4 ms·

I think they're using the Peter Thiel version of the word, not the traditional economics version of the word. For example, while Facebook, Apple, Google, and p

I think they're using the Peter Thiel version of the word, not the traditional economics version of the word. For example, while Facebook, Apple, Google, and present-day Microsoft all are not strictly speaking monopolies (they have viable competitors) -- they each have various features that make switching difficult (but not impossible).

mbesto 11y ago
> I think they're using the Peter Thiel version of the word, not the traditional economics version of the word. Which is a poor way to communicate a point when the widely considered definition of one of your words doesn't match the one you're articulating. It assumes everyone has read Peter Thiel's book (ps - everyone has not). It's the same with the word "startup". For a majority of the world a startup is business that has just started, but for YC (well, pg specifically[0]), the definition is "A startup is a company designed to grow fast" and more specifically notes "Being newly founded does not in itself make a company a startup". The definitions are not only considered inconsistent but they're explicitly inconsistent. Communication is important and this is one of those instances where I think many people might scoff at the notion that YC is building monopolies and that's "bad". [0] - http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html
- chejazi 11y ago
  Maybe a clarification is in order. BUT, this is YC's attempt to make their advice available to the broader community. If you're interested in YC and listen to their advice, you will likely have heard about Peter Thiel's monopoly (see Sam Altman's "How to Start a Startup" series w/ Peter Thiel otherwise). I'm just happy they're making this advice available. EDIT: Here ya go https://www.youtube.com/watch?v=-oKjLVECMKA https://www.youtube.com/watch?v=-oKjLVECMKA
- staunch 11y ago
  Context does matter though. If you're talking about startups in Silicon Valley, it's completely correct to exclude normal small business and focus on technology-based startups aka "tech startups". They really are very different kinds of businesses. The problem may be that that "tech startup" is too verbose and lame sounding.
- increment_i 11y ago
  Is it really though? I'd be more surprised at the scenario where the average hacker read this piece and didn't immediately make the mental connection to "Oh, he's talking about the Thiel thing."
- CPLX 11y ago
  I have an economics degree and know precisely what the word means, and have never read Peter Thiel's book and am not familiar with his usage of the word, and still the concept as applied in the letter made perfect sense to me. All monopoly is contextual.
roymurdock 11y ago
So Peter Thiel's version of "monopoly" is "oligopoly"? Why use a term specific to economics if you're using it in a non-economic sense?
- beat 11y ago
  Because the term has a certain emotional impact. The purpose here isn't to be pedantic economists. The purpose is to sell something - in this case, sell an approach to startups for how they can sell a vision to investors. "Monopoly" is a beautiful, meaningful word, not a technical specification. Investors don't hear dry economics. They hear "Potential for sustainable high profit margins in a large and hopefully growing market". If you want to get pedantic about Thiel, he argues that the monopoly does not need to be the direct source of revenue - in fact, it's better if it isn't. Consider Google. What's their monopoly? Search engines, which they dominate with their superior product. How much do they charge to use that product? Nothing. Google makes all of its income indirectly, off of ads served via their monopoly (and other monopolies they hold, like email).
  - deleted 11y ago
    [deleted]
  - wj 11y ago
    Warren Buffett refers to a moat. Same idea in that you have a defensible advantage.
Kinnard 11y ago
Who is facebook's viable competitor?
- jastr 11y ago
  Individual features of Facebook can be picked off by competitors. Instagram is just Facebook pictures. WhatsApp is just Facebook chat, etc. And, at least Facebook thought they were competitors, because Facebook obviously acquired them.
  - Kinnard 11y ago
    So facebook doesn't have viable competitors, it owns its viable competitors? ;)
- logicallee 11y ago
  obviously Google+, hangouts etc. Facebook has a monopoly on Facebook, not posts, friends lists, and messaging.

mbesto 11y ago

> I think they're using the Peter Thiel version of the word, not the traditional economics version of the word. Which is a poor way to communicate a point when the widely considered definition of one of your words doesn't match the one you're articulating. It assumes everyone has read Peter Thiel's book (ps - everyone has not). It's the same with the word "startup". For a majority of the world a startup is business that has just started, but for YC (well, pg specifically[0]), the definition is "A startup is a company designed to grow fast" and more specifically notes "Being newly founded does not in itself make a company a startup". The definitions are not only considered inconsistent but they're explicitly inconsistent. Communication is important and this is one of those instances where I think many people might scoff at the notion that YC is building monopolies and that's "bad". [0] - http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html

chejazi 11y ago
Maybe a clarification is in order. BUT, this is YC's attempt to make their advice available to the broader community. If you're interested in YC and listen to their advice, you will likely have heard about Peter Thiel's monopoly (see Sam Altman's "How to Start a Startup" series w/ Peter Thiel otherwise). I'm just happy they're making this advice available. EDIT: Here ya go https://www.youtube.com/watch?v=-oKjLVECMKA https://www.youtube.com/watch?v=-oKjLVECMKA
staunch 11y ago
Context does matter though. If you're talking about startups in Silicon Valley, it's completely correct to exclude normal small business and focus on technology-based startups aka "tech startups". They really are very different kinds of businesses. The problem may be that that "tech startup" is too verbose and lame sounding.
increment_i 11y ago
Is it really though? I'd be more surprised at the scenario where the average hacker read this piece and didn't immediately make the mental connection to "Oh, he's talking about the Thiel thing."
CPLX 11y ago
I have an economics degree and know precisely what the word means, and have never read Peter Thiel's book and am not familiar with his usage of the word, and still the concept as applied in the letter made perfect sense to me. All monopoly is contextual.

roymurdock 11y ago

So Peter Thiel's version of "monopoly" is "oligopoly"? Why use a term specific to economics if you're using it in a non-economic sense?

beat 11y ago
Because the term has a certain emotional impact. The purpose here isn't to be pedantic economists. The purpose is to sell something - in this case, sell an approach to startups for how they can sell a vision to investors. "Monopoly" is a beautiful, meaningful word, not a technical specification. Investors don't hear dry economics. They hear "Potential for sustainable high profit margins in a large and hopefully growing market". If you want to get pedantic about Thiel, he argues that the monopoly does not need to be the direct source of revenue - in fact, it's better if it isn't. Consider Google. What's their monopoly? Search engines, which they dominate with their superior product. How much do they charge to use that product? Nothing. Google makes all of its income indirectly, off of ads served via their monopoly (and other monopolies they hold, like email).
- deleted 11y ago
  [deleted]
- wj 11y ago
  Warren Buffett refers to a moat. Same idea in that you have a defensible advantage.

Kinnard 11y ago

Who is facebook's viable competitor?

jastr 11y ago
Individual features of Facebook can be picked off by competitors. Instagram is just Facebook pictures. WhatsApp is just Facebook chat, etc. And, at least Facebook thought they were competitors, because Facebook obviously acquired them.
- Kinnard 11y ago
  So facebook doesn't have viable competitors, it owns its viable competitors? ;)
logicallee 11y ago
obviously Google+, hangouts etc. Facebook has a monopoly on Facebook, not posts, friends lists, and messaging.