Peter Thiel Interview (Full Episode) | The Tim Ferriss Show (Podcast)

hello ladies and gentlemen this is Tim Ferriss and welcome to the Tim Ferriss show this episode is an exciting one and I will start with a quote the quote is from Robert Frost it is freedom lies and being bold if anything our guest this episode is about being bold his name is Peter teal and he is a serial tech founder PayPal Palantir billionaire investor and author of the new book zero to one I'll come back to all of those things but whether you want to be a better investor I've certainly modelled Peter and have him to thank I think for many of my best decisions in the world of investing a better entrepreneur or simply a free thinker who wants to do great things create more value I highly recommend not only this interview but certainly that you read zero to one which is a collection of many of his teachings on differentiation value creation competition it is a treasure trove now Peter who is Peter and if you're not familiar with him I'll give you a quick snapshot he co-founded in 1998 PayPal that was the beginning which was sold to eBay in 2002 for 1.5 billion dollars but more notable I think is the team that he helped to assemble and these individuals known now as the PayPal mafia that's what they're referred to as when I'm to launch a raft of companies that have become household names including at least seven now valued at more than 1 billion dollars I mean literally almost every single person on the founding team if not every person has gone on to create multibillion-dollar company so you have Tesla and SpaceX co-founded by Elon Musk LinkedIn of course Reed Hoffman YouTube Steve Chen Chad Hurley Javad Yelp Jeremy Stoppelman Russell Simmons Yammer David Sachs and the data mining company Palantir which teal himself co-founded in 2004 he was also the first outside investor in facebook and has invested in more than 100 startups he has done a lot he has learned a lot and perhaps most important he consistently questions assumptions and thinks differently so I don't want to delay this any further but I will say this interview was an experiment I was on sick leave so we did it a synchronously what you will hear is blake masters who is a co-author on 0 to 1 reading the questions peter answering them because i was unable to be there in person although I have met Peter on a few occasions before there are also written questions and answers and you can find those written questions and answers on the blog go to 4-hour workweek comm forward slash podcast click on this episode and it'll take you to the right place so without further ado I hope you enjoy this interview please share your thoughts on twitter at t-- ferrous that is made to ours two S's or on facebook at slash tim ferriss two hours two S's and thank you so much for listening at this altitude I can run flat out for a half mile before my hands start shaking no I also posted a question I'm a cybernetic organism living tissue over metal endoskeleton blue this is a Peter teal I'm happy to be here on the Tim Ferriss show thank you for having me since Tim is out my co-author Blake masters is the voice you hear asking questions that came from Tim and his audience let's get started what do you believe that very few others do well for starters I think this is a much harder question to answer than it sounds I give a number of different answers in my in my book one high level answer is that I think technology is far more important in our world than globalization even though we're in a world where people are very focused on globalization on copying things that work and much less on technology on doing new things and I think and we need to shift that hierarchy around and we need to see technology as the main driver for progress in the 21st century a second answer that I that I come to on the business side that I think is quite contrarian is that whereas most people believe that capitalism and competition are synonyms I think they are antonyms a capitalist to someone who's in the business of accumulating capital in a world of perfect competition all the capital is competed away and so for example the restaurant industry in San Francisco is incredibly competitive but not very capitalistic because no one ever makes any money at it whereas Google is a very capitalistic company which has made enormous profits for the last dozen years but has had no real competition ever since it's definitively distanced itself from Yahoo and Microsoft around 2002 what do you wish you had known about business 20 years ago if you go back 20 25 years I wish I would have known that there was no need to wait I went to college I went to law school I worked in law and and banking though not for terribly long but not until I really started PayPal did I fully realize that you don't have to wait to start something so if you're if you're planning to do something with your life if you have a 10-year plan of how to get there you should ask why can't you do this in six months sometimes you have to actually go through the 10 year complex 10 year trajectory but it's at least worth asking with that's just a story you're telling yourself or whether that's the reality how important is failure in business well I think failure is massively overrated most businesses fail for more than one reason and so when a business fails you often don't learn anything at all because the failure was over determined you will think it failed for reason number one but it failed for reasons numbers one through five and so the next business you start will fail for reason number two and then for three and so on and so I think people actually do not learn very much from failure and I think it ends up being quite damaging and demoralizing to people in the long run my sense is that the death of every business is a tragedy it's not some sort of beautiful aesthetic where there's a lot of carnage but that's how progress happens and it's not some sort of educational imperative so I think failure is neither a Darwinian nor an educational imperative failure is always simply a tragedy when you hear the word successful who's the first person you think of and why Mark Zuckerberg the why seemed silly he's done tremendously well or someone like Elon Musk we've had a serial entrepreneurs created multiple mega billion-dollar companies in the last in the last few decades what I think people like Zuckerberg or mosques court Jeff Bezos at Amazon have in common is that they're relentless they don't stop every day they start over do more and get better at it people often ask whether Facebook was just a fluke in the right place at the right time but I think the more you get to know Marc or founders like him the less plausible it becomes and that's in part because you can see how hard works how much planning there was how much of a vision there was from the very beginning where do you see Bitcoin going or not going in the future bitcoin is a class struggle with many of the same issues PayPal encountered when we started in the late 90s we to try to create a new currency and we started by creating a new payment system paypal worked by linking money and e-mail and became very powerful on that on that score although it never quite achieved its a goal of creating a completely new currency i think bitcoin in some ways is the opposite configuration of paypal it has succeeded in creating a new currency but perhaps not yet a new payment system and so people are speculating in bitcoin as a store of value but they're not yet using bitcoin that extensively to transact for bitcoin to really succeed i think it will have to be not just a currency but also a payment system what are the biggest tech trends that you see defining the future I don't like talking in terms of tech trends because I think once you have a trend you have many people doing it and once you have many people doing something you have lots of competition and little differentiation you generally never want to be part of a popular trend you do not want to be the fourth online pet food company in the late 90s you did not want to be the 12th thin panel solar company in the last decade and you don't want to be the end of the company of any particular trend so I think trends are often things to to avoid what I prefer over trends is a sense of mission that you're working on a unique problem that people are not solving elsewhere when Elon Musk started SpaceX they set out the mission to go to Mars you may agree or disagree with that as a mission statement but it was a problem that was not going to be solved outside of SpaceX and all the people working there knew that and it motivated them tremendously so I think unique missions are much to be preferred over trends it is because every moment and technology happens only once and it's always a unique constellation of technologies and people and the world where where the time is right right now for a new kind of thing to come about why do so many investors spray-and-pray instead of focusing on just five to seven companies and each fund like you do it founders fund and the second part of the question do you have any any rules that you follow or tips for those who want to invest in early-stage ventures more intelligently I think people would say that they spray-and-pray because of some sort of portfolio theory some sort of diversification theory and if that's true that might work I don't actually believe that to be true I think the real reason people a spray-and-pray and they're investing is that they are lacking in any conviction and perhaps because they're too lazy to really spend the time to try to figure out what companies are ultimately going to work one of the reasons I do not like that sort of approach to investing is that I don't think it's good to treat companies as lottery tickets it's terrible to treat the founders of companies as lottery tickets and I think it's actually not just sort of a bad thing morally to treat people as lauder chicks I also think it's really bad as an investor as an investor you know once you say that there's a small probability of a big payoff small number times big number normally equals a small number and so once you are thinking in lottery ticket terms you've already psyched yourself into writing checks without thinking and therefore losing money and and so I think that the anti lottery ticket approach is to try to be concentrated because that forces you to have high levels of conviction before you write a check of any size and then I think you'll do much better what problem do you face every day that nobody has solved yet well the problem that I remain the most passionate about is is for us to make some real and continued progress in the fight against aging and death this is not just about my face as a problem you know everybody on this planet faces we have about a hundred thousand people a day who die mostly from diseases linked to old age and so I always find extraordinary is how little we're doing about this problem it seems that people are either in a mode of denial or acceptance which are in some ways opposite extremes but they both have the effect of stopping you from doing anything if you are in denial and say this is not a problem where you accept it and say there's nothing you can do about it both of these are sort of passive modes and what I think we need is a much more active mode instead of being in denial or acceptance I would like us to spending a lot more time of fighting death there people who say that death is natural and to which I think the response always has to be that there is nothing more natural for us than to fight death what would you say to the nine point seven million unemployed people in America let me give both a micro and a macro answer to this on a micro answer I think I don't think there's any sort of one-size-fits-all approach I think there are very different kinds of facts and circumstances in which people find themselves in and I think that a reason approach you know would involve you know very careful looking at why people are there are they in a long-term unemployed situation where they were working a Rust Belt factory with a job that no longer exists or are they a twenty-something college student who studied a major that was poorly advised miss founded as accumulated a mountain of debt and so I think I think we always always want to approach this was with far more granularity and that there's no sort of one-size-fits-all approach the macro answer though that I think is is critical is that we need to find a way for there to be just more growth in our overall economy if the US economy was growing at a rate of four percent a year I think these problems would broadly get solved and the challenge has been that we've been having growth of one or two percent for the last seven eight years and that sort of growth rate is not enough to overcome structural unemployment it's my view that technology is the key driver for growth especially in developed nation like the US and therefore anything we can do to accelerate technological progress and technological innovation will increase growth and ultimately will increase opportunities for people throughout our society how would you reply to someone who says that your position on college and higher education is hypocritical since you yourself went to Stanford for both undergraduate and law school well you know I think some people will always find objections of one sort or another had I not gone to stand for law school people would object and say that I had no idea what I was missing so I think they're they're likely to complain in any event but I would say my view is not hypocritical because I've never made the claim that there's a one-size-fits-all so if I said that nobody should go to college that might be hypocritical but I what I have said is that not everybody should do the same thing and and that there is something very odd about a society where the most talented people all get tracked towards the same elite colleges where they end up studying the same small number of subjects and going the same small number of careers and that strike me as sort of a lack of diversity are thinking about the kinds of things people should be doing that's very limiting for our society as well as for those students I certainly think I was guilty of very much of this myself if I look back on my Stanford undergraduate and lost school years it's possible I would do it do it again but if I had to do something over I would think about it much harder I would ask questions why am I doing this am i doing this just because I have good grades and test scores and because I think it's prestigious or am I doing this because I'm extremely passionate about practicing law so I think they're good answers and they're bad answers and my sort of retrospective on my my early 20s is that I was a way too focused on the wrong answers at the time you studied philosophy as an undergraduate what is philosophy have to do with business and and how is your study of philosophy helped you and you're investing in career today I'm not sure how much the formal study of philosophy matters but I think the fundamental philosophical question is one that's important for all of us and it's always this question of what do people agree merely by convention and what is the truth and this is always the fundamental distinction in a society is there's a consensus of things that people believe to be true and maybe the conventions are right and maybe they're not and we never want to let a convention be a shortcut for truth we always need to ask is this true this is always where I get at with this indirect question tell me something that's true that very few people agree with you on Silicon Valley is a place that is laden with conventional thinking and and one of the reasons that it may afflict Silicon Valley even more than the rest of our society is that there are so few markers you know one of the things we're focused on Silicon Valley is the future and the future is not always a clear thing people can be uncertain about it and when they're uncertain about the future they will try to find shortcuts involved looking at what other people say about the future and when everybody simply is listening to everybody else that's the definition of a bubble or of a mass psychosocial insanity and so I think this this question of trying to think for yourself trying to break through convention is uh is always important but perhaps even more in Silicon Valley than most places what do you think the future of education looks like I don't like the word education because it is such an extraordinary abstraction I'm very much in favor of learning I am much more skeptical of credentialing or the abstraction called education and so there's they're all these granular questions like what is it that you are learning why are you learning it are you going to call us because the four-year party is it a consumption decision is it an investment decision where you're investing your future is it insurance or is it a tournament where you're just beating other people and our elite universities really like studio 54 where it's like a exclusive nightclub I think if we move beyond the education bubble that we're living in today the future will be one which people can speak about these things more clearly and we will talk about is it an investment decision is it a tournament is it a trade or vocational skill that you're developing I think engineering is the opposite of education because it is actually a specific skill that people are learning and it's sort of engineering as a discipline cuts the most against the banality that we're always told that you're just learning how to learn or you're not learning anything in particular you don't know why you're learning things engineering is sort of the anti education in that sense and I think is in some ways a paradigm for the way I think it will be more in the future I think we will have much less of a one-size-fits-all approach I think the big tract institutions are delivering less and less and charging more and more and so I think we are sort of at a point where where things will look very different one of my friends suggested that we are at a point education that's like the place where the Catholic Church was on the eve of the Reformation it comes through a very corrupt institution it was charging more and more for indulgences people thought they could only get saved by going to Catholic Church just like people today believe that salvation involves getting a college to Roma and if you don't get a college diploma that you're gonna go to hell I think my answer is in some ways like that of the Reformers in the sixteenth century it is the same disturbing answer that you don't have to figure out your salvation on your own what are your daily habits and routines always feel I'm a terrible person answering that question uh since things are very unstructured on many ways but I'd say one thing that I try to do every day is to have a conversation with some of the smartest people I know and continue to develop my thinking so I'm trying to learn new things I find that I learned them from other people and it's it's often people with whom I've had conversations for a long time so it's not an MTV approach where you talk to a new smart person every day it's one where you have sustained conversations with a group of friends or people who've been working with for a long time and you come back to thinking about some of some of these questions and that's how that's how I find I really continue to learn everyday and expand my thinking about the world what one thing would you most like to change about yourself or improve on it's always hard to answer this since uh it sort of begs the question of why I haven't already improved on it but I would say that when I look back on on my younger self I was I was insanely tracked insanely competitive and when you're very competitive you get good at the thing you were competing with people on but it comes at the expense of losing out on many other things so if you're a competitive chess player you might get very good at chess but neglect to develop other things because you're focused on beating your competitors rather than on on doing something that's important or valuable and so I become I think much more self-aware over the years about the problematic nature of a lot of the competitions and rivalries that we get caught up in and I would not pretend to have extricated myself in this altogether so I think every day it's something to reflect on and think about how do I become less competitive in order that I can become more successful what did you want to achieve by writing zero to one when you write a book like this you Kynan reaches broaden audience as possible there's there's much that I've learned in the last 15 years as a as both a entrepreneur and investor in the technology industry and I wanted to share some of these lessons not just at Stanford but also in Silicon Valley and with with the wider world I think this question of technology is critical to our society and building a better future in the 21st century and I think there's both sort of a alarmist and a hopeful part of this book the the alarmist part is that if we do not get our act together and innovate more we will have a bleak in stagnant century ahead of us and on the other hand the positive side is that there's absolutely nothing about all the great ideas have been found it's not the case that all the low-hanging fruit has been picked there's a great deal of things that can be done that people can achieve there are many great secrets left to be unlocked in the decades ahead and so so I think it is primarily a cultural question of what we need to do to get back to the future most business books take a 30 page essay and expand into 300 pages of writing and I tried to do the opposite with zero to one I tried to take everything I've learned in the last 15 years and distill it into 200 discipline pages so that you can read it in one afternoon writing this book helped me organize and advance my thinking tremendously and I hope it does the same for its readers if you want more of the tim ferriss show you can subscribe to the podcast on itunes or goto for our blog comm f where you'll find an award-winning blog tons of audio and video interview stories with people like Warren Buffett and Mike Shinoda from Lincoln Park the books plus much much more follow tim on twitter at twitter.com/dspacestv or on facebook at facebook.com slash Tim Ferriss til next time thanks for listening you

Channel: Tim Ferriss

Views: 50,691

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Keywords: tim ferriss, 4 hour workweek, 4 hour body, 4 hour chef, forbes, timothy ferriss, entrepreneur, author, writer, best-seller, public speaker, angel investor, ferriss, twitter, Facebook, stumbleUpon, evernote, uber, tim ferriss blog, timothy ferriss speaker, Peter Thiel (Organization Leader), Podcast (Website Category), Public Speaking (Literature Subject)

Id: 7pCIvOx76p0

Length: 23min 48sec (1428 seconds)

Published: Fri Oct 30 2015