Jobs, Thiel, and Stasis Theory

One way to win an argument is to change its stasis. The stasis of an argument is the mental category that it fits into. Some common examples of stases are fact (“Did you come in after curfew?”), definition (“Was the curfew 11 or 12?”), quality (“I have a good reason…”), policy (“What is the appropriate response?”), or jurisdiction (“Who should decide?”).

Stasis theory is commonly taught in law school; the ability to change the type of argument you are engaged in can be the difference between a win and a loss in the courtroom. Peter Thiel’s class notes exemplify how setting the context is important in discussions of monopoly. Most entrepreneurs would rather have a monopoly than to compete in the market, he argues, but you have to convince the government that you are not a monopoly:

One problem is that if you have a monopoly, you probably don’t want to talk about it…. You don’t just not say that you are a monopoly; you shout from the rooftops that you’re not, even if you are.

But since blatant lies can be undermined by the truth, you have to be a little more clever:

Let’s drill down on search engine market share. The big question of whether Google is a monopoly or not depends on what market it’s in. If you say that Google is a search engine, you would conclude that it has 66.4% of the search market….

But suppose you say that Google is an advertising company, not a search company. That changes things. U.S. search advertising is a $16b market. U.S. online advertising is a $31b market. U.S. advertising generally is a $144b market. And global advertising is a $412b market. So you would conclude that, even if Google dominated the $16b U.S. search advertising market, it would have less than 4% of the global advertising market. Now, Google looks less like a monopoly and more like a small player in a very competitive world.

By changing the context of the argument, you can leverage the truth in your favor. This was a lesson Steve Jobs knew well. When the iPhone 4 was released, the metal case caused a problem with the antenna, which led to dropped calls. The problem quickly got out of hand, and Jobs returned from a family vacation in Hawaii to do damage control:

At the press event that Friday… [Jobs] did not grovel or apologize, yet he was quick to defuse the problem by showing that Apple understood it and would try to make it right. Then he transformed the framework of the discussion, saying that all cell phones had some problems…. He captured it in four short, declarative sentences: “We’re not perfect. Phones are not perfect. We all know that. But we want to make our users happy.” (Isaacson biography, p.522)

Not only did Jobs change the context, as Thiel does in the example above, he also shifts the standard to a false perfect/not perfect dichotomy. It’s a rhetorical trick, but it worked: iPhone 4’s were returned at less than one-third the rate that the 3GS model was, despite the antenna problem. It pays to know a little bit about stasis theory.

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