9 ms·

Andreessen vs. Thiel (2017)

231 points by allenleein 7y ago

buboard 7y ago
In retrospect, Thiel was, and is right. We are facing a global crisis because we brushed away our most important problems and chose to profit from digital cats and emojis. Time does not forgive those who lag behind, and we are now facing a crisis similar to a global war. Science and tech has institutionally been failing for decades, knows it 's been failing and has generally brushed away those concerns. Our weapons are now ancient, containment is a tool from the 1920s. (I know people are offended by this, i was hoping a global pandemic would be a wake up call)
- thundergolfer 7y ago
  Which global crisis you are referring to? It can’t be Climate Change because that isn’t a technology problem it’s a political and economic problem. Is it Covid-19?
  - mehrdadn 7y ago
    Given it says "containment is a tool from the 1920s" I would assume it's the coronavirus.
    - vikramkr 7y ago
      How old a tool is has nothing to do with how good it is - we use simple machines and screws and wheels and multi decade old technologies like the internet all the time. Just pick the right tool for the job and keep inventing new ones to expand the opportunity set.
      - buboard 7y ago
        containment is a very ineffective tool, as is the wooden cart wheel. The fact that we don't have a more effective response other than containment should be extremely worrying. What if this was a more dangerous terrorist bioattack? These questions will rise up soon after this initial shock has passed. Unfortunately, fear seems to work better as a motivation for scientific progress
        andrekandre 7y ago
        what should we be doing instead? we can’t just magic wand our way to a cure/vaccine, so i’m genuinely curious what else we can do...
  - api 7y ago
    I strongly disagree about climate change. It's nothing but a technology problem. The people addressing it are people like Gates with his funding of advanced nuclear and Musk with his driving of EVs, solar power, and grid scale storage. One of the major reasons we've failed at tackling climate change to date is that we've been treating it as a political, economic, or ultimately moral problem and trying to solve it by moralizing. I call this approach "abstinence based environmentalism," making a direct analogy to abstinence based sex-ed. It works about as well. Trying to shame people into using less energy or pursuing less economic activity is going to be about as successful as shaming teens into not having sex. If we try to push abstinence based environmentalism really really hard by legislating it and trying to force people to down-size, we'll get a populist counter-reaction and we'll see the election of explicitly anti-environmentalist candidates. That's worse than nothing. That's going backward. We've already seen some of this. We've been approaching environmental problems as moral and political issues for decades and what do we have to show for it? https://www.sciencealert.com/images/2019-05/processed/017-carbon-ppm-415-co2_1024.jpg https://www.sciencealert.com/images/2019-05/processed/017-ca... Total, absolute failure. To stop CO2 and methane emissions, replace fossil fuels. To stop STDs and unwanted pregnancies, give teens contraceptive pills and rubbers.
    - goldenbikeshed 7y ago
      Fossil fuels only account for about 70% of global CO2 emissions. Replacing all of them with renewable energy sources will lower emissions but also bring more emissions (e.g. from cement needed to build those power plants). Our current global economic system is pretty much single mindedly focused on exponential GDP growth. As long as this system persists, all that new clean energy will be used to produce more useless disposable gadgets, driving up more emissions from methane (from all the new trash produced with all that energy). What we need to stop climate change is to lower consumption and to lower production. This is very much possible while also increasing quality of life. Technology can help with getting that into people's head, but a political will has to be there first, and that won't be possible without challenging the current economic system.
      - api 7y ago
  - look_lookatme 7y ago
    Strange to make a distinction between the two. Saving us from the effects of climate change is only a technology problem at this point, but it's hard and tedious and disincentivized because it's easier to make money right now in the consumer world or, even worse, in the world of quantitative finance and many good minds have drifted to those fields.
    - fulafel 7y ago
      Saving us from the effects of climate change if we let it progress far would be a (very difficult) technology problem, but fighting climate change is an economic and political problem.
_red 7y ago
FB vs Twitter: Two investors justify their investments.
- fortydegrees 7y ago
  Both are on FB's board. Neither are on Twitter's.
seek3r00 7y ago
In his own words: Thiel prefers to go from zero to one, creating products on which you can build a monopoly. I think that he agrees on Andreessen about the importance of timing, but he doesn’t consider timing alone a recipe for a successful business. Also Thiel seems more focused on technology as a whole, rather than the software-centric position adopted by Andreessen. I think that both views have pros and cons, and that we would benefit from trying to find the greatest common denominator between the two approaches—instead of discarding that or this view. PS: I read and enjoyed Zero to One, and I’d like to learn more about Andreessen views. If anyone has any suggestion...
- chiefalchemist 7y ago
  Not sure about Andreessen but Blue Ocean Shift and Blue Ocean Strategy are solid compliments to Zero to One. The gist being, stop trying to compete in shark-infested (blood) red water and look for blue oceans.
  - luckydata 7y ago
    there's a reason some oceans are infested with sharks
    - chiefalchemist 7y ago
      Yes. That reason is: a lack of vision and creativity.
      - luckydata 7y ago
        try "money is there"
idoby 7y ago
Article quotes Thiel out of context, exactly reversing his intended meaning (this is the cost of saying unpopular things, I guess). “If your product requires advertising or salespeople to sell it, it’s not good enough” and “Technology is primarily about product development, not distribution" appear in Zero to One as the wrong lessons from the dotcom crash. Thiel is saying this to establish what he doesn't believe. In fact, that entire chapter is dedicated to convincing techies that sales and advertising do matter.
- seek3r00 7y ago
  Indeed, on the book he says that engineers tend to underrate the importance of the “marketing people”, and that a good product alone won’t sell itself.
- api 7y ago
  Both are true. To have a huge success you need a great product that "sells itself" and you need sales and marketing to sell it. Having just a great product will get you so far, but won't break through into the big leagues. Having only sales and marketing but a shit product will get you a flash in the pan.
  - idoby 7y ago
    I wasn't commenting on whether Thiel or Andreessen are right or wrong, I'm just saying the article misrepresents Thiel's view as they appear in Zero to One. Also not sure if Thiel has changed his mind since then. Judging by recent interviews (e.g. with Eric Weinstein), he hasn't.
    - nishnik 7y ago
      Yes Thiel writes how sales is important. He gives out a mental model to think how much sales is important for your company, and how much you should invest in it. On a scale from tiktok (viral) to Palantir, you have to increase your sales spendings. He talks how advertising was important for PayPal (by giving some money(sales spending) for referring). And he talks why small/medium sized businesses don't use softwares for day-to-day tasks. Because they lie (in his words) a dead zone of sales, the 1000$ per product.
RocketSyntax 7y ago
Meh. Would prefer a summary of Zero to One.
benjaminjosephw 7y ago
Interesting. Both want product-market fit; one perspective focuses on executing well to capture the market at the right time and the other focuses on building a differentiated product and creating a market that didn't exist before. These perspectives were put forward when SaaS was really taking off and software hadn't quite eaten the world yet. The world has change a lot since then. Creating a new software product has never been easier than it is today. That should mean that competition is at its fiercest but we're also seeing a massive consolidation of markets and big winners with no apparent rivals. I think Thiel's focus on defensibility is becoming more and more important for early-stage startups. Why bother proving out market demand if one of the big players snaps up the opportunity from under your feet. Executing well and moving quickly used to be good ways to defend against this happening but I think the established incumbents are not the slow lumbering giants they once were. They are now the software companies that won the market ten years ago. Maybe our strategies need to change to take this into account.
- scirocco 7y ago
  Interesting, so we might have moved from: Big, incumbent non-SW company (Kodak example) being challenged by start-up to Big, software incumbent (Salesforce) with massive developer resources being challenged by start-up. Maybe the strategies need to change - perhaps increasingly partnering with the software incumbents (if you can't beat 'em, join 'em).. Maybe someone can add some insight..?
  - hef19898 7y ago
    One lesson I learned since I started my business a couple of months ago, is how important interfaces are. In practical terms, you can provide any kind of service together with partners as long as the interfaces between these partners are working. Doesn't matter if it is an API or just the way collaborate with, e.g., a photographer. This gives cloud based software companies are huge advantage, and opens all kinds of opportunities for companies developing or working with the interfaces between these cloud solutions and involved parties. My impression is that all the platform start-ups, unless they have competencies in integration of different tools and managing the corresponding processes, are basically dead in the water once VC money is drying up. When we talk about B2B solutions, I don't see any FB-like monopoly. So if start-ups are pushing for that, they gona loose against the big incumbents on the software side and against more operations oriented companies on the integration and process side. I might be completely wrong with that, so.
look_lookatme 7y ago
I think the original video is very much worth watching given what's happening in the world right now: https://www.youtube.com/watch?v=PUhtHojSphk https://www.youtube.com/watch?v=PUhtHojSphk In particular there is a moment where Thiel questions whether Silicon Valley will be able to save western civilization the way California saved a lot of down and out people during the depression era disapora: https://youtu.be/PUhtHojSphk?t=1682 https://youtu.be/PUhtHojSphk?t=1682 In the coming economic, biological and climate crisis I guess we'll see how it fares.
rjyoungling 7y ago
Lots of confusion by the author of this piece, unfortunately. Author seems to struggle with English so perhaps that's why they accidentally misinterpreted some points made by the investors. Aside from the points mentioned in the comments above, I didn't quite get this point: 'The misunderstood dogma here is to have no definite plan, work in incremental iterations to find out what’s most valuable to customers today(Lean Startup Methodology).' Having no plan is the opposite of the Lean Methodology. The approach is literally built on the notion of having a business model that contains a set of hypotheses, which you then test, and iterate accordingly. In lean, a pivot is defined as replacing a hypothesis in the business model with a new one. E.g. Who you thought your market was. All in all, format is interesting but the author doesn't seem particularly knowledgeable in this field. Looking forward to an updated version though.
- allenleein 7y ago
  Author here. Thank you for the precious feedback! I'm working on it.
  - rjyoungling 7y ago
    Keep at it! You're definitely on the right track.
    - allenleein 7y ago
      Thank you!
  - abhinai 7y ago
    You seem very humble. Keep up the good work. Listen to feedback but not all the feedback here needs to be taken seriously.
    - allenleein 7y ago
      Thank you, I will keep that in mind. I always appreciate people giving me brutal feedback so I can learn faster :)
m_a_g 7y ago
If I remember correctly, in Zero to One, Thiel states that one of the strict conditions for a startup to succeed is having great timing. I think the article is not accurate or maybe the author didn't include Thiel's opinion on timing for the sake argument.
- allenleein 7y ago
  My mistake. I'm working on it. :) Thank you
qez 7y ago
This article seems to make a lot of mistakes, which is unfortunate, because they are very interesting thinkers. I can mostly speak to Thiel's views. I will spell them out, if anyone is interested. 1. Peter Thiel strongly values timing. This is not incompatible with the idea of creating your own market. 2. Thiel argues strongly against the ideas that a good invention sells itself. He emphasizes, to the point of contrarianism, that sales is underrated. 3. Thiel believes that competing on quality and price only is a sucker's game, competition. To get monopoly (the goal), you need to do something fundamentally different than anyone else (in kind, not in efficiency). The exception is if you do something 10x better than anyone else, it rolls back around to constituting a difference in kind.
- allenleein 7y ago
  That was my fault. Thank you for pointing out the mistake. Im working on it :)
zackmorris 7y ago
After researching this a bit, it appears that Andreessen and Thiel actually have similar ideologies, which might be described as libertarian. Even though they are both very successful, I feel that focusing on them is a form of framing that limits a broader discussion about how the distribution of seed capital affects innovation. Does anyone know of any VCs who might be considered advocates for social justice?
brador 7y ago
Twitter was succesful in the US because cellphone messaging was expensive. Twitter did not do well initially in parts of the world with free cellphone messaging (Europe). That is the problem Twitter solved.
- pxtail 7y ago
  Recently I read few covid-related threads on Twitter and from my perspective it is insane how utterly useless it is as informative medium, it thrives on bubbling up most controversial sensationalist messages. Reddit on the other hand does pretty good job at crowdsourcing important informations.
- skrtskrt 7y ago
  I haven't heard this theory before - Twitter started off with SMS, so wouldn't it increase your SMS usage? Also in my experience by the time Twitter started, lots of people - especially techie people that would have been early adopters - had unlimited texting plans. They definitely didn't have unlimited data plans by the time Twitter was web-centric.
jeffrallen 7y ago
Frankly, they are both assholes.

231 points by allenleein 7y ago

In retrospect, Thiel was, and is right. We are facing a global crisis because we brushed away our most important problems and chose to profit from digital cats and emojis. Time does not forgive those who lag behind, and we are now facing a crisis similar to a global war. Science and tech has institutionally been failing for decades, knows it 's been failing and has generally brushed away those concerns. Our weapons are now ancient, containment is a tool from the 1920s. (I know people are offended by this, i was hoping a global pandemic would be a wake up call)

thundergolfer 7y ago
Which global crisis you are referring to? It can’t be Climate Change because that isn’t a technology problem it’s a political and economic problem. Is it Covid-19?
- mehrdadn 7y ago
  Given it says "containment is a tool from the 1920s" I would assume it's the coronavirus.
  - vikramkr 7y ago
    How old a tool is has nothing to do with how good it is - we use simple machines and screws and wheels and multi decade old technologies like the internet all the time. Just pick the right tool for the job and keep inventing new ones to expand the opportunity set.
    - buboard 7y ago
      containment is a very ineffective tool, as is the wooden cart wheel. The fact that we don't have a more effective response other than containment should be extremely worrying. What if this was a more dangerous terrorist bioattack? These questions will rise up soon after this initial shock has passed. Unfortunately, fear seems to work better as a motivation for scientific progress
      - andrekandre 7y ago
        what should we be doing instead? we can’t just magic wand our way to a cure/vaccine, so i’m genuinely curious what else we can do...
- api 7y ago
  I strongly disagree about climate change. It's nothing but a technology problem. The people addressing it are people like Gates with his funding of advanced nuclear and Musk with his driving of EVs, solar power, and grid scale storage. One of the major reasons we've failed at tackling climate change to date is that we've been treating it as a political, economic, or ultimately moral problem and trying to solve it by moralizing. I call this approach "abstinence based environmentalism," making a direct analogy to abstinence based sex-ed. It works about as well. Trying to shame people into using less energy or pursuing less economic activity is going to be about as successful as shaming teens into not having sex. If we try to push abstinence based environmentalism really really hard by legislating it and trying to force people to down-size, we'll get a populist counter-reaction and we'll see the election of explicitly anti-environmentalist candidates. That's worse than nothing. That's going backward. We've already seen some of this. We've been approaching environmental problems as moral and political issues for decades and what do we have to show for it? https://www.sciencealert.com/images/2019-05/processed/017-carbon-ppm-415-co2_1024.jpg https://www.sciencealert.com/images/2019-05/processed/017-ca... Total, absolute failure. To stop CO2 and methane emissions, replace fossil fuels. To stop STDs and unwanted pregnancies, give teens contraceptive pills and rubbers.
  - goldenbikeshed 7y ago
    Fossil fuels only account for about 70% of global CO2 emissions. Replacing all of them with renewable energy sources will lower emissions but also bring more emissions (e.g. from cement needed to build those power plants). Our current global economic system is pretty much single mindedly focused on exponential GDP growth. As long as this system persists, all that new clean energy will be used to produce more useless disposable gadgets, driving up more emissions from methane (from all the new trash produced with all that energy). What we need to stop climate change is to lower consumption and to lower production. This is very much possible while also increasing quality of life. Technology can help with getting that into people's head, but a political will has to be there first, and that won't be possible without challenging the current economic system.
    - api 7y ago
- look_lookatme 7y ago
  Strange to make a distinction between the two. Saving us from the effects of climate change is only a technology problem at this point, but it's hard and tedious and disincentivized because it's easier to make money right now in the consumer world or, even worse, in the world of quantitative finance and many good minds have drifted to those fields.
  - fulafel 7y ago
    Saving us from the effects of climate change if we let it progress far would be a (very difficult) technology problem, but fighting climate change is an economic and political problem.

_red 7y ago

FB vs Twitter: Two investors justify their investments.

fortydegrees 7y ago
Both are on FB's board. Neither are on Twitter's.

seek3r00 7y ago

In his own words: Thiel prefers to go from zero to one, creating products on which you can build a monopoly. I think that he agrees on Andreessen about the importance of timing, but he doesn’t consider timing alone a recipe for a successful business. Also Thiel seems more focused on technology as a whole, rather than the software-centric position adopted by Andreessen. I think that both views have pros and cons, and that we would benefit from trying to find the greatest common denominator between the two approaches—instead of discarding that or this view. PS: I read and enjoyed Zero to One, and I’d like to learn more about Andreessen views. If anyone has any suggestion...

chiefalchemist 7y ago
Not sure about Andreessen but Blue Ocean Shift and Blue Ocean Strategy are solid compliments to Zero to One. The gist being, stop trying to compete in shark-infested (blood) red water and look for blue oceans.
- luckydata 7y ago
  there's a reason some oceans are infested with sharks
  - chiefalchemist 7y ago
    Yes. That reason is: a lack of vision and creativity.
    - luckydata 7y ago
      try "money is there"

idoby 7y ago

Article quotes Thiel out of context, exactly reversing his intended meaning (this is the cost of saying unpopular things, I guess). “If your product requires advertising or salespeople to sell it, it’s not good enough” and “Technology is primarily about product development, not distribution" appear in Zero to One as the wrong lessons from the dotcom crash. Thiel is saying this to establish what he doesn't believe. In fact, that entire chapter is dedicated to convincing techies that sales and advertising do matter.

seek3r00 7y ago
Indeed, on the book he says that engineers tend to underrate the importance of the “marketing people”, and that a good product alone won’t sell itself.
api 7y ago
Both are true. To have a huge success you need a great product that "sells itself" and you need sales and marketing to sell it. Having just a great product will get you so far, but won't break through into the big leagues. Having only sales and marketing but a shit product will get you a flash in the pan.
- idoby 7y ago
  I wasn't commenting on whether Thiel or Andreessen are right or wrong, I'm just saying the article misrepresents Thiel's view as they appear in Zero to One. Also not sure if Thiel has changed his mind since then. Judging by recent interviews (e.g. with Eric Weinstein), he hasn't.
  - nishnik 7y ago
    Yes Thiel writes how sales is important. He gives out a mental model to think how much sales is important for your company, and how much you should invest in it. On a scale from tiktok (viral) to Palantir, you have to increase your sales spendings. He talks how advertising was important for PayPal (by giving some money(sales spending) for referring). And he talks why small/medium sized businesses don't use softwares for day-to-day tasks. Because they lie (in his words) a dead zone of sales, the 1000$ per product.

RocketSyntax 7y ago

Meh. Would prefer a summary of Zero to One.

benjaminjosephw 7y ago

Interesting. Both want product-market fit; one perspective focuses on executing well to capture the market at the right time and the other focuses on building a differentiated product and creating a market that didn't exist before. These perspectives were put forward when SaaS was really taking off and software hadn't quite eaten the world yet. The world has change a lot since then. Creating a new software product has never been easier than it is today. That should mean that competition is at its fiercest but we're also seeing a massive consolidation of markets and big winners with no apparent rivals. I think Thiel's focus on defensibility is becoming more and more important for early-stage startups. Why bother proving out market demand if one of the big players snaps up the opportunity from under your feet. Executing well and moving quickly used to be good ways to defend against this happening but I think the established incumbents are not the slow lumbering giants they once were. They are now the software companies that won the market ten years ago. Maybe our strategies need to change to take this into account.

scirocco 7y ago
Interesting, so we might have moved from: Big, incumbent non-SW company (Kodak example) being challenged by start-up to Big, software incumbent (Salesforce) with massive developer resources being challenged by start-up. Maybe the strategies need to change - perhaps increasingly partnering with the software incumbents (if you can't beat 'em, join 'em).. Maybe someone can add some insight..?
- hef19898 7y ago
  One lesson I learned since I started my business a couple of months ago, is how important interfaces are. In practical terms, you can provide any kind of service together with partners as long as the interfaces between these partners are working. Doesn't matter if it is an API or just the way collaborate with, e.g., a photographer. This gives cloud based software companies are huge advantage, and opens all kinds of opportunities for companies developing or working with the interfaces between these cloud solutions and involved parties. My impression is that all the platform start-ups, unless they have competencies in integration of different tools and managing the corresponding processes, are basically dead in the water once VC money is drying up. When we talk about B2B solutions, I don't see any FB-like monopoly. So if start-ups are pushing for that, they gona loose against the big incumbents on the software side and against more operations oriented companies on the integration and process side. I might be completely wrong with that, so.

look_lookatme 7y ago

I think the original video is very much worth watching given what's happening in the world right now: https://www.youtube.com/watch?v=PUhtHojSphk https://www.youtube.com/watch?v=PUhtHojSphk In particular there is a moment where Thiel questions whether Silicon Valley will be able to save western civilization the way California saved a lot of down and out people during the depression era disapora: https://youtu.be/PUhtHojSphk?t=1682 https://youtu.be/PUhtHojSphk?t=1682 In the coming economic, biological and climate crisis I guess we'll see how it fares.

rjyoungling 7y ago

Lots of confusion by the author of this piece, unfortunately. Author seems to struggle with English so perhaps that's why they accidentally misinterpreted some points made by the investors. Aside from the points mentioned in the comments above, I didn't quite get this point: 'The misunderstood dogma here is to have no definite plan, work in incremental iterations to find out what’s most valuable to customers today(Lean Startup Methodology).' Having no plan is the opposite of the Lean Methodology. The approach is literally built on the notion of having a business model that contains a set of hypotheses, which you then test, and iterate accordingly. In lean, a pivot is defined as replacing a hypothesis in the business model with a new one. E.g. Who you thought your market was. All in all, format is interesting but the author doesn't seem particularly knowledgeable in this field. Looking forward to an updated version though.

allenleein 7y ago
Author here. Thank you for the precious feedback! I'm working on it.
- rjyoungling 7y ago
  Keep at it! You're definitely on the right track.
  - allenleein 7y ago
    Thank you!
- abhinai 7y ago
  You seem very humble. Keep up the good work. Listen to feedback but not all the feedback here needs to be taken seriously.
  - allenleein 7y ago
    Thank you, I will keep that in mind. I always appreciate people giving me brutal feedback so I can learn faster :)

m_a_g 7y ago

If I remember correctly, in Zero to One, Thiel states that one of the strict conditions for a startup to succeed is having great timing. I think the article is not accurate or maybe the author didn't include Thiel's opinion on timing for the sake argument.

allenleein 7y ago
My mistake. I'm working on it. :) Thank you

qez 7y ago

This article seems to make a lot of mistakes, which is unfortunate, because they are very interesting thinkers. I can mostly speak to Thiel's views. I will spell them out, if anyone is interested. 1. Peter Thiel strongly values timing. This is not incompatible with the idea of creating your own market. 2. Thiel argues strongly against the ideas that a good invention sells itself. He emphasizes, to the point of contrarianism, that sales is underrated. 3. Thiel believes that competing on quality and price only is a sucker's game, competition. To get monopoly (the goal), you need to do something fundamentally different than anyone else (in kind, not in efficiency). The exception is if you do something 10x better than anyone else, it rolls back around to constituting a difference in kind.

allenleein 7y ago
That was my fault. Thank you for pointing out the mistake. Im working on it :)

zackmorris 7y ago

After researching this a bit, it appears that Andreessen and Thiel actually have similar ideologies, which might be described as libertarian. Even though they are both very successful, I feel that focusing on them is a form of framing that limits a broader discussion about how the distribution of seed capital affects innovation. Does anyone know of any VCs who might be considered advocates for social justice?

brador 7y ago

Twitter was succesful in the US because cellphone messaging was expensive. Twitter did not do well initially in parts of the world with free cellphone messaging (Europe). That is the problem Twitter solved.

pxtail 7y ago
Recently I read few covid-related threads on Twitter and from my perspective it is insane how utterly useless it is as informative medium, it thrives on bubbling up most controversial sensationalist messages. Reddit on the other hand does pretty good job at crowdsourcing important informations.
skrtskrt 7y ago
I haven't heard this theory before - Twitter started off with SMS, so wouldn't it increase your SMS usage? Also in my experience by the time Twitter started, lots of people - especially techie people that would have been early adopters - had unlimited texting plans. They definitely didn't have unlimited data plans by the time Twitter was web-centric.

jeffrallen 7y ago

Frankly, they are both assholes.