Peter Thiel In 'Zero To One': How To Develop The Developed World
WADE GOODWYN, HOST:
You might remember this scene from the movie "The Social Network."
(SOUNDBITE OF FILM, "THE SOCIAL NETWORK")
WALLACE LANGHAM: (As Peter Thiel) You must be Mark.
JESSE EISENBERG: (As Mark Zuckerberg) Hi.
LANGHAM: (As Peter Thiel) We took a look at everything and congratulations, we're going to start you off with a $500,000 investment. Maurice is going to talk to you about...
GOODWYN: That guy you just heard offering $500,000 to a young Mark Zuckerberg - that's Peter Thiel. Well, not really. It's an actor playing Peter Thiel. Thiel was Facebook's first outside investor. He also co-founded PayPal and Palantir Technologies. And through his venture capital firm Founders Fund, he's invested in a number of big-tech companies. He's written a book with Blake Masters. It's called "Zero To One: Notes On Startups, Or How To Build The Future." Welcome, Peter.
PETER THIEL: Thanks for having me on the show.
GOODWYN: It's our pleasure. Your first piece of advice seemed to me to be your most important, and that is that Facebook and Microsoft and Google have already been created. So what these guys did in creating those success stories is not your roadmap. Your roadmap will be your roadmap.
THIEL: Yes. I believe that every moment in the history of business only happens once. And so the next Bill Gates will not be building an operating system company. The next Larry Page will not be building a search engine. The next Mark Zuckerberg won't be building a social network. And so if you're trying to copy these guys, in some sense you're not really learning from them. And one of the challenges is teaching entrepreneurship or writing about it is that there's no cookie-cutter formula that you can follow.
GOODWYN: So if you can't really give them a roadmap, and you say to them, you know, in order to be a success, you have to be original. How do you help students or would-be entrepreneurs?
THIEL: There is still a surprising amount one can say. There's sort of an interview question I like to ask people which is tell me something that is true that very few people agree with you on. The business version of this question is what great business is nobody building? And these questions turn out to be quite hard to answer for two somewhat different reasons. One of them is it's always hard to come up with new truths that people have not yet understood. Secondly, it also requires a bit of courage because you often have to go against social convention in pursuing certain lines of business. People discourage you from doing things that are strange and new.
GOODWYN: I think it's a capitalist truism that competition breeds efficiency and innovation. But you believe monopolies are actually better. Talk about that.
THIEL: Well, I think people always say that capitalism and competition are synonyms. But I think they're really antonyms. If we look at the restaurant industry, it's a very competitive industry. But it's very, very hard to make money opening a restaurant because all the profits are competed away, whereas a company like Google has not had any real competition in search since 2002 when it definitively distanced itself from Yahoo and Microsoft, and is therefore a very profitable business. You can debate how much monopoly should be regulated or when is it a good monopoly that's inventing something new and is dynamic? When it is a bad monopoly that becomes more like a rent collector? But I do think the great fortunes are always made in these monopoly-like businesses.
GOODWYN: Your book is entitled "Zero To One." What does that mean?
THIEL: The basic idea is if you sort of think about innovations where there's someone who builds a first airplane or first home computer or first smartphone that works like the Apple iPhone, these are what I call zero to one innovations. And I think technology involves intensive, vertical, zero to one progress. Globalization involves horizontal, copying, one to end progress. And we'll need both of these in the 21st century. China is sort of the epitome of globalization. What China does is copy things that work. And it has a very straightforward 20-year plan which is to make itself look more like the U.S. and Western Europe. For the developed world - Japan, Western Europe, the United States - progress is a much trickier thing in 21st-century because to take our civilization to the next level, we need to actually do new things. And so I think the question of how do we develop the developed world is a question that's not often asked but is worth for us to look about a lot more.
GOODWYN: You've been publicly skeptical of the value of college. What's not happening there you think should be?
THIEL: Well, if I had to do it over again, I probably would still go to college, but I would think a lot harder about why I went. I think we have often let education become a substitute for thinking about the future. And it's become much more problematic for the younger generation which is amassing enormous amount of student debt. I believe that there is no one-size-fits-all trajectory, and that there is something a little bit unhealthy about the sort of society that says you go to Yale or you go to jail. We need to create a much more diverse array of alternatives. I think the sort of narrowly-tracked system we have is working less and less well.
GOODWYN: Are you optimistic or pessimistic about this country's technological future?
THIEL: Well, I've articulated the view that there has been a lot of progress in the world of bits and not so much in the world of atoms. So there's been a lot of progress in computers, not as much in some other areas such as say energy or transportation or even biomedical. And so the hope is that we can re-accelerate progress so that technology's not just synonymous with computers. I never like to frame things, however, in terms of extreme optimism or extreme pessimism because they both end up being reasons not to do anything. If you're extremely optimistic, then the future will take care of itself. If you're extremely pessimistic, then there's nothing they can do. And so they both are mindsets that I think lead to inaction. And so I think the healthier mindset is always somewhere in between - to say that there's some good things and some bad things, and we have to figure out what are the meaningful things we can do in our time.
GOODWYN: Peter Thiel is the author of "Zero To One." Peter, good talking to you.
THIEL: Thanks for having me.
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