Notes on Peter Thiel's Worldview

Notes on Peter Thiel's Worldview

By Alex Yuan · August 30, 2021 · 8 min read · 1496 words

This is a continually updated collection of notes on Peter Thiel and his book Zero to One.

Radical Contrarianism

  • Many of Thiel's beliefs and visions have contrarian themes. This is driven by his views on human mimesis and imitation (more to be said about this later on).
  • His legendary interview question, “What important truth do very few people agree with you on?”, is a good filtering mechanism for finding other contrarians.
    • This question is notoriously difficult to answer because of the courage needed to express something socially unpopular.
      • If you have a good answer, apply for a job at Thiel Capital and become the next Eric Weinstein.
    • If your answer is something the interviewer agrees with you on, it's probably a bad answer. A good answer makes your interviewer uncomfortable.
    • Most good answers take the following form: “Most people believe in x, but the truth is the opposite of x.”
  • Contrarians aren't always right, but when they are, they are really right.

Technological Stagnation

  • Contrary to popular belief, the rate of technological innovation is decelerating in the US.
    • Where is the cure for cancer? Where are the flying cars? Why aren't we on Mars? What happened to VR? Why is the iPhone not getting better?
    • Eric Weinstein's stagnation test: Get rid of the electronics in your room. How can you tell you aren't in the 1970s except for aspects of design?
  • US manufacturing is in a steep decline due to globalization.
  • Free trade is a scam.
    • The worse you are at negotiating free trade agreements, the better at it you think you are.
  • We haven't had any great scientific discoveries in the fields of physics in the past 50 years. The last great discovery in the field of physics of relativity was done by Einstein 80 years ago. We've been spinning our wheels for decades. String theory is a scam.
    • Some claim all the low-bearing fruit has been discovered and it's now harder to make progress.
  • The only industry which has significantly accelerated is information technology. Historically, inventors were not rewarded for their work. It's difficult to capture value in engineering and the sciences. Software is different because it allows you to capture a large portion of the value you create.
    • The Wright brothers invented the first airplane, but they didn't get rich.
    • Albert Einstein came up with relativity and transformed physics, but didn't even become a millionaire.
    • Jack Dorsey came up with a social media platform capped at 140 characters. He's now a billionaire.
    • Also see Jordan Peterson on the curse of creativity on the struggles to monetize creative endeavours.
  • We wanted flying cars, instead, we got 140 characters - Peter Thiel

  • We're in a battle between atoms and bits. Atoms have been regulated, bits have not. Changes in government regulations and culture have stagnated many industries such as biotech, pharma, and aerospace.
    • It now costs 1 billion dollars to get FDA approval. What happened?

Innovation Moves from 0 to 1

  • Technology and innovation take things from 0 to 1 while globalization takes things from 1 to n. Globalism is copying what works. Technology invents "what works".
    • From 1971 to now, our world has been engulfed by globalism (emphasis on the rise of China).
      • Also see "What Happened in 1971?".
    • This helps explains the technological stagnation we've experienced in the Western world over the last 40 years. Instead of developing new technologies, we are profiting by exporting them to other countries.
  • The ability for the United States to innovate and produce 0 to 1 technologies is what made it so great. The US has cultural and economic factors that make it friendly for innovation.
    • Countries that copy the US, such as China, cannot innovate.
    • Culturally, the US tolerates the ambitious dreamers working on crazy ideas. Failure is not stigmatized.
      • Ambition is not considered cool in Europe.

Think for Yourself (Mimetic Theory)

Stanford philosophy professor René Girard's work on Mimetic Theory influences a large part of Thiel's worldview. There's too much that can be said about Girard's work. I highly suggest you do more of your own research. I've linked related resources on mimetic theory at the bottom of this post.

  • Mimetic theory proposes that every single desire, excluding our most basic needs, are imitated from others.
  • Our basic needs are food, water, shelter, and sex. These desires are inherit to sustain human life.
  • When Shakespeare was alive, the word "ape" also meant to imitate.
  • Man is the creature who does not know what to desire, and he turns to others in order to make up his mind. We desire what others desire because we imitate their desires. - René Girard

Competition is for Losers

  • Competition makes us better at that which we're competing on, but it narrows our focus to beating the people around us. It distracts us from things that are more valuable or more important or more meaningful. - Peter Thiel

  • Our world is obsessed with competition. School teaches us to aggressively compete with one another for academic accolades and prestige.

Don't Copy Business Ideas

  • There is no formula for building a great business. Each great moment in business happens only once.
    • The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them.

    • This also explains Thiel's negative view of business schools and MBAs.
  • This is what makes going from 0 to 1 so difficult compared to 1 to n. Doing something familiar will always be easier.
  • The ultimate question we're trying to answer is,
    • What valuable company is nobody building?

Monopolization as a Rational Bussiness Strategy

When I first read Thiel's views on monopolies, it made me uncomfortable. I knew what he said was true, but I did not know it could be literally be taken as advice. This section was very eye-opening and controversal.

  • Monopolies are good for monopolists but may not be good for society.
  • In a rational, self-interested way of thinking, if you're starting a company you should aim for monopoly.
  • Not all monopolies are bad for innovation or society. Being able to deploy large amounts of money, people, and energy gives the company the ability to work on moonshot projects.
    • Bell Labs researchers developed radio astronomy, transistors, the laser, solar panels, information theory, UNIX, C, C++ and won 9 Nobel prizes.
  • Always start small and monopolize. Many large companies today started out being small experiments that solve one very specific problem.
    • Amazon sold books.
    • Microsoft made compiliers.
    • Apple made the Apple II.
    • PayPal found a niche market on eBay.
  • Non-Monopolies claim they are not.

Getting Back to Growth

  • Growth is what sustains civilization. There cannot be a society without growth. Economic, social, political, spiritual.
  • The growth in US GDP over the past 40 years is not enough to sustain society.

Undeterministic Optimisim

  • A useful theoretical framework to categorize visions of the future is to divide our ideologies into a 2x2 matrix. Let's put optimistic and pessimistic on the Y-axis, and determinate and indeterminate on the X-axis.
    • Determinate means to have a clear vision of the future. One where we know what we want to accomplish.
    • Peter Thiel framework
    • The US during the 1950s to 1960s was optimistic and determinate. Crazy infrastructure ideas were being flown around. Nixon declared war on cancer.
    • The US has now moved to a period of undeterministic optimism. We're still optimistic about our futures, but its lost sight on what it looks like.

You Are Not a Lottery Ticket

  • The way we look at luck has radically changed in the past few decades. Our modern-day vision of luck destroys our free will.
  • Several people have started multiple unicorn companies. Would it be reasonable to say they were incredibly lucky many times?
    • Elon Musk (Zip2, PayPal, Tesla, SpaceX)
    • Peter Thiel (PayPal, Thiel Capital, Clarium Capital, Founders Fund, Palantir)
    • Steve Jobs (Next, Pixar, Apple)
    • Jack Dorsey (Twitter, Square)

The Education System and its Failures

  • At its core, the education system is built to teach what is already known. For us to go from 0 to 1, we need to innovate, not copy.
  • What is the actual purpose of the education system? It depends on who you talk to. The answer is unclear.

Related Readings, Topics, and Links

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