolution, new species to come into existence. And I would posit that that's true for ideas and for companies coming up with new products and services as well. What do you think about that?
Well, the one that my mind goes to, Peter, immediately is the threat of being bypassed by competition. You know, that is certainly part of the entrepreneurial marketplace. And there's real fear there. You could be made obsolete. Your whole concept of the six Ds, which is really worth a revisit in one of our podcasts as we go forward. But you know that suddenly a new value creation solution comes out of the marketplace. Everybody knows Uber. And Uber has probably caused more anxious nights among millions and millions of different kind of people around the world than almost any other new innovation because it threatened a whole way of life. It threatened a whole way of organizing.
transportation in cities and continues to do. But, you know, I think of the black cabs in London, they simply analyzed Uber's model. And within six months, they had their own black cab app that you can have a black cab within two minutes, you could identify the driver and everything like that. So they would never have budged from their traditional way if Uber hadn't come along. So I think that your notion of disruption is probably in the economic world, certainly in the entrepreneurial world, it is the number one environmental pressure that actually exerts itself on progress and forces innovation.
The other example I would give is what Steve Jobs did with his Macintosh team. What Steve did was he pulled a small hand select team. So a small group, right? No bureaucracy, small enough. Everybody knew each other. Everybody knew what they were working on. No organizational structure really required. And he geographically isolated them. He took them outside of Apple headquarters and he put them in a small building, geographically isolated, flew a pirate flag.
over it. And he basically, like you said, set them up in a competition against the rest of the Apple products. That was a very high selection pressure. And it's really under those circumstances. So to wrap on this idea, if you're looking to really create innovation, creating small teams that are geographically isolated, that have a reasonably high amount of pressure, not to the breaking point where they're going to go psychotic, but to the point where they're motivated to work through weekends and at night and shower time and so forth. That's how you drive real innovation.
Yeah. And just picking up on the first suggestions you got, Peter, make sure you include young people in your groups. Also have the prime motivators, curiosity, fear, wealth creation and significance so that there's ample rewards for being uniquely innovative. I think that you've created a master dish here and it's got eight different ingredients, but there's lots of seasoning that goes into this dish and actually creates an innovative environment inside of an organization. And there's nothing here that you've actually suggested in the previous podcast. And this one, Peter, that is beyond the means of a small company.
Maybe the company has five to 10 individuals, but the innovation can be generated there probably at a greater level than a large organization. Agreed. As always, a pleasure, my friend. Thank you. We've got raving fans, certainly in my customer base here at Strategic Coach, for being able to get an inside view of how Peter Diamandis thinks about things. And so I'm really happy to be part of the team that brings this to everybody.
professors, my coaches, my mentors. I'm thankful for everything you do to keep me sharp and keep me in the game at my maximal capacity. All my best. Look forward to our next Exponential Wisdom. Be well. Thank you, Peter.