The Alan Howard Foundation / JW3 Speaker Series presents Peter Thiel in conversation with Niall Ferguson.
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On April 29th, PayPal founder and Facebook director Peter Thiel told a sell-out audience at the JW3 cultural centre how to spot the next Mark Zuckerberg.
Harvard University Professor of History and author, Niall Ferguson, interviewed Thiel for this seventh talk in the Alan Howard Foundation/ JW3 Speaker Series. Globalisation, technology, education and politics were among themes he raised with the American entrepreneur.
Thiel was the first outside investor in Facebook, and early on in the talk Ferguson asked him how investors could spot the next Zuckerberg. Thiel said investors ought to focus on businesses run by competent people and with few competitors.“Always aim for a monopoly,” he said, “capture a small market and grow it over time. Facebook went from zero to 60 per cent market share in ten days.”
Later in the discussion, Thiel gave further investment advice by saying the more investors an enterprise has, the more likely it is to be overhyped. And he recommended that people who wanted to start their own business needed to be idiosyncratic: do something you like, you’re good at and few others are doing.
Although Thiel has a BA and Law degree from Stanford, he left law the law firm he worked at after only seven months and three days, saying it was like Alcatraz. Too many people attend college for negative reasons he believes.”People see it as an insurance product, a defence against falling through the cracks, not as an investment”, he said.
Asked about his politics Thiel said he was fiscally conservative and socially liberal, but said power was with the bureaucrats, not politicians, so there was little point in taking politics too seriously.“I aspire to be a political atheist. I don’t think we should place too much hope in our political leaders,” said Thiel, “A lot of it seems to resemble World Wide Wrestling with the difference that the wrestlers know it’s all fake.”
let's talk a bit about the limits of Technology because I think one of the things that makes you stand out in the Silicon Valley scene is that you're much more skeptical than is typical of technology per se and the most I suppose your most famous quotable quotes is and I want to get it right we were promised flying cars and instead what we got was a hundred and forty characters it's hard to believe that Twitter has solved a profound problem of the human condition and yet it's an enormous ly successful company about which you have had occasion to say somewhat critical things and not only that one I just quoted so how should we understand a phenomenon like Twitter is it a massive breakthrough for mankind that we can now insult one another electronically as long as we can get the insult into 140 characters well I think I think we always um are trying to tell stories of specific and general success or specific and general failure so Solyndra blew up therefore no clean tech thing will ever work or look at how valuable Twitter is as a company as a twenty billion plus market cap and that must show how much how much the information age is going to change the world and I I think we should often separate these specific and the general story so I I do think that Twitter is a is a quite successful business and I think in the same breath one could say that it's not remotely enough to take our civilization to the next level there are a lot of great specific successes in Silicon Valley you know at the end of the day I think I think we are better off with them than with without them so not you know not again against them and in any sense but um but I am a little bit skeptical of the generalization and the general question that's a very hard one to answer is you know how much technological progress is generally happening um you know and and I I do think that these sort of curts while utopia exponential curves everywhere we have exponentiating dizzying rates of progress all you use do is sit back and eat popcorn and watch the movie of the future unfold that strikes me as certainly certainly somewhat off I think the the story of technological progress in recent decades has been sort of a tale of two two worlds there's been the beyond the world of bets computers internet mobile internet software why do think we've seen a very significant progress and then I think most other areas that would have been counted as technology in the 1950s and 1960s have seen much less rapid progress if any at all that would include everything from biotech medical devices energy flying car flying cars supersonic aviation space travel that you know there's been some progress in some of these areas but but certainly not anywhere remotely as much as people would have expected from the vantage point of say the late 1960s how do you explain that why is it that the things that we maddeningly you're three years younger than me that's even that's the most annoying thing actually quite apart from the money but that's never gonna change it's never gonna change plus you'll probably live to be 150 it's just too galling but if we just go back to that time when we were growing up and and reading comics and reading science fiction and reading about the future it did promise us not only flying cars but much else besides and yet we only seem to really have got the dramatic breakthroughs in information technology why is that well you know I think I think almost every question that starts with the word why is an incredibly difficult to answer a question and and if I had to speculate I suspect the causes are somewhat over determined they're probably a number of different kinds of reasons you know my um politically I'm I'm somewhat libertarian where everything that goes wrong gets blamed on the government and and so and so the libertarian explanation would be that you know we the world of bits has been very unregulated the world of atoms has been very regulated and so if if the Food and Drug Administration was regulating video games as aggressively as it regulated pharmaceuticals and if we had to do a double-blind study to see whether video games did damage to your brain or not before the they could be approved I suspect we've had a lot less progress in video games in recent decades than we've had so I do I do think there's a regulatory a story that one could tell this this applies when to air and areas of energy like nuclear power and on and on I think there is probably there's there's probably you know the liberal explanation tends to focus on education that we're not probably or heisting enough science math engineering education that more needs to be needs to be done there I think there are some cultural explanations where people become more risk-averse they become generally scared of Technology I I do think there's a there's a broad cultural sense in which I think our society in general is anti technological it doesn't sort of explicitly say that but the easiest way to show this is if you simply look at all the movies that come out of Hollywood I always challenge people to come with a single science fiction film that portrays the technological future in a positive light um they all portray it as dystopian non-functional dangerous for people and the future some combination of the Terminator movies with robots running around the matrix we were sort of you know just hooked up to these machines it's avatar it's Elysium I watched the gravity movie the other day you would never want to go into outer space you would be so happy to be back on a muddy tropical island somewhere and and so I do think I do think the dominant ethos in our in our culture is um is very anti on scientific very anti technological but in a way this also makes me optimistic because I think I think the slowdown you know whatever reason that happened it's not been a law of nature that we just run out of ideas and the cupboard is bare I think it's much more regulatory cultural much more these other contingent factors which are perhaps somewhat of an indictment of the baby boom generation but are also things I think we could we could theoretically change if we wanted to it's interesting isn't it the way the way Hollywood does that and generally pits this sort of primitive man against the elaborate sophisticated androids but the only exception I've never read think of in this regard is is a very British one and that's the character of Doctor Who who is a superhero with a brain who uses his technological advantages to defeat relatively primitive though sometimes quite deadly monsters but dr. who has never taken off and never been versioned in the United States I think of that as a 50 60s retread so you could say the same with the early Star Trek films they were quite positive so I I think I think you know I don't think science fiction the 50 and 60s was universally optimistic but I think there was a 50 60s version that was quite optimist in Leuven Doctor Who in Britain Star Trek in the u.s. let's talk about globalization which you touched on earlier I was reading just the other day an article you wrote in 2007 pre-crisis article let me quote from it there are no good investments in a 21st century where globalization fails the real alternative to good globalization is world war so although you prefer zero to one technology to 1 to 2 which is essentially globalization just scaling something that was already there you're still a fan of globalization I don't think you could be against globalization or it's very unclear what well but I think really a guardian well but I think I think I think most most anti-globalization movements are you know they're sort of they end up being some sort of self contradictory farce like a global conference of anti-globalization activists or maybe it's a maybe it's really a cover for worldwide communist revolution or something like that but but so I think there's something deeply paradoxical about about these antony's sort of stated anti-globalization movements and in practice you know less globalization would mean a world which there's less trade in which you know the world breaks apart probably a more violent world there's this case you can may that 1913 was a high point of globalization and then you know it went in Reverse for decades starting with World War one you know 1949 China became communist 1/4 of the world seceded humanity seceded from the rest of the world and he didn't really globalization didn't really begin an earnest again I would argue until maybe the Kissinger trip to China in 1971 so I do think that it can go very much in Reverse what I what I suspect has happened it was always not that easy to to precisely quantify is that um is it um there's been so much stress on globalization and not enough on innovation that there are questions how well how well it can work on its own if you have a billion people living in the developed world six billion people living in the developing countries if they if they continue to progress at a at a breakneck pace does this put undue strain on resources does it um you know does it does it set you up for for conflicts and certainly even I think again there's no good future in which China is not integrated into the world economy in which China does not progress if it does it on current technology you know doesn't that just mean you know astronomical prices for fuel food and other things if everyone in China had a car like in the u.s. so if I if I were George Monbiot my went to Oxford with and each shared a house with who's now one of the Guardians most left-of-center columnist hsihu frequently denounces globalization I would say something like this are you would say that because you're a billionaire beneficiary of globalization but what about all those people whose jobs are being destroyed by the payment of subsistence wages in sweatshops in Bangladesh what about the victims of globalization who are suffering from the externalities of unclean unpolluted air in the developing world I mean is there a way of countering that kind of argument that you're a beneficiary you would say that wouldn't you well you know there's always an ad hominem argument that it's not clear how you how you counter a pure ad hominem arguments but but look I would say in the developed world are there have been very powerful shear forces caused by globalization but it's it's not because you know it's only one half of the equation that jobs have been outsourced the the real challenges that they have not been replaced with new jobs and this is why this is why I think new technologies are our farm more critical for the developed world than the developing world China has a you know you know maybe China runs into resource or environmental constraints but it has sort of a relatively straightforward pattern it's gonna just keep copying things that work skip a few steps here and there and you maybe maybe that works maybe it breaks sooner than people think but China is a very straightforward plan if you're in Western Europe or the US if the younger generation is to have a better future than the current generation it requires them to do new things and and if you sort of think about the way we talk about the world in the 50s and 60s it was a pro technology with not so much globalization going on and you split the world into the first world and the third world first rule does that part that was technologically accelerating the third world was that part that sort of permanently screwed up today the world is divided into developed and developing which is a pro globalization convergence theory of history a dichotomy but is also implicitly an anti technological characterization because when we say that we're living in the developed world we're saying sotto voce that we're living in that part of the world that's finished done where nothing news gonna happen where everything was done in the past and where the younger generation should resign itself to reduced expectations for the future is that Europe it's certainly certainly Europe in many ways feels like you know III think we can exaggerate the difference between Europe Japan and the US but but certainly of the sort of pessimist pessimism about the hopes for the younger generation or I think most acute in in continental Europe you were born in Germany you've recently made some investments in in Berlin companies so very many not very many okay not very big but you've done it so you spend time in Europe and you then you think a lot about its problems with sitting here in London which is still at least for the time being a part of Europe do you have a size a very debatable proposition well we'll come to that one to end with a question about London do you have a sense that Europe has a way out of this stagnation because if secular stagnation which is a popular phrase at the moment thanks to my former boss Larry Summers if secular stagnation has any real power as an ID it seems to me to apply well to Europe is there a way I was a bad stagnation that one sees here I agree with summers on the stagnation thesis generally I disagree with his diagnosis where it's a demand-side problem and so if you viewed as a problem on the demand side then it means you should print money or if you're done printing money you should have government's borrow money like crazy and so you sort of somehow have this Keynesian monetary or fiscal stimulus I think of it as a supply-side problem and I think the the solution to stagnation is to be able to do new things and invent new things and then the question is you know why is that so hard to do white why is that not happening enough when we get back to back to the why question you asked before and and but yeah culturally Europe seems very stuck on the on the supply side and people are much seems to be much more interested in finding strange scapegoats to blame for their problems than then really going about building a better future