The Tim Ferriss Show: Peter Thiel on Investing, Business and Life

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“Freedom lies in being bold” – Robert Frost

  • Peter Thiel’s Background: Cofounder of Paypal (sold to ebay for 5 billion) and assembled the “Paypal Maffia” including Elon Musk and Reid Hoffmann that have multiple billion dollar companies (e.g. Tesla, SpaceX, Youtube, Linked In, Yammer, Palantir
  • Peter’s amazing book on innovation: Zero to One
  • Technology is far more important in this world that globalization and we need to shift away from copying ideas that work elsewhere
  • Most people believe competition and capitalism are synonyms, Thiel would argue they are actually antonyms
    • Capitalists accumulate capital
    • In a world of perfect competition, all the capital is competed away
      • g. restaurants in San Francisco are competitive and nobody makes much money
      • While Google is capitalist and makes lots of money as a monopoly without competition
    • There is no need to wait to start something, you might have a 10 year plan, but ask yourself why you can’t do it in 6 months?
    • Failure is massively overrated and most businesses fail for more than one reason and you might not learn anything from it
      • You might think it is failed for reason 1, but it really is reason #1-#5
      • “the death of every business is a tragedy”
    • Successful People: Zuckerberg, Elon Musk
      • They are relentless, start over and do more every day
    • On Bitcoin: Struggling with similar issues to Paypal in 90’s
      • Paypal didn’t succeed of creating a new currency, but did change payments
      • Bitcoin is the reverse, succeeded in a new currency, but may not change payments
        • Not yet using it to transact, but will need both to succeed
    • Trends: I don’t like talking about trends as those involve many people and lots of competition and little differentiation
      • They are to be avoided
      • I prefer a sense of a unique Mission to solve something that other people are not solving
      • Every tech moment only happens once
    • VCs/investors who take a “spray and pray” portfolio theory might work, but they do it because they lack conviction and are too lazy to really spend the time to figure out what companies will work
      • I don’t think it is good to treat companies and founders are lottery tickets, but morally and as an investor
        • Looking for small prob of big payoff = small number and already psyching you into losing money
        • Anti-lottery ticket approach: Forces high levels of conviction before you write a check
      • On Aging/Death: Amazing how little we are doing about this problem
        • People are either in denial or acceptance, but either way it leads to passivity and need to get more active
        • There is nothing more natural for us to fight death
    • Unemployment in the US:
      • Micro: No one-size fits all approach, you need to understand why they became unemployed (e.g. lost rust belt job vs. recent graduate with a lot of debt)
      • Macro: Ned to find a way to find more growth for the overall economy (need more like 4% vs. 1-2%)
        • Technology is the key driver of growth and needs to be accelerated
      • On Being Anti-College: There is no one size fits all, I just say that not everyone should do the same thing
        • It is very odd that all the most talented people all get tracked to the same schools, subjects and careers
        • Thiel was guilty of this as well, if could do it again I would question a lot more, especially going to law school
      • Future of Education: Education is an abstraction, I prefer learning much more than education/credentialing
        • What is it you are learning or why? Why going to college?
          • For a party, consumption decision, investment decision, insurance or just a tournament to beat other people?
          • Are elite universities just like an exclusive nightclub?
        • Engineering is the opposite of education because you are learning a specific skill – the anti-education
        • Much less one-sized fits all as big institutions are providing less and less and charging more and more
        • Education today is at the same point the Catholic Church was before the Reformation
          • Corrupt, increasing charging for indulgences, can only be saved by catholic church (like a college diploma is all that can save you from hell)
        • Future: Disturbing answer, you’re going to have to figure out your salvation on your own
      • On Philosophy: The question of what do people agree simply by convection vs. what is the fundamental truth?
        • We never want to let a convention be a shortcut for truth
        • Silicon valley is latent with conventional thinking, because there are so few markers when you’re thinking of the future and everyone listens to everyone else who is guessing
      • Daily Routines?
        • Generally unstructured
        • Try to speak with learn things from some of the smartest people I know (often with people I have had sustained conversations with people over time)
      • Advice to a younger you?
        • I was too competitive when young
        • You get good at what you compete on, but neglect other areas
        • I’m more self-aware of competition that we get caught up in, but I’m still struggling with it
      • Goal of Zero to One: Want to share learnings as broadly as possible (e.g. not just with a class at Stanford)
        • Alarmist: If we don’t innovate, we’ll have a bleak century
        • Positive: Tons of great opportunity that we can unlock
        • Try to take 15 of years distilled into 200 pages that you can quickly read (vs. most business books that take one idea and repeat over and over again)
      • Book Recommendation: Things Hidden Since the Foundation of the World by Rene Girard
        • Girard gives a sweeping view of the whole human experience on this planet — something captured in the title of his masterwork,Things Hidden Since the Foundation of the World — but it’s not just an academic philosophy. Once you learn about it, his view of imitation as the root of behavior is something you will see every day, not just in people around you but in yourself”
      • Favorite Movie: No Country for Old Men
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