Since Thiel talks a lot about "monopoly theory" it's probably worth reading some of the people who've been talking about this for longer than Thiel's been in business (i.e. before the late 1980s). The two most prominent are Michael Porter and Warren Buffett. Buffett's annual letters to shareholders make excellent reading, and the book Understanding Michael Porter is a very good summary of Porter's thoughts.
Lecture 5, How to Start a Startup: Peter Thiel
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Re: Lecture 5, How to Start a Startup: Peter Thiel
#42Companies like Facebook and Google are definitely not the last companies in their markets. Being in a monopoly position does not grant you magic protection from competitors. It probably even hurts more than it helps in the long term. Google and Facebook have not radically innovated since their inceptions. Google is still essentially a better AltaVista/Hotmail and Facebook is still essentially a better MySpace. And ye…
>> "Google is still essentially a better AltaVista/Hotmail and Facebook is still essentially a better MySpace."
Not sure I agree here. There's much more to both companies than simply google.com the search engine and facebook.com the social network. Both firms have invested heavily in companies and technology that they feel will be leaders in future industries. And by 'future industries' I mean industries that are literally in their infancy right now but are poised for explosive growth in this century (robotics, aerial technology, virtual reality, artificial intelligence, etc). To tie into Thiel's thesis, they are likely preparing and planning to become monopolistic forces in these new fields as well, which is probably a very sound strategy.
Re: Lecture 5, How to Start a Startup: Peter Thiel
#43I think Peter is mistaken as to why science goes about inventing things with little financial gain. There are some people that don't want money (who would have thought?), but find more value in the research. It's fair to say that on the other hand, there are those who also want some sort of financial gain, so there should be a way for them to go about this. > "If people at Twitter make billions of dollars, it must be…
I live in the shadow of a university that is a major biology research magnet, and quite a number of the professors have their own off-campus start-ups going on. There's a widespread misconception about scientists too, due to the assumption that we're all academics. In fact there are quite a lot of scientists in industry, either in companies or as entrepreneurs. I've known quite a few millionaire scientists. Within th…
This the video of the talk where Alan Kay talks about Innovation Vs Invention:
https://www.youtube.com/watch?v=gTAghAJcO1o
Re: Lecture 5, How to Start a Startup: Peter Thiel
#44One interesting thing is really considering whether X and Y really are independent. Much of the software world has taken the position that if Y is too big, X will stay small. This is why open-source exists, basically. So there is a dependence, at least in some markets. In other cases, having a large Y gives the creators the resources to make X much bigger.
For those who would like their work to positively impact the world, and not starve to death in the process, it's something that needs to be considered: how high of a Y is workable in the given environment?
Re: Lecture 5, How to Start a Startup: Peter Thiel
#45Earlier quoted context omitted.
1) That's a terrible source for data. 2) Being worth $1m is still terrible for having done everything he did.
Worth noting that $1mm in the 40s and 50s is much more in 2014 dollars.
True, I looked up the adjusted amount and it's $16m.
But it semantics, as Thiel's point was to contrast the value he created with the value he captured.
Re: Lecture 5, How to Start a Startup: Peter Thiel
#46Earlier quoted context omitted.
Worth noting that $1mm in the 40s and 50s is much more in 2014 dollars.
True, I looked up the adjusted amount and it's $16m. But it semantics, as Thiel's point was to contrast the value he created with the value he captured.
There is a contrast only if you consider that the only way to capture value is through money.
Also you may think that "Capture value" is not a priority for everybody (Not only money, but also public attention, or power).
In fact capturing value as a priority may absorb too much of your time to be useful.
EDIT: corrected a word
Re: Lecture 5, How to Start a Startup: Peter Thiel
#47Thiel's Einstein example was wrong: "You're the smartest physicist of the 20th century -- you come up with special relativity, you come up with general relativity -- you don't get to be a billionnaire; you don't even get to be a millionaire." Actually, Einstein WAS a millionaire. His net worth was around $1 million. http://www.celebritynetworth.com/richest-businessmen/richest...
1) That's a terrible source for data. 2) Being worth $1m is still terrible for having done everything he did.
If we only pursued endeavors that produce money, our civilization's development would be centuries behind and our life would be (more) miserable. Fortunately, not everyone is motivated (just) by money and power.
Re: Lecture 5, How to Start a Startup: Peter Thiel
#48"I'm personally quite skeptical of all the Lean Startup methodology, I think the really great companies did something of a quantum improvement that really differentiated them from everybody else. They typically did not do massive customer surveys. The people who ran these companies would often, not always, have mild forms of Asperger's, so they were not actually that influenced, not that easily deterred by what other…
Almost nobody in this industry has "mild forms of Asperger's." That canard is used far too often, and far too often as an excuse for something much more simple: these people are socially indifferent, to be polite. Some of them are merely socially inept, but others (many? most?) are, to be quite vulgar about it, simply assholes.
What's wrong with being an asshole? The fact that you can't handle it is your problem, not the asshole's. An asshole is simply someone who won't allow themselves to be swayed by anyone else's ignorant opinions.
Re: Lecture 5, How to Start a Startup: Peter Thiel
#49I think Peter is mistaken as to why science goes about inventing things with little financial gain. There are some people that don't want money (who would have thought?), but find more value in the research. It's fair to say that on the other hand, there are those who also want some sort of financial gain, so there should be a way for them to go about this. > "If people at Twitter make billions of dollars, it must be…
I live in the shadow of a university that is a major biology research magnet, and quite a number of the professors have their own off-campus start-ups going on. There's a widespread misconception about scientists too, due to the assumption that we're all academics. In fact there are quite a lot of scientists in industry, either in companies or as entrepreneurs. I've known quite a few millionaire scientists. Within th…
Invention vs. innovation sounds like Schumpeter.
Re: Lecture 5, How to Start a Startup: Peter Thiel
#50"I'm personally quite skeptical of all the Lean Startup methodology, I think the really great companies did something of a quantum improvement that really differentiated them from everybody else. They typically did not do massive customer surveys. The people who ran these companies would often, not always, have mild forms of Asperger's, so they were not actually that influenced, not that easily deterred by what other…
Yeah but it's bloviating. Here's why: at some point you have to check to see if what you're doing is actually taking you somewhere. Sure, maybe you use magic rocks or a psychic telephone hotline to get your vision -- his "we focus too much on incremental" point may be spot-on -- but at some point you gotta have an OODA loop. You gotta stop and take measure of what the heck is going on.
So perhaps he could have gone somewhere interesting with this, it ended up as a rhetorical drive-by shooting.
Having said all of that, the man knows a zillion times more stuff than I do. I'm simply pointing out that this quote is so woefully incomplete as to be sophistry.