Marius Schober

Progress Through Consciousness

  • The Price of Being Right

    •

    4 min read

    Last night, I went down a very unexpected rabbit hole. If you are German and 25-40 years old, you will probably know Arafat Abou Chaker. It turns out he has a live streamed podcast where he plays the role of mediator. YouTube recommended me a video where Manuellsen, a German rapper, sat down to settle a conflict with two internet streamers I never heard of.

    Both parties had some serious internet conflict start starded with a racial slur. Long story short, it was a very very heated argument and beef. But in the end, just through talking and mediating, Arafat ended the conflict.

    It turns out talking and mediating can work better than fighting legal battles. So, while I might have lost 10 IQ points watching it, I regained 20 because I understood that we in the West should learn from Islam’s practice of Sulh.

    Here is a definition I found online:

    In Islamic law, Sulh (Arabic: صلح) refers to the process of amicable settlement and the peaceful resolution of disputes. It is considered a form of contract (Aqd) where parties voluntarily agree to resolve their differences to restore social harmony.

    I don’t believe the reason Sulh works has inherently something with Islam or works only because of Islam, but rather because of hyper-local and social accountability.

    First, in a legal battle, lawyers have no skin in the game regarding the relationship of the two conflict parties (they profit from the process independent of who “wins”). In Sulh there is a mediator, in this case Arafat. He and the conflict parties live in an existing social network. In the process of Sulh, everyone has real downside because they risk reputation, ego, and social standing by facing each other directly. The mediator himself has real downside too – because if the peace fails, he risks reputation.

    Second, the legal system is often an attempt to use the State as a weapon to do something to another (breaking the Silver Rule). Sulh is much more the cessation of “doing” in order to return to a state of peace and social harmony. While a litigation will be “won” by one party, it does not remove the human conflict itself, rather it suppresses it. This can lead to future violence and retaliation because the underlying ego-dishonor remains (or is actually amplified). In that sense, Sulh is antifragile, the legal system fragile. In Sulh, both parties resolve their conflict directly and as a result their relationship actually becomes stronger.

    Arafat – in this case – works great as a mediator because he has more Weight (Social Status) than the other two conflict parties. Arafat works because of his perceived power. While the West also has systems for mediatios, they often fail because the mediator is a neutral “nobody” with no social power to enforce the social contract.

    After watching this, I believe many disputes can be solved better by actually sitting down and talking to each other. This is because Sulh restores social harmony instead of just claiming a winner of a legal battle. The legal system seeks “Truth” which is important. However, Sulh seems to seek “Peace” over “Truth” and sometimes, for social harmony, Truth can be the enemy of Peace. It restores peace and social harmony by actually allowing to bury some facts, and this allows both parties to walk away with dignity and without losing their face.

    Sulh – obviously – won’t work for all disputes. If there are severe power imbalances or serious crimes, the legal system is necessary for deterrence and enforcement. But perhaps we should view the legal system as a backstop, not the default.

    The interesting reflection is this: If you are in a conflict, would you rather “win” or actually restore peace and social harmony?

    0

  • AI Bots and Human Attention

    •

    3 min read

    Over the past months, some of my LinkedIn posts went kind of “viral”. One thing I was able to observe are AI replies. Whether automated or not, this kind of alarms me. Today I went so far as to remove and unfollow a connection that send me an AI written article. For one, I’m not quite sure how many users can actually recognize AI written content. Second, I’m quite sure that most user’s don’t yet understand the consequences of this happening.

    To understand this, you first need to realize that AI is now doubling in capability roughly every six months – or faster. For a while now, humans are using AI to write social posts or comments – purely for engagement. I learned that there is increasingly little to none original thought in a post, comment (even in personal messages and emails).

    But now, AI became agentic. On X, Instagram, Facebook you can use APIs to engage in conversations, to share content, respond to comments. Some of the fastest growing and most polarizing accounts hook up AI systems to run their social accounts. What looks like a human in the first sight, is actually a AI system.

    The problem, I see, is much less about AI itself, but human beings ending up interacting emotionally with these AI bots. If someone is liking your post or leaving a comment, and you don’t realize this is an AI interaction, then you end up believing that you just had real influence, started a real conversation, made real progress – when in reality, you are just wasting your emotional energy interacting with a soulless bot.

    The more this happens – and the phenomenon is clearly increasing – the more we humans step into a trap. We read soulless content, get fooled by soulless comments, and automated likes.

    In a sense, we are right now on a path towards a “dead internet”. AI bots write for other AI bots, algorithms rank content for other algorithms. What is the role of us humans? We become mere spectators. Or much worse: batteries who are providing an emotional charge.

    What is already happening – and I feel the pressure myself sometimes – is that we humans will try to “compete” with the volume and perfection of AI. We start mimicking them (especially when we believe AI agents to be genuinely human). We become less human as a result – because if we don’t pay attention, we will need to survive in a system designed by machines for machines first, and humans second.

    The most important thing you have to realize is that metrics are obsolete, worthless currency. Increasingly, engagement, reach, follower-count will be from soulless AI bots.

    What can we do?

    Our actions matter more than anything else. Whether you use AI to write, allow your marketing department to automate with AI, whether you accept AI slop in your feed, whether you buy from soulless businesses doing soulless AI marketing. We need to starve the AI engagement. If it feels AI, don’t engage. If it is clearly AI (or worse AI automated) remove the connection, consider blocking.

    Most importantly, start valuing real human conversations over anything that is happening online. 10 real conversations with human souls are better than 100,000 impressions.

    Finally, be the human. If you aren’t writing it, don’t post it.

    0

  • AI Commoditization and Conscious Teams

    •

    1 min read

    LLMs work primarily on classical information, which is public and shareable; the outputs of AI therefore inevitably lead to a commoditized equilibrium where everyone reaches the same logical conclusions. For organizations, this means scaling AI-, and logic-based decisions will – in the short term – lead to promising efficiency gains and perhaps innovation, but in the long term inevitably to a highly competitive market with little to no differentiation, simply because these decisions are de-facto always based on historical data. The big difference with AI is that it is connecting dots in massive amounts of data humans are incapable of. However, new Creations, Laws, and Symbols can only emerge from Meaning, not the other way around. Therefore, the only way to deploy AI is to do so alongside training and hiring conscious employees with the aim to create unique, non-reproducible decisions/products that hold immense density of meaning. Focusing on “probabilistic prediction” (AI) leads inevitably to commoditization, while “creative manifestation” (Free Will / Consciousness) is the only antidote. Organizations have to fully drop traditional structures of hierarchies (control) and reinvent as an entangled network of conscious humans to maximize collective comprehension (consciousness does not differentiate between titles, seniority, or network). 

    0

  • Lead or Manage

    •

    6 min read

    AI is a fascinating thing because it demands a complete rethinking of what “work” is. Truly unleashing AI’s potential cannot be achieved through management or consulting because, by definition, they are forced through shareholders or fees to focus on rationality, risk, returns, and metrics.

    For large companies (Fortune 500), the incentive structure does not allow real change: shareholders demand legible risk over actual transformation (too risky), this forces the CEO to optimize for defensibility. He cannot justify intuition or conviction to the board; ergo he outsources decision-making to metrics, consensus (,and AI itself) which in turn creates a perfect market for consultants who can sell change management as a liability insurance, not transformation.

    The next 10 years will show that the only companies that will win aren’t those with the best AI strategy or change management frameworks but the one’s whose leaders simply feel, see, understand what’s coming and reorganize everything around that vision (consequences be damned).

    We already have a selection filter for who will succeed with AI: in the first category are CEOs who have risen through the system, they have learned NOT to trust intuition, NOT to make bold moves, NOT to lead through conviction. The system promotes these people who are really good at managing consensus and hiring consultants. The second category (the winning category) are CEOs who can actually lead this transformation. They can ignore the consultants, move faster than their boards are comfortable with (if they have one), rebuild from first principles and lead from intuition. The second category will save companies and turn SMBs into Fortune 500 companies. They will look chaotic, unreasonable, and like failures for years before the world catches up with what is inevitable.

    However, not every large corporation is doomed. Those CEOs who have majority voting rights (dual-class shares, founder control) are in a unique position compared to anyone else in the Fortune 500 lists. That is also why everyone is looking at Mark Zuckerberg, Sergey Brin, Larry Ellison, Elon Musk, Jeff Bezos, Jensen Huang, or Marc Benioff. Almost all are founder-led tech companies – almost none of the other traditional Fortune 500 have this structure. Many of these other traditional companies are up for a big surprise because they will not be disrupted by their peers in their respective index, rather by SMBs.

    Medium sized businesses have inherent structural advantages in this AI era, because they have decision speed, no board presentations, existential clarity, closer to actual work and their customers, less to lose.

    What might happen is that founder-controlled giants will continue to outperform beyond what we currently believe is possible while traditional large-cap companies are getting hollowed out and disrupted – simply because they are too slow, too consensus driven, too addicted to consultants to be able to match founder-led startups and SMBs.

    Today, SMBs have an asymmetric opportunity. In corporations, there is a big fat layer between “we should use AI” and someone actually building a real workflow and implementing and using it productively and creatively. In SMBs, the person who decides is the person in charge of implementation (or one conversation away).

    The mistake most SMBs are making is they think: “How do I use AI to do what I already do, but cheaper/faster?”. That is the efficiency play the consulting companies are selling to the numbed CEOs. Yes, it helps margins, helps increase competitiveness against those who don’t implement it, but it doesn’t create moats. The real opportunity for SMBs is the question: “What can we do NOW that was impossible before?”

    In a very first step, SMBs need real leadership. A leader who asks: “What business are we actually in, now that AI exists? What would we build if we started today?” – not an operational CEO who says: “Let’s pilot AI in production or marketing, measure productivity gains, then roll out if ROI is positive.” Today – more than ever before – the CEOs actual job is articulating what the company can become, not what it should optimize. To create space for employees to experiment radically, use their intuition and creativity, to act boldly, fail, then rebuild. The task is to kill traditional processes, roles, systems that prevent this new kind of “work” to evolve (in other words throw away any MBA management book).

    Yet none of this is possible without “destroying” the old company, while simultaneously building the new one. Some roles will disappear entirely; some people can’t make this transformation. Some revenue streams must be abandoned to free up focus for new ones. Most SMB CEOs can not stomach this. They want transformation AND stability. They want the new moat WHILE keeping things as they are. This leads to nowhere (because nobody is leading). Now more than ever, CEOs of SMBs must transform their organization so they attract and can select – through leadership – those employees who can operate this way. These employees have high agency, they take responsibility and develop and pursue AI strategies for which they’d otherwise pay consultants expensive money for.

    But – again – AI is little about AI strategy but about whether you can attract the humans who don’t need one. The startups and companies who are building billion-dollar moats right now aren’t “enabling” their teams to use AI. With visionary leadership, they are continuously rebuilding their teams entirely – meaning they are selecting and attracting people with high agency that “change management” is not necessary, because their leaders and the people they attract are the change.

    Most CEOs of SMBs will laugh and pretend these people don’t exist. First, this tells more about the CEO than about “non-existent” talent, and second, they – of course – do exist. They are currently trapped in corporate jobs or building with AI at night only waiting for the leader who speaks their language. They will join companies if they offer at least three things: (1) “impossible” problems (not use AI to improve efficiency by 15%), (2) the permission to fail forward (real ownership and agency, no inconclusive meetings), and (3) visionary leadership through authentic conviction (not consensus-building); a vision so clear they’d be crazy not to join.

    If you are asking “how do I enable my current team to use AI?” you have already lost. You must ask: “Am I building the kind of company where the most talented people on earth would actually want to work?”

    The answer lies not in your AI strategy. The answer lies in your decision: lead or manage?

    0

  • Let the Giants Struggle

    •

    4 min read

    The common refrain in policy circles is deafening: “We must make it easier to start and run a company.” Deregulation, a simpler tax system, etc. is all necessary…

    But is that really solving anything?

    I’m not convinced. If you look back at the fastest growth periods of the USA, China, or Germany, they weren’t particularly famous for “super simple company formation” or the ease of daily operations. In fact, despite modern bureaucracy, the internet has arguably made the logistics easier today than ever before.

    We are optimizing for the wrong variable. What we actually need is a high tolerance for risk and failure. We need engineers and scientists starting companies—not MBAs pursuing PE-style acquisitions or internet entrepreneurs building copycat commoditized products.

    And because of that, I think one of the greatest growth periods for Germany could be right ahead of us.

    Why am I (very) carefully optimistic about Germany over the next 20 years?

    For the past two decades, massive talent (and intellectual property) has been locked up in legacy Mittelstand giants – Bosch, ZF, Siemens, VW, etc. These companies employ engineers, inventors, and extremely smart people. However, under current employment contracts and comfort levels, these individuals would be “stupid” to quit, no matter how stagnated the leadership becomes.

    The more these giants struggle, the more innovation Germany will produce.

    If you ask me, the problem is a big part company leadership (within these giants but generally overall in the German Mittelstand) and real talent being trapped in these big companies with their IP being buried and never commercialized.

    We cannot ignore taxation. A common thread during historical high-growth periods is very low or zero social security “taxes.” These social systems are almost always built after a country gets rich.

    Conversely, high-growth periods feature very low taxation on equity upside. Today, in both Germany and the USA, we have the opposite.

    What is the result?

    • Founders optimize for “get rich quick” schemes.
    • We build lifestyle cash-flow companies and predictable service based businesses
    • We do not build 50-year conglomerates that employ 100,000 people and invent new industries.

    It is pathetic that real estate is now considered the best “investment” – which basically mean returns guaranteed from regulatory scarcity.

    I’m not entirely optimistic, however, because we face endless other problems across the entire West (USA and Germany alike):

    1. Demographic Collapse: Nobody is having babies.
    2. Nostalgic Leadership: Leaders like Trump and Merz seem to work toward the preservation of long-gone greatness rather than future innovation
    3. Avoiding Hard Problems: We don’t attempt to solve the hard physics problems anymore.
    4. Cultural Punishment: As Eric Weinstein notes, we have a culture that punishes anyone who actually tries to solve complex issues.

    Despite all the optimism for the United States. If we are fully honest: What is actually being built in Silicon Valley? How many “Zero to One” companies exist that aren’t total frauds? Even in Thiel’s Founders Fund portfolio, the list is shorter than we’d like to admit. In Germany, that number is hopefully not zero, but who knows?

    Returning to my perspective on Germany: I fear the best path forward – besides removing red tape – is actually allowing all zombie companies to die and all Mittelstand giants to struggle, restructure, and lay off people.

    If I were Chancellor, I would use the new debt capacity in a radical way:

    1. Radical Labor Reform + UBI

    Change labor laws so that ANY company can lay off whomever they want without any justification immediately. To balance this, the state provides an immediate Universal Basic Income to anyone affected (or perhaps, to everyone).

    2. Aggressive Deregulation

    Change regulatory bureaucracy so that it is easier to invest, raise capital, and distribute equity in Germany than in any other nation on Earth.

    3. Unleash the Drive

    This mix would release massive talent that suddenly has an inherent DRIVE to be productive. They would start companies or join existing or newly started ventures that actually commercialize IP rather than letting it gather dust on a corporate shelf.

    4. The Demographic Push

    And while doing so? I’d make it socially unacceptable to not have babies. Placard every public ad space with sweet baby photos while giving influencers with 3+ babies massive tax benefits.

    One is for sure: “business as usual” is no longer an option.

    0

  • Why Low Transactions Will Kill Bitcoin

    •

    3 min read

    The biggest risk to Bitcoin is people not using Bitcoin. If nobody is using Bitcoin for daily transactions, then miners have no continued long-term incentive to keep mining. As soon a different proof of work cryptocurrency starts gaining enormous traction for actual real-world day-to-day peer-to-peer transactions on the scale of Visa and Mastercard, then miners will switch instantly.

    The risk is real because BTC is currently not used in any mentionable degree for on-chain payments. Most transaction are either custodial or speculative holding. Bitcoin turned into a settlement layer for few large-value transactions and what is described as store of “value”.

    But Bitcoin needs daily transactions in order to make long-term financial sense to miners. Miners invest massive compute power for mining Bitcoins, and by doing so they secure the network. For this effort, they are currently rewarded 3.125 BTC per block or 450 BTC per day. The problem is that this effort – and thus Bitcoin’s security – is massively “subsidized” by block rewards (newly minted BTC). Theoretically, miners would also be rewarded by transaction fee revenue. But transaction fees were only 3.53 BTC over the past 24 hours. In other words, <1% of miner revenue is currently funded through transactions and >99% is funded through block subsidies.

    The next halvings in 2028 and 2032 will further reduce subsidy issuance by 50% each time. This puts pressure on Bitcoin because in order for miners to continue mining, the BTC price must appreciate substantially and/or on-chain demand for transactions must rise significantly in order to offset these subsidy halvings. The only way for this to happen is either the mass-adoption of a layer 2 solution like Lightning or Ark and/or that Bitcoin captures 1-5% of the global payment markets in interbank settlements, ETFs, and nation states. This would allow fees to hit 20-50% and thereby offset the 2032 subsidy halving. The only alternative – as long transactions and thereby transaction fees stagnate – is that BTC is crossing >$1M by 2032.

    Leaving speculation aside, either way, by 2140 Bitcoin’s security MUST come from transaction fees alone. If transaction volume stays low then long before 2140 the fee revenue will be inadequate to maintain hash power to secure the network against 51% attacks.

    Bitcoin miners use ASICs, which are specialized chips for computing SHA-256 hashes. Miners already practice “hash rate migration” which means they point their ASICs at whatever SHA-256 blockchain is most profitable to mine at any given moment. This is the rare exception but – in other words – if any other SHA-256 coin genuinely became more valuable (for example by actually being used as a global on-chain P2P cash system) and thereby more profitable to mine than Bitcoin, that hardware will absolutely migrate to whatever that coin will be.

    My Conclusio: Technically, BTC is too limited to be functional as a P2P cash system, and thus Bitcoin in its current form can not capture the global P2P transaction market. Ergo: the most important use case for cryptocurrencies – that of a global mass-adopted day-to-day P2P cash system – is not yet claimed by any cryptocurrency in the market.

    0

  • So Good They Can’t Ignore You

    •

    2 min read

    There is this book from Cal Newport called “So Good They Can’t Ignore You.” It basically says focus on what value you can offer and which rare and valuable skills you can acquire.

    I carefully predict that in order to be “so good they can’t ignore you” in the future, all you need to do is ignore using ChatGPT and any other LLM and just do intellectually challenging work every day. In 3–6 years you’ll be one of the sought out, employable, and highly-paid individuals simply because you are cognitively sovereign.

    Yet, in order to survive the next 3–6 years without falling behind competitively against those who do use ChatGPT et al., you must avoid all computer and knowledge work. In other words: have a career that allows you to provide value (and make money) without using a computer.

    Besides obvious blue-collar jobs (which are themselves antifragile if specialized), this is particularly sales and deal related work: sales, M&A, broker, leader/founder/owner.

    By pursuing such AI-resilient jobs, while spending early mornings, late evenings, or weekends writing essays, doing manual research, solving difficult math or physics problems, or simply by reading real books, you’ll be so good they can’t ignore you.

    It will require much less effort than ever before, not because less effort is required for mastery, but merely because you are now part of the control group against a massive population that will experience cognitive-atrophy and thereby become dependent on AI and thereby unoriginal, homogenous, and uncreative.

    0

  • Principles Shrink Options

    •

    1 min read

    I always thought that the world is big. That there are many countries to choose from if you ask yourself “Where to live?” The truth is: the world is actually very small. When you have certain criteria, the # of countries that qualify collapses from hundreds to only a handful of options. For example: if you believe in home-schooling, no legally required childhood vaccination, and you do like sunshine, only 7 countries will match this specific criteria. Of these, some are shitholes, which leaves you with 5 options. If you don’t want to live completely detached from society (in the jungle or on a remote island) then you have 3 options left. If you want to own property, there are 2 left: Portugal and Panama. If you don’t like the EU, Panama is the only option with its own downsides – or perhaps the best option is to get a medical exemption to make the USA your perhaps best option.

    Have you ever defined what principles are truly important to you – and then matched where in the world these criteria are fulfilled? You will be surprised.

    2

  • Stagnation

    •

    1 min read

    Most seem to overlook that this economic stagnation is global, not specific to their country, and only getting started. Without the ambitious valuations and debt-funded capex for AI, the US economy would be just as (or even more) stagnatory as the EU.

    7 AI-focused companies now make up >30% of the entire US stock market. Banks are becoming increasingly exposed through credit lines to AI companies.

    Globally, growth rates are decelerating. Not only in Germany and more broadly the EU, but in basically all non-US developed economies, we are seeing sub 1-2% growth. Basically zero job creation. Globally, honest inflation is higher than honest GDP growth. China faces massive underreported demographic challenges, the impact of tariffs is brutal. Debt dynamics in the US, relevant EU countries, emerging economies are vicious. Mexico stalls, Brazil slows. If AI valuations and investments falter for whatever reason (unmet productivity or overinvestment), the US will be visibly in a recession, which would trigger a global one.

    Ergo: AI must work and create real productivity growth in traditional economies. That is honestly a lot of pressure on the big AI labs and researchers.

    0

  • Final Thoughts from Warren Buffett

    •

    1 min read

    Warren Buffett is ending his Thanksgiving letter with timeless advice:

    • Don’t beat yourself up over past mistakes.
    • Get the right heroes and copy them.
    • Decide what you would like your obituary to say and live the life to deserve it
    • When you help someone in any of thousands of ways, you help the world.
    • The cleaning lady is as much a human being as the Chairman.

    His letter reads as though he feels his death is near. I learned a lot from everything Warren Buffett has written over his lifetime. I am extremely grateful for that. If there is one thing that he inspired me to do, it is to write publicly. While it feels as if nobody is reading what I write today, I know that there will be one single person 41 years from today who will be just as grateful that I published and not buried my thinking.

    0