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I don't get it - why do people still listen to him (honest question)? Is it the money? Didn't he just luck out with Paypal? He clearly is all about the $$$, eve

I don't get it - why do people still listen to him (honest question)? Is it the money? Didn't he just luck out with Paypal? He clearly is all about the $$$, even advocates that you should actively pursue building a monopoly, since "competition is for losers" (his words). What gives? Because for me, he's part of the Valley problem.

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return0 12y ago
To me, the fact that he gets strongly polarized reviews means he 's interesting. Give me more like him.
rayiner 12y ago
Monopolies are great. Almost everything awesome in computing came from companies insulated in some way from market forces, either because of outright monopolies, network effects, first mover advantages, etc. Bell Labs and the ATT monopoly. Xerox PARC, which gave us the GUI, OOP, email, LAN, was bankrolled by the Xerox copier patent monopoly. Google continues to use its network effect advantage and above-perfect competition profits to bankroll stuff like self-driving cars. Perfect competition is the current PC industry. Lenovo and Acer and HP. Nobody innovates because they can't take any risks with their frighteningly narrow profit margins.
- tew28 12y ago
  His point about monopolies is widely misquoted and causing a lot of confusion. I think he should have been clearer about distinguishing creative monopolies and what we commonly consider monopolies, in the negative sense. There are nefarious monopolies like Comcast that are insulated from competition because of an unfair advantage. A more nuanced position should entail something like the following: - We want competition because it allows nefarious monopolies (and other companies) to be overtaken by better companies. - We don't want to discourage companies from attempting to obtain monopolies in their markets, since this gives them to opportunity to capture monopoly profits. Monopoly profits are not inherently bad. If a company becomes a monopoly, we want them to be a creative monopoly. - A competitive market in the sense of having low profit margins is very different from a competitive market in the sense of whether or not new entrants can come in and compete. - It is a bad thing if a company has monopoly power through something other than being a superior company, is capable of preventing new entrants, and is uncreative. We want to preserve the ability of new entrants to come into the market with superior products and overtake monopolies. (edit: formatting)
  - rayiner 12y ago
    He's not misquoted. Read the WSJ op-Ed: http://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 http://www.wsj.com/articles/peter-thiel-competition-is-for-l.... He's not talking about companies that enjoy monopoly profits because they offer superior products. He's talking about companies that enjoy monopoly profits because they have no competitors. He does posit the "creative monopoly" companies that have no competitors because they're first to a new market. But that only lasts so long as there are barriers to entry in your market.[1] And now we're back to regular old Econ 101 monopolies. The "nefarious monopolies" I mentioned all came into existence through first mover advantage. But they endured because they were protected from competition. And much of their innovative legacy came well into their "static monopoly" phase. [1] To use Thiel's terminology, it matters how quickly the market moves back into equillibrium, and that is dictated by the same forces that give rise to static monopolies.
    - tew28 12y ago
      He is talking about companies that enjoy monopoly profits because of superior products: "I'm not interested in illegal bullies or government favorites: By "monopoly," I mean the kind of company that is so good at what it does that no other firm can offer a close substitute." Distinguishing between "good" and "bad" monopolies is sufficiently complex to deserve more in-depth exploration. Thiel is smart enough to realize that which is why I consider his point to be misquoted. Unfortunately, his view is oversimplified so as to be readily consumed and debated. He lists characteristics of a monopoly in his book: proprietary tech, network effects, economies of scale, and branding. First mover advantage is mentioned as a "tactic, not a goal" - a chapter is even called "Last Mover Advantage." Google, for one, was clearly not a first mover in the search space.
      - merger 12y ago
        Also, why use such a heavily loaded and overloaded term? I am sure he had his reasons, maybe because it is ambiguous. I'm pretty sure we all agree that standard oil and internet explorer were not of great benefit to society.
      - 12y ago
- itg 12y ago
  Monopolies can also cause stagnation as we saw with Internet Explorer back in the 90s. A company is certain you have to use their product so why waste any resources trying to make it better.
ra1n85 12y ago
His thoughts are sometimes controversial and I don't always agree with them. However, I find them to be a refreshing and thoughtful break from the hyper politically correct discourse so widely practiced in the US.
hnnewguy 12y ago
>"that you should actively pursue building a monopoly, since "competition is for losers" Because from your business' perspective, you want a monopoly to have the greatest potential success. This doesn't preclude competition; your competitors are also trying to build a monopoly.
auganov 12y ago
To me Peter only speaks from a founder/company perspective. He doesn't really talk too much about the general economy or what's preferable for consumers. Most confusion comes from applying his thoughts beyond the scope of what he's talking about - startups. And personally, Peter is just very likable. I'm always happy to listen to him talk even when I know what he's gonna say.
Zigurd 12y ago
I read Zero to One. It's not a bad book. But you can boil it down to "Our investment philosophy is to invest only in ventures that can monopolize a sector, preferably while appearing world-changing and benevolent in the process." I don't see that as a problem, but I also don't see it as a sustainable process. Maybe that doesn't matter since VC fund performance is such a hall of mirrors that having the magic investment criterion is better than having the best numbers. There is certainly nothing wrong with prompting entrepreneurs to aim for that kind of a business.
- timdaub 12y ago
  Do not agree with the summary. The chapters on (non-)determinism, man and machine as well as his take on secrets are great examples of tightly distilled, high quality content the book also covers.
zby 12y ago
He is explaining the rules of the game. Shunning him for that is like killing the messenger.
- merger 12y ago
  This is, imo, what is wrong with startup culture. What is the "game"? Are we trying to build great products to "change the world" (aka another anon msging app or "Uber for X") as so many proclaim or are we just here to get rich quick - adopting the previous generation's mantras to fit in and get funding. Why are you here? Why did people come in the early ninetees? We should live our rhetoric and stop mostly aiming for money. Sometimes they go hand in hand but what is our primary motivation these days? Sorry this is not aimed at your response in particular, I just think we as a whole have lost our way and our former identity with startups becoming the new Wall Street. EDIT: made less ranty
  - zby 12y ago
    It is useful to know the current rules before you transcend them. And maybe I used the wrong word - rules suggest something positive - maybe I should say 'mechanics' or something. Take Machiavelli - did he make politics worse by describing how it works?
eli_gottlieb 12y ago
His politics and his sense of business ethics are, in my view, extremely bad. His views on technology are a breath of fresh air. He is one of the only SV figures who seems to care about building technologies with the next century in mind rather than the next three years.
netcan 12y ago
I don't imagine this is a serious question, but… Speaking for myself, I read this article and have "listened to Thiel" on other occasions because he says interesting things. "Something that’s true that very few people agree with you on." I read this and my mind immediately tried to come up with such truths so.. interesting. "The goal of every successful business is to have a monopoly." What's interesting about this idea? Monopolies are profitable. Companies like that. They're big, they like that too. A 'Differentiation' strategy is a way of creating monopoly-like microeconomics for your business. Differentiation is usually the dominant strategy in technologically new industries while its opposite (penetration strategy: high volume, low cost) is usually the dominant strategy in mature industries like supermarkets, auto components and canned beans. That's interesting. Full-blown monopolies often arise at the centre of disruptive new industries. Rails, energy, computing. Patents were originally created give monopolies as a reward for innovation. That's interesting. So far, this monopolies thing seems to be an interesting idea. Other than that, he does interesting things and says interesting things about them: Philanthropy, Seasteading, dropping out of college, anti-aging, book writing...
- merger 12y ago
  "Patents were originally created give monopolies as a reward for innovation." That's a common misconception. The original reasoning for patents was to provide a limited (in time) monopoly to inventors in exchange for sharing (and describing in detail) their invention with the whole of society. Interesting anecdote, afaik Gore & Associates, Inc.'s Goretex patent expired before it was universally used for outdoor clothing, thus any brand coukd release their own unlicensed goretex-like material. They have since stopped patenting many of their inventions afaik.
  - dragonwriter 12y ago
    > The original reasoning for patents was to provide a limited (in time) monopoly to inventors in exchange for sharing (and describing in detail) their invention with the whole of society. Some of the apparent ancient predecessors of patents may have been on this basis, and clearly that's the theory of the modern patent system in some parts of the world. But the origin of letters patent was really the whim of the monarch, and they may have been granted for sharing information, or just for sharing the proceeds of the monopoly with the crown.
api 12y ago
He says many interesting things. For me what blew me away was that he's one of the few people who seems to have realized that most forms of technological innovation outside IT have stagnated since roughly 1970. This is something I've seen for years, and when I bring it up people think I am crazy. Invention, or fundamental innvation, has really stagnated in all fields since then including even IT.
CyberDildonics 12y ago
It's almost like people looked at the title and didn't see what he was actually saying. He uses the term monopolies to talk about building something that is separate from any competitors, either by orders of magnitude improvement or being substantially different from anything else out there. He is basically saying, don't run head first into competing in a commodity business, do something to make your business not a commodity.
mathattack 12y ago
Avoiding competition is central to corporate strategy. Whenever you hear "sustainable competitive advantage" or "building a moat" it's about doing something that nobody else can. This is creating a monopoly.

deleted 12y ago

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return0 12y ago

To me, the fact that he gets strongly polarized reviews means he 's interesting. Give me more like him.

rayiner 12y ago

Monopolies are great. Almost everything awesome in computing came from companies insulated in some way from market forces, either because of outright monopolies, network effects, first mover advantages, etc. Bell Labs and the ATT monopoly. Xerox PARC, which gave us the GUI, OOP, email, LAN, was bankrolled by the Xerox copier patent monopoly. Google continues to use its network effect advantage and above-perfect competition profits to bankroll stuff like self-driving cars. Perfect competition is the current PC industry. Lenovo and Acer and HP. Nobody innovates because they can't take any risks with their frighteningly narrow profit margins.

tew28 12y ago
His point about monopolies is widely misquoted and causing a lot of confusion. I think he should have been clearer about distinguishing creative monopolies and what we commonly consider monopolies, in the negative sense. There are nefarious monopolies like Comcast that are insulated from competition because of an unfair advantage. A more nuanced position should entail something like the following: - We want competition because it allows nefarious monopolies (and other companies) to be overtaken by better companies. - We don't want to discourage companies from attempting to obtain monopolies in their markets, since this gives them to opportunity to capture monopoly profits. Monopoly profits are not inherently bad. If a company becomes a monopoly, we want them to be a creative monopoly. - A competitive market in the sense of having low profit margins is very different from a competitive market in the sense of whether or not new entrants can come in and compete. - It is a bad thing if a company has monopoly power through something other than being a superior company, is capable of preventing new entrants, and is uncreative. We want to preserve the ability of new entrants to come into the market with superior products and overtake monopolies. (edit: formatting)
- rayiner 12y ago
  He's not misquoted. Read the WSJ op-Ed: http://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 http://www.wsj.com/articles/peter-thiel-competition-is-for-l.... He's not talking about companies that enjoy monopoly profits because they offer superior products. He's talking about companies that enjoy monopoly profits because they have no competitors. He does posit the "creative monopoly" companies that have no competitors because they're first to a new market. But that only lasts so long as there are barriers to entry in your market.[1] And now we're back to regular old Econ 101 monopolies. The "nefarious monopolies" I mentioned all came into existence through first mover advantage. But they endured because they were protected from competition. And much of their innovative legacy came well into their "static monopoly" phase. [1] To use Thiel's terminology, it matters how quickly the market moves back into equillibrium, and that is dictated by the same forces that give rise to static monopolies.
  - tew28 12y ago
    He is talking about companies that enjoy monopoly profits because of superior products: "I'm not interested in illegal bullies or government favorites: By "monopoly," I mean the kind of company that is so good at what it does that no other firm can offer a close substitute." Distinguishing between "good" and "bad" monopolies is sufficiently complex to deserve more in-depth exploration. Thiel is smart enough to realize that which is why I consider his point to be misquoted. Unfortunately, his view is oversimplified so as to be readily consumed and debated. He lists characteristics of a monopoly in his book: proprietary tech, network effects, economies of scale, and branding. First mover advantage is mentioned as a "tactic, not a goal" - a chapter is even called "Last Mover Advantage." Google, for one, was clearly not a first mover in the search space.
    - merger 12y ago
      Also, why use such a heavily loaded and overloaded term? I am sure he had his reasons, maybe because it is ambiguous. I'm pretty sure we all agree that standard oil and internet explorer were not of great benefit to society.
    - 12y ago
itg 12y ago
Monopolies can also cause stagnation as we saw with Internet Explorer back in the 90s. A company is certain you have to use their product so why waste any resources trying to make it better.

ra1n85 12y ago

His thoughts are sometimes controversial and I don't always agree with them. However, I find them to be a refreshing and thoughtful break from the hyper politically correct discourse so widely practiced in the US.

hnnewguy 12y ago

>"that you should actively pursue building a monopoly, since "competition is for losers" Because from your business' perspective, you want a monopoly to have the greatest potential success. This doesn't preclude competition; your competitors are also trying to build a monopoly.

auganov 12y ago

To me Peter only speaks from a founder/company perspective. He doesn't really talk too much about the general economy or what's preferable for consumers. Most confusion comes from applying his thoughts beyond the scope of what he's talking about - startups. And personally, Peter is just very likable. I'm always happy to listen to him talk even when I know what he's gonna say.

Zigurd 12y ago

I read Zero to One. It's not a bad book. But you can boil it down to "Our investment philosophy is to invest only in ventures that can monopolize a sector, preferably while appearing world-changing and benevolent in the process." I don't see that as a problem, but I also don't see it as a sustainable process. Maybe that doesn't matter since VC fund performance is such a hall of mirrors that having the magic investment criterion is better than having the best numbers. There is certainly nothing wrong with prompting entrepreneurs to aim for that kind of a business.

timdaub 12y ago
Do not agree with the summary. The chapters on (non-)determinism, man and machine as well as his take on secrets are great examples of tightly distilled, high quality content the book also covers.

zby 12y ago

He is explaining the rules of the game. Shunning him for that is like killing the messenger.

merger 12y ago
This is, imo, what is wrong with startup culture. What is the "game"? Are we trying to build great products to "change the world" (aka another anon msging app or "Uber for X") as so many proclaim or are we just here to get rich quick - adopting the previous generation's mantras to fit in and get funding. Why are you here? Why did people come in the early ninetees? We should live our rhetoric and stop mostly aiming for money. Sometimes they go hand in hand but what is our primary motivation these days? Sorry this is not aimed at your response in particular, I just think we as a whole have lost our way and our former identity with startups becoming the new Wall Street. EDIT: made less ranty
- zby 12y ago
  It is useful to know the current rules before you transcend them. And maybe I used the wrong word - rules suggest something positive - maybe I should say 'mechanics' or something. Take Machiavelli - did he make politics worse by describing how it works?

eli_gottlieb 12y ago

His politics and his sense of business ethics are, in my view, extremely bad. His views on technology are a breath of fresh air. He is one of the only SV figures who seems to care about building technologies with the next century in mind rather than the next three years.

netcan 12y ago

I don't imagine this is a serious question, but… Speaking for myself, I read this article and have "listened to Thiel" on other occasions because he says interesting things. "Something that’s true that very few people agree with you on." I read this and my mind immediately tried to come up with such truths so.. interesting. "The goal of every successful business is to have a monopoly." What's interesting about this idea? Monopolies are profitable. Companies like that. They're big, they like that too. A 'Differentiation' strategy is a way of creating monopoly-like microeconomics for your business. Differentiation is usually the dominant strategy in technologically new industries while its opposite (penetration strategy: high volume, low cost) is usually the dominant strategy in mature industries like supermarkets, auto components and canned beans. That's interesting. Full-blown monopolies often arise at the centre of disruptive new industries. Rails, energy, computing. Patents were originally created give monopolies as a reward for innovation. That's interesting. So far, this monopolies thing seems to be an interesting idea. Other than that, he does interesting things and says interesting things about them: Philanthropy, Seasteading, dropping out of college, anti-aging, book writing...

merger 12y ago
"Patents were originally created give monopolies as a reward for innovation." That's a common misconception. The original reasoning for patents was to provide a limited (in time) monopoly to inventors in exchange for sharing (and describing in detail) their invention with the whole of society. Interesting anecdote, afaik Gore & Associates, Inc.'s Goretex patent expired before it was universally used for outdoor clothing, thus any brand coukd release their own unlicensed goretex-like material. They have since stopped patenting many of their inventions afaik.
- dragonwriter 12y ago
  > The original reasoning for patents was to provide a limited (in time) monopoly to inventors in exchange for sharing (and describing in detail) their invention with the whole of society. Some of the apparent ancient predecessors of patents may have been on this basis, and clearly that's the theory of the modern patent system in some parts of the world. But the origin of letters patent was really the whim of the monarch, and they may have been granted for sharing information, or just for sharing the proceeds of the monopoly with the crown.

api 12y ago

He says many interesting things. For me what blew me away was that he's one of the few people who seems to have realized that most forms of technological innovation outside IT have stagnated since roughly 1970. This is something I've seen for years, and when I bring it up people think I am crazy. Invention, or fundamental innvation, has really stagnated in all fields since then including even IT.

CyberDildonics 12y ago

It's almost like people looked at the title and didn't see what he was actually saying. He uses the term monopolies to talk about building something that is separate from any competitors, either by orders of magnitude improvement or being substantially different from anything else out there. He is basically saying, don't run head first into competing in a commodity business, do something to make your business not a commodity.

mathattack 12y ago

Avoiding competition is central to corporate strategy. Whenever you hear "sustainable competitive advantage" or "building a moat" it's about doing something that nobody else can. This is creating a monopoly.