Today's best practices lead to dead ends
Tech is miraculous because it allows us to do more with less
3 bad egs:
Education is broken
America is exceptional
There is no God
People already agree with 1 and 2, and 3 is just taking a side in a familiar debate
What is Thiel's uncommon belief?
New tech is neither automatic nor guaranteed
We need to imagine and create new technologies for more peace&prosperity
Startups straddle the balance between solo genius (great work but not industry-creating) and bureaucratic hierarchies (minimize risk, move slowly)
Work with others + move stay small
A new company's most important strength is new thinking
Question received ideas and rethink business from scratch
Incremental vs big vision
Lean vs planned
Existing vs new customers
Product vs sales
The most contrarian thing of all is not to oppose the crowd but to think for yourself
Hard question because a company can create a lot of value without becoming very valuable itself
The challenge is to capture some of the value you create
Airline industry worth hundreds of billions
But in 2012 each airline made ~$0.37 per passenger trip
Google brought in less revenue ($50B) but kept 21% for itself- over 100x airline profit margin
Google now worth 3x all US airlines combined
0 to 1 focuses on monopoly-of-ability rather than license-based or rival-eliminating monopolies (can they really be so neatly distinguished? 🤔)
Capitalism = accumulation of capital
Competition = profits get competed away
Everyone is incentivized to lie
Rather, they conceal their monopoly- usually by exaggerating the power of their nonexistent competitors.
Google frames itself as a small player in a big advertising market rather than a big player in search
Eg selling British food in Palo Alto
"No one's doing it, we'll own the whole market"
But what if the relevant market is really all restaurants?
People rarely consider this when evaluating their failure
“In a static world, a monopolist is just a rent-collector. But we live in a dynamic world: it’s possible to invent new and better things.” Hence patents to new inventions.
“The promise of years or even decades of monopoly profits”
So why is competition so idealized? Thiel argues that it’s a sort of physics envy– seeing businesses as interchangeable atoms
That was an underestimate: with 15% YoY growth, most of PayPal’s value will be created after 2020. Thiel says same will be true for LinkedIn
Growth is easy to measure, durability isn’t.
You can hit your weekly growth stats while overlooking deeper, harder-to-measure problems that threaten biz durability
#’s alone can’t tell you if your biz will survive 10yrs – must think critically abt qualitative bits
1. Proprietary tech. Ssomething that makes your product 10x better in a hard-to-replicate way. (Amazon offered 10x more books, Apple made tablets go from unusable to useful)
- no blank spaces left on the map
- incrementalism, taught to kids and also why “publish or perish”
- risk-aversion – people want to be not-wrong more than they want to be interesting