Peter Thiel Speaks His Mind at Harvard Business School
(LtoR:)Peter Thiel, William Sahlman
Peter Thiel is a profound contrarian.
Thinking upstream is part of the secret of his success. He is the cofounder of PayPal, was Facebook’s first external investor, and through the Thiel Foundation has developed a well-deserved reputation as an eclectic philanthropist, supporting causes ranging from artificial intelligence to longevity research.
Coauthor of the new book From Zero to One, Thiel shared his views with members of the Harvard Business School community last week at a special event sponsored by HBS’s Rock Center for Entrepreneurship, answering questions from Professor William Sahlman. Some highlights are excerpted below.
The Role of Luck in Success— “We ascribe way too much to luck. We put too much emphasis on it….Ascribing chance to things is, in most cases, symptomatic of being lazy. It stops us from thinking harder.”
Capitalism vs. Competition — “People think of capitalism and competition as synonyms, and I think they’re really antonyms…Google is very capitalistic and has not had any serious competition since 2002 in their core search business. I think we need to rethink the question of competition, which is the way we evaluate so much of what occurs in our society.”
Don’t Judge a Market by Its Size — “I think people make way too much about the size of markets. They go after big markets. Facebook began at Harvard with 10,000 people. It went from zero to sixty percent market share in ten days. That’s an auspicious start.”
Pro-Founder, Anti-CEO — “I’m very biased pro-founder and somewhat biased anti-externally-hired-CEO. There are many ways in which people who have professional managerial experience get portrayed as knowing a lot about a lot of things. But they typically don’t have the product sense, the vision to drive the company. So I think you’re almost always better off with founders who are learning the business than with businesspeople who are lacking on vision….The businesses in Silicon Valley that I’m most bullish on at this point are all ones that are founder-led.”
Bits vs. Atoms — “We’ve had forty years of innovation centered on the world of bits, computers, internet, mobile internet, that whole ensemble of things, and I think Silicon Valley is very strong in those areas. We haven’t made as much progress in the worlds of atoms or molecules [which means lagging accomplishments in areas such as energy and disease prevention]…. I’d like to see more work done in these fields.”
Lessons Aren’t Best Learned the Hard Way — “The value of failure is greatly overrated. In most cases, people do not fail for just one reason….There were probably 500 things you did wrong and [if you believe in failure as a lesson] you will think it’s one of those five, so you’ll go back and make mistake number two and mistake number three. So I think we make a big mistake when we downplay the high cost of failure.
Don’t Follow the Herd — Whatever a large number of people are doing is probably something to be careful about.”