Peter Thiel (Facebook) (Jul 2015)

Peter Thiel (Facebook Board of Directors) – We are in a Higher Education Bubble (Jul 2015)

Chapters

00:00:27 Questioning Accepted Paths: From Supreme Court Clerkship to the Silicon Valley Asperger

Education and Conformity:
Thiel’s upbringing was marked by a high degree of tracking, leading to a focus on traditional achievements like Stanford Law School and a Supreme Court clerkship. He faced disappointment when he didn’t get the clerkship and later realized it was a blessing in disguise. Thiel highlights the psychological challenge of breaking out of competitive norms and societal expectations that often lead to conforming to tried-and-true paths.

Innovation and Non-Conformity:
Thiel emphasizes the need for innovation and doing things differently to build a better future. He proposes unconventional interview questions like “What great business is nobody building?” and “Tell me something that’s true that very few people agree with you on” to challenge conventional thinking. Thiel acknowledges the difficulty of answering these questions, as they often lead to uncomfortable answers that question the interviewer’s own beliefs.

Imitation and Asperger’s:
Thiel draws a connection between imitation and conformity, citing Shakespeare’s usage of “ape” to mean both primate and to imitate. He observes that while imitation is a natural human tendency and a key aspect of learning and cultural transmission, it can also lead to negative outcomes like market bubbles and crazed manias. Thiel notes that many successful people in Silicon Valley seem to have a mild form of Asperger’s, suggesting that society suppresses creative and innovative ideas in those who do not have Asperger’s.

Critique of Higher Education:
Thiel criticizes the emphasis on higher education as the ultimate goal, viewing it as a safe and conventional track that reinforces conformity. He argues that education is good at training people to do things that have been done before but may not be as effective in promoting innovation and creativity. Thiel compares university administrators to subprime mortgage brokers, suggesting that they are promoting an unsustainable bubble in higher education.

00:04:47 Questioning Technological Progress and the Future of Higher Education

00:09:31 Innovation and Investment Strategies in the 21st Century

Silicon Valley’s Progress and Innovation:
Peter Thiel criticizes the lack of technological innovation in the 2010s compared to previous eras. He argues that although Twitter is a successful business, it represents a limited type of innovation and may not be sufficient to drive societal progress.

Horizontal vs. Vertical Progress:
Thiel distinguishes between two modes of innovation: horizontal or extensive progress (copying things that work) and vertical or intensive progress (doing new things). He emphasizes the importance of vertical progress, represented by technology, in creating valuable businesses and driving innovation.

Advice for Young Entrepreneurs:
Thiel cautions against starting a business for the sake of starting a business. He stresses the need for a specific substantive problem to solve, highlighting the importance of anchoring a business in a real issue.

Evaluating Investment Opportunities:
Thiel shares his investment test, which includes elements such as monopoly potential, durability, and the presence of a secret. He explains the importance of targeting small initial markets and warns against entering vast markets with intense competition. Thiel emphasizes the challenge of durability in cleantech innovation and the difficulty of sustaining a competitive advantage in this field.

Cleantech’s Challenges:
Thiel critiques the cleantech industry for its lack of differentiation and the prevalence of incremental improvements, which make it difficult for businesses to succeed. He points out the need for breakthrough innovations and lasting advantages in cleantech to drive business success.

The Secret Test:
Thiel’s “secret test” involves identifying what a company believes that others don’t. He suggests that the presence of too many buzzwords in a presentation is a sign of undifferentiation and a lack of a unique value proposition.

Aging and Longevity:
Thiel views aging as a problem to be solved and has supported research in this area. He acknowledges the complexity of the issue and resists providing a specific answer to the question of how long humans can live.

00:19:07 Human Agency and the Contingent Future of Longevity

Abstract

“Redefining Success and Innovation: Peter Thiel’s Vision for Education, Technology, and the Future”

In a compelling exploration of societal norms and the future of innovation, Peter Thiel, a renowned entrepreneur and thinker, challenges conventional perceptions of success, education, and technological progress. Thiel’s insights cover a broad spectrum: from critiquing the high costs and traditionalism of education to advocating for a more creative approach in learning, questioning the stagnation in physical technologies, and rethinking the value of education. He also underscores the importance of non-conformity and entrepreneurship, critiques the cleantech industry, and delves into the intricacies of aging and the potential for human longevity. This article synthesizes Thiel’s thought-provoking perspectives, underlining his belief in human agency’s role in shaping our future.

Main Ideas and Expansion:

Challenging Traditional Paths to Success:

Peter Thiel presents a critique of the illusion of conventional success, urging the questioning of established norms. His own upbringing in a high-achieving environment and his subsequent disappointment at not securing a Supreme Court clerkship highlight the psychological barriers in deviating from competitive norms and societal expectations. These norms often lead individuals down conventional paths. To challenge this, Thiel proposes thought-provoking interview questions that often yield uncomfortable answers, questioning the beliefs of the interviewer. He links imitation to conformity, citing Shakespeare’s dual use of the term “ape” to mean both mimicry and the primate. Thiel notes that while imitation is essential for learning and cultural transmission, it can also result in adverse outcomes like market bubbles and manias. He observes that many successful individuals in Silicon Valley display traits associated with a mild form of Asperger’s, suggesting that society often suppresses creative and innovative ideas in those without these traits.

The Rising Costs of Education:

Thiel expresses concern over the skyrocketing costs of education since 1980, which have outpaced inflation. He criticizes the education system for its zero-sum approach, where exclusivity and limited enrollment artificially inflate the value of degrees, leading to hyper-competition. He likens university administrators to subprime mortgage brokers, hinting at an unsustainable bubble in higher education.

Technological Progress vs. Stagnation:

Thiel contrasts the rapid advancements in digital technologies with the stagnation in physical technologies like energy and transportation. He views this disparity as a significant barrier to overall innovation and societal advancement. Thiel attributes part of this stagnation to heavy regulation in the physical technology sector and points out that economic growth and productivity rates have slowed. He uses Twitter as an example of limited innovation, insufficient for driving broad societal progress.

Golden Age of Innovation:

Reflecting on history, Thiel identifies eras like the 1950s, 1960s, and the 1930s as periods of significant technological advancement, emphasizing that innovation can occur in both prosperous and challenging times. He highlights the technological breakthroughs of the 1930s, including secondary oil recovery, the plastics revolution, and the emergence of new industries like aviation and movies.

Rethinking the Purpose of Education:

Thiel calls for a reevaluation of the role of education, questioning whether it serves as an investment, a consumption good, or an insurance policy against societal failure. He critiques the current focus on higher education as a safe, conventional path that reinforces conformity, arguing that while education is effective in training for established tasks, it may not foster innovation and creativity.

Globalization vs. Technological Innovation:

Thiel differentiates between globalization, which involves copying existing methods, and true technological innovation, which creates new products and services. He emphasizes the importance of vertical progress, represented by technology, in driving innovation and building valuable businesses. Thiel warns against starting a business without a specific substantive problem to solve, stressing the significance of anchoring a business in a real issue.

Critique of the Cleantech Industry:

Thiel criticizes the cleantech industry for its lack of differentiation and sustainable business models. He believes the industry’s focus on large, undifferentiated markets and reliance on buzzwords hinder its success. He advocates for breakthrough innovations and lasting advantages in cleantech and uses his “secret test” to identify a company’s unique beliefs, suggesting that an excess of buzzwords in a presentation indicates a lack of differentiation and a unique value proposition.

Entrepreneurship and the Pursuit of Monopoly:

Thiel advises entrepreneurs to aim for monopoly by initially targeting small, niche markets. This strategy, he argues, helps establish a strong market position and avoids intense competition. Thiel shares his investment test, focusing on elements like monopoly potential, durability, and the presence of a secret. He emphasizes the importance of small initial markets to avoid the pitfalls of entering large, competitive markets. Thiel also discusses the challenges of durability in cleantech innovation and the difficulty of sustaining a competitive advantage in this field.

The Secret Test for Investment Opportunities:

In his “secret test” for evaluating investment opportunities, Thiel cautions against presentations filled with buzzwords, which often indicate a lack of genuine innovation.

Perspective on Aging and Longevity:

Thiel views aging and death as challenges to be overcome and expresses interest in funding research in this area. He advocates for a balanced approach, avoiding extreme optimism or pessimism, which can lead to inaction. By embracing mild optimism and pessimism, Thiel believes significant progress can be made in curing diseases and addressing general causes of aging. He estimates that with the elimination of diseases, individuals might live for 600 to 1,000 years before succumbing to accidents.

Thiel’s Advice to Young Entrepreneurs:

Thiel’s mentorship approach is exemplified in his advice to Mark Zuckerberg, where he invested $500,000 and offered the succinct guidance: “Don’t mess it up.” This advice reflects his belief in human agency and the responsibility to maximize opportunities.

Background and Additional Information

In summarizing Thiel’s perspectives, it’s evident that his views extend beyond mere criticism. He offers a multifaceted approach to addressing contemporary challenges, emphasizing the need for innovative thinking, entrepreneurial spirit, and a reevaluation of societal values and norms. Thiel’s insights into education, technology, and the future highlight the importance of questioning the status quo and the potential for human agency to drive significant change. His holistic view of success, innovation, and progress provides a thought-provoking framework for understanding and shaping the world around us.

Notes by: ZeusZettabyte

Peter Thiel (Facebook Board of Directors) – We are in a Higher Education Bubble (Jul 2015)

Chapters

Abstract

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