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Today we dive into 10 ideas from Peter Thiel:

1. Value substance over status

2. Why will the 20th employee join your company?

3. The difference between a mission-driven company and social entrepreneurship

4. Think of the future on three horizons

5. Differentiate as sharply as you possibly can

6. A charismatic leader who can bring out the best in people is underrated

7. All trends are overrated

8. Always pitch your startup to investors as a discount to the future

9. Building a great business is hard but possible

10. There is no wisdom of crowds

#1 Value substance over status

“One of the resolutions I came up with a number of years ago was to always value substance over status.”

In the clip below, Thiel shares that if he were giving advice to his younger self, he’d urge himself to ask: Why am I doing these things?

“I think if I’m honest about it, too much of it was driven by prestige and status—and not quite enough by the substance of really trying to learn things.”

Seven months into working at a prestigious law firm in New York after graduating from Stanford Law School, Thiel had a “quarter-life crisis” and quit.

“All you had to do was go through the front door, but peoples’ identities get so wrapped up in the things they compete for that it was inconceivable for people to actually do that.”

When he reflects on how he ended up in this situation, Thiel says:

“I think I had taken too many of these shortcuts of valuing what was prestigious and conventional over what I really wanted to do.”

He urges the audience to prioritize “substance over status.”

Video source: Stanford Law School “Peter Thiel Returns to Stanford to Share Business Tips from "Zero to One"”

#2 Why will the 20th employee join your company?

When deciding whether or not to invest in a founder, Thiel asks:

“Why will the 20th talented person join your company when they can get paid way more at Google, they will have to work way less hard at Google, and it will look better on their resume to go to Google?”

The 20th employee won’t get the equity or prestige that someone on the founding team will get, so there needs to be another incentive if you’re going to build a truly great company and attract the best people in the world.

Thiel believes the best answer is something along the lines of:

“This is the only place in the world where you can work on this incredibly important problem.”

He continues:

“It has to—on some dimension—be a really important problem that at least some people think is the most important problem in the world. Those are the kinds of businesses that are unique, and when they work, they end up being leaders in their respective markets.”

If it’s a problem that a bunch of other teams are working on, it will be hard to attract a truly world-class employee #20.

Video source: PandoDaily “Fireside Chat with Peter Thiel”

#3 The difference between a mission-driven company and social entrepreneurship

“I don’t think businesses work best when they’re just about making money. But at the same time, I’m also somewhat skeptical of social entrepreneurship as a category—and I differentiate that very sharply from mission-oriented businesses.”

Thiel defines a mission-oriented business as “one where you’re working on a problem where if you don’t work on it, nobody else in the world will. That tends to imbue things with a very deep sense of purpose.”

He gives the example of a company with a novel approach to curing cancer that nobody else believes makes sense: “if we don’t do it, nobody will.” SpacEx’s mission of going to Mars is another good example.

He contrasts this to “social entrepreneurship”:

“In social entrepreneurship, you sort of have this idea that you will do well by doing good and you often end up doing neither.”

He thinks people get tripped up on this because “social” is a very ambiguous word:

“It can mean ‘good for society’—which is a good thing—but it can also mean ‘good as seen by society’. And when it’s ‘good as seen by society’ you end up with sort of copy cat, ‘me too’ [companies]—the hundredth micro-lending company… Whenever you’re the nth company of a category, that’s not a place you want to be.”

Video source: Said Business School, University of Oxford “Peter Thiel: PayPal, politics & the importance of being individual”

#4 Think of the future on three horizons

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