Peter Thiel: The critical thing for starting a company is to have “the kernel of a good idea”

In this 2015 This Week In Startups interview, Peter tells Jason Calacanis:

“I don’t think there’s a right time to start a company. I think the critical thing is to have at least the kernel of a good idea.”

He posits that the formula for a company is some combination of:

1. A talented team that works well together—”internal dynamics matter a lot”

2. A good product/technology

3. A good business strategy

“Somehow you want all three of those to line up, and if you have those, you can have a great company even if you screw up a lot of stuff.”

He continues:

“There are all sorts of processes that people focus on. And I think the reality is that most of the companies in Silicon Valley are somewhere between really badly managed to badly managed. So if you look at these companies from an MBA process, there are all of these things that are being screwed up in enormous ways. And it often doesn’t matter because you have this kernel of a good idea.”

He jokes that in a CNBC interview he once said that he thought there was a lot of pot smoking going on at Twitter:

“But the larger context was it doesn’t matter. Twitter had such a great fundamental idea that whether it was very badly managed or somewhat badly managed or whether you’re in favor of smoking pot or against smoking pot, it just didn’t matter because the great idea carried the day on so many other things.”

He then inverses this insight:

“The more pessimistic version is that if you don’t have something like that, it’s actually really hard to make up for that, even if you get a lot of other things right.”

Full video: This Week in Startups “Peter Thiel on being a contrarian” (Mar 2015)