Peter Thiel on markets, technology, and education

today a successful man and a thorough contrary on why everything you thought you knew about business may very well be wrong Peter teal uncommon knowledge now welcome to uncommon knowledge I'm Peter Robinson a co-founder of PayPal a co-founder of Palantir the president of clarium capital a managing partner in the founders fund and the first outside investor in facebook Peter Thiel is one of Silicon Valley's leading investors one of its leading thinkers and since finding himself portrayed in the movie The Social Network one of its leading celebrities you can't escape it now the son of German immigrants mr. Teel grew up just up the road in Foster City California after majoring in philosophy as a Stanford undergraduate he attended Stanford Law School which is where he and I first became friends before returning to California to begin his career in business mr. teal practiced law briefly how long were you at Cravath solbin Cromwell Sullivan Cromwell interchanges seven months and three days seven months and three days mr. teals new book zero to one notes on startups or how to build the future Peter Thiel welcome zero to one I'm quoting the book now if you take one typewriter and build 100 you have made horizontal progress if you have a typewriter and build a word processor you have made vertical process explained well the I think I think in the 21st century we're gonna have two basic modes of progress one is globalization which is basically about copying things that work and the other one involves technology or inventing new things and that's that's what 0 to 1 is about it's everything I know about how we how we build about how we build the great new companies that will will take our civilization the next level in them in the century ahead you just 0 to 1 you discuss China you consider that an exemplar of globalization all they're doing is copying things that have already existed on the other hand it's quite powerful look what China has been able to do with hundreds of millions out of poverty and yet you say quote most people think the future of the world will be defined by globalization the truth is that technology matters more well China's plan for the next 20 years is very straight forward it is just a copy everything that works in the west it's not that they invent new things it's I I think they might be able to I don't know saying about Chinese culture that intrinsically makes it impossible for people to invent new things but they don't really have to because it's still very poor and they can they can get a lot from just copying things that work but for the so called developed nations us Western Europe Japan we actually do have to invent new things and and that's why that's why for us technology matters a lot more than globalization we have to invent new things let me push that a little bit so from the end of the Second World War until the 1970s as is well known Western Europeans and Americans worked about the same number of hours per week and at that point in the mid 70s once the Western Europeans had rebuilt from the damage of world war ii reestablished a high standard of living they diverged Americans begin working harder but Western Europeans slack off but isn't there something to that point of view that after a certain point you don't have to invent new things you can rely leisure becomes more important time with friends strolling down the Sean's daily they stopping at a cafe for cafe au lait or a nice Cabernet that's the way you should live the Europeans are onto something it's not clear how well it's working and I agree there are differences between US and Western Europe but I would argue that that the entire developed world has entered an era of relative stagnation for for quite some time we've seen progress in computers internet mobile internet per capita incomes have still gone up some in the u.s. in the last forty years but there is there is for this sense of malaise it's much worse in Western Europe but people think the younger generation will not do as well as their parents people think that you know and then and it's very unclear how you grow an economy and our political systems I would argue depend on economic growth so standing still is not a civilizational option you must advance or your civilization will flatten out suffer malaise you can have I think you can have static civilizations and like medieval societies or Egypt unchanged for a thousand dollars though I don't know if you can have it in a representative democracy where the give-and-take of our of our of our Republican form of government depends the pie to grow there's more for you there's more for you there's more for you we craft compromises that are win-win when once the pie stops growing our system gets very polarized and I don't think it actually works that well unless you have growth all right we will return to that first Peter Thiel business subversive at one level zero to one represents how to book a quite specific guide to building a company but even in being a practical how-to manual you engage in acts of subversion you being you are engaging in acts of subversion throughout let's go take out on a couple of these conventional wisdom in Silicon Valley new companies should proceed slowly carefully they should make incremental advances zero to one quote it's better to risk boldness than to be trivial what do you well you the most there's the opening sentence of Anna Karenina is that all happy families are alike all unhappy families are unhappy in their own special way and my claim is that the very opposite of this is true in business all happy companies are different because they found something unique that gives them a mission and it also gives them a monopoly of sorts where they're able to charge more for their products than then other people can where they don't have to compete and all unhappy companies are alike because they fail to escape the essential sameness that is competition so when you iterate when you do things that are just incrementally better you end up in a super intense competitive dynamic you don't want to be the fourth online pet food company you don't want to be the tenth thin-film solar panel company you don't want to open a restaurant period in probably any city in the world and and these are these are incredibly competitive businesses but they're not capitalist in the sense that they do not generate capital they don't generate profits they don't generate capital capitalism works best when you do something that's that's very unique very differentiated and I think that's something people need to think through really hard before starting 0 to 1 competitive markets competitive markets here speaks here sits one of the leading libertarians in Silicon Valley in the country competitive markets destroy profits well certainly as a as an entrepreneur or founder of a company you the goal is always to aim for a monopoly it is to to do something no one else is doing you'd much rather have started a company like Google and have started the pizza place in downtown Palo Alto or or even or even like a say an airline company which is a big company but has an airline industry in the US has made no profits in a hundred years cumulatively because the competition has destroyed all of them all right so you argue in fact in its how-to book you're trying to provide concise memorable lessons but there's one that particularly struck me and I wondered whether you're saying this to be memorable or whether you really mean it you argue that there are really only two kinds of businesses monopolies and those that never make any money I really yeah I mean I mean I mean pretty much everything I say in this book it's it is it's it's those are the two fundamental forms of business the difference gets obscured tremendously because the people who have monopolies pretend not to have them they don't wanna get regulated by the government they want to and so they always pretend to be in a very competitive dynamic and the people have super competitive businesses always want to pretend there's something unique so they can attract investors or something like that so if you're if you were opening a restaurant in Palo Alto and you were trying to get me to invest in it you might say well it's not like in every other restaurant it's really unique it's really different sushi is the best sushi we have we're the only British food in Palo Alto or something like that and and and so people always tell fictional stories like this that end up obscuring the difference the monopolist pretend not to have them and the people in cutthroat competition pretend not to be the apparent difference is much smaller than the real difference so I think this is this is this is the fundamental difference in businesses between a competition and monopoly and and you always want to be on one side of that equation so apply that analysis to a company such as say Ford where Henry Ford he comes up with the assembly line he's do something nobody else is doing Ford becomes immensely popular pop excuse me immensely profitable then along comes Alfred P Sloan at GM GM wakes up and Ford good so Ford you see becoming profitable and then hanging on a Donald Peterson in the late 80s comes along and invents this new line the Taurus up sort of a smooth around or shaped car Ford becomes immensely profitable again and then it nearly goes out of business Elmo Lally for it again is now seems to be undergoing a period of profitability certainly by contrast with GM so how do you explain that they you can achieve over the long lifetime of a great corporation you can achieve periods of monopoly which then get competed away how does that how do you have your analysis to fit that it's well I would say the the early Ford right I was a vertically integrated monopoly with enormous economies of scale so that was the the classic version of this that and that worked the best I would say in in recent decades it's been much a much trickier question how do you actually differentiate yourself the main differentiation is something like Brandt which is is a weak form of monopolies that a lot of these companies have so they're people you know they're it works very well for Mercedes and BMW probably not as well for some of the American companies at this point but that is but that is a you know there are people who like Ford's more than Chevrolet's and they'll they'll pay some somewhat extra for that even its completely undifferentiated so brand is a is it very is the weakest form of monopolies it's a slippery concept but it is real exact ly okay I would like to talk about provoking because in Pepsi right right you can say on one level they're very competitive but there are there are all these people who will only drink Coke or will only drink Pepsi and so they're actually quite profitable franchises because they have this this brand component to it okay no you whom I've known for a long time I know to be a very rigorous thinker and you just say yeah you talk about brand in here just as you did now as a possible as one tool you can use to achieve monopoly and yet it sounds slippery as you describe the concept and you've just said that brand is a slippery concept I mean it's almost as though there's a there's a circularity if a company has a name that people are if a company's doing well it must have a great brand but and yet I know you can't be satisfied how do you how do you think through the question of brand as an investor well I don't understand it so I think it's it's a real phenomenon but I don't understand what what make it's what is objectively the case that ways that are people who will pay more than products cost to manufacture because they like the brand so marketing works advertising works and there are contexts where it can actually generate generate a real brand I prefer not to invest in those sorts of companies I prefer to invest in companies where there's a there's a major technological advantage or you have the vertical integration or you have other other types of monopolies that I consider to be somewhat more robust but but brand is is a very major one all right which leads to another tenet of conventional wisdom that you overturn here is zero to one you hear it said over and over and over again hire the best engineers and just focus laser-like focus that phrase that comes up again and again focus on your product get the product right and it'll sell itself and Peter teal says in 0 to 1 sales matter as much as the product well it's always it's always a combination of of Technology and the selling of technology and there's certainly the conceit that engineers have maybe scientists even more than engineers is that you don't need to convince anybody of what you're doing people the world will beat a path to your door step to get to get what you're producing and there are certainly products where you have enormous lines of people that show up you know Apple computer was able to do this but it the sales didn't it didn't happen in a complete vacuum and so there is always there's always a sales component it always tends to be again something that's somewhat hidden the you know the worst salesmen are salesmen that are transparently salesmen a used-car dealer that's the classic salesman really good salesman it's always unclear so I think Jobs was a phenomenal salesman but he didn't look like a used car dealer so you as an investor if you're investing it consider the earliest stage at which you would consider making an investment must a company have sales and distribution at that stage or is that something that you feel that in as an outside an investor perhaps you get a board seat that can be added if the product is great well I think you'd want to have a distribution plan it's and it's typically it's typically the component that people underestimate the most especially they're coming from an engineering background if they come from a sales background they probably underestimate engineering if they come from an engineering background they underestimate sales people always over value what they do well if you're a lawyer you think the only thing that exists in the world is law if you're a scientist there's nothing but science and and so there's always this bias to overvalue what you're good at and undervalue everybody else okay one last piece of conventional wisdom that you subvert here here over and over again that new companies have to remain flexible the phrase that gets used is retain optionality if this smart market doesn't work adapt your product and go for that market and Peter Thiel says in zero to one a bad plan is better than no plan plan plan plan well it's always it's always worth thinking you know how does this market going to develop houses product can be rolled out will will you know what will happen in 5-10 years with our business and so I think these are all critical questions people should think through this doesn't mean that you can't change your plan or you can change course but but that shouldn't be the starting point if the starting point is we have no idea what we're doing and we'll just figure it out as we go along that's a very bad idea even if it's even if it's like we're gonna you know there's sort of the extreme versions in Silicon Valley that's been tried a few times and has never worked as you we're just gonna get a few talented people into a room and they're gonna keep brainstorming until they come up with a product and I would say good ideas good plans for a business good business plan is actually quite a bit rarer than talented people and so it's it's quite quite a valuable thing when it comes along does the notion of planning apply as well to an individual's life are you one of those people who at Stanford Law School when at Sullivan Cromwell via the recruiter came by and came in and said where do you want to be five years from now you had that answer ready well it's we generally brain as I note that you worked for them by seven months and then he got out well I I would say that I was not thinking about this and this is certainly Mike if I had to give any advice to my younger self it would be to think about these things a lot more my bias was not to think about them my bias was that education was a Institute for thinking about your future what are you gonna do with your future I don't know I'll get a undergraduate degree what are you gonna do once you have that I don't know I'll get a graduate degree what are you gonna do after that I don't know I'll work in a law firm or consulting firm or a banking position because that will generate options down the line and so when we think of our lives as just adding these line items on a resume I think that's actually not the best way to go about it even though that's that is that is the bias that are in our whole elite education system pushes people to quit good the 25 how old were you when you graduated from Stanford Law 24 24 yeah 24 could the 24 year old Peter Thiel have known enough to to establish as a goal the 44 year old peter toth oh I don't think that's I don't think that's realistic but I think I think I think a bad plan is better than no plan and so I think the 24 year old Peter Thiel had had no plan whatsoever and and that was that was a bad plan would have been better got it Peter Thiel public intellectuals 0 to 1 in the late 1960s people looked forward to a four-day workweek energy too cheap to meter and vacations on the moon it didn't happen the smart phones that distract us from our surroundings also distract us from the fact that our surroundings are strangely old only computers and communications have improved dramatically since mid-century close quote only computers and communications but since they affect every aspect of our lives isn't that enough well I would I would argue other that there are quite a few other things that you that that people were expecting to improve there's um there's an energy issue where we haven't really moved beyond fossil fuels and they're getting more and more expensive there is uh there are food production issues where you get a fantastic green revolution that's sort of run out of steam I think there's a lot that we could be doing in medicine biotech you know we thought were going to defeat cancer in the 1970s were 44 years later not making that much progress a lot of other diseases where I think we could be trying a lot harder so I think I think technology has been redefined as information technology it has a much narrower meaning day than it did 40 or 50 years ago and so we have this we have this very powerful but very narrow cone of progress around the world of bits not so much in the world of atoms and so we have this dual it's like this Cartesian dualism where you have all the stuff happening in this virtual reality but the material world that we live in not so much progress and I think that's that's an important part that's missing okay but isn't it the case that computer technology is now just beginning and it will accelerate just beginning to affect the physical world the physical economy just a little patience Peter and you're going to see driverless cars energy cheap enough is coming up fracking is the beginning is going to cause the rebirth of American manufacturing 3d 3d printing is just beginning you're going to have a perfusionist but based on sequencing the genome and the ability to engineer new drugs at the molecular level just a little patience well that's that's what people who are argued against this tech deceleration thesis always always say they always point immediately to the things that will happen a few years from now and and I certainly think that some of these things are plausible there's no reason they couldn't happen but but I always keep coming back to this idea that over the last forty years it's been slower and I think one of the reasons it's been hard to do things in the world of atoms is that it's very heavily regulated it's hard to build a new nuclear power plant it's hard to build a rocket supersonic airplanes are too loud you know new drugs cost a billion dollars to get through the FDA and so I don't think that I don't think there's like a natural law that says that we can't do more but I do think there are these are these cultural and political issues that have slowed us down okay Larry Summers Lawrence Summers former Treasury secretary and former president of Harvard quote even though financial repair had largely taken place by 2009 recovery has only kept up with population growth and has been worse elsewhere in the industrial world than in the United States real interest rates may not be able to fall far enough to spur investment to lead to full unemployment the presumption that normal economic and policy conditions will return at some point cannot be maintained close quote so Lawrence Summers is saying not only is teal on to something but he's understating the case new normal is slow growth and stagnation yeah although the the the place where I would part company very very much with summers is on what he would do about this summers analyzes this is a macroeconomic thing and he looks at it from a Keynesian perspective where you have to increase demand so you have to increase money printing you have to lower interest rates even more you have to increase deficit spending you have to figure out ways government government summers to borrow even more money extend even more credit and this strikes me as completely crazy I mean consumers in the US are borrowing too much as it is you have all the boom baby boomers are approaching retirement in an actuary bankrupt state so it's it's quite irresponsible to try to stimulate demand I have a much more classical view of the economy where I think the only side that really matters is supply the you know the overall productivity of the economy and so we have to ask why is it so hard to make new things to create new things and I think that doesn't have so much to do with what Bernanke or Yellen are doing at the Fed and has much more to do with the micro regulations that drive microeconomics that drive the supply side you sound like Ronald Reagan as adjusted for some experience in Silicon Valley will you accept that characterization it's close although I think in our in our time marginal tax rates aren't as important and I think the regulations are more important okay all right which leads us to Peter Thiel and the United States of America education you yourself attended Stanford as an undergraduate then you went on to Stanford Law School and in recent years you have been scathing on the topic of American education and in fact you that you've found at the teal fellowships to entice bright kids to drop out of college and start their own companies you've said that we're in an education bubble and a bubble means that there's unreality involved people are being buying things that aren't real somehow and yet Peter American higher education is such that students from around the world are clamoring to get into Stanford or Harvard or name any other really at quite a low level into the ranking tables you'll find foreign students trying to get into American schools explained well we have a well we have a bubble in education just like we had a bubble in housing in the last decade or an Internet stocks in the 90s it's reflected in the fact that people are spending more and more the college's costs have gone up by four hundred percent after inflation since 1980 you now have over a trillion dollars in student debt and even though in many cases it still is somehow it makes sense for people to do it because they get this credential it's so important for all these other things it's it is a somewhat parasitic system you know it's a it's it's it's like a it's like a very very expensive IQ test that's being administered where you know my Q test would cost twenty five dollars you know Harvard education costs a quarter of a million dollars and and so yes once once you have that credential you get a better job but it's an incredibly high tax that's being extracted when people use the word education that's always an incredible abstraction already you know and we should be talking about like what specifically are you learning is it stem is science technology engineering math is it real liberal arts we're actually studying the humanities well once you use this abstraction it can it can mean anything you can think about economically as education and investment is it a four-year parties at a consumption decision is it an insurance policy people are buying or is it as I claimed in many cases just a tournament where the value actually consists of the fact that these colleges exclude people primarily and if you were you know if you were president of Harvard or any of these elite universities the one thing that would get you fired right away would be to dramatically increase the enrollment in a normal business you have the entire world clamoring to get in you'd say ok we're gonna we're gonna increase enrollment by 20% or 100 / you know maybe a 10 20 year plan you don't do it right away but because we're offering such a great education obviously more people should have it I think the only sort of business that wouldn't increase it's like it's like a crazy nightclub it's like studio 54 or something like that we have just a long line of people getting in and the more exclusive you make it the more valuable it is so it's a it's it masquerades as something positive some in reality it's very zero-sum I said scathing and that applies so if it's a bubble in what way will the bubble pop it's um it's hard to say exactly how it ends because one of the reasons that we've put so many resources into the education system as it is is that people can envision any kinds of alternatives they can envision doing anything different what I what I think will happen is that we will start to see more alternatives and I mean I've never said nobody should go to college or anything like this I think we should just have more choices it should not be that you go to Yale or you go to jail it should not be that that you have to get a college degree and the the the analogy that I've suggested is that in some ways I think the universities face a crisis somewhat similar to that of the Catholic Church in the early 16th century five hundred years ago where you basically have have a unitary system you know there's one one way and sort of a secular atheistic version of the Catholic Church is like an atheist Church where your salvation consists of getting a college diploma if you don't get a diploma you will go to hell and and there's no salvation outside outside this this university system it's costing more and more the indulgences or get getting more corrupt and and I think the the disturbing message that I have which is similar to that of the 16th century reformers is that there's not any formula and that people have to figure out a way to save themselves and that's and that's that's a disturbing message because we'd like to have a formula so the ultra Oaks you mentioned to go a moment ago if you had any advice for the 24-year old Peter Thiel if you had advice for the 18-year old Peter Thiel when you were graduating from high school up the road here in Foster City would you have said don't would you say now to your 18 year old self don't go to Stanford you know it would it would be why are you why are you going it would be I would say the advice would be always slightly slippery answers it's a little slippery but but it's always so hard we run these experiments but it would be value substance more than status are you doing it for the prestige for the UM for the status or are you doing it because there really are a lot of important things that you want to learn so go long substance go short status got it and well that's advice not just for eighteen year olds okay while we're on education so you the alternatives will take what form MOOCs is is that is the Internet where we're first going to see the the first cracks in the in the in the edifice of American higher education I think it'll be a whole I think it'll be just very heterogeneous it will be many different things so it may be it may be MOOCs it may be it may be amped up vocational training it may be academies where you learn say computer programming in six months and we can actually get a really good job without a four-year degree and to what extent it may be just a whole range of things to what extent is the policy of the federal government supporting the education bubble well it's um it's encouraging people to take on all these loans it's subsidizing the loans and then perversely it's making it impossible for people to ever get out of them so you you cannot get rid of your student debt even if you personally go bankrupt it's attached it's it's like it's a form of almost like indentured servitude it's attached to you you're a physical person for the rest of your life zero to one the government used to be able to coordinate complex solutions to problems like atomic weaponry and lunar exploration but today the government mainly just provides insurance our solutions to big problems are transfer payment programs close quote what went wrong between John Fitzgerald Kennedy saying we will put a man on the moon by the end of this decade and we did and Barack Obama saying the Affordable Care Act will transform American healthcare holding down costs across the country and it hasn't yes what went wrong oh this is this is hard to say let's just start by acknowledging that something's gone wrong and you know I'm a I'm a pretty hardcore libertarian and even I would not have predicted that the Obama Obama care would not be able to get its website to work and a website is a demonstrably inferior simpler product to building an Apollo rocket or to building a bomb I mean a nuclear bomb in the Manhattan Project so so there is that there is this inability to do anything involving complex coordination there's almost I think an inability to to describe a future that's really different from the present so you know a letter from an Einstein will get lost in the White House mailroom and and somehow with what seems to always happen is that that sort of redistribution ax store utilitarian considerations dominates so you'd much rather give grandma a little bit more money for Medicare than really invest in in the research to come up with some new new drugs or you know we will the money that would go to the moon will get spent on on some other transfer program and so it's a the discretionary investing is steadily going down and non-discretionary spending steadily going up and it's it's somehow we can't imagine anything else to do with the money I think ok question about what what else to do with the money massive change imagining a different future reinvigorating NASA reinvigorating a nuclear program so that we can design we could actually use nuclear energy people we could design plants that are the technologies that does that require huge government sums or will your pal Elon Musk send a spaceship to Mars using private money um I don't know if if you can solve every problem with startups or small groups of people but we live in a world where that's how problems actually will get solved will get so we will not do them through mass movements you know think about when was the last time a politician gave a speech in which he or she poor trade a future that looked really different from the present you can say like Martin Luther King I have a dream a painting in black and white how the US would look really different from how it did in the 1960s Reagan mr. Gorbachev tear down that wall a very that yeah you may have had a little bit to do with Peter but that's that's actually the last speech I can remember we're a really different future was described and it's all at this point it doesn't pull tests well you know I think people don't believe in the future you know the every science fiction movie that gets made shows technology or a future that looks different is a bad future it's the matrix its terminator it's avatar its Elysium I saw the gravity movie the other day you'd be you'd be happy to be back on a muddy island you'd never want to go into space and so and so in that sort of a world you will not get any broad political support for doing something very different look II know in that seat maybe four or five months ago George Gilder said much of what you're saying now and he said all of this could the economy growth all of this could be fixed very fast if we elected a government which would address George still believes I think a little bit more than you do in marginal tax rate the importance of lowering marginal tax rates but certainly he would agree with you and the need to rollback regulation if we could do that the economy would be would recover very fast do you believe whether we could do it whether the democratic system as it now exists will lead to such an outcome separate question if we had such an if if you could make Rand Paul President of the United States tomorrow and fill both chambers of Congress with libertarians yeah the economy recover fast we have to always thought experiments are always dangerous because you sort of get into very very speculative territory so yes I I think there are political things we could do that would be better or that would be worse I don't think we should wait for this and this is why this is why I always this why spend much time in Silicon Valley and not in DC I find politics interesting I think it's important I also think it's almost endlessly frustrating and so what's critical is to actually figure out what can you do today without waiting for political reform and there's some things that you probably can't do but I think there is still a lot that people could do and we shouldn't always blame the gridlock and blame the regulations even though they make things worse okay you spend your time in Silicon Valley because you are you you are not suggesting that every bright student at Stanford and across these universities we've been talking that everyone should turn his back on the his or her back on the system and just concentrate you you don't want to lead a libertarian revolution which involves simply ignoring as irrelevant or contemptible the basic structure of the United States of America well I I don't I don't think that there's a there's a unitary thing so I don't think everybody should be an entrepreneur I don't think everybody should be a computer programmer I don't think everybody should be in politics at the margins though I would I would say that one of the one silver lining of the in the aftermath of the 2008 crisis is that young people are not going as much to Wall Street in New York and not going as much into politics in DC there was maybe a two or three year bubble around DC after 2008 that's happily ended and I think I think the fact that Silicon Valley is able to attract a a plurality of the of the talented young people is a very healthy sign enrollments and Teach for America down over the last couple years good or bad it depends what people are doing instead but but I think I think to the extent people are coming to Silicon Valley instead on that that's a good thing New York versus Silicon Valley if you had if you were investing in an index of 100 it's very it's very long Silicon Valley very short New York totally unambiguous it's unambiguous it's we had a quarter century that was dominated by finance you know by 2007 half the profits in this country were being made by banks or financial institutions and I'm not against banks or financial institutions but it was just it was too too distorted and so you're gonna have regulatory head winds and some sort of renormalization same process that will go on for a long time and and I think and I think you know engineering has not been a good career for many years it's been good for computer science most other forms of engineering have been bad nuclear engineering mechanical engineering Electrical Engineering Chemical Engineering and so I think I think there's a lot more room to to build things to to do real engineering and not just financial educator years ahead you seem not to have read the paper in the last few years of the administration of Mayor Michael Bloomberg who was determined to make New York City entrepreneurial and in fact he held a kind of auction for the rights to build a campus on Roosevelt Island I believe right there in the middle of the East River Cornell bid several hundred million dollars they're building a new campus on Roosevelt Island specifically intended to make New York much more like Silicon Valley engineering entrepreneurship New York is going to rise again well I'm always look I'm Peter I'm skeptical of copying things you know you don't want to be copying you know you know you're not you shouldn't try to be the next Facebook or the next Google you know and the next Mark Zuckerberg won't be building a social networking site the next Bill Gates will build an operating system and and I think similarly to the Accenture trying to copy Silicon Valley you're already putting yourself in some you know weird derivative position you know you don't want to be the the Harvard of North Dakota you know the something of some where's often the nothing of nowhere all right Peter Thiel and the meaning of life let's begin with the meaning of human Ness two quotations John Walker writing on ricochet quote humans have consistently shown themselves able to build machines that rapidly surpass their biological predecessors biology never produced anything like a steam engine a locomotive or an airliner there is every reason to suppose that artificial intelligence will surpass our abilities as much as those of a Boeing 747 exceed those of a hawk Peter teal and zero to one computers are complements for humans not substitutes what makes you so sure well I think I think I think artificial intelligence is still of this sort of strong variety that Walker talks about is still extremely far away if it if it will ever happen is there a problem in principle is there some reason why in principle computers cannot replace us it's hard to say it's it's certainly certainly people would have have predicted this would have happened a long time ago so indeed they did those are the predictions you were talking about in the sixties so there have been a series of AI predictions that have turned out to be quite quite mistaken so it's um so I think it's it's possible there's something in principle that makes it harder or almost impossible for reasons that we don't yet fully understand but I think I think the reality is that humans and computers are just good at very different things they are therefore mostly complementary and the fears that people have that they will be replaced by computers I think are largely unfounded you know technology frees people up to do other things it's scary if the computers were better than humans at absolutely everything I think that's still very far away that somewhere between science fiction science fiction fantasy breaker as well as mistaken the singularity is not upon us the singularity defined as the moment when we have a machine that's smarter than we are yeah I think it's not as close and I think his view of the future is mistaken when you see when one says that the singularity is near this sort of portrays the future as the thing that just happens it's just these exponential curves all you need to do is sit back and eat some popcorn and watch the movie unfold and I think it's actually rather than talking about the future in the way in which Kurzweil does I think it's often would be better to talk about human agency and what are what are we doing what what sort of future are we choosing to build he's redevelop does the free will matters a great deal to you well it's um I despite your attack on the Catholic Church a moment ago you're no Calvin reject me it was an attack on the Atheist Church but but but I think that no I think I think that I think that whenever we're too optimistic or too pessimistic about the future I'm always nervous about those those sorts of mindsets because it means that it doesn't matter what you do if you're super optimistic the future will take care of itself if you're super pessimistic we're headed the apocalypse nothing you can do and extreme optimism and extreme pessimism both lead to sort of this inertia and so I think I think it's always a healthier attitude to think of it as somewhat open-ended and it's really up to us to decide what we want the future to be last question last question or to Peter teal on the meaning of life zero to one our task today is to find ways to create the new things that will make the future not just different but better to go from zero to one close quote why why keep at it surely you're not suggesting that we just in a kind of simian overactivity seek to acquire more and more material goods more and more gadgets smarter devices for the sake of smarter devices well I I don't not a techno utopian I do not believe that technology is an absolute good I think there are technological innovations that could be quite problematic you know you can certainly cite nuclear weapons as one such innovation but I I don't think that there can be a good future in which we do not have technological progress we have seven billion people on this on this planet and you can't go back to a you know Garden of Eden you can't go back to some sort of pastoral Neolithic existence so but you know uh there's no go so we you know we have gone on this science technological trajectory and and having gone as far as we have we have to try to go further so there's a difference between saying zero to one I'm making this up as I go along so I'm sure I'll just be ham fisted in trying to draw this distinction but there's a difference between saying lead your life this way because it's it's fulfilling it's simply you talked about the humanities the real human you studied philosophy the Greeks had an idea of excellence the well lived life this is one path to a well lived life that's one thing you seem at moments to be saying and then you seem at other moments to be saying we are in the most terrible Jam we have 7 billion people we're stuck with democracy and the only way out of this Jam is right here baby whether we like it or not we need technological and innovation to get out of this Jam I don't see the contradiction oh I don't see the contradiction I think I think look I think I think I think we could be doing a lot better than we are it's it's important for us to be building these technologies it's it's not incompatible with people also reading go to or Shakespeare or Greek philosophy and so so I think you can do you can do both but I don't think there can be a good future without more scientific and technological progress and this has been this has been a motor that has driven Western civilization for the last few centuries it would be a crazy thing for us to give this up it is it's part of what what's made our civilization so extraordinary and and I think to give it up would be an incredible would represent an incredible decline last question Clayton Chris doesn't Kristensen the famous Harvard Business School figure he had a very serious health problem and since then he's taken to ending his class each semester but putting a couple of questions on the board know up until that moment he's talking about business theory but on the last day he now puts questions that include these how can I be sure that I will be happy in my career and how can I be sure that my relationships become an enduring source of happiness now you may want to reach over the table and slap me for trying to end on a sappy note but how does how do those questions about personal happiness is the work the man uses I'm not going to try to better Clayton Christensen how does happiness figure into Peter Thiel's plan of action here I always prefer meaning to head to happiness i but I think that I think we have meaningful lives when we are I find it to be very meaningful when we do things that otherwise they're important that otherwise would not get done so you don't want to be just a cog a machine you don't want to be just doing something that if you didn't do it a thousand other people who take your place and it's it's always if but for but for you but for this venture or this company that you're working on this important thing would not get done that's that that tends to be extremely meaningful and I think you should always aim for that Peter Thiel author of zero to one thank you thanks for having for the Hoover Institution and the Wall Street Journal I'm Peter Robinson [Music]

Channel: Hoover Institution

Views: 168,628

Keywords: Markets, technology, education, creativity, ideas, monopolies, PayPal, Palantir

Id: 3EJHMoh3Q1k

Length: 45min 37sec (2737 seconds)

Published: Thu Oct 23 2014