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Peter Thiel (who works with YC) will tell you that monopolies are good for the world.
by brndnmtthws 9y ago
Peter Thiel (who works with YC) will tell you that monopolies are good for the world.
- hanklazard 9y agoAny links you could recommend? I’d like to read more as I disagree strongly.
- losteric 9y ago* Peter Thiel's WSJ article: https://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 https://www.wsj.com/articles/peter-thiel-competition-is-for-... * Criticism: https://medium.com/@petersimsie/why-peter-thiel-is-dead-wrong-about-monopolies-390d316180bd https://medium.com/@petersimsie/why-peter-thiel-is-dead-wron... * Alternate interpretation of Thiel's intent: https://www.quora.com/Peter-Thiel-claims-that-competition-is-for-losers-and-that-monopolies-are-the-way-to-go-Does-this-mean-that-I-should-stop-with-my-start-up-idea https://www.quora.com/Peter-Thiel-claims-that-competition-is...
- emodendroket 9y agoI mean, in the narrow sense he's of course right -- if you're a business owner or investor the logical thing to do is to aim to create a monopoly. Where I depart is the claim that this is also good for society as a whole.
- losteric 9y agoI agree - didn't feel it was worth mentioning considering the original and the criticism I linked to :) I like drawing parallels between economics and ecology... monopolies are farms, massive artificial monocultures that suppress natural competition and extract value for the profit of a few. They embody a cycle of growth and stagnation. A healthy economy is more like a jungle, innumerable smaller competitors with diverse approaches to survival... an extremely resilient and constantly evolving ecosystem that leads to fascinating innovation.
- jasode 9y ago>A healthy economy is more like a jungle, innumerable smaller competitors ... that leads to fascinating innovation. I think you missed PT's point. The word "monopoly" has overshadowed his message. He wants people to pursue "blue ocean"[1] ideas to be innovative. Instead of starting a company that makes another generic clone of aspirin, you pursue a drug that cures breast cancer. Or instead of building a business that broadcasts 150 characters (hey we offer you +10 more characters than Twitter), do something more innovative for society like building cheap flying cars. I'd venture to guess that 99% actually agree with PT's underlying idea (innovation) but the distasteful word "monopoly" has completely drowned out the message. The term "blue ocean" is the same concept -- it just doesn't rile people up as much. [1] https://en.wikipedia.org/wiki/Blue_Ocean_Strategy https://en.wikipedia.org/wiki/Blue_Ocean_Strategy
- emodendroket 9y agoDoes the typical investor really care if the idea is a cure for breast cancer or "driving all existing providers in some space out of business and then mopping up the market"?
- jasode 9y agoYes, investors care about the goals of the business. See the promises of Theranos' "40 tests and detect cancer from a single drop of blood". I can't think of a VC that has the investment thesis of "put money into businesses that has cutthroat competition and drive others out of business". Theranos had promises of "blue ocean". No competition. This attracted investors like moths to a flame. (We now know they had no competitors because their technology was a fraud.) The investors would have been better off investing in a boring factory making generic aspirin ("red oceans of bloody competition").
- emodendroket 9y agoI'd argue that's basically what Uber is trying to do.
- rayiner 9y agoThey often are, because companies in highly competitive industries don’t have the excess profits to reinvest in research. Computing as we know it is largely the story of monopolies. Bell Labs bankrolled by the AT&T monopoly. Xerox PARC bankrolled by the Xerox copier monopoly. The Internet bankrolled by the ultimate monopoly (the military). The modern web bankrolled by the Google/Apple duopoly.
- wu-ikkyu 9y ago>companies in highly competitive industries don’t have the excess profits to reinvest in research. On the flip side, monopolies often have little incentive to invest in improving their products/services, and find they can profit from making their products cheaper/worse.
- emodendroket 9y agoOr outright killing research that threatens their main revenue drivers. Like, OK, we eventually got digital cameras, but Kodak didn't do anything with it for a long time because they wanted to keep selling film. With graver consequences, Exxon decided to suppress its own findings about climate change.
- kazagistar 9y agoAnother ongoing example: suppression of research into male birth control due to fears of cutting into profits from the cash cow that is female birth control.
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- titzer 9y agoYet all of those monopolies either imploded, had their markets simply dry up, were out-innovated by smaller competitors, or investors just moved onto hotter fads. The crashing and burning of a big monopoly may very well be a healthy event; but oh the damage they do before then...
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- twobyfour 9y agoOh, heavens, no! Nobody associated with YCombinator (especially a demi-god like Thiel) is ever wrong about any topic involving our economic (or socioeconomic) system. Ever.
- dang 9y agoPlease don't post unsubstantive comments here. (Whether about YC or anything else, doesn't matter.)
- grzm 9y agoThere may be an interesting discussion here somewhere, but as constructed your comment is less likely to produce such. Do you have specifics regarding Thiel’s position and how it compares with that of the article? As is, it appears you’re looking to provoke a reaction rather than promote a productive discussion.
- newmanships 9y agoHe gave a talk about his thoughts to a Stanford class: https://www.youtube.com/watch?v=z6K8PZxyQfU https://www.youtube.com/watch?v=z6K8PZxyQfU His slide on monopolies is around 4:40
- ZeroGravitas 9y agoMy take is that he's basically saying capitalism doesn't work (edit: at least there's big problems within it) and if you want to get rich you should know how to play the system because just providing large amounts of social value isn't sufficient. I'm not sure that's his intended message though, since he often presents himself as a libertarian with the implicit message that capitalism and getting rich is a sign of providing social value.
- frgtpsswrdlame 9y agoHe's also wrong.
- atom-morgan 9y agoReferring to natural monopolies or monopolies created and enforced by the government?
- buttcoinslol 9y agoArgument consists of: Appeal to Authority fallacy Grade: F (see me after class)
- buttcoinslol 9y agoNot sure why I'm being downvoted? OP throws out "Peter Thiel says monopolies are good," which is an appeal to authority and a post meant to cause controversy.
- emodendroket 9y agoI think the point was probably more an attack on Thiel than an appeal to authority.
- chimprich 9y agoThe OP wasn't necessarily agreeing with Thiel, just highlighting something of a counter-opinion. Your reply was a bit uncivil and didn't really add anything.
- maxxxxx 9y agoI remember reading his quote and I understood it to mean that a monopoly is good for the company that has it and a company should try to achieve a monopoly. I don't think he said that it's for the greater good.
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