Peter Andreas Thiel (born October 11, 1967) is an American businessman, philanthropist, political activist, and author. The PayPal co-founder and Facebook’s first professional investor was ranked No. 4 on the Forbes Midas List of 2014, with a net worth of $2.2 billion, and No. 246 on the Forbes 400 in 2016, with a net worth of $2.7 billion.

so I'm David rhew an editor of Wired and it's a amazing honor to introduce Peter who has a fabulous new bestseller out and 0 to 1 and peter is a busy man he has a number of lives that four were at the same time he is a managing partner of the founders fund president the Clarion capital co founder of PayPal palantir and makes good investments like five hundred thousand dollars to 10.2 percent of a new company called face book in 2004 and when he tweets he only ever tweets once he gets 60 thousand followers pretty much straight away now we have big expectations for this evening because everywhere peter has spoken in the last week or so about his new book and he generated headlines and the headlines include Twitter's horribly mismanaged there's a lot of pot smoking there Apple must innovate more technology stalled in 1970 The Wall Street Journal competition is for losers and I think my favorite one from fortune Peter Thiel disagrees with you so I'm expecting Peter to tear apart some of my questions but first please could we welcome him and give him the stage to talk about zero to one well um after that introduction I'm actually quite nervous about saying anything at all here since I feel like I'm on being recorded and they may come back to haunt me in all kinds of strange ways in writing a book about entrepreneurship one of the one of the this and TJ just came out of class that I taught at Stanford in 2012 and one of the challenges in teaching that entrepreneurship or writing about it is I think people tend to sort of write books business books that make one of two kinds of mistakes there's one where it's sort of you tell all these war stories must be like this is what I did it paypal 99s how we combined email and money and this is you know how this all worked and that's not terribly relevant to people who are just some starting new businesses or we're learning from that and I think the other end of the spectrum you have these business books which I think are sort of pseudo-scientific and it's like this formula and you do follow these five steps and you'll have a successful company and I I think that approach also does not work for a similar reason which is that I think every moment in the history of business in the history of Technology happens only once the next bill Gates will not be starting an operating system company the next Larry Page won't start a search engine the next Mark Zuckerberg would not be starting a social network if you are copying these people you're not learning from them and and so the theme of my book is that what's actually important is the things that make these companies singular and indifferent and any of the chapter is entitled you know this opening line from Anna Karenina which says all happy families are alike all unhappy families are unhappy in their own special way and I think the opposite is true of business all on all happy companies are different all on all unhappy companies are alike and that they fail to escape the sameness that is competition and and this was the title of the chapter one of the chapters all happy Cummings are different it got the wall street journal except excerpted it and and published it they retitled that to competition is for losers which is somewhat punch your way of putting that idea and and you know I try to get at this uniqueness question through these various contrarian questions I think a good task one but the business while I was is like what great company is nobody building the more intellectual virgin this question that I think makes for always a terrific interview questions tell me something that's true that almost nobody agrees with you on and this is a shockingly hard question for at least two different reasons first reason is that we've been taught the truth is conventional the truth is just simply what people agree on and so it automatically sounds like you have to be really brilliant and it's really hard to discover some new truth that is a hit her toe unsuspected but it's also very difficult because of just the social context in which these questions get asked so if you're answering it and the interviewer says yes I believe that all along that's that then that's by definition a bad answer and a good answer is one the person asking it does not agree with or does not want to hear and and you know and it requires a certain amount of courage and we live in a world which I think courage is an even shorter supply than ingenious so what I want to what I why I try you in my brief comments knives I'm just going to give a few few answers my book is just a whole series of answers that question the things I believe to be true that most people don't agree with me on but I'll give three on three quick answers to it tonight my in my comments and we'll go to the questions um so the first one on and this is the sort of flows out of this idea that you want all happy companies to be different and unique most people think that capitalism and competition are synonyms I believe they are antonyms you know a capitalist some of the cumulates capital a world of competition as a world where all the prophets are competed away and so if you're an entrepreneur or a founder you always want to be building a monopoly you do not want to be doing something where you're in cutthroat ferocious competition a restaurant is a terrible business to go into its super competitive and extremely non capitalistic people never make money opening restaurants and I sort of give Google as the example of a company together end of the spectrum we have enormous profits and you've had new sort of serious competition in 12 years ever since they definitely distance themselves from Yahoo and Microsoft back in 2002 and and I think one of the things it's that these breakthrough 021 companies have is that they they do things where when you when you do something new you you are in this sort of happy place where you're not sort of directly competing with too many people and then you have a product that you for offering the world that does not yet exist and that's that's what that's what makes these up franchises so extremely valuable and I think this question of competition and monopoly there's so many different reasons it's sort of i think very underappreciated you know sort of as always this nuance where the people have monopolies generally don't talk about it and the people who are in perfect competition pretend that they have something special so you know if you if you're if you're running Google your talking points are you know we're a not a search company that we're a technology company and we're competing ferociously with apple on the phone and with facebook on social and Microsoft on office and we're building cars and we're competing with the car companies which is like competition everywhere and we're not the monopoly the government is looking for and then on and then if you were say trying to open a restaurant in London you would say you know you're trying to get investors to invest in your restaurant you will you will say something like well this is a completely and Andy message will say well I don't want invest in restaurants a bad business will lose money and you'll see no this is a completely different restaurant it's one of a kind it's the only French nepalese fusion cuisine and in London and like you know South Paddington or wherever in some small area of London and and as you will again artificially define what you're doing in a way that's very different and so so I think this question always gets obscured by the people inside these businesses and that's why it's this very important idea that's a much bigger than we think it is but I think it's also we also get trapped in competitive cycles for a sort of psychological reason it's often we often find it reassuring to be in crowds to do things that lots of other people are doing and and you know the word aight we're ready in the time of Shakespeare meant both primate and to imitate and there's something about human nature that's disturbingly lemming like sheep like a plague heard like and and this is this is always a dangerous sort of behavior pattern when you're starting a business because when you're in a crowd it's the crowd of people you're you're competing against and you know and I've been a bit so very big critic of the higher education system because I think that sort of encapsulate this ideology of competition in its purest form we have to compete on you know all these sort of tests and jumping through all these hoops you get to the same sort of a short list of elite universities in the US and you go into the same short list of elite jobs and and a lot of it gets gets driven by by people not really asking what are they doing why is it important but you know when you're focused on competition you're always focused on beating the person next to you and you do get better at the thing you're competing on like during a high school swimming team you'll swim a little bit faster than you otherwise would have swum but you often lose sight of what's truly important and truly valuable is sort of this autobiographical part of this book where if I had to give advice to my younger self and I was I was hyper tracked i was i was you know 8th grade junior high school one of my friends wrote in my yearbook that i would surely get into stanford in four or five years time and that's what happened then I went to Stanford Law School and I sort of got tracked into sort of a big law firm and in manhattan we're from the outside everybody was trying to get in on the inside everybody was trying to leave and you know after I left after seven months and three days I want to be one of the one of the people are down down the hall from me told me it was very reassuring to see me leave he had no idea that it was possible to escape from alcatraz which was of course all items go out the front door but but it was it was again the so much of people's identity was wrapped up in winning these various competitive dynamics that they could not think about this so I gave advice to my give advice to my younger self it would be to you know really think hard why was I doing these things was I engaged in was I doing these things because I genuinely wanted to do them or was it simply a sort of a prestige status game that I was playing with and I think if I was honest that there was way more back going on and is I think a lot of that going on with a lot of us who should always think hard about about doing less of second a second contrarian idea I'll throw out is I think the sort of the conventional view is that there are that that there are not that many answers left this question what's true that I nobody agrees with you on we believe that all these kids already been discovered in the past and you know and maybe there's still some things but they're just about impossible to figure out so there are conventions that we understand their mysteries that nobody can figure out but I I by contrast think they're saw a lot of things left on intermediate level there's a lot of things that I call secrets which are truths that are hard but possible to discover and and I think I think there is always a secret at the core of every great business there's some some sort of research program that or some some area that people are really really focused on they think about really hard and it sort of advances they're thinking to the point where they get an understanding about something that other people do not yet have you know that paypal we were very interested in so the crypto currencies and encryption technology and currencies and could they be intersected could you build a new digital currencies was a question that you know animated us tremendously we didn't quite succeed in building one at PayPal but we had t-shirts that said that we're going to be the new world currency we didn't quite succeed in that in that goal but but that's sort of a in-depth substantive focus actually did help us think really hard about how do you architect a new payment system how do you do certain things differently and it was was a key part of inspiring us I think there are sort of many secrets left this is something is something we generally do not understand it's not obvious where one should look you know if you're if you were living in the 17th or 18th century you could look at a map and there were empty spaces left on the map and you could come and explore and go and discover those places so that was sort of a natural geographical sense in which there were secrets left or in the 19th century there was still you know places the periodic table of elements that were empty and you could sort of do some basic chemistry and find some secrets and and there's for the sense that maybe geography or chemistry our fields are you know basic chemistry and geographies repeals that are closed but I think most fields are not like that in most fields are still ones where there's tremendous amount of innovation possible certainly this is true and on in the computer field where we've seen massive innovation in recent decades in the world of bits computers internet mobile internet that whole ensemble I think we've seen less innovation in the world of atoms on your transportation energy clean energy biomedical biotech space travel all the kinds of things people thought about in the 50s and 60s but i think it's i think it's not because there's some law of nature that it's hard to innovate or impossible to innovate in these areas it's just this urban this cultural change where we haven't tried as much and we you know it's sort of there's a lot of us has a self-fulfilling character if you think that you can't find a secret then you're not going to try and you will not look and you will not be a person to ever one and and and and and so failure pessimism can have a self-fulfilling character as conversely if you think there's a lot to be discovered progress can accelerate and more where things can happen so second sort of contrarian truth that I believe to be true is that they are actually are many secrets left to be discovered the third on 3rd 3rd ID on this one's maybe a little bit bigger picture I think that in a successful 21st century this century is going to be a great peaceful century I think the two big trends that have to continue this trend of globalization and a trend of Technology I think it's always important thing these two things is very different globalization involves copying things that work horizontal growth extensive progress going from 1 to N I always draw globalization on the on the x-axis technology involves doing new things going from 0 to 1 vertical or intensive progress I always draw it on a y-axis night I was set up that contrast because I think there's a tendency for people to to define technology and globalization as synonymous I think it's worth thinking these is very different vectors of progress we on the DIA and if we sort of think about the last 200 years there have been many periods where we've had one or the other or both and was going to underscores how they're different the 19th century you had tremendous amounts of both globalization and technological progress you had both in the 19th century 1914 after World War one starts globalization goes into reverse and last trade the world becomes less connected iron curtain goes down parts of the world more lesser completely cut off and it doesn't really resume till Kissinger goes to China 1971 and we've had blast for decorative in ferocious globalization technology has been we had a lot of progress 1914 271 since 71 I would argue it's been more limited and and with a stress on the computer side so we've had a era of globalization without technology and technology without globalization and then globalization without technology that's characterized the last hundred years in contrast to the century that came before on it sort of shift from the 50s and 60s today's is in the way we talk about the world in 50s or 60s you would have said that the world was divided into the first world in the third world the first world was the place where accelerating change was happening the third world was the place that was permanently screwed up and broken today we speak of the developing in the developed world the developing world is that part of the world that will copy the developed world and and it's sort of this convergence theory of globalization China is the epitome of it it has a very straightforward plan for the next 20 years it's just going to copy everything that works in the west it will skip a few steps but it has a very straightforward plan ahead of it but this developing developed dichotomy while sort of pro globalization is also implicitly anti technological because it tells us that we are living in the part of the world that is developed that is done that is finished we're nothing new is going to happen that's stagnant where we can expect nothing to change where we can expect the younger generation to do no better than their parents maybe worse and and I think this is a conception of our world that we should resist very strongly and and I think we should not even accept the idea that we're living in the developed world that we're living in some sort of end of technology era and so I think we should always return to this question how do we go about developing the developed world thank you very much [Applause] I was going to ask you which important truth the very few people agree with you one but I think you've answered my question as a big theme in the book the number of interviewers actually slaps me that even after I gave a talk similar this one so you paid you paid way more attention I stopped there's so much we can focus on in the book but and there's a theme that comes up repeatedly which is the value of the monopoly business you talk about the history of progress is a history of better monopoly businesses replacing incumbents yet if you look over the last century monopolies haven't always acted in the most enlightened way they haven't always benefited the consumer as governments would have hoped and governments have often had to come in and regulate isn't it a bit of a pure view of the value of the monopoly well so there's always a you have always distinguished looking at this from the inside and the outside so from the point of view of someone starting a business point you have founder and entrepreneur you want to always build a monopoly and it's it's always great to have one from from from the inside and it gives you way more cushion you can do all sorts of things much better you can be exacting can be more ethical company when google says don't be evil on one level at the marketing ploy but on another level you can you can on you don't have to care about nothing but money in a company where you're making so much of it so so on the inside I think you always want to want to have a monopoly from the outside from the point of view society the question are our monopoly is good or bad and I think they are I agree with the critique of monopolies in a stagnant world where it's like the Parker Brothers board game and the monopolist is just a rent collector or a toll collector but I think that if you have a dynamic world where people are inventing and creating new things these are actually positive so when Apple builds a smartphone that just works it has a monopoly on the iphone for many years and I think it still has somewhat of a monopoly in various ways today and that's a good monopoly because it created something that did not exist before and the sort of the common-sense way to differentiate good from bad an optional in mind a little bit fuzzy but the common sense was just do consumers I think it's a good thing or do they think it's a bad thing so they might think the post office is a bad government structured monopoly for his Apple would be would be seen as a good one but is it healthy for the wider economy if a single company like Facebook own so much data on people's preferences that real-time knowledge based on what we're doing mobile and they can set the rules they are more powerful than government well I you know I certainly a much prefer facebook to tone the data than the government I think that I think that okay I think I think you have to go all these distinctions you know it's it's a the there's an important debate about privacy they're important questions about about about how and draw these lines but i think the you know facebook product has has created a lot of value in the world's made the world more connected it's help people stay in touch with their friends and I think it's been a it's been an enormous net plus two people on people all over the place you know I think so yeah every startups in its pitch talks about it's going to come and disrupt a sector and you say in the book that disruption is a self-congratulatory buzzword for anything trendy and new well I sort certainly go after all these different all these different categories I'm always skeptical of anything that gets you know used this much non-stop by people so you know the disruptive person elementary school get sent to the principal's office disruptors are people who look for trouble they typically find it you know some Napster was a classically disruptive business that saw to take on and you disrupt the music industry and you know it's had this disruptive name you would you napping up some music and appliqued innocence and you and and so there's always a sense where disruption already starts by thinking of itself in competitive terms we're defining yourself against somebody and I think you don't want to take your bearings from breaking things but rather from building things so we have to go for an entirely new market I I think those are the best companies are want to go for four broadly new markets you know it's certainly if you if you go after an existing market that's where that's where you're going to get the most ferocious resistance the most intense competition you know PayPal went after online payments Visa and MasterCard will not altogether happy because was a new market they thought they perhaps should have owned but um but it was not like we're taking away business directly from them and in some ways we're actually expanding the universal payments they'd be enabled and so at the end of the day they didn't come after us nearly as much as they would have had we say try to disrupt their business and some direct way so i didn't pay pal become the default payment mechanism i didn't pay pal become bit glen i think payment mechanisms and currencies are related but quite different sorts of things um so i think yet paypal set out to build a new world currency we did build a rather powerful internet payment system bitcoin i think at this point is somewhat the opposite it has actually created a new currency at least on the level of speculation and the payment system part of its actually rather lacking where it's hard to transact in bitcoins people will do it for things that are illegal and they can't buy otherwise but for legal payments it's actually quite hard to do this I think that sort of the opposite of a set of things from from that which paypal habits it's quite hard in general I think the currencies is a much harder thing to build in a payment system because it requires a much larger network effect it's much harder to buy into it you know the you know when I was da me but you know the movie props I would always use when I was a CEO pecos we could hold up a hundred-dollar bill in front of an audience and it would be like hypnotic everybody would want it and this was its network effect money it's very difficult to create a new currency because you're competing with with an existing very large network already there's a lot of people in the valley they're putting big money into bit clean businesses thinking this is going to be the one are you not excited I am I am still a little bit more skeptical but because they've not yet gotten the payment system part of it to work but I think that's the you know if you said what would make me more bullish on Bitcoin it's if there were more are more illegal payments happening on it so when you meet entrepreneurs what personal characteristics do you define in those that you think are going to be the big success stories well I think um I think these these are 0 to 1 companies they're generally not solo efforts it's always a bit of a team effort of people working together and so you know you want a great business idea you want a great technology you want very talented people but one of the very critical question is how well do these people actually work work together and because i think i think the most common cause for failure if the people just don't get along and sort of blows up it blows up internally way before it gets destroyed externally by external competition so people internally don't get along on the and so I question I always like to ask is the prehistory question you know how did you meet how long have you known each other all those sorts of questions bad answers are things like we met a week ago at a entrepreneurial networking event we both wanted to start companies and and that's sort of like saying we got married at the slot machines in Vegas you might hit the jackpot probably very bad idea good answers are things like we met and we working for a number of years and friends for many years you know there's some complementarity maybe you know one of us is focused on the technology side the other person's focused more on the business side so that's that's a good answer I don't know if you noticed the correlation between very successful tech businesses particularly coming from the valley and people with let's say limited social skills there is a spectrum are these the sorts of true correlations that you see there is there is a curious correlation where some sort of mild form of Asperger's seems to be linked with with a lot of these companies night I think we should always flip that around and think of this as a like really an indictment of our society and ask the question what is about our society where people who are socially well adapted are subtly talked out of all their original ideas before they even happen because they pick up on all these social cues and they can sense oh this is a little bit too weird there's a little bit too strange it's not quite respectable what do people think of this and you are talked out of your truly original and creative ideas before they are even fully formed you're picking up all these social cues make and they lead you to give up on them so I think there is some sort of dynamic like this they've done this study at Harvard Business School about which you can think of as a very non Asperger like place we have people who are super well adapted socially they're very extroverted they don't have very strong convictions generally and they are sort of in this hothouse environment for two years where they talk to one another about what they will do for the rest of their lives and the sort of conclusion at the end of the two years is that the largest cohort generally goes into trying to catch the last wave which is always somewhat of a mistake in 1989 everybody wanted to work for Michael Milken as one appointed two years before he went to jail for all the junk bond trading people were never interested in technology or silicon valley except in 99 2000 at the top of a dot-com mania when they they all moved to Silicon Valley 2005 207 it was all real estate and private equity and and so I do think I do think there's some dynamic like that so what mistakes are we in the tech world making now you know there are there are probably were there many categories of mistakes that they were making you know certainly 111 broad category that flows from my my monopoly thesis is that you often want to look at small markets if you can only get need to be a monopoly you have to get to large markets chair so you want to go after small initial markets you know Facebook initially went after the 10,000 people at Harvard who went from zero to sixty percent market share in 10 days and that was a very auspicious start when you sort of grew out in concentric circles paypal our initial market was ebay powerseller there about 20,000 of them and we got to about thirty percent market share within about three months again a very good start you know the the opposite end of the spectrum you know one of the sort of one of the big red flags and any presentation i get is where the first slide says we have a big market and this was this was a this was a mistake that all the clean tech companies in the last decade made where the first slide was we have a in the energy market its measured in hundreds of billions or trillions of dollars and we are a tiny minnow in a vast ocean and what that means is that you have to not just beat the other nine thin film solar panel companies but then you have to also beat the other ninety other types of solar panel companies and then you have to beat the wind companies and the fracking companies and and then you have Chinese manufacturing come out of nowhere and so you're sort of middle in a vast ocean not what you want to be I think the phrase you use is most clean tech founders would have been better off opening a new vagin restaurant in palo alto but you do talk about the brothel in dollar mark restaurant mark is also a trillion-dollar trillion dollars and it does come down to timing because there's a lot of very effective clean tech businesses now one of them is SolarCity Elon Musk's business and his cousins which you have invested in and is it about choosing the timing well I think it's you have to get a number of things right sorry I think you have to get the monopoly question right it's a timing question right you have to get you know there's beast I think you want to have some secret you understand that other people don't you want to get the team right so there are a whole whole set of these things but that had come together um you know I think that dumb you know I think Tesla's a very impressive company that is that it has it has it has worked incredibly well and in some sense they actually started with a with it what was sort of relatively small market electric sports cars were actually a smaller market than the energy market as a whole we still a pretty big market it's still non-trivial to raise the roughly half billion dollars in capital it took but but it was about as they took them about us it was a small market that was about as big as you could possibly be Elon Musk the co-founder at PayPal as well as producing very cool electric cars and solar panels is sending space rockets up eventually to Mars yes just the space Justin short term how do we get more Elon Musk's you know it's it's um III you know it's always I don't I don't know if there's a simple formula for this we had um it's a you know the paypal business was actually quite successful in producing a series of these entrepreneurs or been about of the 220 people who involved with paypal in 2002 in Silicon Valley there's been about 7 billion dollar plus company started by them as he owns a Tesla and SpaceX I was involved in starting pounds here friend Reid Hoffman started linkedin youtube youtube Yammer Yelp and as there's always this question what was about paypal it was so conducive to this it's always hard to know because never behave just like a sample size of one it was one company sort of happened you know it's always hard to to really be too scientific about it but but one of the variables that I think may have been very important was that the lesson people learned inside paypal was that it was hard but possible to build a great business so we had a lot of ups and downs or a lot of challenges at the end it was a very successful exit to ebay i think the lesson people learn in most of the companies they're involved in is very different they're either in companies where things fail and the lesson any moon is that it's impossible to build a great business so if you work in a failed company you will typically the next time around try to do something less ambitious you may succeed but it will be a lesser business because you will aim for something smaller or if you're in a super successful company where everything just worked seamlessly from day one a Microsoft or Google you will learn the lesson that it's easy on and I think to build a great business which i think is just as toxic as the lesson that it's impossible and so I think most people end up finding themselves in contexts where they learn that it's easy or impossible to build great business businesses these are equally mistaken lessons I think the the intermediate one that and Lynn remediate mindset that it's hard but possible because there's a critical component to it pretty much every major city around the world now is trying to become the local Silicon Valley consultant for making a fortune teaching innovation to governments and how reproducible is the success story of the valley you're in London now we have a lot of very very successful companies do you take London seriously as a tech center well I'm always skeptical of copying things so I think just like you shouldn't try to copy Microsoft or Facebook cocking Silicon Valley's probably also the wrong idea you know one reason it's the wrong ideas we don't even actually know what makes Silicon Valley work maybe it's the weather maybe it's non-compete agreements are not enforced in California maybe it is there are these crazy Network effects are the sort of all kinds of you know different explanations one can give so even if we wanted to i'm not sure we even know what what makes it work and then i think more fundamentally when you're when you're copying something you already are setting yourself up to be defined in a lesser way you know if you're the if you're the oxford of iceland that's not quite oxford and and and and so in a similar way calling things you know the some way which you don't want it you don't want to define weigh yourself in a way that's that's derivative there's something of somewhere is often than nothing of nowhere um i think that i think instead what one should try to do is think really hard what are the kinds of things that could be done saying london better than anywhere else in the world you know i think one of the things that that offense i think we never you know we're we're investors in transferwise and i think i think things doing great as a as a company and i think i think there's perhaps a lot of innovation in the area of financial technology that could take place in in London because this is a finance center it's a natural thing that London you can do much better than silicon valley so we can always not a global financial center and it's in London I things also better than New York by the way since some people in New York New York's very self hating people hate the finance industry in New York in a way in which they don't hate it as much in London so if you start a financial technology company in London this would be a cool thing to do it would not be concerned as cool thing to do in New York you invested i think in deep mind and not special intelligence company and you have sort of you have sort of eccentric british technologies that get developed to and this is a company that did will built the 400 million pound and they hadn't least a product um so it's the sort of a manhattan project for AI that was the that would be a that was remains the at the goal of deep mines was they assembled a phenomenal phenomenally talented team and and I think God so I think there are are things like that that work that work quite well but but you know there's no reason that innovation in general has to happen only in Silicon Valley and their Silicon Valley does have some advantages but it probably also has disadvantages the network effects that help Silicon Valley I think also in some cases probably lead to more lemming like and crowd like behavior which i think is it's so problematic you worry about what artificial intelligence will do to us to our ability to earn a living I think I think I'm of the view that strong AI is still quite a long ways off you know if we ever were to get artificial intelligence if we were to build computers that are as smart as human beings in every way this would be a momentous event this would be you know it would be as significant extraterrestrials landing on this on this planet and you know if aliens landed the first question would not be about the economy and what does it mean for your job the first question would be political are they friendly are they unfriendly and so so I think I think even frame it as a question about jobs is to understate the importance or seismic nature thing I would represent I think short of strong AI however I think people are way too worried about computer in this economic sense i think is that we have and we live in it we live in a society that's generally is it we live in a financial and a capitalistic age aye aye sir argued elsewhere that I think we do not live in a scientific or technological age and and most people in the US Western Europe really don't like science they don't like technology they're biased against it in all sorts of ways it's true of people it's true of the politicians it's true the government's it's true the culture easy way to see this is you just look at all the Hollywood movies that basically show technology that doesn't work that kills people is destructive you can choose what matrix or terminator or avatar Elysium I watched the gravity movie the other day you'd never want to go to Mars even to outer space you much happy happy copier being back on somebody island somewhere on this world and that's that reflects the sensibility of most people that the future is something to be feared and that should that we should try to that we should try to prevent and I am and that's why I think people who are involved in the scientific or technological world are the counterculture in our society today and and it is a sort of a very unusual perspective to think that the future is something you hope for so roundabout answer so I think that's this idea that today's computers are replacing people is just another one of these technological August narratives we have I think it's not true i think computers and people are fundamentally different they're good at really different things that fundamentally complimentary not substitutes the you know the much bigger challenge for the middle class in the developed world comes from globalization because people in india people in China are actually not that different from us they can substitute for our labor and that's where that's where the substitution is taking place I don't think we should stop globalization but we should it has some problematic aspects I think technology has far fewer you also think that technology can help fight aging how much can we solve this problem in our lifetimes but we made it we made a lot of progress over the last 150 years you know the maximum life expectancy in 1840 was 46 years among Swedish women today it's something like 87 88 years life expectancy has gone up by about two and a half years a decade so every day that you survived your life expectancy goes up by five or six hours I think that and so there's always been this debate between the you know the mathematicians are extrapolated these curves and the biologists who always argued that you weren't going to make any more progress you're about to at the wall and I would tend to side with the mathematicians over the biologists and I think I think we can do we can do a lot more I don't think we're going to solve you know we're going to find sort of single magic pill that that makes people live forever I think will be a lot of specific walking and tackling but I think you know I think we could make a lot of progress on cancer I think there's no reason that we could not cure Alzheimer's or dementia and one out of three people at age 85 has dementia I think we could be doing a lot more and it's it's really you know it's always again I think it's outrageous that our culture is so complacent about these things and again I think there's mean for a lot of progress in these areas so when you hear of supporters of the singularity people I traitor as well talking about being able to defeat aging the body can live forever what do you think well I think I think it's you know I think this has been this has been a core um animating idea of the entire modern scientific project you know the the search for the water of life but the alchemists had was as great as for the thing that would transmute everything into gold they were actually the alchemists were more interested in living forever than in finding the thing that substitute everything for gold it was you know Francis Bacon the New Atlantis this is this is the whole the whole project of modern science and so so you know it's it's hard to know how much you know how much we can you know change the world for a place where life is nasty brutish and short but but i think i think the moral thing is to is to push it as far as we possibly can in the other direction i know the old sorts of arguments on the other side people say that you know death is a natural part of life and I twitch i always respond that i think it is at least as natural for us to be fighting death and and i think that you know we have this modality where we are either either accepted or denied and i think most feel are serving the schizophrenic mode where they accept death and deny it at the same time and what acceptance in I however have in common is that both modes of thinking that stop you from doing anything it's going to happen or there's nothing you can do about it it's not going to happen what's going to happen there's nothing you can do about it both of those modes tell you that you shouldn't do anything and I think we should be spending more time fighting it I'm clap said that we're not having an argument actually I feel I'm missing out on the big tail experience you're not shouting leads down and you're a man with another shout people down you're a man with political views and you have strong views about education and other things that let me just imagine with you that you're suddenly in the White House it's not gonna happen let's just imagine I what's on our listening started i was thinkin all products remnants or very treacherous things though so let's just say even a jade is it the way doesn't mean i'm mayor of the United States I'm kissing babies all day long what would you like that I'm a dictator what would being there all how far can we play the thought experiment what would you want to change in how America is run well you know I my my my my single issue is that we have to make more progress in science and technology and you know I don't think the government can do that much on this because it's so hostile to these things reflects the population that's hostile to get best we can hope that the government gets out of the way of stopping that's sort of progress there was a time the past when government was able to coordinate things and do things I don't think we're living in that sort of a society anymore you know the US was able to build a nuclear bomb and three and a half years in a project organized by the government or you could put someone on the moon in the Apollo program the 1960s these sorts of things would be utterly inconceivable today you know a letter from Einstein to the White House we get lost in the mail room people say you know who is this crazy scientist who thinks you can do this this completely different sort of a thing and so I think I think the the best role for government our world is is is somewhat more limited because you know I looked at that the other day there 535 congressmen and Senators in the US and by a generous count maybe 35 of them have a background in science or engineering and the rest of them are like in the Middle Ages you know they don't know that solar panels don't work at night or windmills don't work on the wind is not blowing and and so and so I think we can't have that greater hope for how much innovation can happen from government if that's if that's how it's constant now again if we can change everybody in the government that's now we've again playing with a very crazy thought experiment though governments are trying to map the brain Obama's got a big project the European have a big project look there's there's a lot of funding that goes to various kinds of ideas but the polarization of the funding I think has has often had this counterproductive effect you know in in much of science I I worry that there's been a sort of Gresham's law at work where the people who are nimble in the art of writing grant applications to governments have replaced the eccentric people who are the truly great scientists and so the the eccentric university professor is a species that I think is going extinct very fast and because of the sort of Gresham's law dynamics yes there's there's a lot of money going to projects the projects that get funded our consensus projects the experiments that get done our experiments that everybody thinks for work and experiments that everyone thinks will work or one day I think rarely advanced science at all the interesting experiments are ones that no one thinks work and that actually end up working but those those are very hard on politically so you've been back backing a seasteading organizations trying a new kind of nation how's that going that still has a long way to go it is it is it is a it's a small project I got involved in it it always generates enormous interest because I think I think people do have a sense that the frontier is somewhat closed and there's something odd and that there's no longer place you can go to in this world we can start a new community or new society and so so even talking about doing something a speculative as building communities on platforms on the ocean naturally generates an enormous amount of conversation you know i think i think in i think figuring out ways to reopen the frontier is very important it's not clear we can do it geographically because you know the land surface is fully covered outer space is still pretty far away on but but i think you know the frontier is this place where new things happen there's sort of a certain logic to California being the place where so much innovation happened it was the place where the geographical frontier ended he went west to go to the frontier the frontier ended in California and even though it's geographically you know we are finished exploring it it is still a place where a lot of new things happen so I'm the Founders Fund website you famously say that we wanted flying cars instead we got 140 characters what have you got against Twitter well you have to always put this in some context so I think that so it's it's a I think the twitter is a has a great business model um you know it's it's it's in some ways such a good business model that and when you have a monopoly like twitter has on on the service they built out you often don't have to run your business and quite as operationally a tight away as well as you would if you were say opening a restaurant or something like that so I think Twitter is a great business but there is always a sense that it's not enough to take our civilization in the next level this is always sort of the idea that we need to do things not just in the world of bits we should also be try and do more things in the world of atoms the narratives we always tell in our media are ones a specific failure linked to general failure or specific success linked to general success and so it would be twitter is a great business and therefore look at how much is happening in technology and I think we need to consider that it's it's a specific success that's perhaps obscuring a lot of general failures you know the the the cell phones that that distract us from our surroundings also distract us from the fact that our surroundings are strangely old that we live in these old cities where transportation systems are maybe from the 19th or early 20th century where a lot of stuff has not changed in a very long time and so so it's sort of so yes I think Twitter itself is a great company it's not enough to take us to the next level now I know it's it's always haughton gets framed as you know a critique of the Twitter founders but why couldn't they have built something like flying cars i think that's that's very unfair because they did build a great company and we shouldn't blame them it really the blame is on all of us for not working on these other things here is a start-up in Slovakia that we just featured in wife called error mobile is making a flying car by the way what do you think when you see overvalued at 17 billion and what's up bots are 19 billion dollars and snapchat worth somewhere above 10 billion dollars what do you think about the evaluation well there is a sort of always this recurrent question whether we have a bubble in technology like we had in the late 90s I tend to think that there is no bubble in in tuk because these bubbles are psycho social phenomena in which you get the entire public involved and and the public has largely been absent this time around the IPOs are happening very very late they're far fewer than there were in the late 90s and so you do not have a sort of public frenzy around technology that you had in 99 2000 you know if I had to identify a bubble today and we had a bubble attack you know 90s with housing finance one in the last decade the obvious place for the bubble exists today is in government and some you know governments printing money it's an it's in government bonds probably what would the government's are sort of buying up with all the money they're printing and so I think that the place that our bubble and here in some ways the interest rates that are set by the government touch everything but the center of the bubble are probably things are most like government bonds its government bonds corporate bonds maybe its parts of the housing market they're very linked to fixed income maybe it's a parts of the equity market to behave like fixed income so it's stocks to pay high dividends or it or it's the sort of value stock we have very predictable cash flows where the tech stocks are primarily valued on growth which is a very different variable I personally have about three quarters of my net worth tied up in illiquid tech stocks in Silicon Valley and elsewhere and I actually think that it's one of the best places to hide from this massive government bubble that exists everywhere else so I think there is a bubble it's not intact it's in government and I invest in tech in order to hide from the level in government what is the one that you wish you'd invested in that you missed you know they always are they always are many misses and that one has but you know I think sort of the missiles that really it count as mrs. are ones where you spend some time talking the company you have a real conversation you really think about I missed out on you know the series a round at YouTube I missed out on the series a round at Zynga I had lots of conversations with Mark Pincus and known him for many years and very close to doing it but far bigger miss than those two was not doing the series be round at Facebook and I think it's a very instructive sort of set of mistakes that happened um you know on the Omni on the UM and we done this I was in the seed investor to the series a round august of two thousand four has a riposte money evaluation of 5.6 5.7 million in facebook was just growing very fast through eight months later on you know the sort of got this financing round the Washington Post was offering 50 million and then you know Excel a venture fund Silicon Valley came in much higher valuation at 85 million who's 12 times the price per share of the of the for the first run a loop dilution but too much higher valuation in just eight months and his conversation with with markings like why don't you do the this whole round kind of like you and it's like gone up so much and it felt like we had really maximized the valuation and and and part of the psychology was that on the inside it didn't feel like things had changed that much we had this horrible graffiti art on the wall of the office they were sort of it was still only eight or nine people so every day that you went to the office it actually felt like it was the same company who had been at the day before it was true that where these uh these charts where things were moving a very happy north northeasterly direction but but they were very these were abstractions that people i think didn't fully fully gettin away and so on so and so whenever you have these massive up grounds and companies led by on my smart investors almost as a rule of thumb they are undervalued and I've done this back testing on this where the steeper the up round the greater the undervaluation and it's because when these companies have momentum people underestimate the momentum they underestimate when things change the underestimate how much things have changed and it's not just true the outside investors also true the people on the inside you know I course corrected on this in the series c round in facebook which was at 525 million pre just one year later and it was like 5x again and and we saw this question what did what did I done wrong and and i think i think it was like okay this makes no sense at all this is a really crazy valuation but i'm going to still invest because there's something about the momentum that people are missing and that was it was actually a around i'm very glad to have participated in how did it work out well so the facebook is worth more than 550 million was to post money on that round today its last question for me before i revoke my monopoly position and invite the room to us and question what does facebook become long-term you know i have to always be a little bit careful what I say about Facebook since I'm on the board of directors there but I think you know I think that I think it is um it is a pound or LEDs company which means that it will it will it's very focused on innovation on continuing to develop a lot of new things broadly in this in the social networking space i'm i'm generally the most bullish on the founder led companies in Silicon Valley Amazon Google Facebook jobs did a phenomenal job and came back to Apple and there's a certain amount of freedom that founders have that the politician / CEO people could also get brought in to run these companies simply I do not have so we have two rules for the questions now and the first rule is it must have a question mark at the end and the second rule is it must be a genuine question about Peter not some of your own projects and anybody who disobeys gets put on a floating country somewhere off California and if we could have the lights up a little and there are people with microphones and if you would like to ask Peter a question raise your hand and there's a hand just shown up over there and you can have another microphone somewhere at the back of the day cheers I I'm quite interested because he obviously started speaking and the books mainly about 0 to 1 about making you know completely new marketing wish to fill I want to get your opinion on kind of the business model behind rocket internet because of course they're cut the complete opposite of we just completely copy and imitate a speed well I don't think it's a technology company I mean it's a globalization play it's about copying things that work and and sort of copying them elsewhere in the world and so it may work it it you know it's a you have to I think there are some tough questions about how is rocket different from idea lab which was sort of had this intubation model that that blew up famously in the late 90s I think the argument rocket would make that is different is that it has a formula that is just repeating mechanically and i think it's a it's a play on globalization i I'm not interested that much in globalization I think it's important but I'm much more interested in technology but I think investors have to evaluate it as as a you know as a globalization place like investing McDonald's and China or something like that question over here and then another handle next side I've got a mic here it's okay my name is Casey I'm from nine others and thank you very much Peter I really appreciate your time speaking to us I think we've all been inspired by your book and by your story and what I'd like to know is what inspires you where do you go to to find inspiration from what you read or who you meet your places you visit a net sort of thing well it's I'm always really bad at answering sorts of personal questions but but i think it's i find him as inspiration from just all the traffic people that I I get to work with so there's something there's a dynamism to that that's uh that's incredibly incredibly motivating and inspiring and you know I think are all these ways in which one can be pessimistic about certain trends and certain things in our societies but but I think there is sort of a very powerful antidote and in the sort of indomitable Atia of the human spirit is sort of a an enormous part of the of the tech scene in Silicon Valley and elsewhere they're a microphone with somebody here i wither and one question why you were so sure that the next innovation way within the state if necessity the model of innovation I think that is a boy interesting story yep and also the flash married for 20 years of good infrastructure and robotics Fukushima tragedy your political problems so what about Japan well I think Japan is is very interesting there's definitely a logic I would look I generally think the place to look is the developed world because that's the place where people need to do new things the developing world they can just copy stuff so I I do think you look at us scandinavia you know Northern Europe UK Israel and then Australia Canada New Zealand and then I think certainly Japan is a very interesting one it's um it's you know it is it's culturally not a place where people typically start companies so that's sort of so the idea of doing something new in a small company is sort of a is a modality that does not exist so I think I think there may be a lot of innovation in Japan but it may strangely happen in morn larger companies than in smaller companies but that would be my guess but I think I think it's very interesting and it's it's definitely still the third largest economy in the world and it's weirdly very off the radar how much of your investing you doing outside away and the bulk is the boat is in the u.s. it's always you know it's always we it always ends up there's always sort of some connection we have to the people where they can strongly recommend it in one way or another but we've done we've done some things here in the UK we've done a few things in the rest of Europe because some things in Israel we've done some things in Australia New Zealand so we've done some things all over and we have a microphone on this side I was going to say you said that being able where Asperger's is the key to innovation and Facebook is taking all this data and curating a social experience and it's it's almost rewarding people to kind of complete continue to socialize so how does that they take all that data and make people innovate again I mean you've got a huge community listening to you and your kind of curating their social experience but are you necessarily helping that population innovate for themselves and how do you sort of take their data forward and do something more exciting like maybe board Gables doing and continue kind of innovate society rather rewarded for sort of gaming social psychology well I you know I think I think there are sort of all these different different parts when I think I certainly do think that that if you if you are constantly getting feedback on on your ideas and discouraged from having unconventional ideas that that is a big problem i'm not i'm not convinced that's fundamentally what happens on facebook but but it is i think it's a problem that we have in society in general and it's something that we all need to work on overcoming and it's very unfair to blame it on any single company i would say i'd only facebook's doing it but and unfair because i think this is this is a problem it's endemic to society we live in society we're sort of social beings on some level and so we we always take our cues from the people around us and often get talked out of our good ideas from the people around us so this is a very deep problem let me space for two more questions and there was some there I'm harder I was just wondering if you could actually describe your first meeting with Mark Zuckerberg you know he's 19 years old he was he was very introverted and rather quiet at the time he still somewhat introverted he it seemed like the cut that we've done a lot on my friend Reid Hoffman and I had done a lot of homework on the whole social networking space you know Reed had started a company called social net all the way back in nineteen ninety seven seven years earlier and we thought about this a lot and and so it actually didn't depend that much on what happened meeting at all we were going to invest just about no matter what so we had the meeting for now and then we wrote the check but we had we done our homework beforehand I think the the odd question about Facebook that's very hard to get a handle on is why nobody in Boston invested between februari of 04 and August 04 when I met them in Silicon Valley and I have I have this sort of crazy theory that that this is always sort of always are these competitive dynamics people get caught up in there they're very unhealthy and I think 11 version of it is that older people often don't want younger people to do better than themselves and and so if you're I think the worthies mentor capitalists in Boston that were personally annoyed at how well Zuckerberg was going to do and it sort of stopped them in a way from making the investment what I told Zuckerberg when I made the investment was the died I sincerely hoped that he would be far wealthier and far more successful than I had ever been and I'm very glad that happened I interviewed Reid Hoffman and who was given the chance to lead the first round of investment he was working with sean parker and sean parker said hey I got these guys working at this place called the facebook com and and read nobody said well I think there might be a conflict of interest to me but I'll introduce you to my friend pizza so I asked read and does he regret that how did he feel now and he said well the money i don't regret but I regret not having the chance to work with an entrepreneur like Mark and last question Peter fascinated by your comments on education and blood some of the points you made around secrets and really you know how we're going to try and take civilization to the next level my question is really what's your view on Luke's being the facilitator of that opening up the new pioneer um so it's always it's always a little bit tricky if one has too many companies of a given category so you know you don't want to be the fourth online pet food company or the tenth thin-film solar panel company and and so I I think there is this challenge of how are they differentiated from one another what will what will really work and I always think that if we describe it at the level of MOOCs maybe haven't defined a problem properly um but I do think you know I do think we're at a point where the universities are going to change radically it is a it isn't extremely you know it's an extremely corrupt system we have at this point there's we have an education bubble in the u.s. we have a trillion dollars of student debt to a first approximation this has gone to pay for a trillion dollars worth of lies about the value of the education people have received and and I it's not out all obvious yet though what's going to what's going to replace this or how it's going to change my on the movie and I'm somewhat skeptical that it will be replaced by any sort of single unitary system and I have this fellowship for young people to start companies and it's not my claim is not that everybody should do this I don't think everyone should become an entrepreneur and I there is no one-size-fits-all I think so i think the future will be much more heterogeneous much more diverse in terms of what people do and what's what's really anomalous is the sort of unitary tracking where you have to go to elite college you go to Yale or you go to jail there's nothing else you can do you know and so the I think the universities are perhaps in perhaps in the same place as the Catholic Church was in 1514 if we go back 500 years where you have service monolithic way you this Universal way of body of knowledge of teaching things the difference between the Yale and the Harvard political science tackled is a probably new greater than the differences between the Dominicans an apparent siskins we've all kinds of small debates within this context we are we have assistive indulgences that's costing more and more to support this priestly or professorial class of people we are told that the only way to salvation you must get a diploma to be saved if you not get a diploma then you will go to hell and i think and i think the i think the the message that i have that's like the 16th century reformers that's a somewhat troubling message is that you have to work out your salvation on your own you have to save yourself and and that's that's I believe that is the truth but it's uh it's somewhat uncomfortable what the peter has agreed to sign some books kind of at the back outside here and what you must then do is read the book because it's a great tightly written book and then you need to start a monopoly because otherwise tonight's wasted these can we thank peter tail [Applause]

Leave a Reply

Your email address will not be published. Required fields are marked *