Anthropologist Margaret Mead said it first: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.” Entrepreneur Peter Thiel, the first outside investor in Facebook and a founder of PayPal, has made billions with a similar philosophy. Looking at tech startups in his new book Zero to One, he says, “Small groups of people bound together by a sense of mission have changed the world for the better.”
Thiel’s book is full of useful lessons that he expands upon in our interview:
• If you try to copy innovators like Mark Zuckerberg, Steve Jobs and Sergey Brin, you’re not learning from them—great tech opportunities happen only once.
• Don’t look at where the world is now; think about where it will be in 10 years. Aim to create something so great (dare we say, insanely great?) that everyone will want it (even if they don’t know it now) and enjoy a monopoly in the market.
• Think the Tesla Model S for electric performance cars and Google for search engines. Don’t work from old formulas, and don’t be the 20th company trying to sell pet food on the Internet.
• Finally, success isn’t about luck.
“I’m always a little bit uncomfortable with the way people talk about luck,” Thiel tells me. “If you think everything is a matter of luck it becomes demotivating. Sometimes it’s an excuse for not thinking.”
In general, Thiel says, “People want a formula for business, but my bias is anti-formulaic. By the time you’ve adopted a formula, you’ve lost the most essential element, which is everything that’s fresh, strange and unique.”
Thiel worked with Elon Musk at PayPal, and he’s sanguine that Tesla will meet its goals, some of which are daunting. “I would never bet against Elon,” he says. Tesla’s band of renegades is a pretty good example of the change agents Thiel likes to see. “Maybe Tesla’s insight was to see just how broken the major car companies were,” he says. “Why couldn’t they accomplish something similar, with far more people and capital?”
People listen to Peter Thiel when he’s not confounding them. Few investors have been right as often. His Founders Fund, which he operates with a few longtime associates, has more than $2 billion under management. He co-founded a Big Data consulting company, Palantir Technologies, with the Defense Department, CIA and police departments as clients and a $9 billion valuation, and got in early at smart companies like Airbnb. The Forbes 2014 Midas List says Thiel is worth $2.2 billion.
But Thiel has also courted controversy. He’s a Stanford Law graduate who created fellowships that pay students $100,000 to postpone or drop out of college and become entrepreneurs. “If you think that sounds crazy, that’s because it is,” wrote Stanford fellow Vivek Wadhwa in The Washington Post. He also backs “seasteading” to create floating cities in international waters to test new ideas for governance.
Some of his innovators-against-the-herd ideas echo Ayn Rand, but Thiel says it’s not so simple. “She was reasonably accurate about the villains,” he says, adding that Rand hero John Galt might not make it today. “Businesses are too multifaceted for one person to do everything,” Thiel says.
Zero to One, Thiel’s first book (written with Blake Masters), skips the politics in favor of some very direct, from-the-trenches startup advice. It will change the way you think about business, and that’s absolutely intentional.
Peter Thiel explains why team trumps individual talent in “Why the ‘PayPal Mafia’ Worked.”